|Southwest Gas Settles Lawsuit With Southern Union; Resolves All Legal Claims Between the Two Parties|
LAS VEGAS, Aug. 7 /PRNewswire-FirstCall/ -- Southwest Gas Corporation (NYSE: SWX) announced today that the Company has reached a definitive settlement agreement with Southern Union Company (NYSE: SUG), resolving the lawsuit between the parties in the United States District Court for the District of Arizona. The litigation related to the terminated acquisition of Southwest by ONEOK, Inc. in early 2000 (NYSE: OKE) and the rejection of competing offers from Southern Union in 1999.
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Pursuant to the settlement agreement, Southwest will pay Southern Union $17.5 million and both companies will be released from all remaining legal claims between the parties. Southern Union's claims against Southwest's Chief Executive Officer, Michael O. Maffie, were also resolved as part of the settlement. Southwest will take a one-time, non-recurring charge of $17.5 million, or approximately $0.33 per share, in the second quarter of 2002 to cover the settlement costs.
Thomas Hartley, Southwest's Chairman of the Board, stated, "Southwest is pleased to finally resolve our legal disputes with Southern Union. Three years of intense litigation have gone by since Southern Union Company filed its lawsuit against Southwest and several of its officers and directors. Southern Union claimed damages of $750 million at that time. In settling this matter now, Southwest determined that reasonable business judgment called for resolution of the remaining Southern Union claims. Our management team will now have more time to focus our efforts on the fastest growing natural gas distribution company in the United States, Southwest Gas. We strongly believe that this settlement is in the best interests of the Company, our shareholders, our employees and our customers."
Southwest will continue to seek appropriate damages in its remaining breach of contract, breach of implied covenant of good faith, fraud and fraud in the inducement claims against ONEOK. Trial of Southwest's claims against ONEOK is scheduled to commence in Phoenix on October 15, 2002.
Southwest Gas provides natural gas service to nearly 1.4 million homes and businesses in Arizona, California and Nevada. Its service territories are centered in the fastest-growing region of the country.
This report contains statements which constitute "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995 (Reform Act). All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. A number of important factors affecting the business and financial results of the Company could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, the impact of weather variations on customer usage, natural gas prices, the effects of regulation/deregulation, the timing and amount of rate relief, changes in capital requirements and funding, resolution of the pending litigation, acquisitions and competition.
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