Item 1.01 Entry into Material Definitive Agreement
As previously disclosed by Centrus Energy Corp., a Delaware corporation (the
"Company"), on August 30, 2013, the Company submitted a claim to the U.S.
Department of Energy (the "DOE") under the Contract Disputes Act for payment of
$42.8 million, representing the DOE's share of pension and post-retirement
benefits costs related to the transition of employees at the former Portsmouth,
Ohio Gaseous Diffusion Plant to the DOE's decontamination and decommissioning
contractor. On August 27, 2014, the DOE contracting officer denied the Company's
claim. As a result, the Company filed an appeal of the decision in the U.S.
Court of Federal Claims (the "Court") in January 2015. On January 13, 2021, the
Company and the DOE reached a tentative agreement to settle the litigation. The
settlement was subject to the approval by the DOE, the U.S. Department of
Justice, the Company's Board of Directors, and the Court.
On September 7, 2021, after the final approvals for the settlement were
received, the settlement agreement was signed by the parties. The settlement
agreement provides for the payment of $43.5 million comprised of approximately
$37.0 million in principal and $6.5 million in interest, from the DOE to the
Company. The settlement requires the Company to deposit $33.8 million in the
pension plan for its subsidiary United States Enrichment Corp. ("Enrichment
Corp.") and $9.7 million in a trust for payment of post-retirement health
benefits payable by Enrichment Corp. After receiving payment the Company has
agreed to dismiss its suit.
The foregoing description of the settlement agreement does not purport to be
complete and is qualified in its entirety by the text of the agreement, a copy
of which is expected to be filed as an exhibit to Centrus' quarterly report on
Form 10-Q for the third quarter ending September 30, 2021.
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