Twenty-First Century Fox 2013 Annual Report Download - page 41

ITEM 3. LEGAL PROCEEDINGS
Shareholder Litigation
Delaware
On March 16, 2011, a complaint seeking to compel the inspection of the Company’s books and records
pursuant to 8 Del. C. § 220, captioned Central Laborers Pension Fund v. News Corporation, was filed in the
Delaware Court of Chancery. The plaintiff requested the Company’s books and records to investigate alleged
possible breaches of fiduciary duty by the directors of the Company in connection with the Company’s purchase
of Shine (the “Shine Transaction”). The Company moved to dismiss the action. On November 30, 2011, the court
issued an order granting the Company’s motion and dismissing the complaint. The plaintiff filed a notice of
appeal on December 13, 2011. The Delaware Supreme Court heard argument on the fully-briefed appeal on
April 18, 2012 and issued a decision on May 29, 2012 in which it affirmed the Court of Chancery’s dismissal of
the complaint.
Also on March 16, 2011, two purported shareholders of the Company, one of which was Central Laborers
Pension Fund, filed a derivative action in the Delaware Court of Chancery, captioned The Amalgamated Bank v.
Murdoch, et al. (the “Amalgamated Bank Litigation”). The plaintiffs alleged that both the directors of the
Company and Rupert Murdoch as a “controlling shareholder” breached their fiduciary duties in connection with
the Shine Transaction. The suit named as defendants all directors of the Company, and named the Company as a
nominal defendant. Similar claims against the same group of defendants were filed in the Delaware Court of
Chancery by a purported shareholder of the Company, New Orleans Employees’ Retirement System, on
March 25, 2011 (the “New Orleans Employees’ Retirement Litigation”). Both the Amalgamated Bank Litigation
and the New Orleans Employees’ Retirement Litigation were consolidated on April 6, 2011 (the “Consolidated
Action”), with The Amalgamated Bank’s complaint serving as the operative complaint. The Consolidated Action
was captioned In re News Corp. Shareholder Derivative Litigation. On April 9, 2011, the court entered a
scheduling order governing the filing of an amended complaint and briefing on potential motions to dismiss.
Thereafter, the plaintiffs in the Consolidated Action filed a Verified Consolidated Shareholder Derivative
and Class Action Complaint (the “Consolidated Complaint”) on May 13, 2011, seeking declaratory relief and
damages. The Consolidated Complaint largely restated the claims in The Amalgamated Bank’s initial complaint
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.
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