NEW YORK, Nov 26 (Reuters) - General Electric ( GE ),

doing business as GE Aerospace, will pay $362.5 million in cash

to resolve a long-running shareholder lawsuit accusing it of

hiding risks at its power business, court papers show.

A preliminary settlement of the proposed class action was

filed on Monday night in federal court in Manhattan.

It requires approval by U.S. District Judge Jesse Furman,

who in September 2023 refused to dismiss the case while warning

a trial would be "expensive and risky" for both sides.

Filed in 2017, the lawsuit concerned GE's reliance on

factoring, or the sale of future revenue for cash, in connection

with long-term service agreements at its GE Power unit.

Shareholders led by two pension funds -- the Cleveland

Bakers and Teamsters Pension Fund and Sweden's Sjunde AP-Fonden

-- said the power unit grew increasingly reliant on factoring to

boost revenue, while sacrificing future cash flows.

They said the unit did not have enough contracts to factor,

and GE's stock price fell after the company "blindsided"

investors with billions of dollars of unexpected exposure.

The case covered alleged misleading disclosures between

February 2016 and January 2018 by GE and former Chief Financial

Officer Jeffrey Bornstein. Both denied wrongdoing in agreeing to

settle.

Lawyers for the plaintiffs did not immediately respond to

requests for comment on Tuesday. GE and defense lawyers did not

immediately respond to similar requests. The plaintiffs' lawyers

may seek up to 25% of the settlement fund in fees.

In January 2021, Furman dismissed separate fraud claims

concerning a GE insurance portfolio, and dismissed former Chief

Executive Jeffrey Immelt as a defendant.

A month earlier, GE paid $200 million to settle U.S.

Securities and Exchange Commission charges it misled investors

about its power and insurance businesses.

GE, based in Evendale, Ohio, set aside funds for Monday's

settlement in the third quarter.

It spun off its healthcare business GE Healthcare ( GEHC )

in January 2023 and its renewable energy and power business GE

Vernova ( GEV ) in April 2024.

The case is Sjunde AP Fonden et al v General Electric Co ( GE ) et

al, U.S. District Court, Southern District of New York, No.

17-08457.