BHP seeks approval for $50 million US pact over fatal Brazil dam burstPosted On: Sep. 20, 2018 12:50 PM CST
(Reuters) — BHP Billiton Ltd. has asked a U.S. judge to approve a $50 million settlement of claims that it fraudulently inflated its share price by overstating its ability to manage safety risks before a fatal 2015 dam burst at a Brazilian mine.
The Anglo-Australian mining company’s preliminary settlement of class action litigation led by two Alabama pension plans was filed on Wednesday night with the U.S. District Court in Manhattan.
It would resolve shareholder claims stemming from the Nov. 5, 2015, bursting of the Fundão dam in Minas Gerais, Brazil’s main mining state, at a mine run by Samarco, a joint venture between BHP and Brazil’s Vale SA.
The disaster unleashed huge quantities of mud and waste that destroyed a nearby village and killed 19 people.
BHP denied wrongdoing in settling with investors in its American depositary receipts led by the City of Birmingham Retirement and Relief System and the City of Birmingham Firemen’s and Policemen’s Supplemental Pension System.
It is unclear how much of the payout is covered by insurance. BHP did not immediately respond on Thursday to a request for comment.
The settlement covered ADR investors from Sept. 25, 2014, when BHP touted its focus on safety in a regulatory filing, and Nov. 30, 2015, when Brazil sued BHP and Vale for 20 billion reais ($4.87 billion). That case settled in June.
In a court filing, the plaintiffs’ lawyers led by Robbins Geller Rudman & Dowd said they may seek up to $15 million from the settlement fund to cover legal fees.
The case is In re BHP Billiton Ltd. Securities Litigation, U.S. District Court, Southern District of New York, No. 16-01445.