Allegheny Energy settles Merrill Lynch litigation
- Allegheny Energy Inc. has agreed to pay Merrill Lynch & Co. Inc. $50 million in exchange for the securities firm's 2 percent interest in the power company's generation business to settle a lawsuit.
The settlement ends five years of litigation between the two companies over Allegheny Energy's $490 million purchase in 2001 of Merrill's energy trading business. Allegheny Energy said Merrill will turn over its 2 percent interest in Allegheny Energy Supply LLC, in exchange for a $50 million payment. All litigation and claims associated with the case will be dismissed.
In 2001, Allegheny Energy, hoping to cash in on what then was a burgeoning energy trading business led by Enron Corp., purchased Merrill's Global Energy Markets operation, and gave the securities firm a 2 percent stake in its Allegheny Energy Supply LLC.
One year later, Merrill sued Allegheny Energy over $115 million the securities firm claimed it still was owed from the deal. Allegheny Energy countersued, alleging Merrill had misrepresented the trading operation's revenue. Allegheny Energy said Merrill wanted to sell its trading business because it was run by a manager who lied about its finances.
The manager, Daniel Gordon, helped build Merrill's trading business and later headed the unit after Allegheny Energy acquired it. He pleaded guilty to fraud in 2003 and was sentenced to 42 months in prison for embezzling $43 million while he was working at Merrill.
Related News
Nuclear Innovation Needed for American Energy, Environmental Future
WASHINGTON - The most cost-effective way--indeed the only reasonable way-- to reduce greenhouse gas emissions and foster our national economic and security interests is through innovation, especially nuclear innovation. That's from Rep. Greg Walden, R-Oregon, ranking Republican member of the House Energy and Commerce Committee, speaking to a Subcommittee on Energy hearing titled, "Building a 100 Percent Clean Economy: Advanced Nuclear Technology's Role in a Decarbonized Future."
Here are the balance of his remarks.
Encouraging the deployment of nuclear technology, strengthening our nuclear industrial base, implementing policies that helps reassert U.S. nuclear leadership globally... all provide a promising path to meet both…
