According to the Company’s Form 10-Q for the quarterly period ended March 31, 2004, in early March 2003, the three cases were consolidated as In re Beverly Enterprises, Inc. Securities Litigation. On April 30, 2003, plaintiffs filed an amended complaint. On May 30, 2003, the defendants filed a motion to dismiss the amended complaint. Briefing on the motion to dismiss was completed July 11, 2003. The court heard oral arguments on the defendants’ motion on August 28, 2003. On December 23, 2003, the court granted defendants’ motions to dismiss with prejudice and denied plaintiffs’ motion to amend the complaint. Plaintiffs filed a notice of appeal on January 22, 2004. On April 2, 2004, plaintiffs and defendants jointly moved to dismiss the appeal with prejudice and on April 19, 2004, the court dismissed the action.
The original complaint alleges violations of Sections 10(b) and 20(a), of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the suit alleges that Beverly overstated its assets and earnings and that its loss provision and expenses were understated throughout the Class Period.