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FAY'S INCORPORATED SETTLES LAWSUIT

 FAY'S INCORPORATED SETTLES LAWSUIT
 LIVERPOOL, N.Y., Feb. 26 /PRNewswire/ -- Fay's Incorporated


(NYSE: FAY) today announced that it and its wholly owned subsidiary, Carls Drug Co., Inc., have reached a settlement with the New York State Attorney General concerning litigation involving the New York State Employees Prescription Program, resulting in a charge to net earnings of $630,000, or $.04 per share, for Fay's fiscal year ended Jan. 25, 1992. In full settlement of the lawsuit, Fay's has agreed to pay $1,064,000 and Carls has agreed to pay $384,000. Fay's acquired Carls Drug Co., Inc. in April 1991.
 The settlement involves a suit filed by the Attorney General in June 1990 against Fay's and Carls as well as seven other companies operating chain drug stores in the state of New York and 10 pharmaceutical trade associations. The original complaint alleged that in 1986 the defendants conspired to restrain competition among retail pharmaceutical firms regarding the prescription program and sought treble damages, fines and penalties totalling in excess of $105 million. Company officials report that the state has negotiated settlements with the chain drug store defendants which will result in payments to the state of approximately $5 million.
 Henry A. Panasci Jr., chairman and chief executive officer of Fay's Incorporated, stated, "We have steadfastly maintained that Fay's did not participate in the conspiracy alleged by the attorney general. However, when confronted with the prospect of protracted litigation and the threat of paying treble damages attributable to other settling parties, we had little choice but to accept the attorney general's settlement demand. We feel that the best interests of our shareholders and employees have been served by proceeding in this manner."
 -0- 2/26/92
 /CONTACT: Warren D. Wolfson, senior vice president and general counsel of Fay's Incorporated, 315-451-8000/
 (FAY) CO: Fay's Incorporated ST: New York IN: REA SU:


KK -- CL012 -- 2859 02/26/92 13:54 EST
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Publication:PR Newswire
Date:Feb 26, 1992
Words:319
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