Calpine Securities

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In a class action suit involving bond purchasers of Calpine 8.5% Senior Notes with a maturation date of February 15, 2011, the Court recently denied defendants' motion to dismiss the plaintiffs' claims.

The class consists of all purchasers of these Calpine Securities. The bonds were issued in two Prospectuses in February 2001 and October 2001, respectively.

The plaintiffs claim that in both of the prospectuses Calpine made misrepresentations and omitted material facts about its expansion in the California market and that it was involved in manipulation of the electric market prices.

The Complaint asserts that the California Energy Crisis and California's electricity price inflation were not caused by a shortage of supply, or increased demand or the other various factors which Calpine claimed caused the crisis in the Prospectuses, but rather by the withholding of capacity by energy suppliers, including Calpine, in order to drive up power prices during the period from November 2000 through May 2001.

The claim further asserts that Calpine misrepresented the cause of the Energy Crisis and electricity price inflation in the Prospectuses by falsely attributing these to a number of external forces beyond its control.