Sponsored By

C&W Slapped With SuitC&W Slapped With Suit

Class action suit alleges Cable and Wireless misled the market between August 1999 and December 2002

December 26, 2002

2 Min Read
C&W Slapped With Suit

BALA CYNWYD, Pa. -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP: Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Eastern District of Virginia on behalf of all purchasers of American Depository Receipts ("ADRs") of Cable & Wireless (NYSE: CWP - News; "Cable" or the "Company") from August 6, 1999 through December 6, 2002, inclusive (the "Class Period"). If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [email protected]. The complaint charges 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 materially false and misleading statements to the market between August 6, 1999 and December 6, 2002. Specifically, the complaint alleges that defendant Cable issued a press release on August 6, 1999, announcing that it had agreed to sell One 2 One, a British based mobile telecommunications operator, to Deutsche Telekom. Under the announced terms of the agreement, Deutsche Telekom would pay 6.9 billion pounds sterling in cash for 100% of the equity ownership interest in One 2 One including the repayment of 237 million pounds of shareholder loans, and would assume approximately 1.5 billion pounds of third-party debt. According to the complaint, such statements were materially false and misleading because they failed to disclose that a critical term of the One 2 One deal was a 1.5 billion pounds tax indemnification clause agreed to by Cable, and more specifically, a trigger clause, whereby a future downgrade of Cable's long-term debt rating below a predetermined threshold would trigger a 1.5 billion pounds cash obligation on behalf of Cable. On December 6, 2002, Moody's investment service announced that it would downgrade the long-term debt rating of Cable from Baa1 to Baa2. Cable then shocked the market in a press release that same day stating that, as a consequence of the downgrade, the above mentioned "ratings trigger" was activated. The announcement caused the price of Cable's ADRs to fall by 40 percent in one business day, from a closing price of $3.90 per ADR on December 6, 2002, to close at $2.33 per ADR on December 9, 2002, on unusually high trading volume. Subsequently, the company filed a Form 6-K with the SEC on December 9, 2002 which included a statement regarding the tax indemnification "ratings trigger" clause. Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which prosecutes class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like