The Massachusetts Laborers' Pension and Annuity Funds, Burlington, filed suit against K. Rupert Murdoch, chairman and CEO of News Corp., and the company's other directors, seeking to recover “millions of dollars” in losses and strengthen corporate governance over alleged mismanagement and breaches of fiduciary duty exposed by the News of the World phone hacking scandal, according to the lawsuit.
The suit, filed in Delaware Chancery Court on July 15, accuses Mr. Murdoch and the board of “failure to take any action to investigate, control, and limit the fallout from the hacking scandal” that “caused the company to lose billions of dollars in value,” the lawsuit stated. The company's market value fell $7 billion from July 4 when the scandal first began to unravel through July 11, the suit said.
The law firm of Labaton Sucharow is representing the $700 million fund in the suit.
Judge John W. Noble is presiding over the case.
Teri Everett, News senior vice president corporate affairs and communications, couldn't be reached for comment.
On July 8, the Central Laborers Pension Fund, Jacksonville, Ill., the New Orleans City Employees' Retirement System and Amalgamated Bank amended an earlier separate suit they filed March 17 against News directors, accusing the company of nepotism.
In their amended complain, the institutional investors accuse Mr. Murdoch and the other directors of breach of fiduciary oversight and corporate governance failures in the phone hacking scandal, claiming it caused losses of “hundreds of millions of dollars if not billions” in shareholder value.
That suit, also filed in Delaware Chancery Court before Mr. Noble, seeks to recover losses related to the scandal.
In both suits, proceeds from any recovery would be reinvested in the company.