Lawsuits relate to 2011 acquisition of Shine and the U.K. phone-hacking scandal
News Corp. has reached a $139 million settlement agreement in the class-action lawsuit stemming from its 2011 acquisition of Shine Group, ending more than a year-long headache before the company completes a major split from its publishing assets.
Monday’s settlement wraps up a number of cases filed by Amalgamated Bank on behalf of shareholders in relation to the Shine deal plus several cases that followed relating to the hacking scandal at News Corp.’s shuttered U.K. tabloid The News of the World. The suits were consolidated because they all essentially questioned the same thing: News Corp.’s governance.
Because of that, the lawsuit was aimed at News Corp.’s board of directors, an unusual arrangement that led the company itself to be named as a plaintiff along with shareholders.
News Corp. signed a memorandum of understanding as part of the settlement, in which the conglom did not admit to any wrongdoing. The company emphasized the steps it had taken to increase transparency and corporate oversight in a press release announcing the agreement on Monday. The settlement was negotiated as part of the mediation talks between News Corp. and the plaintiffs, who received a commitment by News Corp. to enhance its governance and compliance structure. The bulk of the $139 million will be paid to News Corp. through an insurance policy the company had to guard against such litigation, with the remainder paid to the plaintiffs to cover their litigation costs.
“News Corporation acknowledges the meaningful role the plaintiffs and their counsel played in the company’s continuing efforts to enhance the importance compliance and governance structures and politics that the board and management of News Corporation have adopted over the last year and are adopting as part of this settlement,” the conglom stated.
News Corp.’s new corporate oversight includes adding compliance officers across the company, as well as enhanced compliance and training programs, annual board consideration of leadership structure and a stronger policy on political activities.
The agreement ends ongoing litigationfrom 2011 and 2012 as News Corp. completes the spinoff of its publishing divisions, which include The Wall Street Journal, the New York Post and HarperCollins book publishing. The split, announced in June, is expected to be completed by the middle of this year.