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MILBERG WEISS BERSHAD
HYNES & LERACH LLP
WILLIAM S. LERACH (68581)
HELEN J. HODGES (131674)
ARTHUR C. LEAHY (149135)
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
- and -
ALISON M. TATTERSALL (149607)
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545
BARRACK, RODOS & BACINE
EDWARD M. GERGOSIAN (105679)
KRISTI A. SHELTON (179400)
600 West Broadway, Suite 1700
San Diego, CA 92101
Telephone: 619/230-0800
BERGER & MONTAGUE, P.C.
SHERRIE R. SAVETT
GARY E. CANTOR
1622 Locust Street
Philadelphia, PA 19103
Telephone: 215/875-3000
Co-Lead Counsel for Plaintiffs
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
| In re FRITZ COMPANIES SECURITIES
LITIGATION __________________________________________ This Document Relates To:
__________________________________________ |
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Master File No.
C-96-2712-MHP [filed Aug. 6, 1997] CLASS ACTION DATE: September 12, 1997
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1. I am an attorney licensed to practice in the State of California and am admitted to practice before this Court. I am an associate at the law firm of Milberg Weiss Bershad Hynes & Lerach LLP, one of the counsel of record for the plaintiffs in the above-captioned matter. I submit this declaration in opposition to defendants' motion to dismiss. I have personal knowledge of the facts set forth below, and if called upon to do so, I could and would testify competently to them.
2. In their motion to dismiss, defendants refer to documents that plaintiffs obtained in discovery from KPMG Peat Marwick ("KPMG") in the related state court actions. I was personally involved in obtaining this discovery.
3. In the state court actions, on August 7, 1996, plaintiffs served KPMG with a subpoena seeking the production of all of KPMG's work papers related to KPMG's engagements for the Fritz Companies ("Fritz"), any documents related thereto, and other documents related to the defendants therein. Attached hereto as Exhibit 1 is a true and correct copy of the subpoena.
4. KPMG served a response to the subpoena on September 6, 1996. Attached hereto as Exhibit 2 is a true and correct copy of KPMG's response to the subpoena.
5. KPMG's response to the subpoena indicated that KPMG would not completely comply with the subpoena but rather would produce documents concerning only five discrete issues which it unilaterally identified. See Exhibit 2 at 2, General Objection No. 1. I "met and conferred" extensively with KPMG's attorneys, both by letter and telephone, attempting to have KPMG comply fully with the subpoena, and not limit their production to the five issues. Copies of some of the written correspondence memorializing such discussions are attached hereto as Exhibits 3 through 5.
6. KPMG consistently refused to fully comply with the subpoena, asserting it would only produce documents relating to the five issues. KPMG eventually made a piecemeal production of documents. KPMG did not produce the majority of its work papers. For example, KPMG did not produce the following documents that are included in an accountant's work papers: audit planning memoranda, summary review memoranda, audit programs, adjustment work papers, accounts payable work papers, accrued expenses work papers, and internal control memoranda.
7. Thus, defendants' assertion, in their motion to dismiss, that plaintiffs had "full access to the KPMG work papers" (Defs' Brf. at 12:14), is not true. Far from having "full access," plaintiffs were limited to a small subset of the work papers. Many of the most relevant work papers that potentially reveal and explain defendants' accounting improprieties were not produced by KPMG.
8. Plaintiffs were never able to obtain a full production of documents from KPMG in the state court actions. Before plaintiffs could file a motion to compel, the state court sustained defendants' demurrer without leave to amend.
I declare under penalty of perjury under the laws of the State of California
that the foregoing is true and correct. Executed this 5th day of August,
1997, at San Diego, California.
| _____________________________________
ARTHUR C. LEAHY |
FRITZ\KFC00195.DEC
1. That declarant is and was, at all times herein mentioned, a citizen of the United States and a resident of the County of San Diego, over the age of 18 years, and not a party to or interested in the within action; that declarant's business address is 600 West Broadway, Suite 1800, San Diego, California 92101.
2. That on August 5, 1997, declarant served the DECLARATION OF ARTHUR C. LEAHY IN OPPOSITION TO DEFENDANTS' MOTION TO DISMISS by depositing a true copy thereof in a United States mailbox at San Diego, California in a sealed envelope with postage thereon fully prepaid and addressed to the parties listed on the attached Service List and that this document was forwarded to the following designated Internet site at:
http://securities.milberg.com3. That there is a regular communication by mail between the place of mailing and the places so addressed.
I declare under penalty of perjury that the foregoing is true and correct.
Executed this 5th day of August, 1997, at San Diego, California.
| ______________________________
DANELLE L. McNERTNEY |
12 Oct 1997
Source: Milberg Weiss web file