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Fox shareholders demand internal records over alleged negligence in Fox News' election coverage

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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Fox Corp shareholders using Delaware corporate law provisions demand

Fox Corp shareholders are using Delaware corporate law provisions to demand internal Fox records, such as board minutes, emails, and texts, to investigate whether directors and executives properly oversaw Fox News' coverage of former President Donald Trump's claims of election rigging.

These records and evidence presented in other lawsuits could be used to make directors personally liable for costs resulting from two defamation cases brought by voting-machine companies over Fox coverage.

One individual shareholder has already sued Fox Corp Chairman Rupert Murdoch, his son and Chief Executive Lachlan Murdoch, and three other directors, alleging they breached their duties to the company by allowing Fox to perpetuate Trump's false claims.

Two voting technology companies have sued Fox for defamation, seeking a combined $4.3 billion in damages. The media company faces trial on Tuesday in Delaware on Dominion Voting Systems' claim that Fox defamed it, with Dominion seeking $1.6 billion in damages.

Fox has argued that Dominion's case falls short of proving actual malice and that its damages request is "untethered from reality." If Dominion wins at trial, it will help shareholders argue the board should have put procedures in place to avoid airing defamatory claims that hurt Fox's credibility and finances.

Past shareholder derivative claims led to large settlements and added disclosure requirements.Investors suing over the 2020 election coverage could seek to create an independent panel to report to the board on news accuracy. The media company could face further costs if shareholders are successful in their claims, which could have significant implications for the company's reputation and financial position.

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