LITTLE ROCK, Ark., March 18, 2002 (PRIMEZONE) -- The Law Firm of Cauley Geller Bowman & Coates, LLP today announced that it has filed a class action on behalf of all individuals and institutional investors that purchased the common stock of NewPower Holdings, Inc. ("NewPower" or the "Company") (NYSE:NPW) between October 5, 2000 and December 5, 2001, inclusive.
The class action, styled Pfau, et al. v. NewPower Holdings, Inc., et al., No. 02 CV 1550 (CLB) (S.D.N.Y.), has been assigned to the Honorable Charles L. Brieant in the United States District Court for the Southern District of New York, located at 300 Quarropas Street, White Plains, New York 10601-4150. The complaint charges NewPower and its officers and directors with violations of the Securities Exchange Act of 1934. In addition, NewPower, its officers and directors, as well as underwriters of NewPower's October 5, 2000 initial public offering, are also charged with violations of the Securities Act of 1933.
The complaint alleges that NewPower, a nationwide provider of electrical power and natural gas formed by Enron in 1999, engaged in a pattern of misleadingly described policies and transactions throughout the Class Period that served to mask the true nature of NewPower's business, and its financial condition. Specifically, the complaint alleges that the defendants made numerous false and misleading statements concerning NewPower's ability to succeed in a volatile energy market through sophisticated risk management strategies conceived and largely managed by its affiliate, Enron Energy Services, Inc. ("EES"), an Enron subsidiary. The Complaint asserts that neither EES nor NewPower had identified any hedging strategies that could enable NewPower to operate profitably under market conditions prevailing at the time of the IPO or, indeed, at any time thereafter.
Moreover, as the complaint details, despite representations in the IPO Prospectus designed to portray Enron and its affiliates as long-term investors in the Company and believers in its prospects for success, Enron, through its CFO, Andrew Fastow, had set up a partnership known as "Raptor III," whose purpose was to hedge Enron's position against such an anticipated decline in NewPower's stock. Although the Prospectus purported to describe fully the relationship between Enron, its affiliates, and NewPower, and all of their related party transactions, it failed to fully disclose the extremely troubling and material Raptor transactions. As a result of these various misrepresentations and omissions, the IPO garnered net proceeds to NewPower of $543 million.
In addition, certain defendants made numerous statements concerning the Company's financial performance throughout the Class Period that falsely attributed disappointing results to factors beyond the Company's control. As the complaint charges, they schemed to omit mention of the true reasons the Company was drastically cutting costs, i.e., that it did not have its claimed hedging system against high prices in place (either independently or with the aid of Enron), and that collateral obligations carried a material risk of loss, thereby sapping NewPower's ability to tap enough resources to successfully carry out its business plan. Thereafter, in connection with the collapse of Enron amid scandal in the fall of 2001, NewPower and other defendants belatedly began to disclose that they had no substantial hedges in place, and that, contrary to their repeated representations, a substantial portion (and perhaps all) of the enormous collateral they had posted was at risk of loss.
The complaint alleges that defendants have now admitted in filings made by them with Securities and Exchange Commission that the Registration Statements were false and misleading in that they failed to disclose that, contrary to defendants' prior representations, the collateral postings were not guaranteed to return to NewPower completely or even substantially (as had been previously represented), but were at risk of being seized by the creditor, Enron. NewPower misrepresented the true risk the Enron forward contracts presented because the revelation of the truth would have led to investor suspicions about the very viability of NewPower's business plan, its ability to hedge against higher prices, the adequacy of its liquid resources, and the fairness of its dealings with Enron.
If you purchased NewPower common stock between October 5, 2000 and December 5, 2001, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than April 29, 2002. If you are a member of this class, you can join this class action online at http://www.classlawyer.com/sign_up.html. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller Bowman & Coates, LLP or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller Bowman & Coates, LLP has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Florida, Arkansas and California, but represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.classlawyer.com.
CAULEY GELLER BOWMAN & COATES, LLP Investor Relations Department: Jackie Addison, Sue Null or Shelly Nicholson P.O. Box 25438 Little Rock, AR 72221-5438 Toll Free: 1-888-551-9944 E-mail: info@classlawyer.com
More information on this and other class actions is available on the Class Action Newsline at www.primezone.com/ca