NEW YORK, Nov. 25, 2002 (PRIMEZONE) -- Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the Southern District of New York on behalf of a class (the "Class") of all persons who purchased Reliant Energy Corp. ("Reliant") 2.0% Zero-Premium Exchangeable Subordinated Notes due 2029 ("ZENS") (Registration No. 333-86403) between October 17, 2001 and July 18, 2002,inclusive (the "Class Period").
The complaint names as defendants AOL Time Warner, Inc.: ("AOL-TW" or the "Company") (NYSE:AOL), Stephen M. Case, Wayne H. Pace, Robert W. Pittman, David M. Colburn and J. Michael Kelly. The complaint, filed on November 22, 2002, alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of both AOL-TW securities and Reliant's ZENS. According to the complaint, Reliant owned a substantial number of shares of Time Warner, Inc. common stock. In an effort to monetize its investment in Time Warner, Reliant issued ZENS and tied their value to the stock performance of AOL-TW.
The complaint alleges that AOL-TW issued materially false and misleading statements regarding, among other things, the revenue derived from its online advertising division. The complaint alleges that these statements were materially false and misleading because they failed to disclose that (i) the Company was experiencing declining advertising revenues, (ii) much of the revenue AOL-TW was booking was derived from unconventional non-advertising deals disguised to look like advertising revenue, (iii) much of the Company's revenue was recognized in violation of Generally Accepted Accounting Principles and would ultimately have to be restated, and (iv) that the Company had failed to properly write down the value of more than $50 billion of goodwill. AOL-TW's materially false and misleading statements artificially inflated the price of AOL-TW securities and the ZENS.
On July 18, 2002, the last day of the Class Period, The Washington Post revealed that according to its own internal investigation of AOL-TW, the Company had misstated its advertising revenue and had engaged in a variety of questionable transactions, which called into question the validity of its financial results. Following this announcement, AOL-TW's stock price dropped almost 55% from it's high of $25.99 at the beginning of the Class Period to an intraday low of $11.75, and ultimately closed at $12.45, .76 lower than the previous day's close of $13.11. The ZENS, which had an exchange value of $25.99 at the beginning of the Class Period, fell to $12.45 at the end of the Class Period.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired ZENS during the Class Period. If you purchased or otherwise acquired ZENS during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased ZENS during the Class Period, you may, no later than 60 days from the date of this notice, request that the Court appoint you as lead plaintiff.
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 plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Nancy Kaboolian, Esq. or Mark C. Gardy, Esq. of Abbey Gardy, LLP at (800) 889-3701 or email Nkaboolian@abbeygardy.com or Mgardy@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca