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Case Status:    SETTLED
On or around 07/23/1999 (Date of order of final judgment)

Filing Date: October 15, 1996

The Order and Final Judgment granting lead plaintiff motion for final approval of settlement as set forth in the Stipulation of Settlement dated May 11, 1999, was entered on July 23, 1999. The settlement of this class action became effective, in all material respects in September 1999. In accordance with the terms of the settlement, the Company paid $14.0 million, which was funded from insurance proceeds, to the class settlement fund for distribution to class members and issued 1.5 million shares of common stock for purposes of distribution to class members. The Former Majority Shareholder also transferred 8.7 million shares of the Company's common stock to certain former Champion shareholders and 1.2 million shares of the Company's common stock for purposes of distribution to class members. In addition, the Company made a payment of $1.0 million in cash and issued 1.0 million shares of common stock to terminate a contract with the Former Chairman.

Since October 11, 1996, eight complaints were filed against the Company by current or former stockholders of the Company, allegedly on behalf of all persons who received the Company's common stock through the Merger with Champion and who purchased common stock or a portion of the $325 million 10% Senior Subordinated Notes (the "Notes") between August 13, 1996 and October 9, 1996.

Five of these complaints were filed in the United States District Court for the Southern District of Texas, Houston Division. Two in the Superior Court of the State of California, County of Los Angeles, and one in the District Court of Harris County, Texas.

These complaints assert putative class actions on behalf of current and former holders
of the Company's securities for claims under federal and state statutes and the common law relating to the exchange offer for Champion stock in connection with the Merger, the August 1996 public offerings by the Company of common stock and subordinated notes, and trading in the Company's securities in the period between the Merger and October 9, 1996. In summary, the complaints allege that the Merger and public offerings proceeded on the basis of materially misleading disclosures and omissions by the Company and Champion, as well as certain of the Company's and Champion's officers, directors, and underwriters. The claims asserted include claims under section 11 of the Securities Act of 1933 and under section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In March 1998, the federal district court dismissed claims
relating to the subordinated notes.

The federal consolidated complaint alleged violations of Federal securities laws. More specifically, the complaint alleged that during the class period, the named defendants disseminated materially misleading statements and omitted disclosing material facts about the Company and its business, specifically in the reporting and disclosure of reserves, bad debt expenses, collection expenses and facility closure costs and that the price of the Company's common stock was artificially inflated. The plaintiffs also alleged that the named defendants failed to make a reasonable investigation and did not possess reasonable grounds for the belief that the statements contained in the various registration statements and prospectuses filed during the class period were true, or that there was an omission of material facts necessary to make the statements contained therein not misleading.

The original complaint alleged that Paracelsus, certain of its officers and directors, Bear Stearns & Co., Inc., Smith Barney, Inc., and The Chicago Corporation, certain lead underwriters of Paracelsus's Aug. 13, 1996 offering of 4.6 million shares of common stock, with violations of the federal securities laws (Sections 11, 12(2) and 15 of the Securities Act of 1933), common law, and Texas securities laws, by among other things, misrepresenting and/or omitting material information concerning Paracelsus's financial internal controls and reported earnings during the Class Period.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Healthcare Facilities
Headquarters: United States

SECURITIES INFORMATION:

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

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. Texas
DOCKET #: 96-CV-3464
JUDGE: Hon. Ewing Werlein Jr
DATE FILED: 10/15/1996
CLASS PERIOD START: 08/13/1996
CLASS PERIOD END: 10/11/1996
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ)
    220 St. Paul Street, Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ), NJ 07090
    908.928.1700 908.301.9008 · blbg@blbglaw.com
  2. Kaplan Fox & Kilsheimer, LLP (former New York, NY)
    805 Third Avenue, 22nd Floor, Kaplan Fox & Kilsheimer, LLP (former New York, NY), NY 10022
    212.687.1980 212.687.7714 · info@kaplanfox.com
  3. Kilgore & Kilgore
    3131 McKinney Ave., LB 103, Ste. 700, Kilgore & Kilgore , TX 75204-2471
    214.969.9090 214.953.0130 · dcm@kilgorelaw.com
  4. Susman, Godfrey LLP (Dallas)
    4100 Bank of America, 901 Main Street, Susman, Godfrey LLP (Dallas), TX 75202
    214.754.1908 · mevans@susangodfrey.com
No Document Title Filing Date
COURT: S.D. Texas
DOCKET #: 96-CV-3464
JUDGE: Hon. Ewing Werlein Jr
DATE FILED: 11/17/1998
CLASS PERIOD START: 08/13/1996
CLASS PERIOD END: 10/11/1996
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
  2. Burt & Pucillo LLP
    515 North Flagler Drive, Northbridge Centre, Suite 1701, Burt & Pucillo LLP, FL 33401
    800.349.4612 ·
  3. Kaplan Fox & Kilsheimer, LLP (former New York, NY)
    805 Third Avenue, 22nd Floor, Kaplan Fox & Kilsheimer, LLP (former New York, NY), NY 10022
    212.687.1980 212.687.7714 · info@kaplanfox.com
  4. Kilgore & Kilgore
    3131 McKinney Ave., LB 103, Ste. 700, Kilgore & Kilgore , TX 75204-2471
    214.969.9090 214.953.0130 · dcm@kilgorelaw.com
  5. Susman, Godfrey LLP (Dallas)
    4100 Bank of America, 901 Main Street, Susman, Godfrey LLP (Dallas), TX 75202
    214.754.1908 · mevans@susangodfrey.com
No Document Title Filing Date
No Document Title Filing Date