NEW YORK, Feb 23 (Reuters) - L3 Technologies Inc said on Thursday it reached a $34.5 million settlement of a lawsuit by shareholders who accused the defense contractor of accounting fraud in its aerospace systems business.
A preliminary settlement was filed on Wednesday night in Manhattan federal court, and requires approval by U.S. District Judge Valerie Caproni.
L3 denied wrongdoing. The New York-based company changed its name from L-3 Communications Holdings Inc at the end of 2016.
Shareholders led by two Michigan pension plans accused L3 of hiding improprieties, including those raised by an internal management-level whistleblower, tied to a contract to service U.S. Army C-12 airplanes.
L3 shares slid 12.3 percent on July 31, 2014, losing about $1.3 billion of market value, after the company said it would restate two years of results and fire four people over problems with the C-12 contract, such as inflated costs and sales.
Chief Executive Officer Michael Strianese and Chief Financial Officer Ralph D‘Ambrosio had also been sued. Caproni dismissed claims against them last March, finding a lack of evidence that they acted recklessly or intended to defraud anyone.
The lead plaintiffs are the City of Pontiac General Employees’ Retirement System, Local 1205 Pension Plan, and the City of Taylor Police and Fire Retirement System.
Their law firm, Robbins Geller Rudman & Dowd, plans to seek legal fees of up to 25 percent of the settlement amount on behalf of itself and two other firms, court papers show.
L3 said its insurers would fund the settlement. A company spokeswoman declined additional comment.
The case, which has a different named plaintiff, is Patel v L-3 Communications Holdings Inc et al, U.S. District Court, Southern District of New York, No. 14-06038. (Editing by Lisa Von Ahn)