11/15/01 + 11/29/01 - [CGYC] Judge `Temporarily Suspends' Trial in Carnegie's $2.1 Billion Suit vs. Grant Thornton; Judge Continues Suspension of Trial in Carnegie's $2.1 Billion Suit vs. Grant Thornton
Judge `Temporarily Suspends' Trial in Carnegie's $2.1 Billion Suit vs. Grant Thornton
Court Orders Investigation of Alleged Discovery Violation by Defendant
BALTIMORE, Nov 15, 2001 (BUSINESS WIRE) -- Carnegie International Corporation (OTC BB: CGYC chart, msgs) said today that the trial of its action against Grant Thornton, LLP, its former auditor, has been temporarily suspended pending the outcome of an investigation ordered by the court of an alleged discovery violation by Grant Thornton.
Carnegie President Lowell Farkas said that the trial, which began November 5 in Baltimore Circuit Court, was in process when Grant Thornton's counsel announced in open court that a second set of "original work papers" had been discovered. He said that in the pronouncements made on November 9, Grant Thornton admitted that it had not produced these files during the discovery process.
Judge Kaye A. Allison then suspended the trial to appoint a "third party neutral" to investigate and report back to the Court. Upon receipt of that report, the Court will determine the course of further proceedings, including whether to grant Carnegie's motion for default judgment on all counts.
Grant Thornton was engaged by Carnegie to audit years 1997 and 1998; those reports were included in the company's SEC filings. In May of 2000, Carnegie brought suit against Grant Thornton in Baltimore Circuit Court, alleging that Grant had failed to perform its obligations relating to the audits of 1997 and 1998 as well as fraud.
In related proceedings, Farkas said the court has scheduled a hearing for November 28, 2001, to rule on sanctions requested by Carnegie based on the destruction of other documents by J.W. "Mike" Starr, a senior Grant Thornton officer. (see "Carnegie International Corporation Seeks Default Judgment in $2.1 Billion Suit vs. Grant Thornton, LLP," Business Wire, July 31, 2001).
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:
Lowell Farkas
Carnegie International Corporation
+(410) 785-7400
lfarkas@carnegieint.com
or
David A. Kaminer
The Kaminer Group
+(914) 684-1934
dkaminer@kamgrp.com
siliconinvestor.com
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Judge Continues Suspension of Trial in Carnegie's $2.1 Billion Suit vs. Grant Thornton
Parties Await Report of Special Master on Alleged Discovery Violation by Defendant
BALTIMORE, Nov 29, 2001 (BUSINESS WIRE) -- Carnegie International Corporation (OTCBB: CGYC chart, msgs) said today that the trial of its action against Grant Thornton, LLP, its former auditor, remains temporarily suspended pending the outcome of an investigation ordered by the court of an alleged discovery violation by Grant Thornton.
In a November 27 letter to counsel, Judge Kaye A. Allison said she postponed the hearing originally scheduled for today (which had been moved to November 30), and "decided to defer the hearing until receiving the report of the Special Master," noting that she is taking the steps to appoint that person.
Carnegie President Lowell Farkas said the trial, which began November 5 in Baltimore Circuit Court, was in process when Grant Thornton's counsel announced in open court that a second set of "original work papers" had been discovered. He said that in the pronouncements made on November 9, Grant Thornton admitted that it had not produced these files during the discovery process, and that Judge Allison then suspended the trial. Upon receipt of the Special Master's report, the Court will determine the course of further proceedings, including whether to grant Carnegie's motion for default judgment on all counts.
Grant Thornton was engaged by Carnegie to audit years 1997 and 1998; those reports were included in the company's SEC filings. In May 2000, Carnegie brought suit against Grant Thornton in Baltimore Circuit Court, alleging that Grant had failed to perform its obligations relating to the audits of 1997 and 1998 as well as fraud.
Unrelated to these proceedings, Farkas said that documents are to filed today in Maryland Federal Court approving its previous announced settlement of a class action suit (See "Carnegie International Settles Class Action Suit," Business Wire, September 18, 2000). Farkas said that shareholders of the class would be notified shortly by mail by its representative law firms.
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.
Contact:
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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