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AMES FILES LAWSUIT AGAINST WERTHEIM SCHRODER

 AMES FILES LAWSUIT AGAINST WERTHEIM SCHRODER
 ROCKY HILL, Conn., Oct. 14 /PRNewswire/ -- Ames Department Stores,


Inc. (NYSE: ADD) and its affiliated subsidiaries today filed a lawsuit in the U.S. Bankruptcy Court for the Southern District of New York against Wertheim Schroder & Company, Inc., its former financial adviser, for breach of fiduciary duty, professional malpractice, unjust enrichment and other improper conduct in connection with Ames' acquisition of the discount stores division of Zayre Corp. (currently the TJX Companies, Inc.) in October of 1988. The suit seeks equitable relief and to recover damages in excess of $375 million. In addition, Ames and its subsidiaries filed suit against Wertheim's Chairman, James A. Harmon, for breach of fiduciary duty in connection with the same transaction.
 In its lawsuit, Ames alleges, among other things, that Wertheim failed to conduct the appropriate level of due diligence required as a consequence of Wertheim's inherent conflict of interest in representing both parties in the transaction. Simultaneously serving as financial adviser to Zayre Corp., Wetheim had in early 1988 advised Zayre Corp., that the value of its discount store division was hundreds of millions of dollars less than the price it shortly thereafter recommended that Ames pay. The lawsuit also alleges that Wertheim did not disclose this and other information concerning the fair market price for the Zayre discount store division, whose financial performance was deteriorating at that time. In addition, the lawsuit alleges that Harmon misused his dual position as chairman of both Wertheim and Ames in 1988 during the acquisition of the Zayre discount store division by providing misleading information to Ames' board of directors on the acquisition's prospects and true value.
 In addition to damages in excess of $375 million, Ames is seeking the recovery of investment banking fees, totalling in excess of $20 million, on the theories of fraudulent conveyance, fraudulent transfer and unjust enrichment, that were paid to Wertheim for the original acquisition and subsequent refinancings. Under applicable bankruptcy lays, Ames further seeks the repayment of more than $10 million in preference payments made within one year of the Ames bankruptcy filing.
 Ames which filed for protection under Chapter 11 of the U.S. Bankruptcy Code in April 1990, operates 369 discount department stores in 15 northeastern states.
 -0- 10/14/92
 /CONTACT: Marge Wyrwas of Ames Department Stores, Inc., 203-257-2659, or Andrea Priest of Ogilvy Adams & Rinehart, 212-880-5272, for Ames/
 (ADD) CO: Ames Department Stores, Inc.; Wertheim Schroder & Co., Inc. ST: Connecticut IN: REA SU:


TS-AH -- NY021 -- 9755 10/14/92 10:12 EDT
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Publication:PR Newswire
Date:Oct 14, 1992
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