Sierra hit with new shareholder lawsuit

Wednesday, Oct. 2, 2002 | 9:25 a.m.

A second lawsuit has been filed by stockholders against Sierra Pacific Resources in an effort to prod the power company to consider a $3.2 billion offer by Southern Nevada Water Authority to buy Nevada Power Co.

Stockholders Stephan and Gail Gordon filed suit on Monday, their attorney Mark Albright said.

Since initiating the suit, other shareholders and law firms have called the law firm Albright, Stoddard, Warnick and Albright, the attorney said.

Others are interested in filing separate actions, Albright said, describing his clients and recent callers as "very disgruntled shareholders."

The lawsuits claim that the directors of the utility, based in Reno, breached their fiduciary responsibilities to investors and stockholders by rejecting the Southern Nevada Water Authority's $3.2 billion offer to buy Nevada Power Co.

The lawsuit calls for creating an independent stockholder committee to oversee any proceedings selling or retaining Sierra Pacific assets.

Attorney Stan Hunterton, representing Sierra Pacific, was unavailable for comment.

The first lawsuit filed on behalf of Michael Carlisle was filed in state District Court on Friday by the same law firm.

In each case, the plaintiffs are seeking a court order to make it a class action lawsuit on behalf of all holders of securities, such as stocks and bonds, from Sierra Pacific Resources.

The Water Authority sent an eight-page letter to Sierra Pacific on Aug. 22 hoping to start formal discussions to buy Nevada Power.

"SNWA is prepared to enter into good faith negotiations of definitive agreements to acquire all of the assets and assume certain existing publicly disclosed indebtedness of Nevada Power," the letter said.

However, Nevada Power Chief Executive Officer Walter Higgins, named as a defendant in the lawsuits, said that the utility was not for sale.

A Nevada Power spokesman said the utility had been notified of the lawsuit on Tuesday.