Biofuels developer Rentech Inc. on Wednesday said it received court approval to settle class action lawsuits against the company and several current and former directors and officers.
The lawsuits stem from the Los Angeles company’s Dec. 14, 2009 restatement of financial statements for fiscal 2008 and the first three quarters of fiscal 2009. The settlement provides $1.8 million for shareholders and $300,000 for attorneys’ fees and expenses.
Rentech said in 2009 that it was correcting its earlier incorrect accounting of cash deposits required by gas purchase contracts. The company’s shares dropped 22 percent between the time of the restatement and when the lawsuits were filed two weeks later.
Rentech, which makes nitrogen fertilizer and is developing clean-fuel products, denied any wrongdoing in connection with the lawsuits and noted more than 90 percent of the settlement costs would be covered by insurance.
It is “in the best interests of its stockholders to settle the matters at a reasonable cost to avoid potentially protracted and expensive litigation,” the company said in a statement.
Shares closed down 6 cents, or 7 percent, to 81 cents on the New York Amex.