According to the Company’s FORM 10-K/A for the fiscal year ended December 31, 1999, on March 31, 2000 the Trial Court dismissed plaintiff's amended class action complaint for failure to state a claim upon which relief can be granted. To date the plaintiff has not appealed the Trial Court's decision.

GAINSCO, INC. ("GNA") was named a defendant in the proceedings styled William Steiner v. certain individuals and GAINSCO, INC., filed on August 25, 1998 in the United States District Court for the Northern District of Texas, Fort Worth Division (the "Trial Court"). In that case, the plaintiff asserted claims on behalf of a putative class of persons who purchased GNA's common stock between August 6, 1997 and July 16, 1998, inclusive. The plaintiff asserted claims for damages under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, alleging that GNA's financial results did not reflect GNA's true financial position and results of operations in accordance with generally accepted accounting principles in that they understated reserves for claims and claim adjustment expenses.