LITTLE ROCK, Ark., Feb. 14 (PRIMEZONE) -- The Emerson Firm, a securities trial law firm with offices in Houston, Texas and Little Rock, Arkansas, announced today that a class action has been filed in the United States District Court for the Northern District of Oklahoma on behalf of purchasers of the common stock of Williams Companies, Inc. (NYSE:WMB) ("WMB") and/or Williams Communications Group, Inc. (NYSE:WCG) ("WCG") during the period between July 24, 2000 and January 29, 2002, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be obtained from THE EMERSON FIRM.
The complaint charges defendants WMB, WCG, Keith E. Bailey, Howard E. Janzen and Scott E. Schubert with violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between July 24, 2000 and January 29, 2002, thereby artificially inflating the price of WMB common stock and WCG common stock. Specifically, the complaint alleges that WMB and WCG issued a series of statements concerning their businesses, financial results and operations which failed to disclose (i) that the spin- off of WCG from WMB was not in the best interests of both WMB and WCG shareholders as the primary motivation for the spin-off of WCG was to allow WMB to shore up its balance sheet so that it could then issue more stock and/or debt to acquire companies using its common stock as currency and protect its debt rating; (ii) that WCG was operating at levels well below company-sponsored expectations, such that revenue projections were overstated, and costs and expenses were understated, and also such that, in an effort to control costs, defendants would soon have to take actions which would have a further adverse impact on WCG's profitability; (iii) that approximately $2 billion of WCG debt that was guaranteed for payment by WMB around the time of the spin-off was improperly footnoted by WMB as a mere contingent obligation of WMB, which was materially false and misleading because the declining financial condition of WCG made it increasingly certain that WMB would be forced to pay on such guaranties, for which it did not adequately reserve; (iv) that WCG's assets were permanently impaired and had to be written-off and that WCG avoided taking such write-offs on its own books through the series of financial machinations described in the complaint; (v) that WMB was carrying on its financial statements receivables from WCG that were impaired, uncollectible and should have been written-off in whole or in substantial part. Rather than writing off these impaired assets, which amounted to tens of millions of dollars, WMB agreed to extend up to $100 million of WCG's receivables with an outstanding balance due on March 31, 2001, to March 15, 2002; and (vi) that the sale and leaseback of WCG's office properties in or about September of 2001 was a non-arm's-length transaction at an inflated value for the properties whose motive and intent was to funnel monies to WCG and avoid forcing WMB to perform its guaranties and thereby adversely affect its results and debt ratings.
On January 29, 2002, as alleged in the complaint, WMB shocked the market by announcing that it would be delaying the release of its 2001 earnings ``pending an internal assessment of William's contingent obligations to Williams Communications.'' According to the press release, WMB ``expects to be able to estimate the financial effect, if any, regarding its ultimate obligation related to WCG's $1.4 billion debt and network lease agreement covering assets that cost $750 million.'' In response to WMB's shocking announcement, as alleged in the complaint, the price of WMB common stock, which was already substantially eroded from its prior year's high, declined sharply, falling from approximately $24 per share to as low as $18.70 per share and the already depressed WCG common stock declined to as low as $1.30 per share.
If you bought WMB or WCG common stock between July 24, 2000 and January 29, 2002 inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than April 1, 2002. If you are a member of this class, you can join this class action by contacting THE EMERSON FIRM. Any member of the purported class may move the Court to serve as lead plaintiff through THE EMERSON FIRM or other counsel of their choice, or may choose to do nothing and remain an absent class member.
THE EMERSON FIRM has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Arkansas and Texas, but represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm.
More information on these and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.