THE WALL STREET JOURNAL: Shell to Settle Lawsuit in U.S. Over Pensions: “LONDON -- Royal Dutch/Shell Group said it agreed to pay $90 million to settle a U.S. lawsuit brought by pension holders following the company's oil-and-gas-reserves write-down scandal last year.”: Wednesday 13 July 2005
By BENOÎT FAUCON
DOW JONES NEWSWIRES
July 13, 2005 2:55 a.m.; Page B2
LONDON -- Royal Dutch/Shell Group said it agreed to pay $90 million to settle a U.S. lawsuit brought by pension holders following the company's oil-and-gas-reserves write-down scandal last year.
The proposed pact comes two weeks after U.S. federal prosecutors decided not to file a criminal charge against the Anglo-Dutch company. Prosecutors had investigated the reserves overstatements and cited good cooperation by the oil giant.
In 2004, Shell acknowledged it had misstated oil reserves, a widely followed indicator of future profits, for 2002 and other years. The scandal cost Shell almost $150 million in fines imposed by U.S. and British regulators, and led to the ousting of three senior executives.
As part of the U.S. pensions-related lawsuit, Shell said yesterday it had entered a preliminary agreement with the plaintiffs for a $90 million settlement, which still requires court approval. About $25 million of the settlement will be covered by insurance, Shell said in a statement.
Shell also said it agreed to pay as much as $1 million toward the cost of the expenses of the plaintiffs' counsel, Milberg Weiss Bershad & Schulman, one of the U.S.'s most aggressive class-action law firms. The expenses also include the costs of providing notice of the settlement to class members.
The lawsuit seeking class-action status was filed by current and former employees who claimed the value of their pension benefits had been hurt by a drop in the share price, which fell as much as 15% in the two months that followed the restatements in January 2004.
As part of the settlement agreement, Shell said it agreed to adopt new procedures for monitoring and training individuals appointed to fiduciary positions in savings plans that are subject to the U.S. Employee Retirement Income Security Act of 1974, or Erisa.
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