Chimicles & Tikellis LLP Announce Approval of Settlement in Re Phoenix Leasing Limited Partnership Litigation.

Business Editors

PHILADELPHIA--(BUSINESS WIRE)--March 1, 2002

Chimicles & Tikellis LLP of Haverford, PA announces the approval of the settlement of In re Phoenix Leasing Limited Partnership Litigation, a class action filed against Phoenix American, Inc., of San Mateo, California and its subsidiaries, Phoenix Leasing Incorporated; Phoenix Leasing Associates II, L.P.; Phoenix Leasing Associates II, Inc. and Phoenix Securities, Inc.

The Consolidated Complaint asserted claims of fraud, misrepresentation and breach of fiduciary in connection with Phoenix Leasing Cash Distribution Funds I through V, limited partnerships organized and operated by the Defendants under California law to purchase computer and other equipment for lease to third parties. The Class comprises approximately 40,000 persons located nationwide who invested more than $449.5 million in the Partnerships and who are estimated to have lost $31.5 million of their capital.

The case was settled shortly before a scheduled trial in Third Quarter 2001. The settlement fund has a current value of $11,700,000, with an additional $10 million to be recovered from the insurance policy covering the Defendants that was underwritten by Reliance Insurance Company, which is now in liquidation. The Settlement Fund comprises payments made by Defendants' primary and first excess insurance carriers, which paid in their full policy limits, and a $500,000 payment by Defendants. Additionally, Defendants assigned to the Class all of their rights and entitlements under the Reliance policy, and Defendants consented to the Court's entry of judgment against them so that the Class's rights to collect proceeds under the Reliance policy are triggered. Class Counsel will now pursue the interests of the Class to collect the proceeds under the Reliance policy.

Notice of the settlement was sent to the Claims in November 2001. Not a single objection was made to the settlement. On February 19, 2002, following a hearing on the fairness of the settlement, the Honorable M. Lynn Duryee of the Superior Court of California for Marin County signed the final order approving the settlement and the plan of allocation. Judge Duryee also awarded in full the requested amount of attorneys' fees and litigation expenses. The Judge also approved incentive awards to the eight named plaintiffs who had been deposed and otherwise involved in discovery. Co-Lead Counsel Nicholas E. Chimicles of Chimicles & Tikellis LLP and Joel H. Bernstein of Goodkind Labaton Rudoff & Sucharow LLP are pleased with the settlement and believe it is an excellent outcome for the named plaintiffs and the Class.

Co-Lead Counsel have extensive experience in securities class action litigation and litigation specifically dealing with limited partnerships as a form of investment and as a form of business organization. Collectively, Co-Lead Counsel have recovered hundreds of millions of dollars on behalf of limited partnership investors in federal and state courts throughout the United States. In the course of the last ten years Co-Lead Counsel, Chimicles & Tikellis LLP and Goodkind, Labaton, Rudoff & Sucharow LLP, have been involved in the development of case law regarding the protection of investors in public limited partnerships. Co-Lead Counsel have represented investor classes in landmark cases including In re Prudential Securities Inc. Limited Partnerships Litigation, and In re Paine Webber Inc. Limited Partnerships Litigation.

The parties had vigorously litigated this Action since it was filed in 1997. A memorandum of understanding was reached in July 2002, following four court-ordered mediation sessions. The settlement was signed in October 2002.

Defendants were represented by David M. Balabanian and Mary T. Huser of McCutchen, Doyle, Brown & Enersen, LLP of San Francisco, California.