Shell Settles of Reserve-Related Claims with US Investors
Royal Dutch Shell plc reported that an agreement in principle was concluded to settle the pending United States class action arising from Shell's recategorization of its proved oil and gas reserves in 2004. The class is represented by the Pennsylvania State Employees' Retirement System and the Pennsylvania Public School Employees' Retirement System.
The agreement in principle is subject to specified conditions, including the execution of a definitive settlement agreement, the approvals of Shell's Boards of Directors and of the relevant governmental authorities of the State of Pennsylvania, and the approval of the United States District Court for the District of New Jersey.
The proposed settlement complements a previously announced proposed settlement reached on behalf of non-U.S. persons and entities who purchased Shell shares on non-U.S. exchanges between April 8, 1999 and March 18, 2004 (the "Class Period"). That earlier proposed settlement is pending in the Netherlands, before the Amsterdam Court of Appeals, which has been asked to declare the proposed settlement binding.
The new proposed settlement covers all persons and entities who purchased Shell shares on U.S. markets during the Class Period, as well as all U.S. persons and entities who purchased Shell shares on non-U.S. markets during the Class Period. All participants in the proposed Dutch and U.S. settlements would receive equal settlement relief. The proposed U.S. and Dutch settlements, if approved by the courts, would put an end to all pending litigation arising out of the 2004 reserves recategorization.
Commenting on the US settlement, Beat Hess, Shell's Group Legal Director said," With this settlement, together with the settlement pending in a Amsterdam Court, we made a huge step towards closing the chapter of legal disputes and controversies around the recategorisation of our hydrocarbon reserves".
The agreement in principle in the U.S. litigation would provide, among other relief, the following, subject to the types of conditions described above:
The U.S. class would receive a base settlement amount of $79.9 million plus $2.95 million, which amounts are proportional to the amounts payable to the potential participants in the proposed Dutch settlement.
Both the U.S. class and the participants in the Dutch settlement would receive interest on their respective settlement amounts running from April 1, 2008.
The U.S. class and the participants in the Dutch settlement collectively would receive an additional payment of $35 million, to be divided in accordance with proportions determined in the two proposed settlements.
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