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MedQuist Announces Resolution of the DOJ Investigation and Dismissal of Shareholder Lawsuits
Date:12/3/2008

Quist's behalf, against Philips, CBaySystems Holdings, CBay Inc., five of MedQuist's former non-independent directors, Stephen H. Rusckowski, Clement Revetti, Jr., Greg Sebasky, Jr., Scott M. Weisenhoff and Edward H. Siegel. The original complaint also named MedQuist as a "Nominal Defendant," meaning that no monetary relief was being sought against the Company.

On July 9, 2008, Newcastle amended the complaint to add Arklow, a shareholder that is affiliated with another MedQuist director, as an additional plaintiff. In the amended complaint Plaintiffs alleged that defendants took steps to sell Philips' entire interest in MedQuist to CBaySystems Holdings and CBay Inc. (collectively, "CBay") and pursued four causes of action. First, plaintiffs asserted that Rusckowski, Revetti, Sebasky, Weisenhoff and Siegel (collectively, the Philips Directors), who were also senior officers of Philips, breached their fiduciary duties to MedQuist by taking steps to consummate the sale of Philips' entire interest in MedQuist to CBay (the "CBaySystems Holdings Purchase") which adversely affected MedQuist. Second, plaintiffs claimed that all of the defendants, individually and together, aided and abetted the Philips Directors' breach of their fiduciary duties. Based on the first two causes of action, plaintiffs sought injunctive relief (including an order enjoining the CBaySystems Holdings Purchase), declaratory relief and attorneys' fees and costs. Third, as an alternative form of relief, plaintiffs alleged that in the event that Philips sold its stake in MedQuist, plaintiffs demanded a declaration that a certain agreement related to the governance of the Company remain in full force and effect. Fourth, plaintiffs asserted that CBay breached the standstill provision contained in an April 2008 confidentiality agreement between MedQuist and CBay and demanded an injunction prevent CBay from continuing to violate the terms of that agreement.

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SOURCE MedQuist Inc.
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