You may have missed the article in The Moscow Times, but former directors of Stillwater Mining Co. have lost a lawsuit to some disgruntled investors.
On Monday, Bloomberg News Service picked up the story, apparently first printed in Russia, that investors who sued Stillwater officials for a breach of fiduciary responsibility five years ago have won a $2.6 million settlement.
According to Stillwater's last annual report, in 2002 some investors sued company officials in a Delaware Chancery Court and in federal courts in New York and Montana over "misleading statements about the company's financial performance" and its ore reserves. The New York District Court case was moved to Montana.
On Dec. 7, Delaware Chancery Court Judge Stephen Lamb approved a negotiated settlement of $2.6 million, plus $50,000 in attorney fees.
"Plaintiffs achieved what they set out to achieve," Lamb said, according to the Bloomberg report.
The Delaware Chancery Court is a special court in Delaware that focuses on corporate matters with the authority to issue declaratory judgments and temporary injunctions. A federal judge in Montana also must approve the settlement.
The majority of stock - nearly 55 percent - in the Billings-based Stillwater Mining Co. is owned by Norilsk Nickel of Moscow. Norilsk bought controlling interest in the only U.S. producer of platinum and palladium in 2003. The precious metals are primarily used for jewelry and in catalytic converters for cars and trucks.
The Russian mining giant is the world's largest producer of palladium and nickel and a leading producer of platinum and copper. And the corporate partner to Stillwater Mining may be undergoing big management changes.
Last February, news reports said that one of Norilsk's two top investors, Mikhail Prokhorov, offered to sell his shares in the mining company to the other top investor and executive, Vladimir Potanin. Other reports speculated that outgoing Russian President Vladimir Putin may try to renationalize Norilsk Nickel as he consolidates control of oil and gas and other mining assets.
Last June, after a fight with a Swiss-based company, Norilsk Nickel paid a premium price of $6.4 billion for LionOre, a Canadian nickel and gold producer that also operates in Botswana, South Africa, and Australia.
Stillwater Mining operates two Montana mines, the original at Nye and a second along the East Boulder River. The company was named as a "nominal defendant" in this investor lawsuit and no damages were sought, so the company issued no press release or U.S. Securities and Exchange Commission announcement about the settlement.
"The only reason I knew about it is it appeared on this clip service that we are trying out," said Dawn McCurtain, Stillwater Mining's marketing and investor relations officer. "I wouldn't expect to see this appear first in Moscow (and then) through Bloomberg."
Stillwater Mining isn't financially responsible for the settlement, McCurtain said.
"It actually comes from the insurance company," she said.
Investors who owned stock between April 20, 2001, and April 1, 2002, are eligible for part of the settlement, according to Bloomberg. No further details about the names of the former directors or how to apply for a settlement were immediately available.
"The entire litigation proceedings haven't been completed yet," McCurtain said. "When they are, information will be released on what to do next."
Stillwater Mining reported $613 million in sales in 2006. The mining stock has had a volatile ride this year, hitting a 52-week high of $16.47 on April 26 and a low of $7.93 on Aug. 16.
SMC, which trades on the New York Stock Exchange, closed at $10.34 on Tuesday, 48 cents off the opening price.
Contact Jan Falstad at firstname.lastname@example.org or 657-1306.