On January 7, 2009 the judge entered an order granting the defendants' motions for dismissal with prejudice, ending the nearly seven year case.
According to an article dated February 29, 2008, on March 24, 2006, the plaintiffs filed a motion for reconsideration requesting that the court vacate that portion of its July 14, 2003 order dismissing the plaintiffs' claims based upon Mirant's alleged improper energy trading and marketing activities involving the California energy market. Southern Co. and the other defendants have opposed the plaintiffs' motion. The plaintiffs have also stated that they intend to request that the court grant leave for them to amend the complaint to add allegations based upon claims asserted against Southern Co. in the MC Asset Recovery litigation. Under certain circumstances, Southern Co. will be obligated under its bylaws to indemnify the four current and/or former Southern Co. officers who served as directors of Mirant at the time of its initial public offering through the date of the spin-off and who are also named as defendants in this lawsuit.
According to the docket, the individual and third party defendents filed a motion to dismiss the Plaintiff's Consolidated Amended Class Action Complaint on March 21, 2007.
According to the Company’s FORM 10-Q For the Quarterly Period Ended September 30, 2005, on July 14, 2003, the district court dismissed the claims asserted by the plaintiffs based on the Company’s California business activities but allowed the case to proceed on the plaintiffs’ other claims. This action is stayed as to Mirant by the filing of its Chapter 11 proceeding. On November 19, 2003, the Bankruptcy Court entered an order staying this action also with respect to the other defendants to avoid the suit’s impeding Mirant’s ability to reorganize or having a negative effect upon Mirant’s assets. The Bankruptcy Court has modified the stay to allow the plaintiffs to proceed with discovery of documentary materials from Mirant and the other defendants. On December 11, 2003, the plaintiffs filed a proof of claim against the estate of Mirant, which was subsequently withdrawn on or about October 10, 2004. On August 29, 2005, the district court, at the request of the plaintiffs, dismissed Mirant as a defendant in this action.
As summarized by the same SEC filing, twenty lawsuits have been filed since May 2002 against Mirant and four of its officers alleging, among other things, that the defendants violated federal securities laws by making material misrepresentations and omissions to the investing public regarding Mirant’s business operations and future prospects during the period from January 19, 2001 through May 6, 2002 due to potential liabilities arising out of its activities in California during 2000 and 2001. The complaints seek unspecified damages, including compensatory damages, and the recovery of reasonable attorneys’ fees and costs. These suits have been consolidated into a single action. In November 2002, the plaintiffs filed an amended complaint that added as defendants Southern, the directors of Mirant immediately prior to its initial public offering of stock, and various firms that were underwriters for the initial public offering by the Company. In addition to the claims set out in the original complaint, the amended complaint asserts claims under the Securities Act of 1933, alleging that the registration statement and prospectus for the initial public offering of Mirant’s stock misrepresented and omitted material facts.
The original 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 January 19, 2001 and May 6, 2002. According to the complaint, Mirant reaped illegal profits in California by artificially manipulating energy prices through a variety of improper tactics. Mirant's fraudulent practices have resulted in investigations by both the Attorney General of the State of California, and the Federal Energy Regulatory Commission, as well as a number of lawsuits filed by California, and consumers. As now revealed, during the Class Period, while Mirant announced quarter-after-quarter of outstanding growth, and assured investors that problems in the California market had been properly accounted for, Mirant, in fact, failed to: (a) provide for the return of illegally obtained revenue, through a charge to earnings; (b) provide for professional fees associated with the investigations arising from the fraud through a charge to earnings; and (c) disclose the fact that the illegally obtained revenue was subject to forfeiture and that investigations surrounding the illegally obtained revenue would result in the expenditure of material amounts for legal and professional fees. As a result, defendants' Class Period financial statements were materially overstated, and failed to comply with Generally Accepted Accounting Principles ("GAAP").