Royal Dutch/Shell Group has agreed to pay out $90 million to settle a group action lawsuit issued against it by employees in the US who argued that its reserve estimate declaration problems of last year negatively affected their pensions.
Last year, Shell’s stock price fell repeatedly as it was forced to restate its reserves estimate five times. The oil and gas titan also suffered from fines issued in the US and UK totaling $150 million.
Staff working for the company in the US filed a suit with the US Federal Court in New Jersey in order to win compensation for their devalued pensions, which involve holding shares in Shell. The class action is still pending; however an order preliminarily approving the proposed settlement has been entered.
If the settlement is finally approved by the court, Shell will pay $90 million which, after certain expenses, will be distributed to eligible participants in the relevant employee savings plans. Shell also has agreed to pay up to $1 million of plaintiffs’ counsel’s out-of-pocket expenses.
In addition, as part of the settlement agreement, Shell has agreed to adopt certain new procedures for monitoring and training individuals appointed to fiduciary positions in savings plans that are subject to the US Employee Retirement Income Security Act of 1974.
Beat Hess, Shell’s legal director, commented, Shell believes that this is a good settlement for plan participants and for the companies. We are hopeful that the court will approve the settlement, which represents an important step toward putting litigation relating to the reserves recategorisations behind us.