Federal Judge Removes Plaintiffs Attorneys In FirstEnergy Shareholder Litigation
According to a report from Cleveland.com, a federal judge has removed the plaintiffs’ attorneys in the FirstEnergy shareholder lawsuit. The judge also asked for applications from new lawyers to replace them. The judge ruled that the attorneys in question improperly attempted to evade oversight in the case. In this article, our Miami shareholder dispute lawyer discusses the key developments in the FirstEnergy shareholder litigation.
Background: FirstEnergy Locked in Multi-Million Dollar Bribery Case
FirstEnergy Corp. is a massive electric utility with a main headquarters in Northeast Ohio. In 2020, the company became entangled in a major bribery scandal involving several major players in Ohio state politics, including politicians and lobbyists. Indeed, the former Ohio Speaker of the House of Representatives was arrested on felony charges in relation to the bribery case.
In July of 2021, FirstEnergy Corp. entered into a deferred prosecution agreement with the United States Department of Justice (DOJ). As part of the settlement agreement, FirstEnergy Corp. agreed to pay $230 million in civil financial penalties. Soon after, the company was hit with a shareholder lawsuit.
Shareholder Lawsuit Was Settled in February of 2022
In February of 2022, FirstEnergy Corp. reached a preliminary agreement in one of the largest shareholder derivative cases in United States history. A shareholder derivative lawsuit is one in which shareholders take action to file a claim on behalf of the company itself. The shareholder settlement agreement was for $180 million. In May of 2022, a federal judge granted preliminary approval for the shareholder derivative settlement.
A Twist in the Shareholder Case: Plaintiff’s Attorneys Have Been Dismissed
The latest ruling by Ohio U.S. District Judge John Adams represented the latest twist in this shareholder lawsuit. The federal judge ruled that the plaintiffs’ attorneys representing the FirstEnergy Corp. have improperly attempted to evade judicial oversight. They have been dismissed from the case and the judge is actively soliciting new attorneys to represent the shareholders.
The fact that this is a shareholder derivative lawsuit is notable. In shareholder derivative cases, a judge must sign off on any settlement agreement reached by the parties. The parties have agreed to settle this case—but they cannot do so without approval from a judge.
The action taken by the federal judge in Ohio is relatively uncommon. Though, a judge does generally have the authority to remove legal counsel if they have good reason to believe that legal counsel is providing poor representation to clients.
Get Help From a Top Shareholder Litigation Attorney in Southeast Florida
At Pike & Lustig, LLP, we are committed to helping our clients find the solution that works most effectively for their situation. With experience handling all sides of shareholder disputes, our firm has the well-rounded business law expertise that you can trust. Call us now or connect with us online for a confidential initial consultation. With legal offices in Miami, Wellington, and West Palm Beach, we take on shareholder disputes and shareholder litigation throughout South Florida.
Source:
cleveland.com/court-justice/2022/07/federal-judge-removes-firstenergy-attorneys-in-shareholder-lawsuit-asks-for-applications-to-replace-them.html
