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Federal judge approves $192 million shareholder settlement over failed SC nuclear project

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V.C. Summer nuclear project

The failed V.C. Summer nuclear project near Jenkinsville. A federal judge approved a $192.5 million legal settlement Thursday between the former shareholders of SCANA Corp. and the company's new owner Dominion Energy, stemming from the nuclear project. Provided

A federal judge signed off on a $192.5 million legal settlement Thursday between the former shareholders of SCANA Corp. and the company's new owner Dominion Energy.

The deal, which is being celebrated as the largest investor-related settlement in South Carolina history, stems from the failed V.C. Summer nuclear expansion project in Fairfield County. 

That project, which lasted for nearly a decade, was undertaken by Cayce-based SCANA and Santee Cooper, South Carolina's state-run utility. 

The payout to SCANA's investors is the latest settlement to come out of the failed nuclear project in which $9 billion was sunk into two unfinished reactors before construction was halted.

A separate settlement between Dominion and SCANA's former electric customers was approved last year. A similar settlement between Santee Cooper and its electric ratepayers awaits approval in state court. 

The SCANA shareholder settlement, which took months to negotiate, will include $160 million in cash. The remaining $32.5 million will be covered by cash or Dominion stock. 

In a virtual hearing, U.S. District Judge Margaret Seymour called the settlement fair and reasonable, considering the uncertainty SCANA's former shareholders would face if they pushed the case to trial. 

The total, however, equals only 13 percent of the money the plaintiff attorneys would have asked for had the case gone before a jury. 

The lawsuits alleged SCANA's former executives and several of its board members for years misled the company's shareholders about the health of the nuclear project. They focused specifically on an audit of the nuclear construction project from 2015 which warned the reactors likely would not be completed in time to cash in on billions of dollars in federal tax credits. 

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"This case involved something quite unique: The building of a nuclear power plant and why that failed," said John Browne, one of the lead plaintiff attorneys with Bernstein, Litowitz, Berger and Grossman.

The law firms that sued on behalf of SCANA's investors will take home 14 percent of the settlement — roughly $26.95 million.

The other law firms involved included Motley Rice and Labaton Sucharow. 

"We appreciate the court's thoughtful analysis and consideration of the settlement, which is an excellent result for class members and the largest securities class action recovery ever in South Carolina," said Marlon Kimpson, an attorney with Motley Rice and a Democratic member of the South Carolina Senate.  

Browne said the law firms' cut of the settlement was "modest" considering the subpoenas, depositions and other discovery they undertook to build their case. 

"I'm pleased to sit here in my living room and present this settlement," Browne said. "We believe it is an exceptional settlement for the class. It is the highest securities class action settlement in South Carolina history." 

The settlement, however, is unlikely to end all of the legal drama surrounding the failed nuclear project. 

Steve Byrne, who served as SCANA's vice president during the nuclear construction, is scheduled to be in federal court in Columbia next week, and is prepared to plead guilty to defrauding SCANA's electric utility customers. He's unlikely to be the last person to be indicted by the U.S. Attorneys Office in South Carolina. 

Byrne's plea agreement will require him to cooperate with federal prosecutors, and the charging documents in his case signal that SCANA's former CEO Kevin Marsh and former chief financial officer Jimmy Addison are also targets of the criminal investigation. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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