Blackberry to settle shareholder lawsuit for $165 million

Blackberry announced today that it will settle a shareholder class-action lawsuit it filed eight years ago against the company. It was alleged that Blackberry inflated the success of Blackberry 10 smartphones and drove up its share price.

The lawsuit also names former chief executive officer Thorsten Sheins, former chief finance officer Brian Bidulka, and former chief legal office Steve Zipperstein.

U.S. District Court Judge Colleen McMahon from Federal Court in Manhattan granted Blackberry and shareholder lawyers the permission to postpone their planned trial so that they could negotiate on a preliminary agreement.

Today, the company announced that it had reached a principle agreement that would see the payment of US$165m to settle the claims. The settlement will also include a complete release of all claims against the company and its officers and the express disclaimer that any defendants are liable, wrongdoing, or responsible. BlackBerry expects that the lawsuit will be dismissed without prejudice once the settlement is approved by the court.

The Blackberry 10, which was just launched in 2013, received much praise from critics, but was not popular with consumers. The Blackberry 10 was ultimately overshadowed eventually by Android and Apple smartphones, which continue to dominate the smartphone market.

Canadian company stopped making smartphones in 2016. It now focuses on providing cybersecurity-related products and services.

Companies that mislead shareholders are a common subject of lawsuits in Canada and the U.S. These cases rarely end up in court. A mere 1% of similar cases between 1997-2021 were ever brought to court. Most cases were settled or dismissed.

The court must approve the settlement.