Lovell Stewart Halebian LLP Announces Class Action Lawsuit Against Electronic Data Systems Corp., Officers.

Business Editors & Legal Writers

NEW YORK--(BUSINESS WIRE)--Sept. 26, 2002

The law firm of Lovell Stewart Halebian LLP ([phone] or www.lshllp.com) filed a class action lawsuit on September 26, 2002 on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of Electronic Data Systems Corp. (NYSE:EDS) between September 7, 1999 and September 24, 2002, inclusive.

The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. Any member of the class may move the Court to be named lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than November 25, 2002.

The action, Fadem v. Electronic Data Systems Corp., et al., is pending in the U.S. District Court for the Southern District of New York (500 Pearl Street, New York), Docket No. 02-CV-7738, and has been assigned to the Hon. Deborah A. Batts, U.S. District Judge. According to the complaint, defendants made misstatements of material facts and omitted to state material facts in their public statements and elsewhere, including failing to disclose that EDS's backbone revenue from its Information Solutions IT outsourcing business is highly susceptible to interruption due to terms in EDS's service contracts that enable EDS customers to unilaterally suspend discretionary spending on IT outsourcing, affirmatively misrepresenting the predictability of EDS's future cash flows by touting the anticipated revenue that EDS would supposedly receive from its IT outsourcing service contracts with customers without disclosing that payments under such contracts were not guaranteed, and failing to disclose that EDS faced significant potential threats to its liquidity if its share price fell because of put-option and other obligations that ultimately obligated EDS to in effect buy back a total of 5.44 million shares of EDS stock at fixed prices averaging over $60.00 per share.

The complaint alleges that after Wall Street began to learn about the foregoing on September 18, 2002 after executives of EDS warned that a lack of new revenues would wipe out more than $0.60 per share of its Q3 earnings target of $0.74, the price of EDS stock plummeted to a 52-week low of $20, down from a class period high of $72.45. The complaint alleges that after further revelations regarding EDS's put-option and other liabilities emerged in the wake of the foregoing disclosures, EDS's share price tumbled even further, reaching an intraday low of $10.09 on September 24, 2002.

Christopher Lovell, the senior partner at Lovell Stewart Halebian, has been appointed lead counsel or co-lead counsel in numerous significant class actions, including actions involving reportedly the largest class action recoveries in history under three separate federal statutes (the Sherman Antitrust Act, the Commodity Exchange Act, and the Investment Company Act of 1940). These record-breaking recoveries for class plaintiffs included the $1.027 billion recovery in In re: NASDAQ Market-Makers Antitrust Litigation and a $145.35 million recovery in 1999 in In re: Sumitomo Copper Litigation, a class action against various parties who conspired to manipulate the worldwide copper and copper futures markets for their own profit.

Investors who acquired the common stock of EDS between September 7, 1999 and September 24, 2002 may contact Lovell Stewart Halebian LLP at the telephone number, address or E-mail address below for more information regarding the class action lawsuit. Investors can also visit Lovell Stewart Halebian's website at www.lshllp.com to view a copy of the complaint.