Twenty-First Century Fox 2013 Annual Report Download - page 137

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
and also raised a direct claim on behalf of a purported class of Company shareholders relating to the possible
addition of Elisabeth Murdoch to the Company’s Board. The defendants filed opening briefs in support of
motions to dismiss the Consolidated Complaint on June 10, 2011, as contemplated by the court’s scheduling
order. On July 8, 2011, the plaintiffs filed a Verified Amended Consolidated Shareholder Derivative and Class
Action Complaint (the “Amended Complaint”). In addition to the claims that were previously raised in the
Consolidated Complaint, the Amended Complaint brought claims relating to the alleged acts of voicemail
interception at The News of the World (the “NoW Matter”). Specifically, the plaintiffs claimed in the Amended
Complaint that the directors of the Company failed in their duty of oversight regarding the NoW Matter.
On July 15, 2011, another purported stockholder of the Company filed a derivative action captioned
Massachusetts Laborers’ Pension & Annuity Funds v. Murdoch, et al., in the Delaware Court of Chancery (the
“Mass. Laborers Litigation”). The complaint names as defendants the directors of the Company and the
Company as a nominal defendant. The plaintiffs’ claims are substantially similar to those raised by the Amended
Complaint in the Consolidated Action. Specifically, the plaintiff alleged that the directors of the Company have
breached their fiduciary duties by, among other things, approving the Shine Transaction and for failing to
exercise proper oversight in connection with the NoW Matter. The plaintiff also brought a breach of fiduciary
duty claim against Rupert Murdoch as “controlling shareholder,” and a waste claim against the directors of the
Company. The action sought damages, injunctive relief, fees and costs. On July 25, 2011, the plaintiffs in the
Consolidated Action requested that the court consolidate the Mass. Laborers Litigation into the Consolidated
Action. On August 24, 2011, the Mass. Laborers Litigation was consolidated with the Consolidated Action.
On September 29, 2011, the plaintiffs filed a Verified Second Amended Consolidated Shareholder
Derivative and Class Action Complaint (“Second Amended Complaint”). In the Second Amended Complaint, the
plaintiffs removed their claims involving the possible addition of Elisabeth Murdoch to the Company’s Board,
added factual allegations to support their remaining claims and added a claim seeking to enjoin a buyback of
Common B shares to the extent it would result in a change of control. The Second Amended Complaint sought
declaratory relief, an injunction preventing the buyback of Class B shares, damages, pre- and post-judgment
interest, fees and costs. The defendants filed a motion to dismiss the Second Amended Complaint. The hearing
on the defendants’ fully-briefed motion to dismiss was postponed to allow further briefing by plaintiffs after the
Cohen Litigation, which is defined and described below, was consolidated with the Consolidated Action.
On March 2, 2012, another purported stockholder of the Company filed a derivative action captioned Belle
M. Cohen v. Murdoch, et al., in the Delaware Court of Chancery (the “Cohen Litigation”). The complaint names
as defendants the directors of the Company and the Company as a nominal defendant. The complaint’s claims
and allegations pertained to the NoW Matter and were substantially similar to the NoW Matter allegations raised
in the Second Amended Complaint in the Consolidated Action. The complaint asserted causes of action against
the defendants for alleged breach of fiduciary duty, gross mismanagement, contribution and indemnification,
abuse of control, and waste of corporate assets. The action sought damages, fees and costs. On March 20, 2012,
the Cohen Litigation was consolidated with the Consolidated Action.
On June 18, 2012, the plaintiffs in the Consolidated Action filed a Verified Third Amended Consolidated
Shareholder Derivative Complaint (the “Third Amended Complaint”). The Third Amended Complaint alleged
claims against director defendants for breach of fiduciary duty arising from the Shine Transaction; against Rupert
Murdoch for breach of fiduciary duty as the purported controlling shareholder of the Company in connection
with the Shine Transaction; against director defendants for breach of fiduciary duty arising from their purported
failure to investigate illegal conduct in the NoW Matter and allegedly permitting the Company to engage in a
cover up; against certain defendants for breach of fiduciary duty in their capacity as officers arising from a
purported failure to investigate illegal conduct in the NoW Matter and allegedly permitting the Company to
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