NEW YORK, Feb. 13, 2002 (PRIMEZONE) -- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on January 29, 2002, on behalf of purchasers of the common stock of Williams Companies, Inc. ("WMB") (NYSE:WMB) and/or Williams Communications Group, Inc. ("WCG") (NYSE:WCG) between July 24, 2000 and January 29, 2002, inclusive. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/williamscompanies/
The action is pending in the United States District Court for the Northern District of Oklahoma, located at 333 West Fourth Street, Tulsa, Oklahoma 74103, against defendants WMB, WCG, Keith E. Bailey, Howard E. Janzen and Scott E. Schubert.
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 between July 24, 2000 and January 29, 2002, thereby artificially inflating the price of WMB common stock and WCG common stock.
Specifically, the complaint alleges that WMB and WCG issued a series of statements concerning their businesses, financial results and operations which failed to disclose (i) that the spin-off of WCG from WMB was not in the best interests of both WMB and WCG shareholders as the primary motivation for the spin-off of WCG was to allow WMB to shore up its balance sheet so that it could then issue more stock and/or debt to acquire companies using its common stock as currency and protect its debt rating; (ii) that WCG was operating at levels well below company-sponsored expectations, such that revenue projections were overstated, and costs and expenses were understated, and also such that, in an effort to control costs, defendants would soon have to take actions which would have a further adverse impact on WCG's profitability; (iii) that approximately $2 billion of WCG debt that was guaranteed for payment by WMB around the time of the spin-off was improperly footnoted by WMB as a mere contingent obligation of WMB, which was materially false and misleading because the declining financial condition of WCG made it increasingly certain that WMB would be forced to pay on such guaranties, for which it did not adequately reserve; (iv) that WCG's assets were permanently impaired and had to be written-off and that WCG avoided taking such write-offs on its own books through the series of financial machinations described in the complaint; (v) that WMB was carrying on its financial statements receivables from WCG that were impaired, uncollectible and should have been written-off in whole or in substantial part.
Rather than writing off these impaired assets, which amounted to tens of millions of dollars, WMB agreed to extend up to $100 million of WCG's receivables with an outstanding balance due on March 31, 2001, to March 15, 2002; and (vi) that the sale and leaseback of WCG's office properties in or about September of 2001 was a non-arm's-length transaction at an inflated value for the properties whose motive and intent was to funnel monies to WCG and avoid forcing WMB to perform its guaranties and thereby adversely affect its results and debt ratings.
On 01/29/02, as alleged in the complaint, WMB shocked the market by announcing that it would be delaying the release of its 2001 earnings "pending an internal assessment of William's contingent obligations to Williams Communications." According to the press release, WMB "expects to be able to estimate the financial effect, if any, regarding its ultimate obligation related to WCG's $1.4 billion debt and network lease agreement covering assets that cost $750 million." In response to WMB's shocking announcement, as alleged in the complaint, the price of WMB common stock, which was already substantially eroded from its prior year's high, declined sharply, falling from approximately $24 per share to as low as $18.70 per share and the already depressed WCG common stock declined to as low as $1.30 per share.
If you bought the common stock of WMB or WCG between July 24, 2000 and January 29, 2002, you may, no later than April 1, 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 plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.
Milberg Weiss Bershad Hynes & Lerach LLP, a 190-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton, Seattle and Philadelphia, is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of World War II and other human rights violations, and has been responsible for more than $30 billion in aggregate recoveries. The Milberg Weiss Web site (http://www.milberg.com) has more information about the firm.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 Phone number: (800) 320-5081 Email: williamscase@milbergNY.com Website: http://www.milberg.com
More information on this and other class actions can be found on the Class Action Newslinea t www.primezone.com/ca