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Carnegie International Receives More Favorable Rulings In Pre-Trail Hearings Regarding $2.1 Billion Suit vs. Grant
Thornton
BALTIMORE, Oct 17, 2001 (BUSINESS WIRE) -- Carnegie International Corporation (OTC BB: CGYC chart, msgs) said today that
late last week, United States District Judge Benson Legg issued a ruling denying several Grant Thornton motions in Maryland
Federal Court which obstructed approval of the settlement of shareholder claims brought against the Company in class actions filed
in 1999.
Carnegie said that Grant Thornton had objected to terms of an order, required under federal law, relating to the settlement. Grant's
Motion, in effect, asked that the Federal court determine that certain provisions of the Private Securities Law Reform Act Carnegie's
claims against Grant Thornton in the state court litigation which Carnegie brought against Grant Thornton in May 2000.
In May 2000 Carnegie brought a $2.1 billion lawsuit against Grant Thornton, its former auditor, in Maryland Circuit Court, alleging
fraud, deceit, negligence, intentional interference with Carnegie's business, and other wrongs. Carnegie said that the state court
recently denied Grant Thornton's motions to dismiss those claims, and decided that Carnegie's claims against Grant Thornton must
proceed to trial.
The rulings of October 12th marked the second time Carnegie had received favorable pre-trial rulings (see "Carnegie International
Receives Favorable Rulings in $2.1 Billion Suit vs. Grant Thornton; Grant Thornton Motion to Dismiss Denied," Business Wire,
October 3, 2001).
Carnegie said that in its October 12 ruling, the Federal court denied Grant Thornton's motions to bar Carnegie's state court claims,
and it cleared the way for approval of the settlement reached late last year. Certain procedural steps remain to be done in the typical
process for approval of shareholder class action settlements through approval by the "class."
Judge Legg also granted Carnegie's motion to stay the federal court lawsuit filed by certain shareholders against Grant Thornton. As
part of the settlement agreement in the class action litigation, Carnegie will be assigned any "class" rights against Grant Thornton
which might exist that certain shareholders asserted against Grant Thornton in federal court.
In agreeing with Carnegie's position, and rejecting Grant Thornton's arguments, Carnegie said that Judge Legg ruled that the issues
relating to Carnegie's proof of damages in the state court litigation must be decided by the state court, and not in the federal court.
As a result of this ruling, Carnegie will not be barred by federal law from presenting proof of damages through reference to losses in
Carnegie's market capitalization; the question whether that proof will be allowed is left to the state court, under Maryland law.
In another development, Carnegie said a hearing was held yesterday, October 16, before Maryland State Court Judge Kaye Allison,
on certain motions filed by Grant Thornton relating to several pre-trial and trial related issues. Carnegie said Judge Allison required
Grant Thornton to respond to Carnegie's interrogatories within five business days, effectively requiring Grant Thornton to describe its
defenses to Carnegie's claims.
Carnegie said it will provide further information concerning rulings by the state court, as and when such rulings are received. A further
hearing is scheduled for Tuesday, October 23, on other pre-trial issues.
At the October 16 hearing, Grant Thornton again requested a delay in the start of trial, which was scheduled to begin October 16,
but has been delayed for two weeks because of a conflict in the trial judge's schedule. Carnegie said that it anticipates that the trial
judge will set the date for the formal start of trial soon at the October 23 hearing, and that the trial will begin soon after that hearing.
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:
Carnegie International Corporation
Lowell Farkas, 410/785-7400
lfarkas@carnegieint.com
or
The Kaminer Group
David A. Kaminer, 914/684-1934
dkaminer@kamgrp.com |
