10/17/01 - [CGYC] Carnegie International Receives More Favorable Rulings In Pre-Trail Hearings Regarding $2.1 Billion Suit vs. Grant Thornton; Trial for Carnegie International's $2.1 Billion Suit vs. Grant Thornton Set for November 5th
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
siliconinvestor.com
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Trial for Carnegie International's $2.1 Billion Suit vs. Grant Thornton Set for November 5th
BALTIMORE, Oct 19, 2001 (BUSINESS WIRE) -- Carnegie International Corporation (OTC BB: CGYC chart, msgs) said that the trial for its $2.1 billion its suit vs. Grant Thornton LLP is scheduled to begin before Judge Kaye A. Allison in the Circuit Court for Baltimore City on Monday, November 5, 2001.
Carnegie, an Internet support and computer telephony holding company, filed the action against Grant Thornton, its former accounting firm, in May, 2000.
Carnegie said that in an ORDER dated October 18, 2001, the Court DENIED Grant Thornton's motion to modify the scheduling ORDER. The ORDER, it said, also called for a pretrial conference, if necessary, to be held October 30, 2001, and a trial on the defamation claims of E. David Gable, its chairman, and Lowell Farkas, its president and CEO, to be scheduled at a future date.
The ORDER, said Carnegie, also DENIED Grant Thornton's motion to extend the deadline for filing motions in limine, setting filing for these motions no later than Wednesday, October 24, responses in opposition due by Monday, October 29, 2001, and replies by Thursday, November 1, 2001. Carnegie said an additional ORDER GRANTED Grant Thornton's motion to enforce Carnegie's contractual waiver of a jury trial, except for count 8, the Gable and Farkas individual claims, which will be bifurcated for a jury trial at a later date.
Yesterday's ORDER follows rulings earlier this week by U.S. District Judge Benson Legg (see "Carnegie International Receives More Favorable Rulings in Pre-Trial Hearings Regarding $2.1 Billion Suit vs. Grant Thornton," Business Wire, October 17, 2001), which denied several Grant Thornton motions in Maryland Federal Court.
"We are ecstatic this long and difficult period in our history is finally drawing to a close," said Carnegie's Gable. "We look forward to this bench trial and pending jury trial and having our outstanding legal team present our cases."
Carnegie attorney William H. Murphy said, "we are delighted that there will be no more delays, and look forward to the opportunity to prove our case before Judge Allison."
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
siliconinvestor.com |
