[0] Milberg Weiss Announces RICO Complaint Against Zale Corp., Jewelry Retailer.

Business Editors & Legal Writers

NEW YORK--(BUSINESS WIRE)--July 21, 2000

The following is an announcement by the law firm of Milberg Weiss Bershad Hynes & Lerach LLP:

A class action lawsuit was filed on July 21, 2000, against Irving, Texas-based Zale Corp. (NYSE:ZLC), several of its affiliates, and certain individual defendants, by a client represented by the law firms of Milberg Weiss Bershad Hynes & Lerach LLP; Almon, McAlister, Baccus & Hall, LLC, and The Law Offices Of Young & Pickett.

Zale sells jewelry and related merchandise to consumers under the brand names of Zales Jewelers, Gordon's Jewelers, Bailey Banks & Biddle Fine Jewelers, and Peoples Jewelers. The complaint charges that defendants violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), as well as the common laws of the States of Texas and Arizona concerning fraud, breach of contract, and Arizona's Consumer Protection Act. The named Class includes all people to whom defendants sold unemployment, leave of absence and/or disability credit insurance, notwithstanding their ineligibility for such insurance, for whom the alleged claims accrued and/or were discovered within four years of today.

The complaint alleges, among other things, that Zale fraudulently lured people who purchased Zale merchandise using a Zale credit card into also buying various types of credit insurance. The sale of credit insurance was fraudulent because, as alleged in the complaint, Zale misrepresented, among other things, that there were no eligibility requirements and that issuance was guaranteed. As the complaint alleges, however, many of the credit insurance purchasers were ineligible for coverage under the offered plans, and many have had their claims denied by Zale after filing their claims, despite signing up for and paying premiums for the credit insurance.

The complaint further alleges that, beginning in 1993, Zale adopted and implemented a policy which fraudulently induced people into buying credit insurance whenever they bought Zale merchandise using a Zale credit card. Credit insurance is supposed to pay the monthly balances due on credit balances used in purchasing the merchandise, when the holder of the credit card is unable to do so. Thus, credit disability is supposed to pay the minimum balance due when the consumer is disabled; credit unemployment is supposed to pay when the consumer is unemployed; and credit leave of absence is supposed to pay when the consumer is on leave of absence. The insurance was sold under various plans, such as "The Platinum Plan" and the "Gold Plan."

The complaint alleges that Zale sold credit insurance to customers who Zale knew, or were reckless in not knowing, were disabled, unemployed, and/or on leave of absence, and then denied the claims of those people when they tried to make a claim, on grounds of ineligibility, despite their payment of premiums. Sales associates, the complaint says, were instructed to sell the insurance to everyone, and to tell customers that issuance was guaranteed, and that the plan will be effective immediately, representations which the complaint alleges were not true. Customers were then sent monthly statements which listed the amount due on the Zale credit cards, and segregated the amounts due on the so-called "insurance." The fraudulent scheme is alleged to have been implemented by an enterprise formed through complex entanglements and arrangements between Zale, several of its retail and insurance subsidiaries, and other persons and entities.

Individuals who were sold credit insurance by Zale, and believe that they were ineligible for such insurance coverage at the time of the purchase because they were disabled, on leave of absence, or unemployed at the time, may be a part of the class that this lawsuit seeks to represent.

Milberg Weiss Bershad Hynes & Lerach LLP (http://www.milberg.com), a 160-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton and Seattle, is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others, and has been responsible for more than $20 billion in aggregate recoveries. Please contact the Milberg Weiss website for more information about the firm.

Persons who wish to discuss this action, or have any questions concerning this news release or their rights and interests with regard to the case, may contact the following attorneys:

Steven G. Schulman or Ariana J. Tadler/ Milberg Weiss Bershad Hynes & Lerach LLP, One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, Phone number: [phone]

(or)

G. Rick Hall/ Almon, McAlister, Baccus & Hall, L.L.C., P.O. Box 148, Tuscumbia, AL 35674, Tel: [phone]

(or)

Lance Lee/ Law Offices of Young & Pickett, 4122 Texas Boulevard, P.O. Box 1897, Texarkana, TX 75503, Tel: [phone]