Duke Energy agrees to pay $27 million to settle 2012 CEO firing

Emissions rise from Duke Energy's Gibson Station power plant in Owensville, Ind.
Luke Sharrett | Bloomberg | Getty Images
Emissions rise from Duke Energy's Gibson Station power plant in Owensville, Ind.

Duke Energy has agreed to pay $27 million to settle a lawsuit over the power producer's abrupt firing of its newly installed chief executive in 2012.

Duke had agreed to install Progress Energy head William Johnson a chief executive of the combined company as part of the terms to buy Progress.

But within hours of the deal closing in July 2012, the new Duke board met and fired Johnson, reinstating former Duke CEO James Rogers.

Johnson left with a pre-negotiated $44 million severance package.

Shareholders soon sued Duke, arguing the decision to fire the CEO was reached in May 2012 and concealed from the public, investors and regulators.

A Delaware judge in August denied Duke's bid to end the case, finding the plaintiffs plausibly argued that the defendants might have concealed information about their actions from the public and regulators.

The settlement will be "funded by certain insurers" and does not include admission of any liability or wrongdoing by Duke, according to a court document filed Nov. 9.