Shareholders that sued Ryanair get 13c a share ‘at most’ in US settlement

The airline’s shares in the US are currently trading at more than $106 each.

The lawyers that pursued the case against Ryanair and its group chief executive, Michael O’Leary, are set to take hundreds of thousands of dollars in fees from the settlement amount.

Ryanair has agreed to pay $5m (€4.6m) to settle the near five-year-old legal action in the United States that was taken by a pension fund in 2018 against the carrier and Mr O’Leary after the airline recognised trade unions in 2017.

The City of Birmingham Firemen’s and Policemen’s Supplemental Pension System, a fund based in Alabama, sued Ryanair and Mr O’Leary in 2018 as the lead in a class action, claiming they had made false and misleading statements to shareholders regarding employment issues at the airline – allegations that were strenuously denied.

The pension fund’s lawyers alleged in the action against the airline and its boss that increased costs as a result of unionisation at Ryanair, as well as lower profits, wiped out “millions” in shareholder value.

Those claims were denied.

The airline said the case has been settled with the Alabama-based pension fund following mediation.

Ryanair has insisted that there “was no lawful basis for this claim” made by the fund.

Lawyers for the pension fund are set to take a big chunk of the settlement in fees, subject to court approval.

“Lead counsel have not received any payment for their services in pursuing the claims against the defendants on behalf of the class since the action was commenced in 2018, nor have they been paid to this point for any of their litigation expenses,” a proposed settlement notice of the class action filed in court notes.

Lead counsel have not received any payment for their services in pursuing the claims

It adds that at a settlement hearing with the court, the lead counsel will ask the court to award them “up to 18pc of the settlement amount and litigation expenses they have incurred in pursuing the action in an amount not to exceed $600,000, plus interest”.

The document also confirms the amount likely to be paid to any eligible person or entities as part of the action.

“Based on the plan of allocation being proposed, the estimated average recovery for Ryanair ADSs in the class is $0.13 per share before deduction of court-approved fees and expenses,” it adds.

The estimated average recovery for Ryanair ADSs in the class is $0.13 per share

It stresses the actual amount paid to each eligible person will also depend on the number of claims filed and how many shares they owned.

Individuals or entities who purchased or acquired Ryanair ADS shares between May 30, 2017 and September 28, 2018 are eligible to make a claim from the settlement fund.

Ryanair said the $5m that it has agreed to pay to settle the case is “considerably less” than the legal costs that would have been incurred had the case gone to trial.