DALLAS, Nov. 5, 2002 (PRIMEZONE) -- In an effort to recoup their losses, shareholders are pursuing a stock-fraud lawsuit against TXU Corporation (NYSE:TXU) and two of its top officers, Berman DeValerio Pease Tabacco Burt & Pucillo said today.
The complaint was filed October 16, 2002 in U.S. District Court for the Northern District of Texas, Dallas Division. It seeks damages for violations of federal securities laws on behalf of all investors who bought TXU securities from January 31, 2002 through October 11, 2002 (the Class Period).
Berman DeValerio has represented investors in class actions for 20 years. To review the complaint and learn more about becoming a lead plaintiff, please visit the firm's website at www.bermanesq.com.
The lawsuit claims that the defendants pumped up the energy company's stock price by misrepresenting to the investing public the condition of TXU's European operations throughout the Class Period.
The complaint says TXU lacked a reasonable basis for its earning projections for fiscal 2002 and 2003. Specifically, the defendants misled or failed to tell investors that:
-- TXU's operations in Europe and, specifically, those in the United Kingdom were plagued with deficient, inadequate, and faulty internal and financial controls;
-- TXU's risk management in Europe was virtually non-existent, and there was no means of addressing the risk to TXU from the UK's unregulated electricity market;
-- At least one credit facility worth approximately $500 million contained "cross-default" provisions between TXU Europe and TXU;
-- TXU's UK operations used wholesale electricity "structured transactions" to meet earnings goals in violation of Generally Accepted Accounting Principles by shifting earnings and profits from one quarterly period to another;
-- The company's UK operations had entered into and carried long-term electricity purchase contracts that were "out of the money" by some $700 million; and
-- The European operations were impaired and overvalued by billions of dollars.
According to the complaint, the truth about TXU began to emerge on October 4, 2002, when the company said it was revising its earnings expectations for fiscal 2002 and 2003, and in the spate of news articles and analyst reports that followed. The company revealed more problems in an October 7, 2002 conference call with analysts.
TXU's stock plummeted as a result of these disclosures, falling from a close of $32.90 per share on October 3, 2002 to $13.85 on October 8, 2002.
If you purchased TXU securities during the period January 31, 2002 through October 11, 2002, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Michael J. Pucillo, Esq. Jay W. Eng, Esq. 515 North Flagler Drive Suite 1701 West Palm Beach, FL 33401 (561) 835-9400 lawfla@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than December 13, 2002. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. You may also retain counsel of your choice. To be a member of the class, however, you need not take any action at this time.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations and consumer fraud. The firm consists of 34 attorneys in Boston, San Francisco and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca