On March 26, 2002, the Ninth Circuit Court of Appeals affirmed a decision by a federal court that ruled CIRI's Elders' Benefit Program is legal.

The CIRI Board of Directors, in February 2000, voted to establish an Elders' Benefit Program that would pay quarterly distributions to original CIRI shareholders age 65 and older. The corporation made its first payment of $450 to CIRI elders in May 2000. The following month, a handful of shareholders - Emil Notti, James Grotha, Glen Kerr, Sam Pedro, and Ella Ring as proposed class action representatives - filed a lawsuit claiming the Benefit Program was illegal because it allegedly discriminated against shareholders who did not meet the program's age and enrollment qualifications.

Last May, the Federal District Court for the District of Alaska dismissed the lawsuit, ruling that the program was legally valid. Following the initial ruling, CIRI paid each eligible CIRI elder approximately $1,800 plus the interest it collected while the program was suspended pending the court's decision. The plaintiffs then appealed the ruling to the Ninth Circuit Court of Appeals.

In affirming the Federal District Court's order in favor of CIRI, the Ninth Circuit Court of Appeals stated in part, "The plain language of (ANCSA) allows CIRI to make the distributions . . . .. Moreover, the legislative history of (ANCSA) confirms that Congress intended that ANCSA corporations provide the type of benefits provided by CIRI in this case."

The CIRI Board of Directors is also evaluating the possibility of developing an ANCSA settlement trust, that would replace the current Elders' Benefit Program, to pay tax-advantaged distributions. In addition, another settlement trust is being considered that could provide tax-advantaged distributions to all shareholders. Both of these trusts would require certain favorable tax rulings and a shareholder vote, which the company would hold later in the year.

CIRI has resumed its Elders' Benefit Program by distributing the three quarterly payments that were being held in an interest-bearing account since the payments were suspended due to the litigation. More than 550 eligible CIRI elders were mailed payments. Elders eligible for all three payments received a distribution of $1,350 plus interest. The next regular quarterly payment of $450 is scheduled for distribution on May 10.

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