LITTLE ROCK, Ark., Oct. 29, 2002 (PRIMEZONE) -- The Law Firm of Cauley Geller Bowman & Coates, LLP announced today that a class action has previously been filed in the United States District Court for the Northern District of Texas, Dallas Division, on behalf of purchasers of TXU Corporation ("TXU" or the "Company") (NYSE:TXU) publicly traded securities during the period between April 25, 2002 and October 11, 2002, inclusive (the "Class Period"). The complaint is being amended to include those who purchased TXU securities pursuant to TXU's May 31, 2002 secondary offering of 11 million shares at $51.15 per share and its offering of 8.8 million units of FELINE PRIDES. A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/pr/txu.pdf.
The complaint charges 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. The complaint alleges that during the Class Period, defendants represented that the Company could succeed in the competition created by deregulation. Defendants then represented that TXU's European operations were improving, it would succeed in competition in the U.K. market and it was on track to report EPS of $4.35+ and $4.60+ in 2002 and 2003, respectively. As a result of these allegedly false statements, TXU's stock traded at artificially inflated levels, as high as $56 per share.
Due to this inflation, defendants were able to complete a secondary offering of 11.8 million shares of common stock, priced at $51.15 per share and 8.8 million units of FELINE PRIDES (equity linked debt securities), raising nearly a billion dollars in much needed financing. Subsequent to the offering, defendants needed to maintain a high stock price to avoid triggering additional debt and the conversion of preferred stock into common stock pursuant to a partnership agreement.
On October 4, 2002, TXU issued an earnings warning, indicating that due to customer attrition and ongoing problems in Europe the Company would report 2002 EPS of only $3.25. On this news, the Company's stock price declined to $27 per share, from more than $40 per share the prior week. However, the stock continued to be inflated as defendants concealed the extreme liquidity problems from which the Company was suffering. Defendants even assured the market that the Company was strong financially and that the dividend was "sound and secure." Then, on October 14, 2002, before the market opened, TXU stunned the market with news that it was cutting its dividend 80%, to $0.125 per share and would no longer support its European operations. The Company's stock price immediately collapsed on this news to as low as $10.10 per share before closing at $12.94, a one day drop of 31%, on volume of 39 million shares.
If you bought TXU publicly traded securities between April 25, 2002 and October 11, 2002, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than December 16, 2002. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock, and San Diego.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.cauleygeller.com.
CAULEY GELLER BOWMAN & COATES, LLP Client Relations Department: Jackie Addison, Heather Gann or Sue Null P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 E-mail: info@cauleygeller.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca