Truck maker Navistar has moved nearer the end of the road in a legalfight over whether it had misled investors about its chances to build a newtruck engine both in line with federal emissions requirements and superior tothose made by competitors, as a group of shareholders have asked a federaljudge to sign off on a $9.1 million settlement deal.

On Sept. 28, attorneys for the shareholders filed documentsin Chicago federal court in support of its assertions that the deal, whichcould provide more than $2 million for plaintiffs’ attorneys, is fair to both Navistar and the potentially “hundreds or thousands” of shareholders who couldreceive a cut of the settlement.

The case had landed in Chicago federal court in 2013,shortly after the stock price for the west suburban Lisle-based company had plunged in the wake of news it wouldbe shifting gears in the race to develop a new truck engine designed to meetmore stringent engine emissions standards promulgated by the U.S. EnvironmentalProtection Agency.

For years, according to the lawsuit, Navistar had promisedinvestors it would roll out a new truck engine, referred to as the “AdvancedExhaust Gas Recirculation (EGR)” model, which the lawsuit said would haverepresented “an engineering milestone.”

The assertions, the complaint said, pushed Navistar’s stockprice to as much as $70 per share in 2011.

However, the company in 2012 then backtracked, formallyannouncing its efforts to build the Advanced EGR engine had failed, and itwould adopt the same technology used by its competitors to ensure its trucksmet the emissions requirements. The news came after the company had announcedlosses in the preceding quarter.

The complaint alleged the news caused Navistar’s stock priceto sink, inflicting losses on shareholders.

The putative class action lawsuit was then filed in federalcourt by a group of pension funds, demanding Navistar be made to pay theshareholders back. In later court documents, the plaintiffs pegged shareholders’total losses at $82 million to $133 million.

However, in July 2015, U.S. District Judge Sara L. Ellisdismissed allegations based on all but two of the alleged misleading statementsattributed to Navistar and its executives.

Settlement negotiations later followed, and in May 2016, thecourt granted preliminary approval to the $9.1 million settlement agreementbetween the pension funds and Navistar.

In late September, the plaintiffs asked the court to grantfinal approval to the settlement agreement, and, in a separate motion, askedthe judge to also allow plaintiffs’ attorneys to collect 22 percent of thesettlement amount – or about $2 million – in fees.

The plaintiffs said none of the plaintiff class membersnotified of the settlement have objected to the settlement, as of Sept. 28. Thedeadline for objections is set for Oct 7.

And the plaintiffs said the settlement was the best theycould hope for, given the current weakness of their case, in light of the judge’sdismissal of many of their allegations. They noted the plaintiffs faced therisk of “total dismissal” if they continued to press the case, as well as “zerodamages,” particularly if the case were to advance to trial.

“Defendants would argue … Navistar was a pioneering company,pursuing the development of technology that had not yet been proven but wasrealistically achievable and in the best interests of the Company,” theplaintiffs wrote in a memorandum in support of final approval of thesettlement.

They also said the current state of the litigation wouldmake it difficult for them to prove the “stock price was inflated.”

In light of such challenges, they said the $9.1 millionsettlement, with $2 million for plaintiffs attorneys, represented the bestpossible outcome for class members and the best chance to avoid further costlylitigation for both sides.

Navistar is represented in the action by the firm of Latham& Watkins, of Chicago.