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Case Status:    SETTLED
On or around 08/03/2000 (Date of order of final judgment)

Filing Date: April 09, 1997

According to the firm's 10-K filing dated May 8, 2002, on May 26, 2000, a settlement agreement was executed regarding a class action lawsuit related to accounting irregularities announced in April 1997. The plaintiff claimed that the Company and certain of its current and former officers violated the federal securities laws and were aware of, or recklessly disregarded, material misstatements that were made in MSC's publicly filed financial reports. The Court entered an order preliminarily approving the agreement on May 31, 2000 and ordered that the class be advised of the proposed settlement. On August 1, 2000, the class members were afforded the opportunity to present any objections at a fairness hearing, at which time the settlement was approved with no objections, and the case was dismissed. The costs of the settlement and related legal fees were covered under the Company's insurance policies, net of retention (expensed in fiscal 1998).

The original complaint alleged that defendants were exposed to substantial evidence of Sutton's [defendant] fraudulent activity. According to the second amended complaint, for example, Sutton did not total his manual adjustments to monthly inventory reports. Totals from these reports were supposed to correspond to figures in the General Ledger, but did not. Moreover, inventory quality statements, which were generated and provided to senior management at Material Sciences on at least a monthly basis, showed a rapid and unexplained increase in the cost per pound of carried inventory. This rapid and unexplained increase -- which plaintiff claimed is a classic "red flag" of fraud -- was also discussed in written and oral presentations as a part of quarterly business reviews.

COMPANY INFORMATION:

Sector: Basic Materials
Industry: Misc. Fabricated Products
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MSC
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. Illinois
DOCKET #: 97-CV-2450
JUDGE: Hon. Robert W. Gettleman
DATE FILED: 04/09/1997
CLASS PERIOD START: 04/18/1996
CLASS PERIOD END: 04/06/1997
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Morris and Morris LLC (Former Address)
    1105 North Market Street, Suite 1600, Morris and Morris LLC (Former Address), DE 19801
    800.296.0410 · firm@morrisandmorrislaw.com
  2. Robert D. Allison & Associates
    122 S. Michigan Avenue Ste 1850 , Robert D. Allison & Associates, IL 60603
    ·
  3. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
No Document Title Filing Date
COURT: N.D. Illinois
DOCKET #: 97-CV-2450
JUDGE: Hon. Robert W. Gettleman
DATE FILED: 12/17/1997
CLASS PERIOD START: 04/18/1996
CLASS PERIOD END: 04/06/1997
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Morris and Morris LLC (Former Address)
    1105 North Market Street, Suite 1600, Morris and Morris LLC (Former Address), DE 19801
    800.296.0410 · firm@morrisandmorrislaw.com
  2. Robert D. Allison & Associates
    122 S. Michigan Avenue Ste 1850 , Robert D. Allison & Associates, IL 60603
    ·
  3. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  4. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
No Document Title Filing Date