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Case Status:    SETTLED
On or around 02/13/2007 (Date of order of final judgment)

Filing Date: April 08, 2003

On February 13, 2007, the Court entered the Orders granting the motion for final approval of the class action settlement, certification of the settlement class and approval of the plan of allocation as well as the motion for attorney fees and reimbursement of expenses. Lastly, the Court entered the Final Judgment dismissing the claims in the action with prejudice. The case is now closed.

On October 31, 2006, a Stipulation of Settlement was filed. According to the Stipulation, a settlement fund of $4 million has been established. On November 6, 2006, the Court entered the Order granting the motion for preliminary approval of the settlement, providing for notice, and finding as moot the motion to certify class.

According to the Company’s Form 10-Q For Quarter Ended June 30, 2006, in July 2006, a tentative agreement was reached which, if implemented, would result in a final settlement of the case. This tentative agreement is subject to the negotiation of a definitive written agreement, notice to members of a class of investors to be defined in the written agreement, and Court approval of the terms of the proposed settlement. If the tentative agreement is approved and implemented, the case would be resolved without additional cost to the Company or the other defendants. There can be no assurance whether the tentative agreement will be consummated or the timing of any final settlement.

As previously disclosed by the Company’s FORM 10-K for the fiscal year ended December 31, 2005, the Company is named as a defendant in a proceeding pending in the United States District Court for the Northern District of Texas, Fort Worth Division, styled, “Earl Culp, on behalf of himself, and all others similarly situated, Plaintiff, v. GAINSCO, INC., Glenn W. Anderson, and Daniel J. Coots, Defendants,” Civil Action No. 4:04-CV-723-Y. Defendant Anderson is the Company’s President and Chief Executive Officer, and Defendant Coots is the Company’s Senior Vice President and Chief Financial Officer. In the proceeding, which was initially filed in federal district court in Florida and is a consolidation of two previously separately pending actions filed at approximately the same time and involving essentially the same facts and claims, the plaintiff alleges violations of the Federal securities laws in connection with the Company’s acquisition, operation and divestiture of its former Tri-State, Ltd. (“Tri-State”) subsidiary, a South Dakota company selling non-standard personal auto insurance. On March 29, 2004, plaintiff filed a Second Consolidated Amended Class Action Complaint (the “Second Amended Complaint”) that is based on the same claims as the previously consolidated proceedings. The alleged class period begins on November 17, 1999, when the Company issued a press release announcing its agreement to acquire Tri-State, and ends on February 7, 2002, when the Company issued a press release warning investors that it “expect[ed] to report a significant loss for the fourth quarter and year ended December 31, 2001.” The Second Amended Complaint seeks class certification for the litigation. Discovery in the case is underway.

The original complaint alleges that during the class period, defendants issued
false and misleading statements to the marketplace that artificially
inflated the price of Gainsco's shares. Specifically, on November 17,
1999, Gainsco, an insurance holding company, announced that it would
acquire Tri-State, Ltd.'s privately owned insurance operation which
specialized in nonstandard passenger automobile insurance. According to
CEO Anderson, the Tri-State acquisition marked the Company's expansion
of its passenger auto insurance business that began with Gainsco's
earlier purchase of Miami-based Lalande Group. Anderson also told the
public that the Company would integrate Tri-State's business with
Lalande Group's underwriting and claims systems "to maximize service and
cost efficiency." The transaction was expected to be "minimally
accretive to earnings in 2000."
The Company's second-quarter Form 10-Q, filed in August 2000, stated
that Gainsco had paid $1.15 million to Tri-State's former owners "based
on a conversion goal and specific profitability targets," and falsely
lulled the investment community into believing that Tri-State was
profitable, when in fact it was not. Gainsco continued to issue highly
positive statements throughout 2000 and 2001 and assured the public that
it was resolved to "maintain a strong, disciplined balance sheet." On
August 9, 2001, however, the Company announced that it was selling the
agency operations of Tri-State and would take a $5.1 million write off
from its original $6.0 million investment in Tri-State. This, however,
was only a partial disclosure of Tri-State's problems and led investors
to believe the worst was behind the Company. On August 14, 2001, the
Company announced that it would sell Tri-State to its president, Herb
Hill, for $900,000. On February 7, 2002, the end of the class period,
Gainsco announced that it would discontinue writing commercial lines
insurance business due to adverse claims development and unprofitable
results." Gainsco's stock declined substantially on the news.


Sector: Financial
Industry: Insurance (Prop. & Casualty)
Headquarters: United States


Ticker Symbol: GNAC
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. Florida
DOCKET #: 03-CV-20854
JUDGE: Hon. Joan A. Lenard
DATE FILED: 04/08/2003
CLASS PERIOD END: 02/07/2002
  1. Brian Felgoise
  2. Cauley Geller Bowman Coates & Rudman, LLP (New York)
  3. Law Offices of Charles J. Piven, P.A.
  4. Vianale & Vianale LLP (former Boca Raton)
No Document Title Filing Date
COURT: N.D. Texas
DOCKET #: 04-CV-00723
JUDGE: Hon. Joan A. Lenard
DATE FILED: 03/29/2004
CLASS PERIOD END: 02/07/2002
  1. Cauley Geller Bowman Coates & Rudman, LLP (New York)
    200 Broadhollow, Suite 406, Cauley Geller Bowman Coates & Rudman, LLP (New York), NY 11747
    631.367.7100 631.367.1173 ·
  2. Vianale & Vianale LLP (former Boca Raton)
    The Plaza - Suite 801, 5355 Town Center Road., Vianale & Vianale LLP (former Boca Raton), FL 33486
    561.391.4900 561.368.9274 ·
No Document Title Filing Date
No Document Title Filing Date