LITTLE ROCK, Ark., Jan. 28, 2003 (PRIMEZONE) -- The law firms of Emerson Poynter LLP ("Emerson Poynter") and Cauley Geller Bowman & Coates, LLP ("Cauley Geller") announced today that a shareholder derivative action brought by certain shareholders in the United States District Court for the Western District of Oklahoma on behalf of Pre-Paid Legal Services, Inc. ("Pre-Paid" or the "Company") (NYSE:PPD) is pending voluntary dismissal by the plaintiffs subject to approval by the Court. This notice is made to Pre-Paid shareholders for the purpose of advising them of the potential dismissal of the action and to determine if any Pre-Paid Shareholder objects to the dismissal. The action is styled: Hansen, et al. v. Stonecipher, et al., Case No. CIV-01-0862-C. Copies of pleadings may be viewed at the Court at the address below.
The action charged certain Pre-Paid directors and officers with breaches of fiduciary duty. The complaint alleged, among other things, accounting misconduct and alleged waste of corporate assets of the Company which was alleged to have occurred between March 18, 1999 and May 15, 2001. The complaint alleged similar wrongdoings as alleged in a securities fraud lawsuit which has been dismissed and is currently on appeal. The Individual Defendants in the shareholder derivative action were Harland C. Stonecipher, Randy Harp, Shirley A. Stone, Peter K. Grunebaum, Martin H. Belsky, Wilburn L. Smith, Kathleen S. Pinson, David A. Savula, John W. Hail, and John A. Addison.
The shareholders who originally brought this action have filed a notice of voluntary dismissal of the action which must be approved by the Court. The plaintiffs have also sold their shares in the Company and thus no longer have the legal standing necessary to continuing prosecuting it.
On June 10, 2002, Defendants filed a Motion to Dismiss the Consolidated Amended Verified Shareholder Derivative Complaint, asserting, among other things, that the complaint was unfounded and premature because plaintiff's purported injury and damage claim were based primarily on the securities class action referred to above, which was dismissed with prejudice. The motion to dismiss further asserted that the claims were barred by (1) the director protection provisions of Pre-Paid's Articles and the Oklahoma General Corporation Act; (2) the Oklahoma General Corporation Act's protection of directors from liability for actions taken in reliance on experts; (3) the Business Judgment Rule's presumption that the directors acted on an informed basis, in good faith, and in what they believed to be in the best interest of the corporation; and (4) plaintiffs' failure to make a demand on the Board of Directors before filing the lawsuit. Plaintiffs sought voluntary dismissal of this action and did not file a brief in opposition to the motion to dismiss.
The proposed dismissal does not involve the payment of any money for costs in bringing the action or the payment of any attorney fees. If you wish to object to the voluntary dismissal of this action, you may do so by filing such an objection with the Clerk of the Court at the address listed below before February 28, 2003. Any such objection should also be served by mailing the objection to the counsel listed below.
For additional information, please call:
EMERSON POYNTER LLP Investor Relations Department P.O. Box 164810 Little Rock, AR 72216-4810 Toll Free: 1-800-663-9817 E-mail: tanya@emersonfirm.com
To view pleadings, please visit the Court at the address below. Also, written objections to the dismissal must be filed by February 28, 2003. Mailed objections must reach the Court by the filing date.
United States District Court Western District of Oklahoma 200 N. W. 4th Street Room 1210 Oklahoma City, OK 73102
All written objections must also be served by mailing such objections to the following counsel:
Curtis L. Bowman CAULEY GELLER BOWMAN & COATES, LLP P.O. Box 25438 Little Rock, AR 72221-5438 John G. Emerson, Jr. EMERSON POYNTER LLP P.O. Box 164810 Little Rock, AR 72216-4810 Robert P. Varian CLIFFORD CHANCE ROGERS & WELLS One Market, Steuart Street Tower San Francisco, CA 94150-1420
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.