According to the latest docket, on March 31, 2003, the Court entered the Final Distribution Order and the Final Judgment regarding the KPMG Settlement. The case is closed.

As stated in the Notice of Settlement of the Class Action against KPMG Peat Marwick, LLP, dated March 19, 2002, plaintiffs, individually and as representatives of the Class, entered into a proposed settlement of this action that will resolve all claims of the plaintiffs and the Class against defendant KPMG Peat Marwick, LLP. The Settlement is in addition to the $30,000,000 partial settlement previously reached with Assisted Living Concepts and other defendants named in the action. The KPMG Settlement will create a settlement fund that totals $13,500,000 in cash, plus interest. The court has not yet approved this settlement.

On September 29, 2000, all parties filed the Stipulation of Settlement between the plaintiffs and certain Settling Defendants. On November 30, 2000, the Court entered the Order and Final Judgment by U.S. District Judge Ann Aiken. The Stipulation of Settlement was approved action was dismissed with prejudice without costs to any party. The case continued as to defendant KPMG Peat Marwick LLP.

Beginning on February 1, 1999, 12 separate complaints were been filed against the Company and certain officers and directors in the United States District Court for the District of Oregon. On July 23, 1999, a consolidated complaint was filed in connection with this litigation. The consolidated complaint purports to be brought on behalf of a class of purchasers of our common stock from July 28, 1997 through March 31, 1999 and on behalf of a class of purchasers of our 6.0% Debentures and 5.625% Debentures from the date of issuance through March 31, 1999. The consolidated complaint alleges violations of the federal securities laws and seeks unspecified damages. It also names as additional defendants certain of our directors that were not named previously, as well as our independent auditors (solely in connection with our 1998 offering of 5.625% Debentures) and the underwriters in connection with our 1997 offering of 6.0% Debentures.