Envoy Corporation Securities Litigation

Pursuant to the Settlement described herein, a Settlement Fund consisting of $11,000,000 in cash, plus interest, has been established. Plaintiffs estimate that there were approximately 11.9 million shares of Envoy common stock traded during the Class Period which may have been damaged as a result of the alleged wrongdoing described at ¶¶13-23 below. Plaintiffs estimate that the average recovery per damaged share of Envoy common stock under the Settlement is $0.924 per damaged share before deduction of Court-awarded attorneys' fees and expenses. Depending on the number of shares purchased by Class Members who submit claims, when and for how much those shares were purchased, and whether those shares were held at the end of the Class Period or sold during the Class Period, and if sold, when and for how much they were sold, an individual Class Member may receive more or less than this average amount.

Under the relevant securities laws, a claimant's recoverable damages are limited to the losses attributable to the alleged securities law violations. Losses which resulted from factors other than an alleged securities law violation are not recoverable from the Settlement Fund. For purposes of the Settlement herein, a Class Member's distribution from the Net Settlement Fund will be governed by the proposed Plan of Allocation described below at ¶¶ 37-46, or such other Plan of Allocation as may be approved by the Court.

The parties disagreed on both liability and damages and do not agree on the average amount of damages per share that would be recoverable if plaintiffs were to have prevailed on each claim alleged. The issues on which the parties disagree include the appropriate economic model for determining the amount by which Envoy common stock was allegedly artificially inflated (if at all) during the Class Period; the amount by which Envoy common stock was allegedly artificially inflated (if at all) during the Class Period; the effect of various market forces influencing the trading price of Envoy common stock at various times during the Class Period; the extent to which external factors, such as general market and industry conditions, influenced the trading price of Envoy common stock at various times during the Class Period; the extent to which the various matters that plaintiffs alleged were materially false or misleading influenced (if at all) the trading price of Envoy common stock at various times during the Class Period; the extent to which the various allegedly adverse material facts that plaintiffs alleged were omitted influenced (if at all) the trading price of Envoy common stock at various times during the Class Period; and whether the statements made or facts allegedly omitted were material or otherwise actionable under the federal securities laws.

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