RALEIGH, N.C. (AP) — America's largest electric company said Tuesday that it is settling a lawsuit that claimed shareholders lost millions of dollars when Duke Energy surprised investors by ousting its CEO hours after a long-anticipated buyout of its smaller neighbor.
Charlotte-based Duke Energy said its insurers and shareholders would pay $146 million to end the lawsuit filed after the company completed its July 2012 buyout of Raleigh-based Progress Energy Inc. The company set aside $26 million for the amount not covered by insurance and said consumers would not pay the cost.
The lawsuit said shareholders suffered when Duke Energy directors suddenly fired new chief executive Bill Johnson, who was supposed to head the combined company after holding the same post at Progress Energy. Five months later, Johnson became president and chief executive officer of the Tennessee Valley Authority, the nation's largest public utility.
The class-action lawsuit will compensate individuals and institutions that purchased Duke Energy shares in the three weeks leading up to the merger closing or in the week after the deal finalized, including former Progress Energy shareholders who acquired shares in the combined company after the merger.
The lawsuit had said Duke Energy violated federal securities laws by misrepresenting the terms of the buyout to shareholders.
Duke Energy denied the allegations, and the company denies any wrongdoing as part of the settlement, which must be approved by a federal judge in Charlotte.
North Carolina regulators and the state's attorney general launched separate investigations into whether the utility misled officials who approved the merger. Subsequent hearings into what led Duke Energy's board to dump Johnson force the company to pay another $30 million for ratepayers and low-income assistance and dictated the replacement of several other executives and board members.
Duke Energy has more than 7 million customers in the Carolinas, Ohio, Kentucky, Indiana and Florida.