Petrobras pay $2.95 bn settle US corruption suit

Petrobras to pay $2.95 bn to settle US corruption suit

11:55 AM, 4th January 2018
Petrobras to pay $2.95 bn to settle US corruption suit
Under the proposed settlement, Petrobras has agreed to pay $2.95 billion to resolve claims. (File photo)

RIO DE JANEIRO, BRAZIL: Petrobras has signed an agreement in principle to settle the securities class action lawsuit filed in the United States District Court for the Southern District of New York (SDNY).

The agreement is intended to resolve all pending and prospective claims by purchasers of Petrobras securities in US and by purchasers of Petrobras securities that are listed for trading in the US.

It eliminates the risk of an adverse judgment which, as Petrobras has previously reported, could have a material adverse effect on the company and its financial situation, and puts an end to the uncertainties, burdens and costs of protracted litigation.

Under the proposed settlement, Petrobras has agreed to pay $2.95 billion to resolve claims in two installments of $983 million and a last installment of $984 million.

The agreement does not constitute any admission of wrongdoing or misconduct by Petrobras. In the agreement, Petrobras expressly denies liability. This reflects its status as a victim of the acts uncovered by Operation Car Wash, as recognized by Brazilian authorities including the Brazilian Supreme Court.  As a victim of the scheme, Petrobras has already recovered R$1.475 billion in restitution in Brazil and will continue to pursue all available legal remedies from culpable companies and individuals.

The agreement is in the company’s best interest and that of its shareholders, given the risks of a verdict advised by a jury, particularities of US procedure and securities laws, as well its assessment of the status of the class action and the nature of such litigation in US, where only approximately 0.3 percent of securities-related class actions proceed to trial.

As a result of the agreement, the parties will ask the United States Supreme Court to defer consideration of Petrobras’s petition for a writ of certiorari, which was scheduled for 5 January 2018.

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