PHILADELPHIA, Oct. 24, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit was filed on October 21, 2002, in the United States District Court for the Eastern District of Texas, on behalf of all persons and entities who purchased or otherwise acquired the common stock of Electronic Data Systems (NYSE:EDS)("EDS" or the "Company"), between September 7, 1999 and September 24, 2002, inclusive (the "Class Period") or received shares of EDS through EDS' stock dividend reinvestment plan.
The action, numbered 02-CV-232, is pending in the United States District Court, Eastern District of Texas, located at United States Courthouse, 211 W. Ferguson, Tyler, TX, against defendants Electronic Data Systems, Richard H. Brown, Paul Chiapparone and James Daley. 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 Electronic Data Systems, Richard Brown Chairman of the Board and Chief Executive Officer, Paul Chiapparone, Vice Chairman, James Daley, Executive Vice President 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, defendants made misrepresentations and/or omissions of material fact, including: (a) failing to disclose that EDS' backbone revenue for its information solutions IT outsourcing business is highly susceptible to interruptions due to terms in EDS' service contract that enables EDS' customers to unilaterally suspend discretionary spending on IT outsourcing: (b) affirmatively misrepresenting the predictability of EDS' future cash flows by counting the anticipated revenue that EDS would supposedly receive from its IT outsourcing service contracts with customers without disclosing that payment under such contracts were not guaranteed; (c) failing to disclose the risk that EDS' airline infrastructure outsourcing assets that it acquired in its acquisition of Sabre Holding Corp. were subject to a drastic decrease in value if US Airways declared bankruptcy; and (d) failing to disclose that EDS faced significant potential threats to its liquidity if its share price fell out because of put-option and other obligations that ultimately obligated EDS to in effect buy back a total of 5.44 million shares of EDS stock at fixed prices averaging over $60 per share.
On September 18, 2002 after executives of EDS warned that a lack of new revenues would wipe out more than $.60 per share of its third quarter fiscal year 2002 earnings target of $.74, the price of EDS stock plummeted to a 52-week low of $20, down from a Class Period high of $72.45. After further revelations regarding EDS' put-option and other liabilities emerged in the wake of the foregoing disclosures, EDS' share price tumbled even further, reaching an intra-day low of $10.09 on September 24, 2002.
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 the following cases:
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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 EDS or acquired it through EDS' stock dividend reinvestment plan between September 7, 1999 and September 24, 2002, you may, no later than November 25, 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,
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca