BALA CYNWYD, Pa., Feb. 26, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
A securities class action lawsuit pending in the U.S. District Court for the Northern District of Oklahoma (02-CV-080) claims William Companies, Inc. ("WMB") (NYSE:WMB) and/or Williams Communications Group, Inc. ("WCG") (NYSE:WCG) issued false and misleading statements concerning its business and financial condition.
Plaintiff seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of all investors who bought William Companies, Inc./Williams Communications Group, Inc. securities between July 24, 2000 and January 29, 2002 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of William Companies, Inc./Williams Communications Group, Inc. and are interested in joining this class action suit visit http://www.sbclasslaw.com/cgi/DB_Search/db_search.cgi?setup_file=sign.setup&submit_search=yes&recnum=
The complaint alleges that the Oklahoma-based William Companies, Inc./Williams Communications Group, Inc. 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 Williams' 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 purchased William Companies, Inc./Williams Communications Group, Inc. securities between July 24, 2000 and January 29, 2002, you may be a member of the class and have until April 1, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca