ATLANTA, Nov. 8, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit has been filed in the United States District Court for the Northern District of Texas, Dallas Division, on behalf of all persons who purchased or otherwise acquired TXU securities from January 31, 2002 through October 11, 2002 (the Class Period). The lawsuit alleges that TXU (NYSE:TXU) and certain of its officers and directors and its underwriters with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, arising out of defendants' issuance of false and misleading statements about the Company's business, operating performance and prospects. In a November 6, 2002, filing with the U.S. Securities and Exchange Commission, TXU stated that it will take a charge of $4.2 billion to write off its failed foray into Europe.
If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Nikole Davenport at 1-888-873-3999 (toll-free) or by e-mail at nmd@classlaw.com.
The lawsuit claims that the defendants pumped up the 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 bought the securities of TXU from January 31, 2002 through October 11, 2002, you may, no later than December 16, 2002, join in the action and/or move for appointment as lead plaintiff. In order to serve as lead plaintiff, you must meet certain legal requirements.
Plaintiff is represented by Chitwood & Harley, a law firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States and has been instrumental in recovering billions of dollars on behalf of its clients. Clients and courts alike have praised the results achieved by Chitwood & Harley. Recently, the federal judge in In re BankAmerica Securities Litigation, which resulted in a $490 million recovery for the class, commented favorably on co-lead counsel's performance stating: "Class members were well served by experienced attorneys who, through considerable time and effort, obtained a significant recovery for their clients," and, "(a)s the Court has remarked throughout this litigation, class counsel ... have performed at exceptionally high levels, and all parties have been exceedingly well represented."
For more information about Chitwood & Harley, please visit our website at www.classlaw.com or contact Nikole Davenport at 1-888-873-3999 (toll-free), by e-mail at nmd@classlaw.com or at 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca