James D. Pippin, et al. v. ICF Kaiser International, et...

CHAS. F. McDEVITTMcDEVITT & MILLER, LLP537 W. Bannock, Suite 21 5P.O. Box 2564-83701Boise, Idaho 83702Telephone: (208) 343-7500Facsimile: (208) 336-691 2

J . DENNIS FAUCHERPATRICK E . CAFFERTYMICHAEL C. DELL'ANGELOMILLER FA UCHER and CAFFERTY LLP30 South 15th Street, Ste . 2500Philadelphia, PA 19102Telephone : (215) 864-2800Facsimile: (215) 864-281 0

Attorneys far Plaintiff James D. Pippin

, ; ;

IN THE UNITED STATES DISTRICT COURT , FOR THE DISTRICT OF IDAHO

JAMES D . PIPPIN, individually and onbehalf of all others similarly situated ,

vs .

Plaintiff,

ICF KAISER INTERNATIONAL, INC . ;IC I' KAISER ADVANCEDTECHNOLOGY, INC . ; JAMES

EDWARDS; DAVID WATSON ;and JEFFREY GOLDFARB ,

Defendants .

No . CIV-99-0114-S-BLW

PLAINTIFF'S SECOND AMENDEDCLASS ACTION COMPLAINTFOR VIOLATION OF THEFEDERAL SECURITIES LAWSAND BREACH OF CONTRACT

PLAINTIFF DEMANDS TRIALBY JURY

PLAINTIFF'S SECOND AMENDED CLASS ACTION COMPLAINT ORIGINAL

Plaintiff, James D . Pippin, individually and on behalf of all other persons similarly situated ,

by his undersigned attorneys, alleges as follows :

NATURE OF THE ACT ION

1 . On March 17, 1998, astock-for-stock merger between ICT Spectrum Constructors ,

Inc., ("ICT Spectrum"), and ICF Kaiser Advanced Technology, Inc ., ("ICF Kaiser Advanced

Technology"), a wholly owned subsidiary of ICF Kaiser International, Inc ., ("ICF Kaiser"), was

completed ("the Merger") . Under the terms of the Agreement and Plan of Merger (the "Merge r

Agreement"), entered into February 5, 1998, ICT Spectrum Shareholders received restricte d

securities of ICF Kaiser as consideration . The Merger was approved by ICT Spectrum Shareholder s

because a Private Offering Memorandum ("POM") issued March 3,1998, included numerous untru e

statements of material facts and omitted to state material facts necessary in order to make th e

statements contained therein, in light of the circumstances under which such statements were made ,

not misleading . The misrepresentations and omissions concerned numerous major ICF Kaiser "fixe d

price" or "cost plus" construction contracts and their adverse impact on ICF Kaiser's financia l

position. The misrepresentations and omissions concealed the material risks to ICF Kaiser' s

viability as a going concern, rendering financial guarantees to ICT Spectrum Shareholders, as se t

forth in the Merger Agreement, extremely speculative . But for the misrepresentations and omissions

particularized herein, the Merger would not have been approved by ICT Spectrum Shareholders .

2. Plaintiff, James D. Pippin, received ICF Kaiser shares in exchange for his IC T

Spectrum shares as a result of the Merger . He brings this action individually and, pursuant to Rul e

23 of the Federal Rules of Civil Procedure , as a class action on behalf of all persons whose IC T

Spectrum stock was exchanged for ICF Kaiser stock pursuant to the February 5, 1998, Merger

Agreement ("the Class" or "ICT Spectrum Shareholders") . Plaintiff asserts causes of action under

PLAINTIFF 'S SECOND AMENDED CLASS ACTION COMPLAINT -1-

the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78n(e), and 78t(a), and for breach of

contract .

JURISDICTION AND VENUE

3 . This action arises under Sections 10(b), 14(e) and 20(a) of the Exchange Act, 1 5

U.S.C . §§ 78j(b), 78n(e), and 78t(a), and Rule l Ob-5, promulgated thereunder by the SEC, 17 C .F .R .

240. l Ob-5, as a result of false and misleading statements Defendants made to and/or in connectio n

with ICF Kaiser's acquisition of ICT Spectrum . This Court has jurisdiction in this action pursuan t

to Section 27 of the Exchange Act, 15 U .S .C . § 78aa . This Court has supplemental jurisdiction o f

the breach of contract claim pursuant to 28 U .S .C. § 13 67 .

4. Venue is proper in this District pursuant to § 27 of the Exchange Act, 15 U.S .C . §

78aa, and 28 U .S.C. §§ 1331, 1367 . A substantial partof the events and omissions giving rise to th e

claims alleged herein, including the dissemination of the Private Offering Memorandum that

contained materially false and misleading information, occurred in this District . Prior to the Merger ,

ICT Spectrum was headquartered in this District . Following the Merger, ICF Kaiser has continued

to maintain its offices in this District .

5 . In connection with the acts and conduct alleged in this Second Amended Complaint ,

Defendants, directly and indirectly, used the means and instrumentalities of interstate commerce ,

including the mails and telephone communication systems, and the facilities of national securitie s

markets .

THE PARTIES

Plaintiff

6. Plaintiff, James D . Pippin, an Idaho resident, acquired shares of common stock of IC F

Kaiser in exchange for his Class 1 and Class 2 shares of ICT Spectrum in connection with th e


~.

Agreement and Plan of Merger entered into on February 5, 1998, approved by ICT Spectru m

shareholders on March 12, 1998, and consummated March 17, 1998 . The Merger took place, to

Pippin's detriment, because of the material misrepresentations and omissions alleged herei n

concerning ICF Kaiser's operations .

Defendants

7 . Defendant ICF Kaiser, is a Delaware corporation headquartered in Fairfax, Virginia .

ICF Kaiser, through ICF Kaiser Engineers and Constructors, and its other operating subsidiaries, i s

one of the nation's largest engineering, construction, program management, and consulting services

companies as of the end of 1997 . ICF Kaiser has more than 4,800 employees in offices throughou t

the country and the world . ICF Kaiser stock is publicly traded on the New York Stock Exchange

under the symbol "ICF "

8. ICF Kaiser Advanced Technology, Inc ., a Delaware corporation, is a wholly-owne d

subsidiary of ICF Kaiser located at 2710 Sunrise Rim Road No. 100, Boise, Idaho 83705 . ICF

Kaiser Advanced Technology is a party to the Merger Agreement .

9. Defendant, James Edwards ("Edwards"), was, at all relevant times, Chairman of th e

Board and Chief Executive Officer of ICF Kaiser. Edwards, together with David Watson, negotiated

the Merger Agreement with ICT Spectrum .

1 0. Defendant, David Watson ("Watson"), was, at all relevant times, Executive Vic e

President of ICF Kaiser and President of ICF Kaiser's Engineers and Constructors Group . Watson ,

together with Edwards, negotiated the Merger Agreement with ICT Spectrum . Watson also

controlled the participation of ICF Kaiser's Engineers and Constructors Group in several nitric aci d

projects, which are addressed more fully below .

11 . Defendant Jeffrey Goldfarb ("Goldfarb") was, at all relevant times, Chief Financial

PLAINTIFF'S SECOND AMENDED CLASS ACTION COMPLAINT -3-

T.

Officer of ICF Kaiser's Engineers and Constructors Group . Goldfarb participated in negotiations

from which the Merger arose . Additionally, he conducted "due diligence" on behalf of ICF Kaise r

and was charged with the responsibility for the financial oversight of the nitric acid projects .

12. Edwards, Watson and Goldfarb are referred to herein collectively as "the Individua l

Defendants . "

13 . None of the Individual Defendants remains an officer or employee of ICF Kaiser .

SOURCE OF PLAINTIFF'S ALLEGATIONS

14. From the time of the effective date of the Merger, March 17,1998, until March, 1999 ,

Plaintiff was employed by ICF Kaiser and had the title Chief Financial Officer of Kaiser Advance d

Technology, a subsidiary of ICF Kaiser International, Inc ., under the Engineers and Constructors

Group . During that period of employment, and in the regular course of his employment, Plaintiff

regularly communicated with officers of the ICF Kaiser Engineers and Constructors division wh o

were given responsibility for assisting in ICF Kaiser's efforts to minimize losses on the nitric aci d

contracts and Bath Iron Works project addressed below. Those officers had access to written

documents of ICF Kaiser with respect to the bidding, evaluation, cost and income projections an d

results, and progress reports regarding the nitric acid projects and Bath Iron Works project . The

allegations in this Second Amended Complaint with respect to the misrepresentations, th e

Defendants' knowledge of those misrepresentations, and the areas of responsibility of the Individua l

Defendants are based on information provided to Plaintiff in the ordinary course of business b y

fellow officers and employees, and on internal information about the business affairs of ICF Kaiser

otherwise acquired by Plaintiff in the ordinary course of his employment. In particular :

(a) ICF Kaiser regularly prepares Monthly Operating reports-"MOPS"-for al l

major construction projects . The reports address the health of the projects, including (1) safety


issues, (2) schedule status, (3) budget status, (4) project team morale, (5) disputes involving IC F

Kaiser, (6) leads for future work, (7) client relationship, (8) issues requiring management attention,

and (9) overall project condition . The overall project condition in the MOPS included red, yellow

or green signals . A red signal indicated that a project was in trouble and required immediat e

management involvement ; a yellow signal indicated caution ; and green signal indicated that the

project was proceeding as planned relative to both the budget and the schedule. The MOPS were

presented to ICF Kaiser's top management on a monthly basis .

(b) At all relevant times, Plaintiff had regular communications with Paul F .

Smith, who had been President and Chairman of the Board of ICT Spectrum prior to the Merger .

Following the Merger, Mr . Smith was a Senior Vice President assigned to the Nitric Acid contract s

in Texas (El Dorado) and Louisiana (PSC), among others . Mr. Smith informed Plaintiff that in Apri l

1998, he reviewed the MOPS issued immediately prior to the Merger for the Canada (ICI), Texas (E l

Dorado) and Louisiana (PSC) Nitric Acid projects and that the reports all had red signals an d

addressed many serious problems facing the projects .

(c) Mr. Smith further informed Plaintiff that even the dismal outlook in the MOP S

failed to convey the true magnitude of the problems . Mr. Smith advised Plaintiff that when h e

arrived on the scene of the Texas (El Dorado) project in June, 1998, it was apparent that the projec t

was in far worse shape than ICF Kaiser had previously disclosed . The project was significantly

behind schedule and over budget . Mr. Smith also advised Plaintiff that when he arrived at th e

project site, Ell Vines, a Senior Vice President who was ICF Kaiser's project manager for the Nitric

Acid projects, told him that the Nitric Acid Projects were in "big trouble" and that ICF Kaiser ha d

grossly underbid on those projects .

(d) Mr. Vines authored a number of documents which confirmed the grave


,~. .

problems facing the Nitric Acid projects, and the fact that upper management knew, or recklessl y

disregarded, the magnitude of the problems prior to the Merger . For example, in a June 18, 1998

memorandum regarding the Nitric Acid projects, Mr . Vines stated that :

. . . I began to more fully understand the profound impact of what we were dealing

with in January and February of -this mar. The impact of the failure and

incompleteness of the engineering design and the resultant mess that had to be

cleaned up for Phase I El Dorado project was just being understood ; the forecasts for

Comstock for the ICI project which increased the projections from a TOTAL of

about 30,000 man hours to a FORECAST TO COMPLETE of 65,800 were made (It

was inconceivable to me that we could spend more than almost two times the original

estimate to complete the project which was supposed to be about 35% complete for

the piping systems .); and the beginning of the realization of the fact that we had

major engineering design resources and schedule issues for El Dorado and PCS

projects were upon us. We were bringing inform [sic] the "street" piping designers

and stress people . We were totally understaffed and were in now way ready for the

impact of two projects which required the generation if over l 100 ISO's in less than

four months using a 3-D model that had only 1 1/2 people who had in depth piping

design experience with it . We were "afraid" to bring in the resources in fear of

blowing the budgets which had been cut at the bid stage, as we sold "duplicate"

plants to both El Dorado and PCS . We began to deal with this issue in early

March.

(Emphasis added . )

(e) Similarly, in a July 2, 1998 "NOTES REGARDING NITRIC ACI D

PROJECTS" from Mr. Vines to defendant David Watson, Mr . Vines candidly provided a brie f

history of the Nitric Acid Projects stating, in part, as follows :

In November 1997, the assumption was made that Engineering was on track in

accordance with the schedules presented by the project teams and that the Process

work was close to being finalized . [i .e ., that the chemical process could be designed] .

This assumption proved NOT to be correct as it turned out :

IC I - Process was not finalized until April 20,1998 .

El Dorado and PCS - Process not finalized until 2/28

(November reviews indicated serious issues) .

Piping design for Phase 1 of El Dorado was notadequate . There were no piping supports and valveswere not located according to access requirements .

** *


• Assumption had to be made by Vine s that Pittsburgh [i. e., senior management] knew

what they were doing. The depth of the engineering problem was unbelievable andwas not perceived .

• Engineeri ng organization had been reduced to minimal levels . Uti l i zation driven .

No bench strength . Des igns done with pick up team ve ry heavily staffed by contract

personnel or new hires . There was no institutional knowledge nor was there anysign i ficant effort to get procedures in place . There was no engineering aud i t

capab ility in the corporation nor was there a Chief Engineer . Pittsburgh market was

very busy . There was very limited ability to expand rapidly and there was nosignificant planning to deal with the issues of taking on about $120 million of new

work while simultaneously dealing with the pressures of the Nova Hut project. Also ,

EL Dorado and PCS projects were to be done in 3-D in Intergraph . The only major

experience was in the Oakland operation (Gas Compressor Stations) which were

delivered under the direction of Rich Nunes who had depa rted for Australia. [Mark]

Tipermas [ICF Kai ser 's Chief Operating Officer] should have known this .

• By February 1998, it was clear a major enCinee _r_ n~ refocus was requ ired for

three (3) projects, ICI, PCSand El Dorado. The organization was restructured by

V ines and resources were brought in from all over the USA . The Pip ing Group was

expanded by about 20 people . The decision was made to "blow" the engineering

budget and get the work done. Schedule impacts were enormous.

~* *

• Piping Department manager quit in early 1998 . I t took 6 months to replace him .

• Nitric Acid task force separated itself from the rest of the functioning Pittsburgh

organization (Engineering, Project Controls, Purchasing, etc .) to the point that the

core organization "let the task force sink ." The first thing that Vines did was to bust

up the task force (Oct. 97) .

• Task force personnel were asked to do impossible tasks in terms of work load . Most

people were burned out and working 60+ hours per week. We brought in new

resources to revitalize the task force but downside was that shoppers had no incentive

to get work done fast. (Shoppers are contract personnel . )

• Pittsburgh had no experience base to "measure" the project status . We had no wayof knowing how deep the hole was .

• Pittsburgh management ignored all the earl warning signs including significant

complaint s from clients . Task force management kn ew bette r and regional

operational management wa s in den ial.• There was no working relationship between Pittsburgh regional management and the

President of North American Operations .• In January 1998 , Vines brought in the process group from Houston to get a grasp

of the process issues . Note, New Jersey process group was tied up in the start-up of

MCC and Phase 1 of El Dorado during the ent ire first quarter of 1998.

• The "best" construction management team we had was at the El Dorado project an d


T

we burned them out on Phase 1 . Team is being replaced totally by a new team fromAdvanced Technology, effective immediately .

~* *

• Pittsburgh utilization is running at +85% with no recognizable gross margin .• With limited resources at the very senior level, we are spread very very thin . All of

the corporation's attempts to get a replacement in Pittsburgh for Vines have failed .

• Vines is managing 4 Nitric Acid projects in 4 locations, plus three very significant

claims plus the closeout of the projects .

• The corporation has yet to deal with the magnitude and resources required to dealwith the claims issues and lawsuits that will follow in order to recoup the monie snecessary .

• ICF Kaiser had no Chief Engineer during the period in question .

(Emphasis and bracketed language added . )

(f) In an April 2,1998 Memorandum concerning "ICI Nitric Acid Plant Review"

from Edgar Randol, an ICF Kaiser Vice President, to Ell Vines and copied to David Watson and Pau l

Smith, Mr. Randol indicated that the Canada (ICI) Nitric Acid Project was only 66% complete (a s

of March 24, 1998) as opposed to 80% complete as represented by the project team .

(g) With respect to the Bath Iron Works project, Walt Teasdale, ICF Kaiser' s

executive vice president for the eastern region, told Mr . Smith in June, 1998 that ICF Kaiser had

underbid the Bath Iron Works project by $20 million. Mr. Teasdale indicated that the Senior Vic e

President in charge of the project, Michael Gaffney, ignored the objections of managers and

submitted a bid at a loss anyway .

(h) In July 1998, John Williamson, ICF Kaiser's project control manager ,

indicated to Mr . Smith that upper management knew of a $2 million "bust" (i.e ., error resulting i n

a loss) by August 1997. Mr. Williamson indicated that the trend was not good, but that uppe r

management had refused to deal with it .

(i) In July 1998, just fewmonths afterthe completion of the Merger in which IC T

PLAINTIFF 'S SECOND AMENDED CLASS ACTION COMPLAINT -$-

~-

Spectrum shareholders received restricted ICF Kaiser securities, Defendant David Watso n

commented to Mr . Smith that "if the losses exceed $20 million, I guess we're bankrupt . "

0) In mid-April 1998, Mr. Smith indicated to Plaintiff that he had becom e

familiar with many of the ICF Kaiser projects that were in progress at the time of the Merger an d

that, contrary to ICF Kaiser's commitment in the Merger Agreement, the true state of affairs at 1C F

Kaiser had not been accurately disclosed during the Merger discussions and in the related disclosur e

documents issued to ICT Spectrum shareholders .

15 . Prior to the Merger, Plaintiff was the Chief Financial Officer and a director of IC T

Spectrum. Allegations in this Second Amended Complaint with respect to Spectrum and the Merger

are based on the Merger documents and on information known to Plaintiff as an officer and directo r

of Spectrum .

16 . Allegations in this Second Amended Complaint with respect to the motivation of th e

Defendants to make fraudulent misrepresentations and omissions are based on Plaintiffs knowledge

of the business and financial affairs of Spectrum before the Merger . Additionally, such allegation s

are also based on knowledge of ICF Kaiser's business and financial condition at the time of th e

Merger and thereafter that Plaintiff acquired while he was employed by ICF Kaiser .

17 . Allegations with respect to public information about ICF Kaiser are made in relianc e

on the investigation by Plaintiff's counsel and on Plaintiff's personal review ofthe publicly availabl e

information .

18. Allegations consisting of legal conclusions are made in reliance on the advice o f

Plaintiffs legal counsel .


Y

CLASS ACTION ALLEGATIONS

19. Plaintiff brings this action as a class action pursuant to Federal Rules of Civi l

Procedure Rule 23 (b)(3) on behalf of a class consisting of all persons whose ICT Spectrum stoc k

(Class 1 and/or Class 2 shares) was exchanged for ICF Kaiser securities pursuant to the February 5 ,

1998 Agreement and Plan of Merger ("the Class" or "ICT Spectrum Shareholders" )

20. The Class is sufficiently numerous, in that there are approximately 48 members o f

the Class geographically dispersed across the country . Joinder of all Class members in a singl e

action is impracticab le .

21 . Common questions of law and fact exist as to all members of the Class and

predominate over any questions affecting individual members of the Class only . Questions of law

and fact common to the Class include :

(a) Whether Defendants engaged in acts or conduct in violation of the federalsecurities laws, as alleged herein ;

(b) Whether the March, 1998 Private Offering Memorandum made untruestatements of material fact and/or omitted to state material facts necessary inorder to make the statements made, in the light of the circumstances underwhich they were made, not misleading ;

(c) Whether Defendants had a duty to disclose certain information about ICF

Kaiser's operations in the March, 1998 Private Offering Memorandum ;

(d) Whether Defendants acted knowingly or recklessly in making materially falseand misleading statements to Plaintiff and the Class, or in failing to correctsuch statements upon learning that they were materially false and misleading ;

(e) Whether the false or misleading statements in the Private OfferingMemorandum constituted a breach of contract by ICF Kaiser and ICF KaiserAdvanced Technology ; and

Whether the members of the Class have sustained damages and, if so, theproper measure of such damages .

22 . Plaintiffs claims are typical of the claims of all Class members as Plaintiff and


.r

members of the Class have all sustained damages arising out of Defendants' wrongful conduct i n

violation of federal law and breach of contract, as complained of herein.

23. Plaintiff has no interests antagonistic to or in conflict with those of the Class, and h e

has retained counsel competent and experienced in class action and securities litigation . Plaintiff

and his counsel will fairly and adequately protect the interests of the members of the Class .

24. A class action is superior to other available methods for the fair and efficient

adjudication of this controversy and there will be no difficulty in the management of this action a s

a c lass action.

SUBSTANT IVE ALLEGATIONS

THE MERGER

25 . ICT Spectrum was an Idaho corporation with two wholly-owned subsidiaries, Micron

Construction, Inc ., also an Idaho corporation, and Micron Construction of New Mexico, Inc ., a New

Mexico corporation . ICT Spectrum was created for purposes of acquiring all of the issued °an d

outstanding stock of the subsidiaries under the terms of a Stock Purchase Agreement dated Augus t

28, 1997, and then engaging in the specialty business of construction management of fabrication

plants for semiconductor and microelectronics manufacturers . Prior to the Merger, ICT Spectrum

was the largest semiconductor contractor in the United States . Based on 1996 revenues of $289.9

million, Engineering News-Record magazine ranked ICT Spectrum as the No . 1 semiconducto r

contractor in the United States. The magazine also ranked the company as the No . 4 electroni c

assembly contractor and the No . 5 manufacturing plant contractor .

26 . At the time of the Merger, ICT Spectrum possessed large cash reserves, lucrativ e

construction contracts and specialty industry presence that ICF Kaiser sorely needed to maintain it s

business operations .


27. Prior to the Merger, the outstanding shares of ICT Spectrum fell into two categories .

One category, referred to in the Merger Agreement as "Class 1 Shares", included shares owned

outright by certain ICT Spectrum Shareholders and were not subject to any vesting requirements o r

risk of forfeiture. The balance of the ICT Spectrum Shares, referred to in the Merger Agreement a s

"Class 2 Shares", were subject to several categories of vesting requirements and risk of forfeiture .

On the date of the Merger, ICT Spectrum had 46,657 Class 1 Shares and 129,410 Class 2 Share s

outstanding . These 176,067 Shares were held by approximately 48 shareholders .

28 . On or about February 5, 1998, ICF Kaiser and ICF Kaiser Advanced Technology

entered into an Agreement and Plan of Merger ("the Merger Agreement") with ICT Spectrum an d

the holders of a majority of the outstanding Shares of stock of ICT Spectrum . Under the terms o f

the Merger, ICT Spectrum was to merge with ICF Kaiser Advanced Technology and continue it s

business under that name .

29. Under the terms of the Merger Agreement, each share of ICT Spectrum stock was t o

be exchanged for 8 .519 Shares of ICF Kaiser stock, which required the issuance of 1 .5 million ne w

unregistered shares of ICF Kaiser common stock . At that time, in February 1998, ICF Kaiser stoc k

was trading in the range of approximately $2 1/4 per share on the New York Stock Exchange, an

open and efficient market . The ICF Kaiser Shares into which Class 2 Shares of ICT Spectrum wer e

converted are also subject to the vesting requirements and a risk of forfeiture . To the extent that

Class 2 Shares might be forfeited as a result of vesting requirements, said shares are to be distribute d

pro rata among the owners of the balance of the ICT Spectrum Shares .

30 . The Merger Agreement guaranteed that if the fair market value of the exchanged ICF

Kaiser shares did not reach a market price of $5 .36 by March 1, 2001, ICF Kaiser would make u p

the shortfall either by paying additional cash or by issuing additional shares of common stock .


~..

Under the terms of the acquisition, total contingently issuable shares of ICF Kaiser common stoc k

could not exceed 1 .5 million. Such a provision guaranteeing that the stock to be received by the

seller will have a certain higher value at a specified future date is commonly referred to as a "fill-up "

provision .

31 . The Merger Agreement also provided that newly issued ICF Kaiser shares would b e

subject to a hold restriction and could not be transferred or sold until the earlier of : (a) March 1 ,

2001 ; or (b) the date that ICF Kaiser stock reached an average market value of $5 .36 per share . The

shares were also subject to SEC Rule 144, 17 C .F .R. § 230.144 .

32. The Merger Agreement also provided that :

The ICF Kaiser Private Placement Memorandum will not contain any

untrue statement of a material fact or omit to state a material fact

necessary in order to make the statements contained therein, in light

of the circumstances under which such statements are made, not

misleading .

Merger Agreement ¶ 4 .8 .

33. The Merger Agreement was signed by Watson, on behalf of ICF Kaiser and ICF

Kaiser Advanced Technology .

34. On February 18, 1998, the ICF Kaiser Board of Directors approved the acquisitio n

of ICT Spectrum .

35 . On March 3, 1998, ICF Kaiser issued a Private Offering Memorandum ("POM") in

connection with the Merger . The POM states that it was "being provided solely to shareholders o f

ICT Spectrum Constructors, Inc., in connection with the proposed merger ." The POM purported to

describe ICF Kaiser's business operations and the status of pending projects . The "Risk Factor "

section included the following categories :

(a) Lack of Results for Fourth Quarter and Year-end 1997 ; Possible Losses du e


T

(b)

(c)

(d)

(e)

(g)

(h )

(i)

(k)

(1)

(m)

(n)

36 .

to Uncertainties on a Fixed-Price Contract ; Possible Need for Amendment ofCredit Facility if Loss Reported in Fourth Quarter

Uncertainties Created by Significant Shareholder

Risks Associated with Contingent Merger Considerations

Pricing and Other Contract Risks ; Fixed Price Contracts

ICF Kaiser is Highly Leveraged

Limited Ability to Incur Additional Debt and Risk Associated with ICF Kaiser'sPledge of Assets

ICF Kaiser Dependence of Federal Government Contracts

Highly Competitive Private Sector Market for ICF Kaiser's Service s

Limitations on Change of Contro l

ICF Kaiser Dependence on Governmental Environmental Regulation Continuin g

Potential Environmental Liability

Ability to Attract and Retain Professional Personne l

Fluctuations in Quarterly Financial Result s

Market for ICF Kaiser Common Stock ; Restrictions on Transfer .

With respect to the first identified Risk Factor, the POM indicated that ICF Kaise r

expected cost overruns on "a certain $18 million fixed-price contract ." ICF Kaiser stated that i t

"expects to establish a project reserve in its fourth-quarter accounts for the uncertainties raised by

this contract ." Defendant represented that the reserve could negatively impact fourth-quarter

earnings by as much as $7 .5 million . Nevertheless, ICF Kaiser "expects that the net fourth quarter

results will be slightly less than those of the third quarter . "

37. With respect to the fourth Risk Factor, the POM stated that :

ICF Kaiser's subsidiaries operate under a number of different type s

PLAINTIFF'S SECOND AMENDED CLASS ACTION COMPLAINT - 14 -

,,„.

of contract structures with private and public sector clients. Most

such contacts are "cost plus" contracts under which ICF Kaiser's

costs are reimbursed with an incentive or award fee provided as an

inducement for effective project management . Under other cost plus

contracts, the rates for ICF Kaiser subsidiaries' direct and indirect

costs are negotiated and fixed before work commences . To the extent

that ICF Kaiser subsidiaries' actual overhead and generaladministrative costs exceed limits under government or other

contracts and cannot be fully recovered, ICF Kaiser subsidiaries may

experience low profit margins or losses on a portion of its cost plus

contacts .

ICF Kaiser subsidiaries have a number of "fixed price"

contracts under which ICF Kaiser subsidiaries are paid an amount for

all services to be provided as detailed in design and performance

specifications agreed to at a project's inception, before work

commences. ICF Kaiser subsidiaries party to such fixed price

contracts benefit to the extent they are able to complete a project at

a cost lower than estimated at the contract inception . However,

because fixed price contracts usually extend overlong periods of time

encompassing many financial reporting periods, profit margins on

such contracts may change significantly at each financial reporting

period during contract performance. Because of the nature of fixed

price work and the need for accurate cost forecasting, there is a risk

that ICF Kaiser will suffer losses i f the costs at completion exceed the

estimate at contract inception and if these costs prove to be

unrecoverable .

The contracts relating to some projects require not only

performance of services, but assurances that the completed projectwill operate in conformance with specifications . ICF Kaiser is from

time to time required to provide guarantees of the performance of its

subsidiaries on such projects and/or the performance of the project

itself.

POM at 5 .

38 . The POM does not specifically identify the "certain $18 million fixed-price contract, "

nor does the POM address the status of any other pending construction project .

39. In reliance on the POM, warranties in the Merger Agreement, and the market pric e

of ICF Kaiser stock, the ICT Spectrum Board of Directors recommended that ICT Spectru m


~ .

Shareholders approve the Merger in a Proxy Statement issued March 6, 1998, and signed by Pau l

F. Smith, President and Chairman of the Board of ICT Spectrum .

40 . On March 12, 1998, at a special Meeting of Stockholders held in Boise, Idaho, (an d

connected telephonically with Lehi, Utah and Tempe, Arizona), ICT Spectrum stockholder s

approved the Merger . On that date, the trading price of ICF Kaiser stock closed at $2 11/16 per

share .

41 . On March 17, 1998, the transaction closed and the acquisition and Merger wa s

effective as of January 1, 1998 . The 46,657 shares of Class 1 stock of ICT Spectrum stock and

129,410 Class 2 Shares of ICT Spectrum stock were converted into 397,493 shares and 1,102,50 7

Shares of ICF Kaiser common stock, respectively .

THE TRUE STATE OF AFFAIRSATICFKAISER AT THE TIME OF THE MERGER

42. At the time that the POM was issued and at the time of the Merger, Defendants kne w

the fol lowing adverse facts :

(a) that the actual cost overruns on mismanaged and underbid fixed price

and cost plus contracts was many times greater than the potential cost

overruns represented in the POM ;

(b) that the cost overruns were of a continuing nature and wouldsubstantially exceed even the overruns then admitted ; and

(c) that the actual (as opposed to potential) overruns had caused ICF

Kaiser to violate the terms, conditions and/or covenants set forth in

its credit facility; and

(d) that the Company had violated generally accepted accountingprinciples by prematurely recognizing revenue .

43. Despite their knowledge of the adverse facts set forth above, Defendants engaged i n

fraudulent misrepresentations and omissions of material facts designed to conceal the true state o f


T

affairs at ICF Kaiser in an effort to effort to effectuate the Merger that Plaintiff and ICT Spectru m

would not have otherwise approved . Knowing full well the true state of affairs at ICF Kaiser ,

Defendants' actions were calculated to obtain ICT Spectrum's substantial cash reserves, lucrative

contracts and specialty industry presence, in order to assist diverting Kaiser from the course o f

financial ruin charted by Defendants .

THE NITRIC ACID PROJECTS

44. In their attempt to defraud ICT Spectrum Shareholders into approving the Merger ,

Defendants misrepresented and concealed the status of the Nitric Acid projects . The cost overruns

and associated losses substantially exceed the $7 .5 million "reserve" represented in the POM .

Defendants knew or should have known that the $7 .5 million reserve was grossly minimized .

Defendants also expected further, substantial cost overruns on these projects .

45 . The POM failed to disclose that Defendants had experienced cost overruns and woul d

experience additional cost overruns as a result of four fixed-price nitric acid projects . The POM

concealed, rather than disclosed, the true nature of ICF Kaiser's operations, financial condition ,

viability as a profitable and ongoing concern, and its ability to sustain its business or businesses an d

operations, specifically, but not limited to, certain nitric acid fixed price contracts, including :

ICI-Nitric Acid Plant ("ICI Canada") ; El Dorado Nitric Acid Plant ("El Dorado"); Miss-Chem-55 0

TPD Nitric ("Mississippi Chemical"); and PCS Nitrogen Nitric Acid Plant ("PCS Nitrogen" )

(collectively, ICI Canada, El Dorado, Mississippi Chemical and PCS Nitrogen are referred to herei n

as the "Nitric Acid contracts") ; to falsely portray ICF Kaiser's financial and business viability an d

its ability to meet the terms of the "Fill-Up Provision" as set forth in the Merger Agreement ; and ,

thereby, to induce holders of Spectrum stock to approve the Merger .

46. The nitric acid plant contracts were under the control of David Watson, the head of


. ~.

the Engineering and Contractors Group ("the Group") at ICF Kaiser's Eastern U .S. Regional

Headquarters in Pittsburgh. In January, 1998, the Group concluded that the projects had been

severely mismanaged and that the projects were in such disarray and so substantially behin d

schedule that the appointment of a special team of engineers was necessary to get a grasp on issue s

pertaining to the project .

47. In February, 1998, prior to the Merger and during the course of active negotiations ,

the Group determined that ICF Kaiser's handling of the projects had to be refocused. The decision

was, therefore, made to disregard the budgets in an attempt to complete the work .

48. By March, 1998, both ICF Kaiser and the Individual Defendants knew that the Nitri c

Acid projects were so far behind schedule and involved engineering and design problems so sever e

that they could render ICF Kaiser insolvent and, therefore, unable to honor its commitment to pa y

the agreed upon share price to ICT Spectrum shareholders . For example, pursuant to the terms o f

the ICJ plant contract, the plant was to have been completed in January 1, 1998 . In mid-March, the

project was only sixty-six percent complete .

49. Defendants, being aware of the true state of affairs at ICF Kaiser, knew that in orde r

to obtain the substantial cash reserves, lucrative accounts, and industry prestige that ICT Spectru m

accorded, the true state of affairs at Kaiser had to be hidden from Plaintiff and Spectrum

Shareholders .

50 . The actual loss on the ICI contract alone was $19 million, rather than the $7 .5 million

admitted to in the POM .

51 . In fact, the total cost overruns on the four nitric acid plant contracts was late r

disclosed to be $66 million.

52. ICF Kaiser's 10-Q for the period ended September 30, 1998, revealed that the


T

Company had suffered "a reduction of $35 .0 million and $6 .1 million for the three and nine months ,

respectively, in revenue recognized on the Nitric Acid projects ." The loss was attributed to, in part ,

"additional losses" that had theretofore been unidentified .

53 . Therefore, at the time of the Merger, Defendants knew that : (a) the profitability o f

the Nitric Acid contracts had been seriously jeopardized ; (b) substantial cost overruns had alread y

occurred and would continue ; and (c) the completion of such projects was already behind schedul e

and could not be completed in a timely or economically efficient manner .

AMENDMENT OF THE CREDIT FACILIT Y

54. ICF Kaiser's POM also set forth that there existed "Possible Need for Amendmen t

of Credit Facility if Loss is Reported in Fourth Quarter ." (Emphasis added.) Concurrently, however ,

ICF Kaiser was negotiating amendments to its credit facility and, on March 12, 1998, reached an

agreement that "exclude[d]" shortfalls resulting from at least one of its fixed-price Nitric Aci d

contracts from the computations of the covenants set forth its credit facility . Indeed, Exhibit number

10, Material Contracts, of Kaiser's annual 10-K for the fiscal year ending December 31, 1997 ,

(" 1997 10-K"), includes at (a), "Amended and Restated Credit Agreement dated as of December 3 ,

1997, with CoreStates Bank N.A., as agent, (1) Amendment No . 1 dated as of March 12, 1998 . "

Thus, Defendants definitively knew, not later than March 12, 1998, that ICF Kaiser would report a

fourth-quarter loss on a Nitric Acid contract, necessitating an amendment to its credit facility t o

prevent an event of default .

55 . ICF Kaiser's 1997 10-K was filed on March 31, 199$, only two weeks after the

completion of the Merger . The 10-K was signed by Defendant Edwards and the members of the

Board of Directors of ICF Kaiser on March 27, 1998 . ICF Kaiser's independent accountants

prepared correspondence dated March 26, 1998, in which they set forth that they had audited the


T

consolidated financial statements and financial statement schedule of the Company.

BATH IRON WORKS

56. Prior to the effective date of the Merger, ICF Kaiser entered into a $187 millio n

maximum-price contract for the construction of a ship construction facility in Bath, Maine . By

March 15, 1998, the Company knew that it had underestimated the cost of the project b y

approximately $30 million . ICF Kaiser later recorded a charge in the amount of a $40 millio n

reserve "primarily intended to cover its estimate of the total contract cost overruns it expect[ed] t o

incur ."

57. The reserve identified in the POM was to have included possible overruns incurre d

on "several" unidentified fixed-price contacts . Despite the negotiation of an interim agreement, the

customer of the Bath, Maine proj ect terminated the agreement on August 14,199$, and subsequentl y

presented ICF Kaiser with an "initial draft of a claim" to recover certain damages resulting from th e

contract .

MATERIALITY

58. ICF Kaiser's financial situation and prospects were highly material to ICT Spectrum

Shareholders at the time of the Merger because, under the terms of the Merger Agreement, they wer e

to receive only ICF Kaiser stock as consideration and they could not liquidate those securities for

a long period of time . While the POM affirmatively described ICF Kaiser as a strong constructio n

company poised for solid future growth it was, in fact, in financial distress and on a path toward

bankruptcy. Defendants, aware of the true state of affairs at ICF Kaiser, engaged in a course o f

fraudulent conduct designed to extract the cash reserves, lucrative contracts and specialty industry

presence of ICT Spectrum . While the POM described the risks associated with "cost plus" an d

"fixed price" contracts in a most general manner, it did not disclose that, at the time of the Merger ,


those risks had been realized on a number of large contracts .

FOLLOWING THE MERGER

59. In the months following the Merger, however, as public investors gradually becam e

aware of the true state of ICF Kaiser's operations, the market price for ICF Kaiser stock began t o

slide downward . In mid-July, 1998, the ICF Kaiser stock began trading below $2 per share on th e

New York Stock Exchange and it has remained below $2 per share ever since .

60. The Company's 1998 Third Quarter 10-Q revealed that ICF Kaiser's service revenu e

had decreased by 33 .6 million and $74 .0 million for the three and nine months ended September 30 ,

1998 , respectively ." The losses were attributed to $17 .2 million and $57.2 million loss reserve s

"established primarily to cover estimated cost overruns" for the first time identified as being "on th e

Nitric Acid Projects and also for revised profit margin estimates at completion on the other larg e

fixed price contracts . "

61 . Indeed, one of the few bright spots in ICF Kaiser's performance was that it enjoyed

"an increase of $13 .4 million and $77 .9 million in revenue for the three and nine months ,

respectively, generated" by the acquisition of ICT Spectrum .

62. Kaiser is in continuing danger of being forced to seek relief in the bankruptcy court ,

has had two Chief Operating Officers in the past twelve months, and has had to raise cash by sellin g

its consulting business, and environmental and facilities management group . Public disclosure o f

ICF Kaiser's losses has driven its share price from $3 . 00, on March 4, 1998, to $ 11/32, on June 23 ,

1999.

63 . In an effort to raise needed cash, ICF Kaiser has commenced selling off parts of th e

Company. On March 1, 1999, ICF Kaiser announced that it planned to sell its consulting unit, ICF

Kaiser Consulting Group, for $75 million to unit management and the New York-based investment


~.. .

firm CM Equity Partners LP . On March 9,1999, it was announced that IT Group Inc ., agreed to bu y

ICF Kaiser's Environment and Facilities Management unit for $82 million .

64. These transactions demonstrate that the POM's disclosures regarding ICF Kaiser' s

financial condition and prospectus were false and misleading . It also raises considerable doubt as

to whether the restricted shares of ICF Kaiser stock, which Plaintiff and the Class accepted in

exchange for the shares in ICT Spectrum, could ever achieve guaranteed prices and, if not, whethe r

ICF Kaiser could satisfy its financial obligations to ICT Spectrum Shareholders under the terms of

the Merger Agreement . ICF Kaiser has been forced by the adverse events that were not disclose d

to Plaintiff and the Class, to become and altogether different company .

65 . The misrepresentation and omissions concerning the status of pending "fixed price" ,

"cost plus" and "maximum price" contracts were highly material to the ICT Spectrum Shareholders '

decisions as to whether to approve the Merger ; were material to a reasonable investor's decision as

to whether to approve the Merger; were made with the intent to induce the ICT Spectru m

Shareholders to approve the Merger ; were reasonably relied upon by the ICT Spectrum Shareholder s

in voting to approve the Merger ; and induced Plaintiff and ICT Spectrum Shareholders to vote t o

approve the Merger .

66. Plaintiff and the Class, in the exercise of reasonable diligence, did not know, and ha d

no reason to suspect, that the POM contained materially false and omissive statements until, at th e

very earliest, one month after the transaction closed in March, 1998, when certain ICT Spectrum

Shareholders assumed positions with ICF Kaiser and gained access to the true state of affairs withi n

the Company .

67. Defendants, individually and in concert, engaged and participated in a course o f

conduct to mislead ICT Spectrum shareholders in order to induce them to approve the Merger as


.r

specified herein . Defendants recklessly employed devices, schemes, and artifices to defraud an d

recklessly engaged in acts, practices, and a course of conduct as herein alleged in an effort to induc e

the consent of ICT Spectrum Shareholders . This included the formulation, making of and

participating in the making of untrue statements of material facts and the omission to state materia l

facts necessary in order to make the statements made, in the light of the circumstances under whic h

they were made, not misleading in the POM .

68. Defendants' acts and practices operated as a fraud and deceit upon Plaintiff and othe r

members of the Class by failing to disclose the facts necessary for Plaintiff and the Class to mak e

a reasoned judgment regarding whether to consent to the Merger .

69. The statements particularized above were false and misleading when made by th e

Defendants . By making these statements, the Defendants recklessly created a false and misleading

impression in order to induce ICT Spectrum shareholders to consent to the Merger . Defendants, wh o

were under a duty to make truthful and complete disclosures, instead misrepresented or conceale d

material facts, which caused ICT Spectrum shareholders to consent to the Merger, to their detriment .

DEFENDANTS' KNOWLEDGE OR RECKLESSDISREGARD OF THE FALSE AND MISLEADINGSTA TEMENTS IN THE POM AND MERGER A GREEMEN T

70. The false representations and material omissions were made with scienter in that :

(a) The Individual Defendants controlled the relevant operations of ICF Kaise r

and its subsidiaries at the time of the Merger and actively participated in th e

Company's affairs, including the management, performance and cost contro l

matters related to and impacting upon the Nitric Acid contracts ; an

underbidding of the Bath, Maine ship construction facility ; and the review o f

relevant financial data;

(b) The Individual Defendants knew that ICF Kaiser was suffering from financial

hardship because of an anticipated loss of as much as $0 .20 per share ; a

possible violation of its credit facility ; gross mismanagement of and cost

overruns on its Nitric Acid contracts ; and an underbidding of the Bath, Maine


T

project. In an effort to shore-up ICF Kaiser's sagging performance,

Defendants believed that the acquisition of a strong semiconductor and

microelectronics manufacturer such as ICT Spectrum was imperative, but the

Company did not have sufficient cash reserves to make such a purchase .

Accordingly, a stock-for-stock merger was the only means by which ICF

Kaiser could make such an acquisition ;

(c) In order to make a stock-for-stock merger viable, it was imperative that the

market price for ICF Kaiser stock on the New York Stock Exchange be

maintained until completion of the Merger ;

(d) The Merger Agreement, signed by Edwards, warranted that the POM woul d

"not contain any untrue statement of a material fact or omit to state a materia l

fact necessary in order to make the statements contained therein, in light o f

the circumstances under which such statements are made, not misleading . "

In addition to the federal securities laws, therefore, Edwards and ICF Kaise r

accepted an affirmative contractual duty to ICT Spectrum Shareholders t o

ensure the complete accuracy of the POM ;

(e) At the time the POM was issued, each Individual Defendant knew the statu s

of pending "cost plus" and "fixed price" contracts as a result of monthly

reports issued on the status of all projects . Defendants could have assured the

accuracy of the POM without great effort . In allowing the POM to be issue d

with false and misleading information, the Defendants acted knowingly or

with reckless indifference as to whether it was accurate or not ; and

(f) At the time of the Merger, each Individual Defendant was knew the status o f

pending "cost plus", "fixed price" and "maximum price" contracts and th e

warranty in the Merger Agreement imposed a continuing duty upon them t o

ensure that ICT Spectrum Shareholders had truthful information upon whic h

to base their vote on the Merger. In allowing the vote to take place withou t

correcting the false impression left by the POM, Defendants acted knowingl yor with reckless indifference as to whether the POM was accurate at the tim e

of the vote .

COUNT I

FOR VIOLATION OF SECTION 10(b) OF THE EXCHANGE ACT ANDRULE I Ob-5 AGAINST ICF KAISER AND THE INDIVIDUAL DEFENDANT S

71 . Plaintiff incorporates by reference the allegations of the prior and subsequent

paragraphs as though fully set forth herein .


~W..

72. This claim is asserted by Plaintiff and the Class against all Defendants and is based

upon Section 10(b) of the Exchange Act, 15 U .S .C. § 78j(b), and Rule 10b-5 promulgated

thereunder.

73 . The Defendants used the mails, other instrumentalities of interstate commerce and/o r

the facilities of a national securities exchange in connection with ICF Kaiser's acquisition of IC T

Spectrum securities .

74. In connection with the purchase of ICT Spectrum securities in the stock-for-stoc k

Merger, as alleged above, the Defendants :

(a) employed a device, scheme, or artifice to defraud ;

(b) made untrue statements of material fact and to omitted to state material facts

necessary in order to make the statements made, in the light of the

circumstances under which they were made, not misleading-, and/or

(c) engaged in acts, practices, and a course of business which operated as a fraudor deceit upon Plaintiff.

75 . The Defendants acted with knowledge of the false and misleading statements in th e

POM or with reckless indifference to the truth or falsity .

73 .[sic] Plaintiff and the Class justifiably relied upon the truth and completeness of th e

POM, which was warranted in the Merger Agreement, and on the integrity of the market for ICF

Kaiser stock .

76. Plaintiff and the Class suffered damages as a result of Defendants' misconduct in tha t

they approved the Merger and received restricted shares of ICF Kaiser as consideration for their ICT

Spectrum shares . But for Defendants' misconduct, Plaintiff and ICT Spectrum Shareholders woul d

not have approved the Merger .


,.. .

COUNT II

FOR VIOLATION OF SECTION 1 4 OF THE EXCHANGE ACTAGAINST ICF KAISER AND THE INDIVIDUAL DEFENDANT S

77. Plaintiff incorporates by reference the allegations of the prior and subsequen t

paragraphs as though fully set forth herein.

78. This claim is asserted by Plaintiff and the Class against all Defendants and is based

upon Section 14 of the Exchange Act, which provides in pertinent part as follows :

It shall be unlawful for any person to make any untrue statement of a material factor omit to state any material fact necessary in order to make the statements made, inthe light of the circumstances under which they are made, not misleading or toengage in any fraudulent, deceptive, or manipulative acts or practices, in connectionwith any tender offer or request or invitation for tenders, or any solicitation ofsecurity holders in opposition to or in favor of any such offer, request, or invitation .

15 U . S . C . § 7 8n(e) .

79. In connection with the solicitation of consents for the Merger from ICT Spectrum

Shareholders, Defendants made false and misleading statements, which induced ICT Spectru m

Shareholders to consent to the Merger, to their detriment.

COUNT III

FOR VIOLATION OF SECTION 20 OF THE EXCHANGEACT AGAINST THE INDIVIDUAL DEFENDANT S

80. Plaintiff incorporates by reference the allegations of the prior paragraphs as though

fully set forth herein .

81 . This claim is asserted against the Individual Defendants and is based upon Section

20(a) of the Exchange Act . The Individual Defendants acted as controlling persons of ICF Kaiser

within the meaning of Section 20 of the Exchange Act . By reason of their positions and control ove r

ICF Kaiser, these Defendants had the power and authority to cause or to prevent the wrongfu l


conduct complained of herein .

82 . The Individual Defendants supervised the compilation of information contained i n

the POM and the Merger Agreement, and ultimately, took the responsibility for the veracity of thos e

documents .

83. By reason of such wrongful conduct, Individual Defendants are liable to Plaintiff an d

the Class pursuant to Section 20 of the Exchange Act . As a direct and proximate result of such

wrongful conduct, Plaintiff and the other members of the Class suffered damages in connection with

the Merger.

COUNT IV

FOR BREACH OF CONTRACT AGAINSTICF KAISER AND ICF KAISER ADVANCED TECHNOLOGY

$4. Plaintiff incorporates by reference the allegations of the prior paragraphs as though

fully set forth herein .

85. On or about February 5, 1998, ICF Kaiser and ICF Kaiser Advanced entered into an

Agreement and Plan of Merger with ICT Spectrum and the holders of a majority of the outstandin g

shares of stock of ICT Spectrum .

86. The Merger Agreement also provided that : "[t]he ICF Kaiser Private Placement

Memorandum will not contain any untrue statement of a material fact or omit to state a material fact

necessary in order to make the statements contained therein, in light of the circumstances unde r

which such statements are made, not misleading . "

87. In breach of the Merger Agreement, as particularized above, the POM did contai n

untrue statements of material fact or omit to state a material fact necessary in order to make th e

statements contained therein, in light of the circumstances under which such statements were made ,


not misleading .

88 . Based on the false and omissive statements in the POM, the ACT Spectrum Board o f

Directors recommended that ICT Spectrum Shareholders approve the Merger in a Proxy Statemen t

issued on March 6, 1998 . Plaintiff and the Class, who were intended beneficiaries of the Merge r

Agreement, relied upon the recommendation of the Board of ICT Spectrum, and upon the false an d

omissive statements in the POM, in voting to approve the Merger . But for the false and omissiv e

statements in the POM, the ICT Spectrum Board would not have recommended the Merger and IC T

Spectrum Shareholders would not have approved the Merger .

89. Plaintiff, the Class and ICT Spectrum have all performed the obligations required o f

them under the Merger Agreement .

90 . As a result of the Merger, Plaintiff and the Class have been damaged .

PRAYER FOR RELIEF

WHEREFORE, P l aintiff requests judgment against Defendants, and each of them, jointl y

and severally, as follows :

A. Declaring this action to be a proper class action maintainable pursuant to Rule 23 o f

the Federal Rules of Civil Procedure ;

B . Awarding Plaintiff and the members of the Class compensatory damages as a resul t

of the wrongs complained of herein, together with pre judgment and post judgment interest ;

C. Awarding Plaintiff and the members of the Class the costs and expenses of thi s

litigation, including reasonable attorneys' and experts' fees, and other costs and disbursements ;

D . Awarding such other and further relief as may be just and proper under th e

circumstances .

PLAINTIFF'S SECOND AMENDED CLASS A CTION COMPLAINT -28-

DEMAND FOR JURY TRIAL

Plaintiff demands a trial by jury on all issues .

Respectfully submitted this 15th day of May, 2000 .

T-Charles F . McDevit tMcDEVITT & MILLER LL P

J . Dennis Fauche rP atrick E. LaffertyMichae l C. Del l 'AngeloMILLER F AUCHER and CAFFERTY LLP

Attorneys for PlaintiffJAMES D . PIPPIN, individually and onbeha lf of all others similarly situate d


CHAS . F. McDEVITTMcDEVITT & MILLER, LLP

537 W . Bannock, Su ite 215

P .O . Box 2564-8370 1Boise, Idaho 83702Telephone: (208) 343-7500Facsimile : (208) 336-6912

J . DENNIS FAUCHERPATRICK E. CAFFERTYMICHAEL C . DELL'ANGELOMILLER FAUCHER CAFFERTY

and WEXLER LLP30 South 15`h Street, Ste . 2500Philadelphia, PA 19102Telephone: (215) 864-2800Facsimile: (215) 864-281 0

Attorneys for Plaintiff James D. Pippin

U . S

.` ~ r

IN THE UNITED STATES DISTRICT COURT, DISTRICT OF IDAHO

JAMES D . PIPPIN, individually and onbehalf of all others similarly situated

Case No . CIV99-01145-BL W

Plaintiff ,

vs .

ICF KAISER INTERNATIONAL, INC . ;ICF KAISER ADVANCEDTECHNOLOGY, INC ., JAMESEDWARDS; DAVID WATSON ; andJEFFREY GOLDFARB ,

Defendants .

CERTIFICATE OF SERVICE - 1

CERTIFICATE OF SERVICE

'T

I HEREBY CERTIFY that I am employed by the law firm of McDevitt & Miller LLP,

over eighteen years of age, and not a party to the above-entitled action ; that on the 15'' day of

May, 2000, 1 served a true and correct copy of the PLAINTIFF'S SECOND AMENDED

CLASS ACTION COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIE S

LAWS AND BREACH OF CONTRACT to the following :

Mr. Thomas A . Banducci, EsqSTOEL RIVES101 S Capitol Blvd ., Ste . 1900Boise ID 83702-595 8

Mr. Richard H . Greener, EsqCOSHO HUMPHREY815 W WashingtonBoise ID 83702-5590

CERTIFICATE OF SERVICE - 2

X FIRST CLASS MAILHAND DELIVEREDFACSIMILE (208-389-9040)

X FIRST CLASS MAILHAND DELIVEREDFACSIMILE (208-338-3290)

elIV cke

1

James D. Pippin, et al. v. ICF Kaiser International, et...

Documents

Transcript of James D. Pippin, et al. v. ICF Kaiser International, et...