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(Updates with lawsuit background in third paragraph.)
Feb. 16 (Bloomberg) -- Motorola Solutions Inc. and a group of investors who sued a corporate predecessor claiming it misled them about the company’s prospects in 2006 won a U.S. judge’s tentative approval of a $200 million settlement.
U.S. District Judge Amy St. Eve today preliminarily signed off on the proposed agreement after hearing from the parties’ lawyers at the federal courthouse in Chicago. She will consider a motion for final approval on May 9, after class members have had an opportunity to file objections.
In an August 2007 complaint, Motorola Inc.’s then-Chief Executive Officer Edward Zander and other executives were accused of overstating the prospects of the company and its mobile phone-making unit in the second half of 2006. By 2007, Motorola was the world’s third-biggest mobile phone maker, down from second-biggest.
The mobile phone-making unit, now known as Motorola Mobility Inc., was spun off last year and is based in Libertyville, Illinois. Motorola Solutions, based in Schaumburg, Illinois, makes two-way radios, bar-code scanners and radio frequency identification tags.
In 2009, the court certified a class of investor plaintiffs who held Motorola stock from July 2006 to January 2007.
Motorola Solutions and lawyers for the stockholders announced the settlement agreement on Feb. 2.
The lead plaintiffs in the case are the Macomb County Employees’ Retirement System and the St. Clair Shores Police & Fire Pension System, both of Michigan.
The U.S. Justice Department on Feb. 13 approved Motorola Mobility’s acquisition by Google Inc. for $12.5 billion.
The case is Silverman v. Motorola Inc., 07-cv-4507, U.S. District Court, Northern District of Illinois (Chicago).
--Editors: Glenn Holdcraft, Peter Blumberg
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