Twenty-First Century Fox 2013 Annual Report Download - page 45

connection with the NoW Matter. The action named as defendants the Company, Les Hinton, Rebekah Brooks
and the directors of the Company. The plaintiff sought various forms of relief including compensatory damages,
voiding the election of the director defendants, an order requiring the Company to take certain specified
corporate governance actions, injunctive relief, restitution, fees and costs.
On November 21, 2011, the court issued an order setting a briefing schedule for the defendants’ motion to
stay the Stricklin Litigation, the Iron Workers Litigation and the Shields Litigation pending the outcome of the
consolidated action pending in the Delaware Court of Chancery. On September 18, 2012, the Court denied the
motion as to two of the cases and dismissed the third with leave to replead, which the plaintiff did. Specifically,
on October 4, 2012, Stricklin filed a Second Amended Complaint that added a claim under Section 14(a) of the
Securities Exchange Act challenging the disclosures in the Company’s definitive proxy statements issued during
the years of 2005 through 2012. The plaintiff sought, among other things, to void the election of the director
defendants at the Company’s 2012 annual meeting. The plaintiffs in Shields, Stricklin and Iron Workers
requested a pre-motion conference to address the potential consolidation of these derivative actions and a
briefing schedule regarding the potential leadership structure for the plaintiffs, but a pre-motion conference was
not held and the actions were not consolidated.
On July 16, 2013, after the dismissal of the Consolidated Action by the Delaware Court of Chancery as
discussed above, the court entered uncontested Orders of Dismissal in the Shields Litigation, the Stricklin
Litigation and the Iron Workers Litigation, dismissing each of the lawsuits. As described above, the settlement of
the Consolidated Action (described above under the heading “Shareholder Litigation—Delaware”) became
effective on August 16, 2013, because as of that date, the dismissal of the Consolidated Action as well as the
dismissals of each of the Shields Litigation, the Iron Workers Litigation and the Stricklin Litigation were no
longer subject to appeal.
On June 7, 2013, Iron Workers brought a second derivative action captioned Iron Workers Mid-South
Pension Fund v. Murdoch, et al. (“Second Iron Workers Litigation”), in the United States District Court for the
Southern District of New York, which related to the same subject matter as the Consolidated Action and the
Shields Litigation, the Stricklin Litigation, and the Iron Workers Litigation. The plaintiff brought state law claims
for breach of fiduciary duty, waste of corporate assets, and unjust enrichment in connection with alleged anti-
competitive practices at Company subsidiaries. The action named as defendants current and former directors of
the Company. The plaintiff sought various forms of relief including compensatory damages, an order requiring
the Company to take certain specified corporate governance actions, injunctive relief, restitution, fees and costs.
On June 18, 2013, the plaintiff moved for the dismissal of the Second Iron Workers Litigation, and the court
granted the Order of Dismissal on July 24, 2013, dismissing the Second Iron Workers Litigation.
U.K. Newspaper Matters and Related Investigations and Litigation
U.S. regulators and governmental authorities continue to conduct investigations initiated in 2011 with
respect to the U.K. Newspaper Matters. The Company is cooperating with these investigations. It is not possible
at this time to estimate the liability, if any, of the Company relating to these investigations.
In connection with the Separation, the Company and News Corp agreed in the Separation and Distribution
Agreement that the Company will indemnify News Corp, on an after-tax basis, for payments made after the
Separation arising out of civil claims and investigations relating to the U.K. Newspaper Matters, as well as legal
and professional fees and expenses paid in connection with the related criminal matters, other than fees, expenses
and costs relating to employees who are not (i) directors, officers or certain designated employees or (ii) with
respect to civil matters, co-defendants with News Corp (the “Indemnity”). As of June 30, 2013, the Company
recognized approximately $40 million related to the fair value of amounts accrued by News Corp as of the date
of the Separation which are expected to be covered by the Indemnity and has provided an additional $110 million
for the fair value of expected future payments under the Indemnity. If additional information becomes available
and as payments are made, the Company will update the liability provision for the Indemnity.
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