Brazilian oil company Petrobras agrees to $2.95B settlement with U.S. investors

By Ed Adamczyk  |  Jan. 3, 2018 at 12:44 PM
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Jan. 3 (UPI) -- The state-owned Brazilian oil company Petrobras agreed to pay nearly $3 billion to settle a U.S. shareholder lawsuit, it announced on Wednesday.

The settlement ends a three-year legal battle in which depository receipt holders and bondholders in the United States lost money as the company's market value declined. Brazilian prosecutors began an inquiry in 2014 regarding a far-reaching money-laundering, bribery and kickback scheme known as Operation Carwash. Dozens of Petrobras executives and Brazilian politicians, including former Presidents Dilma Rouseff and Luis Lula de Silva, have been implicated.

Prosecutors say that nearly $3 billion in bribes were paid in the arrangements, The New York Times reported on Wednesday.

Petrobras calls itself a victim of the corruption, and said on Monday that about $449 million in restitution has already been recovered. The settlement with U.S. investors totals $2.95 billion and will be paid in three installments charged to its fourth-quarter earnings, the company said in a Wednesday filing with the U.S. Securities and Exchange Commission.

While the settlement must still be approved by a U.S. court, Jeremy Lieberman, lead counsel for the plaintiffs in the class-action lawsuit, said his clients were "very pleased with this historic settlement. Simply put, this litigation and its ultimate resolution have yielded an excellent result for the class."

Petrobras said that the settlement is not an admission of wrongdoing on the company's part. In a statement, it called itself "a victim of acts uncovered by Operation Carwash, as recognized by Brazilian authorities including the Brazilian Supreme Court."

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