COURT APPROVES $48 MILLION SETTLEMENT OF IN RE INDEPENDENT ENERGY HOLDINGS PLC SECURITIES LITIGATION
By Orders filed September 29, 2003, the Honorable Shira A. Scheindlin, United States District Court Judge for the Southern District Court of New York, gave her final approval to two settlements totaling $48 million in cash, which resolved all remaining claims in the litigation. The action was brought on behalf of a class of all persons or entities who between February 14, 2000 and September 8, 2000 (the “Class Period”) (a) purchased Independent Energy Holdings PLC (“IE”) American Depository Shares (“ADS”) and/or (b) purchased IE Ordinary Shares trade on the London Stock Exchange while residing in the United States or one of its territories. Jeffrey Klafter led the prosecution and settlement of this action while at Bernstein Litowitz Berger & Grossmann LLP, and has continued to oversee the litigation through its conclusion.
The action concerned the demise of Independent Energy Holdings PLC, which had positioned itself as an independent supplier of electricity throughout the United Kingdom. During the Class Period, IE, with the assistance of Donaldson Lufkin & Jenrette Securities Corporation (and certain related entities), Prudential Securities Incorporated, and Johnson Rice & Company, conducted a secondary offering of ADS at $49.25 per ADS, by which the sellers on the offering, which included IE, several of IE’s officers and directors and DLJ, collectively realized proceeds of almost $200 million. Barely five weeks later, on May 10, 2000, IE disclosed that it had agreed with the UK Energy Regulator to a restriction on its ability to obtain certain new electricity customers. Four months later, IE requested its lending banks to appoint a receiver to oversee the liquidation of the company and IE securities became worthless. Plaintiffs alleged that the offering documents and various press releases by IE during the Class Period were materially false and misleading in that they concealed, prior to May 10, that IE was under investigation by the UK Energy regulator and misrepresented, throughout the Class Period the extent of and cause of the billing problems which led to IE’s financial collapse on September 8.
A full description of the litigation is set forth in The Notice of Settlement of Class Action, Application for Attorneys’ Fees and Expenses and Settlement Hearing. The deadline for submitting a Proof of Claim and Release was September 25, 2003.