On July 31, 2002, this case was dismissed in its entirety of the United States District Court, Eastern District of New York. The decision was then made by lead counsel to appeal the dismissal judgment to the United States Circuit Court of Appeals, Second Circuit. On June 25, 2004, the Second Circuit Court of Appeals ruled in favor of the defendants, affirming the dismissal and effectively ending the case with no recovery for any plaintiffs or attorneys.
As reported by the Company’s FORM 10-Q for the quarterly period ended September 30, 2000, on or about July 18, 2000, the class action lawsuits were consolidated into one and a consolidated amended class action complaint was filed in the United States District Court for the Eastern District of New York. The Company was not named as a defendant in the amended complaint because of its filing for protection under Chapter 11 of the Bankruptcy Code.
The original lawsuit alleges that Family Golf was experiencing numerous severe but undisclosed financial problems during the relevant time, and that the company and key management personnel issued materially false and misleading statements that acted to artificially inflate the price of Family Golf stock.