Re: 7/31/01 - [CGYC] Carnegie International Seeks Default Judgement in $2.1 Billion Suit vs. Grant Thornton
Carnegie International Seeks Default Judgement in $2.1 Billion Suit vs. Grant Thornton
`Willful and Intentional Destruction of Evidence' by Accounting Firm Alleged Paramount Subsidiary Signs Master Agency Agreement with Qwest Communications
BALTIMORE, Jul 31, 2001 (BUSINESS WIRE) -- Carnegie International Corporation (OTC BB: CGYC chart, msgs), an Internet support and computer telephony holding company, said it has filed a motion in Baltimore City Circuit Court asking for a judgement in its favor in a $2.1 billion suit against Grant Thornton LLP, its former accounting firm.
The motion, filed on Wednesday, July 25, alleges that J.W. Mike Starr, a senior partner and former director of risk management at Grant Thornton, "willfully, knowingly and intentionally destroyed Carnegie documents with the full understanding that litigation was imminent." The motion says that Starr admitted destroying the documents in a deposition given earlier in July in Chicago.
Carnegie's motion says that "Starr admitted that he deliberately destroyed the entire Carnegie file, including, among other things, e-mails, communications with Carnegie, and his contemporaneous notes of telephone calls, meetings with Carnegie management and the members of its Audit Committee."
Carnegie originally filed suit against Grant Thornton in May 2000, claiming that the accounting firm had "caused omissions and misstatements" in filing Form 10SB and Form 10KSB for 1997 and 1998 made with the Security & Exchange Commission That eight-count complaint accused Grant Thornton of fraudulent inducement, negligence, malpractice, breach of contract, excessive fees, breach of trust, intentional interference with business relations, and defamation, during the period between December of 1997 and October of 1999.
Those filings, Carnegie's suit and motion allege, led to a "near catastrophic" drop in the trading price of the company's shares, a suspension in trading lasting more than a year, and, ultimately, delisting by the American Stock Exchange.
Trading in Carnegie shares resumed in May of 2000 on the NASDAQ Over-the-Counter Bulletin Board.
E. David Gable, chairman of Carnegie, said the company is represented in its actions against Grant Thorton by William H. Murphy, Jr., of Baltimore, who filed last week's motion, and Willie E. Gary of Stuart, Florida.
Paramount Signs Agreement with Quest
Carnegie also said that its Paramount International Telecommunications, Inc., subsidiary has signed a Master Agency Agreement with Qwest Communications Ltd. (NYSE: Q chart, msgs). Paramount, based in Vista, California, serves hotels, hospitals, institutions and other businesses, primarily in 0+/- call auditing and international one-plus sectors, and has more than 250,000 registered phones.
Under the terms of the two-year agreement, Qwest will provide enhanced services for Paramount, including live operator service in the U.S., Canada, and Mexico, and the ability to use Qwest branding for all call records originating from Paramount properties. Paramount also gains access to the Qwest platform for calls placed from Western Europe to the U.S. with credit card, local exchange carrier (LEC) or third-party/collect billing.
Michael Eberle, president and CEO, of Paramount, said the new business from Europe should result in some 15,000 additional calls billed through Paramount per month within a six-month period, and that the live operator services in the U.S., Canada and Mexico could increase his company's profits by 15 to 30 per cent annually.
About Carnegie International Corporation
Carnegie International Corporation is an Internet support and computer telephony holding company with specialization in telecommunications products, services and distribution, and in E-Commerce and EDI.
Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this Press Release (as well as information in oral statements or other written statements made or to be made by Carnegie International Corporation) contain statements that are forward-looking, such as statements relating to the future anticipated direction of the telecommunications industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, and potential contracts. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of Carnegie International Corporation. These risks and uncertainties included, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, domestic and global economic conditions, change in Federal or state laws, and market competition factors.
Contact:
Press Contacts:
Carnegie International Corporation
Lowell Farkas, 410/785-7400
lfarkas@carnegieint.com
or
The Kaminer Group
David A. Kaminer, 914/684-1934
dkaminer@kamgrp.com
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