Motorola Solutions Inc. agreed to pay $200 million to settle a 2007 investor lawsuit co-led by two Michigan pension plans that accused the company of overstating its sales prospects.
The agreement with the company, which was formerly known as Motorola Inc., must still be approved by U.S. District Court Judge Amy St. Eve, who was scheduled to preside over a trial starting April 9 in Chicago.
Stockholder Eric Silverman initially alleged that then- Motorola Inc. CEO Edward Zander and other officers had told investors to expect strong sales growth in the last quarter of 2006.
The lead plaintiffs in the case are the $784 million Macomb County Employees Retirement System, Mount Clemens, Mich., and the $1.1 million St. Clair Shores (Mich.) Police and Fire Pension System. The asset size of the St. Clair Shores pension plan could not be learned by press time.
When the suit was filed in August 2007 amid declining sales, Motorola had fallen from the world’s second-biggest mobile phone maker to third.
“The settlement represents an extraordinary recovery for investors in a case where there was no financial restatement” or an investigation by the SEC, the plaintiffs’ attorney, Samuel Rudman of law firm Robbins Geller Rudman & Dowd, said in a statement.
The parties to the lawsuit have asked Ms. St. Eve to hold a hearing Feb. 16 to consider preliminary approval of the accord.
“We are pleased to have this behind us,” Nicholas Sweers, a Motorola Solutions spokesman, said in a telephone interview. “It removes the risk and distractions of this litigation and enables us to continue to focus on delivering mission-critical communications solutions.”
Motorola Mobility wasn’t a party to the lawsuit and isn’t contributing to the settlement, according to Mr. Sweers and Jennifer Erickson, a Motorola Mobility spokeswoman.
Mr. Sweers said the settlement would be paid for using a combination of insurance and previously booked reserves.