Suit Against American Physicans Capital Tossed

Suit Against American Physicans Capital Tossed

NU Online News Service, Jan. 12, 2:17 p.m. EST?American Physicians Capital Inc. announced today that a federal judge has thrown out a shareholders class action lawsuit brought against APCapital and two of its officers alleging securities fraud violations.[@@]

The action against the East Lansing, Mich.-based firm was dismissed with prejudice by U.S. District Court Judge Gordon Quist in Grand Rapids, Mich.

"I am very pleased with the ruling handed down yesterday and glad we can put this distraction behind us so we can devote 100 percent of our efforts to running our business," said R. Kevin Clinton, APCapital's president and chief executive officer.

The suit was filed February 2004, in the U.S. District Court for the Western District of Michigan, against the company and officers William B. Cheeseman and Frank H. Freund.

Mr. Cheeseman, currently a director, stepped down as CEO on Dec. 31, 2003 after investors called for his resignation in the wake of the company's report of a $77.1 million third-quarter loss.

Mr. Freund is the company's chief financial officer, executive vice president and treasurer.

The suit alleged that the defendants violated federal securities laws by issuing false and misleading statements to the market which artificially inflated the company's stock price.

American Physicians Capital Inc. is a regional provider of medical professional liability insurance focused primarily in the Midwest markets through American Physicians Assurance Corporation and its other subsidiaries.

The company on Sept. 30, 2004 reported third-quarter net income of $4.5 million and $ 48.4 million in total premiums earned.