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Case Status:    SETTLED
On or around 12/01/2005 (Date of order of final judgment)

Filing Date: May 07, 1999

According to Wyndham International, Inc.’s FORM 10-Q for the quarterly period ended June 30, 2005, two separate cases were filed against Patriot American Hospitality, Inc. in May and June 1999. The first action, known as the “Merger Action,” was first filed in May 7, 1999 and the second action, known as the “Open Market Action,” was first filed in June 22, 1999. By order of the Judicial Panel on Multidistrict Litigation, these actions along with certain actions have been consolidated in the Northern District of California for consolidated pretrial purposes. The Multidistrict Litigation docket is 00-CV-1300.

According to the latest docket, both cases have settled. By the two separate Orders entered on November 30, 2005, relating to the Merger Action and the Open Market Action, the Court granted the plaintiffs’ motions for final settlement approval, final approval of the plan of allocation and an award of attorneys’ fees and expenses. The Merger Action settlement is in the aggregate amount of $12,650,000 and attorneys’ fees and expenses are in the amount of $2,626,805.58. The Open Market Action settlement is in the aggregate amount of $5,000,000 and attorneys’ fees and expenses are in the amount of $1,009,939.28. Judgment for the Merger Action and Judgment for the Open Market Action were both entered on December 1, 2005, and signed by U.S. District Judge Vaughn R. Walker.

I. The “Merger Action”

On May 7, 1999, Doris Johnson and Charles Dougherty filed a lawsuit in the Northern District of California against Patriot, Wyndham, their respective operating partnerships and PaineWebber Group, Inc. This action, Johnson v. Patriot American Hospitality, Inc., et al., No. C-99-2153, was commenced on behalf of all former holders of Bay Meadows stock during a class period from June 2, 1997 to the date of filing. The action asserts securities fraud claims and alleges that the purported class members were wrongfully induced to tender their shares as part of the Patriot/Bay Meadows merger based on a fraudulent prospectus. The action seeks unspecified damages and further alleges that defendants continued to defraud stockholders about their intentions to acquire numerous hotels and saddle Wyndham with massive debt during the class period. Three other actions against the same defendants subsequently were filed in the Northern District of California: (i) Ansell v. Patriot American Hospitality, Inc., et al., No. C-99-2239 (filed May 14, 1999), (ii) Sola v. PaineWebber Group, Inc., et al., No. C-99-2770 (filed June 11, 1999), and (iii) Gunderson v. Patriot American Hospitality, Inc., et al., No. C 99-3040 (filed June 23, 1999). Another action with substantially identical allegations, Susnow v. Patriot American Hospitality, Inc., et al., No. 3-99-CV1354-T (filed June 15, 1999) also subsequently was filed in the Northern District of Texas. By order of the Judicial Panel on Multidistrict Litigation, these actions along with certain actions identified below have been consolidated in the Northern District of California for consolidated pretrial purposes.

On or about October 13, 2000, the defendants moved to dismiss the actions. On or about August 15, 2001, the Court granted Defendants’ motions to dismiss the action, dismissing some of the claims with prejudice and granting leave to replead certain other claims in the Complaint. On or about October 15, 2001, plaintiff filed an amended complaint seeking substantially the same relief as in the original complaint. On or about December 20, 2001, the defendants moved to dismiss the amended complaint. On or about September 3, 2002, the Court granted in part and denied in part Defendants’ motion to dismiss. The Court did not dismiss certain of Plaintiffs’ claims under Section 11 of the Securities Act of 1933 and Section 12(b) of the Securities Exchange Act of 1934. An answer to the complaint has been filed and the parties have been exchanging discovery. The Court has not yet certified a class. On or about February 28, 2005, the parties entered into a stipulation of settlement. Pursuant to the stipulation of settlement, the Company shall issue 11 million shares of Wyndham common stock to the proposed settlement class. The Company also has agreed to contribute a maximum amount of $1,000 to the settlement class, only in the event that the trading price of Wyndham common stock falls below a certain threshold for a defined period of time.

The Company has also agreed that in the event that the holders of the series B preferred stock convert the series B preferred stock into common stock of Wyndham at any time on or before December 31, 2005, the members of the settlement class shall have the right to participate in a rights offering. On or about June 20, 2005, the parties entered into an amended stipulation of settlement that would provide class members with cash consideration equal to the consideration per common share provided to holders of Wyndham common stock in the event of a sale, merger or other business combination of Wyndham prior to the issuance of the 11,000,000 shares to the class. In addition, the amended stipulation of settlement provides that in the event that (i) the series B preferred shares have been converted into common stock prior to the consummation of a sale of Wyndham and (ii) the per share consideration provided to holders of Wyndham common stock in the sale were greater than 90% of the conversion price of the price per common share at which the holders of series B preferred stock convert shares into Wyndham common stock, then instead of a rights offering each class member would receive additional cash consideration in an amount equal to the product of (a) that number of shares of Wyndham common stock necessary to maintain that person’s ownership percentage of Wyndham’s common stock prior to the conversion and (b) the difference between the per share consideration provided to holders of Wyndham common stock in the sale and 90% of the conversion price. As of June 30, 2005, the Company has recorded a reserve of $11,200 to cover the cost of the settlement.

II. The “Open Market Action”

On or about June 22, 1999, a lawsuit captioned Levitch v. Patriot American Hospitality, Inc., et al., No. 3-99-CV1416-D, was filed in the Northern District of Texas against Patriot, Wyndham, James D. Carreker and Paul A. Nussbaum. This action asserts securities fraud claims and alleges that, during the period from January 5, 1998 to December 17, 1998, the defendants defrauded stockholders by issuing false statements about Wyndham. The complaint sought unspecified damages and was filed on behalf of all stockholders who purchased Patriot American and Wyndham stock during that period. Three other actions, Gallagher v. Patriot American Hospitality, Inc., et al., No. 3-99-CV1429-L, filed on June 23, 1999, David Lee Meisenburg, et al. v. Patriot American Hospitality, Inc., Wyndham International, Inc., James D. Carreker, and Paul A. Nussbaum Case No. 3-99-CV1686-X, filed July 27, 1999 and Deborah Szekely v. Patriot American Hospitality, Inc., et al., No. 3-99-CV1866-D, filed on or about August 27, 1999, allege substantially the same allegations. By orders of the Judicial Panel on Multidistrict Litigation, these actions have been consolidated with certain other stockholder actions and transferred to the Northern District of California for consolidated pretrial purposes.

On or about October 20, 2000, the defendants moved to dismiss the actions. On or about August 15, 2001, the Court granted Defendants’ motions to dismiss the action, dismissing some of the claims with prejudice and granting leave to replead certain other claims in the Complaint. On or about October 15, 2001, plaintiff filed an amended complaint seeking substantially the same relief as in the original complaint. On or about December 20, 2001, the defendants moved to dismiss the amended complaint. On or about September 3, 2002, the Court dismissed in its entirety the complaint and granted plaintiffs leave to amend. On or about December 2, 2002, plaintiffs filed an amended complaint. The Court has not yet certified a class. On or about September 30, 2004, the parties entered into a stipulation of settlement with class counsel to settle the litigation. The stipulation of settlement is subject to Court approval. Pursuant to the stipulation of settlement, the Company shall pay $2,500 in cash when an order is entered by the Court preliminarily approving the proposed settlement and an additional $2,500 on or before the second anniversary of the final Court approval. As of June 30, 2005, the Company has recorded an adequate reserve to cover the cost of the settlement.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Healthcare Facilities
Headquarters: United States

SECURITIES INFORMATION:

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

About the Company & Securities Data


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COURT: N.D. California
DOCKET #: 99-CV-02153
JUDGE: Hon. Susan Illston
DATE FILED: 05/07/1999
CLASS PERIOD START: 06/02/1997
CLASS PERIOD END: 05/07/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cotchett Pitre & Simon
    San Francisco Airport Office Center, 840 Malcolm Road, Suite 200, Cotchett Pitre & Simon, CA 94010
    650.697.6000 ·
  2. Finkelstein & Krinsk LLP
    501 West Broadway, Suit 1250, Finkelstein & Krinsk LLP, CA 92101
    877.493.5366 619.238.5425 ·
  3. Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA)
    100 Pine Street - Suite 2600, Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA), CA 94111
    415.288.4545 415.288.4534 ·
  4. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  5. Stanley, Mandel & Iola LLP (Dallas)
    3100 Monticello Avenue, Suite 750 , Stanley, Mandel & Iola LLP (Dallas), TX 75205
    214.443.4300 ·
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 00-CV-1300
JUDGE: Hon. Susan Illston
DATE FILED: 10/15/2001
CLASS PERIOD START: 06/02/1997
CLASS PERIOD END: 12/17/1998
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cotchett Pitre Simon & McCarthy
    San Francisco Airport Office Center, 840 Malcolm Road, Suite 200, Cotchett Pitre Simon & McCarthy, CA 94010
    650.697.6000 650.697.0577 · info@cpsmlaw.com
  2. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
No Document Title Filing Date
No Document Title Filing Date