The complaints seek unspecified damages on behalf of other stockholders, alleging they were misled about financial risks.
By Joe Walker firstname.lastname@example.org
Two more federal lawsuits seeking class-action status were filed this week in Paducah alleging securities fraud against USEC Inc., the Bethesda, Md.-based operator of the Paducah Gaseous Diffusion Plant.
With the new filings, there are now three virtually identical suits against USEC in the Paducah Division of U.S. District Court. The first suit was filed Oct. 27.
One new complaint was filed Tuesday by lawyers in Louisville and Philadelphia on behalf of USEC stockholders David and Chaile Steinberg. The other was filed Wednesday by attorneys in Louisville; Bala Cynwyd, Pa.; and Boca Raton, Fla., for shareholder Stella Sheremet.
All the complaints seek unspecified damages on behalf of other stockholders, alleging they were misled about financial risks. The suits ask to be declared class actions.
In July 1998, USEC was privatized through the sale of 100 million shares in a $1.9 billion stock offering. Since then, its securities have plummeted from $14.25 per share to less than $5. The stock has lost about 30 percent of its value this year.
The company has significantly lowered its earnings projections and cut hundreds of jobs at its Paducah and Piketon, Ohio, plants. USEC plans to upgrade the Paducah plant and close the Ohio plant in June.
Lawsuits allege the stock dropped after USEC failed to adequately disclose that the uranium-enrichment market was in serious decline and downplayed the likelihood that a long-term contract to buy overpriced Russian uranium would become unprofitable.
USEC also is accused of misleading shareholders by abandoning a promising laser-based technology known as AVLIS only months after highly touting it, and by not fully revealing environmental liabilities.
Instead, USEC claimed in a prospectus to be financially strong and that the world enrichment market would be stable for 10 to 15 more years, the suits claim.
As the undisclosed risks materialized, USEC stock fell to about $7.38 per share Dec. 3, 1999, the day after USEC announced it would continue its money-losing contract with Russia, the suits claim. They seek to include all people who bought stock until the announcement.
Like the first suit, the new complaints name USEC President and Chief Executive Officer William H. Timbers and two other senior managers as primary defendants. The October suit and one of the new complaints also name as defendants a group of Wall Street firms, led by Morgan Stanley Dean Witter, that underwrote USEC's stock offering.
In a shareholders meeting last week, Timbers said the initial claims were groundless. USEC Communications Vice President Charles Yulish told The Sun the firm will vigorously defend the allegations.
The October suit was filed by two of the lawyers who sued former operators of the Paducah plant for billions of dollars, alleging they poisoned workers and the public with radiation and toxins. USEC is not part of the environmental suits.