お知らせ • Nov 25
Exelon Provides Notice of Pending and Proposed Settlement of Shareholder Derivative Action
Pursuant to Rule 23.1 of the Federal Rules of Civil Procedure (“Rule 23.1”) and an Order of the United States District Court for the Northern District of Illinois (the “Court”), that a proposed Settlement has been reached by the Settling Parties in the above-captioned shareholder derivative action now pending before the Court brought on behalf of Exelon. The Settlement would resolve all claims asserted in the consolidated derivative action captioned In re Exelon Corporation Derivative Litigation, No. 1:21-cv-03611 (N.D. Ill. Jul. 8, 2021) (“Consolidated Derivative Action”), as well as all claims described in the Demand Letters The Consolidated Derivative Action, brought derivatively on behalf of Exelon, alleged claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of federal securities laws against the Individual Defendants and various current and former Company officers, directors, and employees, as well as third parties, relating to or arising out of the conduct set forth in the Deferred Prosecution Agreement (“DPA”) (as defined in the Stipulation) and/or the Demand Letters. In response to the Demand Letters and pursuant to 15 Pa. C.S. § 1783(a), the Board of Exelon established the SLC to investigate and address the alleged breaches of fiduciary duties and other violations by Exelon and ComEd officers and directors related to the conduct described in the DPA. The SLC represents that, over the course of nearly two years, it conducted a thorough, probing, and entirely independent investigation of all issues raised in the Demand Letters, which included significant document review and a substantial number of witness interviews. Pursuant to 15 Pa. C.S. § 1783(e), the SLC determined that the Settlement is in the best interests of the Company. On May 18, 2023, the SLC unanimously approved a resolution reflecting its recommendation that the Company should settle and dismiss the claims raised in the Consolidated Derivative Action, and any other future action(s) relating to or arising out of the conduct at issue or described in the Consolidated Derivative Action, the Demand Letters, or the investigation of the SLC, on the terms set forth in the Stipulation. On May 19, 2023, the Independent Review Committee (“IRC”), which the Board previously formed to ensure that the Board’s consideration of the SLC’s recommendation would be completely independent and objectively in the best interest of the Company, unanimously approved a resolution reflecting its determination that the Settlement is in the best interests of the Company and recommending that the Board settle the matters raised in the Demand Letters and the Consolidated Derivative Action on the terms set forth in the Stipulation. On May 22, 2023, the Board unanimously approved a resolution reflecting the Board’s acceptance of the IRC’s determination that the Settlement is in the best interest of the Company and the Board’s adoption of the SLC’s determination that the Company should settle and dismiss the claims raised in the Demand Letters and the Consolidated Derivative Action on the terms set forth in the Stipulation. On June 9, 2023, Plaintiffs, Defendants, the SLC, and the IRC executed the Stipulation. If the Court approves the proposed Settlement, Exelon shareholders will be forever barred from contesting the Settlement and from pursuing the Released Claims. In consideration for the full and final release, settlement, and discharge of any and all Released Claims and the dismissal with prejudice of the Consolidated Derivative Action on the terms and conditions set forth in the Stipulation, the Settling Parties have agreed (i) to a monetary payment of $40 million paid by the Company’s insurers to the Company; and (ii) that Exelon will implement and/or maintain certain corporate governance reforms as set forth in Exhibit A of the Stipulation. The Company has decided in its business judgment to use $30 million of these insurance proceeds to fund a portion of the $173 million securities settlement in the action captioned Flynn v. Exelon Corp., Case No. 1:19-cv-08209 (N.D. Ill.). To date, Plaintiffs’ Counsel have not received any payment for their efforts or for the expenses they incurred in pursuing the Consolidated Derivative Action on behalf of Exelon and its shareholders. In recognition of Plaintiffs’ Counsel’s role in prosecuting the Consolidated Derivative Action, Exelon agrees to cause its insurers to pay attorneys’ fees and expenses to Plaintiffs’ Counsel in the total amount of $10,000,000 (the “Fee and Expense Amount”), subject to the Court’s approval. On March 18, 2026 at 11:00 a.m., the Court will hold the Settlement Hearing before the Honorable John Robert Blakey, United States District Judge of the United States District Court for the Northern District of Illinois, in Courtroom 1203 of the Everett McKinley Dirksen United States Courthouse, 219 South Dearborn Street, Chicago, IL 60604. The purpose of the Settlement Hearing is to determine: (i) whether the Settlement is appropriate and in the best interests of Exelon and its shareholders and should be approved pursuant to 15 Pa. C.S. § 1783 and the procedural notice provisions of Rule 23.1; (ii) whether a Final Judgment, substantially in the form attached as Exhibit F to the Memorandum in Support of the Motion for Preliminary Approval of the Settlement, should be entered dismissing the Consolidated Derivative Action with prejudice, and settling and releasing, and barring and enjoining the commencement or prosecution of any action asserting any Released Claims, as set forth in the Stipulation; (iii) whether the Fee and Expense Amount to the Plaintiffs’ Counsel set forth in paragraph 5.1 of the Stipulation should be approved and whether the Court should award any requested service awards to the Plaintiffs; and (iv) such other matters as may be necessary and proper under the circumstances.