August 24, 2022
  • Deal said to be among largest derivative recoveries
  • Judge not confident higher recovery “realistic”

Shareholders of FirstEnergy Corp. won court approval of a $180 million settlement in their derivative litigation against the utility company’s directors.

The shareholders have said the settlement is “among the largest derivative recoveries ever achieved” in the US, noted Judge Algenon Marbley of the U.S. District Court for the Southern District of Ohio, who granted final approval Tuesday.

The Akron, Ohio-based company had been embroiled in a bribery scandal tied to nuclear subsidies, admitting in mid-2021, as part of a deal with federal prosecutors, that it conspired with public officials and others to pay millions of dollars in bribes.

According to settlement terms, the defendants’ insurers will pay $180 million to FirstEnergy, less legal fees. FirstEnergy will also commit to a series of internal governance reforms, including the departure of six directors.

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Cohen Milstein Sellers & Toll PLLC represents additional plaintiff Massachusetts Laborers Pension Fund.

Read the article on Bloomberg Law.