PHILADELPHIA, Aug. 14, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit was filed on August 5, 2002 in the United States District Court for the District of Montana, Butte Division, on behalf of all persons and entities who purchased or otherwise acquired the common stock of Touch America Holdings f/k/a Montana Power Company (NYSE:TAA) ("Montana Power" or the "Company") between January 30, 2001 and November 14, 2001, inclusive (the "Class Period").
The action, numbered 02-CV-85, is pending in the United States District Court, District of Montana, Butte Division, located at 273 Federal Building, 400 N. Main Street, butte, MT 59601, against defendants Montana Power Company and Robert Gannon, Chairman, President and Chief Executive Officer. The Honorable Richard W. Anderson is presiding over the case. A copy of the Complaint is available from the Court or the Law Offices Bernard M. Gross, P.C. Please visit our website at http://www.bernardmgross.com or contact us by phone at 866-561-3600 (toll free) or by E-mail at susang@bernardmgross.com.
The complaint charges Montana Power Company and Robert Gannon with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, by issuing a series of materially false and misleading statements to the market during the Class Period. As alleged in the Complaint, in June 2000, Montana Power purchased two hundred fifty thousand customer accounts from Qwest Communications International ("Qwest"). Shortly after the purchase, Montana Power started to experience problems with those assets and with its relationship with Qwest. For example, Qwest failed to transfer certain customers to Montana Power as required by their agreement and improperly assessed costs to Montana Power. As a result, Montana Power lost revenues. As a result of these problems, Montana Power's transformation from an energy company to a telecommunications company was becoming increasingly more difficult. Rather than disclose the problems with the assets the Company had purchased from Qwest, which now constituted Montana Power's sole line of business, defendants concealed those problems in order, in part, to enable the Company to obtain shareholder approval of the sale of its energy operations. On February 21, 2001, Montana Power issued a press release announcing that it had closed the sale of its independent power business for $84.5 million in cash to privately held CES Acquisition Corp.
On May 1, 2001, Montana Power issued a press release announcing its financial results for the first quarter of 2001, this period ending March 31, 2001. The Company reported that consolidated new income increased to $0.58 per share. On August 1, 2001, Montana Power issued a press release announcing its financial results for the second quarter of 2001, the period ending June 30, 2001. The Company reported net losses of $0.11 per share "mainly due to loses of $0.51 per share related to market based power purchases from the buy out of a large electric supply contract." In response to this announcement, the price of Montana Power stock declined from $10.13 per share to $7.94 per share on August 1, 2001. On September 21, 2001, Montana Power issued a press release announcing that "shareholders representing more than two-thirds of the outstanding common stock of the" Company had approved the sale of the Company's remaining utility operations to Northwestern Corporation and approved the restructuring of the Company to allow Touch America to become the "trade company." On October 31, 2000, Montana Power issued a press release announcing that it would be delaying the release of its third quarter financial results. In response to this announcement, the price of Montana Power declined from $5.96 per share to $5.07 per share.
Finally, on November 14, 2001, the last day of the class period, Montana Power issued a press release announcing its third quarter 2001 results. The Company reported a loss of $0.26 per share. Defendant Gannon stated that the quarterly losses "reflect the continued slowing of the nation's economy and the difficult transition of Montana Power from a diversified energy company to Touch America..." The press release further revealed that, as a result of its poor third quarter results, the Company was not is compliance with certain financial covenants under its Senior Secured Credit Facility. Finally, the press release revealed that the Company was engaged in litigation with Qwest concerning the June 2000 Qwest Sale -- litigation which had been ongoing since August 2001 but not meaningfully disclosed. Following this announcement, the price of Montana Power common stock further declined from $5.16 per share to $4.70 per share on heavy trading.
Law Offices Bernard M. Gross, P.C. has significant experience and expertise in prosecuting class actions Law Offices Bernard M. Gross P.C. has recently filed cases in the following securities:
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Touch America TAA-NYSE 1/30/01-11/14/02 8/26/02
f/k/a Montana
Power Company
Plaintiff seeks to recover damages on behalf of Class members and, is represented by the law firm of Law Offices Bernard M. Gross, P.C. which has significant experience and expertise in prosecuting class actions.
If you bought the common stock of Montana Power (NYSE:TAA) between January 30, 2001 and November 14, 2001, you may, no later than August 26, 2002, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters, please contact:
Law Offices Bernard M. Gross, P.C. Deborah R. Gross, Esquire Susan Gross, Esquire 1515 Locust Street, Second Floor Philadelphia, PA 19102
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca