Questar Corp.on May 5 said it would be pursuing a settlement in four lawsuits related to thecompany's planned merger with DominionResources Inc.
Four suits are pending in the Utah State District Court, butQuestar and other defendants in the merger litigation signed a memorandum ofunderstanding to settle the lawsuits, the company said. In part, the memorandumrequired Questar to disclose extra information about the merger process andexpectations, and the company included these supplemental disclosures in theMay 5 Form 8-K.
In the state court actions, the company shareholders allegedderivative and direct claims for breach of fiduciary duty in relation to themerger, according to Questar. The supplemental information the company providednoted that Questar and its board had evaluated a host of business risks,opportunities and alternatives before agreeing to the withDominion.
Questar emphasized that it agreed to the settlement andmemorandum "solely to avoid the costs, risks, and uncertainties inherentin litigation" and that the company was not admitting "any liabilityor wrongdoing." The settlement is still subject to approval by the UtahState District Court.
"If the settlement is finally approved by the court, itwill resolve and release all claims that were or could have been brought in anyof the actions challenging any aspect of the proposed merger, the mergeragreement, and any disclosure made in connection therewith," Questar said.
The May 5 Form 8-K did not mention a fifth , which was filed in Utahfederal court. Under this class-action shareholder litigation, the plaintiffsalleged that the proposed transaction undervalues Questar and that the boardand Ronald Jibson, Questar's chairman, president and CEO, failed shareholdersby not seeking out a more competitive price.