New York, NY/April 22, 2013–News Corp. has settled a shareholder lawsuit brought in 2011 stemming from claims against its board related to the out-of-control phone hacking scandal and other matters.
The $139 million that News Corp. will receive (from insurance proceeds) is the largest cash settlement ever in a derivative lawsuit. The settlement also includes extensive corporate governance reforms at the media giant, soon to be split into two divisions, publishing and entertainment.
Leading securities and corporate governance law firm Grant & Eisenhofer P.A. represented co-lead plaintiffs and News Corp. shareholder Amalgamated Bank and the Central Laborers Pension Fund. Co-lead counsel was Bernstein Litowitz in its representation of the City of New Orleans Eployees’ Retirement System.
The settlement is subject to approval by the Delaware Court of Chancery, where the litigation had been proceeding. In addition to alleging fiduciary lapses over the hacking fiasco that embarrassed the company and led to the firing – and arrests – of numerous News Corp. executives, shareholders challenged directors over the company’s 2011 purchase of the Shine Group from Rupert Murdoch’s daughter Elizabeth. The derivative lawsuit is captioned In re News Corp. Shareholder Litigation (6316-VCN).
The full terms of the settlement are available at www.newscorpderivativesettlement.com/pdf/mou.pdf.
A joint announcement from shareholders and the law firms follows. Let us know if you'd like to speak with Grant & Eisenhofer managing director Jay Eisenhofer about the settlement.