According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2005, in June 2004, the parties entered into a settlement agreement which provided for the parties to settle the action for $13.8 million. The court approved the settlement on September 29, 2005 and the matter is now concluded. The settlement was funded entirely by insurance.
On November 29, 2001, the Court entered the Order consolidating the action. On March 27, 2002, the Court entered the Order appointing lead plaintiffs and approving their selection of lead counsel. On May 13, 2002, the plaintiffs filed a Consolidated Amended Class Action Complaint and the defendants responded by filing a motion to dismiss. On March 12, 2003, the Court entered the Order granting in part the defendants' motion to dismiss the Consolidated Class Action Complaint. On April 7, 2003, the plaintiffs filed an Amended Class Action Complaint, and the defendants again responded by a motion to dismiss. On August 5, 2003, the Court entered the Opinion and Order denying the motion to dismiss. On September 23, 2004 the plaintiffs filed a Settlement Agreement.
The original complaint charges KeySpan and certain of its executive officers with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants are liable as participants in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of KeySpan common stock by disseminating materially false and misleading statements and/or concealing material adverse facts. The scheme: (i) deceived the investing public regarding KeySpan's business, operations, management and the intrinsic value of KeySpan common stock; (ii) enabled the Individual Defendants to sell their personally-held shares of KeySpan common stock reaping proceeds of more than $29 million; and (iii) caused plaintiff and other members of the Class to purchase KeySpan common stock at artificially inflated prices.