What is Section 16(b) and why is it relevant to this filing?

Section 16(b) of the Securities Exchange Act of 1934 deals with the recovery of 'short-swing' profits. These are profits realized by corporate insiders (like directors or major shareholders) from buying and selling the company's stock within a six-month period. The law is designed to prevent insiders from profiting unfairly from their knowledge of company information. This filing concerns a settlement where such profits were alleged to have been made by specific funds.

Who are the parties involved in this settlement?

The settlement involves CSX Corporation as the company whose securities were traded, Deborah Donoghue, a shareholder who brought the lawsuit, and the defendants, The Children's Investment Fund and 3G Capital Partners LP, who were alleged to have made short-swing profits.

What are the financial implications for CSX from this settlement?

CSX will receive a total of $11 million from The Children's Investment Fund and 3G Capital Partners LP. After deducting $550,000 for attorney's fees and expenses, CSX is expected to net $10.45 million from this settlement. This infusion of cash provides a positive financial outcome related to the resolution of this legal matter.

When will CSX receive the settlement funds?

CSX is expected to receive the settlement funds, totaling $11 million less legal costs, no later than the tenth business day after the court's order approving the settlement becomes final. Finality is dependent on the expiration of the appeal period or the resolution of any filed appeals.

CSX 8-K SEC Disclosure

Summary

CSX Corporation announced a significant development regarding a civil action related to Section 16(b) of the Securities Exchange Act of 1934. A federal court in New York has approved a settlement concerning alleged short-swing profits by The Children's Investment Fund and 3G Capital Partners LP in their dealings with CSX securities. This settlement will result in CSX receiving a total of $11 million from the two entities, minus $550,000 for attorney's fees and expenses. The payment is expected to be made within ten business days after the court order becomes final, which is subject to appeal periods. This resolution brings closure to the legal action, releasing the defendants from further claims under Section 16(b) related to these specific transactions.

Key Highlights

1CSX Corporation involved in a Section 16(b) settlement.
2Shareholder lawsuit alleged short-swing profits by The Children's Investment Fund and 3G Capital Partners LP.
3Court approved settlement agreement.
4CSX to receive $10 million from The Children's Investment Fund.
5CSX to receive $1 million from 3G Capital Partners LP.
6Total proceeds for CSX: $11 million, less $550,000 in legal fees and expenses.
7Settlement resolves claims of violations of Section 16(b) of the Exchange Act.

CSX CORP 8-K Report, Corporate Update (Mar 6, 2009)

Summary

Key Highlights

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