The lawsuits allege that, by the summer of 2003, Golden State was beginning to emerge from a long history of losses coupled with massive writedowns, and that the defendants realized that Golden State had not only turned around financially but had begun to exhibit strong growth. The defendants allegedly knew that disclosing the company’s profitability would send its shares higher, making their plans to acquire Golden State in a reverse split/going-private transaction less profitable, if not impossible. As part of the defendants’ reverse split scheme, they disseminated to shareholders a proxy statement dated December 23, 2003, detailing the terms of the proposed transaction.

The complaint alleges that the proxy included false statements about the value of Golden State’s business and its prospects-- those false statements were allegedly included to induce Golden State shareholders to approve the sale of Golden State to the O’Neill Acquisition Company, LLC. O’Neill Acquisition is a California limited liability company associated with defendant Jeffrey B. O’Neill, who allegedly planned to cash out all Golden State shareholders holding less than 5,900 shares for $3.25 per share.

On January 7, 2004, O’Neill’s reverse split scheme was thwarted when a third party made an offer to buy the company at a price higher than the O’Neill Group’s $3.25 offer. Instead of disclosing the third-party offer, the defendants allegedly concealed the offer from the company’s shareholders until the defendants could modify the plan to acquire the Golden State via the management-led buyout.

On January 20, 2004, allegedly after concealing the third-party offer for two weeks, the defendants falsely stated that the O’Neill Group transaction had been “indefinitely suspended ... in order to provide more time to fully evaluate current conditions and the potential implications for shareholder value.” The defendants also stated that they were terminating the sale to the O’Neill Group due to “recently improved business and market conditions.” Thereafter, the company executed an agreement to sell Golden State for a much higher price, and ultimately signed a definitive agreement to sell the company to The Wine Group for $8.25 per share.

If you purchased securities issued by Golden State Vintners during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 18, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.