Williams Cos. on Tuesday announced an agreement in principle to pay $290 million to settle class-action lawsuits that were filed on behalf of purchasers of Williams’ stock between July 24, 2000 and July 22, 2002. The original lawsuit, filed in January 2002, alleged Williams made “material misrepresentations to the markets” to inflate its stock price (see Daily GPI, Jan. 30, 2002).
Williams and various other parties to the agreements did not admit to any liability by the company, its directors or officers. In addition, there were no findings of any violation of federal securities laws.
Subject to court approval, Williams said the settlement will be funded through a combination of insurance proceeds and cash on hand and will not have a material effect on the company’s liquidity position. Williams expects to pay $145-220 million in cash to fund the settlement, with the balance funded by its insurers. Williams said it would record a 2Q2006 pre-tax charge in the same range as its expected cash outlay. On an after-tax basis, the charge is estimated to be $98-148 million, or 16-24 cents/share. The charge will be nonrecurring.
Williams noted that it chose to settle this litigation as part of its efforts “to resolve legacy issues and move forward with its plans for profitable growth.”
Williams and the plaintiffs plan to file definitive settlement agreements in early August with the U.S. District Court for the Northern District of Oklahoma. The settlement would be funded within 30 days of the court’s preliminary approval of the agreement, which could occur as soon as mid-August.
The agreement is exclusive of the company’s litigation with plaintiffs representing a class of Williams Communications securities purchasers. That lawsuit is pending in U.S. District Court for the Northern District of Oklahoma.
©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |