Class action lawsuit filed against Boston Chicken led by Seattle law firm of Hagens & Berman

07/28/1997

SEATTLE – On July 28, 1997, a class action lawsuit was filed in Colorado State District Court for Jefferson County against Boston Chicken, Inc. (Nasdaq: BOST), Scott A. Beck and Mark W. Stephens. The lawsuit asserts claims under the federal securities laws and the laws of the State of Colorado. Specifically, plaintiffs have brought claims under sections 11, 12(2) and 15 of the Securities Act of 1933. This lawsuit seeks to recover losses suffered by investors who bought Boston Chicken Securities.

The Complaint alleges the inclusion of false and misleading information contained in the Registration Statement and Prospectus (collectively the "Convertible Debenture Registration Statement") for an offering of $250 million of Convertible Debentures issued by the company in April of 1997 (the "Offering"). Specifically, the complaint alleges that the financial statements contained in the Convertible Debenture Registration Statement were false and misleading because they failed to consolidate large losses being experienced in the Boston market system by the "Area Developers" - companies which were, at all times, under the direct control of BCI. Additionally, BCI improperly recognized franchise fees from these controlled companies, in violation of Generally Accepted Accounting Principles and SEC Regulations.

The Convertible Debentures were issued by the company at a par value of $100.00 per Convertible Debenture. The complaint alleges that once the news regarding the financial improprieties was made public, the price of the Convertible Debentures had sagged to a price of $89.00 at the end of the Class Period.

The plaintiffs are represented by three law firms - Hagens & Berman, P.S., Kaufman Malchman Kirby & Squire, LLP and Dyer Donnelly, each of whom have significant expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Hagens & Berman, P.S. has concentrated its practice in the field of class action and multi-plaintiff litigation, representing plaintiffs in numerous securities and investment fraud actions throughout the country.

Hagens & Berman, P.S. has been appointed lead or co-lead counsel on behalf of defrauded investors in numerous complex financial cases, and has been responsible for many large recoveries which, in the aggregate, total in the hundreds of millions of dollars.

Kaufman Malchman Kirby & Squire, LLP has been actively engaged in a wide variety of commercial litigation, including consumer, and securities litigation, for nearly half a century. The firm is active and has been active and successful in major litigation in federal and state courts throughout the country. Its achievements and quality of services have been chronicled in published decisions, and the firm's efforts have been responsible for significant financial recoveries, or injunctive relief, for its clients and class members.

Dyer Donnelly has also served as lead or co-lead counsel in numerous securities and consumer class actions. Many of these cases have settled in the multi-million dollar range. Dyer Donnelly is particularly active in the Rocky Mountain and Midwest regions.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in nine cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List seven times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

Contact
Ashley Klann
ashleyk@hbsslaw.com
206-268-9363


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07/31/06: Case Settled

Defendants Arthur Andersen and an underwriter syndicate led by Merrill Lynch & Co., Deutsche Banc Alex. Brown LLC and Morgan Stanley & Co. Incorporated have settled for a total of $19.4 million. Individual defendant Mark Stephens, formerly Boston Chicken's chief financial officer and vice chairman of the board of directors, also recently agreed to settle.

Notice of the settlement was issued to class members, and all class-member claim forms have been evaluated.

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