As summarized by the latest docket posted, on April 22, 1998, NAL Financial Group filed a Suggestion of Bankruptcy. On July 21, 998, the plaintiff filed a Notice of Voluntary Dismissal of claims with prejudice, and on October 2, 1998, the case was closed. On October 6, 1998, the Court entered the Order signed by U.S. District Judge Daniel T. K. Hurley dismissing case with prejudice. All pending motions were declared moot.
According to the complaint, this action is brought to redress violations of the antifraud provisions of the Securities Exchange Act of 1934 (the "Exchange Act") committed by NAL Financial Group Inc. ("NAL" or the "Company"), an automobile finance company, and its senior officers involving a series of misrepresentations about the adequacy of the Company's credit loss reserves and its corresponding underwriting practices. Although the Company admittedly relaxed certain underwriting criteria relating to the creditworthiness of the applicants for its automobile financing and did not strengthen such criteria until at least the end of 1996, NAL had been repeatedly telling its shareholders and the investing public generally that for the past year it employed strict underwriting criteria and maintained sufficient reserves for credit losses. When the Company began to disclose, in piecemeal, the inadequacy of its underwriting practices and loss provisions, the price of NAL common stock began to fall from the $13-$15 per share level at which it had been trading for most of 1996 to the current $2 per share range.