GENIE ENERGY LTD. (NYSE:GNE) Files An 8-K Other EventsItem 8.01 Other Events.
On July 5, 2017, Genie Energy Ltd. (the “Registrant”) and its subsidiaries, IDT Energy, LLC, Genie Retail Energy, Inc. and Genie Energy International Corporation, Inc. (collectively, the “Defendants”) entered into a class action settlement agreement (the “Settlement Agreement”) with the class action plaintiffs Louis McLaughlin, Anthony Ferrare and Deborah Aks, acting individually and on behalf of the entire class, in the lawsuits entitled McLaughlin v. IDT Energy, Inc. (Civil Action No. 14 Civ. 4107), Ferrare v. IDT Energy, Inc. (Civil Action No. Civ. 4658) and Aks v. IDT Energy, Inc., (Civil Action No. L-04936-14) (the “Lawsuits”), currently pending in the United States District Court for the Eastern District of New York, United States District Court for the Eastern District of Pennsylvania and Superior Court of New Jersey Law Division, Essex County, respectively. In these actions, which were brought shortly after the winter of 2013-2014, the named plaintiffs alleged that they and other former and current electric or gas customers of Defendants were injured as a result of Defendants’ allegedly unlawful sales and marketing practices. During that winter, due to the unusually severe cold weather, wholesale energy commodity costs rose dramatically, contributing to an usually high volume of customer complaints throughout the industry, particularly for suppliers with variable rate plans. Defendants took voluntary steps to address the impact on its customers from the “polar vortex” and is dedicated to customer satisfaction, The Registrant does not believe that there was any wrongdoing on its part, and is entering into this settlement to further its efforts to address its customers’ concerns.
Under the Settlement Agreement, the Registrant has agreed to pay certain amounts (the “Settlement Payment”) to resolve the Lawsuits and obtain a release of claims that were asserted or could be asserted in the Lawsuits or that are related to or arise out of the conduct alleged in the Lawsuits or similar conduct, wherever it may have occurred. The Settlement Payment includes payments to customers who timely make a claim (the “Class Members”), class counsel, and the named plaintiffs as well as the cost of a claims administrator for administrating the claims process.
Class Members are to receive settlement payments in the form of a check or credit against future invoices. The amount of the settlement payment will depend on a variety of factors, including whether the Class Member was an electric, gas or dual meter customer, energy usage level, and the length of time that the Class Member was a customer of Defendants. Electric customers will receive cash payments of between $2.50 and $3.50, depending on usage level, for each month Defendants supplied electricity up to a maximum of 15 months or a credit of between $4.25 and $5.25, depending on usage level, for each month Defendants supplied electricity up to a maximum of 20 months. Gas customers will receive cash payments of between $0.75 and $1.00, depending on usage level, for each month Defendants supplied gas up to a maximum of 15 months or a credit of between $1.70 and $2.10, depending on usage level, for each month Defendants supplied gas up to a maximum of 20 months. Class Members who received certain rebates from Defendants will also have the right to elect to have their rebate recalculated or to receive a $1.00 cash payment or $2.00 invoice credit. The actual amount to be paid out will depend on several factors, including the number of customers who elect to be seek the settlement payments to which they are entitled. The Registrant estimates, based in part on historical participation rates, that its total Settlement Payment will be approximately $9 million.
The Settlement Agreement is subject to entry of a final order by the court approving the Settlement Agreement.
About GENIE ENERGY LTD. (NYSE:GNE)
Genie Energy Ltd. (Genie) owns interest in its subsidiary, Genie Energy International Corporation, which owns Genie Retail Energy and Genie Oil and Gas, Inc. The Company operates through three segments: Genie Retail Energy (GRE), Afek Oil and Gas, Ltd. (Afek), and Genie Oil and Gas (GOGAS). The GRE segment operates retail energy providers (REPs), including IDT Energy, Inc. and Residents Energy, Inc., and energy brokerage and marketing services. Its REP businesses resell electricity and natural gas to residential and small business customers. The Afek segment operates an oil and gas exploration project. The GOGAS segment is an oil and gas exploration company. The GOGAS segment consists of early-stage oil shale projects, including its interest in Genie Mongolia, Inc., an oil shale exploration project; American Shale Oil Corporation, which holds and manages an interest in AMSO, LLC, an oil shale development project, and Israel Energy Initiatives, Ltd., an oil shale development project.
