Rentech settles restatement-related lawsuits

Los Angeles-Rentech Inc., which owns Illinois nitrogen producer Rentech Energy Midwest Corp., said March 23 that it has reached agreements to settle all of the class action lawsuits pending in federal court and all of the shareholder derivative lawsuits pending in state and federal courts against the company and a number of its current and former directors and officers. The lawsuits (GM Jan. 11, 2010) relate to the company’s restatement in December 2009 (GM Dec. 21, 2009) of certain of its financial statements for fiscal year 2008 and the first three quarters of fiscal year 2009. The company believes that 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 and the individual defendants have denied any liability or wrongdoing in connection with the allegations contained in these lawsuits. The settlement for the consolidated class action lawsuits pending in United States District Court for the Central District of California (In re Rentech Securities Litigation, Lead Case No. 2:09-cv-09495-GHK-PJW) provides for a settlement fund of $1.8 million, from which plaintiffs’ counsel will seek an award of attorney’s fees and expenses. The settlements for the consolidated shareholder derivative lawsuits pending in that same court (In re Rentech Derivative Litigation, Lead Case No. 2:10-cv-0485-GHK-PJW) and in the Superior Court of the State of California for the County of Los Angeles (Andrew L. Tarr v. Dennis L. Yakobson, et al., LASC Master File No. BC430553) provide that the company will adopt certain governance practices, and pay (or cause its insurance carrier to pay) plaintiffs’ attorney’s fees and expenses of up to $300,000. The company expects that over 90 percent of the aggregate securities class action and shareholder derivative settlement payments will be covered by its insurance carriers. The settlements are subject to court approval and certain other conditions, including notice to the company’s stockholders.