Twenty-First Century Fox 2013 Annual Report Download - page 44

Southern District of New York
On July 18, 2011, a purported shareholder of the Company filed a derivative action captioned Shields
v. Murdoch, et al. (“Shields Litigation”), in the United States District Court for the Southern District of New
York. The plaintiff alleged violations of Section 14(a) of the Securities Exchange Act, as well as state law claims
for breach of fiduciary duty, gross mismanagement, waste, abuse of control and contribution/indemnification
arising from, and in connection with, the NoW Matter. The complaint named the directors of the Company as
defendants and named the Company as a nominal defendant, and sought damages and costs. On August 4, 2011,
the plaintiff filed an amended complaint. The plaintiff sought compensatory damages, an order declaring the
October 15, 2010 shareholder vote on the election of the Company’s directors void; an order setting an
emergency shareholder vote date for election of new directors; an order requiring the Company to take certain
specified corporate governance actions; and an order (i) putting forward a shareholder vote resolution for
amendments to the Company’s Article of Incorporation and (ii) taking such other action as may be necessary to
place before shareholders for a vote on corporate governance policies that: (a) appoint a non-executive Chair of
the Board who is not related to the Murdoch family or extended family; (b) appoint an independent Chair of the
Board’s Audit Committee; (c) appoint at least three independent directors to the Governance and Nominating
Committees; (d) strengthen the Board’s supervision of financial reporting processes and implement procedures
for greater shareholder input into the policies and guidelines of the Board; and (e) appropriately test and
strengthen the internal and audit control functions.
On July 19, 2011, a purported class action lawsuit captioned Wilder v. News Corp., et al. (“Wilder
Litigation”), was filed on behalf of all purchasers of the Company’s common stock between March 3, 2011 and
July 11, 2011, in the United States District Court for the Southern District of New York. The plaintiff brought
claims under Section 10(b) and Section 20(a) of the Securities Exchange Act, alleging that false and misleading
statements were issued regarding the NoW Matter. The suit names as defendants the Company, Rupert Murdoch,
James Murdoch and Rebekah Brooks, and seeks compensatory damages, rescission for damages sustained, and
costs. On June 5, 2012, the court issued an order appointing the Avon Pension Fund (“Avon”) as lead plaintiff
and Robbins Geller Rudman & Dowd as lead counsel. Thereafter, on July 3, 2012, the court issued an order
providing that an amended consolidated complaint shall be filed by July 31, 2012. Avon filed an amended
consolidated complaint on July 31, 2012, which among other things, added as defendants NI Group Limited (now
known as News Corp UK & Ireland Limited) and Les Hinton, and expanded the class period to include
February 15, 2011 to July 18, 2011. The defendants have filed motions to dismiss the complaint which are
pending. The Company’s management believes the claims in the Wilder Litigation are entirely without merit, and
intends to vigorously defend those claims.
On July 22, 2011, a purported shareholder of the Company filed a derivative action captioned Stricklin
v. Murdoch, et al. (“Stricklin Litigation”), in the United States District Court for the Southern District of
New York. The plaintiff brought claims for breach of fiduciary duty, gross mismanagement, and waste of
corporate assets in connection with, among other things, (i) the NoW Matter; (ii) News America’s purported
payments to settle allegations of anti-competitive behavior; and (iii) the Shine Transaction. The action named as
defendants the Company, Les Hinton, Rebekah Brooks, Paul Carlucci and the directors of the Company. On
August 3, 2011, the plaintiff served a motion for expedited discovery and to appoint a conservator over the
Company, which defendants objected to. The motion was not briefed. On August 16, 2011, the plaintiffs filed an
amended complaint. The plaintiff sought various forms of relief including compensatory damages, injunctive
relief, disgorgement, the award of voting rights to Class A shareholders, the appointment of a conservator over
the Company to oversee the Company’s responses to investigations and litigation related to the NoW Matter, fees
and costs.
On August 10, 2011, a purported shareholder of the Company filed a derivative action captioned Iron
Workers Mid-South Pension Fund v. Murdoch, et al. (“Iron Workers Litigation”), in the United States District
Court for the Southern District of New York. The plaintiff brought claims for breach of fiduciary duty, waste of
corporate assets, unjust enrichment and alleged violations of Section 14(a) of the Securities Exchange Act in
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