General Electric Co. shareholders have requested a Manhattan federal judge’s approval for a $362.5 million settlement to conclude a lengthy securities class action. The lawsuit, poised to go to trial, accused GE of hiding critical cash flow problems that led to a dramatic stock price drop.
Settlement Deemed “Outstanding Result”
The class representatives, Swedish pension fund Sjunde AP-Fonden (AP7) and the Cleveland Bakers and Teamsters Pension Fund, filed a motion Monday seeking preliminary approval of the deal. They described the settlement as an “outstanding result” achieved just weeks before trial in a seven-year case.
“While class representatives and plaintiffs’ counsel believe the class’s claims against defendants are meritorious … they also recognize the significant risk that trial and appeals could preclude any recovery for the class,” the motion stated.
The settlement covers thousands of investors who acquired GE common stock between Feb. 29, 2016, and Jan. 23, 2018. The settlement fund will also cover attorney fees and litigation costs, with class counsel planning to request no more than 25% of the fund (about $90.6 million) and up to $10 million in expenses.
General Electric $362.5M Settlement : Negotiation After Vigorous Litigation
The resolution was reached following three mediation sessions. Counsel for the plaintiffs emphasized the procedural fairness of the settlement, noting that extensive discovery and trial preparation informed their negotiations.
