Duke Energy shareholders sue over coal ash
05/22/2014 4:01 PM
05/22/2014 4:23 PM
Two Duke Energy shareholders claim in a lawsuit that the company’s leaders exposed Duke to billions of dollars in potential liability over its coal ash management.
The lawsuit is the first to be filed against Duke by its shareholders since a Feb. 2 ash spill into the Dan River. Shareholder suits also followed Duke’s troubled 2012 merger with Progress Energy.
Shareholder Edward Tansey, who was also a plaintiff in a merger-related lawsuit, and the Police Retirement System of St. Louis filed the suit Wednesday in the Delaware Court of Chancery. The court hears internal disputes of corporations organized in Delaware, including Duke.
The suit names as defendants chief executive Lynn Good; company officials Keith Trent and Lloyd Yates, who oversee regulated utilities; and Duke’s directors.
It claims those leaders breached their fiduciary duty, wasted corporate assets and profited from Duke’s ash management.
Duke’s board created a “lawless culture” and the company allowed “widespread acceptance of environmental abuse,” the lawsuit claims, by holding ash in 33 North Carolina ponds.
The lawsuit claims Duke officials knew for years that ash was contaminating water, and cites violations filed after the Dan River spill by the N.C. Department of Environment and Natural Resources.
It seeks an injunction forcing Duke to eliminate ash contamination, damages and corporate changes, including tests for potential problems at ash disposal sites and greater shareholder input to the board.
Duke said it is reviewing the lawsuit.
“Duke Energy’s board of directors and senior management team have been actively engaged in coal ash management and oversight – both before and after the Feb. 2 Dan River ash release,” Duke said in a statement.
“The company took immediate responsibility for the Dan River incident and is developing a comprehensive ash management plan that is both environmentally sound and in the best interests of the company’s customers and shareholders.”
Other shareholders have also pressed Duke for changes after the February ash spill.
At Duke’s May 1 shareholder meeting, North Carolina Treasurer Janet Cowell voted against one director who serves on a committee that oversees environmental matters. Pension funds in California and New York City, which together own 3.9 million shares, urged fellow investors to oust four directors.
Shareholders instead re-elected all 15 directors.
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