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The following is an excerpt from a 10KSB SEC Filing, filed by BURZYNSKI RESEARCH INSTITUTE INC on 5/2/2001.
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BURZYNSKI RESEARCH INSTITUTE INC - 10KSB - 20010502 - LEGAL_PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS

On November 20, 1995, the Company and Dr. Burzynski were indicted in a criminal action (U.S. v Stanislaw Burzynski and the Burzynski Research Institute) brought by the United States in the United States District Court, Southern District of Texas, for alleged violations of FDA law and mail fraud. The case was resolved in 1997 with a complete acquittal and dismissal of all charges against both Dr. Burzynski and the Company.

The Company and Dr. Burzynski were named as defendants in a lawsuit (Provident Life Insurance Co. v. Stanislaw R. Burzynski and the Burzynski Research Institute) filed on December 5, 1995 by Provident Life Insurance Co. in the U.S. District Court, Southern District of Texas, Houston Division, for the recovery of monies which Provident Life paid to Dr. Burzynski for the treatment of six of its insured, including claims for insurance fraud. The trial court dismissed the fraud claims and granted restitution of monies paid to Dr. Burzynski, including statutorily granted attorney fees. In 1999, the case was settled while on appeal to the United States Court of Appeals for the Fifth Circuit.

The Company and Dr. Burzynski were named as defendants in a lawsuit (Bedient v. Stanislaw R. Burzynski and the Burzynski Research Institute) filed on July 9, 1998, in the State District Court in Harris County, Houston, Texas. This was a fraud and medical malpractice case relating to the treatment of one of Dr. Burzynski's former patients. The case was settled in 2000 by Dr. Burzynski by return of a small amount of the patient's treatment expenses.

The Company and Dr. Burzynski were named as defendants in a lawsuit (Mohammad Khalid, et al. v. Burzynski Research Institute, et al) filed on March 11, 1998 in the United States District Court, Southern District of Texas, by two former employees of the Company who made a claim based on discrimination and retaliation. The former employees sought damages, including back pay and lost future wages. The lawsuit concluded in February 2000 and resulted in a verdict in favor of the Company and Dr. Burzynski on all claims.

Since 1997, there have also been other minor lawsuits filed against Dr. Burzynski. All of these lawsuits have been resolved and have not had a material adverse effect on Dr. Burzynski or the Company.

The Company's activities are subject to regulation by various governmental agencies, including the FDA, which regularly monitor the Company's operations and often impose requirements on the conduct of its clinical trials and other aspects of the Company's business operations. The Company's policy is to comply with all such regulatory requirements. From time to time, the Company is also subject to potential claims by patients and other potential claimants commonly arising out of the operation of a medical practice. The Company seeks to minimize its exposure to claims of this type wherever possible.

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