8-KOther Events

CONSOLIDATED EDISON INC 8-K Report (May 19, 2003)

Filed May 19, 2003For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) is reporting on ongoing legal disputes stemming from a failed merger agreement with Northeast Utilities. In 2001, Con Edison sued Northeast Utilities for breach of contract. Northeast Utilities subsequently filed a counterclaim for damages exceeding $1.2 billion, alleging Con Edison breached the agreement. This report discloses a new class action lawsuit filed on May 16, 2003, by Northeast Utilities shareholders, seeking damages purportedly duplicative of Northeast Utilities' own counterclaim. Con Edison maintains its position that Northeast Utilities materially breached the merger agreement, negating Con Edison's obligation to proceed with the acquisition. The company asserts that Northeast Utilities failed to meet critical conditions, including operating in the ordinary course of business, maintaining accurate representations, and avoiding material adverse changes. Con Edison is currently unable to quantify the potential financial impact of these lawsuits on its financial position, results of operations, or liquidity.

Key Highlights

  • 1New class action lawsuit filed by Northeast Utilities shareholders against Con Edison.
  • 2The lawsuit alleges breach of the merger agreement and seeks damages.
  • 3The damages sought are believed to be substantially duplicative of Northeast Utilities' own counterclaim.
  • 4Con Edison reiterates its belief that Northeast Utilities materially breached the merger agreement.
  • 5Con Edison believes it is not obligated to acquire Northeast Utilities due to unmet conditions by Northeast Utilities.
  • 6The company cannot predict the material impact of these lawsuits on its financial position, results, or liquidity.

Frequently Asked Questions

The main event is the disclosure of a new class action lawsuit filed against Con Edison by Northeast Utilities shareholders, related to a previously alleged breach of a merger agreement between the two companies.

Con Edison believes Northeast Utilities materially breached the merger agreement and that it is therefore not obligated to acquire Northeast Utilities. The company views the new shareholder lawsuit as duplicative of Northeast Utilities' own claims.

Con Edison is unable to predict whether these lawsuits or other related proceedings will have a material effect on its financial position, results of operations, or liquidity.

Con Edison believes Northeast Utilities failed to meet conditions such as carrying on its business in the ordinary course, ensuring its representations and warranties were true and correct, and avoiding any material adverse change.