Avista Stockholder Lawsuits Mounting
The lead plaintiff deadline is today for class action lawsuits on behalf of Avista Corp.'s stockholders who may have lost money after the company reported a loss of $22 million in the second quarter. The losses followed unhedged power trades in the forward market in the second quarter.
In June, Avista acknowledged that one of its energy traders had entered into excessive levels of short-term, fixed-price power contracts. The trader then allegedly committed suicide after the transactions were revealed (see Daily GPI, June 22).
Several class action lawsuits were filed in July (see Daily GPI, Aug. 1), and the latest law firm to file a suit was Spector, Roseman & Kodroff P.C. of Philadelphia. The lawsuit, filed last week, alleges that statements made by Avista's president and CEO that "Avista Utilities did not generally hold energy commodity instruments for speculative trading purposes, but rather engaged in trading energy commodity instruments contracts to hedge against price fluctuations associated with the management of resources was false."
The newest lawsuit also alleges that the defendants' statements regarding "among other things, the purported 'strong performance' of the Avista Utilities unit were misleading" because they omitted facts about the company's short position and the "many millions of dollars it would cost the company to cover the position."
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