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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Judge Dismisses Class Action Suit Against USEC, Doe, USEC Still Search For Off-Spec U Solution
By: Michael Knapik, Washington
Nuclear Fuel. April 1, 2002
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Excerpt: USEC Inc. won a major victory last week as a federal judge dismissed a class action lawsuit alleging that USEC misled investors with its July 1998 privatization prospectus. Senior Judge Alexander Harvey of the U.S. District Court in Maryland said that the plaintiffs in the case filed their action too late. In addition, the judge said, the 1998 prospectus contained ''extensive cautionary language'' that ''rendered immaterial as a matter of law the alleged misrepresentations and omissions relied upon by plaintiffs in this case.'' Harvey also dismissed claims against USEC's privatization underwriters. The cases were dismissed with prejudice, meaning that the plaintiffs are barred from refiling any of the claims and now can only appeal the judge's ruling. One of the main points the plaintiffs raised in the case was that USEC's prospectus indicated that commercial deployment of the atomic vapor laser isotope separation (Avlis) technology was the cornerstone of USEC's future profitability. But on June 9, 1999, less than 11 months after USEC was privatized, the company said it was abandoning the Avlis project. USEC's press release was, or should have been, a ''storm warning'' to the plaintiff investors, Harvey said. He said that the abandonment of Avlis raised ''an indication that USEC...had falsely stated in the prospectus that commercial deployment of Avlis was anticipated within several years....With the announcement that Avlis had been abandoned, the falsity of the statement in the prospectus that it would soon be deployed became apparent, and a cause of action under the Securities Act existed.'' But the first plaintiff in the case did not file an action until Oct. 27, 2000, Harvey noted, which was outside of the one-year statue of limitations for such lawsuits. But later in his decision, Harvey spent several pages quoting from what he said was the ''cautionary language'' of the prospectus. He said this language ''rendered immaterial as a matter of law the alleged misrepresentations and omissions relied upon by plaintiffs in this case. The disclaimers contained in the prospectus were neither vague nor 'boilerplate' in nature.... The cautionary statements were tailored precisely to address the uncertainties faced by USEC in its future operations.''
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