Westar Energy Settles Shareholder Suits
Westar Energy has reached an agreement in principle to settle pending shareholder securities class action and shareholder derivative lawsuits related to actions that occurred under former management.
Under the terms of the settlement, the company will make a payment of $1.25 million and the company’s insurance carriers will make a payment of $31.25 million.
“This is one more matter dealing with actions under former management that we are relieved to have closed,” Jim Ludwig, vice president, public affairs, said.
The settlement amount, less legal fees for the plaintiffs’ counsel in amounts to be determined by the court, will be paid to the plaintiffs in the securities class action lawsuit. The settlement is subject to various conditions, including the execution of definitive agreements and approval of the United States District Court in Topeka, Kan. Also as part of the settlement, the company has agreed not to seek reimbursement from its insurance carriers for past or future legal costs related to these lawsuits or the criminal proceedings against certain of the company’s former executives. The settlement does not prevent the company from seeking reimbursement from those former executives of legal expenses advanced to them or on their behalf following the conclusion of relevant proceedings.
Both the securities class action lawsuit and the shareholder derivative lawsuit were related to the matters covered by the report of the Special Committee of the Board of Directors released in May 2003.
The settlement does not include an admission of liability by the company or any of the individual defendants. The company entered into the settlement agreement to eliminate uncertainties related to these lawsuits and the burden and expense of further protracted litigation. The settlement does not include the pending class action lawsuit related to the company’s 401(k) savings plan.
This settlement does not prevent the company from pursuing its claims against certain of its former executives in arbitration and has no impact on the criminal prosecution of them by the United States Attorney’s Office.
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