The shareholders party to a securities fraud suit against Gogo Inc. and several company leaders have moved for preliminary approval of a settlement reached last October. According to the motion filed late last week, the $17.3 million figure represents approximately 8% of the total maximum damages potentially available in the action, a percentage “well above the median recovery in securities class action settlements.”
Aggrieved shareholders sued in 2018, alleging that the defendants made materially false and misleading statements about Gogo’s “2Ku global satellite system” or “2Ku.” Specifically, the operative complaint argued that 2Ku was “suffering from a significant product design defect—de-icing fluid used on the exterior of the planes was making Gogo’s 2Ku global satellite system inoperable.”
The lawsuit cited multiple corrective disclosures that downplayed the seriousness of the de-icing fluid issue and ultimately resulted in a series of stock price decreases.
The court dismissed the investors’ first complaint in 2019, but their second withstood the defendants’ pleading challenge last April. Thereafter, the Chicago, Illinois case proceeded towards discovery and counsel engaged in “extensive” mediation.
Now, the plaintiffs ask for preliminary approval of their settlement, arguing that it is in the best interest of the settlement class in view of the case’s strengths and weaknesses. “Here, there is no question that continued litigation would have been costly, risky, and protracted,” the filing says.
The motion also asks for approval of the plaintiffs’ notice plan and certification of the settlement class. As to the former, the motion points out that the plaintiffs have chosen well-established, effective procedures for accomplishing claim processing and relief distribution.
The filing notes that plaintiffs’ counsel will seek up to 33.3% of the settlement in attorneys’ fees.
Levi & Korsinsky LLP and Glancy Prongay & Murray LLP are lead counsel while DiTommaso Lubin Austermuehle P.C. serves as liaison counsel. Gogo and the individual defendants are represented by Neal, Gerber & Eisenberg LLP and Shearman & Sterling LLP.