Madison Square Garden Entertainment’s board has agreed to settle for $85 million a shareholder suit accusing it of failing to protect stockholders’ interests when it merged with MSG Networks.

The deal will be covered by the board’s insurers, according to a securities form filed on Wednesday. There was no admission of wrongdoing.

The suit filed in 2021 accused the Dolan family of engineering the merger, “overpaying for MSGN and diluting MSGE’s public stockholders,” to further their own interests and enhance their voting stake. Shareholders alleged that the deal was meant to fund, among other projects, the $1.9 billion MSG Sphere project in Las Vegas, which is set to open this year. They also claimed that the deal was consummated at an unfair price because it took advantage of the pandemic’s impact on MSGE’s business, which primarily consists of hosting live events. Three suits were filed in Delaware Chancery court and later consolidated.

The merger was completed in March 2021 in an all-stock transaction.

The Dolan family controls over 70 percent of the voting power of MSGE. The company’s board, led by chief executive James Dolan, violated their fiduciary duties when they leveraged their control of both companies to complete a merger that led to MSGE’s stock falling by nearly $10 a share after it was announced, according to the complaint, which was filed a month after a Delaware judge blocked efforts from both companies’ investors to block a vote to approve the deal. In that case, Chancellor Kathaleen McCormick found that the Dolan family didn’t violate a state law barring a shareholder with a voting stake of at least 15 percent from pursuing an acquisition within three years of when the equity was acquired.

The deal has been agreed to by both sides and has been documented in a term sheet. A formal stipulation of settlement hasn’t been filed.

“The parties to the Litigation reached an agreement in principle to settle the Litigation on the terms and conditions set forth in a binding term sheet, which will be incorporated into a long-form settlement agreement,” states the securities filing. “The Term Sheet provides for, among other things, the final dismissal of the Litigation in exchange for a settlement payment to MSG Entertainment of $85 million, subject to customary reduction for attorneys’ fees and expenses, in an amount to be determined by the Court.”

In a statement, a MSGE spokesperson said “As described in the 8-K, this is a settlement that involves payment to the company of $85M from the insurers, and the board agreed to settle these claims without admitting any liability.”

Joel Fleming, representing the shareholders, declined to comment.