By the Order and Final Judgement, dated May 10, 2004, from U.S. District Judge Thomas A. Varlan of the US District Court for the Eastern District of Tennessee, the case was settled in a manner that was in favor of Plaintiffs.
According to a Press Release dated April 7, 2004, a hearing will be held before the Honorable Thomas A. Varlan on April 29, 2004 to determine whether the action should be certified as a class action, whether a proposed settlement of (i) 129,870 shares of Tengasco common stock and 100,000 shares of Miller Petroleum, Inc. ("Miller") common stock from defendant Ratliff, and (ii) 300,000 three-year warrants to purchase restricted Tengasco stock at $1 per share, 150,000 shares of Miller common stock and $37,500 cash from defendant Tengasco, should be approved by the Court as fair, reasonable and adequate, and to consider the application of Plaintiff's Counsel for attorneys' fees and reimbursement of expenses. The stock and warrants are to be issued exempt from the registration requirements pursuant to Section 3(a)(10) of the Securities Act of 1933.
The complaint alleges that Tengasco and its Chief Executive Officer violated the Securities Exchange Act of 1934 by making materially false and misleading statements concerning hydrocarbon production, drilling success and prospects of Tengasco's Swan Creek Field and also made materially false and misleading statements concerning Tengasco's earnings potential during the Class Period. The defendants were motivated to make such false and materially misleading statements in order to secure a multi-million dollar loan from Bank One; certain of the proceeds of which were used to pay off loans made by Tengasco insiders. The complaint alleges that as a result of these false and misleading statements, the price of Tengasco's shares were artificially inflated throughout the Class Period causing plaintiff and the Class to suffer damages.