Transcend Services, Inc. Receives Favorable Decision On Lawsuit

Business Wire, Oct 5, 1998

ATLANTA--(BUSINESS WIRE)--Oct. 5, 1998--TRANSCEND SERVICES, INC. (NASDAQ:TRCR) announced today that the Supreme Court of the State of California has agreed to review the decision of the California Court of Appeals affirming the Superior Court of the State of California's dismissal of Transcend's $115 million lawsuit against 22 of the largest California worker's compensation insurance carriers.

In September, 1993 Transcend and its former subsidiaries initiated a lawsuit against the carriers seeking $115 million in compensatory damages plus punitive damages for among other claims, negligent and unlawful or unfair business practices which led to the discontinuation in April 1993 of the businesses of Transcend's former subsidiaries.

On June 25, 1998, the California Court of Appeals affirmed the Superior Court of the State of California's decision dismissing the case. Transcend filed a Petition for Review with the California Supreme Court in July 1998.

Commenting on the Supreme Court's action, Larry Gerdes, Chief Executive Officer stated, "We are very encouraged by this decision. We have spent a great deal of money and time since 1993 pursuing significant damages from the defendants. We are pleased with the Court's willingness to hear our case and believe the decision to dismiss our case was seriously flawed. We look forward to the opportunity to present our case to the Supreme Court of the State of California."

Transcend Services, Inc. provides solutions for patient information to hospitals and other associated healthcare providers. Transcend s range of solutions includes "Co-Sourcing" of medical records, transcription of physicians dictated medical notes, consulting relating to medical records management, compliance, and reimbursement coding, and state-of-the-art software tools for the management of healthcare information.

This press release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are competitive pressures, the mix of service revenue, changes in pricing policies, delays in sales revenue recognition, lower-than-expected demand for Transcend's solutions, business conditions in the integrated healthcare delivery network market, general economic conditions and the risk factors detailed from time to time in Transcend's periodic reports and registration statements filed with the Securities and Exchange Commission.