Case Page

 

Case Status:    SETTLED
On or around 08/01/2005 (Date of order of final judgment)

Filing Date: December 26, 2002

According to the Company’s FORM 20-F filed on September 20, 2005, while the case was pending on appeal, on 7 January 2005, the parties reached a preliminary agreement to settle the complaint on the basis of the defendants making a payment of US$7 million (£3.7 million) to the plaintiff class (with the support of the Company’s insurers) in full and final settlement of the complaint. On 1 March 2005, the parties filed a stipulation with the Court of Appeals requesting that the Court of Appeals remand the case to the District Court for the limited purpose of considering the parties’ settlement. The Court of Appeals accordingly referred the case back to the District Court on 21 March 2005, for consideration of the settlement agreement. The District Court granted preliminary approval of the settlement by order dated 13 May 2005 and final approval by order dated 23 July 2005 thereby bringing the proceedings to a close.

Earlier, according to the same SEC filing, the Company and the individual defendants filed motions to dismiss the class action complaint, which were heard on 31 October 2003. In March 2004 the Court issued orders granting the Company’s and the individual defendants’ motions to dismiss the complaint (but denying the defendants’ motion to dismiss the claims of foreign (non-US) purchasers for lack of subject matter jurisdiction). On 4 May 2004 and 5 June 2004, the Court issued memoranda opinions with regard to its previous orders. On 15 June 2004, the Court entered judgement for the Company and the individual defendants consistent with its March 2004 orders and memoranda opinions. On 16 April 2004, plaintiffs filed an appeal of the District Court’s decision to the US Court of Appeals for the Fourth Circuit. On 3 May 2004, defendants filed a notice of cross-appeal with respect to the District Court’s order denying their motion to dismiss the claims of foreign (non-US) purchasers for lack of subject matter jurisdiction.

Between December 2002 and February 2003, ten shareholder class action lawsuits were filed in the United States District Court for the Eastern District of Virginia naming Cable and Wireless plc and several of its officers and directors as defendants. In March 2003, the Court consolidated all the cases into one action, styled as In re Cable and Wireless plc Securities Litigation, Civil Action No. 02-1860-A. In May 2003, the lead plaintiffs filed a consolidated complaint that alleged violations of certain sections of the Securities and Exchange Act of 1934 and the rules promulgated thereunder. A central allegation was that the defendants made false and misleading statements about the Company’s financial condition by failing to disclose on a timely basis the existence of a tax indemnity and a ratings trigger to place money in escrow until any liability which the Company may have had under the tax indemnity was finally determined. The indemnity and ratings trigger appeared in an agreement reached in 1999 between the Company and Deutsche Telekom for the sale of the Company’s interest in the mobile telephone company that operated under the name One2One. In addition to the allegations relating to the tax indemnity, the consolidated complaint also alleged that the defendants made false and misleading statements by: (1) failing to disclose certain lease liability commitments and (2) improperly recognising revenue received from sales of capacity to other carriers. The plaintiffs sought unspecified money damages in their complaints.

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 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 in cash for 100% of the equity ownership interest in One 2 One including the repayment of £237 million of shareholder loans, and would assume approximately £1.5 billion 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 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 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.

COMPANY INFORMATION:

Sector: Services
Industry: Communications Services
Headquarters: United Kingdom

SECURITIES INFORMATION:

Ticker Symbol: CWP
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Virginia
DOCKET #: 02-CV-1860
JUDGE: Hon. Gerald Bruce Lee
DATE FILED: 12/26/2002
CLASS PERIOD START: 08/06/1999
CLASS PERIOD END: 12/06/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abraham, Fruchter & Twersky (New York, 42 Street)
    60 East 42 Street, Abraham, Fruchter & Twersky (New York, 42 Street), NY 10021
    212.687.6655 ·
  2. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  3. Pomerantz LLP (New York)
    600 Third Avenue, Pomerantz LLP (New York), NY 10016
    212.661.1100 212.661.8665 · info@pomerantzlaw.com/
  4. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  5. Wechsler Harwood LLP
    488 Madison Avenue 8th Floor, Wechsler Harwood LLP, NY 10022
    212.935.7400 · info@whhf.com
  6. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: E.D. Virginia
DOCKET #: 02-CV-1860
JUDGE: Hon. Gerald Bruce Lee
DATE FILED: 05/27/2003
CLASS PERIOD START: 08/06/1999
CLASS PERIOD END: 12/06/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
  2. Cohen, Gettings & Caulkins, P.C.
    2200 Wilson Boulevard, Suite 800, Cohen, Gettings & Caulkins, P.C., VI 22201
    703.525.2260 703.525.2489 · info@cohengettings.com
  3. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC)
    1100 New York Avenue, N.W., Suite 500, West Tower, Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC), DC 20005
    202.408.4600 202.408.4699 · lawinfo@cmht.com
  4. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
No Document Title Filing Date