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ILLINOIS STATE COURT ISSUES ORDER ENJOINING AND RESTRAINING SAFECARD SERVICES, INC. FROM PURSUING WYOMING LAWSUIT AGAINST PETER HALMOS

 MIAMI, Aug. 19 /PRNewswire/ -- Peter Halmos, co-founder and former chairman and chief executive officer of SafeCard Services, Inc. (NYSE: SSI), today reported that the Illinois state court has issued an order enjoining and restraining SafeCard from proceeding with the lawsuit it filed against Mr. Halmos on Aug. 11, 1993, in state court in Wyoming. The order by the Illinois Court, issued on Aug. 16, is based on that court's finding that SafeCard's Wyoming action against Halmos "could possibly result in fraud, gross wrong and oppression" of Halmos by SafeCard, and "a manifest wrong and injustice."
 As previously announced, the U.S. District Court in Wyoming on Aug. 6 dismissed SafeCard's claims against Mr. Halmos in their entirety. SafeCard filed essentially the same claims against Mr. Halmos in Wyoming state court on Aug. 11, changed only by the fact that SafeCard added as defendants two of Mr. Halmos' private companies even though SafeCard earlier had told the Wyoming federal court that it had no claims against those companies. The Illinois Court's action now enjoins and restrains SafeCard from proceeding with its only remaining state court lawsuit against Mr. Halmos in Wyoming.
 Mr. Halmos said: "I am very pleased by the Illinois Court's order enjoining and restraining SafeCard. It is the latest in a lengthening series of legal defeats for SafeCard's incumbent board and management. Moreover, the unsuccessful and costly legal maneuvers by SafeCard cast further light on that board and management's continuing, cynical efforts to manipulate the court system at the expense of SafeCard's shareholders."
 Mr. Halmos is seeking redress against SafeCard in Illinois state court for reneging on SafeCard's promises and obligations made to Mr. Halmos over the past several years. Instead of fulfilling its commitment, Mr. Halmos has alleged, SafeCard has engaged in a pattern of misconduct in order to cover up certain issues with respect to SafeCard which Mr. Halmos raised and to deprive him of pursuing his other business interests. Mr. Halmos' suit seeks a variety of relief, including but not limited to monetary damages in excess of $100 million.
 "SafeCard's management and directors should be ashamed of themselves for the tremendous waste of SafeCard's assets spent pursuing this frivolous Wyoming litigation, which has now been dismissed and enjoined. As a SafeCard shareholder, I noted with particular alarm that SafeCard's second-quarter earnings were, in SafeCard's words, 'adversely affected by an increase in legal fees...in the second quarter of 1993 [of] $1.3 million compared to $400,000 in the same quarter last year.' SafeCard's shareholders have every right to ask whose interests the board and SafeCard's management were serving by these costly and fruitless pursuits that materially increase SafeCard's exposure," Mr. Halmos said.
 "This is further evidence of why SafeCard's shareholders should take a long look at SafeCard's recent conduct. In my opinion, SafeCard's incumbent board and management are not only committing a waste of company resources but seriously damaging SafeCard's credibility. As SafeCard's co-founder and a major shareholder, I believe these corporate governance issues need to be addressed," he said.
 Separately, the Illinois Court today also issued an order confirming that SafeCard has withdrawn motions to dismiss Mr. Halmos' Illinois lawsuit. The Illinois Court gave SafeCard 14 days to answer or otherwise plead in that action. The Illinois Court also rejected SafeCard's efforts to stop discovery that had been served by Mr. Halmos on third parties.
 -0- 8/19/93
 /CONTACT: Robert Siegfried or Roy Winnick of Kekst and Company, 212-593-2655/
 (SSI)


CO: SafeCard Services, Inc. ST: Illinois, Florida, Wyoming IN: SU:

SM -- NY065 -- 4421 08/19/93 15:11 EDT
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Publication:PR Newswire
Date:Aug 19, 1993
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