Announcement • Jun 20
Redwire Corporation Announces Proposed Settlement of Shareholder Derivative Actions
Redwire Corporation reported that on June 8, 2026, the United States District Court for the Middle District of Florida issued an order for preliminary approval of a proposed settlement of the claims asserted nominally on behalf of Redwire Corporation against the individual defendants named in the previously disclosed shareholder derivative actions entitled Yingling v. Cannito, et al., Case No. 1:22-cv-00684-MN (D. Del.), which was transferred from the United States District Court for the District of Delaware to the Court. The Court issued the Order in accordance with the Stipulation and Settlement Agreement entered in February 2026. As previously disclosed in the Company's Form 10-Q filed on May 7, 2026, the proposed settlement calls for the Company to adopt certain corporate governance reforms, as described further in the Stipulation, and pay attorneys' fees and expenses, which the Company expects to be funded by its insurance carrier, in exchange for a full and complete release and dismissal of the derivative actions. The Order set a final approval hearing for July 30, 2026. The principal terms, conditions, and other matters that are part of the Settlement, which is subject to approval by the Court. Within thirty (30) days of issuance of an order finally approving the Settlement by the Court, Redwire's Board shall adopt resolutions and amend committee Charters and or By-Laws to ensure adherence to the below corporate governance Reforms, which shall remain in effect for no less than 5 years from the date of adoption. The Company and Redwire's Board acknowledge that the Reforms confer a substantial benefit upon Redwire and its stockholders, and that the Derivative Action was a substantial factor in the Board's decision to implement and or maintain the Reforms. After negotiating and reaching full agreement on the Reforms, Plaintiff's Counsel and Redwire, acting by and through Counsel for Defendants, attempted to negotiate the attorneys' fees and expenses the Defendants' insurers would pay to Plaintiff's Counsel based on the substantial benefits conferred upon Redwire and its stockholders by the Settlement. Having reached an impasse, the parties agreed to mediate with Ms. Yoshida, an independent mediator with substantial experience mediating shareholder derivative actions. Ultimately, the parties reached agreement after accepting Ms. Yoshida's double-blind mediators' recommendation. In light of the substantial benefits conferred by Plaintiff's Counsel's efforts upon Redwire and its stockholders, Redwire, acting by and through its Board, has agreed that Defendants' insurers will pay nine hundred twelve thousand five hundred dollars and no cents ($912,500.00) in attorneys' fees and expenses, subject to Court approval (the Fee and Expense Amount). Plaintiff's Counsel has informed Defendants that they intend to apply to the Court for a service award to Plaintiff for the time and expenses Plaintiff expended in the prosecution of the Derivative Action of five thousand dollars ($5,000.00) to be payable from the Fee and Expense Amount awarded to Plaintiff's Counsel (the Service Award). The Settling Parties have determined that it is desirable and beneficial that the Derivative Action, and all of their disputes related thereto, be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation, and Plaintiff's Counsel believe that the Settlement is in the best interests of the Settling Parties, Redwire, and its shareholders. The Settling Defendants have denied and continue to deny each of the claims and contentions alleged by the Plaintiff in the Derivative Action. The Settling Defendants expressly have denied and continue to deny all allegations of wrongdoing or liability against them or any of them arising out of, based upon, or related to, any of the conduct, statements, acts or omissions alleged, or that could have been alleged in the Derivative Action. Without limiting the foregoing, the Settling Defendants have denied and continue to deny, among other things, that they breached their fiduciary duties or any other duty owed to Redwire or its shareholders, or that Plaintiff, Redwire, or its shareholders suffered any damage or were harmed as a result of any conduct alleged in the Derivative Action. The Settling Defendants have further asserted and continue to assert that at all relevant times, they acted in good faith and in a manner they reasonably believed to be in the best interests of Redwire and its shareholders. Nonetheless, the Settling Defendants also have taken into account the expense, uncertainty, and risks inherent in any litigation, especially in complex cases like the Derivative Action, and that the proposed Settlement would, among other things (a) bring to an end the expenses, burdens, and uncertainties associated with the continued litigation of the claims asserted in the Derivative Action (b) finally put to rest those claims and the underlying Derivative Action and (c) confer substantial benefits upon them, including further avoidance of disruption of their duties due to the pendency and defense of the Derivative Action. Therefore, the Settling Defendants have determined that it is desirable and beneficial that the Derivative Action, and all of the Settling Parties' disputes related thereto, be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation. Pursuant to the terms of the Settlement, the Stipulation (including all of the Exhibits hereto) shall in no event be construed as or deemed to be evidence of an admission or concession by the Settling Defendants with respect to any claim of fault, liability, wrongdoing, or damage whatsoever.
