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Miller Energy looks to settle securities lawsuit in Tennessee
Miller Energy Resources Inc. says it has reached a settlement in a securities fraud case in Tennessee, where the company is based.
Resolving the class action would involve a payout of $2.95 million, with the money coming from the company’s insurer, said a notice of settlement filed July 17 in U.S. District Court at Knoxville.
Miller is the parent company of Cook Inlet Energy LLC, an Anchorage-based oil and gas producer and explorer.
Investors hit Miller with several lawsuits after its stock price tanked in 2011. The suits were consolidated into a single case, with the Oklahoma Firefighters Pension and Retirement System designated as lead plaintiff.
The investors alleged Miller executives overstated the value of Cook Inlet oil and gas assets acquired in 2009, and violated accounting principles. This had the effect of artificially inflating the price of Miller’s stock, the plaintiffs contended.
Investors who bought the stock suffered losses after the fraud was exposed and Miller’s stock price crashed, the lawsuit alleged.
Miller denied misleading investors, defended its asset valuation, and moved to dismiss the case. The presiding judge, however, in February denied the motion.
The settlement notice said the lead plaintiff and Miller took part in two mediation sessions, the most recent on June 5.
Subsequently, the two sides continued to negotiate a settlement and “have now agreed upon all material terms.”
They’ve asked the court to call off pending case deadlines and the trial scheduled for Feb. 9, 2015, so they can finalize the settlement.
The parties expect to file full settlement documentation by Aug. 15, with a hearing on preliminary approval possibly to come in early September.
Cash bonuses Miller entered the Alaska oil and gas arena in December 2009 when its subsidiary, Cook Inlet Energy, acquired a collection of assets out of the bankruptcy of California-based Pacific Energy Resources Ltd.
The assets, arrayed along the inlet’s west side, included the West McArthur River oil field, the offshore Redoubt unit and Osprey platform, and an assortment of other properties and leases.
Since then, the company has worked aggressively to rehabilitate the assets, and to acquire new properties including the North Fork gas field on the Kenai Peninsula. The company also is in the process of taking over the Badami oil field and pipeline on the North Slope.
Meantime, Miller is looking to sell off its Tennessee assets to focus on Alaska.
The company is listed on the New York Stock Exchange.
In recent filings with the U.S. Securities and Exchange Commission, Miller reported average production in excess of 3,000 barrels of oil equivalent per day.
On July 31, Miller filed a report regarding executive compensation.
The report said the company’s board of directors had approved cash bonuses for top executives for fiscal year 2014, which ended April 30.
Scott Boruff, chief executive officer, was awarded a $150,000 bonus, the report said.
Other executives receiving bonuses include Deloy Miller, executive chairman, $125,000; David Voyticky, president, $75,000; John Brawley, chief financial officer, $75,000; David Hall, chief operating officer and the company’s point man in Alaska, $125,000; and Conrad Perry, vice president and drilling manager for Cook Inlet Energy, $50,000.
For fiscal 2015, base salaries were listed as follows: Boruff, $795,000; Miller, $375,000; Voyticky, $500,000; Brawley, $350,000; Hall, $375,000; and Perry, $350,000.
President departs On Aug. 12, Miller announced Voyticky, the company’s president, had resigned “to pursue other opportunities.”
Other Miller executives will assume Voyticky’s responsibilities, the company said.
“I would like to personally thank David for his tremendous contributions to Miller over the past four years,” CEO Boruff said.
Boruff credited Voyticky with helping cut interest rates on company borrowing, and helping raise “hundreds of millions of dollars to fund our successful drilling program and acquisition strategy.”
- Wesley Loy
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