<PAGE>

                                                                 EXHIBIT 99.2

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTY


IN RE ENCORE COMPUTER CORPORATION              )
SHAREHOLDERS LITIGATION                        )       Civil Action No. 16044


                     PLAINTIFFS' MOTION FOR COURT APPROVAL
                             OF PLAN OF DISTRIBUTION

     Plaintiffs Louis J. Williams and Paul S. Rosenblum (the "Plaintiffs"),
through undersigned counsel, respectfully submit this motion for Court approval
of a proposed "Plan of Distribution" of common stock of Encore Computer
Corporation ("Encore" or "the Company"). For the reasons stated below, the
motion should be granted.

I.  Background

     A.   The Litigation

     On November 18, 1997, Plaintiffs initiated this action by filing derivative
and class action complaints, subsequently consolidated by order dated December
17, 1997 (the "Action"), on behalf of all shareholders of Encore against Gould
Electronics, Inc., Kenneth G. Fisher, Rowland H. Thomas, Robert J. Fedor and C.
David Ferguson (collectively, the "Original Defendants"), and named the Company
as a nominal defendant. Plaintiffs alleged that the defendants breached their
fiduciary duties and obligations owed to the shareholders of Encore in
connection with the proposed sale of Encore's storage products business to Sun
Microsystems, Inc. (the "Sun Transaction").
<PAGE>

     On July 15, 1999, the plaintiffs filed an Amended Complaint adding two
additional defendants, Michael C. Veysey and Thomas N. Rich (collectively with
the Original Defendants, the "Defendants") and no longer naming the Company as a
nominal defendant. The Amended Complaint alleged that the defendants breached
duties and obligations owed to the shareholders of the Company in connection
with the operation and management of the Company, including the Sun Transaction,
as well as the sale of Encore's "real-time" computing business to Gores
Technology Group (the "Gores Transaction), and made or caused misstatements
and omitted to disclose information in the Sun and Gores Proxy Statements.

     On August 30, 1999, all Defendants moved to dismiss the Action. After
briefing and oral argument, on June 16, 2000, the Court of Chancery granted
Defendants' motion and dismissed the Action in its entirety. By notice dated
July 10, 2000, the Plaintiffs appealed the Court of Chancery's dismissal of the
Action to the Supreme Court of the State of Delaware.

     B. The Settlement and Plan of Distribution

     During the pendency of the appeal, the Plaintiffs and Defendants conducted
arms' length settlement negotiations and agreed in principle upon the terms of
a settlement, subject to definitive documentation and the approval of the Court
of Chancery.

     On July 5, 2001, the parties executed a settlement agreement styled
"Stipulation And Agreement Of Compromise, Settlement And Release (the
"Stipulation"). The parties have jointly filed, contemporaneously herewith, the
Stipulation, as well as a proposed scheduling order, form of notice to the
class, and proposed final order.

     As described in detail in the Stipulation, the settlement calls for the
Company to repurchase the shares Encore common stock held by the defendants for
a price consisting of the

                                       2
<PAGE>

defendants' pro rata share of Encore's assets. The shares repurchased by the
Company will then be redistributed to the members of the Class.

     Plaintiffs have prepared a proposed "Plan of Distribution," attached hereto
as Exhibit A, designed to effectuate the redistribution of shares of the common
stock of Encore repurchased by the Company from the defendants. The Plan, which
is the subject of the motion, is discussed in detail below.

     In substance, the consideration received by the Class in the settlement is
the defendants' interest in the publicly traded corporate "shell" of Encore.
Plaintiffs have consulted with, and defendants have agreed to appoint as a
successor Board of Directors, consultants who specialize in the placement of
active private businesses with publicly traded shell corporations. The successor
Board, subject to compliance with all applicable laws, will consummate a merger
between the Encore shell and an active business. Plaintiffs believe that this
will maximize the value of the shell, and the shares held by members of the
Class.

II. Argument

     The Plan of Distribution provides that (1) 40% of the repurchased shares,
referred to as Tranche A, will be automatically distributed to the holders as of
the record date of the Sun Transaction, (2) 10% of the repurchased shares,
referred to as Tranche B, will be automatically distributed to the holders as of
the record date of the Gores Transaction, and (3) the remaining 50% of the
repurchased shares, or Tranche C, will be distributed to the class as a whole,
based on their losses, on a claims-made basis.

     As noted above, and discussed in considerably more detail in the Amended
Complaint the allegations of this case principally concern the Sun Transaction
and Gores Transaction.

                                       3
<PAGE>

Accordingly, plaintiffs have structured the Plan of Distribution to recognize
that the damages incurred by the Class arise principally form these two
transactions. Thus, the proposed Plan of Distribution allocates 50% of the
repurchased shares to the holders on the respective record dates of the Sun and
Gores Transactions.

     An analysis of the damages incurred by the Class, contained in the
Affidavit of Matthew E. Miller ("Miller Aff.," filed herewith as Exhibit B),
demonstrates that approximately 80% of the damages can be attributable to the
Sun Transaction, and 20% to the Gores Transaction. Accordingly, the 50% of the
repurchased shares set aside for holders as of the record dates of the Sun and
Gores Transactions has been allocated in a 4:1 ratio. See Miller Aff., (P) 18.
                                                      ---
     Although the Sun and Gores Transactions are the focus of the allegations of
the Amended Complaint, plaintiffs also recognize that Class members may have
been damaged by the defendants conduct without actually holding as of the record
dates of the Sun and Gores Transactions. For example, a Class member who
purchased shares following the Sun Transaction in reliance upon defendants'
representations concerning plans to continue the real-time computing business,
but sold those shares at a loss on the eve of the record date of the sale of
that business in the Gores Transaction, would have been damaged by defendants'
conduct.

     Accordingly, to afford a remedy to Class members whose damages are not
adequately reflected through their holdings as of the record dates of the Sun
and Gores Transactions, the Plan of Distribution allocates 50% of the
repurchased shares, in Tranche C, to the entire Class on a claims-made basis,
based on the losses incurred by each class member. Each class member will be
entitled to claim one share in Tranche C for each $1.30 of losses in his
transactions in Encore stock held at any time during the Class Period. This
ratio is determined by dividing the

                                       4
<PAGE>

total losses incurred by the Class, $33,292,597, by the number of shares
available for redistribution in Tranche C, 25,562,371. See Miller Aff., (P) 9.
                                                       ---
In the unlikely event that the total shares claimed exceeds those available,
shares will be distributed on a pro rata basis. Any unclaimed shares will be
                                --------
retired by the Company.

     Plaintiffs believe that the foregoing formula represents a fair and
reasonable method of (1) affording a remedy to those directly damaged by the
conduct alleged in the Amended Complaint concerning the Sun and Gores
Transactions, and (2) affording a remedy to all members of the Class who may
have been damaged, albeit less directly, by defendants' conduct.

III. Conclusion

     For the reasons stated above, plaintiffs respectfully pray that the Court
enter an order, inter alia, approving plaintiffs' proposed Plan of Distribution.
                ----------

Dated: July 5, 2001

Of Counsel:
Matthew E. Miller
P.O. Box 1255                                 /s/ David Staats
Arlington, VA 22210                       --------------------------------
(703) 248-9393                            David Staats
                                          Law Offices of David Staats, P.A.
                                          1701 Augustine Cut-Off; Suite 36
                                          Wilmington, DE 19803
                                          (302) 658-8188
                                                  Attorneys for Plaintiffs and
                                                  Proposed Class

                                       5
<PAGE>

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTY

IN RE ENCORE COMPUTER CORPORATION          )
SHAREHOLDERS LITIGATION                    )      Civil Action No. 16044

                                   AFFIDAVIT

COMMONWEALTH OF VIRGINIA            )
                                    )
COUNTY OF FAIRFAX                   )


     1.   I am an attorney doing business as The Law Offices of Matthew E.
Miller, in Arlington, Virginia. I am lead counsel for the plaintiffs in this
action.

     2.   I submit this affidavit in support of "Plaintiffs' Motion for Court
Approval of Plan of Distribution".

     3.   I have conducted a statistical analysis of the damage caused to the
Class in this action as a result of the conduct described in the Amended
Complaint. Attached as Exhibit 1 hereto is the data relied upon in this
analysis, namely, the historical trading data of Encore common stock from
November 25, 1996 to June 29,2001.

     4.   I have measured damages in terms of the diminution of value of the
shares of common stock held by members of the Class (defined in the "Stipulation
And Agreement Of Compromise, Settlement And Release" as record holders or
beneficial owners of Encore Common Stock, other than the Defendants, at any time
during the period beginning on and including October 31, 1997).

     5.   During the one-year period preceding the sale of Encore's storage
products business to Sun Microsystems, Inc. (the "Sun Transaction"), the shares
held by the Class had an average market value of $34,083,578.
<PAGE>

     6.   Between November 24, 1997 (the date after the completion of the Sun
Transaction) and September 10, 1998 (the date prior to the sale of Encore's
"real-time" computing business to Gores Technology Group (the "Gores
Transaction")), the shares held by the Class had an average market value of
$7,673,380. A diminution in value of $26,410,198 can thus be attributed to the
Sun Transaction, and defendants' conduct in connection therewith.

     7.   Between September 11, 1998 (the date of the Gores Transaction) and
June 29, 2001, the shares held by the Class had an average market value of
$790,981. A diminution in value of $6,882,399 can thus be attributed to the
Gores Transaction, and defendants' conduct in connection therewith.

     8.   Based on the foregoing analysis, out of the Class' total damages of
$33,292,597, approximately 79.3%, or $26,410,198 can be attributed to the Sun
Transaction, and approximately 20.6%, or $6,882,399 can be attributed to the
Gores Transactions.

     9.   Based on the total damages of $33,292,597, and the redistribution of
25,562,371 shares in Tranche C, one share will be available for each $1.30 of
total loss to each class member in Tranche C.


                              /s/ Matthew E. Miller
                              ---------------------
                                Matthew E. Miller


Sworn to before me this
2/nd/ day of July, 2001

/s/ [ILLEGIBLE]
-------------------------
      Notary Public

My Commission Expires: 05/31/03

                                       2
<PAGE>

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                          IN AND FOR NEW CASTLE COUNTY

IN RE ENCORE COMPUTER CORPORATION     )
SHAREHOLDERS LITIGATION               )     Civil Action No. 16044


                              PLAN OF DISTRIBUTION
                              --------------------

     Plaintiffs Louis J. Williams and Paul S. Rosenblum (the "Plaintiffs") on
behalf of themselves and the Class (as defined in the Stipulation and Agreement
of Compromise, Settlement and Release), through undersigned counsel, submit
this proposed Plan of Distribution of common stock of Encore Computer
Corporation to be received from the Defendants in settlement of this action.

     WHEREAS plaintiffs have negotiated a "Stipulation of Settlement, Compromise
and Release" (the "Stipulation" or "Settlement") with Gould Electronics, Inc.,
Robert J. Fedor, C. David Ferguson, Thomas N. Rich, Michael C. Veysey, Kenneth
G. Fisher and, Rowland H. Thomas (collectively the "Defendants"),

     WHEREAS Plaintiffs and Defendants stipulated that a class shall be
certified for settlement purposes pursuant to Court of Chancery Rule consisting
of all persons who and entities which were record holders or beneficial owners
(other than the Defendants) of the common stock of Encore Computer Corporation
("Encore" or "the Company") (the "Encore Common Stock") at any time during the
period beginning on and including October 31, 1997, the record date for the
Sun Transaction, through and including the Effective Date (as defined in the
Stipulation); and
<PAGE>

     WHEREAS a principal element of consideration provided by the Defendants is
the retirement of their shares of Encore Common Stock (the "Repurchased
Shares"),

     Plaintiffs propose the following plan of distribution of those shares
to members of the Class:

     1.   The Repurchased Shares shall be allocated as follows:

          (a) Tranche A: 40% of the Repurchased Shares, or 20,449,897 shares,
          shall be distributed to Class member who were holders of record as of
          October 31, 1997 (the record date of the Sun Transaction); claimants
          will receive approximately 0.69 shares for each share held as of
          October 31, 1997;

          (b) Tranche B: 10% of the Repurchased Shares, or 5,112,474 shares,
          shall be distributed to Class members who were holders of record as of
          August 6, 1998 (the record date of the Gores Transaction); claimants
          will receive approximately 0.17 shares for each share held as of
          August 6, 1998;

          (c) Tranche C: 50% of the Repurchased Shares, or 25,562,371 shares,
          shall be distributed to the entire Class, on a pro rata basis, based
                                                         --------
          on their Total Loss (as that term is defined below) incurred in
          purchases and sales of Encore Common Stock during the Class Period.
          Each class member's "Total Loss" consists of (i) the cost basis of all
          shares of Encore common stock held as of the Effective Date, plus (ii)
          losses incurred in sales of Encore common stock occurring during the
          class period. For each $1.30 of Total Loss, the Class member will
          receive one (1) share of common stock. In the event that the total
          shares claimed exceeds the number of shares available, the shares will
          be distributed on a pro rata basis to those Class members timely
                              --- ----
          filing claims.

     2.   Members of the Class may claim, and receive, distributions of stock
from more than one of the three Tranches.

     3.   Shares of Traches A and B will be distributed to the Company's
Shareholders in accordance with the Company's stock transfer and stock registry.
Shares of Tranche C will only be distributed to those Class members who timely
file claims in accordance with the procedures described in the "Proof of Claim
and Release" disseminated to all Class members with the "Notice of Pendency of
Class Action; Proposed Settlement of Class Action and Settlement Hearing."

                                       2
<PAGE>

     4.   Shares of Tranches A and B that are unclaimed will be retired by the
Company. To the extent that the number of shares available for distribution in
Tranche C exceeds the number of shares claimed, the unclaimed shares will be
retired by the Company.




July 5, 2001                                   LAW OFFICES OF DAVID STAATS, PA.

                                                   David Staats
                                               --------------------------------
                                               David Staats
                                               1701 Augustine Cut-Off, Suite 36
                                               Wilmington, DE 19803
                                               (302)658-8188

                                               Counsel for Plaintiffs


OF COUNSEL:

LAW OFFICES OF MATTHEW E. MILLER
Matthew E. Miller
P.O. Box 1255
Arlington, VA 22210
(703) 248-9393

                                       3
<PAGE>

                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTY

IN RE ENCORE COMPUTER CORPORATION            ) CONSOLIDATED
SHAREHOLDERS LITIGATION                      ) C.A. No. 16044



                                       ORDER

     This matter having come before the Court on Plaintiffs' Motion For Court
Approval Of Plan Of Distribution, and the Court having considered the Motion and
heard interested parties with respect thereto,

     NOW, therefore, it is hereby ordered that Plaintiffs' Motion For Court
Approval Of Plan Of Distribution is GRANTED, and that the Plan Of Distribution
attached to this Order is approved effective upon the date of entry of this
Order.

     IT IS SO ORDERED.


                                      _______________________________
                                      Jack B. Jacobs, Vice-Chancellor

Dated: _______________
<PAGE>

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTY


IN RE ENCORE COMPUTER CORPORATION                )
SHAREHOLDERS LITIGATION                          )     Civil Action No. 16044


                             PLAN OF DISTRIBUTION
                             --------------------

     Plaintiffs Louis J. Williams and Paul S. Rosenblum (the "Plaintiffs") on
behalf of themselves and the Class (as defined in the Stipulation and Agreement
of Compromise, Settlement and Release), through undersigned counsel, submit this
proposed Plan of Distribution of common stock of Encore Computer Corporation to
be received from the Defendants in settlement of this action.

     WHEREAS plaintiffs have negotiated a "Stipulation of Settlement, Compromise
and Release" (the "Stipulation" or "Settlement") with Gould Electronics, inc.,
Robert J. Fedor, C. David Ferguson, Thomas N. Rich, Michael C. Veysey, Kenneth
G. Fisher and, Rowland H. Thomas (collectively the "Defendants"),

     WHEREAS Plaintiffs and Defendants stipulated that a class shall be
certified for settlement purposes pursuant to Court of Chancery Rule consisting
of all persons who and entities which were record holders or beneficial owners
(other than the Defendants) of the common stock of Encore Computer Corporation
("Encore" or "the Company') (the "Encore Common Stock") at any time during the
period beginning on and including October 31, 1997, the record date for the Sun
Transaction, through and including the Effective Date (as defined in the
Stipulation); and
<PAGE>

     WHEREAS a principal element of consideration provided by the Defendants is
the retirement of their shares of Encore Common Stock (the Repurchased Shares),

     Plaintiff propose the following plan of distribution of those shares to
members of the

Class:

     1.   The Repurchased Shares shall be allocated as follows:

          (a) Tranche A: 40% of the Repurchased Shares, or 20,449,897 shares,
          shall be distributed to Class member who were holders of record as of
          October 31, 1997 (the record date of the Sun Transaction); claimants
          will receive approximately 0.69 shares for each share held as of
          October 31, 1997;

          (b) Tranche B: 10% of the Repurchased Shares, or 5,112,474 shares,
          shall be distributed to Class members who were holders of record as of
          August 6, 1998 (the record date of the Gores Transaction); claimants
          will receive approximately 0.17 shares for each share held as of
          August 6, 1998;

          (c) Tranche C: 50% of the Repurchased Shares, or 25,562,371 shares,
          shall be distributed to the entire Class, on a pro rata basis, based
                                                         --------
          on their Total Loss (as that term is defined below) incurred in
          purchases and sales of Encore Common Stock during the Class Period.
          Each class member's "Total Loss" consists of (i) the cost basis of all
          shares of Encore common stock held as of the Effective Date, plus (ii)
          losses incurred in sales of Encore common stock occurring during the
          class period. For each $1.30 of Total Loss, the Class member will
          receive one (1) share of common stock. In the event that the total
          shares claimed exceeds the number of shares available, the shares will
          be distributed on a pro rata basis to those Class members timely
                              --------
          filing claims.

     2.   Members of the Class may claim, and receive, distributions of stock
from more than one of the three Tranches

     3.   Shares of Traches A and B will be distributed to the Company's
Shareholders in accordance with the Company's stock transfer and stock
registry. Shares of Tranche C will only be distributed to those Class members
who timely file claims in accordance with the procedures described in the "Proof
of Claim and Release" disseminated to all Class members with the "Notice of
Pendency of Class Action, Proposed Settlement of Class Action and Settlement
Hearing."


                                       2
<PAGE>

     4.   Shares of Tranches A and B that are unclaimed will be retired by the
Company. To the extent that the number of shares available for distribution in
Tranche C exceeds the number of shares claimed, the unclaimed shares will be
retired by the Company.

July 5, 2001                            LAW OFFICES OF DAVID STAATS, P.A.

                                        /s/ David Staats
                                        ---------------------------------

                                        David Staats
                                        1701 Augustine Cut-Off, Suite 36
                                        Wilmington, DE 19803
                                        (302) 658-8188

                                        Counsel for Plaintiffs

OF COUNSEL:

LAW OFFICES OF MATTHEW E. MILLER
Matthew E. Miller
P.O. Box 1255
Arlington, VA 22210
(703) 248-9393

                                       3
<PAGE>

               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                         IN AND FOR NEW CASTLE COUNTRY

IN RE ENCORE COMPUTER CORPORATION       )    CONSOLIDATED
SHAREHOLDERS LITIGATION                 )    C.A. No. 16044





                            CERTIFICATE OF SERVICE

     I hereby certify that I have caused two copies of PLAINTIFFS' MOTION FOR
COURT APPROVAL OF PLAN OF DISTRIBUTION to be served on the following attorneys
of record by first class mail, postage prepaid:


     R. Franklin Balotti, Esq.
     Peter B. Ladig, Esq.
     Richards, Layton & Finger
     One Rodney square
     Wilmington, DE 19899

     Steven J. Balick, Esq.
     Ashy & Geddes
     222 Delaware Avenue
     P.O. Box 1150
     Wilmington, DE 19899

     on the date below.

                                        /s/ David Staats
                                        ----------------------
                                        David Staats, Esquire

Date:  JUL 06 2001
     --------------------