NEW YORK, Oct. 22, 2002 (PRIMEZONE) -- The law firm of Abbey Gardy, LLP has filed a class action against TXU Corp. (TXU" or the "Company") (NYSE:TXU) in the United States District Court for the Northern District of Texas, on behalf of all persons or entities who purchased securities during the period from April 25, 2002 and October 11, 2002, inclusive (the "Class Period"). The suit names TXU and certain of its officers and directors. A copy of the complaint can be obtained from the Court. The civil action number is 3-02-CV-2315.
The Complaint 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 TXU securities. The complaint alleges that during the Class Period, defendants represented that the Company could succeed in the competition created by deregulation. Defendants represented, among other things, that TXU's European operations were improving 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. On October 4, 2002, the Company disclosed that it expected materially lower earnings than had been previously predicted. Specifically, in addition to revising and lowering its guidance for the third and fourth quarters of 2002, the Company also lowered its guidance for the year 2002 to a range of $3.20 to $3.25 and further lowered its guidance for the year 2003 to a range of $3.45 to $3.55. These revelations caused the Company's common stock to decline over 55%.
However, the stock continued to be inflated as defendants concealed the extreme liquidity problems from which the Company was suffering. Defendants 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 was selling all of its European assets. On this news the Company's stock price immediately collapsed and at $12.94, on volume of 39 million shares.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired TXU securities during the Class Period. If you purchased or otherwise acquired TXU securities 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 TXU securities during the Class Period, you may, no later than December 14, 2002, 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.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. 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. of Abbey Gardy, LLP at (800) 889-3701 or email Nkaboolian@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca