Williams Companies sued for allegedly not disclosing liabilities to investors, law firm says

TULSA, Okla., Feb. 19, 2002 — A group of shareholders are pursuing a class action lawsuit against Williams Companies, Inc., its top officers and its underwriters, claiming that regulatory documents filed by the company violated federal securities laws, Berman DeValerio Pease Tabacco Burt & Pucillo said today.

The complaint was filed on February 5, 2002 in the U.S. District Court for the Northern District of Oklahoma and assigned the docket number 02CV097B. It seeks damages on behalf of investors who bought WMB notes in or traceable to the company’s January 7, 2002 offering. These notes were convertible into common stock and known as FELINE PACS (OTC BB: WMB PrI). Unlike other recent class actions filed against WMB, this lawsuit focuses narrowly on the January 7 offering.

Berman DeValerio has represented investors in class actions for 20 years. To review the complaint and learn more about becoming a lead plaintiff, visit the firm’s Web site at www.bermanesq.com.

The complaint alleges that documents filed by WMB in connection with its offering failed to adequately disclose more than $2.4 billion in credit, support and lease obligations that WMB had at the time of the offering. The complaint also says that those documents incorporated by reference previous financial filings with the Securities and Exchange Commission that had not properly accounted for these obligations.

Specifically, the complaint said that WMB had provided credit support and lease guarantees for certain debt and obligations of Williams Communications Group, Inc. (WCG), a former subsidiary spun off in March 2001. Although the offering documents including the prospectus and prospectus supplement, disclosed those contingent obligations, they misly described them as a “risk,” when it was clear by the time of the offering that WCG (a) could not meet its obligations, (b) would default on its debt and © that WMB would be responsible for $2.15 billion, plus $250 million in other expenses omitted from the prospectus. WMB also failed to account for these obligations in its earlier financial reports, which were incorporated by reference into the offering documents, the complaint says.

On January 29, 2002, just three weeks following the offering, the complaint says, WMB stunned investors by announcing that it was delaying the release of its fiscal 2001 financial results to account for the $2.4 billion obligation, which included $250 million in costs that were not even mentioned in the offering documents. The disclosure devastated WMB stock prices and hence the value of its FELINE PACS, which were tied to the price of that stock.


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