It also took the heat off the state of Delaware, which has been plagued by criticism from technology and business leaders.
The second day of the eight-day trial in Delaware's Court of Chancery was about to start on Thursday when the legal team for the shareholder plaintiffs announced they had reached a deal to resolve the case.
The terms are still being hammered out, but the agreement ends a case that had the potential to fuel a trend of companies abandoning the state as their legal home.
Since last year, Elon Musk and other business leaders have attacked the state's courts, once the key reason companies incorporated in Delaware, for rulings that they say made it easier for shareholders to sue directors.
Musk encouraged companies to leave the state and in the past year, Trump Media & Technology, Roblox, and Simon Property were among the large public companies that reincorporated outside Delaware, a trend dubbed "Dexit."
Critics claim the state's courts are biased against company founders, an uncomfortable backdrop for the Meta case, whose 11 defendants included the billionaires Zuckerberg, Sheryl Sandberg, Marc Andreessen, Palantir Technologies, co-founder Peter Thiel and Reed Hastings, who co-founded.
A ruling that spared the defendants might have given the impression the court caved to pressure to let them off the hook, while one that favoured the plaintiffs could have led to further calls for companies to leave Delaware.
"It was going to be really awkward for the court," said Ann Lipton, a professor at Colorado Law School.
Meta, which owns Facebook, Instagram and WhatsApp, and lawyers for Meta investors and the defendants did not respond to requests for comment.
Meta shareholders alleged current and former officers and directors of Facebook were liable for failing to protect users' data.
The shareholder plaintiffs wanted the court to order the defendants to use their personal fortune to reimburse the company for the $8 billion in legal costs that Facebook had shelled out for violating user privacy, including a $5 billion fine paid to the Federal Trade Commission in 2019.
--Reuters--
