Savett Frutkin Podell & Ryan, P.C. Files Class Action Against USN Communications Inc. USNC.

PHILADELPHIA--(BUSINESS WIRE)--Dec. 21, 1998--Savett Frutkin Podell & Ryan, P.C. hereby gives notice that a class action complaint has been filed in the United States District Court for the Northern District of Illinois on behalf of a Class of persons who purchased common stock issued by USN Communications Inc. (Nasdaq:USNC) ("USN" or the "Company") at artificially inflated prices during the period Feb. 4, 1998 through Nov. 3, 1998 (the "Class Period") and who were damaged thereby.

The Complaint charges that throughout the Class Period, USNC, a competitive local exchange carrier, and certain officers and directors of the Company during the relevant time period violated provisions of the federal securities laws.

Specifically, the Complaint alleges that defendants made false and misleading representations in connection with USNC's $128 million initial public offering of 8 million shares of common stock on Feb. 4, 1998 (the "IPO" or the "Offering").

The Complaint alleges that, in the Company's IPO Prospectus and in statements made thereafter, defendants described the Company as being involved in reselling local telephone services and that the Company's business of reselling services was becoming increasingly successful.

In truth, however, defendants knew, or were reckless in not knowing, that profit margins on reselling local service made it virtually impossible for that strategy to be profitable and that the Company would be forced to switch to a non-reselling strategy, including the possible building or leasing of its own systems, in order to make the Company profitable.

During the Class Period, the Company, in fact, was forced to move away from its pure re-selling strategy and began belatedly, to build its own network. However, the change in strategy was too late, and, as defendants knew all along, required a high infusion of capital, which the Company did not have.

On Nov. 4, 1998, the day after the announcement of massive restructuring and lay-offs in the Company, the stock closed at $3/8 per share, an all time low.

Savett Frutkin Podell & Ryan, P.C. has extensive experience representing shareholders in class actions and has successfully recovered hundreds of millions of dollars for defrauded investors and shareholders.

The reputation and expertise of the firm in shareholder and other class action litigation has been repeatedly recognized by the courts, which have appointed the firm to major positions in complex class action litigations.

Any member of the proposed Class who desires to be appointed lead plaintiff in this action must file a motion with the Court no later than sixty (60) days from Nov. 12, 1998. Class members must meet certain legal requirements to serve as a lead plaintiff.

If you purchased USN (USNC) stock during the Class Period or have questions or information regarding this action or your rights, you may call or write: