February 1, 2002 -- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on January 11, 2002, on behalf of purchasers of the securities of McLeodUSA Inc. ("McLeodUSA" or the "company") (Nasdaq:MCLD) between January 30, 2001 and December 3, 2001 inclusive (the "Class Period").

The action is pending in the United States District Court for the Northern District of Iowa, against McLeodUSA, Clark McLeod (Company's Chairman and Co-CEO), Steve Gray (Company's President and Co-CEO) and Chris Davis (Company's Chief Operating and Financial Officer since August 1, 2001). The Honorable Edward J. McManus is presiding over the case.

The complaint charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 30, 2001 and December 3, 2001. The complaint alleges that McLeodUSA issued a series of materially false and misleading statements regarding its business, operations and financial statements that failed to disclose: (i) that the company was failing to timely and properly recognize hundreds of millions of dollars in impairment losses in connection with certain acquisitions, such as Splitrock Services, Inc. and Caprock Communications Corp.; (ii) that the Company did not have the funds necessary to complete its National network and that it would soon have to abandon its plans to finish the network; and (iii) that the Company was unable to service its substantial debt and lacked the financial flexibility necessary to avoid a restructuring. During the Class Period, prior to the disclosure of the true facts about the Company, McLeodUSA purchased Intelispan for $40 million in McLeodUSA stock

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