SOURCE: Case Financial

March 02, 2007 06:30 ET

Case Files Fraud Lawsuit Regarding Agreement

CARLSBAD, CA -- (MARKET WIRE) -- March 2, 2007 -- Case Financial, Inc. (OTCBB: CSEF) today announced that, on February 23, 2007, it filed suit against the Canadian Commercial Workers Industry Pension Plan ("CCWIP"), South Ocean Development Company Ltd. ("South Ocean"), Allen & Company and certain individuals for fraud arising out of their conduct with respect to prior litigation over agreements to purchase a waterfront hotel property, overlooking a golf course and marina, including a gaming license, located on the island of New Providence, Bahamas.

The suit alleges that the defendants made fraudulent misrepresentations intended to induce Case Financial to rely and act on these misrepresentations and enter into a settlement agreement resolving the prior litigation. The suit also alleges that the defendants knowingly concealed facts that would have had a material impact on the decision to enter into that settlement agreement.


On or about March 21, 2005, South Ocean and L&M Specialties ("L&M"), an affiliate entity of Case Financial, entered into a Letter of Intent ("LOI") concerning the purchase of real estate and a gaming license attached to that real estate located on the island of New Providence, Bahamas (the "Property"). Pursuant to the LOI, South Ocean was obligated to permit L&M to perform due diligence. After numerous attempts to resolve disputes that had arisen relating to the intended purchase of the Property, Case Financial and L&M filed a complaint against CCWIP, South Ocean, Allen & Company, and related individuals in the United States District Court for the Southern District of Florida ("Florida Litigation").

Between January and March 2006, the defendants in the Florida Litigation conducted settlement discussions with Case Financial. Prior to signing the settlement agreement, it was represented to Case Financial that no action had been taken regarding the sale of the Property and that Case Financial would have an opportunity to purchase the Property following settlement. Case Financial signed this settlement agreement relying on the representations concerning the disposition and availability of the Property.

The Company has subsequently learned that South Ocean was sold to Roger Stein, an investor, prior to Case Financial signing the settlement agreement at the end of March 2006.

Although Case Financial, Inc. believes strongly in the merits of this suit, as with any litigation, this suit may be protracted and costly with no assurance that Case Financial, Inc. will ultimately be successful. Even if Case Financial is successful in the lawsuit, such a result could be appealed. There is no assurance Case Financial would be successful on any appeal and an appeal could also be protracted and costly.

Forward-Looking Statements

Except for historical information contained herein, the statements made in this release constitute forward-looking statements (including within the meaning of Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934). Such forward-looking statements are based on current expectations that are subject to significant risks and uncertainties that are difficult to predict, including statements regarding the intent, belief or current expectations of Case Financial, Inc. and its management regarding strategic directions, prospects and future results. These forward-looking statements include, among other things, statements regarding future events and the future financial performance of the corporation that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by Case Financial, Inc., which are on file with the U.S. Securities and Exchange Commission and may be accessed at, and specifically the most recent reports on Form 10-K and 10-Q, each as it may be amended from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Case Financial, Inc. disclaims any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this press release.

Contact Information

  • Contact:
    Michael Schaffer
    Case Financial, Inc.
    Tel. 760 804 1449