Morrison Knudsen To Settle 3 Lawsuits

Morrison Knudsen Corp. and MK Rail Corp. have agreed to settle three shareholder lawsuits filed in connection with MK Rail’s initial public offering of stock last year.

The companies announced Wednesday that they will pay $16.4 million in cash and stock to settle the suits, but denied any wrongdoing by themselves or their executives.

Shareholders filed two class-action suits and a derivative suit earlier this year, alleging securities violations and mismanagement by both companies and several current and former officers.

The suits alleged that investors were purposely misled about MK Rail and its business prospects. The derivative suit alleged executives did not live up to their responsibilities.

Morrison Knudsen spokesman Brent Brandon said the companies chose to settle instead of fight because the parent company needs to sell MK Rail to raise cash and pay down $343 million in debts. He also said Morrison Knudsen needed a settlement to satisfy its bankers.