UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 26, 2019

 

 

NiSource Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-16189   35-2108964

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(I.R.S. Employer

Identification No.)

801 East 86th Avenue

Merrillville, Indiana

  46410
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (877) 647-5990

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading

Symbol(s)

 

Name of Each Exchange

on Which Registered

Common Stock, par value $0.01 per share   NI   New York Stock Exchange
Depositary Shares, each representing a 1/1,000th ownership interest in a share of 6.50% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25,000 per share and a 1/1,000th ownership interest in a share of Series B-1 Preferred Stock, par value $0.01 per share, liquidation preference $0.01 per share   NI PR B   New York Stock Exchange

 

 

 

Item 8.01.

Other Events.

Proposed Settlement of Third-Party Claims Related to the Greater Lawrence Incident

On July 26, 2019, NiSource Inc. (the “Company”), Columbia Gas of Massachusetts, a subsidiary of the Company (“Columbia of Massachusetts”), and NiSource Corporate Services Company, a subsidiary of the Company, entered into a term sheet with the class action plaintiffs under which they agreed to settle the class action claims in connection with the series of fires and explosions that occurred in Lawrence, Andover and North Andover, Massachusetts related to the delivery of natural gas by Columbia of Massachusetts on September 13, 2018 (the “Greater Lawrence Incident”).

Columbia of Massachusetts agreed to pay $143 million into a settlement fund to compensate the settlement class and the settlement class agreed to release Columbia of Massachusetts and affiliates from all claims arising out of or related to the Greater Lawrence Incident. The following claims are not covered under the proposed settlement because they are not part of the consolidated class action: (1) physical bodily injury and wrongful death; (2) insurance subrogation, whether equitable, contractual or otherwise; and (3) claims arising out of appliances that are subject to the Massachusetts Department of Public Utilities orders. Emotional distress and similar claims are covered under the proposed settlement unless they are secondary to a physical bodily injury. The settlement class is defined under the term sheet as all persons and businesses in the three municipalities of Lawrence, Andover and North Andover, Massachusetts, subject to certain limited exceptions. The proposed settlement is subject to negotiation and execution of a final settlement agreement, and preliminary and final court approvals.

At March 31, 2019, the Company estimated that total costs related to third-party claims resulting from the Greater Lawrence Incident would range from $961 million to $1,010 million, depending on the final outcome of ongoing reviews and the number, nature and value of third-party claims, and that total other incident-related costs would range from $360 million to $370 million, depending on the incurrence of future restoration work. Such amounts did not include certain costs as noted below.

For the quarter ended June 30, 2019, the Company expects to record a charge of approximately $103 million for costs related to the Greater Lawrence Incident, which includes the impact of the proposed settlement of the third-party claims described above. At June 30, 2019, the Company estimates that total costs related to third-party claims resulting from the incident will range from $994 million to $1,020 million, depending on the final outcome of ongoing reviews and the number, nature and value of third-party claims, and that total other incident-related costs will range from $430 million to $440 million, depending on the incurrence of future restoration work.

The foregoing amounts do not include costs of certain third-party claims that the Company is not able to estimate or the estimated capital cost of the pipeline replacement. Such amounts also do not include the total amount of any expenses associated with government investigations and fines, penalties or settlements with certain governmental authorities, including the Massachusetts Department of Public Utilities and other regulators that the Company may incur in connection with the Greater Lawrence Incident.

The Company will provide an update on the foregoing and other ongoing matters related to the Greater Lawrence Incident in connection with its release of earnings and quarterly report on Form 10-Q for the quarter ended June 30, 2019.

On July 29, 2019, NiSource issued a press release announcing the proposed settlement of the third-party claims described above. A copy of that press release is filed as an exhibit to this report and is incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits:

 

Exhibit
No.

  

Description

99.1    Press Release issued on July 29, 2019 by NiSource Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    NISOURCE INC.
Date: July 29, 2019     By:  

/s/ Donald E. Brown

      Donald E. Brown
      Executive Vice President and Chief Financial Officer

Exhibit 99.1

 

LOGO

July 29, 2019

MEDIA CONTACT:

Dean Lieberman

978-407-1637

Columbia Gas Settles All Class Action Lawsuits for Merrimack Valley Incident

New $143 million settlement part of the approximately $1 billion in funds dedicated to address needs of affected communities

Company continues to fulfill commitments to residents, businesses

Westborough, Mass.— Columbia Gas of Massachusetts and its parent company, NiSource Inc. (NYSE: NI), today announced a settlement of all class action lawsuits regarding damages resulting from the September 13, 2018 gas event.

As part of the approximately $1 billion in funds dedicated to address the needs of affected customers, residents, and communities, the company will pay $143 million into a settlement fund for a class of plaintiffs, per the terms of the class action settlement announced today. The class of plaintiffs includes thousands of residents and businesses affected by the incident.

This settlement stems from a voluntary mediation process, covering multiple class action lawsuits, in which all parties engaged in good faith negotiations over several months.

“What happened last September  was tragic, and we will always be mindful of its impact on our customers and everyone in the communities we serve, including those represented by this settlement,” said Joe Hamrock, CEO and President of NiSource. “Today marks another important step forward, as we continue to fulfill our commitment to residents and businesses. We are pleased that we have reached a resolution so swiftly, and we thank the mediator, as well as all involved who helped us achieve this result.”

More specifically, the company and the proposed class of plaintiffs have entered into an Agreement in Principle to resolve all class action litigation related to the gas event. The Agreement in Principle will now be subject to court approval.

The ongoing Columbia Gas-managed claims process, which was established immediately after the incident, is still processing claims. It will continue to do so, with oversight of the mediator, until the Court gives preliminary approval to the settlement, at which time a settlement claims administrator will take over the process. All residents and businesses in Andover, Lawrence, and North Andover will be eligible to file claims through this process just as they currently can. More information on this will be made available in the coming weeks.

Other settlements and payments

The approximately $1 billion in funds dedicated to address the needs of the affected customers, residents, and communities includes the $143 million settlement announced today, as well as the following:

 

  •  

Restoration work conducted in homes and businesses, including sourcing and installing nearly 18,500 new appliances and pieces of equipment (i.e. boilers, furnaces, ranges, and dryers).

 

  •  

Temporary housing needs for affected residents, including sourcing more than 4,000 hotel rooms, more than 160 one, two, and three bedroom apartments, and more than 200 RVs. At its peak, more than 2,200 families, totaling more than 8,000 individuals, utilized temporary housing.

 

  •  

Funds paid to residents and businesses through the Columbia Gas-managed claims process thus far.

 

  •  

The April announcement of a settlement with the Figueroa family, of Lawrence, which had several individuals injured as a result of the incident.

 

  •  

The May announcement that the company and the affected municipalities—Andover, Lawrence, and North Andover— agreed to an $80 million settlement covering reimbursement of expenses and claims by the municipalities and curb-to-curb repairs of roadways.

 

  •  

The July announcement of a settlement between the company and the family of Leonel Rondon, the young man who lost his life on September 13, 2018.

As NiSource has previously disclosed, in addition to the approximate $1 billion amount addressed above, NiSource has dedicated funds to the capital pipeline replacement project, charitable donations, and other expenses. The total cost of the recovery related to the Merrimack Valley Incident will be updated in conjunction with NiSource’s second quarter earnings report.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws. Investors and prospective investors should understand that factors govern whether any forward-looking statement contained herein will be or can be realized. Any one of those factors could cause actual results to differ materially from those projected. Examples of forward-looking statements in this press release include statements and expectations regarding the settlement of the class action lawsuits filed against Columbia Gas of Massachusetts and NiSource in connection with the gas incident on September 13, 2018. All forward-looking statements are based on assumptions that management believes to be reasonable; however, there can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ materially from the forward-looking statements discussed in this press release include, among other things, entry into a settlement agreement and preliminary and final approval of such agreement by the Massachusetts state court, and other matters set forth in Item 1A, “Risk Factors” section of NiSource’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in other filings with the Securities and Exchange Commission. NiSource expressly disclaims any duty to update, supplement or amend any of its forward-looking statements contained in this press release, whether as a result of new information, subsequent events or otherwise, except as required by applicable law.

About Columbia Gas of Massachusetts:

More information about Columbia Gas recovery efforts to date can be found here: https://www.columbiagas.com/massachusetts/news-center

Columbia Gas of Massachusetts delivers clean, affordable and efficient natural gas to over 320,000 natural gas customers in southeastern Massachusetts, the greater Springfield area and the Merrimack Valley. Headquartered in Westborough, Massachusetts, the company is the largest gas-only provider in the state and is one of NiSource’s seven regulated utility companies. NiSource (NYSE:NI) is one of the largest fully-regulated utility companies in the United States, serving approximately 3.5 million natural gas customers and 500,000 electric customers through its local Columbia Gas and NIPSCO brands. More information about Columbia Gas of Massachusetts is available at www.ColumbiaGasMA.com .

About NiSource:

NiSource Inc. (NYSE: NI) is one of the largest fully-regulated utility companies in the United States, serving approximately 3.5 million natural gas customers and 500,000 electric customers across seven states through its local Columbia Gas and NIPSCO brands. Based in Merrillville, Indiana, NiSource’s approximately 8,100 employees are focused on safely delivering reliable and affordable energy to our customers and communities we serve. NiSource is a member of the Dow Jones Sustainability - North America Index and the Bloomberg Gender Equality Index and has been named by Forbes magazine among America’s Best Large Employers since 2016. Additional information about NiSource, its investments in modern infrastructure and systems, its commitments and its local brands can be found at www.nisource.com . Follow us at www.facebook.com/nisource , www.linkedin.com/company/nisource or www.twitter.com/nisourceinc . NI-F

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