Northrop Settles Lawsuit Over Merger

Northrop Grumman Corp. said it agreed to pay $6 million to settle a class-action lawsuit brought in 1994 on behalf of Grumman employees who owned Grumman stock at the time of the company’s merger with Century City-based Northrop. The lawsuit accused trustees of Grumman’s employee investment plan of breaching their fiduciary duty by approving the merger without proper consultation with the employee shareholders. At the time of the merger, there were about 17,000 Grumman employees holding company stock through the investment plan, Northrop said. Northrop Grumman and the individual defendants continue to deny wrongdoing. The settlement must be approved by the U.S. District Court for the Eastern District of New York. Northrop Grumman stock fell 38 cents to close at $72.88 on the NYSE.