A half-decade of litigation over reserves revisions, allegations of wash trading and charges of market manipulation against El Paso Corp. drew closer to closure Tuesday when a federal judge in Houston gave preliminary approval to a proposed settlement and set a final hearing date in the class action suit against the company.
U.S. District Judge Lynn Hughes set the final hearing for March 6 at U.S. District Court for the Southern District of Texas in the case of Oscar Wyatt versus El Paso.
In the previously announced proposed settlement (see Daily GPI, Aug. 3), El Paso said that it will pay about $48 million and its insurers will cover the remaining $242 million to settle multiple shareholder class action lawsuits and several other derivative lawsuits filed against the company between 2000 and 2004.
El Paso has said the settlements cover all shareholder class action litigation filed on behalf of purchasers of its securities between Feb. 22, 2000 and Feb. 17, 2004. Under the terms of the one agreement El Paso and its insurers will pay a total of $273 million to the plaintiffs. Its insurers will contribute $225 million of the total. Since El Paso previously reserved a substantial portion of its contribution in prior periods, the company said the settlement will have no material impact on its quarterly financial results. The parties intend to submit the settlement to the court within 45 days.
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