WILMINGTON, Del.—U.S. institutional investors have amended an earlier lawsuit against K. Rupert Murdoch, chairman and CEO of News Corp. and other News Corp. directors, claiming breaches of fiduciary oversight and corporate governance failures in the News of the World phone hacking scandal, claiming it caused losses of “hundreds of millions of dollars if not billions” in shareholder value.

The $814 million Central Laborers Pension Fund in Jacksonville, Ill.; the $310 million New Orleans City Employees' Retirement System and Amalgamated Bank in New York Monday amended an earlier suit filed March 17 against News Corp. directors, accusing the company of nepotism.

The amended suit, filed in Delaware Chancery Court in Wilmington, seeks to recover losses related to the News of the World scandal on behalf of the company, with any recovered money going directly to the company, said Jay Eisenhofer, managing director in New York of the law firm of Grant & Eisenhofer P.A., which is representing the plaintiffs.

Shareholders would benefit only indirectly by seeing any recovery go to the company, Mr. Eisenhofer said in an interview.

The amount of the losses hasn't been quantified, Mr. Eisenhofer said, but they appear to be in the “hundreds of millions of dollars if not billions.”

Losses include the potential loss from a potential U.K. regulatory rejection of News Corp.'s proposal to acquire full control of British Sky Broadcasting Group because of the scandal, Mr. Eisenhofer said.

“The board failed to exercise proper oversight over management of the company, and as a result shareholders have incurred huge losses that need to be compensated in some way,” Mr. Eisenhofer said.

The losses in regarded to the amended complaint occurred in the past week following revelation of the phone hacking at News of the World, a London-based newspaper run by News Corp. unit News International. The newspaper printed its final issue Sunday.

“These revelations show a culture run amuck within News Corp and a board that provides no effective review or oversight,” the suit said.

The original suit accused News Corp. directors of nepotism in overpaying for Shine Group Ltd., majority-owned by Mr. Murdoch's daughter, Elisabeth Murdoch.

Judge John W. Noble, vice chancellor of the court, is presiding over the suit.

Teri Everett, News senior vp-corporate affairs and communications, couldn't be reached for comment.

Barry B. Burr is a reporter for Pensions & Investments, a sister publication of Business Insurance.