Delaware Judge Awards $110 Million to Former Shell Shareholders
HOUSTON (AP) _ A Delaware judge Wednesday awarded approximately $110 million to about 1,000 former Shell Oil Co. stockholders who relinquished 1 million shares in a merger deal five years ago.
The shareholders, most of whom are present or former Shell employees, were awarded $71.20 per share for their stock by Vice Chancellor Maurice Hartnett III in Delaware.
Houston-based Shell Oil Co. became a wholly owned subsidiary of the giant Royal Dutch-Shell Group of Cos. on June 7, 1985, completing a $5.7 billion merger.
As part of the merger, the shareholders were given the option of accepting $60 per share or seeking a court appraisal of stock value, said Houston attorney Lee Godfrey, lead counsel for the shareholders.
The shareholders who received the $71.20 had sought the court appraisal rather than the $60-per-share offer. The judge also awarded interest to the shareholders on the $71.20 price at 10 percent interest from June 1985, increasing the amount to about $110 per share.
″Our contention all along was that Shell’s foreign-owned parent paid far too little in the 1985 cash-out merger,″ said Lee Godfrey, lead counsel for the 1,000 shareholders.
Plaintiffs’ attorneys maintained the fair value was $89 per share, while experts for Shell said the value was $55 a share.
Shell officials can appeal the decision issued Wednesday, but company officials would not discuss their plans.
″We don’t have a comment at this time. Our attorneys are still studying the document,″ said Shell spokeswoman Eydie Pengelly.
Last month, Hartnett awarded some 20,000 other former Shell stockholders an additional $2 per share for 15 million shares relinquished in the same merger deal. Those shareholders were given $58 per share, plus $2 a share for giving up their right of appraisals.
That award followed a June 1990 court finding of disclosure violations in materials Shell distributed to shareholders describing their options in the buyout.
Hartnett ruled last June that the material mailed to shareholders failed ″to disclose the existence of oil and gas reserves having a value of approximately $1 billion.″
Plaintiffs’ attorneys still are seeking interest on the $2-per-share award and attorneys’ fees.