NEW YORK, April 15, 2002 (PRIMEZONE) -- Please take notice that the law firm of Kirby McInerney & Squire, LLP has commenced a class action lawsuit in the United States District Court for the Southern District of Texas on behalf of all purchasers of certain non-publicly traded securities issued by Enron Corp. and its affiliates (NYSE:ENE) (Pink Sheets:ENRPQ) during the period between October 19, 1998 and November 27, 2001 (the "Class Period").
A copy of the complaint is available from the Court or from Kirby McInerney & Squire. If you wish to discuss this action or have any questions, please contact us by phone at (888) 529-4787 or by email at mstrauss@kmslaw.com.
Securities Included in the Action
The action asserts claims on behalf of non-publicly traded securities (collectively, the "Class Securities") that were (a) issued by Enron or by Enron affiliates or by trusts or other issuers (collectively with Enron, "Enron Entities") and (b) that either were secured or guaranteed, in whole or in part, directly or indirectly, by Enron or by Enron's issuance of other Enron debt or preferred or equity securities, or which benefited from any such guarantee, including, without limitation, Enron performance guarantees or Enron payment guarantees that were issued in connection with securities or that were structured to be repaid, in whole or in part (including without limitation payments of dividends, yield or interest with respect to such Class Securities) from a stream of income generated by notes or by other securities or other payment obligations of Enron. The Class Securities do not include any securities which are included within the class definition in the Consolidated Action captioned Amalgamated Bank, et al. v. Kenneth L. Lay, et al., Civil Action No. H-01-4198, filed in the same court. Excluded from the Class are defendants, the officers and directors of Enron, members of their immediate families and their legal representatives, heirs, successors or assigns.
Defendants in the Action
The action asserts claims against Arthur Anderson, LLP and other member firms of Anderson Worldwide, S.C. ("Arthur Anderson") and against 27 Enron executives who, during the Class Period, collectively received in excess of $1 billion from selling Enron stock. Enron itself is not named as a defendant in this action as it is protected by the automatic stay pursuant to Chapter 11 of the U.S. Bankruptcy Code.
Legal Claims of the Action
The claims asserted arise under and pursuant to Section 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission ("SEC"), and also arise under Texas state law.
Summary of the Allegations
The complaint alleges that, during the Class Period, defendants materially misrepresented -- through (i) through public statements, (ii) audited financial statements, and (iii) disclosure documentation provided to purchasers of the Class Securities -- Enron's ability to perform pursuant to guarantees and other forms of credit enhancement issued as part of the Class Securities. Defendants' material misrepresentations concerning Enron's true operational and financial condition had the effect of artificially inflating the value of the Class Securities purchased by class members during the Class Period. The complaint alleges that had defendants' statements been accurate and the truth concerning Enron been known, plaintiff and other members of the Class would not have purchased or otherwise acquired the Class Securities, or, if they had acquired such securities during the Class Period, they would not have done so at the artificially inflated prices which they paid. The action seeks recovery of losses suffered by investors from purchases of the Class Securities during the Class Period when, it is alleged, these securities traded at prices artificially inflated by defendants' misrepresentations.
In order to overstate its net income and earnings per share during the Class Period, the defendants caused the Company to violate GAAP and SEC rules by failing to consolidate entities which, pursuant to GAAP, were required to be consolidated into Enron's financial statements and which entities were incurring hundreds of millions of dollars in losses and should have reduced Enron's earnings. Enron also improperly accounted for common stock issued to a related-party entity which should have been treated as a reduction to shareholders' equity but was accounted for as a note receivable. Enron has also admitted to not recording, from 1997 to 2000, material proposed audit adjustments and reclassifications to shareholders' equity, which Enron chose not to make until the end of the Class Period. Enron also failed to record, on a timely basis, required write-downs for impairment in the value of Enron's content services business, and for the impairment in the value of Enron's interest in The New Power Company, and its broadband and technology investments. Enron has now admitted that these results were false and improperly reported and has restated its financial results.
Plaintiffs are represented by Kirby McInerney & Squire, LLP, which specializes in complex litigation, including securities class actions. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts, which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's website at www.kmslaw.com.
If you are a member of the class described above, you may, no later than June 14, 2002, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, please contact:
Jeffrey H. Squire, Esq. Richard L. Stone, Esq. Mark Strauss, Esq. KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: mstrauss@kmslaw.com
More information on these and other class actions can be found on the Class Action Newsline at www.primezone.com/ca