Constellation shareholders file lawsuits challenging merger

Six filed in Baltimore City Circuit Court since news of deal with Exelon

May 09, 2011|By Hanah Cho, The Baltimore Sun

Constellation Energy Group shareholders have filed six lawsuits in Baltimore City Circuit Court since the power company announced in late April that it had agreed to sell itself to Chicago-based Exelon Corp. for $7.9 billion in an all-stock deal.

In a filing Monday with the Securities and Exchange Commission, Constellation said the class-action lawsuits allege the company's directors breached their fiduciary duties because the deal does not maximize shareholder value.

Within a day of the deal's announcement, law firms were seeking plaintiffs in filing class-action lawsuits challenging the proposed union, which would create the largest U.S. competitive energy provider and one of the largest utility systems in the country.

Constellation's regulated utility is Baltimore Gas & Electric, while Exelon has two regulated utilities, one in Chicago and another in Philadelphia.

Constellation said in the filing that it was unable to offer an estimate of possible losses related to the proceedings or to determine the ultimate outcome of the lawsuits.

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