KANSAS CITY, Mo. (AP) -- Aquila Inc. has agreed to pay $10.5 million to settle a class-action lawsuit that accuses the utility of misleading employees by encouraging them to invest retirement funds in the utility's stock during its risky boom years.
The settlement, filed Monday in federal court, comes in addition to numerous enhancements the company made to its pension benefits after a group of former employees sued Aquila and its board of directors in September 2004.
"Those benefits were very substantial," plaintiff attorney Steven Krasner said. "If you add the $10.5 million to that, they did a pretty decent job to make people whole."
Aquila officials continue to deny wrongdoing and say they're settling the case to get it behind them.
"It's always more efficient to resolve the issues in a case rather than follow through the courts," spokesman Al Butkus said.
U.S. District Judge Dean Whipple still must decide if the agreement is reasonable. If he does, both sides have requested a final hearing be scheduled for Nov. 13 to hear concerns from plaintiffs and to potentially approve the agreement.
The settlement covers an estimated 7,000 current or former Aquila employees who bought or owned retirement plan shares between Jan. 1, 1999, and May 5, 2004, although not all of them will be eligible for benefits, Krasner said.
Plaintiffs argued the company misled them, beginning in 1999 when officials described Aquila stock as a "conservative" investment option for participants in its retirement plans.
At the time, Aquila, then named UtiliCorp United Inc., was beginning to aggressively participate in the risky energy trading business.
The collapse of energy trading giant Enron Corp. in 2001 pulled Aquila under as well, knocking off 92 percent of the company's share price during the class period and wiping out an estimated $183 million in retirement plan value.
After the lawsuit was filed, Aquila agreed to provide a number of enhancements to pension plan participants, such as eliminating a 30-year service cap to determine benefits, providing medical premium credits and offering free financial planning services.