This stockholder derivative litigation arises out of an alleged bribery scheme involving FirstEnergy Corp. (“FirstEnergy”). Plaintiffs in the litigation allege that FirstEnergy misused corporate funds by funneling over $60 million to the former Speaker of the Ohio House of Representatives Larry Householder and other public officials in exchange for favorable legislation. On July 22, 2021, FirstEnergy entered into a deferred prosecution agreement (“DPA”) with the United States Department of Justice to resolve allegations concerning the alleged bribery scheme. In conjunction with the DPA, FirstEnergy agreed to pay a $230 million fine for its role in the alleged bribery scheme.
On February 10, 2022, following hard-fought litigation and arms’-length negotiations, FirstEnergy announced that the parties had reached an agreement in principle for a global settlement (the “Settlement”) of Plaintiffs’ derivative claims asserted on behalf of FirstEnergy. Under the terms of Settlement, FirstEnergy will receive $180 million less a court-approved award of attorneys’ fees and expenses, and six directors who have been on the FirstEnergy Board of Directors for a minimum of five years will not stand for re-election. Additionally, FirstEnergy will adopt governance reforms that relate to FirstEnergy’s political spending and lobbying.
On May 9, 2022, the United States District Court for the Southern District of Ohio granted preliminary approval of the proposed Settlement and scheduled a final approval hearing for August 4, 2022. On May 16, 2022, FirstEnergy provided Court-approved formal notice of the Settlement to shareholders. A copy of the Notice of (I) Pendency and Proposed Settlement of Stockholder Derivative Actions; (II) Settlement Fairness Hearing; and (III) Motion for an Award of Attorneys’ Fees and Litigation Expenses, which contains more detailed information about this litigation and the terms of the proposed Settlement, is available below.
On July 7, 2022, Plaintiffs filed their motion for final approval of the proposed Settlement, an award of attorneys’ fees and expenses, and Plaintiff service awards. Copies of Plaintiffs’ filings are available below.
On July 13, 2022, the United States District Court for the Northern District of Ohio, which is overseeing a substantively identical parallel derivative litigation captioned Miller v. Anderson et al., Case No. 5:20-cv-01743 (N.D. Ohio) (the “Miller Action”) issued an order concerning appointment of counsel in this matter. Pursuant to the Court’s order, any counsel interested in appointment to represent the interests of FirstEnergy in the Miller Action shall notify the Court via a written submission addressed to Judge John R. Adams, 2 South Main Street, Suite 510, Akron, OH 44308. Any such written interest must be received by the Court by no later than July 25, 2022. The full text of the order can be accessed under “Downloads” below.
5-16-2022 - Notice of (I) Pendency and Proposed Settlement of Stockholder Derivative Actions; (II) Settlement Fairness Hearing; and (III) Motion for an Award of Attorneys’ Fees and Litigation Expenses (pdf)
Download7-7-2022 - Plaintiffs' Motion for Final Approval of Settlement, An Award of Attorneys' Fees and Expenses, and Plaintiff Service Awards (pdf)
Download7-7-2022 - Transmittal Declaration of John C. Camillus (pdf)
Download07-13-2022 Northern District Order Providing Notice That The Court Intends To Appoint Counsel In This Matter. (pdf)
DownloadCopyright © 2022 First Energy Derivative Settlement - All Rights Reserved.
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