Sep 14, 2000 |
PAA and Plains Resources Inc. Announce Agreement in Principle With Plaintiffs to Settle Class Action Lawsuits |
(Houston – September 14, 2000) Plains All American Pipeline, L.P. (NYSE:PAA) and
Plains Resources Inc. (AMEX:PLX) announced today they had reached an agreement in principle
for the settlement of class action securities suits related to the unauthorized trading loss disclosed
in November 1999. For purposes of the settlement, the two classes include all persons who
purchased the common limited partnership units of Plains All American Pipeline, L.P. from
November 17, 1998, through November 26, 1999, and all persons who purchased the common
stock and call options of Plains Resources Inc. from October 29, 1998, through November 26,
1999, in both cases excluding defendants and their affiliates.
Aggregate amounts to be paid under the agreement in principle total approximately $29.5
million plus interest through the date actual proceeds are remitted to representatives for the
plaintiffs. Taking into account applicable insurance proceeds and existing reserves, it is estimated
that the settlement and associated expenses will reduce current quarter net income by up to $0.14
per unit for the Partnership and $0.06 to $0.17 per share for the Company, depending on the final
allocation between the Partnership and the Company of the settlement amount and related costs.
Plains All American and Plains Resources denied the claims in the lawsuits and stated
they are entering into this settlement arrangement to eliminate the significant burden and expense
of further litigation. The settlement is subject to a number of conditions, including negotiation
and finalization of a stipulation and agreement of settlement and related documentation, and approval of the United States District Court.
“After taking into account the estimated insurance proceeds, we believe that the
settlement arrangement is in the best interests of Plains All American and Plains Resources, as it
enables us to avoid a protracted and expensive litigation process,” said Greg L. Armstrong, Chief
Executive Officer. “Moreover, upon satisfying the conditions of the settlement, we can devote
100% of our attention to continuing the profitable operation and growth of our base businesses.”
Armstrong noted that upon satisfaction of the conditions of the agreement in principle,
the settlement arrangement would dispose of all class action securities claims made following the
announcement of the unauthorized trading loss in November 1999. The settlement arrangement
does not resolve two outstanding derivative lawsuits filed in Delaware Chancery Court and in
Texas which named Plains All American’s General Partner, its directors and certain of its
officers as defendants alleging they breached their fiduciary duties owed to Plains All American
and its unitholders. Plains All American is a nominal defendant in these derivative complaints.
All statements, other than statements of historical fact, included in this press release are
forward-looking statements, within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements reflect the current views of the Partnership and the Company with
respect to future events, based on what the Partnership and Company believe to be reasonable
assumptions. These statements, however, are subject to certain risks and uncertainties and
assumptions, including but not limited to, those set forth in the Partnership’s and the Company’s
Forms 10-K for the year ended December 31, 1999 (at pages 2 and 21 and pages 2 and 33,
respectively), as well as final negotiation of settlement documents relating to the securities
litigations described above, satisfaction of all conditions to the settlement, and court approval of
the settlement.
Plains Resources is an independent energy company engaged in the exploration,
acquisition, development and exploitation of crude oil and natural gas. Plains All American
Pipeline, L.P. is engaged in interstate and intrastate crude oil transportation, terminalling and
storage, as well as crude oil gathering and marketing activities, primarily in California, Texas,
Oklahoma, Louisiana and the Gulf of Mexico. Plains All American Inc., a wholly owned subsidiary
of Plains Resources Inc., holds an effective 54% interest in the Partnership and serves as its General
Partner. The Partnership’s common units are traded on the New York Stock Exchange under the
symbol “PAA.” Plains Resources Inc.’s common shares are traded on the American Stock
Exchange under the symbol “PLX.” Both the Partnership and the Company are headquartered in
Houston, Texas. |
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