6:40am PT by Eriq Gardner
Judge Approves News Corp.'s $139 Million Shareholder Settlement
News Corp. is richer today after a Delaware judge approved a $139 million settlement in a lawsuit brought by shareholders over allegations that the company's board had failed to exercise its duties properly in relation to phone hacking.
Although News Corp. was the subject of the lawsuit, it ends up being the beneficiary as well, as the company's insurers must now pay out directly to the company, which is meant to indirectly benefit the shareholders. The lawyers won't do badly, either, taking about $28 million in fees.
The money isn't free.
As part of the settlement, News Corp. agreed to various governance reforms including a compliance steering committee, the establishment of an anonymous whistle-blowing hotline and the posting on its website of a "political activity policy."
News Corp. has said that it has already taken many of these steps in the wake of a hacking scandal that forced the company's U.K. tabloid News of the World to shutter, the company to withdraw a bid to buy British Sky Broadcasting Group, chairman Rupert Murdoch to give testimony to the U.K. parliament about the relationship between the press and politicians and the company having to defend and settle hundreds of civil lawsuits.
Insurers will now be paying for the company's missteps. The judge approved the settlement after reportedly saying that it was the largest cash derivative settlement he's ever seen and would prompt "significant procedural changes in how the [News Corp.] board will have to operate."
On Friday, News Corp. is scheduled to split into two companies -- the new News Corp and 21st Century Fox. Shareholders approved that move earlier this month.