Judge Dismisses Claims Against European Micro Holdings

Business Wire, April 16, 2001

Business Editors

MIAMI--(BUSINESS WIRE)--April 16, 2001

European Micro Holdings, Inc. (Nasdaq National Market: EMCC) announced today that the United States District Court for the Eastern District of New York has dismissed 31 of the 33 claims brought against EMCC, Big Blue Europe, B.V., John B. Gallagher and Harry D. Shields (Alnwicks, et al. v. European Micro Holdings, Inc. et al. No. 99.CV.7380) on grounds of "forum non conveniens."

The Court decided that it would be more appropriate that these claims be adjudicated in The Netherlands, under Dutch Law. The Judge had granted the Plaintiffs in the case (Jeffrey and Marie Alnwick and Big Blue Products) the option to proceed with the remaining two counts in United States District Court for the Eastern District of New York; the Plaintiffs elected to have these two counts dismissed, with the intention to appeal each of the 33 original claims.

John Gallagher and Harry Shields, Co-Presidents and Co-Chairman of EMCC, commented, "We are extremely pleased with the Court's decision in this matter, as we believe that these issues can be more easily, economically and appropriately addressed in Big Blue Europe's home country and under Dutch Law. Should these allegations proceed in The Netherlands, we expect a more favorable economic impact as many of our key witnesses reside in Holland and the Dutch legal system is far less expensive to navigate than its United States counterpart. Legal fees related to this Complaint are expected to decrease substantially going forward."

It should also be noted that EMCC, European Micro plc and Messer's Gallagher and Shields have filed a Complaint against the Plaintiffs and Big Blue Europe as a nominal defendant in Holland for damages incurred by, among others, Big Blue Europe as a result of Plaintiff's conduct. This Complaint was filed in March 2000.

The Company also announced that its insurance carrier has offered to reimburse the Company a majority of its legal expenses related to the dismissal of the case in United States District Court.

Phillips, Nizer, Benjamin, Krim & Ballon, LLP of New York City, Catlin, Saxon, Tuttle, Evans, Fink & Kolski, PA of Miami, FL and Houthoff Buruma of The Netherlands represent EMCC, European Micro plc and John B. Gallagher and Harry D. Shields.

European Micro Holdings, Inc. is an independent, focused distributor of microcomputer products. The Company monitors and capitalizes on worldwide market-price disparities to purchase a select group of in-demand products from other distributors in 28 countries in 13 currencies. Utilizing its multi-lingual sales staff, European Micro then quickly and efficiently sources these products to its customer base, which includes value-added resellers, corporate resellers, retailers, direct marketers and distributors throughout the world. The vast majority of the products sold by European Micro are manufactured by well-recognized companies such as IBM, Compaq, Hewlett-Packard and 3Com.

Statements contained in this news release regarding these legal proceedings are forward-looking statements, subject to uncertainties and risks, many of which are beyond the Company's control, including, but not limited to, the fees and costs expected to be incurred by the Company in defending this lawsuit in the United States and/or The Netherlands. These and other applicable risks are summarized in the Company's Annual Report on Form 10-K for the year ended June 30, 2000 and Form 10-Qs for the periods ended September 30, 2000 and December 31, 2000 as filed with the Securities and Exchange Commission. Forward-looking statements by their nature involve substantial risks and uncertainties. As a result, actual results may differ materially depending on many factors, including those described above. The Company cautions that historical results are not necessarily indicative of the Company's future performance.