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Case Status:    SETTLED
On or around 11/20/2002 (Date of order of final judgment)

Filing Date: July 02, 1998

On November 18, 2002, U.S. District Judge Jeremy Fogel granted the motions for attorney fees and reimbursement of expenses, final approval of the settlement, and the plan of allocation. The action was dismissed with prejudice. According to AFC’s Form 10-K For the fiscal year ended December 31, 2002, the total amount of the settlement was $20.0 million, $2.9 million of which was not funded by insurance.

The original complaint charges Advanced Fibre with misleading their investors with false information about the company's financial condition and prospects. The defendants publicly represented that GTE Communications Systems Corporation was their biggest client and largely responsible for Advanced Fibre's substantial growth in earnings and revenue. However, they failed to disclose that they had lost the GTE contract and thereafter sales to GTE were winding down. In addition, Advanced Fibre provided misleading information regarding their operations, success, and growth prospects in China and the domestic success achieved while courting the Regional Bell Operating Companies. As a result, common stock value was inflated and high level executives were able to pocket over $100 million in proceeds. On June 30, 1998, when it was revealed that the information provided to investors was misleading, and that sales and earnings would be "below expectations, common stock value plummeted 52%."

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