On September 30, 2003, the U.S. District Court for the Southern District of Indiana certified a class of current and former employees of IPALCO, Inc. in an action against the company seeking compensation for losses to class members' 401(k) retirement funds. In the wake of a 2001 buyout by Virginia-based AES, Inc., IPALCO stock was exchanged for AES stock. AES stock quickly lost approximately 90% of its value, taking with it many of IPALCO employees' retirement funds, which were heavily invested in IPALCO stock. The action seeks the return of roughly $100 million for losses caused by the acquisition and for material misrepresentations allegedly made by IPALCO executives regarding the buyout.

When AES tendered its offer to purchase IPALCO, a very profitable Indiana power company with high stock value and steady return of dividends, an agreement was reached to purchase each share of IPALCO stock for $25. However, at the time the buyout actually took place the offer was rescinded and an exchange of AES stock for IPALCO stock was negotiated in its place. AES was a highly leveraged company with approximately 75% of its net worth locked into debt. Shortly after the buyout, AES stock dropped dramatically and lost roughly 90% of its value due to poor financial results and regulatory and operational problems. Even though IPALCO management knew of the volatile nature of AES stock, they strongly advocated for the buyout. However, while advocating for the buyout and representing its benefits to IPALCO shareholders, IPALCO executives were systematically dumping their own shares of IPALCO stock before the acquisition was completed.

The end result of the buyout left IPALCO employees with nearly worthless retirement accounts. The class encompasses roughly 2,000 former and current employees of IPALCO. Class notice is expected to be mailed in November 2003.