Connect with us

Business

Duke Energy to Pay $146M to Settle Lawsuit Over CEO Ouster

Published

on

In this Feb. 14, 2012 file photo, Duke Energy employees work on power lines in Charlotte, N.C. Duke Energy Corp. reports quarterly earnings on Tuesday, Feb. 18, 2014. (AP Photo/Chuck Burton, File)

In this Feb. 14, 2012 file photo, Duke Energy employees work on power lines in Charlotte, N.C. Duke Energy Corp. reports quarterly earnings on Tuesday, Feb. 18, 2014. (AP Photo/Chuck Burton, File)

EMERY P. DALESIO, AP Business Writer

RALEIGH, N.C. (AP) — America’s largest electric company said Tuesday that it will pay nearly $150 million to settle claims that shareholders lost millions when it ousted its CEO hours in a surprise move after a long-anticipated buyout.

Duke Energy said its insurers and shareholders would pay $146 million — an “off the charts,” number for such a settlement, according to one expert — to end the lawsuit filed after the company’s July 2012 buyout of Raleigh-based Progress Energy Inc.

Duke set aside $26 million for the amount not covered by insurance and said consumers would not pay the cost.

The company denied the allegations, and it denies any wrongdoing as part of the settlement, which must be approved by a federal judge in Charlotte. Duke Energy spokesman David Scanzoni said the company had no comment beyond its prepared statement.

The decision to settle was probably driven by insurers who feared forking out more if the case went to trial, said Alan Palmiter, a business law professor at Wake Forest University.

For litigation prompted by a merger, “$146 million is off the charts,” said James Cox, a securities law specialist at Duke University. “It is probably an indication that the amount of money that was involved here, if it gone to trial, would have been a very significant recovery.”

Over the past six years, about nine out of 10 corporate mergers valued at more than $100 million have been challenged by shareholder lawsuits, according to an annual report by Cornerstone Research, which consults with attorneys in complex litigation. Fewer than 10 percent end up with any payments for shareholders, the report said.

Few shareholder lawsuits in recent years have seen settlements in the ballpark of Duke’s, though Freeport-McMoRan Inc. settled for $137 million in January over a pair of 2013 acquisitions.

The lawsuit against Duke said the company violated federal securities laws by misrepresenting the terms of the buyout to shareholders.

It claimed shareholders suffered when Duke directors decided hours after the merger closed to fire new chief executive Bill Johnson, who was supposed to head the combined company after holding the same post at Progress Energy. Five months later, Johnson became president and chief executive officer of the Tennessee Valley Authority, the nation’s largest public utility.

Johnson’s ouster was “the most blatant example of corporate deceit that I have witnessed during a long career on Wall Street,” John Mullin III, the former lead director of Progress Energy, said at the time.

Thousands of individual and institutional investors are covered by the class-action settlement, but exact numbers are not available, said Scott Zdrazil, first vice president of Amalgamated Bank, one of the lead plaintiffs in the case. A unit of the Service Employees International Union owns a majority of the New York bank.

Investors covered by the settlement include those who purchased Duke Energy shares in the three weeks leading up to the merger closing or in the week after the deal finalized, including former Progress Energy shareholders who acquired shares in the combined company after the merger.

North Carolina regulators and the state’s attorney general launched separate investigations into whether the utility misled officials who approved the merger. Subsequent hearings into what led Duke Energy’s board to dump Johnson forced the company to pay another $30 million for ratepayers and low-income assistance and dictated the replacement of several other executives and board members.

Duke Energy has more than 7 million customers in the Carolinas, Ohio, Kentucky, Indiana and Florida.

___

Emery P. Dalesio can be reached at http://twitter.com/emerydalesio

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Activism

Oakland Post: Week of November 13 – 19, 2024

The printed Weekly Edition of the Oakland Post: Week of November 13 – 19, 2024

Published

on

To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.

Continue Reading

Activism

LIVE! — TOWN HALL ON RACISM AND ITS IMPACT — THURS. 11.14.24 5PM PST

Join us for a LIVE Virtual Town Hall on the Impact of Racism hosted by Post News Group Journalist Carla Thomas and featuring Oakland, CA NAACP President Cynthia Adams & other Special Guests.
Thursday, November 14, 2024, 5 p.m. – 6:30 p.m. PST

Published

on

Join us for a LIVE Virtual Town Hall on the Impact of Racism hosted by Post News Group Journalist Carla Thomas and featuring Oakland, CA NAACP President Cynthia Adams & other Special Guests.
Thursday, November 14, 2024
5 p.m. – 6:30 p.m. PST

Discussion Topics:
• Since the pandemic, what battles have the NAACP fought nationally, and how have they impacted us locally?
• What trends are you seeing concerning Racism? Is it more covert or overt?
• What are the top 5 issues resulting from racism in our communities?
• How do racial and other types of discrimination impact local communities?
• What are the most effective ways our community can combat racism and hate?

Your questions and comments will be shared LIVE with the moderators and viewers during the broadcast.

STREAMED LIVE!
FACEBOOK: facebook.com/PostNewsGroup
YOUTUBE: youtube.com/blackpressusatv
X: twitter.com/blackpressusa

Continue Reading

Activism

Oakland Post: Week of November 6 – 12, 2024

The printed Weekly Edition of the Oakland Post: Week of November 6 – 12, 2024

Published

on

To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.

Continue Reading

Subscribe to receive news and updates from the Oakland Post

* indicates required

CHECK OUT THE LATEST ISSUE OF THE OAKLAND POST

ADVERTISEMENT

WORK FROM HOME

Home-based business with potential monthly income of $10K+ per month. A proven training system and website provided to maximize business effectiveness. Perfect job to earn side and primary income. Contact Lynne for more details: Lynne4npusa@gmail.com 800-334-0540

Facebook

Trending

Copyright ©2021 Post News Group, Inc. All Rights Reserved.