8-KOther EventsExhibits & Filings

CSX CORP 8-K Report, Corporate Update (Jan 9, 2009)

Filed January 9, 2009For Securities:CSX

Summary

CSX Corporation (CSX) filed an 8-K report on January 9, 2009, primarily to disclose the preliminary approval of a settlement in a shareholder derivative lawsuit. The lawsuit alleged "short-swing" profits by The Children's Investment Fund and 3G Capital Partners LP under Section 16(b) of the Securities Exchange Act of 1934. While CSX is a nominal party, the action was brought for its benefit. If the settlement receives final court approval, CSX will receive a total of $11 million ($10 million from The Children's Investment Fund and $1 million from 3G Capital Partners LP). This settlement resolves claims related to alleged violations of Section 16(b) by the defendants. A hearing to determine final approval is scheduled for March 5, 2009. Investors should note that this filing relates to a legal matter and the financial impact on CSX is the inflow of settlement funds.

Key Highlights

  • 1CSX Corporation filed an 8-K on January 9, 2009, reporting on a legal settlement.
  • 2The settlement resolves a shareholder derivative lawsuit concerning alleged "short-swing" profits under Section 16(b) of the Securities Exchange Act of 1934.
  • 3Defendants in the lawsuit are The Children’s Investment Fund and 3G Capital Partners LP.
  • 4CSX will receive $11 million in total settlement funds: $10 million from The Children’s Investment Fund and $1 million from 3G Capital Partners LP.
  • 5The settlement requires final court approval, with a hearing scheduled for March 5, 2009.
  • 6CSX is a nominal party in the lawsuit, with the action brought for its benefit.

Frequently Asked Questions

The main purpose of this 8-K filing is to report the preliminary approval of a settlement in a shareholder derivative lawsuit. This lawsuit alleged that certain parties made "short-swing" profits from trading CSX securities, which is a violation of Section 16(b) of the Securities Exchange Act of 1934.

CSX is expected to receive a total of $11 million from the settlement. This amount is comprised of $10 million from The Children’s Investment Fund and $1 million from 3G Capital Partners LP.

The settlement is not yet finalized. A federal court in New York will hold a hearing on March 5, 2009, at 10 a.m. to determine whether to grant final approval to the settlement.

The filing states that the alleged short-swing profits were realized by defendants The Children’s Investment Fund and 3G Capital Partners LP. CSX itself is a nominal party to the suit, as the action was brought for its benefit, and there is no indication in this filing that CSX's executives or directors were directly involved in the alleged profit-making activities.