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Case Status:    DISMISSED    
On or around 01/06/2009 (Notice of voluntarily dismissal)

Filing Date: December 08, 2008

Constellation Energy Group, Inc. ("Constellation" or the Company) is a public utility company that provides electric power and natural gas across the United States.

According to the Complaint, this class action is brought on behalf of the public shareholders of Constellation against the Company and its Board of Directors (the "Board" or the "Individual Defendants"), MidAmerican Energy Holdings Co. ("MidAmerican") and MEHC Merger Sub, Inc. ("MEHC"), alleging violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder by the United States Securities and Exchange Commission, as well as breaches of fiduciary duty under Maryland law.

Specifically, the Individual Defendants have attempted to solicit shareholder proxies in support of the Company' s proposed sale to MidAmerican and MEHC (the "Proposed Transaction"), with a materially deficient proxy statement that contains numerous omissions of material fact concerning, inter alia, (i) the process resulting in the Proposed Transaction, including the alternative transactions that the Board considered; (ii) the negotiation of the terms of the Proposed Transaction, including the deal protection devices at issue ; and (iii) Constellation's engagement of its two financial advisors, Morgan Stanley & Co. Incorporated and UBS Securities LLC, as well as the financial analyses that Morgan Stanley rendered.

Moreover, in breach of their fiduciary duties, the Board has unfairly locked-up the Proposed Transaction by agreeing to unreasonable deal protection terms which make the Company exponentially more expensive and difficult (if not impossible) for any prospective buyer to acquire or any alternative transaction to emerge. These terms, agreed to by the Company's Board under extreme time pressure and without review of all reasonably available information, are unduly coercive because not only are they triggered when the Merger Agreement is terminated (even in favor of a superior transaction), but they are also triggered under certain circumstances even when it is not. Thus, the Company's shareholders are necessarily compelled to approve the Proposed Transaction because the adverse effects of the terms may be realized regardless of whether they vote down the Proposed Transaction.

The significance of adequate disclosure to shareholders, and the concern that these terms may spurn viable alternative transactions, is heightened as a result of recent events which suggest that the Company's shares are worth more than MidAmerican and MEHC has offered for them. On December 2, 2008, Electricite de France International , S.A. ("EDFI"), a substantial shareholder of the Company, communicated a proposal to the Board pursuant to which it offered to acquire certain assets and bolster the Company's liquidity with an immediate billion-dollar cash investment. Specifically, EDFI proposed (a) to purchase a 50% ownership interest in the nuclear generation and operation business of Constellation for a purchase price of $4.5 billion; (b) to make an up-front $1 billion cash investment in Constellation in the form of a nonconvertible cumulative preferred stock, which amount would be credited against the purchase price of the 50% ownership interest that EDFI has offered to acquire; and (c) to grant an asset put option pursuant to which Constellation could, at its option, sell to EDFI non-nuclear generation assets having an aggregate value of up to $2 billion. EDFI also expressed its belief that its proposal yields an implied price of $52.00 per share for Constellation's common stock. Unless the Board adequately considers EDFI's proposal and makes disclosure regarding its merits (or disadvantages), shareholders cannot possibly cast an informed vote on the Proposed Transaction.

On December 10, 2008, the Plaintiff filed an Amended Complaint. On January 6, 2009, the Plaintiff voluntarily dismissed this action without prejudice. District Court Judge Andre M. Davis approved the voluntary dismissal the same day.

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