Shareholder sues Duke directors over potential losses

In papers filed with Delaware’s Chancery Court on July 17, Duke Energy (NYSE: DUK) shareholder Lesley C. Rupp has alleged that the last-minute switch from Bill Johnson to Jim Rogers as CEO during Duke’s merger with Progress Energy will have financial impacts on the company and shareholders.

Duke’s share price has been deflated since the switch. Rupp says that additional costs could or have come in the form of Johnson’s $44 million severance package, severance for three other ex-Progress executives who resigned and legal expenses.

Rogers testified before the NC Utilities Commission on July 10, saying the $44 million will be paid by investors and “none will be charged to customers.”

Rupp also alleged that some level of conspiracy was present prior to the official merger. In her filing, Rupp said that some weeks before closing, the pre-merger directors had already decided they would cause Duke to fire Johnson and re-install Rogers as CEO of the combined entities. “They kept this planned breach of the merger agreement secret from all their constituencies,” Rupp said in the filing.

Rupp wants the 11 Duke directors who voted to remove Johnson as CEO to pay Duke’s losses and expenses if they occur and to pay “interest at the highest rate allowable by law.”

The entire filing is available here.

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