According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2003, several substantially similar cases were subsequently filed in the same court and were consolidated into one action. On Aug. 13, 2003, the court, acting upon a motion filed by the defendants, dismissed the action without prejudice. On Sept. 22, 2003, upon stipulation of the parties, the court entered a new order changing the dismissal of the case from without prejudice to with prejudice. Accordingly, this lawsuit has been concluded.
Several securities class action lawsuits were filed against Alliant Energy Corporation. The original class action shareowner lawsuit was filed against Alliant Energy, Erroll B. Davis, Jr., Thomas M. Walker and John E. Kratchmer. The amended consolidated complaint alleged that the defendants made false and misleading statements in relation to Alliant Energy's expected performance of its various non-regulated businesses.
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 29, 2002 to July 18, 2002. The complaint alleges that the Company falsely touted the performance of its non-regulated businesses and represented that those businesses would compensate for expected 2002 weakness in its utilities operations. The complaint further alleges that the Company also represented that its unregulated businesses were integral to the Company's operations and were key to the Company's expected annual growth rate of 7%-10%. Such statements were materially false and misleading when made, the complaint alleges, because defendants knew, or were reckless in not knowing, that the unregulated businesses were suffering from serious problems, that such businesses were a material drain on the Company overall and could not compensate for any weaknesses in the regulated businesses and that the Company could not meet its 2002 earnings targets by the results of its utilities businesses alone. On July 18, 2002, the Company announced that it was cutting its 2002 earnings expectations by over 35%. Investors, conditioned by defendants Class Period statements, reacted by selling-off the stock, which fell by 23% in one day, from $23.78 per share on July 18, 2002, to $18.22 per share on July 19, on unusually heavy trading volume. A few months after the end of the Class Period, the Company announced that it would sell many of its non-utility assets as part of an effort to re-focus its business around the Company's utilities operations.