Montreal-based flight simulation and training company CAE Inc. has agreed to settle a class-action lawsuit brought by shareholders against the company, its former chief executive and its former chief financial officer, with the defendants set to pay a total of $38.25 million.
Under the terms of the proposed agreement, CAE itself will contribute up to $5 million, while the remainder of the settlement amount will be covered by the company’s insurers.
Allegations Centred on Defence Contracts
The lawsuit alleged that CAE and its executives made misleading statements related to fixed-price contracts in the defence sector, claims that plaintiffs said had the effect of inflating the company’s share price. The defendants have denied all of the allegations against them.
Despite the denial, a statement issued by lawyers representing the plaintiffs said both sides agreed to settle the matter in order to avoid the delays and risks that come with continuing litigation and a potential trial.
Who Is Covered and What Comes Next
The class covered by the settlement includes investors who purchased CAE shares between Aug. 10, 2022, and May 21, 2024, and who still held some or all of those shares at any point between Feb. 14, 2024, and May 22, 2024.
The proposed settlement still requires court approval. A hearing on the matter has been scheduled for Dec. 22 before a Quebec court.
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