According to the latest docket posted, on February 21, 2003, the Court entered the Mandate from the Second Circuit Court of Appeals. According to the Mandate, the judgment of the District Court was affirmed in accordance with the opinion of the Second Circuit Court of Appeals.
On January 28, 2002, the Court entered the Memorandum and Order signed by U.S. District Judge Lawrence M. McKenna granting the defendants’ motions to dismiss the Corrected Consolidated Amended Class Action Compliant. According to the Order, defendants’ Motion to dismiss are granted on the ground that plaintiffs' claims pursuant to the federal securities laws are untimely, the complaint having been filed after the expiration of the applicable statutory limitations period. Having so determined, this Court does not address defendants’ other arguments in support of their Motions to dismiss. The Corrected Consolidated Class Action Complaint is dismissed. Judgment was entered and the case was closed. On February 5, 2002, the plaintiffs filed a notice of appeal.
As summarized by the Company’s FORM 10-K for the fiscal year ended December 31, 2000, in July 2000, the Company was served with a purported securities class action complaint. Subsequently, six nearly identical complaints were filed. The complaints allege that the Company and certain of its officers and directors violated certain securities laws by making false and misleading statements about the Company's business and prospects during the period from August 5, 1997 to April 14, 2000. The actions are purportedly brought on behalf of all persons who purchased the Company's stock during that period. The plaintiffs' damages are not specified. In November 2000, the Court granted the Plaintiffs' motion to consolidate these actions and for appointment of lead plaintiffs and lead plaintiffs' counsel. On February 5, 2001, plaintiffs filed a Corrected Consolidated Amended Class Action Complaint.
The original Complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 5, 1997 and April 14, 2000, thereby artificially inflating the price of Frontier common stock. For example, as alleged in the complaint, on December 4, 1997, Frontier announced that it expected to boost the scope of its medical malpractice business through the acquisition of Western Indemnity Insurance Company. In fact, as revealed on April 14, 2000, the increase in the Company's medical malpractice business resulted from the Company's relaxation of underwriting standards, loosening of policy terms and predatory pricing - not simply by its acquisition of Western's medical malpractice business. On April 14, 2000, the Company announced a revision of its previously reported 1999 results causing its stock to close at $1 per share, a decline of more than 97% from the class period high of $38.6875 per share.