The agreement was reached Monday, according to a regulatory filing made this week by TXU. If approved by the courts, the settlement would remove a hurdle to the deal, which faces a Sept. 7 vote of TXU shareholders.

TXU announced in February that its board had agreed to sell the company to investors led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group.

Within weeks, several lawsuits were filed in state and federal court against TXU and its directors, claiming they failed look out for the interests of shareholders in agreeing to the deal.

The plaintiffs, who were seeking class-action status for their cases, said TXU directors had divided loyalties because they stood to gain from the sale to the KKR-TPG group.

All of the cases in state court were combined, and a judge in Dallas dismissed them, according to TXU's lawyers at the firm of Fulbright & Jaworski.

Monday's agreement between KKR-TPG investors, TXU and some of the plaintiffs would result in dismissing all the merger-related lawsuits if the courts approve, according to the filing.

Under the deal, TXU would not pay anything to the plaintiffs. But the buyers agreed that TXU would pay $925 million (€677.61 million) instead of $1 billion (€730 million) if it broke off the deal, and they made other changes in the proxy statement sent to shareholders, TXU said in the filing.

The sale the KKR-TPG group would require approval by two-thirds of TXU shareholders.

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