Harman International Industries Inc. agreed Wednesday to pay $28.25 million to settle shareholder allegations that the automotive technology company inflated its stock price ahead of an ultimately failed private equity merger, putting an end to the litigation after nearly a decade.
The all-cash deal, filed Wednesday in D.C. federal court, will settle investors’ claims that Harman misrepresented the strength of sales for certain products in the run-up to a planned, $8 billion acquisition by Kohlberg Kravis Roberts & Co. LP and a Goldman Sachs & Co. affiliate. The settlement comes just over a year after the U.S. Supreme Court rejected Harman’s petition to review a D.C. Circuit decision reviving the case.
Steven J. Toll, an attorney for lead plaintiff the Arkansas Public Employees’ Retirement System and co-chair of Cohen Milstein Sellers & Toll LLP’s securities fraud and investor protection practice, told Law360 that the deal was a good result for the investors, who will finally get money back, 10 years after their initial investments. “After all these years and a loss at the outset, we’re very pleased and glad our client is pleased with this recovery,” Toll said.
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