Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 8, 1990                   TAG: 9006080227
SECTION: BUSINESS                    PAGE: B5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Short

KLUGE RULED VULNERABLE TO LAWSUIT

U.S. District Judge James H. Michael Jr. of Charlottesville had ruled the plaintiffs had no claim against Kluge, who has been named the richest man in the United States by Forbes magazine.

But the 4th U.S. Circuit Court of Appeals said three businessmen who invested in the cattle-breeding program could file a claim under federal securities laws that require full disclosure of information in investment offers.

In 1985, the plaintiffs bought cattle embryos from Kluge's Albemarle Farms, which agreed to care for the resulting calves and sell them when they matured.

The plaintiffs paid $2,500 for each embryo in hopes that a crossbreeding program at the farm would result in a superior new breed of cattle that they could sell for a premium price.

The plaintiffs said Albemarle Farms abandoned the crossbreeding program in 1987 because tax law changes made it no longer profitable. In their lawsuit, they claimed that Kluge had violated federal securities laws by failing to make full disclosures about the program.

The appeals panel said the breeding program was an investment offer that should be subject to federal securities laws.