According to a press release dated September 8, 2005, the Complaint alleges that defendants violated Sections 10(b), 14(e) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and common law fiduciary duties, by purchasing certain Corporate Units (NYSE: TXU PrC) and PRIDES (NYSE: TXU PrD) (collectively, "the Convertible Securities") without disclosing its plan to dramatically increase the dividend payout on TXU common stock upon completion of the Tender Offer. The complaint alleges that TXU in September 2004 made a self-tender offer to purchase the Convertible Securities at a price linked to the value of its common stock, without disclosing its plan to dramatically increase the common stock's dividend payout immediately following completion of the Tender Offer. Nine short days after the Tender Offer expired, TXU adopted a 350% increase in its common stock dividend, resulting in a 20% increase in the common stock price. To keep the common stock price low during the Tender Offer pricing period, however, TXU injected a false air of uncertainty into the market concerning its plan to increase the dividend, which enabled it to purchase the Convertible Securities from Plaintiffs and other Class members at a substantial and artificial discount.

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