NEW YORK, May 20, 2002 (PRIMEZONE) -- The law firm of Abbey Gardy, LLP has filed a class action suit against Reliant Resources Inc. ("Reliant Resources" or the "Company") (NYSE:RRI) in the United States District Court for the Southern District of Texas, Houston Division, on behalf of all persons or entities who purchased Reliant Resources common stock pursuant to or traceable to the Registration Statement declared effective May 1, 2001 or in the open market during the period from May 1, 2001 through April 14, 2002, (Section 11 Class Period) and on behalf of all persons who purchased Reliant Resources common stock during the period May 1, 2001 through May 10, 2002 (Section 10(b) Class Period).
The Complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933, and 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, thereby artificially inflating the price of Reliant Resources securities. Starting with the May 1, 2001 Registration Statement, defendants issued a series of materially false and misleading statements regarding Reliant Resources' quarterly and annual financial performance and filed reports confirming such performance with the Securities and Exchange Commission ("SEC"). The complaint also alleges that these statements were materially false and misleading because, among other things, (1) the Company's stated and represented revenues in 1999 and 2000 were materially overstated because 10% of such revenues represented purchases and sales with the same counter-party at the same price ("Roundtrip Transactions"); and (2) the Company improperly accounted for certain transactions in its conventional accrual accounts as cash flow hedges.
On May 10, 2002, Reliant Resources announced that it was canceling a $500 million private placement debt offering that had been priced on May 9, 2002, due in part, to having engaged in "round trip" trades. Following this announcement, Reliant Resources' common stock fell from a high of $ 15.10 on May 9, 2002 to a low of $ 11.10 on May 10, 2002, or a single-day decline of more than 25% on high trading volume and a decline of more than 55% from its high.
Plaintiffs seek to recover damages on behalf of all those who purchased or otherwise acquired Reliant Resources securities during the Class Periods. If you purchased or otherwise acquired Reliant Resources securities during the Class Periods, 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 Reliant Resources securities during the Class Periods, you may, no later than July 15, 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. or Jennifer Haas of Abbey Gardy, LLP at (800) 889-3701 or email jhaas@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.