On August 30, 1999, the Court approved the proposed order of settlement, which included dismissal of all claims against the defendants. Cephalon agreed to pay the plaintiffs $17,000,000, which was inclusive of attorneys fees and expenses. Of the settlement amount, $7,500,000 was paid by Cephalon's directors' and officers' liability insurance carriers and the remaining $9,500,000 was paid by Cephalon.

According to the complaint Cephalon and certain of its officers were named as defendants in a number of civil actions filed in the U.S. District Court for the Eastern District of Pennsylvania, which were later consolidated. Several of the plaintiffs were designated by the Court, collectively, as the "lead plaintiff" for purposes of the Private Securities Litigation Reform Act of 1995. The consolidated complaint, filed in October 1996 by the lead plaintiffs, extended and expanded the class period to include purchasers of the Company's securities as well as options to purchase or sell those securities during the period between June 12, 1995 and June 7, 1996. Plaintiffs seek to hold defendants liable for stock trading losses that stem from alleged violations of the U.S. securities laws and alleged common law negligent misrepresentation. More specifically, plaintiffs have alleged that statements by Cephalon and the named defendants relating to the results of certain clinical studies of MYOTROPHIN were misleading.