Class Action Suit Filed Against Apple South, Inc. and its Officers and Directors Alleging Misrepresentations and Insider Trading.

SAN DIEGO--(BUSINESS WIRE)--Sept. 25, 1997--A class action has been commenced in the United States District Court for the Middle District of Georgia on behalf of purchasers of Apple South, Inc. ("Apple South") common stock during the period between May 26, 1995 through September 24, 1996 (the "Class Period").

The complaint charges Apple South and certain of its officers and directors with violations of the federal securities laws. The complaint alleges that during the Class Period, defendants falsely represented that Apple South was successfully pursuing an aggressive expansion plan, was successfully assimilating several Applebee's restaurants Apple South acquired from the Marcus Corporation ("Marcus") and improving their profit margins, and was successfully expanding its Tomato Rumba's chain of restaurants, and that because of the success of those expansion efforts and Apple South's management's expertise at assimilating acquisitions and controlling operating costs without adversely impacting service levels or customer satisfaction, Apple South would achieve strong earnings per share ("EPS") growth in 1996 and 1997, to $.90-$.95 and $1.20, respectively, while opening 68 new restaurants in 1997 and at least 85 restaurants in 1997. Throughout the Class Period, defendants concealed the severe adverse impact that Apple South's acquisition of 18 Applebee's restaurants from Marcus was having on Apple South's business, the failure of the Tomato Rumba's expansion efforts and its adverse impact on Apple South, the adverse impact Apple South's aggressive cost control efforts were having on its Applebee's restaurants, the fact that Apple South's EPS prospects were much worse than forecasted, and the fact that its expansion program would have to be drastically scaled back. This scheme artificially inflated the price of Apple South stock to a Class Period high of $28-3/8, which enabled Apple South to sell 900,000 new shares to the public to raise $16.6 million to pay for the Marcus acquisition, issue (sell) 9.3 million Apple South shares worth $190 million to purchase DF&R Restaurants, Inc., to sell $125 million in debt securities on favorable terms to raise needed capital, and further enabling three top Apple South insiders to sell 920,804 of their Apple South shares during the Class Period for $19.6 million.

However, on Sept. 24, 1996 Apple South suddenly revealed that its May 1995 acquisition of Applebee's restaurants from Marcus had been a disaster, that those acquisitions had hurt Apple South's business and that, as a result, Apple South would fall far short of its 1996 and 1997 EPS forecasts, and Apple South had to sharply curtail its expansion program. Apple South's stock instantly collapsed, from $20-7/8 to $12-1/4, a 40% one-day collapse on huge volume of 14 million shares, the largest one day stock decline on the largest one-day trading volume in Apple South's history as a public company.

Recovery is sought for all purchasers of Apple South common stock during the Class Period (the "Class"). The plaintiff is represented by several law firms, including Milberg Weiss Bershad Hynes & Lerach LLP, who have expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Milberg Weiss has been actively engaged in commercial litigation, emphasizing securities and antitrust class actions, for more than 20 years. The firm has offices in New York, San Diego, San Francisco and Los Angeles and is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to major positions in complex multi-district or consolidated litigations. Milberg Weiss has taken a lead role in numerous important actions on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total approximately $2 billion. Visit the firm's website at http://www.milberg.com .

If you are a member of the Class described above, you may, no later than 60 days from today, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss at 800/449-4900 or via e-mail at [e-mail].

CONTACT: Milberg Weiss

William Lerach or Darren Robbins, 800/449-4900

[e-mail]