Avista Hit With Another Lawsuit

Wed., Aug. 9, 2000

From Staff

A fourth federal class-action lawsuit was filed Monday against Avista Corp. for alleged violations of securities laws.

Martin Capetz, described as an Avista stockholder, claims he and other investors were victimized by “fraud and deceit” when utility managers failed to disclose the extent of energy trades this year that caused significant company losses.

Those losses reduced Avista’s market capitalization by $800 million, according to the new lawsuit. In that time, Avista’s stock lost half its value, from more than $37 a share to $19 on June 21.

The energy trades involved future purchases by subsidiary Avista Utilities of natural gas and electrical power at pre-set prices.

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, according to company estimates. The loss effectively drained total profits for this year, according to Avista Chairman Tom Matthews.

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

The new suit names both Matthews and Jon Eliassen, Avista senior vice president.

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Avista Hit With Another Lawsuit

Jesse Tinsley

Jim Meehan

Molly Quinn

Rob Curley

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