According to a press release dated February 21, 2007, Willbros also disclosed that on February 15, 2007, the U.S. District Court for the Southern District of Texas issued an Order approving final settlement of the previously disclosed consolidated securities class action lawsuit. The class action was filed in 2005 and named as defendants (1) the Company, (2) certain of its then-current officers, and (3) a former officer of its international subsidiary. The Order dismissed with prejudice all claims against all defendants. No members of the settlement class exercised their right to be excluded from or object to the final settlement, which was funded by Willbros' insurance carrier. The Court's Order ends the class action litigation.
According to the Notice of Pendency of Proposed Settlement of Class Action dated November 27, 2006, the settlement amount is in the amount of $10,500,000.
In a press release dated August 9, 2006, Willbros has reached an agreement in principle to settle the consolidated securities class action lawsuit filed in 2005 against the Company and certain of its current officers and a former officer of its international subsidiary. Under the terms of the agreement in principle, Willbros and the plaintiffs will negotiate and seek court approval of the definitive settlement. The settlement will be funded by Willbros' insurance carrier, and will include the dismissal of all claims against all defendants.
The complaint charges Willbros Group, Inc. and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that Defendants issued, or caused to be issued, false and misleading statements during the Class Period to artificially inflate the value of Willbros stock. Willbros is the target of numerous governmental investigations, both here in the United States by the Securities & Exchange Commission and Department of Justice, and abroad, because the Company engaged in a campaign of illegal and illicit bribery of foreign government officials in Bolivia, Nigeria and Ecuador to successfully obtain construction projects. As a result of these illegal actions, the Company has delayed filing its Form 10-K for 2004; announced a restatement of its financial results for 2002, 2003 and the first nine months of 2004; instituted a series of modifications to rectify material weaknesses in its internal controls; provided an estimate of its possible exposure for violating the Foreign Corrupt Practices Act ("FCPA") (which could be as much as $650,000 per violation, not including criminal penalties of more than $2 million per violation); and withdrew its 2005 guidance. The Company estimates an astonishing 35% to 44% reduction in previously reported net income when the restatement is completed for the collective period of 2002, 2003 and the first nine months of 2004. This means that the Company overstated net income during that period by an incredible 53% to 80%. In addition, the Company also disclosed a number of previously unreported related party transactions from 2002, 2003 and 2004 that materially impacted financial results. As a result of the above restatement, the Company stands in default of its debt covenants because of its substantial reduction in net income. Because of its violations of FCPA, the Company could be prohibited from bidding for future U.S. government contracts. The Company disclosed this information on May 16, 2005 after the market had closed. The market responded immediately and the stock lost 31% on usually high volume of 6.9 million shares, trading as low as $10.15 per share on May 17, 2005, down $5.77 from its previous close of $15.92.