Archie's Corner

[WillyWizard]

CGYC News

(BSNS WIRE) Special Master Appointed in Carnegie's $2.1 Billion Suit vs. Gr
Special Master Appointed in Carnegie's $2.1 Billion Suit vs. Grant Thornton


Business Editors

BALTIMORE--(BUSINESS WIRE)--Jan. 14, 2002--

Investigation of Violation by Defendant,
Resulting Costs Covered by Grant Thornton
Carnegie President Cites
`Similarities to Arthur Andersen Evidence Destruction Debacle'

Carnegie International Corporation (OTC BB: CGYC) said today it
has been notified by the Circuit Court for Baltimore City that a
Special Master has been appointed to conduct a court-ordered
investigation of a discovery violation by Grant Thornton, LLP,
Carnegie's former auditor and the defendant in a $2.1 billion action
being tried in Baltimore Circuit Court (see "Judge `Temporarily
Suspends' Trial in Carnegie's $2.1 Billion Suit vs. Grant Thornton,
Orders Investigation of Alleged Discovery Violation by Defendant,"
Business Wire, Nov. 15, 2001).
Carnegie President Lowell Farkas said his company and its team of
lawyers were notified late last week that Juliet A. Eurich, Esq., a
former federal prosecutor, has been appointed by Judge Kaye A.
Allison.
In her Order (full text at www.carenegitint.com), Judge Allison
appointed Ms. Eurich pursuant to Rule 2-541, Maryland Rules of
Procedure, allowing up to 90 days for a report on the results of the
investigation. Judge Allison also ordered Grant Thornton to pay all
costs for the Special Master, including legal and other costs incurred
by Carnegie in connection with the selection of, investigation of, and
the preparation of the Special Master's report.
Carnegie also filed a motion in Baltimore City Circuit Court on
July 25, 2001 seeking a default judgment in the $2.1 billion suit,
alleging that J.W. Mike Starr, a senior partner and former director of
risk management at Grant Thornton, "willfully, knowingly and
intentionally destroyed Carnegie documents with the full understanding
that litigation was imminent." In a pre-trial ruling in October, Judge
Allison said that Mr. Starr "had knowledge that a lawsuit against
Grant was imminent when he deleted his computer files," finding him
"in violation" of court rules. (see "Carnegie International Receives
Favorable Rulings in $2.1 Billion Suit vs. Grant Thornton; ," Business
Wire, Oct. 3, 2001).
The trial began November 5, but was temporarily suspended by Judge
Kaye on November 9 when Grant Thornton's counsel announced in open
court that a second set of "original work papers had been discovered,"
and admitted not producing these files during the discovery process.
Judge Allison then suspended the proceedings, saying she would appoint
a "third party neutral" to investigate and report back.

There is similarity to Arthur Andersen Destruction of Evidence
Debacle

Farkas said there were "many similarities to the Arthur Andersen &
Company evidence destruction debacle," in which the accounting firm
admitted destroying significant documents and records relating to its
client Enron (NYSE: ENE) and Grant Thornton, LLP.
"The irony and timing of the Arthur Andersen situation, which
remains Page 1 and editorial page news, was not lost on our
shareholders or media," Farkas said. "Our phones have been ringing off
the wall."
Farkas said that Grant Thornton had been engaged by Carnegie to
audit years 1997 and 1998; those audit reports included in the
company's SEC filings. In May 2000, Carnegie brought suit against
Grant Thornton in Baltimore Circuit Court, alleging Grant failed to
perform its obligations relating to the audits of 1997 and 1998 as
well as fraud. Upon receipt of that report, Farkas said the court will
determine the course of further proceedings, including acting on
Carnegie's motion for default judgment on all counts.
Law firms representing Carnegie International in its action
against Grant Thornton are Gary, Williams, Parenti, Finney, Lewis of
Stuart, Florida, Florida, and William H. Murphy Jr. & Associates,
P.A., and Blank Rome Comisky & McCauley, LLP, both of Baltimore.

About Carnegie International Corporation

Carnegie International Corporation is an Internet support and
computer telephony holding company with specialization in
telecommunications products, services and distribution, and in
E-Commerce and EDI.

Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included
in this Press Release (as well as information in oral statements or
other written statements made or to be made by Carnegie International
Corporation) contain statements that are forward-looking, such as
statements relating to the future anticipated direction of the
telecommunications industry, plans for future expansion, various
business development activities, planned capital expenditures, future
funding sources, anticipated sales growth, and potential contracts.
Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in
the future, and accordingly, such results may differ from those
expressed in any forward-looking statements made by or on behalf of
Carnegie International Corporation. These risks and uncertainties
included, but are not limited to, those relating to development and
expansion activities, dependence on existing management, financing
activities, domestic and global economic conditions, change in Federal
or state laws, and market competition factors.

--30--rc/ny*

CONTACT: Carnegie International Corporation
Lowell Farkas, +[phone]
[e-mail]
or
The Kaminer Group
David A. Kaminer, +[phone]
[e-mail]

KEYWORD: MARYLAND
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS E-COMMERCE INTERNET
LEGAL/LAW TELECOMMUNICATIONS
SOURCE: Carnegie International Corporation

Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: http://www.businesswire.com


Disclaimer: http://www.investorshub.com/boards/read_msg.asp?message_id=243398 This disclaimer is copied off my web site and should be read in conjunction with all my posting at IHUB.