IN THE COURT OF `CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
..--~.-------------------------------------~~---------------------------~~
WILLIAM KASS, derivatively on behalf of
FINOVA GROUP, INC..,
Plaintiff,
-against-
MATTHEW M. BREYNE, SHOSHANA TANCER
CONSTANCE R. CURRAN, ROBERT H. CLARK
and JOHN W. TEETS
Defendants,
-and-
FINOVA GROUP, INC.,
a Delaware Corporation,
Nominal Defendant.
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COMPLAINT
1. Plaintiff, by his attorneys, alleges upon personal knowledge as to
own acts and upon information and belief as to all other matters, as follows:
NATURE OF ACTION
2. This is a stockholde:rs' derivative action brought pursuant to
Rules of the Court of Chancery. Plaintiff brings this derivative action on behalf of Finova
Group, Inc ("Finova") to remedy the breaches of fiduciary duty committed by the Defendants
named herein, who include, inter alia, a majority of Finova's Board of Directors.
SNIPPETS:
-against-MATTHEW M. BREYNE, SHOSHANA TANCER
Plaintiff brings this derivative action on behalf of Finova
Inc to remedy the breaches of fiduciary duty committed by the Defendants
named herein, who include, inter alia, a majority of Finova's Board of Directors.
defendants caused these materially false and
misleading statements to be made in order to: artificially inflate the price of Finova's
personal-computer distributor, at least $70 million in 1998, to finance the
Generally Accepted Accounting Principles,
unrecoverable prior to the false and misleading statements detailed below.
O-K with .the SEC, which falsely reported that net income increased 34% from the prior year,
million special charge to bolster reserves.
account management process and internal controls.
Plaintiff William Kass is.
breaches of fiduciary duties by the Company's directors and certain of its officers.
information about the Company, it.s products, and its financial condition which is material t
materially false and/or misleading press releases, SEC tilings, dissemination of false
Defendant Shoshana Tancer is, and has been a director of Finova since
$30,000 in fiscal 1999 and is expected to receive annual compensation of$30,000 for fiscal
She is also a member of the Audit Committee of the Board.
Defendant John W. Teets is, and has been a director of Finova since
financial and accounting systems and internal controls were wholly inadequate.
stock was, and is, registered with the SEC pursuant to the Exchange Act, and was traded on the
New York Stock Exchange, and governed by the provisions of the federal
Under the Chmmercial Finance group are six lines of business - Business Credit,
at 0'56% o-f managed assets.
Loss reserves covered 3.5x annualized net chargeoffs in the second quarter and 3.6x for 1998.
Finova's portfolio quality continues to be excellent.
Moreover, the reserve for credit losses as a percentage of encling managed assets rose 10
generally investigates its prospective customers through a review of historical financial
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