Duke settles lawsuit over Progress merger for $146M
Posted March 10, 2015
Charlotte, N.C. — Duke Energy officials said Tuesday that the company has agreed to settle a shareholder lawsuit linked to the 2012 merger of Duke and Progress Energy for approximately $146 million.
The agreement, which is subject to approval by a federal judge, would end a class-action lawsuit that alleged Duke executives and board members misled shareholders about who would be chief executive of the utility after the merger.
The two companies had agreed that Bill Johnson, who had been CEO at Progress, would lead the combined utility, but he was forced out within hours of the July 2, 2012, merger. James Rogers, who had been Duke's CEO and was supposed to serve as the merged company's chairman, then assumed the CEO role.
The North Carolina Attorney General's Office and the state Utilities Commission investigated the shake-up shortly after the merger but agreed to end the investigations once Duke agreed to seek input from customers and employees about ways to improve service and internal operations.
As part of the lawsuit settlement, Duke and the executives and directors named as defendants denied any wrongdoing.
The company said the settlement avoids the cost of prolonged litigation and eliminates uncertainty. Duke's insurance carrier will pick up most of the cost of the settlement, the company said, and the company already set aside $26 million for the portion not covered by insurance.
The settlement covers shareholders “who purchased or acquired shares of Duke common stock between June 11, 2012, and July 9, 2012," including former Progress shareholders who acquired shares of Duke common stock in the merger, the company said.