In the latest development in the long-running FirstEnergy bribery-related derivative lawsuit settlement saga, a federal judge has granted final approval to the proposed settlement in the consolidated action pending in the Southern District of Ohio, albeit while reducing the amount of the plaintiffs’ fee award. The parties will now, with the benefit of the final settlement approval, turn to the Northern District of Ohio, where an unconsolidated parallel action remains pending, and where the presiding judge has recently appointed new counsel to prosecute the separate action. In a rational and orderly world, the separate proceeding in the Northern District of Ohio would be dismissed. However, under the actual conditions, anything could happen.
Continue Reading FirstEnergy Bribery-Related Derivative Suit Settlement Receives Final Approval; What Happens Next?
FirstEnergy
FirstEnergy Derivative Suit: Cycle of Post-Settlement Weirdness Continues to Unspool
As I have previously noted (here), even though the parties to the consolidated First Energy derivative litigation pending in the Southern District of Ohio reached an agreement to settle the case for a payment of $180 million and the company’s agreement to adopt governance reforms, Northern District of Ohio Judge John Adams has tried to force the plaintiffs’ lawyers to continue to pursue the separate case pending in his court, notwithstanding the settlement. Now, as Alison Frankel reported in a July 15, 2022 post in her On the Case blog (here), Judge Adams has followed through on his threat to boot the plaintiffs’ lawyers and replace them with lawyers that will pursue the case in his court. At first no prospective replacement lawyers appeared. But now, of all things, the famed litigator David Boies has stepped forward to propose his firm as counsel to take over the case in the Northern District of Ohio. All of this comes just as the settlement proceedings in the Southern District of Ohio are about to come to a head.
Continue Reading FirstEnergy Derivative Suit: Cycle of Post-Settlement Weirdness Continues to Unspool
Further Developments in Two Recent Jumbo Derivative Lawsuit Settlements
As I detailed in blog posts at the time, the parties to two separate shareholder derivative lawsuits in recent months announced what were among the largest derivative suit settlements – the massive $300 settlement in the Renren derivative lawsuit and the $180 million settlement in the FirstEnergy derivative lawsuit. Though the settlements in each of these two cases were announced to great fanfare, both settlements, for separate reasons, ran into procedural roadblocks. There have now been further developments in each of these cases – the Renren settlement appears to be back on track, while the federal district judge presiding over one of the unconsolidated FirstEnergy derivative suits continues to throw up roadblocks, as discussed below.
Continue Reading Further Developments in Two Recent Jumbo Derivative Lawsuit Settlements
The Parties Agreed to a Settlement. Then Things Got Weird.
Last month, when I noted in a post that the parties to the FirstEnergy bribery-related derivative litigation had agreed to settle the suits for a payment of $180 million and the company’s agreement to adopt certain governance reforms, I added what I thought at the time was the pro forma observation that the settlement was subject to court approval. The court processes that have followed have been anything but pro forma. As it has turned out, Northern District of Ohio Judge John R. Adams has thrown a huge money-wrench into the works, refusing even to stay the case pending in his court, demanding that plaintiffs’ counsel reveal the names of the individuals that actually paid the supposed bribes, and directing the parties to conduct depositions in the case – a case that the parties have already agreed to settle. The story of the unfolding of these events is well told in two recent posts on Alison Frankel’s On the Case blog, here and here.
Continue Reading The Parties Agreed to a Settlement. Then Things Got Weird.
FirstEnergy Bribery-Related Derivate Lawsuit Settled for $180 Million
In what is one of the largest shareholder derivative lawsuit settlements ever, the parties to the various FirstEnergy bribery-related derivative lawsuits have reached an agreement to settle the actions for a payment of $180 million and the company’s agreement to adopt a number of corporate governance reforms. The settlement amount is to be funded by D&O insurance. The settlement agreement is subject to court approval. First Energy’s February 10, 2022 announcement of the settlement can be found here. The parties’ February 10, 2022 settlement term sheet can be found here.
Continue Reading FirstEnergy Bribery-Related Derivate Lawsuit Settled for $180 Million