Clout score

15 January 2015 By Reynolds Holding, Kevin Allison Follow @holdingren

The U.S. miner’s $138 mln check to resolve a lawsuit over conflicts-riddled deals sets a precedent that gives shareholders more clout. It should turn up the heat on Chairman James Moffett, whose cross-holdings factored in the case. Better governance would enhance the big payout.

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Copper and gold producer Freeport-McMoRan on Jan. 15 settled for $137.5 million a lawsuit claiming that its executives and directors had conflicts of interest that caused the company to overpay for two oil and gas companies in 2013.

The agreement ends shareholder litigation over the purchase of Plains Exploration & Production and McMoRan Exploration for a total of about $9 billion. The investors who pursued the suit will be paid the settlement proceeds, minus legal fees and other expenses, as a special dividend. The deal is subject to approval by a Delaware Chancery Court judge at a hearing scheduled for March 16.

Freeport said the individual defendants in the case denied wrongdoing and did not violate their duties to shareholders.

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