Business

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

Published

10 years ago

March 10, 2015

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

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Oakland Post: Week of December 25 – 31, 2024

The printed Weekly Edition of the Oakland Post: Week of December 25 – 31, 2024

Published

23 hours ago

December 26, 2024

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Bay Area

Glydways Breaking Ground on 14-Acre Demonstration Facility at Hilltop Mall

Glydways has been testing its technology at CCTA’s GoMentum Station in Concord for several years. The company plans to install an ambitious 28-mile Autonomous Transit Network in East Contra Costa County. The new Richmond facility will be strategically positioned near that project, according to Glydways.

Published

3 days ago

December 24, 2024

Oakland Post

Image of planned Richmond facility courtesy of Glydways.

The Richmond Standard

Glydways, developer of microtransit systems using autonomous, small-scale vehicles, is breaking ground on a 14-acre Development and Demonstration Facility at the former Hilltop Mall property in Richmond, the Contra Costa Transportation Authority (CCTA) reported on social media.

Glydways, which released a statement announcing the project Monday, is using the site while the mall property undergoes a larger redevelopment.

“In the interim, Glydways will use a portion of the property to showcase its technology and conduct safety and reliability testing,” the company said.

The new Richmond development hub will include “over a mile of dedicated test track, enabling Glydways to refine its solutions in a controlled environment while simulating real-world conditions,” the company said.

Visitors to the facility will be able to experience on-demand travel, explore the control center and visit a showroom featuring virtual reality demonstrations of Glydways projects worldwide.

The hub will also house a 13,000-square-foot maintenance and storage facility to service the growing fleet of Glydcars.

“With this new facility [at the former Hilltop Mall property], we’re giving the public a glimpse of the future, where people can experience ultra-quiet, on-demand transit—just like hailing a rideshare, but with the reliability and affordability of public transit,” said Tim Haile, executive director of CCTA.

Janet Galvez, vice president and investment officer at Prologis, owner of the Hilltop Mall property, said her company is “thrilled” to provide space for Glydways and is continuing to work with the city on future redevelopment plans for the broader mall property.

Richmond City Manager Shasa Curl added that Glydways’ presence “will not only help test new transit solutions but also activate the former Mall site while preparation and finalization of the Hilltop Horizon Specific Plan is underway.

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2024 in Review: 7 Questions for Outgoing Stockton Mayor Kevin Lincoln

Lincoln’s decision to run for mayor stemmed from his love of people and his desire to serve his city. He prioritized resolving issues, including homelessness and public safety, among others. Lincoln, a Republican, will transition out of his role as mayor on Dec. 31, after an unsuccessful campaign to represent the 9th Congressional District.

Published

3 days ago

December 24, 2024

Oakland Post

Stockton Mayor Kevin Lincoln. Photo provided by California Black Media.

Kevin Lincoln, outgoing mayor of Stockton, CA, captured during his tenure as a leader dedicated to the city’s progress and community engagement.

By Edward Henderson
California Black Media

Born in Stockton, Mayor Kevin Lincoln says his Army upbringing inspired him to serve others.

Lincoln joined the United States Marine Corps in 2001 and was later assigned to Marine One, serving during President George W. Bush’s administration.

Following his military service, Lincoln worked for one of the nation’s top private security companies for eight years in Silicon Valley. In 2013, he resigned from his corporate position to give back to his community in Stockton through full-time ministry at a local church.

Lincoln’s decision to run for mayor stemmed from his love of people and his desire to serve his city. He prioritized resolving issues, including homelessness and public safety, among others.

Lincoln, a Republican, will transition out of his role as mayor on Dec. 31, after an unsuccessful campaign to represent the 9^th Congressional District.

Recently, California Black Media (CBM) spoke with Lincoln. He reflected on his accomplishments this year and his goals moving forward.

Responses have been edited for length and clarity.

Looking back at 2024, what stands out to you as your most important achievement and why? 

What I prioritize for our city council is our youth. They are the future — not only our city, but this region as a whole.

We were able to invest over $6 million in youth programming and workforce development, and partner with 14 different community-based organizations. We were able to employ over 600 young people through the city of Stockton. We launched even our first ever summer jobs program for the city of Stockton.

How did your leadership and investments contribute to improving the lives of Black Californians? 

It’s about giving people a seat at the table, and not necessarily waiting for people to come to me, but me going to the community, making myself accessible, meeting our community at the point of their need, where they’re at.

What frustrated you the most over the last year?

It’s politics. Because unfortunately, there’s politics in everything. And I say politics impedes progress. You can have a policy, a solution that may not necessarily be 100% perfect. But it’s a good solution for everybody. But because we allow politics to get in the way based off our personal ideologies, oftentimes we can miss opportunities to make an impact for the benefit of the whole.

What inspired you the most over the last year?

My biggest inspiration has been the community and our ability to work together. What’s unique about Stockton, one in 20 jobs are nonprofit jobs in the city of Stockton and even San Joaquin County.

What is one lesson you learned in 2024 that will inform your decision-making next year?

To stay focused. In politics, there’s a lot of opportunity for distractions. There are a lot of influences from the outside — good, bad and indifferent. It’s important to stay focused, have a clear vision, and be committed to that vision.

In one word, what is the biggest challenge Black Californians face?

Economics. When the economy is not healthy, when we’re not thriving, we’re limited. Opportunities are limited.

What is the goal you want to achieve most in 2025?

I just want to continue to be a servant leader and serve our community in whatever capacity I am in.