News Corp. will receive $139 million worth of insurance proceeds in a rare cash settlement that resolves a lawsuit by shareholders alleging the board failed to investigate the company's phone hacking scandal.
The $139 million, which will be paid by the liability insurance for the board members, is the largest cash settlement in such a derivative case, according to one of the plaintiff's attorneys.
In a derivative lawsuit, shareholders seek to step into the shoes of the company and hold board members and officers responsible for harm caused to the corporation. The cases often settle for changes to corporate governance, and as is the case with News Corp., any payment goes to the company, with shareholders benefiting indirectly.
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