FOR IMMEDIATE RELEASE
Wednesday, Oct. 30, 2002
Media contact: Trey Davis (510) 987-0056
Communications office (510) 987-9200
University of California named lead plaintiff in
Dynegy securities suit
The United States District Court Monday (Oct. 28) named
the University of California as lead plaintiff in the Dynegy
securities fraud class action lawsuit.
"The University of California will shoulder its responsibility
as lead plaintiff with the deepest sense of obligation to
the UC family of employees, retirees and students and to the
millions of shareholders who placed their trust in Dynegy,”
said James E. Holst, the university's general counsel. “We
look forward to working closely with all of the plaintiffs
to vigorously pursue this litigation with the shared goal
of securing substantial recovery for all shareholders."
Judge Sim Lake of the U.S. District Court for the Southern
District of Texas in Houston based his 27-page ruling on a
combination of factors, including the amount of losses that
UC sustained as a result of its Dynegy investments, the characterization
of its claims as “typical” of those of other class
members, and its ability to litigate the case on behalf of
The University of California's Dynegy losses totaled $112.4
million, based on 4.16 million shares purchased between Nov.
1, 2000, and May 7, 2002. The current value of UC's diversified
portfolio, which includes both pension and endowment funds,
stands at approximately $51 billion.
"Our Dynegy losses, while substantial, represented
less than one-quarter of one percent of total funds under
management," said David H. Russ, the university's treasurer.
"As a result, the loss will have no impact upon the retirement
benefits provided to UC retirees and the endowment’s
support of the university's academic and research mission.
Nonetheless, the university feels a strong obligation to recover
assets that rightfully belong to the university, its employees
and the other class members."
The University of California filed its motion to be named
lead plaintiff on June 25, 2002. The lead plaintiff in such
cases helps manage and monitor the litigation process on behalf
of others who bought the securities.
To litigate the case and work with other shareholders, the
university has retained on contingency Milberg Weiss Bershad
Hynes & Lerach LLP, one of the country’s largest
and most experienced class action law firms, as its counsel
for the suit. In his ruling, Judge Lake concurred that the
firm “is fully capable of representing the lead plaintiff
and the class.”
The other shareholders who sought lead-plaintiff status included
the New York Hotel Trades Council and Hotel Association of
New York City pension funds, Banknorth Investment Management
Group, RRZ Investments Management, Tennant Group, Daniel Rascoe,
Brian Lindquist, and Michael Kvetnoy.
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