Notice of Pendency of class action filed against
LAS VEGAS, NV--June 27, 1997--Notice of Pendency of class
action filed against Polyphase Corp. (AMEX: PLY).
You are hereby notified that on June 27, 1997, a class action
lawsuit was filed in the U.S. District Court for the District of
Nevada (Civ. Action No. CVS 97-0791-HDM (RJJ)) on behalf of all
purchasers of the common stock of Polyphase Corp.
("Polyphase") during the period of May 21, 1996 through
June 16, 1997, inclusive (the "Class Period").
The complaint names as defendants Polyphase as well as certain
of its officers and directors. The complaint asserts claims
against the defendants for violations of the federal securities
laws (Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5) as well as Nevada state common law for fraud
and deceit and negligent misrepresentation.
The complaint alleges that during the Class Period the
defendants grossly overstated Polyphase's financial results for
fiscal 1996. The complaint further alleges that defendants failed
to disclose that Polyphase was in breach of certain covenants
contained in various lending agreements valued at approximately
$31 million. Consequently, the debts were placed in default by
the company's lenders and became immediately due, requiring the
company to reclassify such debts as current liabilities and
prompting the company's independent auditors to question
Polyphase's ability to survive as a going concern. The complaint
further alleges that noncompliance of the aforementioned loan
agreements caused the suspension of the company's stock from
trading for over five months. In addition, the complaint alleges
that defendants failed to disclose that certain payments due to
Polyphase from PLY Stadium Partners Inc. ("PLY
Partners") which were included in fiscal 1996 income were
not collectable. PLY Partners is a private investment firm whose
members include two of the insider defendants, including Paul A.
Tanner, Polyphase's president and CEO. During the Class Period
certain of the defendants sold substantial amounts of Polyphase
common stock while the price of Polyphase common stock was
artificially inflated by the alleged misrepresentations.
Plaintiff seeks to recover damages on behalf of class members
and is represented by the law firms of Stull, Stull & Brody
and Weiss & Yourman which concentrate in litigating class
actions on behalf of investors and shareholders.
If you are a member of the class described above, you may, not
later than 60 days from the date of this notice, move the court
to serve as a lead plaintiff in this action, if you so choose. In
order to serve as a lead plaintiff, however, you must meet
certain legal requirements.
To assure that you will be included in a list of the class
members, or if you wish to discuss this action, or have any
questions concerning this notice, or your rights or interests
with respect to this matter, please contact Jules Brody at Stull,
Stull & Brody, 6 East 45th Street, New York, New York 10017,
by telephone at 1-800-337-4983, or by e-mail at SSBNY@aol.com, or
contact Joseph H. Weiss at Weiss & Yourman, The French
Building, 551 Fifth Avenue, Suite 1600, New York, New York 10176,
by telephone at 1-888- 593-4771 or e-mail at wynyc@aol.com
CONTACT: Stull, Stull & Brody Jules Brody, 1-800-337-4983
or Weiss & Yourman Joseph H. Weiss, 1-888-593-4771