Former Bonneville Pacific officer Stephen Nadauld will pay $260,000 to Bonneville Pacific trustee Roger Segal in exchange for being dismissed from the massive federal lawsuit Segal filed two years ago.
The money Nadauld is paying comes from a $500,000 severance package Bonneville Pacific paid Nadauld a few months before the company declared bankruptcy in December 1991, said Randon Wilson, Nadauld's attorney.Segal named Nadauld as a defendant in a massive lawsuit filed against scores of former officers and associates because Nadauld received the funds so close to the bankruptcy.
Under federal bankruptcy law, a trustee can try to get back for creditors any monies a company spends shortly before declaring bankruptcy.
Nadauld announced the settlement Monday. If a federal bankruptcy judge approves the settlement, Nadauld will pay Segal $210,000 in cash and a $50,000 note. The note will be paid off with the tax refund Nadauld expects on the $210,000, Wilson explained.
Wilson prepared a statement on Nadauld's behalf. "This will confirm on behalf of our client, Stephen Nadauld, an agreement be-tween the Bonneville Pacific trustee and our client of claims involving an employment contract and resulting severance compensation received by him upon his departure from employment by Bonneville in 1991.
"Mr. Nadauld entered into an employment contract with Bonneville at Portland General's request at the time Portland began its acquisition of Bonneville. Subsequently, this employment contract was bought out, at the request of Portland. The amount paid to terminate the contract was received by him as severance benefits and was legal at the time it was paid. The employment contract payments later became subject to claim by the trustee upon filing of bankruptcy. We confirm that our client has always been willing to return any contract payment which is subject to legitimate claims. He is pleased that the parties have reached an agreement."
U.S. Bankruptcy Judge John H. Allen will hold a hearing Nov. 28 on the proposed settlement.
"We expect there will be no objections and it will sail through," Nadauld said.
Nadauld served as chief financial officer for Bonneville Pacific for nearly two years, leaving the company in 1991.