According to the Final Order entered on September 20, 2001, U.S. District Judge William P. Dimitrouleas granted the Defendants’ motion to dismiss the second amended complaint. The Second Consolidated Amended Class Action Complaint was dismissed and the case closed.

On July 6, 2000, the case was reopened after Judge William P. Dimitrouleas granted in part and denied in part Plaintiff Value Holdings' motion to alter and/or amend the Judge’s March 31, 2000 Final Order dismissing the consolidated amended. The plaintiffs soon after filed a Second Consolidated Amended Class Action Complaint.

The original Complaint alleges that defendants Stephan and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5). Specifically, the Complaint alleges that defendants reported materially false and misleading financial results for the second and third quarters of 1998. Earnings for the second and third quarters of 1998 were overstated because Stephan continued to use historical gross profit percentages even though the product mix of the Company was materially altered as a result of the Company's acquisition of Morris-Flamingo LP, a hair products distributor, in March of 1998.