BlackBerry Ltd plans to settle a more than eight-year-old lawsuit claiming it defrauded shareholders by inflating the success and profitability of its long-discontinued BlackBerry 10 smartphones.
U.S. District Judge Colleen McMahon in Manhattan federal court granted a Wednesday request by lawyers for BlackBerry and the shareholders to adjourn their planned trial so they could negotiate a preliminary settlement in the class action.
Jury selection had been scheduled to begin on Thursday. Any settlement would require the judge’s approval.
Lawyers for the shareholders did not immediately respond to requests for additional comment. BlackBerry and its law firm did not immediately respond to similar requests.
While the BlackBerry 10 won positive reviews from critics, it never caught on with the public, which preferred Android-based smartphones and Apple Inc’s iPhones.
This led to BlackBerry’s 2016 decision to stop making phones. The Waterloo, Ontario-based company now focuses on cybersecurity.
Shareholders accused BlackBerry of concealing BlackBerry 10’s true sales prospects in public statements during 2013, resulting in an inflated share price.
The lawsuit began in October 2013. Other defendants include Chief Executive Officer Thorsten Heins, former Chief Financial Officer Brian Bidulka and former Chief Legal Officer Steve Zipperstein.
Lawsuits accusing companies of misleading shareholders are common in the United States, but few go to trial.
From 1997 to 2021, less than 1% of federal securities class actions went to trial, while most were settled or dismissed, according to Cornerstone Research.
The case is Pearlstein v BlackBerry Ltd, U.S. District Court, Southern District of New York, No. 13-07060.
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