July 19, 2012 (Update) -- Proposed settlement. Settlement hearing scheduled for September 17, 2012.
According to the Notice: HALLIBURTON SECURITIES HOLDERS ARE HEREBY NOTIFIED THAT A PENDING SHAREHOLDER DERIVATIVE ACTION BROUGHT ON BEHALF OF HALLIBURTON COMPANY HAS BEEN SETTLED. THIS NOTICE IS NOT AN EXPRESSION OF ANY OPINION BY THE TEXAS COURT IN WHICH THE ACTION IS PENDING AS TO THE MERITS OF CLAIMS OR DEFENSES ASSERTED IN THE ACTION. THE STATEMENTS CONTAINED IN THIS NOTICE DO NOT CONSTITUTE FINDINGS OF THE TEXAS COURT.
May 14, 2009 -- Investors in Halliburton Company (Public, NYSE:HAL) and KBR, Inc. (Public, NYSE:KBR) have filed at least two separate lawsuits on behalf of current investors in Halliburton Company (Public, NYSE:HAL) in Texas state court on Thursday, May 14, 2009 against certain one-time Halliburton subsidiary KBR, Inc. executives and officers and others alleging that poor oversight and lack of internal controls enabled a pervasive environment of misdeed and corruption, resulting in enforcement actions and substantial government penalties that have severely damaged investors' holdings.
The complaint alleges wrongdoing by KBR, including massive waste and overbilling of services provided to American forces in Iraq; bribery in Nigeria to win government contracts; and multiple instances of fraud, corruption, and misconduct in both its domestic and foreign operations. The defendants include KBR Chief Executive Officer William Utt and six board members, former Chevron Corp. CEO Kenneth Derr and Robert Crandall, past chairman of American Airlines, and others. The plaintiff accuses that the “Defendants' failures have caused the Companies to suffer hundreds of millions of dollars in damages, and to be exposed to substantial additional judgments in the future. Halliburton and KBR have paid more than $650 million in fines, penalties, and settlements -- including the largest fine ever assessed by the U.S. Commerce Department and the largest settlement ever paid by U.S. companies for violations of the Foreign Corrupt Practices Act.
The plaintiff allege that “Under defendants’ watch, and supposedly under their control and supervision, the companies were permitted to engage in conduct so notorious that the name ‘Halliburton’ has become virtually synonymous with ‘corruption,” and that the companies board of directors breached their fiduciary duty through business practices and criminal activities that resulted in massive fines, penalties and settlements paid to the federal government.
According to the complaint, the full extent of misdeeds was successfully hidden until KBR was spun off as an independent company in 2006 and the myriad crimes and wrongdoings […] could not have happened if Defendants were doing their jobs. As officers and directors of the Companies, the Defendants were required to ensure that the Companies' internal controls were in place, functioning properly, and sufficiently strong to prevent it from committing wrongful or illegal acts.
A spokeswoman for KBR reportedly said the company hadn’t been served with the complaint and couldn’t comment on specific accusations.
KBR, Inc. (KBR) is an engineering, construction and services company supporting the energy, petrochemicals, government services, industrial and civil infrastructure sectors. KBR, was part of Halliburton until two years ago and is located Houston, Texas. KBR Inc (KBR.N) had $8.745billion in total revenue with $302million in 2007 and $11.581billion in total revenue with $319million in net income in 2008. Shares of KBR closed on Friday at $16.99 per share, down from a 52weekHigh of $38.41 per share and $44.01 in 2007. Halliburton Company provides a variety of services and products to customers in the energy industry. Halliburton Company is also located in Houston, Texas and had $15.264billion in total revenue with $3.486billion net income in 2007 and $18.279billion in total revenue with $2.224billion net income in 2008. Shares of Halliburton Company (HAL) closed on Friday, May 15, 2009 at $21.17 per share, down from a 52weekHigh of $55.38 per share.