COLCHESTER, Conn., Nov. 18, 2004 (PRIMEZONE) -- Scott + Scott, LLC has filed complaints charging Star Gas Partners, Inc. ("Star" or the "Company") (NYSE:SGU) (NYSE:SGH) and certain of its officers and directors with violations of the Federal Securities Laws (Securities Exchange Act of 1934). Star Gas is a holding company for regulated utilities and other unregulated businesses. The initial complaint on file had a date beginning with securities purchasers of 12/4/03. (The complaint Scott + Scott, LLC filed for other counsel has an initial opening period of July 25, 2000. Upon appointment of lead plaintiff and the filing of an amended complaint, this issue will be resolved in the best interest of the damaged class as defined at that time.)
Scott + Scott, LLC, (contacted at StarGasSecuritiesLitigation@scott-scott.com or nrothstein@scott-scott.com), a law firm based in Connecticut with offices in Ohio and California (http://www.scott-scott.com ), announced that it had filed a complaint in the United States District Court for the District of Connecticut on behalf of all purchasers of securities from December 4, 2003 to October 18, 2004 (the "Class Period") inclusive (those in the longer period may contact the firm as well). Star Gas Partners, Inc. continues its investigation which has yielded additional facts. You can contact Scott + Scott, LLC at 800/404-7770 (EDT) or 800/332-2259 (PST); you can also dial direct at 860/537-3818 in Connecticut or 619/233-4565 in California. Those who purchased securities in Star Gas can contact the firm to further discuss this matter. Attorney Neil Rothstein is available to speak with you.
This is an action on behalf of purchasers of Star Gas Partners, L.P. publicly traded securities. Star Gas is a diversified home energy distributor and service provider, which purports to specialize in heating oil, propane, natural gas and electricity. During the Class Period, defendants caused Star Gas's shares to trade at artificially inflated levels through the issuance of false and misleading statements.
As a result of this inflation, Star Gas was able to complete a secondary public offering of 1.3 million common units and two note offerings totaling $65 million, raising net proceeds of $95 million during the Class Period. On October 18, 2004, TheStreet.com issued an article entitled "Stocks In Motion: Star Gas." The article stated that the Company reported it could not meet the current conditions of its working capital line and that "if lenders do not agree, however, to offer modified terms, Star said it could be forced to seek alternative financing on 'extremely disadvantageous' terms or even be forced to seek bankruptcy protection."
On this news, Star Gas's stock dropped to $4.32 per share from a closing price of $21.60 on the previous trading day. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were that the Company was experiencing certain massive delays; that the Company's Petro heating oil division's business process improvement program was faltering and that contrary to defendants' earlier indications, the Company was not able to increase or even maintain profit margins in its heating oil segment; and that the Company's second quarter 2004 claimed profit margins were an aberration and not indicative of the Company's success or ability to pass on the heating oil price increase because the Company had earlier acquired heating oil (sold in the second quarter) at a much lower cost.
As a result, defendants were facing imminent bankruptcy and would no longer be able to service the Company's debt, all of which would halt the Company's ability to maintain the Company's credit rating and/or obtain future financing. Star has $265 million in principal amount of unsecured senior notes due February 13, 2013 at the parent company level. Star has retained Peter J. Solomon Company, LP an independent investment banking firm, to advise Star on possible restructuring alternatives and other strategic options.
LETTER AMMENDMENT AND WAIVER
On November 5, 2004, Star Gas Partners L.P. announced that it had successfully entered into a Letter Amendment and Waiver under its Credit Agreement with Wachovia Bank, National Association, as Administrative Agent and other lenders. The company added that the ability to borrow under the amendment is subject to a number of specific conditions in addition to the usual borrowing conditions. The special stipulations include the Partnership's Propane segment keeping, in effect, without any amendment, its proposed commitment letter with JP Morgan.
The company said that its Star Propane division entered into a Commitment Letter with JP Securities Inc. and JP Morgan Chase Bank, providing for funding of a refinancing by Petro and Star Propane of all of their existing working capital facilities and all of the outstanding institutional indebtedness of Petro and Star Propane. Under the Commitment Letter, JP Morgan Chase Bank commits to provide a $300 million asset-based senior secured revolving credit facility and an additional $300 million senior secured bridge facility to Star Propane and Petro as joint borrowers.
The company disclosed that the proceeds of the above credit facility and the bridge facility or public or private offering, whichever one, must be used to refinance the existing working capital facilities, including the above mentioned amendment with Wachovia and others, and to refinance all of the outstanding institutional indebtedness of Petro and Star Propane. Further, the company revealed that its Star Propane Segment issued an Engagement Letter, and appointed JP Morgan Securities to act as the underwriter or placement agent of a $300 million public or private offering of debt securities. The waiver is valid until December 17, 2004.
If you are a member of the class described above, you may, not later than sixty days from December 20, 2004, move the Court to serve as lead plaintiff of the class, if you so choose. 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.
A LAW FIRM DEDICATED TO SHAREHOLDER RIGHTS
Scott + Scott, LLC, which prides itself on its dedication to the class and its tenacity for the interest of the class, recently won an important decision in the Halliburton Securities Litigation (NYSE:HAL) case on behalf of its Lead Plaintiff halting a settlement that was deemed inadequate by the Court and completed secretly behind its lead plaintiff's back (a non-profit charitable organization). Scott + Scott. LLC fought this battle to successfully have final approval denied. This unusual victory (described in the articles below) took over a year and a half: http://www.washingtonpost.com/wp-dyn/articles/A13102-2004Sep10.html or http://www.taipeitimes.com/News/biz/archives/2004/09/12/2003202628. Additionally, Scott + Scott recently defeated the primary portion of defendants' motion to dismiss in the Priceline.Com Securities Litigation, also pending in Connecticut federal court. The firm is also working as counsel on United Rentals (NYSE:URI) in the same jurisdiction.
Scott + Scott, LLC, a Connecticut-based law firm with offices in Ohio and California, is a law firm with a national practice and reputation. Scott + Scott dedicates itself to client communication and satisfaction. The firm is currently litigating major securities, antitrust and employee retirement plan cases throughout the United States and represents pension funds, charities, foundations, individuals and other entities worldwide -- in both class and non-class cases. Please visit our website at http://www.scott-scott.com to learn more about the firm, its practice and other cases. If you wish to discuss this action with an attorney or have any questions concerning this notice, your rights or any matter within our expertise, please contact attorney Neil Rothstein at nrothstein@scott-scott.com or by calling 800-404-7770 (EDT) or 800-332-2259 (PDT). You can dial direct in California at 1/619-233-4565. Scott + Scott, LLC is located at 108 Norwich Avenue, Colchester, CT 06415; phone: 860/537-3818; fax: 860/537-4432. This release is issued in accordance with the applicable federal law of the United States.
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More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.