(CN) – SeaWorld agreed to pay $65 million to settle claims by shareholders over comments made by the park’s executives who said the documentary “Blackfish” had no effect on park attendance.
The 2013 documentary, which took a critical look at SeaWorld’s captivity practices, took a bite out of ticket sales and prompted the class action.
The parties announced the proposed settlement Tuesday shortly before a trial was set to take place in California federal court. A federal judge must approve the deal.
“Blackfish” delved into the life of a captive killer whale that killed a SeaWorld trainer in 2010. The film criticized the park’s treatment of orca whales and their placement in small enclosures.
A month after the film’s theatrical release, SeaWorld reported that attendance in the second quarter dropped from the prior year. Executives at the time told the press they could “attribute no attendance impact at all to the movie.”
According to a $5 million settlement with the U.S. Securities and Exchange Commission in September 2018, SeaWorld’s stock price fell 33% as a result of the documentary, causing a loss of nearly $830 million in shareholder value. The SEC settled with the park and ex-CEO James Atchison, who agreed to pay $1 million of the $5 million fine, including disgorgement of $730,860 in SeaWorld stock he sold at inflated prices during the relevant period.
According to Tuesday’s proposed settlement, the $65 million “represents a substantial percentage of the potential recoverable damages” if the case went to trial.
“Damages in a securities fraud case are typically presented to the fact finder on a per share basis and are a measure of the artificial inflation in a company’s stock price caused by the alleged fraud, after controlling for industry and market factors,” the proposed settlement, signed by class attorney Joshua D’Ancona of Kessler Topaz on behalf of a passel of other attorneys and firms, says.
The class estimated damages at $7.52 per share according to the notice of the proposed settlement.
An email and phone call to SeaWorld were not immediately answered for comment.