CHICAGO, Oct. 23, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that class action lawsuits are pending in the United States District Court for the Northern District of Texas, Dallas Division, on behalf of purchasers of the securities of TXU Corporation. (NYSE:TXU) ("TXU" or the "Company") between April 25, 2002 and October 11, 2002, inclusive ("Class Period").
It has been alleged that TXU and certain of its officers and directors violated the federal securities laws by issuing a series of materially false and misleading statements to the market, causing the market price of TXU securities to be artificially inflated.
Much Shelist is currently investigating these claims. If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to TXU.
The complaint charges TXU and certain of its officers and directors with violations of the federal securities laws arising out of defendants' issuance of false and misleading statements about the Company's business, operating performance and prospects. The complaint alleges that during the Class Period, defendants represented that the Company could succeed in the competition created by deregulation. Defendants then represented that: TXU's European operations were improving, TXU would succeed its competition in the U.K. market and TXU was on track to report EPS of $4.35+ and $4.60+ in 2002 and 2003, respectively. As a result of these allegedly false statements, TXU's stock traded at artificially inflated levels, as high as $56 per share.
Because of TXU's inflated stock price, defendants were able to complete a secondary offering of 11.8 million shares of common stock, priced at $51.15 per share and 8.8 million units of FELINE PRIDES (equity linked debt securities), raising nearly a billion dollars in much needed financing. Subsequent to the offering, defendants needed to maintain a high stock price to avoid triggering additional debt and the conversion of preferred stock into common stock under a partnership agreement.
On October 4, 2002, TXU issued an earnings warning, indicating that due to customer attrition and ongoing problems in Europe the Company would report 2002 EPS of only $3.25. On this news, the Company's stock price declined to $27 per share, from more than $40 per share the prior week. The stock, however, continued to be inflated as defendants concealed the extreme liquidity problems plaguing the Company. Defendants even assured the market that the Company was strong financially and that the dividend was "sound and secure."
Then, on October 14, 2002, before the market opened, TXU stunned the market with news that it was cutting its dividend 80%, to $0.125 per share, and would no longer support its European operations. The Company's stock price immediately collapsed on this news to as low as $10.10 per share before closing at $12.94, a one day drop of 31%, on volume of 39 million shares.
If you purchased TXU securities during the Class Period, and if you meet certain other legal requirements, you may file a motion in the court where the lawsuit has been filed to serve as a lead plaintiff. You must file your motion no later than December 16, 2002.
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. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca