According to the Company’s FORM 10-Q for the Quarterly Period Ended September 30, 2002, since October 13, 2000 there have been eight complaints filed in the United States District Court for the District of Maryland against the Company and five individual defendants. Lead plaintiffs and lead counsel were subsequently appointed. A consolidated amended complaint captioned The Marsh Group, et al. v. PrimRetail, Inc., et al. dated May 21, 2001 was filed. The Company and the individual defendants filed a motion to dismiss the complaint, which was granted on November 8, 2001. The plaintiffs appealed the matter to the Fourth Circuit. Briefs were filed and oral arguments were held on June 4, 2002. On September 3, 2002 the Fourth Circuit affirmed the dismissal. Plaintiffs have agreed not to seek further review of the dismissal.
The original complaint charges Prime Retail and certain of its officers and directors with violations of federal securities laws. Specifically, the complaint alleges that Prime Retail assured its investors throughout the Class Period that it would issue a dividend in its fourth quarter of 1999, even though it knew that its deteriorating operations and debt-laden balance sheet would make issuing a dividend impossible. On January 18, 2000, Prime Retail announced that it would suspend its common dividend for 2000 because of lowered occupancy rates and cash shortage. The value of Prime Retail's securities plummeted by 37% from its prior day close on the news of this announcement.