Ontario Teachers' Pension Plan and Arkansas Teacher Retirement System agreed to a $311 million cash settlement in a securities class action against The Williams Cos., its directors and officers, its auditor, and its underwriters, according to an announcement from the C$96 billion (US$83.6 billion) Ontario fund.
"This recovery is an excellent example of the positive impact that institutional investors can have in securities class actions," said Claude Lamoureux, president and CEO of the Ontario fund, said in a statement.
The Ontario fund and the $8 billion Arkansas fund, Little Rock, were co-lead plaintiffs in the lawsuit. The trial was scheduled to begin Aug. 16 in U.S. District Court in Tulsa, Okla., said Chad Johnson, partner of law firm Bernstein Litowitz Berger & Grossmann, which represents the lead plaintiffs.
"It's a terrific settlement," Mr. Johnson said in an interview, noting the amount ranks among the top 15 securities class-action settlements of all time.
The settlement agreement is expected to be filed July 24 with U.S. District Judge Stephen Friot for preliminary approval and to notify the members of the class, so they can file any objection to the agreement, Mr. Johnson said. The $311 million will be designated for distribution to investors eligible for a claim of the settlement, he said. It is too early to say how much the Ontario and Arkansas funds will share, he said.
The plans alleged in the complaint, filed in 2002, that the company misrepresented its financial condition by failing to provide timely disclosure of a multibillion-dollar loss and inflated valuations of some contracts, the statement said.
Williams did not admit "to any liability by the company, its directors or officers," according to a statement. "In addition, there were no findings of any violation of federal securities laws."
"The settlement will be funded through a combination of insurance proceeds and cash on hand, and will not have a material effect on the company's liquidity position," the company statement added.