Twenty-First Century Fox (NASDAQ:$FOX) has finally reached a settlement of $90 million, based on the shareholder claims over the Fox Channel News sexual harassment scandal that cost the jobs of longtime news chief Roger Ailes and anchor Bill O’Reilly.
The settlement still requires a judge’s approval but aims to resolve the “derivative” claims against several Fox officers and directors, which includes Fox’s executive chairmen Rupert Murdoch and his son Lachlan, chief executive James Murdoch, and Ailes’ estate.
The $90 million settlement is to be paid by the insurers of Fox offices, Fox directors, and Ailes’ estate, for the benefit of the shareholders.
As a result of this settlement, Fox says that it will enhance governance and has created the Fox News Workplace Professionalism and Inclusion Council to do so. The Council will ensure a proper workplace environment, bolster training, and further the recruitment and advancement of women and minorities. The Council is made up of four independent members, including former federal judge Barbara Jones.
As with any derivative case, shareholders sue in the name of the company to fix wrongs inflicted by a supposed lack of oversight done by the company’s officers and directors.
Ailes’ estate has, however, disputed many of the settlement’s allegations, which, according to court records, was reached before a complaint was formally filed.
Jack Abernethy, co-president of Fox News Channel, stated that “the Workplace Council gives our management team access to a brain trust of experts with deep and diverse experiences in workplace issues. We look forward to benefiting from their collective guidance.”
The City of Monroe Employees’ Retirement System in Michigan led the shareholders in the settlement, with their lawyer Max Berger stating that the accord would provide “meaningful benefits” for shareholders and for Fox News employees alike.
This accord is not the first big derivative settlement involving a Murdoch-led company. In 2013, a $139 million settlement was reached by former Fox parent News Corp, consisting of derivative claims that the board has ignored phone hacking at its London tabloids.
In 2015, a $275 million settlement was approved by the Delaware court, which involved the “Call of Duty” video game maker Activision Blizzard Inc over a stock sale by Vivendi SA.
This settlement for Fox has its origins back in July 2016, when a lawsuit was filed by former anchor Gretchen Carlson accusing Ailes of harassment, and in April O’Reilly lost his job after he was accused of harassment. O’Reilly has denied wrongdoing.
Ailes died the next month, causing Fox to have to deal with other private litigation tied up with the whole scandal.
The case is City of Monroe Employees’ Retirement System v Murdoch et al, Delaware Chancery Court, No. 2017-0833.
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