Milberg Weiss Announces the Filing of A Class Action Suit on Behalf of Purchasers of the Securities of McLeodUSA Inc. -- MCLD


NEW YORK, Feb. 13, 2002 (PRIMEZONE) -- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on January 11, 2002, on behalf of purchasers of the securities of McLeodUSA Inc., ("McLeodUSA" or the "Company") (NASDAQ: MCLD) between January 30, 2001 and December 3, 2001 inclusive (the "Class Period'). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/mcleodusa/

The action is pending in the United States District Court for the Northern District of Iowa, against McLeodUSA, Clark McLeod (Company's Chairman and Co-CEO), Steve Gray (Company's President and Co-CEO) and Chris Davis (Company's Chief Operating and Financial Officer since August 1, 2001). The Honorable Edward J. McManus is presiding over the case.

The complaint charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 30, 2001 and December 3, 2001. The complaint alleges that McLeodUSA issued a series of materially false and misleading statements regarding its business, operations and financial statements that failed to disclose: (i) that the Company was failing to timely and properly recognize hundreds of millions of dollars in impairment losses in connection with certain acquisitions, such as Splitrock Services, Inc. and Caprock Communications Corp.; (ii) that the Company did not have the funds necessary to complete its National network and that it would soon have to abandon its plans to finish the network; and (iii) that the Company was unable to service its substantial debt and lacked the financial flexibility necessary to avoid a restructuring. During the Class Period, prior to the disclosure of the true facts about the Company, McLeodUSA purchased Intelispan for $40 million in McLeodUSA stock

If you bought the securities of McLeodUSA between January 30, 2001 and December 3, 2001, you may, no later than March 12, 2002, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. 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 serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.

Milberg Weiss Bershad Hynes & Lerach LLP (http://www.milberg.com) is a 190-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton, Philadelphia and Seattle, and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others, and has been responsible for more than $20 billion in aggregate recoveries. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:

Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165

Phone number: (800) 320-5081 Email: mcleodusacase@milbergNY.com Website: http://www.milberg.com

More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca



            

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