(Dow Jones Newswires circulated the following article on November 1.)
WASHINGTON — Union Pacific Corp. said Wednesday that the U.S. government is seeking more than $246 million in damages from its Union Pacific Railroad Co. unit in connection with a 2000 forest fire in California.
Union Pacific said in its quarterly report filed with the Securities and Exchange Commission that its unit disputes the amount, which is significantly higher than the initial claim filed by the U.S. government.
Union Pacific also said that it believes it has adequate insurance coverage and that it doesn’t expect the litigation to have an adverse material impact on its financial condition.
The fire, which started Aug. 17, 2000, ravaged areas of the Plumas National Forest, the Lassen National Forest, and private timberland near Storrie, Calif. U.S. Forest Service officials then blamed Union Pacific Railroad maintenance crews for starting the fire.
Separately, Union Pacific said it entered into a stipulation of compromise and settlement with the plaintiff of a purported shareholder derivative lawsuit who had alleged failures by Union Pacific Railroad to properly report accidents and comply with safety standards.
As part of the proposed settlement, Union Pacific agreed to pay about $1.13 million to cover the plaintiff’s legal fees and expenses. In addition, the company agreed to hire an outside consultant to review the monitoring of safety performance, name a chief safety officer, and change its corporate policies to emphasize operational safety and regulatory compliance.