Summary
Williams Companies, Inc. (WMB) has announced an agreement in principle to settle a class-action shareholder lawsuit. The lawsuit, filed on behalf of purchasers of WMB securities between July 24, 2000, and July 22, 2002, will be settled for $290 million, subject to court approval. The company expects to fund a significant portion of this settlement, estimated between $145 million and $220 million, from cash on hand and insurance proceeds, with the remainder covered by insurers. Williams plans to record a pre-tax charge in the second quarter of 2006, aligning with its expected cash outlay. Importantly, neither the company nor its directors or officers admit any liability, nor have any violations of federal securities laws been found. This settlement is separate from ongoing litigation involving Williams Communications securities purchasers. Investors should note that this settlement, while significant, is being reported under Regulation FD and is not considered "filed" for certain legal purposes.
Key Highlights
- 1Agreement in principle reached to settle class-action shareholder litigation for $290 million.
- 2Settlement covers purchasers of Williams securities between July 24, 2000, and July 22, 2002.
- 3Williams expects to pay between $145 million and $220 million in cash, with the balance funded by insurers.
- 4A pre-tax charge in the second quarter of 2006 will be recorded, reflecting the expected cash outlay.
- 5No admission of liability by the company, its directors, or officers; no findings of federal securities law violations.
- 6The settlement is exclusive of litigation concerning Williams Communications securities purchasers.
- 7The information is disclosed under Regulation FD and not deemed 'filed' for certain SEC provisions.