LNR Property Shareholders Litigation

On August 29, 2004, LNR entered into a Plan and Agreement of Merger with Riley Property Holdings LLC and its wholly owned subsidiary, Riley Acquisition Sub Corp. ("Merger Agreement"), which provided for the merger of Riley Acquisition Sub Corp. into LNR in a transaction (the "Transaction") that resulted in LNR's stockholders receiving $63.10 per share in cash and LNR being indirectly wholly owned by Riley Property Holdings LLC, an affiliate of Cerberus Capital Management, L.P. (which, together with its affiliates, including but not limited to Blackacre Capital Management LLC, and their successors are referred to herein as "Cerberus"), and LNR thereby becoming an affiliate of Cerberus.

On August 30, 2004, two shareholders of LNR, Mr. Aaron Brody and Eastside Investors, LLP, filed separate, class action lawsuits in the Court against Defendants alleging various breaches of their fiduciary duties that resulted in alleged inadequate merger consideration of $63.10 per share. Plaintiffs Brody and Eastside Investors sought preliminary and permanent injunctive relief, as well as damages and other relief.

On September 1, 2004, Mr. George Caton, another shareholder of LNR, also filed a similar lawsuit in the Court against Defendants based on the same legal theories and seeking similar relief.

On September 28, 2004, the Court consolidated the three Delaware actions into a single action captioned, In re LNR Property Corp. S'holders Litig., C.A. No. 674-VCL ("Consolidated Complaint").

On October 10, 2004, LNR filed a Rule 14A Preliminary Proxy Statement with the United States Securities and Exchange Commission ("SEC"), and on January 3, 2005 LNR filed its Rule 14A Definitive Proxy Statement ("Proxy") with the SEC.

On January 31, 2005, LNR's stockholders voted to approve the Transaction and on February 3, 2005, LNR and Cerberus completed the Transaction.

On April 19, 2005, the Defendants filed their motion to dismiss the Consolidated Complaint. On June 8, 2005, Plaintiffs filed a motion for leave to file an amended consolidated complaint in lieu of answering the pending motion to dismiss and, thereafter, on June 23, 2005, Plaintiffs filed their Consolidated Amended Complaint ("Consolidated Amended Complaint"). Collectively, the Consolidated Complaint and the Consolidated Amended Complaint are referred to herein as the "Class Action."

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