Union Pacific to Pay $34 Million to Settle Suit

Union Pacific Corp. will pay $34 million to settle a 1997 shareholder suit charging that the railroad failed to disclose problems stemming from its merger with Southern Pacific Rail Corp., according to a federal filing. The suit, filed in U.S. District Court in Dallas, claimed the railroad made false and misleading statements about the merger, in particular about the safety of its rail network, while touting the potential cost savings. The $5.4-billion acquisition in 1996 led to a yearlong logjam that started in mid-1997, after the companies combined operations. The company also agreed to commission a study if it proposes to buy another rail system with more than 1,000 miles of track, according to the filing with the Securities and Exchange Commission. Union Pacific also will pay $975,000 to settle a second lawsuit, said spokeswoman Beth Whited, who declined further comment. Union Pacific didn’t admit wrongdoing or liability, and payment will be covered by its insurance, the filing said. The class-action suit represented buyers of Union Pacific common stock between March 4 and Oct. 1, 1997, the day the railroad filed its plan for fixing its service problems with the Surface Transportation Board. Union Pacific shares rose $1.06 to close at $41.69 on the New York Stock Exchange.