According to the firm's 10-K filing dated 4/02/2001, on July 3, 1997, the Company filed a motion to dismiss the lawsuit. On November 6, 1997, the Court dismissed all of the plaintiff's state law causes of action (in a state action with allegations similar to those of the federal action) against NTN but retained the plaintiff's federal law causes of action. On November 7, 1997, the court granted KPMG LLP's motion to dismiss the plaintiffs' claims against it pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief may be granted. In April 2000, the court approved the Company's settlement agreement with the class of plaintiffs in the Miller litigation and dismissed the litigation as to all defendants. The settlement provides that the Company will pay $3,250,000 as allocated per the approved settlement agreement. The settlement payment is fully covered by the Company's liability insurance.

The complaint alleges that NTN, certain of its officers and directors, and KPMG Peat Marwick LLP, violated federal securities laws by, among other things, violating the disclosure requirements in connection with NTN's filings with the SEC. The complaint alleges that defendants devised an "exit strategy" that would provide certain defendants with millions of dollars of compensation upon their resignation from NTN. The complaint further alleges that defendants made false statements about, and failed to disclose, contingent liabilities and phantom assets in NTN's financial statements and Peat Marwick's audit reports, and failed to disclose a contingent liability known as the "Symphony Put" in the amount of $3.045 million. The complaint also alleges that Peat Marwick failed to follow Generally Accepted Accounting Procedures (GAAP) in rendering audit opinions on NTN's financial statements during the class period.