Duke Energy Shareholder Lawsuit Over CEO Firing Moves Forward

Duke Energy Corp’s board must face a shareholder lawsuit over its abrupt 2012 firing of its newly installed chief executive, a Delaware judge has ruled. In a decision on Wednesday, Delaware Vice Chancellor Sam Glasscock denied Duke’s bid to end the case, finding the shareholder plaintiffs plausibly argued that the defendants might have concealed information about their actions from the public and regulators. As part of its $18 billion deal to acquire Progress Energy, Duke had agreed to install Progress head William Johnson as CEO of the combined company. But within hours of the acquisition’s closing in July 2012, the new Duke board met and fired Johnson, reinstating former Duke CEO James Rogers, in a vote along company lines. Johnson left with a pre-negotiated $44 million severance package. Shareholders almost immediately sued Duke, arguing the decision to terminate him was reached in May 2012 and concealed from the public, investors and regulators. Duke’s share price subsequently fell and the S&P lowered the company’s credit rating.

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