CHICAGO, Oct. 28, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that it has sued Electronic Data Systems Corporation (NYSE:EDS) ("EDS" or the "Company") in the United States District Court Eastern District of Texas, Texarkana Division. The shareholder lawsuit is on behalf of all persons and entities who purchased EDS securities during the period September 7, 1999 through September 24, 2002, inclusive ("Class Period").
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 EDS.
The complaint charges EDS, Richard Brown, Chairman of the Board and Chief Executive Officer, Paul Chiapparone, Vice Chairman, and 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 promulgated thereunder, and Sections 11, 12 and 15 of the Securities Act of 1933 ("Securities Act"). The securities violations arise from defendants' issuance of a series of allegedly materially false and misleading statements to the market during the Class Period. Specifically, the Complaint alleges that defendants misrepresented and/or omitted material facts, 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. Defendants' Securities Act violations stem from these alleged misrepresentations and omissions of material fact in Securities and Exchange filings, which they incorporated by reference into the registration statement they used to offer EDS stock through EDS' dividend reinvestment plan.
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.
If you purchased EDS 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 November 25, 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