Nicor Reports on Pending Legal Proceedings
Illinois-based Nicor Inc. announced that its board of directors has approved an agreement to settle the securities class action litigation that has been pending in federal court in Chicago against the company and certain of its officers since the summer of 2002.
Under the terms of the agreement, the claims against the company and the company-related defendants will be dismissed without any finding or admission of wrongdoing or liability. The final settlement is contingent on execution of a formal stipulation of settlement and court approval.
Under the terms of the agreement, the company will pay $38.5 million to the class. The company continues to pursue coverage from its insurance carriers. The company also indicated that while the settlement will have an adverse impact on its first quarter 2004 financial results, it is not expected to have a material adverse impact on the company’s liquidity or financial condition.
Nicor Gas also announced that the parties to the company’s proceedings before the Illinois Commerce Commission regarding the company’s Performance Based Rate Program have agreed to a stay of the hearing scheduled for Monday, April 19, in order to undertake additional third party discovery.
In a separate development, the company was advised by the SEC Division of Enforcement that it intended to recommend to the SEC that it bring a civil injunctive action against the company, alleging that the company violated Sections 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1 and 13a-13. The SEC may also seek injunctive relief, disgorgement and civil penalties. The SEC staff invited the company to make a formal response (known as a Wells submission) with respect to the proposed recommendation.
Nicor Inc. is a holding company and its principal businesses are Nicor Gas, a natural gas distribution company, and Tropical Shipping, a containerized shipping business serving the Caribbean region. Nicor also owns and has an equity interest in several energy-related businesses.