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Getty Petroleum Marketing Inc. Trust reaches settlement in lawsuit against Lukoil

Hydrocarbon Engineering,

Getty Realty Corp. has announced that the parties in the adversary proceeding brought in the US Bankruptcy Court, Southern District of New York, by the Getty Petroleum Marketing Inc. Trust against Lukoil Americas Corporation, Lukoil North America LLC, OAO Lukoil, and certain directors and officers of Getty Petroleum Marketing Inc. have agreed upon a settlement. The case was based upon claims, among others, of fraudulent conveyance and breach of fiduciary duties.

The terms of the settlement include release of the defendants from the claims alleged by the Trust in its complaint in return for a collective payment of US$ 93 million.

In accordance with a litigation funding agreement (LFA) between Getty Realty Corp. and the GPMI Liquidating Trust, the former has been funding the Trust’s prosecution costs for the Lukoil lawsuit, as well as certain expenses incurred by the GPMI Liquidating Trust in connection with wind down of its estate.

The LFA dictates that the company is entitled to receive proceeds from the successful prosecution of Lukoil (including by way of settlement) in an amount equal to the sum of:

  • All funds advanced for wind down costs and expert witness and consultant fees plus interest on such advances.
  • All funds advanced for legal fees and expenses relating to the prosecution of litigation plus interest on such advances, or 24% of the gross proceeds from the settlement.
  • Reimbursement of certain additional legal fees incurred by Getty in connection with the LFA.

The US$ 93 million settlement payment to the GPMI estate is conditioned on approval by the Bankruptcy Court and may be subject to objections. A hearing to consider both settlement and objections has been scheduled for 29th July, 2013.

Adapted from press release by Emma McAleavey.

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