NEW YORK (Standard&Poor's) June 11, 2004--Standard&Poor's Ratings Services said today that Aquila Inc.'s (B-/Negative/--) announcement that it will settle an appraisal-rights lawsuit for $37.95 million is not favorable for the company's credit quality; however, the announcement does not affect the ratings or outlook on the company. Aquila's payment to settle a lawsuit filed by shareholders who objected to the value of stock they received when the company withdrew from energy trading and recombined with former energy trading unit, Aquila Merchant Services, in 2002 will further strain the company's weak liquidity position. Aquila will take a $7.5 million charge in its second quarter to fund the settlement. Most of the cost of the settlement will be covered
