Summary
Netflix Inc. (NFLX) filed an 8-K on May 15, 2020, to announce the preliminary approval of a settlement in a stockholder derivative lawsuit. The lawsuit, captioned City of Birmingham Relief and Retirement System v. Hastings, et al., alleged false and misleading disclosures regarding the company's Performance Bonus Plan between 2015 and 2017, along with breaches of fiduciary duties and waste of corporate assets. The company and defendants have denied these allegations. While the settlement has received preliminary approval from the U.S. District Court for the Northern District of California, it is important for investors to note that Netflix has not paid performance-based bonuses under the Plan since 2018. The filing primarily serves to inform stakeholders about the status of this litigation and makes available the Notice of Pendency of Proposed Settlement of Stockholder Derivative Action.
Key Highlights
- 1Preliminary approval granted for settlement of stockholder derivative lawsuit.
- 2Lawsuit alleged false/misleading disclosures regarding the Performance Bonus Plan (2015-2017).
- 3Allegations also included breach of fiduciary duties and waste of corporate assets.
- 4Netflix and defendants deny all allegations.
- 5The company has not paid performance-based bonuses under the Plan since 2018.
- 6Filing includes the Notice of Pendency of Proposed Settlement of Stockholder Derivative Action.