Class Action Suit Filed Against Unison Healthcare Corporation and Its Underwriters and Insiders for False Statements Made in Unison's 1995 IPO.

SAN DIEGO, Calif.--(BUSINESS WIRE)--Aug. 19, 1997--A class action has been commenced in California Superior Court, County of Orange on behalf of persons who purchased the common stock of Unison Healthcare Corporation ("Unison") in connection with Unison's December 1995 initial public offering.

The complaint charges Unison, certain of its officers and directors and the underwriters of its $18 million IPO with violations of the California Corporations Code. On December 18, 1995, the defendants sold 2 million shares of Unison stock at $9 per share, raising $18 million from plaintiff and the Class. The complaint alleges that by way of the Roadshow, Registration Statement and/or Prospectus, the defendants represented:

-- That Unison's quality mix during the second half of 1995 was exceeding 45%.

-- That Unison was rapidly and successfully integrating Unison's operations with those of BritWill, a company recently acquired by Unison.

-- That the integration of Britwill was rendering substantial operating synergies.

-- That Unison's acquisitions of nursing centers and related ancillary service companies combined with cost reductions obtained from the integration of the existing operations of Britwill and Unison would provide EPS growth of 20%-30% in 1996 and 1997.

-- That Unison would generate positive EPS in 4Q95.

-- That Unison's revenues and EPS would reach $150 million and $1.10, respectively.

Despite defendants' assurances in connection with the Offering, and thereafter during 1996, that Unison was "an expanding company" and that defendants looked forward to 1996 with confidence, the complaint alleges at the time of Unison's 1995 IPO its financial performance was much worse than reported and its prospects for 1996 were very poor. The complaint notes that the true facts, which were not disclosed by defendants in connections with Unison's IPO, were:

-- That Unison's accounting system was unable to accurately record accounts payable, accrued expenses or asset amortization;

-- That defendants had no basis to expect Unison to be able to increase profitability or to "maintain control over its operating costs" as Unison's accounting system was not able to timely or accurately: (i) estimate Medicare third party settlements; (ii) amortize intangible assets or prepaid expenses; (iii) accrue expenses; or (iv) record accounts payable;

-- That Unison's accounting system and internal controls were so inadequate that they could not reliably estimate Unison's Medicare/Medicaid revenues accrued expenses, accounts payable or prepaid expenses;

-- That because Unison's accounting information systems were unable to provide accurate or timely data at the time of the Offering, they could not support Unison's planned growth for 1996;

-- That the Company's accounting systems and controls, including its general ledger, accounts payable and payroll systems were inadequate, resulting in misallocation and/or failure to record accounts payable and expenses in a timely and accurate manner;

-- That Medicare accounts receivables balances acquired by Unison from Britwill were overstated by at least 20%, as many of the receivables were not collectible or were collectible at amounts materially lower than those recorded by Britwill and Unison;

-- That Unison's financial statements were not a fair presentation of the Company's financial position and results of operations as of September 30, 1995:

-- That Unison was in violation of various covenants, including current ratio and operating cash flow ratio entered into by defendants in connection with the Britwill Acquisition;

-- That defendants lacked a reasonable basis for their positive forecasts and projections regarding Unison's revenues and earnings growth for 1996 which statements were, in fact, false as they were inconsistent with the above negative factors;

-- That defendants' forecasts of 1996 EPS of $1.10 were false, as they were contradicted by the adverse facts as set forth above.

In March 1997, when Unison ultimately reported its results for 1996 and began to disclose the truth about the Company's operations, including the fact that it would be restating its previously issued results for 1996, the price of Unison common stock fell to $2-1/2 per share, a decline of more than 70% from its IPO price!

Plaintiffs seeks to recover damages on behalf of all purchasers of Unison securities during the Class Period (the "Class"). 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 wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach, Alan Schulman or Darren Robbins of Milberg Weiss at 800/348-6192 or via e-mail at [e-mail] .

CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP

William Lerach/Alan Schulman/Darren Robbins,

800/348-6192

[e-mail]