case2-05-cv-02165-ssv-dek document224 filed 05/25/2007...

Case 2-05-cv-02165-SSV-DEK Document 224 Filed 05/25/2007 of 65

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

IN RE OCA, INC. SECURITIES AND * CIVIL ACTION NO. 05-2165DERIVATIVE LITIGATION

SECTION: R(3)

* HONORABLE SARAH S. VANCE

MAGISTRATE JUDGE DANIEL E.KNOWLES III

DERIVATIVE CASE ONLY

SECOND AMENDED AND RESTATED COMPLAINTOF FTI CONSULTING, INC. AS TRUSTEE

Philip K. Jones, Jr. (Bar #7503)James A. Brown (Bar #14101)John C. Anjier (Bar #20083)Joseph I. Giarrusso III (Bar #27476)Collette N. Ross (Bar #30700)Liskow & Lewis,701 Poydras Street, Suite 5000New Orleans, Louisiana 70139Tel: 504-581-7979Fax: 504-556-4108

Attorneys For FTI Consulting, Inc.,

as Trustee for the OCA Chapter 11

Plan Trust, Plaintiff

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TABLE OF CONTENTS

INTRODUCTION .................................................................................................. .............1

A. SUMMARY OF THE ACTION ......................................................................... .............2

B. JURISDICTION AND VENUE .......................................................................... .............6

C. PARTIES ....................................................................................................... .............7

D. DUTIES OF THE DIRECTOR DEFENDANTS AND OFFICER

DEFENDANTS ............................................................................................... ...........11

1. The Director Defendants and Officer Defendants OwedFiduciary Duties to OCA ................................................................ ...........11

2. The Board of Directors and the Audit Committee Did NotExercise Independent Judgment ..................................................... ...........13

II. SUBSTANTIVE ALLEGATIONS RELATING TO FAILURE TOIMPLEMENT ACCOUNTING CONTROLS AND RESULTINGIRREGULARITIES ................................................................................................ ...........14

A. OCA DID NOT HAVE EFFECTIVE ACCOUNTING CONTROLS AND

SYSTEMS ...................................................................................................... ...........14

B. FALSIFICATION OF ACCOUNTING ENTRIES ................................................... ...........24

1. Improper Charges to Intangible Asset Accounts ............................ ...........24

2. May 2005 Alterations to Platinum General Ledger System ........... ...........25

3. Alteration of Walrus/OrthoStats Data ............................................. ...........26

C. OTHER ACCOUNTING MISCALCULATIONS AND MISSTATEMENTS ................ ...........27

D. DEFENDANTS FAILED TO CORRECT DEFICIENT CONTROLS AND

ACCOUNTING MISSTATEMENTS AND ERRORS .............................................. ...........28

E. DEFENDANTS ABDICATED THEIR OVERSIGHT RESPONSIBILITY OF

THE COMPANY ............................................................................................. ........... 30

F. OCA COULD NOT FILE ITS 2004 10-K BECAUSE OF ACCOUNTING

IRREGULARITIES .......................................................................................... ...........33

G. PALMISANO, SR., PALMISANO, JR. AND VERRET PREPARED AND

FILED FALSE 10-Q' S IN 2004 ....................................................................... ...........37

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H. PALMISANO, SR. AND ASHTON RYAN FILED FALSE 8-K .............................. ...........37

III. SUBSTANTIVE ALLEGATIONS RELATING TO IMPROPERPAYMENTS AND TAX VIOLATIONS ............................................................... ...........39

A. PALMISANO, SR. AUTHORIZED AND RECEIVED IMPROPER PAYMENT

OF AIRPLANE EXPENSES FROM OCA ........................................................... ...........39

B. PALMISANO, SR. CAUSED OCA TO FAIL TO COMPLY WITH THE

INTERNAL REVENUE CODE IN ITS PAYMENTS TO HIM AS AN

EMPLOYEE ................................................................................................... ...........41

IV. SUBSTANTIVE ALLEGATIONS RELATING TO DAMAGESSUFFERED BY OCA............................................................................................. ...........43

A. DEFAULTS UNDER THE CREDIT AGREEMENT ............................................... ...........43

B. LITIGATION COSTS RELATED TO SECURITIES LITIGATION AND

SPECIAL COMMITTEE ................................................................................... ...........48

C. COSTS OF BANKRUPTCY CASES ................................................................... ...........50

V. COUNTS ................................................................................................................. ...........50

A. FIRST COUNT: BREACH OF FIDUCIARY DUTIES OF LOYALTY AND

GOOD FAITH BY THE DIRECTOR DEFENDANTS AND THE OFFICER

DEFENDANTS ............................................................................................... ...........50

B. SECOND COUNT: AIDING AND ABETTING BREACH OF FIDUCIARY

DUTIES ......................................................................................................... ........... 52

C. THIRD COUNT: GROSS NEGLIGENCE BY DEFENDANTS ............................... ...........52

D. FOURTH COUNT: BREACH OF FIDUCIARY DUTIES BY AUDIT

COMMITTEE DEFENDANTS ........................................................................... ...........53

E. FIFTH COUNT: BREACH OF FIDUCIARY DUTIES BY THE OFFICER

DEFENDANTS ............................................................................................... ...........54

F. SIXTH COUNT: DELIBERATE AND INTENTIONAL BREACH OF DUTY

BY PALMISANO, SR., PALMISANO, JR. AND VERRET .................................... ...........55

G. SEVENTH COUNT: THE BREACH OF DUTY BY PALMISANO, SR.,

PALMISANO, JR. AND VERRET WAS A WILLFUL NEGLECT OF DUTY ........... ...........56

H. EIGHTH COUNT: DISGORGEMENT ............................................................... ...........57

1. NINTH COUNT: CORPORATE JET RECOVERY FROM PALMISANO, SR........... ...........57

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J. TENTH COUNT: FAILURE TO PAY WITHHOLDING TAXES ....................................... 58

K. ELEVENTH COUNT: DIRECT ACTION AGAINST INSURER

DEFENDANT S .......................................................................................................... 58

VI. JURY DEMAND ...............................................................................................................59

VII. PRAYER FOR RELIEF ....................................................................................................59

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1. INTRODUCTION

1. This action is being brought by the OCA Chapter 11 Plan Trust through its

Trustee, FTI Consulting, Inc., as Trustee of the OCA Chapter 11 Plan Trust, against former

directors and officers of OCA, Inc. and their insurers to remedy the defendants ' breaches of

fiduciary duties and other violations of law.

2. Beginning on June 10 , 2005, various shareholders of OCA, Inc. ("OCA" or

"Company") filed separate class action derivative complaints alleging that the directors had

violated their fiduciary duties to the Company. By order of this Court, Eric Nagel was appointed

the lead derivative plaintiff on November 18, 2005. On February 21, 2006, Nagel filed an

amended shareholder derivative complaint, entitled "Lead Derivative Plaintiff's Amended

Verified Shareholder Derivative Complaint." (P-170).

3. On March 14, 2006, OCA and various subsidiaries filed voluntary petitions for

bankruptcy under Chapter 11 of the Bankruptcy Code in the bankruptcy cases entitled "In re

OCA, Inc., et at (the "Bankruptcy Case")." 1

4. On January 26, 2007, the Bankruptcy Court confirmed the Amended and

Supplemental Joint Chapter 11 Plan of Reorganization for OCA, Inc. and Filed Subsidiaries as of

January 3, 2007 (the "Confirmed Plan"). The Effective Date of the Confirmed Plan occurred on

January 26, 2007.2

5. Under the Confirmed Plan, all Chapter 11 Plan Trust Causes of Action were

transferred to the OCA Chapter 11 Plan Trust. The Chapter 11 Plan Trust Causes of Action were

defined in the Confirmed Plan as follows:

'Bankruptcy Case Nos. 06-10179, et seq., United States Bankruptcy Court, Eastern District of Louisiana.

2 Id. at P-2214.

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All Causes of Action (including all derivative Causes of Action) ofthe Debtors, the Debtors in Possession and/or any of theirrespective Estates against any former or current director or officerof one or more of the Debtors pursuant to the Bankruptcy Code orpursuant to any statute or legal or equitable theory that is in anymanner arising from, connected with or related to any act oromission of such director or officer that occurred prior to theEffective Date.

6. The OCA Chapter 11 Plan Trust Agreement dated as of January 26, 2007

established the OCA Chapter 11 Plan Trust on the Effective Date of the Confirmed Plan. This

Agreement appointed FTI Consulting, Inc. to be Trustee for the OCA Chapter 11 Plan Trust and

authorized FTI Consulting Inc. as Trustee to prosecute the OCA Chapter 11 Plan Causes of

Action.

7. On April 17, 2007, FTI Consulting , Inc. as Trustee for the OCA Chapter 11 Plan

Trust was substituted as plaintiff in the derivative litigation pursuant to the order of this Court.

(P-219).

8. This Second Amended and Restated Complaint adds the defendants' insurance

carriers , National Union Fire Insurance Company of Louisiana and XL Specialty Insurance, as

defendants, and amends and restates the original claims against certain of the defendants.

A. SUMMARY OF THE ACTION

9. OCA provides business services to affiliated orthodontic and pediatric dental

practices in the United States . OCA provides these affiliated practices with a range of

operations, purchasing, financial, marketing, administrative, and other business services, as well

as capital and proprietary information systems. The affiliated practices of OCA provide

treatment to patients throughout the United States and, prior to December 1, 2005, through its

foreign subsidiaries in Japan, Mexico, Spain, and Brazil.

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10. OCA rapidly expanded through the late 1990s and into the early 2000s. To fuel

this expansion, OCA needed its stock price to increase . OCA increased its stock price by

increasing its reported revenues by signing additional orthodontists into long-term business

services agreements . OCA paid a combination of cash and OCA stock as consideration under

the long-term business services agreements. The higher the stock price, the more money the

orthodontists made on the OCA stock they received and the greater incentive additional

practitioners had to affiliate with OCA. Moreover, OCA needed to maintain its stock price to

limit dissent from existing orthodontists who were affiliated with OCA.

11. OCA was a party to a $125,000,000 Credit Agreement among Orthodontic

Centers of America, Inc., certain Domestic Subsidiaries, certain Lenders, Bank of America, N.A.

as Administrative Agent, Bank One, NA as Syndication Agent, and U. S. Bank, National

Association as Documentation Agent, dated as of January 2, 2003 (the "Credit Agreement")

12. Pursuant to Section 7.1 of the Credit Agreement, OCA was obligated (i) to

provide the Administrative Agent certain audited financial statements in a timely fashion and (ii)

to make certain filings with the United States Securities and Exchange Commission ("SEC") in a

timely fashion. Failure to do so constituted an Event of Default under section 9.1(b) of the

Credit Agreement.

13. As a consequence of the mismanagement of Bart Palmisano, Sr. (Chairman and

CEO) ("Palmisano , Sr."), David Verret (CFO) ("Verret"), Bart Palmisano, Jr. (COO)

("Palmisano , Jr.") and the Board of Directors of OCA, the Company failed to establish and

maintain adequate internal controls and accounting systems. As a result, OCA was unable to

prepare and file its 2004 audited financial statements and made false reports in its regulatory

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filings with the SEC. Additionally, false entries were made in certain accounting records of

OCA to improve the reported financial results of the Company.

14. The actions of the defendants thus caused at least three accounting deficiencies.

First, these systems allowed Palmisano, Sr., Verret and/or Palmisano, Jr., either by commission

or omission, to manipulate and falsify entries in certain portions of OCA' s accounting systems.3

Second, as result of these falsifications and poor accounting systems and controls, OCA has not

been able to rely on its own financial statements . Third, the auditors for OCA could not rely on

the financial data, or in some cases the personnel of OCA, in auditing the financial statements of

OCA.

15. As a result of the acts of the defendants and those under their supervision, OCA

was not able to prepare and file audited financial statements for 2004 or subsequent years and

since March 15, 2005 has not complied with SEC filing requirements . Additionally, because of

the auditor's lack of confidence in management's accounting systems, financial statements, and

supporting documentation, the Company announced to the SEC and the marketplace that the

previously issued 2004 1OQ's could not be relied upon and were subject to material

misstatement.

16. This failure and continuing inability to prepare and file audited financial

statements and to file SEC reports in a timely fashion, among other numerous and serious effects

to OCA, caused OCA to breach its obligations under the Credit Agreement, thus placing OCA in

default under the Credit Agreement. OCA was required to seek numerous waivers and

extensions from Lenders (as defined in the Credit Agreement) of its obligations under the Credit

Not all accounting records of OCA were impaired by the actions of the Defendants. No evidenceto date has been found that Defendants altered amounts of advances made to active affiliatepractices.

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Agreement . These defaults caused OCA to pay substantial amounts in increased interest and in

the fees and costs associated with the concomitant amendments to the Credit Agreement.

Additionally, OCA could not draw upon its credit line under the Credit Agreement, severely

limiting its ability to finance its operations, which ultimately caused OCA to file a voluntary

petition under Chapter 11 of the Bankruptcy Code and to incur costs that otherwise would not

have been incurred but for the actions of the defendants.

17. The failure of OCA to comply with its SEC filing requirements and the disclosure

of accounting irregularities also caused the decrease in the price of the stock of OCA and its

ultimate delisting from the New York Stock Exchange on November 8, 2005 . As a result, many

of the affiliated practices of OCA sought to terminate their contracts with OCA, further

damaging the business of OCA by negatively affecting their financial performance and causing

OCA to spend additional sums for legal fees to defend the ensuing litigation and pursue the

defaulting affiliated practices.

18. The defendants' misconduct has, among other things, caused severe, irreparable

injury and damage to OCA, including (1) the insolvency and bankruptcy of OCA (and the

substantial legal and expert fees incurred); (2) expensive internal and SEC investigations of

OCA; (3) the delisting of OCA stock and the deregistration of OCA; (4) expensive and time-

consuming litigation including millions of dollars in potential liability for violations of state and

federal law; and (5 ) the destruction of OCA's relationship with many of its affiliated dentists and

orthodontists.

19. The defendants, the Company's highest ranking officers and/or members of its

Board of Directors, breached their fiduciary duties of due care, loyalty , and good faith by (1)

actively participating in and/or permitting the accounting improprieties that led to reporting of

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Case 2:05-cv-02165-SSV-D Document 224 Filed 05/25/2007 of 65

false or misleading financial information to the public; (2) by failing to design and implement an

effective system of internal financial reporting and disclosure controls sufficient to reasonably

assure the detection and prevention of same and that the Company's financial statements were

prepared in conformity with generally accepted accounting principles (`GA-P") and; (3) failing

to monitor OCA's internal controls with regard to its accounting, financial reporting, and

information technology systems. As described in greater detail below, defendants were aware

of numerous "red flags," all of which they knew of and consciously ignored. Defendants

failed to undertake actions, which in good faith would have improved OCA's collection,

processing, and reporting of its financial results and prevented the losses complained of

herein. Defendants' failure to monitor proximately caused the losses complained of herein.

B. JURISDICTION AND VENUE

20. This Court has jurisdiction over this action pursuant to 28 U.S.C. §1332(a)(2) in

that Plaintiff and defendants are citizens of different states and the matter in controversy exceeds

$75,000, exclusive of interest and costs . This Court also has jurisdiction over this action

pursuant to 28 U.S.C. §1334 and supplemental jurisdiction pursuant to 28 U.S.C. §1367(a).

21. Venue is proper in this Court because a substantial portion of the transactions and

wrongs complained of herein, including the defendants' primary participation in the wrongful

acts detailed herein, occurred in this District. One or more of the defendants resides in this

District, and defendants have received substantial compensation in this District by engaging in

numerous activities and conducting business here, which had an effect in this District.

Additionally, the bankruptcy cases of OCA, Inc. and it subsidiaries are pending in this district.

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C. PARTIES

22. Plaintiff, FTI Consulting, Inc. is Trustee for the OCA Chapter 11 Plan Trust that

was established on January 26, 2007 pursuant to the OCA Chapter 11 Plant Trust Agreement and

Confirmed Plan. FTI Consulting, Inc. is domiciled in Maryland. The beneficiary of the OCA

Chapter 11 Plan Trust is OCA, Inc.

23. Defendant Bartholomew F. Palmisano, Sr. served as Chairman and Chief

Executive Officer of the Company beginning July 2000 and as President beginning October

1999. Palmisano, Sr. resigned those positions in May 2006. Previously, he served as Co-Chief

Executive Officer from September 1998. He served as a Director of the Company from its

inception until 2006. Palmisano, Sr. served as Chief Financial Officer, Senior Vice President,

Secretary, and Treasurer of the Company from its inception until September 1998. He also

served on the Board of Directors from 1989 to 2006. At all relevant times Palmisano, Sr. owned

or controlled over 3, 800,000 shares of OCA stock, approximately 7.6% of all outstanding

common shares of the Company. Palmisano, Sr. is a lawyer and certified public accountant and

is a citizen of the State of Louisiana.

24. Defendant Dennis Buchman ("Buchman") was at times relevant to the allegations

asserted herein a Director of OCA. Defendant Buchman served as OCA's Executive Vice

President from March 2002 and a Director from 2001 to April 2007. He served as Doctor

Liaison from March 2000 to September 2001 and Senior Vice President from September 2001 to

March 2002. He was one of the founding doctors at the time of OCA's initial public offering in

December 1994. Buchman is a citizen of the State of Florida.

25. Defendant Dr. Hector M. Bush ("Bush") was a Director and an affiliated

practitioner of OCA. He served as a Director from 2001 until his resignation on September 8,

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2005. Defendant Bush has been affiliated with OCA since 1994 . Bush is a citizen of the State of

Georgia.

26. Defendant Dennis Summers ("Summers") was a Director of OCA. He served as a

Director of the Company from 2001 until his resignation on September 8, 2005. He is the former

Chairman of the Board of OrthAlliance, Inc., where he also served as its interim President and

Chief Executive Officer until its merger with OCA in November 2001. During the relevant

period, Defendant Summers was a member of the Compensation Committee. McGuire Woods

LLP, a law firm in which Summers is a partner, provided legal services to the Company.

Summers is a citizen of the State of Georgia.

27. Defendant Linda C. Girard ("Girard") was at all times relevant to the allegations

herein a Director of OCA. She served as a Director from April 2004 through 2006. Defendant

Girard was during the relevant period a member of the Compensation, Nominating, and

Corporate Governance Committees, and the OCA International Special Committee. Girard is a

close friend of Maria Palmisano, the wife of Palmisano, Sr. Girard is a citizen of the State of

California.

28. Defendant Ashton J. Ryan, Jr. ("Ryan") was at all times relevant to the allegations

herein a Director of OCA. He served as a Director of the Company from 1996 through 2006.

Defendant Ryan during the relevant period was Chairman of the Audit Committee, Chairman of

the OCA International Special Committee , and Chairman of the Special Committee appointed to

investigate Palmisano, Jr. Ryan is a former Arthur Anderson audit partner and a certified public

accountant. Ryan is a citizen of the State of Louisiana.

29. Defendant Kevin M. Dolan ("Dolan") was at all times relevant to the allegations

herein a Director of OCA. He served as a Director from 2004 through 2006 . Defendant Dolan

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was a member of the Audit Committee and a member of the Special Committee appointed to

investigate Palmisano, Jr. Dolan is a certified public accountant and a citizen of the State of

Illinois.

30. Defendant David W. Vignes ("Vignes") was at all times relevant to the

allegations herein a Director of OCA. He served as a Director of the Company from 2001

through 2006. Defendant Vignes was during the relevant period a member of the Audit

Committee, Nominating, and Corporate Governance Committees (Chair) and the OCA

International Special Committee. Vignes is a certified public accountant and Palmisano, Sr.'s

former accounting firm partner and Palmisano, Sr.'s personal accountant. Vignes is a citizen of

the State of Louisiana.

31. Defendant Edward J. Walters, Jr. ("Walters") was at all times relevant to the

allegations herein a Director of OCA . He served as a Director of the Company from 1994

through 2006. Defendant Walters was during the relevant period a member of the Compensation

Committee (Chair), the Nominating Committee, and the Corporate Governance Committees.

Walters is an attorney and a close personal friend of Palmisano Sr. and his family. Walters is a

citizen of the State of Louisiana.

32. Defendant Bartholomew F. Palmisano, Jr. ("Palmisano, Jr.") served as the

Company's Chief Operating Officer from 2001 to 2005. He also served as Chief Financial

Officer from 1998 to 2001 and Chief Information Officer from 1994 to 1998. Palmisano, Jr. is

the son of Palmisano, Sr. Palmisano, Jr. is a citizen of the State of Louisiana.

33. Defendant David S . Verret ("Verret") served as OCA' s Senior Vice President of

Finance from January 9, 2004 until his resignation in March 2005, and its Chief Financial

Officer from March 30, 2004 until his resignation in March 2005. He held other positions at the

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Company from 1995 in operational accounting, financial reporting, and external financial

reporting. Verret is one of Palmisano, Jr.'s best friends. Verret is a certified public accountant

and citizen of the State of Louisiana.

34. Defendant National Union Fire Insurance Company of Louisiana ("National

Union") is a Louisiana insurance company. National Union is made a direct action defendant

pursuant to Louisiana's "Direct Action" statute, La. Rev. Stat. § 22:655.

35. Defendant XL Specialty Insurance Company ("XL Specialty Insurance") is a

foreign insurer with its principal place of business in Stamford, Connecticut. XL Specialty

Insurance is made a direct action defendant pursuant to Louisiana's "Direct Action" statute, La.

Rev. Stat . § 22:655.

36. During all relevant times, OCA's Board of Directors consisted of ten (10)

members - Defendants Palmisano, Sr., Buchman, Bush, Dolan, Vignes, Ryan, Girard, Summers

and Walters (the "Director Defendants") and Dr. Jack P. Devereux, Jr.

37. During all relevant times, Ryan, Dolan, and Vignes served as members of the

Audit Committee (the "Audit Committee Defendants")

38. Defendants Palmisano, Sr., Palmisano, Jr., Verret, and Buchman (the "Officer

Defendants ") served as officers of OCA.

39. At all relevant times National Union and XL Specialty Insurance (the "Insurer

Defendants") provided insurance coverage for the Director Defendants, Audit Committee

Defendants and Officer Defendants.

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D. DUTIES OF THE DIRECTOR DEFENDANTS AND OFFICER DEFENDANTS

1. The Director Defendants and OfficerDefendants Owed Fiduciary Duties to OCA

40. The Director Defendants and Officer Defendants owed the Company and its

public shareholders the fiduciary duties of due care, diligence, loyalty, and good faith in the

management and administration of the affairs of the Company, as well as in the use and

preservation of its property and assets.

41. The Director Defendants received benefits, stock options, and other emoluments

by virtue of their membership on the Board of Directors and their control of OCA . Specifically,

in 2003, each Director Defendant was paid $25,000.00. Additionally, for Audit Committee

meetings held in 2003, each member of the Audit Committee was paid $20,000.00. Thus, in

2003, Defendants Dolan, Ryan, and Vignes each received $45,000.00 for service on the OCA

Board of Directors. In addition, each non-employee Director received a grant of options to

purchase 3,717 shares of OCA immediately following each annual meeting of the stockholders.

The Director Defendants have thus benefited from the wrongdoing herein alleged and have

engaged in and/or permitted such conduct in order to preserve their positions of control and the

perquisites thereof.

42. The Director Defendants and the Officer Defendants owed duties to OCA that

included duties to:

• in good faith, manage, conduct, supervise and direct the business and affairs of OCAcarefully and prudently and in accordance with the laws of the State of Delaware, thelaws of the United States, and the rules and regulations and the charter and by-laws ofOCA;

• neither violate nor knowingly permit any officer, director or employee of OCA toviolate applicable federal and state laws, rules and regulations or any rule orregulation of OCA;

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• remain informed as to the status of OCA' s operations, and upon receipt of notice orinformation of imprudent or unsound practices , to make a reasonable inquiry inconnection therewith , and to take steps to correct such conditions or practices andmake such disclosures as are necessary to comply with the federal securities laws;

• supervise the preparation , filing and/or dissemination of any SEC filings, pressreleases, audits , reports or other information required by law, to examine and evaluateany reports or examinations , audits , or other financial information concerning thefinancial condition of OCA and to cause OCA to obey and comply with and notviolate the federal or state securities laws;

• ensure that OCA operated in a diligent, honest and prudent manner in compliancewith all applicable federal and state laws, rules and regulations;

• maintain and implement an adequate system of controls and information systems; and

• implement financial and accounting controls sufficient to reasonably ensure that theCompany's financial statements were accurate.

43. Moreover, OCA's Audit Committee Charter provided that the primary function of

the Audit Committee was to act on behalf of the Board of Directors in fulfilling the oversight

responsibilities of the Board of Directors with respect to, inter alia:

• Assisting the Board of Directors in fulfilling its responsibilities with respect to theoversight of (i) the integrity of OCA's financial statements , (ii) OCA' s compliancewith legal and regulatory requirements , (iii) the independent auditor ' s qualificationsand independence , and (iv) the performance of OCA' s internal audit function andindependent auditors;

• Selecting, engaging, overseeing, evaluating and determining the compensation ofOCA's independent auditors;

• Preparing the Audit Committee report required to be included in OCA's annual proxystatement;

• Carrying out the other duties and responsibilities enumerated in Article IV of thisCharter; and

• Ensuring that OCA maintains an internal audit function to provide management andthe Audit Committee with ongoing assessments of OCA's risk management processesand system of internal control.

44. Additionally, the Audit Committee Charter prescribes the Audit Committees

responsibilities and duties to include the review of:

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(A) major issues regarding accounting principles and financial statements presentations,including any significant changes in OCA's selection or application of accountingprinciples, and major issues as to the adequacy of OCA's internal controls and anyspecial audit steps adopted in light of material control deficiencies;

(B) analyses prepared by management and/or the independent auditor setting forthsignificant financial reporting issues and judgment made in connection with thepreparation of the financial statements, including analyses of the effects of alternativeGAAP methods on the financial statements;

(C) the effect of regulatory and accounting initiatives, as well as off-balance sheetstructures, if any, on the financial statements of OCA; and

(D) the type and presentation of information to be included in earnings press releases(paying particular attention to any use of "pro forma" or "adjusted" non-GAAPinformation), as well as review any financial information and earnings guidance providedto analysts and rating agencies.

45. As members of the Audit Committee, Ryan, Dolan & Vignes had a fiduciary duty

to monitor the financial reporting process of OCA; to oversee the internal control system; to

oversee the internal audit and independent public accounting functions and to report their

findings to the Board of Directors.

2. The Board of Directors and the Audit CommitteeDid Not Exercise Independent Judgment

46. The Board of Directors and the Audit Committee rubberstamped the requests of

Palmisano, Sr. and did not exercise independent judgment . Although the Director Defendants

were inundated with correspondence and reports identifying management, accounting, and

control weaknesses and failures, the Director Defendants did not act to correct these deficiencies.

47. This lack of independent judgment and lack of action is exemplified by the fact

that even after Palmisano, Jr. was suspended on June 2, 2005 for manipulating certain accounting

and financial reporting systems of OCA, Palmisano, Sr. continued to use Palmisano, Jr. to

generate financial projections and to process and present accounting data . After his suspension,

Palmisano, Jr. continued to access OCA accounting systems and prepared and presented

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projections to OCA' s lenders and consultants . Palmisano, Jr. also participated in meetings

between OCA management, Ernst & Young, and the OCA Special Committee, including

directors Vignes and Ryan.

48. Following Hurricane Katrina, Palmisano, Sr., with the acquiescence and approval

of the Director Defendants, rehired Palmisano, Jr. to participate in the preparation and generation

of financial statements of OCA. He also set up the temporary office of OCA in Florida and

participated in management meetings and conference calls. Under this arrangement, Palmisano,

Jr. continued to have unfettered access to the computer and accounting systems of OCA.

49. As directors of the Company, the Director Defendants received regular and

detailed financial reports and were, or should have been, kept abreast and made familiar with the

current financial conditions of the Company. In addition, the Audit Committee Defendants

received regular reports from the independent auditors for OCA and the internal accounting

personnel of OCA detailing the accounting and control deficiencies of the Company.

50. Despite their knowledge of the adverse information concerning the Company as

alleged herein , Palmisano, Sr., Palmisano , Jr. and Verret allowed the Company to disseminate

false and misleading information to the investing public through OCA's public SEC filings.

II. SUBSTANTIVE ALLEGATIONS RELATING TOFAILURE TO IMPLEMENT ACCOUNTINGCONTROLS AND RESULTING IRREGULARITIES

A. OCA DID NOT HAVE EFFECTIVE

ACCOUNTING CONTROLS AND SYSTEMS

51. In December 1993, Palmisano, Sr. appointed his son, Palmisano, Jr., as Chief

Information Officer (`CIO") of OCA. Palmisano, Jr. was 23 years old at the time. He had one

year of experience at OCA. His only other experience was a prior partial year of employment at

Arthur Andersen LLP.

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52. In September 1998, the Board of Directors appointed Palmisano, Jr., age 28, to

serve as Chief Financial Officer ("CFO") and Secretary of OCA. Palmisano, Jr. was not a

certified public accountant and had less than one year of experience working for a public

accounting firm.

53. In October 2001, Palmisano, Jr. was appointed as Chief Operating Officer

("COO"). Nevertheless, Palmisano , Jr., as described below, kept many of his CFO duties as

COO. As COO and as previous CFO, Palmisano , Jr. developed and supervised the development

and implementation of most of the accounting and financial reporting processes and procedures

used at the Company.

54. In October 2001, in Palmisano, Jr.'s place, the Board of Directors appointed John

Glover as CFO. Glover was formerly the Vice President of Investor Relations for OCA . Glover

was also neither an accountant nor a CPA. He had no previous experience as a CFO.

55. In October 2002, one year later, the Board of Directors replaced Glover and

appointed Thomas Sandeman as CFO.

56. In January 2004, although Sandeman had substantial prior experience as a CFO,

the Board of Directors forced Sandeman out, appointing Verret as Senior Vice President for

Finance. Sandeman formally resigned and Verret was appointed CFO in March 2004.

57. Ernst & Young ("E&Y"), a public accounting firm, was the auditor for the

Company in 2001.

58. On April 12, 2001, E&Y reported to the Audit Committee that:

Significant controls embedded in the Company's non-routine dataand estimation processes, including those controls which are partof the Company's financial statement close process, are performedor exercised by the Chief Financial Officer [Palmisano, Jr.]. Theseprocesses affect the determination of significant estimates andjudgments included in the Company's financial results. In some

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cases, the Chief Financial Officer is responsible for the calculationof significant items and the final review of such calculations.Effective internal controls require objective and independentreview of financial data to minimize the possibility that errors ofaudit significance would not be detected. We recommend that theCompany identify additional resources to supplement the work ofthe Chief Financial Officer in order to provide for greatersegregation of duties. Such resources may include additionaltechnical support for accounting and reporting matters andrecordkeeping support for the calculation of significant estimatesand judgments.

In addition, E&Y reported to the Audit Committee that:

We noted that certain reconciliation processes are not performedon a routine basis including the reconciliation of certain cashledger accounts to bank records, investment accounts to third partyrecords, intercompany accounts between legal entities and theJapan general ledger to subsidiary ledgers.

59. Following E&Y's report, the Director Defendants (as noted above) permitted

OCA to hire John Glover (OCA's director of investor relations) as CFO, replacing Palmisano,

Jr., and appoint Palmisano, Jr. as COO.

60. Although Palmisano, Jr. no longer held the title "CFO," he maintained unfettered

access to OCA's accounting system (called "Platinum,") and to its systems for recognizing

revenue from its doctors (called "Walrus" and "OrthoStats"). Moreover, because the controls

and accounting systems of OCA were poorly documented or documentation was nonexistent,

subsequent CFO's had to rely on Palmisano, Jr. with regard to the gathering , processing and

reporting of financial results and particularly as to the recognition of revenue. Because of the

lack of systems, controls and personnel, Palmisano, Jr. regularly participated in the evaluation

and entry of accounting and financial data into the computer systems of OCA. The Audit

Committee Defendants knew and the Director Defendants knew or should have known that (1)

OCA's accounting systems and controls were deficient; (2) the gathering, processing and

reporting of financial results by OCA was substantially dependent on the efforts of Palmisano,

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Jr.; and (3) that Palmisano, Jr. maintained unfettered access to OCA's accounting and control

software.

61. The Director Defendants received E&Y's April 12, 2001 letter and knew that

E&Y had advised implementing material and substantial changes to its financial controls.

Defendants Palmisano, Sr., Verret, Ryan, and Vignes as certified public accountants, knew or

should have known that the April 12, 2001 letter operated as a "red flag" of the accounting and

control deficiencies that permeated OCA. The Director Defendants ' failure to implement the

procedures set forth by E&Y, among other failures to monitor, led directly to the losses

complained of herein.

62. On March 18, 2002, E&Y submitted a report entitled "Results of Audit - Report

to Management." In the report, E&Y warned that OCA needed to "make significant investments

in its finance and accounting infrastructures with particular emphasis on communications

between finance and operations personnel, documentation of accounting policies and procedures,

formalization of routine, non-routine and estimation processes, use of subsidiary ledgers to

control information, and additional automation of the Company's doctor accounting and accrual

basis finance statement preparation." Included in the report were issues to be addressed by OCA

and recommendations for improvement by E&Y. For example, E&Y observed that:

• Management provided E&Y with a list of patients, which had thousands ofinactive patients , to perform analytical review procedures and confirm accountbalances.

• OCA did not make adjustments to the fixed asset records for disposals and forfully depreciated assets.

• OCA's detailed fixed asset system did not agree, by category , to the amountsrecord in the general ledger.

• OCA's financial statement close procedures were not documented and did notappear to be consistently applied.

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• OCA's trial balance was designed so that certain amounts related to the foreignsubsidiaries were recorded in the Company's general ledger for OCA and otheramounts were recorded in separate foreign Company ledgers; this structure didnot allow for the Company to appropriately monitor its investments in its foreignoperations.

• OCA had difficulties in supporting the amount recorded for amounts due toaffiliated practices for Japan.

• OCA had deficiencies with respect to access control, particularly with OCA'sWalrus computer software.

63. In 2003, E&Y continued to warn the Officer Defendants and members of the

Audit Committee that there were deficiencies in OCA's recognition of revenue. E&Y reported

in part that there were particular risks with regard to: understated or overstated allowances,

overstatement of receivable balances due to a significant number of non-Walrus receivables, and

overstatement of receivables due to error and unbilled receivable calculations.

64. Following the audit of OCA's fiscal 2003 financial statements, in April 2004,

OCA received from E&Y a "material weakness letter" and a "management letter" both dated

March 15, 2004.

65. The material weakness letter reported that E&Y believed material weaknesses

existed in the internal controls over OCA's financial statement close process. These material

deficiencies were "in the design or operation of internal controls that, in our judgment, could

adversely affect the organization's ability to record, process, summarize, and report financial

data consistent with the assertions of management in the consolidated financial statements."

66. E&Y further reported in the material weakness letter that there were " significant

deficiencies in the design or operation of internal control" in substantially all of the following

processes and activities:

• Calculation of fee revenue and receivables;

• Evaluation of the collectibility of receivables;

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• Evaluation of the recoverability of certain long-lived assets, evaluation of changes instock compensation plans and new compensation programs;

• Review of changes in balance sheet and income statement accounts;

• Calculation and estimate of accruals related to loss contingencies, stockcompensation and other liabilities; and

• Formal review and approval processes for periodic reports.

67. E&Y reported a lack of segregation of duties, including Palmisano, Jr.'s

continued participation and control over the revenue recognition process even though he was no

longer CFO. In particular, E&Y reported lack of segregation of duties in:

• Determining service fees revenue and service fees receivable and other processes;

• A lack of review and approval of calculations , judgments and estimates requiredto determine certain account balances included in the Company' s financialstatements;

• Incomplete analyses in explaining variances or other unusual relationships betweensignificant financial statement accounts;

• Inadequate staffing in the accounting department and poor communicationsbetween operations and financial personnel; and

• General lack of documentation of accounting treatment for certain significantbalances.

68. These problems were substantially similar to those that had been identified in the

April 12, 2001 report from E&Y and subsequent reports from E&Y.

69. In the E&Y management letter, E&Y proposed a number of measures to correct

the accounting and control weaknesses at OCA.

70. The list of recommendations in the E&Y management letter included:

• Perform an evaluation of OCA' s financial statement close process and establishcontrols and processes that address the weaknesses identified in E&Y' s materialweakness letter;

• Develop programming and other tests to detect exceptions or other unusual variancesthat could affect the calculation of patient fees receivable, routinely perform analyses

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to explain changes in patient fees receivable and related revenue, and institute aprocess to reconcile patient fees receivable to service fees receivable at least on aquarterly basis. In addition, as discussed with the audit committee , OCA shouldidentify the reasons why certain transactions on a sample of statements selected fortesting were modified or omitted at December 31, 2003, but were included on thepatient statement at September 30, 2003, and develop an appropriate action plan toaddress any control deficiencies noted; [emphasis added]

• Evaluate the effectiveness of OCA' s internal audit function and dedicate additionalresources to enhance this function or consider outsourcing all or a portion of thefunction;

• Develop a methodology to evaluate the collectibility of receivables and therecoverability of intangibles relating to the litigating and nondepositing practices anddocument the results of this analysis on a quarterly basis;

• Establish policies and procedures to ensure that transactions and agreements betweenOCA and its affiliated practices are reported to OCA's accounting department prior tothe transactions and the agreements being finalized;

• Move the primary responsibility for the calculation of service fees receivable to theaccounting department with appropriate support by personnel in OCA's EDPdepartment;

• Collect the input and programming errors in the calculation of patient fees receivableidentified in the year-end audit and develop a consistent methodology for handlingsuch items, such as old or duplicate contracts, contracts converted to Walrus, andscale adjustments;

• Establish a position of corporate controller or chief accounting officer to oversee andmanage the operations, processes, and activities of OCA' s accounting and financialdepartments;

• Develop processing, including periodic review of aging, to evaluate the collectibilityof the patient fees receivable and advances to affiliated practices. These processesshould include a periodic review of accuracy of the estimates by performing"lookback" studies;

• Accelerate the development of documentation and the evaluation of controls andtesting pursuant to the requirements of Section 404. (Attention to this matter iscritical as OCA is far behind E&Y's suggested timetable for the completion of thisproject and where other comparable companies stand);

• Using the capabilities of the Walrus system, calculate service fees receivable on amonthly, rather than quarterly, basis and analyze the changes in the receivables andrelated revenue on a monthly basis; and,

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• Develop a process that "rolls forward" changes in the amounts due from doctors forfixed asset loans, start-up losses, and interest. Review this analysis on a monthly orquarterly basis to ensure that all transactions are properly accounted for. To enhancethis analysis, we [E&Y] suggest that interest be reported separately from start-uplosses.

71. The Director Defendants and Officer Defendants failed to implement the changes

proposed by E&Y, its independent auditor . Defendant Verret who then occupied the position of

CFO did not provide a substantive analysis of the E&Y findings to the Board of Directors or to

the Audit Committee until October 5, 2004. Had the Director Defendants and Officer

Defendants implemented these recommendations and those of prior years, OCA would have

been able to produce its 2004 audited financial statements on a timely basis. Also, Palmisano, Jr.

would not have been able to manipulate portions of OCA's accounting data and systems and

enter false data into certain sections of OCA' s accounting system. He also would not have been

able to submit false information to the auditors for OCA.

72. E&Y's management and material deficiency letters were "red flags" that were

brought to the attention of the Director Defendants and Officer Defendants. These defendants

consciously ignored the advice of E&Y, causing the losses sustained by OCA.

73. Following the E&Y letters disclosing material weaknesses in OCA's

accounting controls , Defendants Palmisano, Sr., Palmisano, Jr., Verret, Ryan, and Vignes

replaced E&Y as auditor with Pricewaterhouse Coopers ("PwC") on April 20, 2004.

74. Palmisano, Sr. and Verret represented to the public in the Form 10-Q filed with

the SEC on May 20, 2004 that the disclosure controls and procedures of OCA were effective.

These representations were both in the public filings of OCA and in the certificates that

Palmisano, Sr. and Verret signed. Palmisano, Sr. and Verret represented:

OCA's Chief Executive Officer and Chief Financial Officerconcluded that its disclosure controls and procedures are effectivein timely alerting them to information required to be disclosed in

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reports that OCA files with or submits to the Securities andExchange Commission under the Securities Exchange Act of 1934.

75. Notwithstanding these representations, the accounting controls and procedures

were defective and subject to manipulation by Palmisano, Jr. and other personnel of OCA. The

representations made by Palmisano, Sr. and Verret in the Form 10-Q filed with the SEC on

May 20, 2004 were contradicted by the information presented to them by E&Y in its letters dated

April 12, 2001, March 18, 2002 and April 27, 2004.

76. Upon its engagement and review of the accounting and financial reporting

controls and processes of OCA, PwC reported to OCA, the Audit Committee and the Board of

Directors in April 2005 concerns substantially similar to those reported by E&Y relating to

OCA's accounting controls and procedures.

77. PwC reported potential material weaknesses in:

• IT security and management controls over data integrity;

• Financial close process review (intercompany, foreign currency, accruals);

• Segregation of duties and documentation of adequate levels of review; and

• Controls over the recording and depreciation of property, plant and equipment.

78. As reported by E&Y and PwC, the financial controls of OCA had material

weaknesses in a number of processes and activities, including (i) calculation of fee revenue and

receivables, (ii) evaluation of the collectibility of receivables, (iii) evaluation of the

recoverability of certain long-lived assets, (iv) evaluation of changes in stock compensation

plans and new compensation programs, (v) review of changes in balance sheet and income

statement accounts, (vi) calculation and estimate of accruals related to loss contingencies,

stock compensation and other liabilities, and (vii) a formal review and approval process for

periodic reports.

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79. Audit Committee Defendants failed to take any actions to address these serious

deficiencies despite their knowledge of them.

80. Moreover , Palmisano, Sr., Palmisano, Jr., and Verret, without appropriate

segregation of duties supervised and controlled OCA's operational accounting and financial

reporting. As such, they determined fee revenue, service fees receivables, and other

processes without any review and approval of the calculations, judgments, and estimates

required to determine account balances. There were also variances and other unusual

relationships between financial statement accounts and documentation issues.

81. Palmisano, Sr. and Verret represented in filings with the SEC on July 26, 2004,

and again on August 9, 2004, that OCA's weaknesses in accounting systems and controls were

being corrected. However, these weaknesses were not corrected and OCA continued to suffer

from ineffective accounting controls and systems.

82. OCA' s accounting systems had numerous systemic errors and errors in particular

entries. Many of these errors were the result of actions by Palmisano, Jr. These errors and

inconsistencies included, but were not limited to, accounting irregularities related to:

• Leases and capitalization of leasehold improvements;

• The capitalization of startup costs and certain balance sheet accounts for OCA'sJapanese subsidiary;

• Capitalization of other costs that should have been expensed;

• Inventory;

• The calculation of patient receivables; and

• The calculation of revenue.

83. The Director Defendants' failure to ensure that OCA had adequate controls

amounted to a conscious failure to monitor OCA's accounting and financial personnel and

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departments. The Officer Defendants , as officers responsible for OCA' s accounting and

reporting, and the Audit Committee Defendants, had particular duties to monitor the accounting

controls of OCA.

84. Accounting improprieties resulting from the Director Defendants' failure to

ensure that OCA had adequate systems and controls included:

• On January 3, 2001, Verret e-mailed Palmisano, Jr. asking if he should changeother entries in "billed 3g2000 net.xls" so that it would "look cleaner."Palmisano, Jr. suggested, among other things, changing the balance on theKendall entry to avoid an "audit flag" and changing the even numbers in Hyannis,West Ashley, and Huntington "just a few bucks either way" so as to avoid auditinquiry; and

• In an e-mail dated January 4, 2002, Palmisano, Jr. stated that his records indicated61 OCA practitioners were involved in litigation against the Company, andanother employee fixed the number at 53. Palmisano, Jr. decided "from anaccounting perspective" that "70 sounds better."

85. As a result of the control failures, OCA has had to employ manual processes and

data validation procedures in its attempt to evaluate and correct its financial records. This

resulted in numerous adjustments to its financial records, a process that is still not complete. In

addition, OCA has not been able to complete its financial close process for 2004 and was never

able to complete its SEC filings prior to the Effective Date of the Confirmed Plan.

B. FALSIFICATION OF ACCOUNTING ENTRIES

1. Improper Charges to Intangible Asset Accounts

86. Among numerous other accounting improprieties, Palmisano, Jr. made journal

entries in the revenue, fixed assets, and intangible asset accounts on OCA's general ledger during

the 1998 to 2001 period that were false and had the effect of increasing OCA's reported

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revenues. Palmisano, Jr. recorded false journal entries of approximately $71,999,999 as follows:

2. May 2005 Alterations to Platinum General Ledger System

87. To conceal the improper entries that he made from 1998 to 2001, Palmisano, Jr.

manipulated OCA's Platinum accounting general ledger system . Palmisano, Jr. made it appear

that the improper entries he made from 1998 to 2001 had been reversed, when in fact these

entries had not been reversed. Palmisano, Jr. made these entries using access under his name, his

sister's name, (viz. Gina Palmisano), and the name of a deceased employee, (viz. Jose Paz).

88. After discovery of the improper entries, Palmisano, Sr. in conjunction with

Palmisano, Jr. prepared the "Fixed Asset Memorandum" dated May 13, 2005. This

memorandum contained false statements and attempted to justify the false entries and was

provided to Joey Richard, an outside accountant for OCA . Palmisano, Jr. also prepared an e-

mail memorandum on May 16, 2005 that provided additional false justifications for the entries.

Palmisano, Sr. also provided this memorandum to OCA's outside accountants.

89. On May 16, 2005, Palmisano , Jr. created a false memorandum purportedly dated

October 24, 2001 from a deceased employee, (viz. Jose Paz), supporting the false entries. On

that same date, Palmisano, Jr. submitted this memorandum to Palmisano, Sr. who provided it to

OCA's auditors and its outside accountants.

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3. Alteration of Walrus/OrthoStats Data

90. From February to May 2005, Palmisano, Jr. altered OCA patient data that was

provided to PwC, OCA's independent public accounting firm. Palmisano, Jr. generated false

patient accounts and presented them to PwC.

91. On April 22, 2005, PwC requested additional information on the patient contracts.

On May 4, 2005, Palmisano, Jr. instructed OCA personnel to disable PwC's access to OCA's

Walrus patient information systems until "we get comfortable with our data."

92. Subsequently, Palmisano, Jr. and others at his direction altered data for thirty

patients that PwC had selected in OCA's Walrus system. The alteration of this data was to

conceal the fact that OCA was recognizing revenue from inactive patients. Palmisano, Jr. added

some 2, 900 patient records to OCA's Walrus system so that it would appear that patients who

were inactive were actually current and had received services in 2004 and 2005. Moreover,

Palmisano, Jr. modified related data in other OCA databases.

93. The Director Defendants and the Officer Defendants failed to implement the

necessary controls that could have prevented the manipulation by Palmisano, Jr. of the

accounting system.

94. Palmisano, Sr. and Verret knew, and Ryan, Vignes and Dolan knew or should

have known, (a) of Palmisano, Jr.'s unfettered access to OCA's accounting and financial data;

(b) that Palmisano, Jr. was processing certain information in Walrus; and (c) that data provided

to the auditors had been manipulated. Palmisano, Sr. and Verret knew of these irregularities with

OCA's controls and failed to remedy them, causing losses to be sustained by OCA.

95. The effect of these alterations was to compromise the integrity of certain

accounting records of OCA, causing PwC to reasonably consider all information from OCA as

suspect.

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C. OTHER ACCOUNTING MISCALCULATIONS AND MISSTATEMENTS

96. As a result of the deficient accounting and control systems, OCA also overstated

its 2004 receivables in 2004 public filings. The amounts of patient receivables previously

reported for each quarter ended March 31, June 30, and September 30, 2004 were overstated by

material amounts.

97. Under the direction of Palmisano, Sr. and with the collaboration of Palmisano, Jr.

and Verret, OCA's Japanese subsidiary improperly capitalized certain startup costs during the

period from 1999 through 2003, with most of the startup costs being incurred and capitalized in

2000 . OCA has also identified certain unreconciled items between OCA's Japanese subsidiary

records and the U. S. general ledger.

98. On January 15, 2003, the CEO of OCA's Japanese subsidiary wrote Palmisano,

Jr., pointing out that certain "balance figures were changed as a result of entries at the US side."

He asked Palmisano, Jr. to notify him before changes were made in order to "avoid confusion."

Palmisano, Jr. forwarded the message to OCA employee Hong Messina, telling her to "make

sure that we fix these [entries] when the E&Y people are done."

99. The aggregate impact on OCA's December 31, 2003 balance sheet of potential

adjustments relating to those Japan-related items is a reduction in assets and retained earnings of

approximately $3.1 million, on an after-tax basis.

100. OCA improperly capitalized repairs and maintenance and other costs as fixed

assets from 1995 through 2004. OCA also did not write off certain assets associated with closed

or disaffiliated offices.

101. OCA understated the number of outstanding shares of its common stock by

varying amounts during the periods from 1999 through September 30, 2004. The amount of the

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understatement for each year was approximately 500,000 shares. This increased the earnings per

share reported by OCA.

102. OCA did not maintain adequate inventory control systems and overstated its

inventory by approximately $4,200,000 in 2003.

103. OCA did not reconcile items in its prepaid assets , deposits, and accounts payable

accounts for periods prior to December 31, 2002.

D. DEFENDANTS FAILED TO CORRECT DEFICIENT CONTROLS

AND ACCOUNTING MISSTATEMENTS AND ERRORS

104. Notwithstanding OCA's assurances and representations in its 2004 Form 10-Q

filings with the SEC, signed by Palmisano, Sr. and Verret, that OCA was actively addressing its

internal accounting control problems and that the control deficiencies raised by E&Y relating to

patient revenues and receivables were no longer applicable, the Director Defendants consciously

ignored and failed to remedy the problems and deficiencies.

105. OCA represented throughout 2004 that OCA was addressing the areas of material

weakness identified by E&Y in April 2004. However, many of the internal control weaknesses

ultimately disclosed on June 7, 2005 were the same weaknesses identified by E&Y in its

March 15, 2004 letter to the Audit Committee, including: 1) a lack of segregation of duties in

determining revenue and receivables and other processes; 2) incomplete analyses in explaining

variance or other unusual relationships between certain financial statement accounts; 3) lack of

documentation of accounting treatment for certain significant balances; and 4) inadequate

staffing in the accounting department and poor communications between operations and

financial personnel.

106. Even though PwC continued to inform Palmisano, Sr., Verret, Palmisano, Jr.,

Ryan, Dolan, and Vignes about continued weaknesses in OCA' s controls , the Director

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Defendants and the Officer Defendants failed to correct the control weaknesses. These same

weaknesses were utilized and exploited by Palmisano, Jr. in manipulating OCA's Platinum

general ledger system and OCA's Walrus accounting and practice management system.

107. Under the Director Defendants ' supervision and control , OCA had internal

control deficiencies and these control deficiencies resulted in reporting false financial

information and OCA' s failure to prepare and file audited financial statements for 2004.

108. The Director Defendants and the Officer Defendants failed to implement or

maintain effective controls over period-end financial reporting processes in at least the following

circumstances:

• Independent and timely review of the Company's consolidation, analyses, andfinancial reporting processes;

• Revenue recognition reviews;

• Reviews of allowances for bad debt for patient and affiliated practitioneraccounts; and

• Review and approval of journal entries to the general ledger and accountreconciliations.

109. Through June 2005, the Director Defendants and Officer Defendants failed to

maintain adequate segregation of duties, which affected OCA's financial reporting controls,

revenue controls, expenditure controls, and information technology controls.

110. OCA did not maintain effective controls over access to financial applications and

data. Certain of the OCA executive officers, including Palmisano, Jr., as well as information

technology staff and other users with financial, accounting, and reporting responsibilities, had

complete unfettered access to financial application programs and data.

111. The Officer Defendants failed to maintain adequate oversight of these employees

or effectively monitor access to this information. The Officer Defendants knew of these material

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weaknesses from their personal knowledge of how OCA operated and from the repeated

warnings from OCA's own accountants . Because of the material weaknesses, Palmisano, Sr.

either directly or through his son and other employees had the ability to override other controls

and information critical to an effective review of transactions, accounting entries, and related

entries.

E. DEFENDANTS ABDICATED THEIR OVERSIGHT

RESPONSIBILITY OF THE COMPANY

112. The Director Defendants, and especially CEO Palmisano, Sr. and Executive Vice

President Buchman and the members of the Audit Committee, Dolan, Ryan, and Vignes, were

responsible for maintaining and establishing adequate internal controls for OCA and for ensuring

that OCA's financial statements were based on accurate financial information. According to

SEC rules, to accomplish the objectives of accurately recording, processing, summarizing, and

reporting financial data, a company must establish an internal control structure. Pursuant to

section 13(b)(2) of the Exchange Act, Defendants were required to:

(A) make and keep books, records, and accounts, which, in reasonable detail, accuratelyand fairly reflect the transactions and dispositions of the assets of the issuer;

(B) devise and maintain a system of internal accounting controls sufficient to providereasonable assurances that-

(i) transactions are executed in accordance with management ' s general or specificauthorization;

(ii) transactions are recorded as necessary

(I) to permit preparation of financial statements in conformity withgenerally accepted accounting principles or any other criteria applicable tosuch statements, and

(II) to maintain accountability for assets;

(iii) access to assets is permitted only in accordance with management ' s generalor specific authorization; and

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(iv) the recorded accountability for assets is compared with the existing assets atreasonable intervals and appropriate action is taken with respect to anydifferences.

113. In addition, according to Appendix D to the Statement on Auditing Standards

("SAS") No. 55, management should consider, among other things , such objectives as: (a)

making certain that "[t]ransactions are recorded as necessary ... to merit preparation of financial

statements in conformity with generally accepted accounting principles... [and] to maintain

accountability for assets" and (b) making certain that "[t]he recorded accountability for assets is

compared with the existing assets at reasonable intervals and appropriate action is taken with

respect to any differences."

114. According to SAS 55.13:

Establishing and maintaining an internal control structure is animportant management responsibility. To provide reasonableassurance that an entity's objectives will be achieved, the internalcontrol structure should be under ongoing supervision bymanagement to determine that it is operating as intended and that itis modified as appropriate for changes in conditions.

115. Defendants failed to, among other things, properly implement, review, and

oversee: (i) the Company's financial statements and its financial reporting process; (ii) the

systems of internal accounting and financial control; (iii) the internal audit function; (iv) the

annual independent audit of the Company's financial statements; and (v) the press releases on

earnings and future guidance presented to analysts and the investing public.

116. Defendants caused OCA to maintain an inadequate system of internal financial

and accounting controls such that OCA's financial statements did not reflect the true condition of

the Company. Moreover, OCA's auditors could not rely on OCA's financial data and lost their

trust in the management of OCA.

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117. The Officer Defendants failed to correct the severe lack of internal controls

because doing so could have (a) limited their ability to unilaterally control OCA and its

operations ; (b) harmed the market price of OCA's stock; (c) alienated OCA affiliated doctors so

that they would terminate their contracts with OCA and reduce OCA's revenue; (d) disclosed

Palmisano, Jr.'s prior and continued manipulation of OCA' s accounting and controls ; (e) resulted

in the loss of goodwill in the investing community; and (f) jeopardized their personal reputation

and financial interests.

118. Due to these accounting improprieties, the Company presented its financial results

and statements in a manner that violated GAAP principles . For example:

The principle that interim financial reporting should be based upon the same accountingprinciples and practices used to prepare annual financial statements was violated (APBNo. 27, ¶ 10);

The principle that financial reporting should provide information that is useful to presentand potential investors and creditors and other users in making rational investment, creditand similar decisions was violated (FASB Statement of Concepts No. 1, ¶34);

The principle that financial reporting should provide information about the economicresources of an enterprise, the claims to those resources, and the effect of transactions,events and circumstances that change resources and claims to those resources wasviolated (FSASB Statement of Concepts No. 1, ¶40);

The principle that financial reporting should provide information about how managementof an enterprise has discharged its stewardship responsibility to owners (stockholders) forthe use of enterprise resources entrusted to it was violated. To the extent thatmanagement offers securities of the enterprise to the public it voluntarily accepts widerresponsibly for accountability to prospective investors and to the public in general (FASBStatement of Concepts No. 1, ¶50);

The principle that financial reporting should provide information about an enterprise'sfinancial performance during a period was violated. Investors and creditors often useinformation about the past to help in assessing the prospects of an enterprise. Thus,although investment and credit decisions reflect investors' expectations about futureenterprise performance, those expectations are commonly based at least partly onevaluations of past enterprise performance (FASB Statement of Concepts No. 1, ¶42);

The principle that financial reporting should be reliable in that it represents what itpurports to represent was violated. That information should be reliable as well as

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relevant is a notion that is central to accounting (FASB Statement of Concepts No. 2,¶¶58-59);

The principle of completeness, which means that nothing is left out of the informationthat may be necessary to insure that it validly represents underlying events and conditionswas violated (FSAB Statement of Concepts No. 2, ¶79); and

The principle that conservatism be used as prudent reaction to uncertainty to try to ensurethat uncertainties and risks inherent in business situations are adequately considered wasviolated. The best way to avoid injury to investors is to try to ensure that what is reportedrepresents what it purports to represent (FASB Statement of Concepts No. 2, ¶95, 97).

F. OCA COULD NOT FILE ITS 2004 10-K

BECAUSE OF ACCOUNTING IRREGULARITIES

119. By January, 2005, Defendants Palmisano, Sr., Palmisano , Jr., Verret, Ryan,

Vignes, and Dolan knew OCA would in all likelihood not be able to prepare and file its 2004

audited financial statements as required by the Credit Agreement and the SEC.

120. On March 18, 2005, Palmisano, Sr. disclosed to the SEC that OCA was unable to

file its Form 10-K by March 16, 2005 because it was unable to complete its audited financial

statements for 2004 and it was unable to finalize its assessment of internal controls under Section

404 of the Sarbanes-Oxley Act of 2002. Palmisano, Sr. made these disclosures in a Form NT 10-

K. PwC would not approve or certify OCA's 2004 financial statements because they were

concerned in part about the lack of detail in OCA's financial information, OCA's controls in

generating that information, errors in OCA account information, and the reliability of that

information.

121. The Form NT 10-K filing was the first time that OCA, as well as Palmisano, Sr.,

admitted publicly that management had "identified significant deficiencies, including internal

controls relating to accounts being reviewed by the Company" and that "the Company currently

believes that it is probable that one or more of these significant deficiencies will be determined to

be a material weakness."

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122. This was also the first time that OCA disclosed that it was reviewing its

accounting for leases, its depreciation and capitalization of leasehold improvements, equipment,

and other fixed assets, the appropriateness of capitalization of startup costs, and certain balance

sheet accounts for its Japanese subsidiary. OCA further disclosed for the first time that it had

identified certain errors and potential errors related to 2004 and prior years, but had not

completed its review or made a final determination about the effect of any adjustments or

whether these errors or potential errors were material and would therefore require a restatement

of any previously issued audited financial statements.

123. After Palmisano , Jr.'s manipulations of OCA' s accounting and practice

management systems were first discovered by outside accountants and auditors, the Company's

Board of Directors on June 2, 2005, appointed a Special Committee of the Board of Directors to

review certain accounting manipulations in OCA' s general ledger system (i.e., Platinum), and in

its practice management and financial software (i.e., Walrus). The Special Committee was

comprised of Ryan and Dolan. Although Ryan and Dolan were nominally "independent"

directors, as members of the Audit Committee they were responsible for the lapses in OCA's

accounting systems and controls that had allowed Palmisano, Jr. to manipulate the Walrus and

Platinum accounting systems.

124. As a result of the disclosure of Palmisano, Jr.'s involvement with the

manipulation of the Walrus and Platinum accounting systems, the Board of Directors suspended

Palmisano, Jr. from his duties at OCA on or about June 2, 2005.

125. At about the same time, PwC advised the Officer Defendants that prior quarterly

financial statements for 2004 should no longer be relied upon and that PwC was unwilling to rely

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upon the representations of certain members of the management team . The Audit Committee

Defendants concurred with this finding.

126. The Director Defendants on June 7, 2005 were forced to issue a press release

and file a Form 8-K with the SEC revealing the numerous accounting and control breakdowns

and misrepresentations and acknowledging that they had not maintained effective control over

financial reporting. Indeed, although the Company had maintained throughout 2004 that it was

addressing areas of material weakness identified by E&Y in April 2004, and notwithstanding the

Company's other representations about OCA's internal controls, many of the internal control

weaknesses identified on June 7, 2005 were the same weaknesses that had been identified by

E&Y beginning in April 2001 and thereafter. These included: (1) a lack of segregation of duties

in determining fee revenue and service fees receivable and other processes; (2) incomplete

analyses in explaining variances or other unusual relationships between certain financial

statement accounts; (3) lack of documentation of accounting treatment for certain significant

balances; and (4) inadequate staffing in the accounting department and poor communications

between operations and financial personnel. The Company further revealed in this Form 8-K

that its control deficiencies resulted in audit adjustments and would likely result in the

restatement of the Company's audited financial statements.

127. Despite Palmisano, Sr.'s and Verret's prior representations to the contrary,

OCA disclosed in this Form 8-K that it "cannot currently estimate when it will complete

those statements or file its 2004 Form 10-K or 2005 First Quarter Form 10-Q."

128. Although Palmisano, Jr. was placed on administrative leave by the Board of

Directors on June 2, 2005, Palmisano, Jr. continued to have unfettered access to OCA's

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computer systems and to prepare financial reports for the Company. Palmisano, Sr. knew that

Palmisano, Jr. retained this unfettered access to the accounting systems of OCA.

129. After Hurricane Katrina hit on August 29, 2005 , Palmisano, Jr. began openly

working for OCA again despite his administrative leave. Palmisano, Jr. continued to have

unfettered access to the accounting and computer systems of OCA.

130. On September 8, 2005, Defendants Summers and Bush resigned from OCA's

Board of Directors.

131. On November 1, 2005, PwC resigned as OCA's independent auditors. In PwC's

letter of resignation to the Audit Committee, these auditors stated that they believed that OCA

had not taken timely and appropriate remedial actions in response to the discovery of alleged

alterations of records provided to OCA' s contract internal auditors, current independent

registered public accountants, and prior independent accountants from January 2000 through

May 2005. These alleged alterations had been disclosed in the Form 8-K filed by OCA with the

SEC on June 7, 2005. PwC further stated that it believed such failure of OCA to act had

compromised the ability of PwC to complete a thorough and independent investigation into these

matters.

132. On November 8, 2005 the New York Stock Exchange ("NYSE") announced its

decision to suspend trading and seek delisting of OCA' s common stock . OCA advised the

NYSE that it would seek to be quoted on the Pink Sheets electronic quotation service following

the suspension.

133. In August 2006, OCA restated its FY 2001 financial results for fiscal year 2001.

OCA is in the process of determining appropriate adjustments for 2002 and 2003 which will

address the inaccuracies in the accounting records caused by the Defendants ' acts and omissions.

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134. OCA under the Officer Defendants ' control was never able to produce 2004

audited financial statements or to file its 2004 Form 10-K. OCA was therefore never able to

comply with the provisions of the Credit Agreement requiring audited financial statements.

G. PALMISANO, SR., PALMISANO, JR. AND VERRET

PREPARED AND FILED FALSE 10-Q'S IN 2004.

135. OCA's quarterly filings with the SEC for 2004 were materially false in that they

overstated accounts receivables and had a number of other inaccuracies.

136. For example, in 2004 OCA overstated its accounts receivables by $30 million

(approximately 24 percent) and its inventory by $3 million, materially affecting OCA's retained

earnings by approximately $25 million. These overstatements each met the threshold of

materiality.

137. The Company never reported it was operating with material internal control

weaknesses despite the fact the same is a reportable condition under the Sarbanes-Oxley Act of

2002.

H. PALMISANO, SR. AND ASHTON RYAN FILED FALSE 8-K

138. OCA endeavored from August through October of 2005 to file a Form 8-K with

the SEC reporting on the status of the investigation of the Special Committee and the condition

of the Company. Numerous drafts were circulated among Palmisano, Sr.; Ryan, the acting CFO;

Cathy Green; OCA's auditors, PwC; and others.

139. Although there was agreement on some language, no final Form 8-K was

prepared. Nevertheless, without authority, defendants Palmisano, Sr. and Ryan prepared a Form

8-K that was filed on November 4, 2005 and signed by Palmisano, Sr. This Form 8-K included

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new language purportedly reporting on the Company' s results and commenting on OCA's

relationship with its affiliated doctors.

140. The new language was not submitted by Palmisano, Sr. or Ryan to the CFO of

OCA, the Board of Directors of OCA, the Audit Committee of OCA, or OCA' s accountants and

was not authorized by OCA. Palmisano, Sr. as CEO and Ryan as head of the Audit Committee

knew that these personnel had not reviewed or approved the Form 8-K.

141. The results reported in this Form 8-K were false and Palmisano, Sr. and Ryan

knew or should have known that these results reported in this Form 8-K were false.

142. Moreover, Ryan and Palmisano, Sr. incorrectly characterized OCA's relationship

with its affiliated orthodontic practices. In particular, Ryan prepared language for the 8-K in

which Palmisano, Sr. reported "[b]efore the issuance of Staff Accounting Bulletin 101 ("SAB

101") by the SEC in December, 1999, we [OCA] considered ourselves to be a partner in

nationwide orthodontic practices and considered our revenues to be derived from direct service

to patients" (emphasis added). Palmisano and Ryan knew that OCA did not consider itself "to

be a partner" with its doctors and that OCA had carefully defined and preserved its relationships

with its doctors through detailed business service agreements to avoid any implication that OCA

was engaged in the practice of dentistry/orthodontics. Indeed, the service agreements

specifically provided OCA did not have a partnership or joint venture relationship with the

doctors. Palmisano and Ryan further knew or should have known that such language: (1) was

false ; (2) was inflammatory to OCA's doctors; and (3 ) would be harmful to OCA' s position in

pending litigation with OCA' s affiliated practices.

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III. SUBSTANTIVE ALLEGATIONS RELATING TOIMPROPER PAYMENTS AND TAX VIOLATIONS

A. PALMISANO, SR. AUTHORIZED AND RECEIVED IMPROPER

PAYMENT OF AIRPLANE EXPENSES FROM OCA

143. Palmisano, Sr. purchased a Cessna Citation II (Model 550) (the "Citation") twin

engine executive corporate jet in 2001.

144. Palmisano, Sr. directed that OCA pay directly all of the expenses of this airplane.

In 2001 , OCA paid $377,243 .93 in "operating costs" for the Citation . " Operating costs" paid by

OCA included pilot salaries, fuel, training, insurance, repairs, maintenance, and hanger fees.

Palmisano, Sr. used the corporate jet for both business and personal trips without reimbursing

OCA for the cost of personal trips . Personal use was approximately 10 percent of the total use.

145. In 2002, Palmisano, Sr. charged OCA $460,000 in " operating costs" for the

Citation and instructed OCA personnel to have OCA reimburse him for these "costs."

146. Not content with having OCA pay all of his expenses in connection with the

corporate jet, on February 27, 2003 Palmisano, Sr. made a request to the Compensation

Committee and to the Board of Directors to pay not only the expenses of the plane, but to have

OCA pay Palmisano, Sr. personally for a "lease" of the Citation. Under the proposal, OCA was

to lease the Citation from Palmisano, Sr. through BFP Charters, LLC (later renamed to BFP

Enterprises, LLC) at a lease rate of $33,525 per month. This payment was an above-market

price, constituting a breach of the duty of loyalty by Palmisano, Sr.

147. The Board of Directors considered this lease proposal on May 9, 2003. After

consideration of the terms, the Board of Directors "deferred any further action on the proposed

lease" according to the minutes of this meeting . In accordance with the Board of Directors

decision, no lease was executed between Palmisano, Sr. and OCA. Nevertheless, without Board

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authorization, Palmisano, Sr. unilaterally directed OCA personnel to have OCA make the

$33,525 lease payments to him in addition to continuing to pay the operating expenses of the jet.

148. In 2003, Palmisano, Sr. directed OCA personnel to have OCA pay $402,300 in

unauthorized lease payments to himself or BFP and $350,444 in operating expenses. Total

payments were $752,744 in 2003.

149. In 2004, Palmisano, Sr. directed OCA personnel to have OCA pay $402,300 in

lease payments to himself or BFP and $600,268 in operating expenses. Again, these payments

were not authorized by the Board of Directors. Total unauthorized payments in 2004 were

$1,002,568. These operating expenses included approximately $200,000 in upgrades to

Palmisano, Sr.'s plane. During 2004, Palmisano, Sr. used the corporate jet at least 16 percent of

the time for personal trips for himself and his wife.

150. In March 2005, after being confronted by Don Moody, OCA's outside counsel,

regarding the unauthorized lease payments, Palmisano, Sr. agreed to reduce the lease payment to

$13,200 per month for 2005. The Board of Directors did not authorize this lease and no lease

was signed between Palmisano , Sr. and OCA.

151. On or about June 7, 2005, Palmisano, Sr. agreed that he would no longer charge

lease or operating expenses for the airplane to OCA . This agreement was disclosed in OCA's

Form 8 -K dated June 7, 2005 which stated : "Mr. Palmisano has taken action to terminate the

Company 's lease of an aircraft owned by an affiliate of Mr. Palmisano , and the Company will no

longer be paying the operating costs for the aircraft. These lease and operating costs totaled

approximately $1.1 million in 2004."

152. Despite Palmisano, Sr.'s agreement not to charge any operating expenses of his

jet to OCA and the public disclosure of that agreement in the June 7, 2005 Form 8-K, Palmisano,

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Sr. directed OCA personnel to have OCA continue to pay those expenses through May 2006,

even after OCA had filed its voluntary petition under Chapter 11 of the Bankruptcy Code. These

expenses included: hanger fees, repairs, maintenance, upgrades, insurance, training, pilot salary

and benefits, co-pilot pay, and fuel.

153. In 2005 and 2006 Palmisano, Sr. directed OCA personnel to have OCA pay at

least $670,906.80 in lease payments and operating expenses. Of this amount, Palmisano, Sr.

directed that $392,883 be paid after June 7, 2005, the date when Palmisano, Sr. expressly had

agreed not to charge OCA for these payments. At least 30 percent of the flights in 2005 and

2006 did not involve the business of OCA.

154. OCA paid a total of $3,263,461 in operating expenses and lease payments on the

Citation. Of this amount, OCA estimates that at least 20 percent of these expenses are

attributable to personal flights.

155. The total expenses for the personal flights are estimated to exceed $652,692.

Palmisano, Sr. did not reimburse OCA for any expenses related to his personal flights.

156. Unauthorized lease payments from OCA to Palmisano, Sr. total $905,175.

157. As an officer and director of OCA, Palmisano, Sr. owed heightened fiduciary

duties regarding the payment of operating expenses for this plane and the lease payments to

himself. Palmisano, Sr. did not and cannot establish the appropriateness of these payments.

These lease payments were not authorized by the Board of Directors. Moreover, the lease

payments and the operating expense payments made after June 7, 2005 were expressly not

authorized by OCA, were illegal , and must be repaid to OCA.

B. PALMISANO, SR. CAUSED OCA TO FAIL TO COMPLY WITH THE

INTERNAL REVENUE CODE IN ITS PAYMENTS TO HIM AS AN EMPLOYEE

158. Palmisano, Sr. was a full time employee of OCA serving as CEO and President.

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159. Palmisano, Sr. entered into an employment agreement with OCA on

November 21, 1994 and has remained an employee of OCA pursuant to this agreement or

pursuant to an oral agreement relating to his service as CEO. As a CPA, Palmisano , Sr. was well

aware of OCA's obligations in connection with the IRS and FICA withholding applicable to his

salary.

160. As a result of Palmisano, Sr.'s status as an employee of OCA, the Company was

required by the Internal Revenue Code to deduct and to withhold income taxes from his

compensation. See 26 U.S.C. § 3402. Likewise, OCA was required by the Internal Revenue

Code to deduct and withhold Federal Insurance Contributions Act payroll taxes ("FICA taxes")

from compensation paid to Palmisano, Sr. See 26 U.S.C. § 3102.

161. During the term of Palmisano, Sr.'s employment with OCA from January, 1995 to

May 12, 2006, OCA paid Palmisano, Sr. $2,365,279.21 in salary in addition to substantial

bonuses and other perquisites.

162. For certain periods, despite his status as an employee, Palmisano, Sr. instructed

OCA personnel to pay his salary to his professional corporation, Bart F. Palmisano, P.C.

Palmisano, Sr. further instructed OCA to pay his salary and bonuses without deducting or

withholding income taxes or FICA taxes . In accordance with these instructions, OCA did not

file Forms W-2 reflecting the compensation paid to Palmisano, Sr. In addition, although OCA

filed Forms 1099 beginning in 1995 that reflected Palmisano, Sr.'s salary being paid to

Palmisano, Sr.'s professional corporation , OCA did not file Forms 1099 reflecting any

compensation to Palmisano, Sr. or his professional corporation in later years.

163. Palmisano informed the internal auditor that the payments were made to the

professional corporation for "tax purposes ." Palmisano, Sr. caused OCA to violate the Internal

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Revenue Code and subjected OCA to liability to the Internal Revenue Service in the amount of

the taxes that should have been withheld , in addition to penalties and interest . 26 U.S.C. §§

3402, 6651, 6656, 6672.

164. To the extent that OCA is found liable to the IRS for the employer wage taxes

(FICA taxes) as a result of Palmisano , Sr.'s actions , Palmisano, Sr. is liable for these amounts.

IV. SUBSTANTIVE ALLEGATIONS RELATINGTO DAMAGES SUFFERED BY OCA

A. DEFAULTS UNDER THE CREDIT AGREEMENT

165. As a result of the Director Defendants' and the Officer Defendants' breaches of

their duties of loyalty and care, OCA was unable to timely file with the SEC or to deliver to the

Lenders (as defined in the Credit Agreement) annual audited financial statements for the fiscal

year ended December 31, 2004. These repeated breaches of their duties forced OCA to request

and pay for multiple waivers of default and forbearances from the Lenders, costing OCA over

$8,000,000 in fees and expenses. The timely providing of these documents to the Lenders was

an obligation of OCA. The failure to do so by OCA constituted an event of default under the

Credit Agreement. As a consequence, OCA was required to seek waivers and extensions from

the Lenders.

166. Under the Second Amendment to the Credit Agreement and Waiver dated as of

March 31, 2005 (the "Second Amendment"), the Lenders waived any default or event of default

resulting from OCA's failure to timely (a) file with the SEC OCA's annual report on Form 10-K

for the year ended December 31, 2004 (the "2004 Form 10-K") and (b) deliver to the Lenders

audited consolidated financial statements for the fiscal year ended December 31, 2004. The

Second Amendment extended until May 31, 2005 the deadline under the Credit Agreement for

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filing the 2004 Form 10-K and receipt by the Lenders of the audited financial statements for

fiscal year 2004.

167. In consideration for the agreement of the Lenders under the Second Amendment,

OCA was obligated to pay:

(b)Fees and Expenses . Payment by the Borrower of all reasonablefees and expenses owed by the Borrower to the Lenders and theAdministrative Agent including , without limitation , the reasonablefees and expenses of Moore & Van Allen PLLC, counsel to theAdministrative Agent.

(c)Amendment Fee . The Administrative Agent shall have received

an amendment fee for the account of each Lender returning a copy

of the Amendment executed by it to the Administrative Agent on

or prior to 5:00 p.m., Eastern Time, April 1, 2005, in an amount

equal to 0.10% of the sum of (i) such Lender's Pro Rata Share of

the Revolving Committed Amount and (ii) such Lender's Pro Rata

Share of the then outstanding Term Loans.

168. OCA was unable to deliver to the Lenders under the Credit Agreement its

quarterly financial statements for the fiscal quarter ended March 31, 2005 or timely file its Form

10-Q with the SEC as required by the Credit Agreement. As a consequence, OCA was required

to seek a waiver from the Lenders. The waiver of the obligation of OCA to deliver to the

Lenders the quarterly financial statements for the fiscal quarter ended March 31, 2005 and to file

its Form 10-Q for this period was granted in the Third Amendment to Credit Agreement Waiver

dated as of May 10, 2005 (the "Third Amendment"). The Third Amendment granted OCA an

extension until May 31, 2005 within which to deliver to the Lenders its quarterly financial

statements for the fiscal quarter ended March 31, 2005 and to file with the SEC its Form 10-Q

for this period.

169. In consideration for the agreement of Lenders under the Third Amendment, OCA

was obligated to pay:

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(b)Fees and Expenses . Payment by the Borrower of all reasonablefees and expenses owed by the Borrower to the Lenders and theAdministrative Agent including, without limitation, the reasonablefees and expenses of Moore & Van Allen PLLC and WinsteadSechrest & Minick P.C., counsel to the Administrative Agent tothe extent invoices for such have been provided to the Borrowerprior to the date of this Amendment.

170. OCA was unable to timely deliver to the Lenders its audited Financial Statements

for the fiscal year ended December 31, 2004, or file timely with the SEC its Form 10-Q for fiscal

quarter ended March 31, 2005 by the deadline of May 31, 2005 as granted by the Second

Amendment and Third Amendment. As a consequence, OCA was required to seek a waiver and

extension from the Lenders until June 30, 2005. The Fourth Amendment to Credit Agreement

and Waiver dated as of May 31, 2005 (the "Fourth Amendment") granted OCA an extension

until June 30, 2005 to deliver to the Lenders the audited Financial Statements for the fiscal year

2004 and the fiscal quarter ended March 31, 2005.

171. In consideration for the agreement of the Lenders under the Fourth Amendment,


(b)Fees and Expenses . Payment by the Borrower of all reasonablefees and expenses owed by the Borrower to the Lenders and theAdministrative Agent including, without limitation, the reasonablefees and expenses of Winstead Sechrest & Minick P.C., counsel tothe Administrative Agent to the extent invoices for such have beenprovided to the Borrower prior to the date of this Amendment.



of this Amendment executed by it to the Administrative Agent on

or prior to noon, Central Time, May 31, 2005, in an amount equal

to 0.05% of the sum of (i) such Lender's Pro Rata Share of the

Revolving Committed Amount and (ii) such Lender's Pro Rata

Share of the then outstanding Term Loan.


for the fiscal year ended December 31, 2004, or file timely with the SEC its Form 10-Q for fiscal

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quarter ended March 31, 2005 by the deadline of June 30, 2005 as set forth by the Fourth

Amendment. As a consequence, OCA was required to seek a waiver and extension from the

Lenders until July 31, 2005. The Fifth Amendment to Credit Agreement and Waiver dated as of

June 30, 2005 (the "Fifth Amendment") granted OCA an extension until July 31, 2005 to deliver

to the Lenders the audited Financial Statements for fiscal year 2004 and the fiscal quarter ended

March 31, 2005.

173. In consideration for the agreement of the Lenders under the Fifth Amendment,


(b)Fees and Expenses . Payment by the Borrower of all reasonablefees and expenses owed by the Borrower to the Lenders and theAdministrative Agent including, without limitation, the reasonablefees and expenses of Winstead Sechrest & Minick P.C., counsel tothe Administrative Agent, and FTI Consulting, Inc., advisor to theAdministrative Agent, to the extent invoices for such have beenprovided to the Borrower prior to the date of this Amendment.




or prior to noon, Central Time, July 1, 2005, in the amount equal to

0.05% of the sum of (i) such Lender's Pro Rata Share of the

Revolving Committed Amount and (ii) such Lender's Pro Rata

Share of the then outstanding Term Loans.


for the fiscal year ended December 31, 2004 and the fiscal quarter ended March 31, 2005, or file

timely with the SEC its Forms 10-K and 10-Q by the deadline of July 31, 2005 as set forth in the

Fifth Amendment. As a consequence, OCA was required to seek a waiver and extension from

the Lenders until October 31, 2005.

175. The Sixth Amendment to Credit Agreement and Forbearance dated as of

August 19, 2005 (the "Sixth Amendment") granted OCA an extension until October 31, 2005 to

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deliver its audited Financial Statements for fiscal year ended December 31, 2004 and for fiscal

quarters ended March 31, 2005 and June 30, 2005.

176. The Sixth Amendment also imposed additional obligations on OCA and caused

OCA to grant additional security to the Lenders.

177. As consideration for the agreement of the Lenders under the Sixth Amendment,


(b)Fees and Expenses . Payment by the Borrower of all reasonablefees and expenses owed by the Borrower to the Lenders and theAdministrative Agent including, without limitation, the reasonablefees and expenses of Winstead Sechrest & Minick P.C., counsel tothe Administrative Agent, and FTI Consulting, Inc., advisor to theAdministrative Agent, to the extent invoices for such have beenprovided to the Borrower prior to the date of this Amendment.




or prior to 10:00 a.m., Central Time, August 19, 2005, in the

amount equal to 0.10% of the sum of (i) such Lender's Pro Rata

Share of the Revolving Committed Amount (as reduced herein)

and (ii) such Lender's Pro Rata Share of the then outstanding Term

Loans.


for the fiscal year ended December 31, 2004 or for fiscal quarters ended March 31, 2005 and

June 30, 2005 or to timely file with the SEC the Forms 10-K and 10-Q by the deadline of

October 31, 2005 as set forth in the Sixth Amendment. Additionally, the loan came due under

the Credit Agreement and OCA was unable to refinance this obligation. As a consequence, OCA

was required to seek from the Lenders a waiver and extension from the Lenders.

179. The Seventh Amendment to Credit Agreement and Forbearance dated as of

January 30, 2006 (the "Seventh Amendment") granted OCA an extension until March 15, 2006

for certain actions to occur including the delivery of audited Financial Statements to the Lenders.

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180. In consideration of the agreement of Lenders under the Seventh Amendment,

OCA was obligated to pay a forbearance fee of $458,616.67 and reimburse the Lenders for their

professional fees and expenses.

181. The Second through Seventh Amendments also limited the amount of funds

available for borrowing under OCA's revolving line of credit. Under the Credit Agreement

OCA was prohibited from additional borrowing until OCA delivered to the Lenders its audited

2004 financial statements, its unaudited financial statements for the first quarter of 2005, the

related compliance certificates, and filed its 2004 Form 10-K and First Quarter Form 10-Q with

the SEC. The Second through Seventh Amendments also restricted OCA's use of funds

borrowed under the Credit Agreement during that period to the funding of ordinary course

business expenses and working capital needs.

182. OCA filed its voluntary petition under Chapter 11 of the Bankruptcy Code on

March 14, 2006.

183. Because OCA did not complete its 2004 financial statements or file the 2004

Form 10-K, OCA was not in compliance with NYSE listing rule 203.01 and on November 8,

2005 the NYSE announced its decision to suspend trading and seek delisting of OCA' s common

stock.

B. LITIGATION COSTS RELATED TO SECURITIES

LITIGATION AND SPECIAL COMMITTEE

184. As a result of the Director Defendants' and the Officer Defendants' breaches of

their fiduciary duties, OCA has been named a defendant in numerous federal securities class

action lawsuits pending in the United States District Court for the Eastern District of Louisiana.

In connection with OCA' s defense of the federal securities class action, OCA has expended and

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will continue to expend significant management time and effort and sums of money. These

include but are not limited to:

(a) Costs incurred to carry out internal investigations, including legal fees paid tooutside counsel; and

(b) Costs incurred in investigating and defending OCA and certain officers anddirectors in the Class Actions.

185. In addition, OCA has had its reputation in the business community irreparably

tarnished and has thus been damaged in an amount to be proven at trial.

186. As a consequence of the breach of their duties by the Director Defendants and

Officer Defendants, OCA has been required to pay substantial sums of money in connection the

breaches of the Credit Agreement and the subsequent amendments:

Lender's Attorneys Fees $889,005

Lender's Amendment and Forbearance Fees $299,664Lender's Financial Consultant $1,382,904

OCA's Financial Consultant $2,285,492

Additional Interest Charges $3,516,061

TOTAL $8,373,126

187. As a consequence of the breach of duties , OCA paid approximately $1,717,210 in

legal, accounting and consultant fees for the investigation of the Special Investigative

Committee. To date, OCA has incurred at least $435,114 in costs and legal fees in defending

OCA, and its officers and directors as a result of the conduct described herein. OCA has also

incurred additional accounting expenses in seeking to establish appropriate controls, correct and

reconcile prior years' financial statements, and to audit the 2004 financial statements.

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C. COSTS OF BANKRUPTCY CASES

188. As a consequence of its inability to satisfy or fulfill its obligations under the

Credit Agreement, OCA was forced to file its voluntary petition under Chapter 11 of the

Bankruptcy Code on March 14, 2006.

189. The Bankruptcy Cases resulted in a complete restructuring of the debt and equity

ownership of OCA as outlined in the Confirmed Plan.

190. The Bankruptcy Cases were a direct consequence and result of the actions of the

defendants. As such, the Company was damaged by the costs of the Bankruptcy Cases including

professional fees and other extraordinary administrative costs.

191. The quantification of the costs of the Bankruptcy Cases for which defendants are

responsible will be proven at trial.

V. COUNTS

A. FIRST COUNT: BREACH OF FIDUCIARY DUTIES OF LOYALTY AND

GOOD FAITH BY THE DIRECTOR DEFENDANTS AND THE OFFICER

DEFENDANTS

192. Plaintiff incorporates by reference each of the preceding allegations.

193. Through the above described acts and omissions, the Director Defendants and

Officer Defendants breached their fiduciary duties of loyalty and good faith owed to OCA.

194. As a result of these defendants' actions, including their admitted failure to

maintain a system of internal financial and accounting controls adequate to ensure that the

financial statements issued by OCA were true and correct in all material respects, OCA has

suffered considerable damage to, and drastic diminution in the value of its assets, goodwill and

reputation, and overall enterprise value.

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195. The conduct of the Director Defendants and Officer Defendants complained of

herein involves a knowing and culpable violation of their obligations as directors and/or officers

of OCA, the absence of good faith on their part, a breach of their duty of loyalty and a reckless

disregard for their duties to the Company and its shareholders. These defendants were aware or

should have been aware that their actions posed a risk of serious injury to the Company.

196. The Director Defendants breached their fiduciary duties by failing in their

responsibility to maintain adequate controls, practices, and procedures for OCA to properly

account for and report its financial results and by failing to properly supervise and monitor

OCA's reporting and disclosure practices.

197. The Officer Defendants breached their fiduciary duties by failing to monitor

OCA's accounting and financial reporting practices and by allowing OCA to report false

financial information to the markets and the SEC.

198. The Director Defendants breached their fiduciary duties owed to the Company

and its shareholders by failing to reveal to the public the truth about the Company's improper

accounting and admitted lack of controls.

199. The Director Defendants and Officer Defendants breached their fiduciary duties

of good faith and loyalty owed to OCA by failing in their responsibility to maintain adequate

controls, practices and procedures for the proper disclosure of information (including, but not

limited to, public reports, press releases, and SEC filings) to its shareholders, the markets, and

analysts, which artificially inflated the value of OCA's common stock and exposed OCA to strict

liability and fraud claims under the federal securities laws.

200. The Officer Defendants breached their fiduciary duties of good faith and loyalty

owed to OCA by filing false statements with the SEC related to revenues . These statements

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were made without reasonable grounds and without confidence that the statements were true and

devoid of any material misstatements or omissions of material fact.

201. As a result of the breaches of fiduciary duties of the Director Defendants and

Officer Defendants, OCA has been damaged in an amount to be proven at trial.

202. FTI as Trustee seeks recovery for the damages suffered by OCA and other relief.

B. SECOND COUNT: AIDING AND ABETTING BREACH OF FIDUCIARY DUTIES


204. Each Individual Director Defendant and Officer Defendant knew or should have

known of every other Defendants' breach of their fiduciary duties of good faith and loyalty owed

to OCA.

205. Each such Defendant provided substantial assistance to the other Defendants'

breaches of fiduciary duty to OCA by knowingly assisting and participating in their acts,

omissions and breaches of fiduciary duty.

206. As a result of the Defendants' knowing assistance and participation in breaches of

fiduciary duties of the Defendants, OCA has been damaged in an amount to be proven at trial.


C. THIRD COUNT: GROSS NEGLIGENCE BY DEFENDANTS


209. Through the above described acts and omissions, the Director Defendants acted

with gross negligence , reckless disregard and a carelessness amounting to indifference to the best

interest of OCA and its shareholders . OCA has been damaged as a result in an amount to be

proven at trial.


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D. FOURTH COUNT: BREACH OF FIDUCIARY

DUTIES BY AUDIT COMMITTEE DEFENDANTS


212. The Audit Committee Defendants (viz. Dolan, Ryan, and Vignes), who also

comprised a majority of the purported "independent" members of the Board, exhibited a

sustained and systematic failure to fulfill their fiduciary duties, and failed to exercise good faith

in their business judgment . Although E&Y and PwC, the Company' s independent auditors,

repeatedly notified the Company and its Audit Committee of the existence of specific material

weaknesses in the Company's internal controls and processes, the Audit Committee Defendants

did little or nothing to rectify the problems despite their knowledge. In fact they permitted the

Company's situation with respect to internal controls to further deteriorate.

213. The Audit Committee Defendants failed to design , implement, and maintain an

effective internal accounting and financial control system for OCA and thereby violated their

fiduciary duties of loyalty and good faith. Their actions also violated the Audit Committee

Charter.

214. The Audit Committee Defendants along with Palmisano, Sr., Palmisano, Jr., and

Verret knew that OCA's controls were deficient and that Palmisano, Jr. maintained unfettered

access to OCA's accounting systems and control software. Despite that knowledge, these

defendants failed to ensure that OCA addressed the deficiencies identified by E&Y beginning in

its letter of April 12, 2001. Their lack of action with regards to implementing appropriate

controls amounted to a wholesale disregard of their duties of good faith, loyalty, and care.

215. Ultimately, the material weaknesses reported by OCA's auditors were the same

material weaknesses exploited by Palmisano, Jr. in manipulating and falsifying OCA's financial

statements and reports.

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216. The Audit Committee Defendants consciously disregarded the advice of OCA's

auditors E&Y and PwC.

217. The material weaknesses in OCA's controls also called into question the OCA

accounting records and directly prevented OCA from obtaining an audit of its 2004 financial

statements.

218. Through the above described acts and omissions, the Audit Committee

Defendants breached their fiduciary duties of loyalty and good faith owed to OCA.

219. Through the above described acts and omissions, the Audit Committee

Defendants acted with gross negligence, reckless disregard, and a carelessness amounting to

indifference to the best interests of OCA and its shareholders.

220. As a result of the Audit Committee Defendants' breaches of their fiduciary duties,

OCA has been damaged in an amount to be proven at trial.


E. FIFTH COUNT: BREACH OF FIDUCIARY DUTIES BY THE OFFICER DEFENDANTS


223. The Officer Defendants acted with gross negligence and with reckless disregard

and indifference to the interests of OCA in connection with its operations, management, and

direction of OCA' s internal accounting controls and processes as it related to financial reporting.

224. The Officer Defendants knew that OCA's controls were deficient and that

Palmisano, Jr. maintained unfettered access to OCA's accounting systems and control software.

Palmisano, Sr. failed to ensure that OCA addressed the defects identified by E&Y in its letter of

April 12, 2001.

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225. The Officer Defendants consciously disregarded the advice of OCA's auditors

E&Y and PwC.

226. The material weaknesses in OCA's controls also called into question the OCA

accounting records and directly prevented OCA from obtaining an audit of its 2004 financial

statements.

227. Through the above described acts and omissions, the Officer Defendants breached

their fiduciary duties of due care, loyalty and good faith owed to OCA.

228. Through the above described acts and omissions, the Officer Defendants acted

with gross negligence , reckless disregard and a carelessness amounting to indifference to the best

interests of OCA and its shareholders.

229. As a result of the Officer Defendants breaches of their fiduciary duties, OCA has

been damaged in an amount to be proven at trial.


F. SIXTH COUNT: DELIBERATE AND INTENTIONAL BREACH OF

DUTY BY PALMISANO, SR., PALMISANO, JR. AND VERRET


232. Through the acts and omissions described with particularity above, Palmisano, Jr.

intentionally manipulated and misrepresented the financial performance and results of OCA.

233. Through the acts and omissions described with particularity above, Palmisano, Sr.

and Verret intentionally disseminated false information through press releases and SEC filings

relating to OCA's financial performance and the status of OCA' s accounting controls in 10-Qs

published on May 20, 2004, August 9, 2004, and December 23, 2004.

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234. Palmisano, Sr., through the acts and omissions described with particularity above,

intentionally disseminated false information relating to OCA's financial performance in a Form

8-K published on November 11, 2005.

235. As a result of these intentional and deliberate acts, OCA reported false financial

results to the market and the SEC; the integrity of OCA' s books and records and financial

reporting was compromised; OCA was forced to commence and pay for an expensive internal

investigation; OCA was forced to defend expensive derivative and securities fraud lawsuits; and

OCA's reputation with the financial markets was seriously impugned.

236. The acts of Palmisano, Sr., Palmisano, Jr. and Verret were unlawful and intended

to harm OCA. There was an objective substantial certainty of harm to OCA or a subjective

motive to cause harm to OCA.

237. The damages caused to OCA by Palmisano, Sr., Palmisano, Jr. and Verret were

the direct result of the deliberate and intentional acts of these Defendants. The amount of

damages suffered by OCA will be proved at trial.

238. FTI as Trustee seeks recovery for the damages suffered by OCA as a consequence

of the above described acts of Palmisano, Sr., Palmisano, Jr., and Verret and other relief.

G. SEVENTH COUNT: THE BREACH OF DUTY BY PALMISANO, SR.,

PALMISANO, JR. AND VERRET WAS A WILLFUL NEGLECT OF DUTY


240. Through the acts and omissions described with particularity above, Palmisano, Jr.

intentionally manipulated and misrepresented the financial performance and results of OCA.

241. As a result of these intentional and deliberate acts, OCA reported false financial

results to the market and the SEC; the integrity of OCA' s books and records and financial

reporting was compromised and ultimately destroyed; OCA was forced to commence and pay for

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an expensive internal investigation; OCA was forced to defend expensive derivative and

securities fraud lawsuits ; and OCA's reputation with the financial markets was seriously

impugned.

242. The acts of Palmisano, Sr., Palmisano, Jr. and Verret that caused the damages to

the Company were the consequence of the willful neglect of duty by these defendants to the

Company. The amount of damages suffered by OCA will be proved at trial.


of the above described acts of Palmisano, Sr., Palmisano, Jr. and Verret and other relief.

H. EIGHTH COUNT: DISGORGEMENT


245. Plaintiff seeks disgorgement from the Director Defendants and Officer

Defendants, and each of them of all compensation, profits, perquisites, or other benefits of every

kind received by them as the result of their wrongful acts and omissions described above.

1. NINTH COUNT: CORPORATE JET RECOVERY FROM PALMISANO, SR.


247. The payment of the lease and expenses of the Citation jet was unauthorized.

Palmisano, Sr. breached his duties of loyalty and good faith by directing that OCA make

improper, unauthorized and illegal payments for the lease and expenses of the Citation jet.

Palmisano, Sr. was on both sides of the transaction . He caused OCA to lease the Citation and

received a personal windfall from the lease of the airplane. This breach is heightened by the

representation in OCA' s Form 8-K filing with the SEC dated June 7, 2005, wherein Palmisano,

Sr. agreed not to cause OCA to lease the aircraft.

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248. The payment of the lease of the Citation was unauthorized. The use of the

Citation for personal trips was unauthorized and Palmisano, Sr. did not reimburse OCA for the

cost of the personal trips. The payment of operating expenses after June 7, 2005 was also

unauthorized and Palmisano, Sr. is obligated to return these amounts to FTI as Trustee.

Palmisano, Sr. is liable for these amounts to FTI as Trustee as a result of the willful and

intentional acts of Palmisano, Sr.


of the above-described acts of Palmisano, Sr.

J. TENTH COUNT: FAILURE TO PAY WITHHOLDING TAXES


251. Palmisano, Sr. willfully and intentionally caused OCA to violate the Internal

Revenue Code and subjected OCA to liability to the Internal Revenue Service in the amount of

the taxes that should have been withheld on his salary, in addition to penalties and interest.

252. OCA also faces liability to the IRS for the employer wage taxes (FICA taxes).

Palmisano, Sr. is liable to FTI Trustee to the extent of damages suffered by the Company.


of the above-described acts of Palmisano, Sr.

K. ELEVENTH COUNT: DIRECT ACTION AGAINST INSURER DEFENDANTS


255. National Union and XL Specialty Insurance issued policies of liability insurance

covering the Director Defendants and Officer Defendants for the above described acts and

omissions. Accordingly, National Union and XL Specialty Insurance are liable for all relief

sought herein, including damages and/or losses proximately resulting from the acts and

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omissions of the Director Defendants, the Audit Committee Defendants and the Officer

Defendants.

256. FTI as Trustee seeks recovery from the Insurer Defendants for the damages

suffered by OCA as a consequence of the above described acts of the Director Defendants,

Officer Defendants and Audit Committee Defendants.

VI. JURY DEMAND

257. Plaintiff demands a trial by jury.

VII. PRAYER FOR RELIEF

WHEREFORE, Plaintiff FTI Consulting Inc., as Trustee of the OCA Chapter 11 Plan

Trust and assignee of the OCA Chapter 11 Plan Trust Causes of Action, prays for judgment

against all defendants as follows:

1. Awarding damages and/or restitution in favor of Plaintiff and against defendantsand awarding punitive and exemplary damages as allowed by law, plus pre andpost judgment interest, costs, and expenses;

2. Granting equitable and/or injunctive relief as permitted by applicable law andequity;

3. Awarding reasonable attorneys' fees as allowed by law and all other recoverablelitigation expenses; and

4. Granting such other and further legal, equitable and general relief as this Courtmay deem just and proper.

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Respectfully submitted,

Philip K. Jones, Jr. (Bar #7503)James A. brown (Bar #14101)John C. Anjier (Bar #20083)Joseph I. Giarrusso III (Bar #27476)Collette N. Ross (Bar #30700)Liskow & Lewis, APLC701 Poydras Street, Suite 5000New Orleans, Louisiana 70139Tel: 504-581-7979Fax: 504-556-4108

By: /s/ John C. AnjierAttorneys For FTI Consulting, Inc.,

as Trustee for the OCA Chapter 11

Plan Trust, Plaintiff

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the Second Amended and Restated Complaint of

FTI Consulting, Inc. as Trustee (the "Complaint") was served electronically on CM/ECF

participants on the 25th day of May, 2007. A copy of the Complaint will be served by United

States Mail, properly addressed and postage prepaid on the 29th day of May, 2007 on the

following non-CM/ECF participants:

Marc L. Ackerman George Edward BarrettBrodsky & Smith, LLC Barrett, Johnston & Parsley2 Bala Plaza 217 Second Avenue, NSuite 602 Nashville, TN 37201Bala Cynwyd, PA 19004

Lionel Z. Glancy Fred Taylor IsquithGlancy & Binkow Wolf Haldenstein Adler Freeman &1801 Avenue of the Stars Herz LLPSuite 311 270 Madison Ave.Los Angeles, CA 90067 New York, NY 10016

Joseph Birrcher Landry Roger J. LeBlancLandry & Lavelle, L.L.P. LeBlanc & Associates631 St. Charles Ave. 8126 One Calais AvenueNew Orleans, LA 70130 Suite 2C

Baton Rouge, LA 70809

D. Scott Macrae Brian J. RobbinsSteyer Lowenthal Boodrookas Robbins Umeda & Fink, LLPAlvarez & Smith LLP 610 West Ash St.One California Street Suite 1800Third Floor San Diego , CA 92101-3350San Francisco , CA 94111

Allan SteyerSteyer Lowenthal BoodrookasAlvarez & Smith LLPOne California StreetThird FloorSan Francisco, CA 94111

Frederic S. FoxKaplan Fox & Kilsheimer LLP805 Third Avenue22nd FloorNew York, NY 10022

Steven S . KaufholdAkin Gump Strauss Hauer & Feld(San Francisco)580 California StreetSuite 1500San Francisco , CA 94104

Lemon Bay Partners, LLPc/o Robert Garfield2828 North Beach RoadEnglewood, FL 34223

Bruce Victor SchewePhelps Dunbar, LLPCanal Place365 Canal St.Suite 2000New Orleans, LA 70130-6534

/s/John C. An/ier

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case2-05-cv-02165-ssv-dek document224 filed 05/25/2007...

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