NEW YORK, Oct. 24, 2002 (PRIMEZONE) -- Wolf Popper LLP has filed a securities fraud class action complaint against TXU Corp. (NYSE:TXU), its CEO, Erle Nye and CFO, Michael J. McNally, on behalf of purchasers of TXU securities from January 31, 2002 through October 11, 2002. A copy of the complaint is available from the U.S. District Court for the Northern District of Texas - Dallas Division or this firm's website www.wolfpopper.com.
The plaintiff alleges in this class action that during the Class Period defendants falsely represented that TXU's European operations, particularly its operations in the UK, were improving, and that TXU was on track to report EPS of $4.35 to $4.45 per share of common stock in 2002 with continued 9 to 11% growth thereafter. As a result of these allegedly false statements, TXU's securities traded at artificially inflated levels during the Class Period. In addition, this false and misleading portrayal of TXU's business and operations allowed the Company 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.
The truth about TXU's business was revealed beginning on October 4, 2002, when the Company said it was revising its earnings expectations for fiscal 2002 to a range of $3.20 to $3.25 per share of common stock, and its guidance for 2003 to a range of $3.45 to $3.55 per share of common stock. In response, TXU's stock price plummeted, falling from a close of $32.90 per share on October 3, 2002 to $13.85 on October 8, 2002. However, the price per share of TXU's securities remained inflated as defendants concealed the extreme liquidity problems from which the Company was suffering, and continued to assure the market that the Company was financially sound and that the Company's dividend would not be cut. Then, on October 14, 2002, before the market opened, TXU announced 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 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.
Any member of the class who desires to be appointed lead plaintiff in the class action must file a motion with the Court no later than December 13, 2002. Class members must meet certain legal requirements to serve as a lead plaintiff. If you have questions or information regarding this action, or if you are interested in serving as a lead plaintiff in this action, you may call or write:
Wolf Popper LLP, Michael A. Schwartz, Esq. 845 Third Avenue, New York, NY 10022-6689; Tel.: 212.451.9668, Toll Free: 877.370.7703; Fax: 212.486.2093, Toll Free: 877.370.7704; Email: irrep@wolfpopper.com; website: www.wolfpopper.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca