A federal judge has granted preliminary approval to a proposed $180 million settlement between FirstEnergy shareholders and a group of company executives who ran the Akron-based utility during the House Bill 6 scandal.
However, U.S. District Judge Algenon Marbley, the chief judge of the Southern District of Ohio, refused to halt companion settlement cases in the Northern District of Ohio and in Summit County Common Pleas Court. That makes Marbley’s order, issued Monday, only a step towards ending the case, rather than a final resolution of the lawsuit.
“Of course, preliminary approval ‘is only the first step in an extensive and searching judicial process, which may or may not result in final approval of a settlement in this matter,’” wrote Marbley in his order, quoting a ruling in a separate federal case from 2001.
In the case, FirstEnergy investors filed what is known as a derivatives lawsuit against the company, claiming the utility’s directors of officers’ failure to provide proper oversight led to the company paying more than $60 million to former Ohio House Speaker Larry Householder’s political operation to secure the passage of HB6. The shareholders aren’t suing to get money from FirstEnergy, but rather are seeking for the company to be paid by an insurer for FirstEnergy executives.
In addition, six members of FirstEnergy’s board would step down and not seek re-election under the terms of the proposed settlement.
HB6, signed by Gov. Mike DeWine in 2019, gave a $1 billion-plus ratepayer bailout to two Ohio nuclear power plants owned by a then-subsidiary of FirstEnergy. It also, among other things, allowed FirstEnergy to collect millions more from ratepayers than it otherwise would have been allowed to via a so-called “decoupling” provision.
In the wake of Householder’s arrest in July 2020, DeWine signed a bill last year to repeal the bailout, the “decoupling” policy, and some other parts of the energy law.
Last year, FirstEnergy admitted to bribing Householder and ex-Public Utilities Commission of Ohio Chair Sam Randazzo and paid a $230 million fine to avoid federal charges. Householder and Randazzo have each maintained their innocence; Householder is set to be tried early next year on a racketeering conspiracy charge.