A Delaware man wants access to records he believes could expose reasons behind cost overruns and delays at the more than $7 billion Kemper County energy facility.
Alan Nussbaum, an investor in Atlanta-based Southern Co., asked a Delaware court for documents to determine whether Southern’s officers and directors mismanaged the company, committed fraud or breached trust between the company and its stockholders according to a Delaware Court of Chancery filing submitted Friday.
Southern Co. owns Mississippi Power Co., which is building the Kemper County facility in east Mississippi.
Nussbaum also wants to know whether the utility company’s directors systematically failed to monitor the company and its officers regarding construction of the Kemper plant, and if Southern Co.’s directors knowingly misled investors in filings with the U.S. Securities and Exchange Commission.
In order to keep federal funds and tax credits that Southern Co. secured in 2010, the Kemper Plant had to be operational by 2014, Nussbaum’s complaint states.
Nussbaum alleges that after Southern Co. began construction of the plant in Kemper County, Mississippi through Mississippi Power Company, the company has known since at least 2012 that its targeted completion date and costs could not be justified.
However, the company continuously misrepresented to investors and federal regulators that those targets would be met, the filing says.
“The misrepresentations by Southern’s officers and directors have further harmed the company through internal investigations, federal securities and derivative litigation, and an on-going investigation by the United States Securities and Exchange Commission”
Earlier this month, Mississippi Power Co. announced it would need more time to complete its power plant in order to make repairs. The company did not set a deadline, saying an updated completion schedule and cost estimate for the plant should be revealed in a monthly status report that Mississippi Power expects to file by early April.
In January, a class-action lawsuit was filed against Southern Co. over Mississippi Power Co.’s construction of its Kemper County energy facility, complaining that Mississippi Power Co.’s parent, Southern Company, and its officers and directors violated the Securities Exchange Act of 1934.
Southern Co. representatives were not immediately available to comment on the lawsuit.
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Mr. Nusbaum, you just proved the risk of investing in utility stocks.