PostRock Securities Litigation Resolved
OKLAHOMA CITY, Jan. 27, 2011 (GLOBE NEWSWIRE) -- PostRock Energy Corporation (Nasdaq:PSTR) ("PostRock" or the "Company") today announced the final settlement of all its outstanding federal and state securities and shareholder derivative litigation. In November, the United States District Court for the Western District of Oklahoma approved the settlement of a series of lawsuits dating back to as early as 2008. However, before the settlement could become final, dismissal of certain state court derivative actions was required. An agreed order dismissing those cases was entered yesterday, concluding the settlement process.
PostRock contributed $1.0 million toward the settlement of the lawsuits and $0.4 million toward the associated defense costs of certain individual defendants. The $1.4 million was recognized prior to the end of the third quarter of 2010 and nearly all was paid prior to year end.
Commenting on the announcement, David C Lawler, the Company's President and CEO, said "The settlement of all securities claims made against the Company arising out of the actions of its prior management is a major step. While numerous challenges remain, the elimination of these claims, in concert with our recent debt reduction and Appalachian property sales, has freed up a significant amount of management time that can be redirected to enhance the efficiency and effectiveness of our core business. We look forward to keeping you abreast of our continued progress in the months ahead."In September, 2010, White Deer Energy L.P., a middle-market energy private equity fund, invested $60 million in PostRock and the Company restructured its credit agreements. In the last 30 days, two packages of non-strategic assets in Appalachia have been sold for approximately $40 million and certain other minor related property interests may be sold shortly. The Company is currently focused on optimizing its operations in the Cherokee Basin before it begins to pursue a growth strategy based on a combination of ongoing development and acquisitions.
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