NEW YORK, Jan. 28, 2003 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has filed a class action in the United States District Court for the Eastern District of Virginia, case number 03 CV 108A, against Cable & Wireless PLC ("CWP" or the "Company") (NYSE:CWP) and the Company's Chief Executive Officer and a member of its Board of Directors on behalf of investors who purchased the securities of CWP during the period between August 6, 1999 through December 6, 2002, inclusive (the "Class Period").
The Complaint alleges that CWP, a global telecommunications business with customers in 80 countries, including the United States, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading statements touting CWP's cash-rich position, numerous all cash acquisitions of companies, and the benefits of its August 6, 1999 sale of its 50% ownership stake in One 2 One, a mobile telecommunications operator, to Deutsche Telekom. Defendants, however, failed to disclose a critical contractual term relating to its disposition of One 2 One, which obligated the Company to set aside 1.5 billion Pounds or $2.4 billion in cash once the Company's long-term debt rating fell below a certain threshold.
Specifically, the contract contained an indemnification clause that would obligate CWP to cover any potential tax liabilities arising out of the sale. Contained in that indemnification was a trigger mechanism whereby any future downgrade of CWP long-term debt rating below a predetermined level would activate the 1.5 billion Pounds obligation on behalf of CWP.
On December 6, 2002, CWP shocked the market when it announced that a downgrade by Moody's Investment Service ("Moody's") on its long-term debt rating had triggered its obligation to escrow 1.5 billion Pounds in cash. It was only on December 6, 2002, that the Company disclosed its 1.5 billion pounds contingent liability. As a result of the disclosure, the stock price of CWP fell $1.57 from $3.90 to a closing price of $2.33, a single-day drop of 40%.
If you purchased the securities of CWP during the Class Period, you have until February 24, 2003 to ask the Court to appoint you as lead plaintiff for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, or if you would like to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz firm, which has offices in New York and Chicago, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca