BlackBerry Reaches Agreement in Principle to Settle Class Action Litigation
T.BB | 57 minutes ago
WATERLOO, ON, April 7, 2022 /PRNewswire/ -- BlackBerry Limited (NYSE: BB; TSX: BB) announced today that it has reached an agreement in principle to settle the consolidated securities class action lawsuit captioned Pearlstein v. Blackberry Limited, et al., Case No. 13 Civ. 7060 (CM) (KHP) pending against the Company and certain of its former officers in the U.S. District Court for the Southern District of New York. The consolidated class action complaint was filed in October 2013, as described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2022.
The agreement in principle was reached following a voluntary mediation process resulting in the parties' acceptance of the mediator's recommendation for settlement. The court has granted the parties' jointly request to adjourn further proceedings in the matter pending approval of the final settlement.
The agreement in principle contemplates an aggregate cash payment by the Company of $165 million to settle the claims brought on behalf of all persons who purchased or otherwise acquired BlackBerry shares on the NASDAQ between March 28, 2013 and September 20, 2013. The parties have agreed to negotiate in good faith to execute a definitive stipulation of settlement and related documents to be filed with the court. The Company anticipates that the stipulation of settlement will provide a full release of all claims against all defendants, including the Company and its officers, and will expressly deny any liability, wrongdoing or responsibility by any of the defendants. The Company anticipates that, upon final approval of the settlement, the litigation will be dismissed with prejudice. Approval by the court, notice to the putative class, and the satisfaction of customary conditions to effectiveness may take several months.
While BlackBerry believes that the allegations in the case were without merit, it also believes that eliminating the distraction, expense and risk of continued litigation is in the best interests of the Company and its shareholders.
As previously disclosed, given the uncertainties of litigation, BlackBerry had not been in a position to assess the likelihood of any potential loss or adverse effect on its financial condition or to reasonably estimate the amount of potential loss in connection with the class action. As a result of the entry into the agreement in principle, BlackBerry expects that the above-referenced $165 million will be incorporated into its results of operations and financial condition for the fiscal quarter ending May 31, 2022. The Company does not expect to recover any portion of this amount from insurance proceeds.