Virgin Galactic Holdings Inc. (NYSE: SPCE) announced that a federal court granted preliminary approval for a $2.75 million settlement to resolve shareholder derivative lawsuits filed against the company and its officers and directors.

The U.S. District Court for the Eastern District of New York approved the settlement on May 19, 2026, according to a company statement. The agreement, executed on April 23, 2026, resolves claims in two consolidated derivative actions that alleged breaches of fiduciary duty between July 2019 and October 2021.

Under the settlement terms, Virgin Galactic's insurers will pay $2.75 million to the company, with Virgin Galactic retaining half of that amount. The company will also implement corporate governance reforms for three years and pay $1.375 million in attorneys' fees to plaintiffs' counsel, subject to court approval.

The lawsuits alleged that company executives made misleading statements about operations while knowing about spaceship stabilizer destruction in 2019, Federal Aviation Administration violations that grounded flights in 2021, and undisclosed delays in commercial launches. Plaintiffs claimed executives sold stock at inflated prices while possessing material nonpublic information.

Virgin Galactic's current and former officers and directors have denied all claims and allegations of wrongdoing in the actions.

A final settlement hearing is scheduled for July 28, 2026, at 11:00 a.m. before Judge Orelia E. Merchant. Once the court issues final approval, all related claims are expected to be dismissed or declared moot.

The settlement information is based on a press release statement from Virgin Galactic.