AlphaStar Wins “Film Finance” Appeal; Nasdaq May Delist Shares

April 23, 2003

Bermuda’s Alpha Star Insurance Group (ASIG) announced that the Appellate Division, First Department, of the New York State Supreme Court has unanimously affirmed an earlier jury verdict dismissing all of the claims asserted against ASIG, its London subsidiary Stirling Cooke Brown Reinsurance Brokers and one of its former employees.

In a separate announcement it reported that the it had “received a notification from the Nasdaq Listing Qualifications Department that the Company has failed to comply with the filing requirements for continued listing set forth in NASD Marketplace Rule 4310 (c)(14), and that its securities are, therefore, subject to delisting from The Nasdaq Stock Market, Inc.” The problem arose due to the delayed filing of the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as required for continued listing on the exchange.

The film financing case involved a lawsuit brought by AXA Reassurance S.A. and New Hampshire Insurance Company, asserting claims of fraud and negligent misrepresentation in the placement of reinsurance contracts entered into in connection with certain “reinsurance-backed gap film financing”. A jury decided the case in favor of ASIG in December of 2001, and the plaintiffs had appealed. The bulletin indicated that “The action was the first ‘film finance’ case to go to trial among the more than 50 such cases now pending around the world involving, according to some observers, more than $1.5 billion in potential coverage.”

James Lawless, IV, ASIG’s Senior VP and General Counsel, stated, “We are very gratified that the Court upheld the jury’s finding that there was no basis in fact for the claims asserted against AlphaStar and its co-defendants. While we were always confident that this was the right result, this was a complex and hard-fought piece of litigation, and we are obviously pleased that we were able to establish this result with finality.”

As to the problem with Nasdaq, ASIG said it had anticipated the receipt of the delisting notice, and affirmed that “the 2002 10-K has been substantially completed and is currently in its final stage of review by the Company’s auditors. The Company expects to be able to file the 2002 10-K with the next 10 days. The Company does not anticipate that the 2002 Form 10-K will involve any restatement of prior results.”

As of the opening of business on April 22, 2002, the Company’s trading symbol, “ASIG,” will be amended to include the fifth character “E” to denote the Company’s filing delinquency. It plans to request an appeal hearing before a Nasdaq Listing Qualification Panel “to review the Staff determination in accordance with the NASD Marketplace Rule 4820(a).” The Panel will set the time and place for the hearing, but the request will stay the scheduled delisting of the Company’s securities pending its decision. Without such a request the shares could have been de-listed as of Wednesday, April 28 without further notice.

ASIG said that although “There can be no assurance that the Panel will grant the Company’s request for a continued listing,” it believes that “if it files the 2002 10-K prior to the hearing, the Panel will grant the Company’s request for a continued listing.”

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