Avista Faces More Lawsuits

Thu., Aug. 3, 2000

From Staff

Two more class-action lawsuits have been filed against Avista Corp. and Chairman Tom Matthews claiming the company misled investors about the nature of its energy-trading activities and the looming losses from those operations.

Like a similar complaint last week, the new, duplicate lawsuits filed Wednesday in U.S. District Court in Spokane allege the company and Matthews did not disclose the potential for huge losses stemming from trades in the wholesale electricity market obligating a subsidiary, Avista Utilities, to deliver power at low, pre-set prices through October.

As power prices soared in May and June, Avista Utilities was forced to buy that expensive power to meet its obligations.

The miscalculations cost the utility $126 million in the second quarter.

The company revealed the problem in a June 21 telephone conference with stock analysts.

The lawsuit says that information should have been disclosed April 25, when the first-quarter earnings were released. The trades that triggered the losses were made two weeks earlier.

The suits, filed on behalf of investors Wei Cao and William Dalton, seek damages for all those who bought Avista stock between April 25 and June 21. Shares lost about half their value during that period.

Avista officials have declined comment on the litigation.

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Avista Faces More Lawsuits

Jesse Tinsley

Jim Meehan

Molly Quinn

Rob Curley

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