Reliant Energy Inc. and Deloitte & Touche LLP agreed to pay a total of $75 million as part of a proposed settlement of shareholder class-action lawsuits, according to separate statements issued today by Reliant and Berman DeValerio Pease Tabacco Burt & Pucillo, the law firm representing the lead plaintiff, the $1.2 billion Louisiana Municipal Police Employees' Retirement System, Baton Rouge. The suits, filed in 2002 and later consolidated in the U.S. District Court in Houston, alleged that Reliant made false statements and failed to disclose some energy trading that improperly inflated revenues between 1999 and 2001. Deloitte & Touche audited those financial statements.
Reliant will make a total payment of $68 million, $61.5 million of which will be covered by the company's director and officer insurance policies. Deloitte & Touche agreed to pay $7 million. Under the proposed settlement, which is subject to court approval, Reliant did not admit any liability by the company or its directors and officers, and there are no findings of federal securities law violations. The plaintiffs would also release all claims against former officers of Reliant.
Deborah Harrington, a Deloitte spokeswoman, could not comment on the matter by press time.