Westar stockholders seek to keep lawsuit alive

? Attorneys representing stockholders who allege they were defrauded by former Westar Energy Inc. management will file legal briefs Monday hoping to keep the case going.

Former Westar chief executive and convicted felon David Wittig, other former top managers and former and current board members are seeking to have the lawsuit dismissed.

“The defendants have filed seven separate motions to dismiss, and on Monday I am filing responses to all seven,” said Joel Laitman, an attorney from New York.

The federal class-action lawsuit could involve hundreds of thousands of people who purchased Westar stock between March 2001 and December 2002, according to court filings.

During that period, Wittig, his lieutenants and the Westar board sought to artificially inflate the company’s stock price by concealing from the investing public Westar’s financial troubles, the extent of Wittig’s compensation package and perks, and allegations of improper power trading, according to the lawsuit.

The lawsuit is aimed at Wittig, former board members and one current board member, all with deep Kansas University connections.

Gene Budig, a former KU chancellor; Frank Becker, a prominent KU alumnus and Lawrence businessman; and John Dicus, another high-profile KU alumnus, have resigned from the board in the past two years. John Nettles, also named in the lawsuit, remains on the Westar board.

The lawsuit says the “outside directors” allegedly defrauded consumers and through mismanagement failed to rein in Wittig.

But in voluminous court filings, the defendants say the lawsuit is without merit.

The filing by Becker, Budig, Dicus and Nettles noted that it was the plaintiffs who said in their pleadings that the board was the victim of misstatements from Wittig. They also said that even if guilty of mismanagement, as the plaintiffs allege, that isn’t a crime.

Wittig’s attorney, David Marcus of Kansas City, Mo., said in legal briefs that the plaintiffs “did not do much more” than simply take Westar’s internal investigative report of 2003 and turn it into a lawsuit.

Wittig’s motion said that statements made under his watch about the financial condition of Westar, which were attacked by plaintiffs as untrue, were actually statements of corporate optimism “and puffery that are not actionable.”

Plaintiffs’ complaints about Wittig’s opulent lifestyle “does not amount to securities fraud,” the motion said.

Last month, Wittig was sentenced to four years and three months in federal prison for his role in trying to hide a bank loan from federal regulators. He and former Westar’s former executive vice president of corporate strategy Douglas Lake also face federal charges in which they are accused of “systematically looting” Westar. They have pleaded innocent.