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JURY ABSOLVES GRANT THORNTON FROM NEGLIGENCE IN LONGSTANDING FDIC LAWSUIT; AUDITORS FOUND NOT RESPONSIBLE FOR INSTITUTION'S FAILURE

 CHICAGO, April 1 /PRNewswire/ -- In what may prove to be a significant decision in the recent wave of lawsuits brought against auditors of failed financial institutions, a federal jury in Wichita, Kan., yesterday unanimously found that Grant Thornton and Fox & Company were not liable for negligence in the performance of their audits of a now-defunct savings and loan association.
 "We are very pleased that the jury had the patience to persevere to a just verdict," said Robert E. Nason, executive partner of Chicago- based Grant Thornton, the seventh-largest accounting and management consulting firm, which has 49 U.S. offices. "This is one of the few lawsuits brought against an accounting firm regarding a failed savings and loan that has gone through trial to a jury verdict. Most have been settled out of court."
 "This verdict clearly demonstrates that responsibility for the failure of a financial institution rests with its officers and directors who make decisions in carrying out the management and governance process, not its independent auditors," Nason added. As a result, it represents a major positive step forward for our entire profession in responding to the troublesome litigation environment in our country."
 The case involved audits conducted in 1984 by Fox and 1985 by Grant for Rooks County Savings Association in Plainville, Kan. Fox combined with Grant Thornton, then called Alexander Grant & Company, in 1985.
 The lawsuit was filed in 1987 and was pursued by the Federal Deposit Insurance Corporation (FDIC) as the receiver for the failed savings association. The suit alleged that Fox and Grant negligently performed audits causing losses on a number of loans which allegedly caused the institution to fail.
 Grant Thornton was represented in the three-month trial by Ellen Flaum, assistant general counsel, and two law firms: Mayer Brown & Platt (Chicago) and Fleeson, Gooing, Coulson & Kitch (Wichita).
 -0- 4/1/93
 /CONTACT: Robert E. Nason, executive partner, or Margaret M. Zagel, general counsel, 312-856-0001, or John C. Koegel, public relations, 212-599-0100, all of Grant Thornton Public Relations/


CO: Grant Thornton ST: New York IN: SU:

WB -- NY102 -- 2195 04/01/93 16:10 EST
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Publication:PR Newswire
Date:Apr 1, 1993
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