Williams Cos., the biggest U.S. natural-gas transporter, agreed to settle for $290 million class-action lawsuits by shareholders accusing the company of inflating the value of telecommunications and energy-trading businesses.
Settlement costs of $98 million to $148 million, or 16 cents to 24 cents per share, will be recorded this quarter, Tulsa, Okla.-based Williams said yesterday.
Shareholders accused Williams of failing to disclose $2.2 billion of liabilities at Williams Communications Group Inc., a fiber-optic unit that went bankrupt in April 2002, a year after it was spun off. Shareholders also said Williams manipulated energy-trading results to exaggerate profit.
“This recovery is an excellent example of the positive impact that institutional investors can have in securities class actions,” Claude Lamoureux, chief executive officer of Ontario Teachers' Pension Plan, a lead plaintiff against Williams, said in a statement. The settlement provides “at least partial compensation,” he said.
Williams said it admitted no wrongdoing in the settlement, which it expects to become final by mid-August subject to court approval. Excluded from the agreement is separate class-action litigation by Williams Communications shareholders, the company said.
The company's stock plunged as much as 97 percent in 2002, sinking as low as 88 cents, after energy-trading losses and the bankruptcy of Williams Communications.
Williams agreed in November to pay $55 million to former employees who accused the company of misleading them into investing their retirement accounts in its stock.
