Halliburton to Settle Accounting Suits
Halliburton Co. said Friday it has agreed to pay $6 million to settle 20 shareholder lawsuits that accused it of using deceptive accounting practices while Vice President Dick Cheney led the company.
The lawsuits challenged the way that the oil-field-services company counted revenue from cost overruns and change orders on long-term fixed-price construction projects.
Halliburton began booking some of the unapproved amounts as revenue in 1998 and later disclosed the change in filings with the Securities and Exchange Commission. The SEC is investigating the accounting change and the way it was disclosed.
The company said three of the four lead plaintiffs have agreed to the settlement and a fourth is evaluating the offer. The plaintiffs had bought Halliburton stock between 1998 and 2002, and the cases had been combined into one class-action lawsuit filed in a Dallas federal court.
Halliburton said it would not admit wrongdoing.
The proposed settlement requires the release of all present and former Halliburton officers and directors named in the lawsuits, the company said.
Cheney was chief executive of the Houston-based company from 1995 until August 2000, when he resigned to become then-Texas Gov. George W. Bush’s running mate.
Cheney’s private attorney, Terrence O’Donnell of the Washington law firm Williams & Connolly, declined to comment Friday.
Halliburton spokeswoman Wendy Hall said the settlement is subject to court review and approval. The company said the costs of the settlement would not affect second-quarter results.
A similar lawsuit filed in Houston has been dismissed, the company said.
The settlement would follow a December deal under which Halliburton agreed to pay about $4 billion in cash and stock to resolve 300,000 asbestos claims and head off future cases. Fears about liability from asbestos claims, most of which Halliburton inherited in the 1998 acquisition of Dresser Industries Inc., had helped drive the stock from more than $50 to a low of about $9.
Friday’s announcement did not resolve all of Halliburton’s legal challenges. Judicial Watch, a government-watchdog group, said its lawsuit against Cheney and the company was not affected. The group accuses the company of defrauding investors by changing accounting methods.
Halliburton is one of the world’s largest providers of equipment and services to the oil and gas industry.