Business
Duke Energy to Pay $146M to Settle Lawsuit Over CEO Ouster
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.
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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.
Activism
‘Jim Crow Was and Remains Real in Alameda County (and) It Is What We Are Challenging and Trying to Fix Every Day,’ Says D.A. Pamela Price
“The legacy of Jim Crow is not just a legacy in Alameda County. It’s real. It is what is happening and how (the system is) operating, and that is what we are challenging and trying to fix every day,” said D.A. Price, speaking to the Oakland Post by telephone for over an hour last Saturday. “Racial disparities in this county have never been effectively eliminated, and we are applying and training our lawyers on the (state’s) Racial Justice Act, and we’re implementing it in Alameda County every day,” she said.
By Ken Epstein
Part One
Alameda County District Attorney Pamela Price gave an exclusive in-depth interview, speaking with the Oakland Post about the continuing legacy of Jim Crow injustice that she is working to overturn and her major achievements, including:
- restoring and expanding services for victims of crime,
- finding funding for an alternative to incarceration and/or prosecution for substance use and mental health-related misdemeanors and
- aggressively prosecuting corporations for toxic pollution and consumer violations.
“The legacy of Jim Crow is not just a legacy in Alameda County. It’s real. It is what is happening and how (the system is) operating, and that is what we are challenging and trying to fix every day,” said D.A. Price, speaking to the Oakland Post by telephone for over an hour last Saturday.
“Racial disparities in this county have never been effectively eliminated, and we are applying and training our lawyers on the (state’s) Racial Justice Act, and we’re implementing it in Alameda County every day,” she said.
Passed by the State Legislature, this law “is an extremely helpful tool for us to address the racial disparities that continue to exist in our system,” she said.
(The law addresses) “the racial disparities that we find in our juvenile justice system, where 86% of all felony juvenile arrests in the county are Black or Brown children.
“We trained the entire workforce on the Racial Justice Act. We are creating a data system that will allow us to look at the trends and to clearly identify where racism has infected the process. We know that where law enforcement is still engaging in racial profiling and unfair targeting and arresting, we’re trying to make sure we’re catching that.”
Many people do not know much about the magnitude of Alameda County District Attorney’s job. Her office is a sprawling organization with 10 offices serving 1.6 million people living in 14 cities and six unincorporated areas, with a budget this year of about $104 million.
Asked about her major achievements since she took office last year, she is especially proud of the expanded and renewed victims’ services division in the DA’s Office, she said.
“We have expanded and reorganized the entire claims division so that we are now expediting as much as possible the benefits that victims are entitled to. Under my predecessor, they were having to wait anywhere, sometimes as long as a year, to 400 days to get benefits.
“Claims had been denied that should not have been denied. So, we’re helping people file appeals on claims that were denied under her tenure,” D.A. Price said.
“Under my predecessor, (the victims’ service office) was staffed by people who were not trained to provide trauma-informed services to victims, and yet they were the only people that the victims were in contact with. We immediately stopped that practice,” she continued.
“We had to expand the advocate workforce to include people who speak Hmong, the indigenous language of so many people in this county who are victims of crime.”
More African Americans advocates were hired because they represent the largest percentage of crime victims and we hired a transgender advocate and advocates who speak Cantonese and Mandarin. “The predominantly Chinese American community in Oakland was not being served by advocates who speak the language,” said D Price
“We reduced the lag time from the delivery of benefits to victims from 300 to 400 days down to less than 60 days.”
She increased victim advocacy by 38%, providing critical support to over 22,500 victims, a key component of community safety.
Other major achievements:
- She recently filed 12 felony charges against a man accused of multiple armed robberies, demonstrating her seriousness about prosecuting violent crimes
- In October, a jury delivered a guilty verdict in the double murder trial of former Alameda County Sheriff’s Deputy Devin Williams, showing DA Price’s commitment to holding law enforcement accountable.
- She recently charged a man and woman in unincorporated San Leandro with murder, felony unlawful firearm activity, and felony carrying a loaded firearm in public.
- A. Price’s office was awarded a $6 million grant by the state for its CARES Navigation Center diversion program. In partnership with the UnCuffed Project at a Seventh Day Adventist Church in Oakland, the program provides resources and referrals for services to residents as an alternative to incarceration and/or prosecution for substance use and mental health-related misdemeanors.
“This is the largest grant investment in the history of the Alameda County District Attorney’s Office,” said D.A. Price.
She explained that the program now has a mobile unit. “We have washers and dryers. We have a living room. We have a television. It’s a place where people can decompress, get themselves stabilized,” she said.
The project has “the ability to refer people to housing, to more long-term mental health services, to social services, and to assist them in other ways.”
- Her office joined in a $49 million statewide settlement with Kaiser Health Plan and Hospitals, resolving allegations that the healthcare provider unlawfully disposed of hazardous waste, medical waste, and protected health information. The settlement, which involved the state and a half dozen counties, resulted in Alameda County receiving $7 million for its residents.
- DA Price charged a former trucking company employee for embezzling over $4.3 million, showing her commitment to tackling white-collar crime.
- For the first time, Alameda County won a criminal grand jury indictment of a major corporation with two corporate officers that have been sources of pollution. “They had a record of settlements and pollution in this community, and they had a fire that constituted a grave danger,” she said.
Attorney Walter Riley contributed to this article.
Activism
Oakland Post: Week of October 30 – November 5, 2024
The printed Weekly Edition of the Oakland Post: Week of October 30 – November 5, 2024
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Business
Chevron Reports Progress in Flaring, Emissions at Community Town Hall
At the first in a series of community town halls on Oct. 16, Chevron Richmond reported a reduction in year-over-year flaring incidents, both in number and duration, and detailed new technologies and processes that will further drive down emissions and heighten community awareness about operations. Chevron employees also answered questions from the community and listened to concerns at the town hall, which was hosted by Ceres Policy Research and held at CoBiz in downtown Richmond.
By Mike Aldax
The Richmond Standard
At the first in a series of community town halls on Oct. 16, Chevron Richmond reported a reduction in year-over-year flaring incidents, both in number and duration, and detailed new technologies and processes that will further drive down emissions and heighten community awareness about operations.
Chevron employees also answered questions from the community and listened to concerns at the town hall, which was hosted by Ceres Policy Research and held at CoBiz in downtown Richmond.
Similar town halls will be held twice per year over the next five years as part of a settlement agreement with the Bay Area Air Quality Management District (BAAQMD).
The goal is to increase transparency about flaring and increase opportunities for the community to get answers to their questions about potential impacts to the community.
A key output is the creation of a Community Action Plan, or CAP. The CAP aims to create a two-way dialogue between Chevron and neighbors around flaring and environmental compliance.
“Chevron’s focus in this process is one of learning and engagement,” said Brian Hubinger, public affairs manager at Chevron Richmond. “We felt the most efficient way was to bring together a broad selection of community members rather than just think about what it would take to comply with the settlement agreement.”
The first town hall drew a few dozen members of the community, including Chevron employees, representatives of fence-line neighborhoods and members of local environmental organizations.
During the event, Chevron employees reported that 19 BAAQMD-reportable flaring incidents occurred at the refinery from October 2022 to September 2023 with a total duration of 270 hours. During the same period this year, 18 flaring incidents occurred with a total duration of 159 hours, marking a 41% decrease in duration.
Further gains are expected with the implementation of Flare IQ, set to be installed this year and next on all of the refinery’s flaring systems. Flare IQ is described as a supercomputer with an algorithm that gathers data from operations and enables employees to address potential issues before they occur.
Chevron also reported a 40% decrease in particulate matter emissions since the completion of the refinery modernization project in 2018.
In addition, flare gas volume related to Chevron’s new hydrogen plant project, built as part of the modernization project, decreased by 85% since 2019. The hydrogen plant has also reportedly made the refinery 20% more efficient.
“We’re really proud about that,” said Kris Battleson, manager of health, safety and environment at Chevon Richmond.
Neighborhood council leaders joined the president of the local NAACP in lauding the effort toward transparency and accountability. Among them was Vernon Whitmore, president of the Sante Fe Neighborhood Council and member of the 15-person CAP committee.
“The way we were able to talk openly and freely with Chevron – honestly, bluntly and frankly – while developing this program was very good,” Whitmore said. “And it was something that was well-needed at this time.”
Still, residents are skeptical, including Kathleen Sullivan, a longtime community advocate who also serves on the CAP committee. But she added, “you can’t complain about something and not be involved in the solution.”
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