Dynegy, Inc. (NYSE: DYN), a Houston-based energy provider, has announced the preliminary settlement of the securities class action pending against the company in the S.D. of Texas. The case, originally filed in 2002, alleges fraud related to the accounting treatment and disclosures associated with a structured natural gas transaction know as “Project Alpha.”
The settlement is for $468 million (including $150 million from the company’s insurers, a $250 million cash payment, and the issuance of $68 million in common stock). Dynegy also agreed to the election of two new directors to its Board of Directors from a list of candidates supplied by the lead plaintiff in the case.