The Loewen Group, Inc. Securities Litigation

This litigation was brought in 1998 as a series of securities fraud cases brought by Loewen Group shareholders against officers and directors of the corporation as well as the corporation itself. In the spring of 1999, Lead Plaintiffs were appointed and cases brought by various individuals were consolidated into the current class action. Loewen Group filed for bankruptcy protection in June 1999 and, consequently, this litigation was suspended until late 2001, when it was resumed. On August 29, 2003, Plaintiffs filed their Corrected Consolidated Amended Complaint (the "Complaint"). The case is pending against Loewen Group (n/k/a Alderwoods Group, Inc.), Raymond L. Loewen, and Paul Wagler (collectively, the "Defendants"). However, because of bankruptcy proceedings involving Loewen Group, Plaintiffs are not entitled to seek any monetary recovery from Loewen Group. Defendants subsequently moved to dismiss the Complaint. On August 18, 2004, after extensive briefing and oral argument, the Court upheld a subset of Plaintiffs' claims. The Court dismissed certain of Plaintiffs' claims and upheld only three of the Plaintiffs' claims.

Plaintiffs, on behalf of the Class, allege that the Defendants knowingly or recklessly made false and misleading statements regarding Loewen Group's financial prospects and conditions and that these false and misleading statements constituted violations of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. The specific claims that were upheld by the Court in the Opinion and Order of August 18, 2004 were based on the Plaintiffs' allegations that, during the Class Period, defendants misled investors by materially misstating the value of Loewen Group's businesses and properties, by failing to record contingent losses on put/call agreements with respect to certain key acquisitions, and by failing to account properly for imputed interest on zero interest finance plans. Defendants deny any wrongdoing and specifically have denied the claims made by Plaintiffs in this Action.

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