The giant Anglo/Dutch energy firm revealed the settlement in a Web site statement , which indicated that the funds, minus attorney fees, would be distributed to the retirement plans of eligible participants. Shell said it will also bear the cost of up to $1 million of plaintiff counsel’s expenses including the cost of notifying members of the class action case about the settlement.
Lead plaintiffs will prepare a plan on allocating the funds that will be approved by the court, the company said.
The lawsuit, filed last year in US District Court in New Jersey, followed Shell’s company’s oil-and-gas-reserves write-down scandal last year. In 2004, Shell acknowledged it had misstated oil reserves, a widely followed indicator of future profits, for 2002 and other years. The scandal cost Shell almost $150 million in fines imposed by US and British regulators, and led to the ousting of three senior executives.
The lawsuit claimed the value of the employees’ pension benefits had been hurt by a drop in the company’s share price, which fell as much as 15% in the two months that followed the restatements in January 2004.
As part of the settlement, Shell said it agreed to adopt new procedures for monitoring and training individuals appointed to fiduciary positions in savings plans that are covered by the Employee Retirement Income Security Act of 1974 (ERISA).
The proposed pact comes two weeks after US federal prosecutors decided not to file a criminal charge against the company. Prosecutors had investigated the reserves overstatements and cited good cooperation by the oil giant.
“Shell believes that this is a good settlement for plan participants and for the companies,” said Beat Hess, Shell’s Legal Director, in the Web statement, “We are hopeful that the court will approve the settlement, which represents an important step toward putting litigation relating to the reserves recategorizations behind us.”