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Case Status:    DISMISSED    
On or around 05/27/2003 (Date of order of final judgment)

Filing Date: May 17, 2002

According to a press release dated April 23, 2003, Judge Gerard Lynch of the United States District Court for the Southern District of New York granted the motion of Allied Capital, William Walton, and Penni Roll to dismiss the consolidated complaint for failure to state a claim upon which relief may be granted. Judge Lynch ruled that "(t)here is simply no basis (in the Complaint) on which to infer that Allied's valuation of its investments was in fact incorrect or inflated, and thus no basis to infer that Allied's accounting policies resulted in fraudulent overvaluation." He further held that "(s)ince Allied's actual valuation policies were public, as was all adverse information about the companies in which Allied had invested, plaintiffs have not alleged that Allied concealed any facts from its investors." In addition, the judge held that plaintiffs had not properly pled that any alleged overvaluation was material. The Court therefore dismissed the case in its entirety.

The lawsuits filed against this company were consolidated into a single proceeding captioned In re Allied Capital Corp. Securities Litigation, 02 CV 3812. The consolidated complaint does not include Arthur Andersen LLP as a named defendant or assert any state law claims against the remaining named defendants.

The original complaint alleged that defendants misstated the value of Allied Capital's investments in companies including, inter alia, Velocita Corp. and Loewen Group, Inc. in Allied's public filings with the SEC and otherwise as a result of failing to "mark to market" or record write-downs of investments that had substantially declined in value long after it had become apparent that such investments were being carried on Allied's books at values vastly higher than their true values. The complaint further alleges that Allied Capital misstated its total assets in its financial statements by carrying Allied's investments including Velocita Corp. and Loewen Group, Inc. on Allied's balance sheet at unrealistically and misleadingly high values. The complaint further alleged that Arthur Andersen, LLP violated the federal securities laws by certifying Allied's financial statements and by allowing its unqualified opinion to be incorporated by reference into Allied's filings with the SEC after it was readily apparent that investments on Allied's balance sheet, including Allied's investments in Velocita Corp. and Loewen Group, Inc., were being carried at unrealistically and misleadingly high values. When the foregoing was revealed to the market on May 16, 2002, the complaint alleged, Allied's share price plummeted from its opening price of $26.44 to as low as $20.00 before closing at $23.20.

COMPANY INFORMATION:

Sector: Financial
Industry: Misc. Financial Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ALD
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. New York
DOCKET #: 02-CV-3812
JUDGE: Hon. Gerard E. Lynch
DATE FILED: 05/17/2002
CLASS PERIOD START: 11/14/2001
CLASS PERIOD END: 05/16/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  2. Bernard M. Gross
    1500 Walnut Street, Suite 600, Bernard M. Gross, PA 19102
    215.561.3600 215.561.3000 · bmgross@BernardMGross.com
  3. Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR)
    P.O. Box 25438, Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR), AR 72221-5438
    501.312.8500 501.312.8505 ·
  4. Kirby McInerney & Squire LLP
    830 Third Avenue 10th Floor, Kirby McInerney & Squire LLP, NY 10022
    212.317.2300 ·
  5. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  6. Lovell Stewart Halebian LLP (former New York)
    500 Fifth Avenue, Lovell Stewart Halebian LLP (former New York), NY 10110
    212.608.1900 212.719.4677 · info@lshllp.com
  7. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 02-CV-3812
JUDGE: Hon. Gerard E. Lynch
DATE FILED: 10/18/2002
CLASS PERIOD START: 11/14/2001
CLASS PERIOD END: 05/16/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR)
    P.O. Box 25438, Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR), AR 72221-5438
    501.312.8500 501.312.8505 ·
  2. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  3. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
No Document Title Filing Date