8-KOther Events

SOUTHERN CO 8-K Report, Corporate Update (Mar 30, 2005)

Filed March 30, 2005For Securities:SOSOJESOJFSOJCSOJDSOMN

Summary

Southern Company (SO) filed an 8-K on March 30, 2005, to disclose significant developments regarding the bankruptcy proceedings of Mirant Corporation. Mirant's board of directors has authorized litigation against Southern Company to recover approximately $1.945 billion in transfers made between 1999 and 2001. These transfers include dividends, repayment of intercompany loans, and a stock redemption involving subsidiaries. Southern Company maintains that there is no valid basis for these claims and intends to vigorously defend itself.

Key Highlights

  • 1Mirant Corporation has authorized litigation against Southern Company to recover alleged transfers totaling approximately $1.945 billion.
  • 2The disputed transfers occurred between 1999 and 2001 and include dividends, intercompany loan repayments, and a stock redemption.
  • 3Southern Company states that it believes there is no meritorious basis for Mirant's claims.
  • 4Southern Company intends to vigorously defend itself against any legal action brought by Mirant.
  • 5The filing references previous disclosures in Southern Company's Form 10-K for the year ended December 31, 2004, regarding the Mirant bankruptcy matter.
  • 6The ultimate outcome of any potential litigation is currently indeterminable.

Frequently Asked Questions

This 8-K filing is to inform investors that Mirant Corporation, currently in bankruptcy, has authorized its board to pursue litigation against Southern Company to recover approximately $1.945 billion in alleged transfers made between 1999 and 2001.

Mirant seeks to recover $668 million in dividends, $1.035 billion for the repayment of intercompany loans and accrued interest, and $242 million related to a stock redemption involving subsidiaries.

Southern Company believes there is no meritorious basis for Mirant's claims and has stated its intention to vigorously defend itself against any legal action.

While Southern Company believes its defense is strong, any litigation carries inherent risks and potential costs. The ultimate outcome could impact financial results, though the company currently believes there is no basis for a claim.