/raid1/www/Hosts/bankrupt/CAR_Public/000223.MBX                C L A S S   A C T I O N   R E P O R T E R

               Wednesday, February 23, 2000, Vol. 2, No. 38


AMERICAN BANK: Defends & Tries to Settle Securities Lawsuit in New York
AMERICAN BANK: Former Parent Announces Atty. for NY Investigates on IPO
DOJ: Report Says 9,000 Lawyers Join Action Seeking Back Pay
DRUG PRICES: Court Rejects Appeal by Pharmacies over Price Discounts
FEN-PHEN: LA HMO Seeks to Block Transfer of Suit to Federal MDL Court

INDUS INTERNATIONAL: Berman, DeValerio Files Securities Suit in CA
LUTHERAN GENERAL: IL Ct Bars Risk Management Staff from Ex Parte Talk
MCDERMOTT INT'L: Announces Babcock & Wilcox Files Petition under Ch 11
MONSANTO CO: Faces Shareholder Suit on Proposed Delta & Pine Merger
PATHOGENESIS CORP: Trial Court WA Dismisses Securities Lawsuits

PEDIATRIC SERVICES: Denies GA Charges of Violations of Securities Laws
PUBLISHERS CLEARING: Appeal Slows Down Settlement Pay for Sweepstakes
SHELDAHL INC: Shareholders Sue in MN over Consideration from Molex Deal
SOTHEBY'S HOLDINGS: Reports on Management Changes and Antitrust Suit
SOTHEBY'S: Paper Says Company Hints of Settlement for Alleged Collusion

STAR TELECOM: Refutes Investors' Suit over Deal in World Access Merger
SUBSQUEHANNA RADIO: Atlanta 99X Faces Suit over Unwelcome Tel Messages
U.S, U.K: EU Probes Economic Spying Charges by Echelon
WAR VICTIMS: Milberg Files Suit in CA for Compensation from Japanese


AMERICAN BANK: Defends & Tries to Settle Securities Lawsuit in New York
A consolidated class action complaint against American Bank Note
Holographics Inc., certain of its former officers and directors, its
Former Parent, the four co-lead underwriters of the Offering and its
auditors, has been filed in the United States District Court for the
Southern District of New York. The complaint alleges violations of the
federal securities laws and seeks to recover damages on behalf of all
purchasers of the Company's Common Stock during the class period (July
15, 1998 through February 1, 1999). The complaint seeks rescission of
the purchase of shares of the Company's Common Stock or alternatively,
unspecified compensatory damages, along with costs and expenses
including attorney's fees.

The Company and certain other defendants have separately moved to
dismiss the complaint. The Plaintiffs' discovery requests as well as
their motion for class certification have been stayed pending resolution
of the respective motions to dismiss. The Company has commenced
settlement discussions with Plantiffs' counsel.

Management of the Company does not believe it is feasible to predict or
determine the outcome or resolution of these proceedings, or to estimate
the amounts of, or potential range of loss with respect thereto. In
addition, the timing of the resolution of these proceedings is
uncertain. The range of possible resolutions could include judgements
against the Company or settlements that could require substantial
payments by the Company, including costs of defending such suits, which
could have a material adverse effect on the Company's financial
position, results of operations and cash flows.

AMERICAN BANK: Former Parent Announces Atty. for NY Investigates on IPO
Report of American Bank Note Holographics Inc. filed with the Securities
and Exchange Commission:

On February 9, 1999, the Division of Enforcement of the SEC issued a
Formal Order Directing Private Investigation, designating officers to
take testimony and requiring the production of certain documents, in
connection with matters giving rise to the need to restate the Company's
previously issued financial statements. The Company has provided
numerous documents to and continues to cooperate fully with the SEC
staff. Management of the Company cannot predict the duration of such
investigation or its potential outcome.

The U.S. Attorney's Office for the Southern District of New York has
commenced an investigation in connection with matters giving rise to the
need to restate the Company's previously issued financial statements, as
well as a possible violation in 1998 of the Foreign Corrupt Practices
Act. The Company has not been advised that it is a target of such
investigation. The Company has provided numerous documents to and
continues to cooperate fully with the U.S. Attorney's office. Management
of the Company cannot predict the duration of such investigation or its
potential outcome.

On January 20, 2000, the Former Parent announced in an SEC filing that
it was advised by the U.S. Attorney's Office for the Southern District
of New York that it is a target of an investigation relating to the
revenue recognition issues involving the Company, which issues the
Company believes to have arisen prior to the Company's initial public
offering and separation from the Former Parent. In addition, the Former
Parent announced that, in connection with the same issues, the staff of
the SEC is prepared to recommend to the SEC that enforcement proceedings
be commenced against the Former Parent in U.S. District Court seeking
injunctive relief and monetary disgorgement. The Former Parent also
announced that it was advised by counsel to Morris Weissman, the Former
Parent's Chairman of the Board and Chief Executive Officer and the
Company's former Chairman of the Board and Chief Executive Officer, that
such counsel had received similar notification from the U.S. Attorney's
Office for the Southern District of New York and the staff of the SEC
with respect to Mr. Weissman.

                        Former Parent

American Bank Note Holographics, Inc. was, until July 20, 1998, a
wholly-owned subsidiary of American Banknote Corporation (the "Former
Parent"). On the Offering Date, the Former Parent completed the sale of
13,636,000 shares of the Company's common stock in a public offering,
representing its entire investment in the Company. The Company did not
receive any proceeds from the Offering. Additionally, in connection with
the Offering, the amounts due from the Former Parent and affiliates of
approximately $33.9 million were cancelled and deemed to be a dividend.
Immediately following the Offering, the Company had approximately $5.2
million of secured bank debt and nominal cash.

On June 11, 1998, the Company declared a 1,363.6 to one stock split,
effective July 2, 1998, in the form of a stock dividend, of its Common
Stock and increased its authorized Common Stock to 30,000,000 shares and
its authorized Preferred Stock to 5,000,000 shares. The accompanying
financial statements give retroactive effect to the consummation of the
stock split.

As a wholly-owned subsidiary, the Company was provided certain corporate
and administrative services by its Former Parent, including financial
reporting, treasury functions, tax planning and compliance, risk
management, human resources and legal services. Additionally, because
the Former Parent managed cash and financing requirements centrally,
interest expense and financing requirements prior to the Offering Date
were based on the existing capital structure. The financial position and
operations of the Company may differ from the results that may have been
achieved had the Company operated as an independent entity.

The Company originates, mass-produces, and markets secure holograms.
Holograms are used for security, packaging and promotional applications.
The Company operates in one reportable industry segment.

DOJ: Report Says 9,000 Lawyers Join Action Seeking Back Pay
Nearly 9,000 Justice Department lawyers have joined in a class-action
lawsuit claiming that they were illegally denied overtime payments
during the past eight years. The suit could cost taxpayers more than
$500 million.

The suit, initially filed in the U.S. Court of Federal Claims in
November 1998 by 180 present or former Justice Department lawyers, saw
its plaintiff count increase significantly over the past five months
when nearly 9,000 lawyers joined as part of an "opt-in" period approved
in September 1999 by Judge Robert Hodges Jr. The deadline to join the
case was last week.

The suit seeks $500 million in damages plus interest for present or
former Justice lawyers who worked for the department in Washington and
in U.S. attorneys' offices across the country since November 1992.

Covering nearly 80 percent of the department's staff lawyers, it accuses
the agency's top management of illegally refusing to make payments for
overtime that was legally accrued.

The suit charged that the department made "a conscious decision" to
ignore a federal law requiring the payment of overtime for employees who
work more than 40 hours a week.

Washington lawyer Robert A. Van Kirk, who represents the lawyers, said
about 50 top Justice Department officials have received notice that they
will be deposed in the case, including Attorney General Janet Reno and
Deputy Attorney General Eric H. Holder Jr.

Mr. Van Kirk, a lawyer at Williams & Connolly, said he hopes to question
Miss Reno, Mr. Holder and the others this spring and is looking for a
trial date in September. "It is ironic that the very agency charged with
enforcing this country's laws has made a deliberate policy decision in
this case to ignore the law," Mr. Van Kirk said. "The purpose of this
lawsuit is to ensure that the nation's chief law-enforcement agency
abides by the law itself."

Justice Department spokesman Charles Miller declined to comment on the
suit. The department has argued in the past, however, that the payment
of overtime to its lawyers could cost taxpayers $40 million a year. It
also has insisted that its legal staff is composed of "professionals"
who knew that they often would be required to spend more than 40 hours a
week on the job to complete their work.

The suit said the department, in refusing to pay its lawyers for
overtime work, knowingly violated the 1945 Federal Employees Pay Act
that requires overtime pay for all federal employees who work more than
an eight-hour day or a 40-hour week. The law does not create an
exception for lawyers.

It said records show Justice Department lawyers work much more than 40
hours a week and that "DOJ management expects that its attorneys will
work overtime, has knowledge that its attorneys are working overtime,
relies on the time records they submit, and approves of the hours
expended." "Indeed, the department has adopted a formal policy of
refusing to pay overtime even while admitting that its attorneys must
work overtime to perform their jobs competently," the suit said.

The suit also said the department maintained "two sets of hourly time
records" - one showing that its lawyers worked five eight-hour days a
week and another recording actual time, which is often more than 40
hours a week. It said the second set of books was used to justify higher
budget requests sent to Congress and in setting awards for attorneys'
fees in litigation with private parties.

The Justice Department has argued that the hourly time records were used
as a "management tool" to help supervisors allocate resources among its
various divisions and the 94 U.S. attorneys offices around the country,
which are ranked according to how much overtime their lawyers record.

Documents obtained by the plaintiffs in the case show that senior
Justice Department officials recognized as early as 1980 that the
decision not to pay lawyers for overtime was vulnerable to a court
challenge. However, a statute of limitations allows the plaintiffs to
seek compensation only since 1992.

The records show that in a memo dated 16 days before the suit was filed,
Fran Allegra, then a deputy associate attorney general, said it was
"problematic some might use the term unconscionable for the department
to continue to not pay its attorneys overtime knowing full well that the
overtime statute applies."

Mr. Van Kirk said his clients share a sense of disappointment that the
department would be less than forthright in its obligations under the
law with regard to overtime pay. He said many expected that their
employer, charged with the responsibility of enforcing the country's
laws, would make every effort to obey them. (The Washington Times,
February 22, 2000)

DRUG PRICES: Court Rejects Appeal by Pharmacies over Price Discounts
The Supreme Court on February 22 refused to revive the main part of a
lawsuit that accuses prescription drug manufacturers and wholesalers of
conspiring to deny price discounts to pharmacies. The court, without
comment, rejected an appeal in which the pharmacies argued that the drug
companies' actions, taken as a whole, spell out a conspiracy aimed at
charging pharmacies more than other customers.

The class-action lawsuit, filed on behalf of thousands of retail
pharmacies, accuses drug manufacturers and wholesalers of keeping
pharmacies from buying brand-name drugs at the discounted prices offered
to hospitals, nursing homes and health-maintenance organizations.

The pharmacies said they pay an average 10 percent to 25 percent more
than other brand-name drug customers. They also said the drug makers and
sellers agreed during the early 1990s to rely on the Consumer Price
Index to set price increases for pharmacies.

The drug companies argued that hospitals and HMOs have the leverage to
negotiate discounts because their use of approved-drug lists meant they
could decide not to buy certain drugs.

Because pharmacies have to stock virtually all types of drugs to serve
their customers, they do not have the same negotiating leverage, the
drug companies contended.

A federal judge in Chicago ruled for the drug makers and wholesalers
last year, and the 7th U.S. Circuit Court of Appeals generally agreed.

Drug manufacturers can legally charge higher prices to some customers so
long as they do not conspire to do so, the appeals court said. It added
that the pharmacies provided evidence of such an agreement only with
regard to the claim that prices for pharmacies were pegged to the CPI.

The appeals court ordered a lower court to resolve other issues to
determine whether the CPI claim should go to trial.

In the appeal, the pharmacies' lawyers said the appeals court's ruling
''has opened a safe harbor where sellers may engage in a plain form of
price collusion.'' The 7th Circuit court should have considered the drug
companies' actions as a whole instead of as separate issues, the appeal
said. The drug companies' lawyers said the appeal was premature and that
the lower court ruled correctly.

The case is HJB vs. Amerisource Corp., 99-786. (AP Online, February 22,

FEN-PHEN: LA HMO Seeks to Block Transfer of Suit to Federal MDL Court
A Louisiana health maintenance organization (HMO) that filed a class
action lawsuit on behalf of all third-party payors who have had to pay
for treating diseases allegedly caused by diet drugs is now trying to
prevent the suit from being transferred to the diet drug multidistrict
litigation (MDL) court. HMO Louisiana Inc. v. American Home Products
Corp. et al., No. 99-1086 (JPML, motion filed Dec. 1, 1999 ).

Plaintiff HMO Louisiana argues that its claims are very different from
those asserted in the MDL by thousands of diet drug users and that the
proposed global settlement between the plaintiffs in those cases and
American Home Products Corp. does not include reimbursements to medical
insurers and HMOs. "To transfer the Louisiana action to the MDL would be
to inject new parties with differing claims requiring different types of
damages discovery which does not pertain to any of the claims of the
individual plaintiffs whose claims are currently in the MDL," HMO
Louisiana told the Judicial Panel on Multidistrict Litigation in its
motion to vacate the conditional transfer of the case.

HMO Louisiana is the first -- and thus far, only -- HMO to have brought
suit against the diet drug manufacturers to recover the costs of
treating diet drug users who subsequently developed heart valve disease
or primary pulmonary hypertension. In addition the HMO is also seeking
to recover the costs of medical tests for thousands of insureds who
sought physical examinations and electrocardiograms to rule out injuries
from the drugs. If the case is transferred, the MDL court will have to
preside over two distinct types of cases involving differing discovery
issues, theories of recovery, and issues of proof, the HMO said. Thus,
transferring the suit to the MDL would result in more time and expense
on the part of all parties rather than a saving of judicial resources,
the plaintiff contended. Further, the defendants in the case have filed
a motion to dismiss all of the claims for failure to state a claim. A
judgment on that motion would constitute an adjudication on the merits,
and therefore can only take place in the transferor court, in this case,
the Western District of Louisiana. (Call 877-595-0449 for the three-page
motion to vacate and the plaintiff's five-page brief in support of the
motion.) (Managed Care Litigation Reporter, January 17, 2000)

INDUS INTERNATIONAL: Berman, DeValerio Files Securities Suit in CA
Berman, DeValerio & Pease LLP commenced a securities class action
lawsuit on behalf of purchasers of the common stock of Indus
International, Inc. between October 29, 1999 and January 27, 2000,
inclusive, in the United States District Court for the Northern District
of California.

The complaint charges Indus International and certain of its directors
and executive officers with violations of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. The complaint alleges, among
other things, that the Company's financial statements for the third
quarter ended September 30, 1999 materially overstated revenues and net
income, which resulted in the Company's stock price being artificially

The Company has announced that after an in-depth review by the Company's
auditors of its revenue recognition practices, the Company is restating
its financial statements for the third quarter ending September 30,
1999, reducing net income by 89%. In the wake of this revelation, Indus
International's stock price fell to $7.625, more than 23% below its
previous close and 42% below the Class Period high of $13 per share.

For additional information on this action, you may contact Chauncey D.
Steele IV or Michael G. Lange of Berman DeValerio & Pease LLP at One
Liberty Square, Boston, MA 02109, or call at (800) 516-9926 or vie
e-mail at bdplaw@bermanesq.com or visit web site at

LUTHERAN GENERAL: IL Ct Bars Risk Management Staff from Ex Parte Talk
A Cook County associate judge on February 18 entered a protective order
that prevents risk management employees for hospitals from having ex
parte conversations with hospital medical staff members whose alleged
negligence is not at issue in a medical malpractice case.

Judge Joseph N. Casciato's order will stay in effect while
constitutional challenges to a new law involving the privacy of hospital
patients remain pending, lawyers in the cases said.

At issue is an amendment to the Hospital Licensing Act, 210 ILCS 85/6.17
(d) and (e), that took effect Jan. 1 and allows hospital lawyers and
risk management employees to talk to patients' doctors about the
defendant physicians' care without the patients' knowledge.

Pending disposition of the merits of plaintiff's motion, those parties
responsible for risk management or defense of claims of defendant
hospital shall not communicate outside the presence of the plaintiff's
counsel with any of plaintiff's health care providers, other than those
whose alleged negligence plaintiff's lawsuit seeks to impute to the
defendant hospital, for the purposes of gathering information concerning
the lawsuit," states Casciato's order. The case is Doris Burger v.
Lutheran General Hospital, et al., No. 98 L 11618.

Casciato's ruling is a great order in the sense that it protects the
patients' privacy interests," said Bruce R. Pfaff, a Chicago lawyer who
heads a firm bearing his name and is co-lead plaintiff counsel.

The ruling preserve the status quo as it existed before Jan. 1, said
Keith A. Hebeisen, a partner with Clifford Law Offices P.C. in Chicago,
and the other co-lead plaintiff lawyer.

Plaintiff attorneys sought the protective order relating to risk
managers after similar orders were entered by judges preventing hospital
attorneys from participating in ex parte discussions with hospital staff
members whose negligence isn't at issue.

We protected risk management employees' right to do all their other
duties," Hugh C. Griffin, a Lord, Bissell & Brook partner and lead
defense counsel along with Eugene A. Schoon of Sidley & Austin, said
after February 18's court hearing, referring to Casciato's order.

Risk management employees also are involved in peer review and other
internal quality control issues.

Plaintiff attorneys assert that the language in the amendment relating
to ex parte contact already has been declared unconstitutional by the
Illinois Supreme Court in rulings striking down the Civil Justice Reform
Amendments, also known as tort reform" legislation. Those rulings came
in Best v. Taylor Machine Works, 179 Ill.2d 367 (1997), and Kunkel v.
Walton, 179 Ill.2d 519 (1998).

The new law violates the separation of powers doctrine because the
legislature is attempting to involve itself in discovery issues, which
remain the purview of the Supreme Court, plaintiff attorneys contend.
The new law also should be struck down because it constitutes special
legislation, they added.

Defense attorneys are expected to defend the statute vigorously. More
than 100 motions have been filed in the Cook County Circuit Court
challenging the constitutionality of the new law. Law Division Presiding
Judge Judith Cohen designated Casciato to hear the consolidated motions.
The challenged amendment relates to an important discovery issue in many
pending medical malpractice cases, Cohen said. There are about 3,000
medical malpractice cases pending in Circuit Court here, according to
the clerk's office.

Casciato has directed both sides to file their respective briefs
concerning the constitutional issues by March 27 and set a status date
for two days later. (Chicago Daily Law Bulletin,February 18, 2000)

MCDERMOTT INT'L: Announces Babcock & Wilcox Files Petition under Ch 11
McDermott International, Inc. (NYSE: MDR) announced on February 22 that
its wholly owned subsidiary, The Babcock & Wilcox Company (B&W), and
certain of B&W's subsidiaries, filed a voluntary petition in the U.S.
Bankruptcy Court for the Eastern District of Louisiana in New Orleans to
reorganize under Chapter 11 of the U.S. Bankruptcy Code. B&W is taking
this action because it offers the only viable legal process by which it
can seek to determine and comprehensively resolve asbestos liability

Keller Rohrback LLP's Complex Litigation Group has announced
investigation on charges against McDermott International, Inc. and
certain of its officers and directors for violation of federal
securities laws, and this has been reported in the CAR.

McDermott's announcement of the voluntary petition by Babcock & Wilcox
for Chapter 11 Reorganization includes the following:

* Only Means for B&W to Resolve Asbestos Liability Claims
* B&W to Continue Normal Operations
* B&W Receives Commitment for $300 Million in DIP Financing
* McDermott International, Inc. and Subsidiaries Receive $500 Million
  in Additional Financing
* Other McDermott International, Inc. Subsidiaries Not Included in

"Unfortunately, the other avenues through which we might reasonably
resolve this issue appear to have been closed," said Roger Tetrault,
chairman of the board and chief executive officer of McDermott
International, Inc. "Historically it has been B&W's practice to settle
asbestos claims out of court. This has been a reasonable and responsible
approach for nearly 20 years, which minimized costs to B&W and maximized
payments to claimants. However, recent increases in settlement demands
from claimants, coupled with a lack of legislative relief from the
financial burden presented by the increased demands, have forced us to
reexamine that approach. The asbestos claims, in the context in which
they are now presented, represent a serious threat to B&W's future. This
filing is the only means available to resolve them."

Included in the filing are The Babcock & Wilcox Company and its
subsidiaries Americon, Inc., The Babcock & Wilcox Construction Company,
Inc. and Diamond Power International, Inc. B&W Canada is not part of the
filing; however, B&W has requested that the Court issue an injunction
staying asbestos suits from being brought against B&W Canada. No other
B&W subsidiary, nor any other McDermott subsidiary, such as BWX
Technologies, Hudson Products, the Delta companies, McDermott Technology
and J. Ray McDermott, is included in the filing.

To ensure that it has the capital necessary to meet letter of credit and
cash needs to continue to operate its business, B&W has obtained a
commitment of up to $300 million in debtor-in-possession (DIP) financing
provided by Citibank, N.A. and Salomon Smith Barney, members of
Citigroup. B&W has requested, on an expedited basis, Court approval of
this financing package. McDermott International, Inc. and certain of its
other subsidiaries have obtained an additional $500 million of financing
provided by Citibank, N.A. and Salomon Smith Barney, members of
Citigroup, to ensure uninterrupted operations in the balance of its
operating segments. The additional financing consists of up to $ 300
million at J. Ray McDermott and up to $200 million at McDermott
International, Inc.

"Our business remains solvent and strong. However, the recent increased
demands for settlement of asbestos claims represent a real threat to
B&W's long-term health unless we take this step now," said James F.
Wood, president of B&W. "Although it is not unusual for B&W to receive
high initial settlement demands, we generally have been successful in
negotiating those demands to tolerable levels. Recently, however, this
has not been the case. As a result we are forced to make this Chapter 11

"We expect that this filing will have little effect, if any, on our
customers, suppliers, employees or retirees. We are committed to
operating the business as normal, delivering products and services as
usual and pursuing new contracts and growth opportunities for our
company and its subsidiaries," continued Wood.

Wood noted the outstanding contributions of the company's employees over
the years, and emphasized that B&W fully expects to continue to pay all
employee wages, salaries and benefits as usual. Retiree pension benefits
are fully protected from the claims of creditors. B&W also intends to
pay for the post-petition delivery of goods and services in the ordinary
course of business. B&W expects that the claims of trade creditors
should be paid in full under its plan of reorganization. B&W's DIP
financing provides substantial assurance that B&W can meet these

As part of a plan of reorganization to be filed at a later date, B&W
intends to establish a trust that will provide a process through which
future asbestos claims will be evaluated and resolved.

Like many other companies, B&W was a purchaser of asbestos rather than a
manufacturer. The material was used many years ago in the power
generation industry as insulation to protect people and equipment from
high temperatures inside industrial, utility and marine boilers. The use
of asbestos was specified and encouraged by U.S. government agencies for
decades. B&W utilized asbestos in conformance with guidelines published
by applicable regulatory bodies. Like many other users of asbestos, B&W
was unaware that its use of asbestos posed health hazards. After
government regulations imposed low exposure thresholds for asbestos in
the early 1970s, asbestos use by B&W and others in industry was phased

B&W was acquired by McDermott in 1978. In 1982, B&W began to settle
claims for asbestos exposure. As of December 31, 1999, B&W had settled
over 340,000 asbestos claims, with approximately another 45,000 claims
outstanding and presented for settlement. The total cost of settling
claims since 1982 has been over $1.6 billion, including payments to
claimants, defense and legal costs, and claims processing costs. The
settlement costs were borne by both B&W and its insurers.

In recent months, settlement demands from claimants' lawyers have spiked
to levels dramatically above the historical pattern. B&W's effort to
negotiate the increases down to tolerable levels has been unsuccessful,
which has precipitated February 22's filing.

"Recently, B&W saw a sharp increase in the price demanded by some
claimants' lawyers to settle asbestos claims against B&W. Those
increases were not justified by any change in the facts, the law, or in
B&W's liability posture, nor was the company offered any reasonable
explanation for these increases by the claimants' attorneys. Under these
circumstances, this step is the only way approved by the courts to
determine B&W's total asbestos liability and to resolve legitimate
asbestos claims," said Wood. "A balance must be struck between the
legitimate rights of plaintiffs who were actually injured by asbestos
exposure, and who can establish that their injury was attributable to
B&W, and the interests of employees, shareholders and communities that
have suffered from this phenomenon."

The U.S. Supreme Court has on several occasions stated that the asbestos
issue requires legislative relief. In Ortiz et al. v. Fibreboard
Corporation et al. (1999), the Court stated that the "elephantine mass
of asbestos cases...defies customary judicial administration and calls
out for national legislation." While legislation has been introduced
into Congress, no action has been concluded to date. The Supreme Court
has also observed that Chapter 11 - in contrast to class actions or
other traditional means of resolving mass claims in the legal system -
offers the only viable legal means for companies seeking to settle and
resolve asbestos exposure claims.

"We concur with the Supreme Court's position that there needs to be a
reasonable legislative solution to the asbestos issue, particularly
since the current targets of litigation are largely not manufacturers of
asbestos, but customers who were unaware of the hazards it presented,"
said Tetrault. "It is unfortunate that such legislation has not been
implemented in time to help B&W resolve its particular situation."

Babcock & Wilcox is a subsidiary of McDermott International, Inc., a
leading worldwide energy services company. McDermott subsidiaries
manufacture steam-generating equipment, environmental equipment, and
products for the U.S. government. They also provide engineering and
construction services for industrial, utility, and hydrocarbon
processing facilities, and to the offshore oil and natural gas industry.
More information about McDermott and Babcock & Wilcox can be found on
the company's web sites at http://www.mcdermott.comand

MONSANTO CO: Faces Shareholder Suit on Proposed Delta & Pine Merger
Monsanto Co announces that on December 30, 1999, a derivative and class
action lawsuit was filed, as Civil Action 17707, by two alleged holders
of Delta and Pine Land common stock, in the Delaware Court of Chancery.
Defendants include Monsanto, Delta and Pine Land and members of the
Delta and Pine Land Board.

The suit seeks a declaration that the individual defendants have
violated their fiduciary duties and to direct the individual defendants
to take certain actions to maximize shareholder value. The suit also
requests compensatory damages, costs, disbursements and fees. The suit
relates to Monsanto's withdrawal of its filing for U.S. antitrust
clearance of its proposed merger with Delta and Pine Land in light of
the U.S. Department of Justice's unwillingness to approve the
transaction on commercially reasonable terms. The Delaware lawsuit
alleges that Delta and Pine Land has been harmed by the termination of
the effort to complete the transaction and that the individual
defendants have a continuing duty to seek a value- maximizing
transaction for the shareholders.

On January 3, 2000, Monsanto paid Delta and Pine Land $80 million in
cash, equal to the amount of a termination fee set forth in the merger
agreement, plus reimbursement of $1 million in expenses. Monsanto did
exercise commercially reasonable efforts to complete the transaction and
has meritorious defenses to the claims in the lawsuits and will
vigorously defend the actions.

PATHOGENESIS CORP: Trial Court WA Dismisses Securities Lawsuits
On Friday, Feb. 18, the U.S. District Court for the Western District of
Washington dismissed with prejudice all eight consolidated putative
class action lawsuits that had been filed in March and April 1999
against PathoGenesis Corp. (Nasdaq: PGNS) and two of its officers.

The plaintiffs had claimed that the company and its officers violated
certain provisions of the federal securities laws in making statements
in early 1999 regarding the company's 1998 financial results and
expected 1999 results. The consolidated case was dismissed on the basis
of the court's determination that the plaintiffs' amended complaint
failed to state a cause of action. The court's ruling bars plaintiffs
from filing another lawsuit on the matter, although the plaintiffs can
appeal the court's decision.

In his oral decision granting PathoGenesis' motion to dismiss the case,
U.S. District Judge Thomas S. Zilly said that Congress had intended to
protect companies and officers from precisely this type of lawsuit when
it adopted the Private Securities Litigation Reform Act of 1995.

Seattle-based PathoGenesis Corp. develops and commercializes drugs to
treat chronic infectious diseases - particularly serious lung
infections, including those common in cystic fibrosis, bronchiectasis
and ventilator patients. PathoGenesis' stock is traded on the Nasdaq
National Market System under the symbol PGNS.

PEDIATRIC SERVICES: Denies GA Charges of Violations of Securities Laws
Pediatric Services of America Inc reminds its investors that a putative
class action complaint was filed against the Company and certain of its
then current officers in the United States District Court for the
Northern District of Georgia on March 11, 1999. The plaintiffs and their
counsel were appointed lead plaintiffs and lead counsel, and an amended
complaint was filed on or about July 22, 1999.

In general, the plaintiffs allege that prior to the decline in the price
of the Company's Common Stock on July 28, 1998, there were violations of
the Federal Securities Laws arising from misstatements of material
information in and/or omissions of material information from certain of
the Company's securities filings and other public disclosures
principally related to its reporting of accounts receivable and the
reserve for doubtful accounts.

The amended complaint purports to expand the class to include all
persons who purchased the Company's Common Stock during the period from
July 29, 1997 through and including July 29, 1998.

On October 8, 1999, the Company and the individuals named as defendants
moved to dismiss the amended complaint on both substantive and
procedural grounds. The motion is currently pending before the Court.
The Company and the individuals named as defendants deny that they have
violated any of the requirements or obligations of the Federal
Securities Laws.

In the opinion of the Company's management, the ultimate disposition of
this lawsuit should not have a material adverse effect on the Company's
financial condition or results of operations, however, there can be no
assurance that the Company will not sustain material liability as a
result of or related to this lawsuit.

PUBLISHERS CLEARING: Appeal Slows Down Settlement Pay for Sweepstakes
The payout to more than 25,000 members of a class-action suit against
Publishers Clearing House will be delayed five to 12 months because of
an appeal by two lawyers who were not allowed to intervene in the case.

U.S. District Judge G. Patrick Murphy is seeking to impose sanctions
against the lawyers, both from California. Murphy said they tried to
enter the suit just to delay the litigation.

Lawyers who filed the suit opposed the entry of Lynde Selden II and
Richard H. Rosenthal, calling them "professional objectors" and "claim
jumpers" who go about the country objecting to settlements of
class-action suits "to enhance their fees."

On Febrary 18 Murphy gave final approval to the $ 30 million settlement
in the suit, filed in East St. Louis. It was brought by people who said
they were duped into magazine purchases that they believed would
increase their chances of winning millions in sweepstakes. In his order,
Murphy mentioned that one of the class members, Frederick L. Hawk of
California, objected to the proposed settlement because "negotiations
were suspect."

The judge held hearings and found Hawk had little knowledge of the suit
and would be satisfied getting back the $ 80 he paid to PCH. He said he
didn't even know one of the lawyers.

Murphy said Selden, of San Diego, and Rosenthal, of Carmel, Calif., had
a record of "objecting to class-action settlements, make no specific
allegations of wrongdoing or conflict of interest, but raised vague
claims that the timing of the settlement was somehow sinister." Selden
and Rosenthal engaged in conduct punishable under court rules, Murphy
wrote. "Specifically, the court found that their client was put forward
and their pleadings were filed for the improper purpose of interfering
with and delaying this litigation."

One of the lawyers who brought the case said some lawyers try to
intervene in class-action cases, raise objections and delay settlements
for a year of more in hopes of "cadging fees or getting paid to go
away." The judge could impose fines. But Selden and Rosenthal appealed
their being denied entry into the case to the 7th U.S. Circuit Court of
Appeals. The payout to people not part of the class-action suit will
have to wait many months pending the outcome of the appeal, according to
lawyers in the case. (St. Louis Post-Dispatch, February 22, 2000)

SHELDAHL INC: Shareholders Sue in MN over Consideration from Molex Deal
Sheldahl, Inc. (Nasdaq: SHEL) announced that it has received notice of a
Minnesota state court complaint against the Company, its directors and
Molex Incorporated (Nasdaq: MOLX) claiming that the consideration to be
paid in a proposed transaction between the Company and Molex, as
announced on February 17, 2000, is unfair and inadequate for the
Company's shareholders. The complaint requests certification as a class
action, and seeks injunctive relief and compensatory damages. Sheldahl
believes that the claims and allegations in the complaint have no merit
and intends to vigorously contest the action.

Sheldahl, Inc. is a producer of high-density substrates, high-quality
flexible printed circuitry and flexible laminates primarily for sale to
the automotive electronics and data communications markets. The Company,
which is headquartered in Northfield, Minnesota, has operations in
Northfield; Longmont, Colorado; Detroit, Michigan; South Dakota;
Toronto, Ontario, Canada; and Chihuahua, Chih., Mexico. Its sales
offices are located in Hong Kong, China; Singapore; and Mainz, Germany.

Molex Incorporated is a 61 year-old manufacturer of electronic,
electrical and fiber optic interconnection products and systems,
switches and application tooling. Based in Lisle, Illinois, Molex
operates 50 manufacturing facilities in 21 countries and employs
approximately 15,900 people. Molex common stock is included in the S&P
500 Index and is listed as part of the S&P 500 Electrical Equipment
Industry Group.

SOTHEBY'S HOLDINGS: Reports on Management Changes and Antitrust Suit
The Board of Directors of Sotheby's Holdings, Inc. (NYSE: BID) announced
on February 21 a number of management changes.

Alfred Taubman has stepped down as Chairman of Sotheby's Holdings. Mr.
Taubman said: "While this clearly is not an easy decision for me, I have
determined that it is time for me to step down from my role as

Diana D. Brooks has resigned as President and Chief Executive Officer of
Sotheby's Holdings. Mrs. Brooks said: "I am very proud of the
achievements and initiatives that Sotheby's has undertaken in recent
years and I am confident that in the future it will build upon its great
franchise and reputation for excellence. My decision is a very difficult
one, but I have taken it in the best interests of the Company and of my

The Board announced the appointment of Michael Sovern, former President
of Columbia University, as the new Chairman of the Board of Directors of
Sotheby's Holdings and the appointment of William Ruprecht as the
President and Chief Executive Officer of Sotheby's Holdings. Joining Mr.
Ruprecht in the Office of the Chief Executive will be Robin Woodhead,
Chief Executive of Sotheby's Europe and Asia and an Executive Vice
President of Sotheby's Holdings, and Deborah Zoullas, Executive Vice
President of Sotheby's Holdings. Mr. Ruprecht, Mr. Woodhead and Ms.
Zoullas were elected to the Board of Sotheby's Holdings, effective

In commenting on these new appointments, the Board said: "As President
Emeritus of Columbia University, Michael Sovern brings to Sotheby's
Board a distinguished reputation as a leader, lawyer, scholar and
educator. This experience and his extensive board participation,
including membership on the Boards of AT&T and Warner-Lambert, will
provide our Board with proven leadership at this important time for

The Board continued: "Mr. Ruprecht has been Managing Director of
Sotheby's North and South America since 1994, having joined Sotheby's in
1980. In addition to his management expertise, his career at Sotheby's
includes art expertise as well as worldwide marketing experience. He is
also one of the firm's senior auctioneers. We know that under his
leadership, and with the close working relationship that already exists
among him, Robin Woodhead and Deborah Zoullas, Sotheby's goes forward in
excellent hands."

                     Antitrust Investigation

As previously reported, the Antitrust Division of the Department of
Justice began an investigation in 1997 of dealers and auction houses,
including Sotheby's and its principal competitor, Christie's. Among
other matters, the investigation has reviewed whether Sotheby's and
Christie's had any agreement regarding the amounts charged for
commissions in connection with auctions. Sotheby's has recently met with
the Department of Justice in order to discuss a prompt and appropriate
resolution of this investigation, which will allow the Company to put
this difficult matter behind it.

The European Commission, the Office of Fair Trading in the United
Kingdom and the Australian Competition Commission have each started an
inquiry as well, and a number of private civil complaints, styled as
class action complaints, have been filed against Christie's and
Sotheby's alleging violation of the federal antitrust laws based upon
alleged agreements between Christie's and Sotheby's regarding commission
pricing. In addition, several shareholder class action complaints have
been filed against Sotheby's and certain of its officers, alleging
failure to disclose the alleged agreements and their impact on Sotheby's
financial condition and results of operations. Although the outcome of
the investigation by the Department of Justice, other governmental
inquiries and these lawsuits cannot presently be determined, these
matters could well have a material impact on Sotheby's financial
condition and/or results of operations.

                    Statement from the Board

The Board continued: "Sotheby's has just completed one of the best and
most important years in its 256-year history. In 1999 Sotheby's had its
best overall sales results in nine years and it was also the year in
which the Company made a major commitment to the Internet, with the
launch of two internet auction sites. The Company also expanded its
physical premises around the world, with the addition of new salesrooms
in Zurich and Amsterdam and the expansion of its York Avenue
headquarters to make it the best auction facility in the world.

"The business now goes forward under new leadership. The Company has up
to $300 million of committed financing with an international banking
syndicate arranged through Chase Manhattan Bank, which together with
operating cash flows, will provide funding for growth in the Company's
portfolio of art-related loans, for investment in the Company's Internet
business and for other future business needs. The strong and experienced
management team which is in place will build on the extraordinary
momentum of the past year and we are confident that they and Sotheby's
talented staff will continue to further enhance one of the greatest
franchises in the world."

                   About Sotheby's Holdings

Sotheby's Holdings, Inc. is the parent company of Sotheby's worldwide
live and Internet auction businesses, art-related financing and real
estate activities. The Company operates in 38 countries, with principal
salesrooms located in New York and London. The Company also regularly
conducts auctions in 15 other salesrooms around the world, including
Australia, Canada, Germany, Hong Kong, Israel, Italy, Monaco, the
Netherlands, Switzerland and Taiwan. Sotheby's Holdings, Inc. is listed
on the New York Stock Exchange and the London Stock Exchange.

SOTHEBY'S: Paper Says Company Hints of Settlement for Alleged Collusion
The Financial Times (London) describes the resignation of Sotheby's
chairman and chief executive officer as unexpected, in the most serious
fall-out from the price fixing scandal that has engulfed the auction
world in recent weeks. The paper says their decisions have thrown the
New York-based auction house into one of the worst crises of its
256-year existence.

Art industry figures said it must have required great pressure to
dislodge the Sotheby's chair man, in particular, Financial Times
(London) relates. Mr Taubman is one of the largest single shareholders
in Sothbey's, with 13.2m shares, which amount to 22.5 per cent of the
total outstanding, and 63.6 per cent of the voting rights.

According to the Financial Times (London), Sotheby's hinted on February
21 that it was close to a settlement with the justice depart-ment; the
auction house said it had recently met officials to discuss "a prompt
and appropriate resolution" of the investigation, "which will allow the
company to put this difficult matter behind it".

Sotheby's also declared that it has up to $ 300 million of committed
financing with an international banking syndicate arranged through Chase
Manhattan, Financial Times (London) says. The investigations and law
suits "could well have a material impact on (its) financial condition
and/or results of operations", Sotheby's said, according to Financial
Times (London), February 22, 2000.

STAR TELECOM: Refutes Investors' Suit over Deal in World Access Merger
STAR Telecommunications Inc. (Nasdaq:STRX) will defend itself vigorously
against a class action shareholder lawsuit filed in Santa Barbara
Superior Court. The suit alleges that STAR and its Board of Directors
failed to take actions necessary to attain a higher valuation for the
company than provided for in the World Access merger, and seeks to block
that merger.

"STAR's management and its Board of Directors are well aware of our
fiduciary responsibilities to shareholders," commented STAR's Chairman
and CEO, Chris Edgecomb. "We continue to believe that this combination,
which includes both capital and operating synergies, will offer STAR's
shareowners a good opportunity for future share price appreciation."

STAR Telecommunications is a provider of global telecommunications
services to consumers, long-distance carriers, multinational
corporations and Internet service providers worldwide. STAR provides
international and national long-distance services, international private
line, prepaid calling cards, dial-around services and international
toll-free services.

SUBSQUEHANNA RADIO: Atlanta 99X Faces Suit over Unwelcome Tel Messages
A businessman and an attorney have sued the owner of Atlanta radio
station 99X, complaining it left unwelcome and illegal computer-dialed
telephone messages at their homes. The suit against Susquehanna Radio
Corp., filed Feb. 18 by corporate consultant Matt Garver and Deveau &
Marquis associate Ryan A. Schneider, alleges that rock station 99X's
telephone promotion violated state and federal law. The plaintiffs are
asking a Fulton State Court judge to grant the suit class action status.

Sole practitioner Marc B. Hershovitz, who represents the plaintiffs
along with Michael K. Jablonski, of counsel at Marietta's Browning &
Tanksley, says the case is the first in Georgia to tackle
automatically-dialed telemarketing calls, which he claims invade privacy
and are a nuisance. Garver v. Susquehanna Radio Corp., Number not yet
assigned (Fult. St. filed Feb. 18, 2000).

                         More Suits Planned

This suit is just the first of at least three similar suits Hershovitz
says he'll bring against Atlanta radio stations in coming weeks over
their use of ADAD-automatic dialing and announcement devices.

Typically, he says, ADAD calls are made during the day when recipients
aren't at home. The recorded advertisements are left on answering
machines or voice mail where they take up valuable space, he says.

The pre-recorded calls his clients got, Hershovitz says, were promotions
for the station and contained voice recordings of one or more of the 99X
morning disc jockeys: Barnes, Leslie and Jimmy.

                   Federal, State Prohibitions

The federal Telephone Consumer Protection Act prohibits the pre-recorded
advertising messages unless the sender has obtained the express
permission or consent of the party, Hershovitz says. Georgia law is more
stringent, he adds, requiring that that permission be in writing or
given by the recipient at the beginning of the call. 99X didn't get
permission from those it called, he adds.

Craig Bremer, Susquehanna's vice president and general counsel, declines
comment on the suit until the company has been served.

Georgia allows individuals to be placed on a no-call list, which
prohibits Georgia companies from soliciting those on the list by phone.
The state also has a specific law aimed at ADAD telephone solicitation,
O.C.G.A. 46-5-23(a)(2).

Had 99X's promotional calls been made by one of the morning DJs in
person, Hershovitz says, they could have legally called Georgia
residents not on the no-call list. But pre-recorded calls are different,
he says. "You can't hang up on a recording, and a recording can't take
your name to put on a do-not-call list," he says.

Georgia law provides that recorded telemarketing messages cannot, under
any circumstances, be left on answering machines, he says.

The TCPA provides for penalties of at least $500 and up to $1,500 for
each violation of the act. The state statute does not specify a monetary
amount in damages.

The Fulton ADAD suit is not the first Georgia case brought under the
TCPA. A $12 million class action against Hooters is pending in the
Georgia Court of Appeals, alleging that the restaurant chain violated
the federal law prohibiting junk faxes. (Daily Report, Jan. 26, 2000).

Augusta sole practitioner Sam Nicholson filed that suit after he
received an unsolicited lunch coupon for Hooters at his law office in
1995, he says. A Richmond County judge certified a class in the case
last year. (Fulton County Daily Report, February 22, 2000)

U.S, U.K: EU Probes Economic Spying Charges by Echelon
European Commission President Romano Prodi has directed his staff to
follow up on charges of reported economic espionage against EU targets
by both Britain and the United States. In an interview with French radio
RTL on February 22, Prodi said he wants full details about reports of
listening posts in England for British and U.S. use, and he wants
answers to questions raised by a European Parliament report.

The report claims secret data obtained by eavesdropping from the
listening points in Britain has been sent to the U.S. Commerce
Department for use by American firms.

The action ordered by Prodi follows similar disclosures earlier this
month by The Times of London and the French daily Le Monde. On Feb. 10
and Feb. 11, the newspapers reported that both the British and U.S.
governments are targeted for class-action lawsuits being prepared in
connection with the alleged commercial espionage. Le Monde said
disclosures of the electronic spy system against French companies,
diplomats and Cabinet ministers had provoked Parisian lawyer Jean-Pierre
Millet to prepare a lawsuit representing French civil liberties

The European Parliament study charges that Britain and the United States
have intercepted communications using a sophisticated joint global
network called Echelon. Prodi called the allegations serious and said
they would be "looked into thoroughly." The European Parliament's
Committee on Citizens' Freedoms and Rights is set to begin hearings on
the issue on February 23.

Echelon, already under scrutiny in France, is also being examined by
both the Italian and Danish parliaments.

According to the European Commission, the alleged commercial espionage
is orchestrated by the U.S. National Security Agency and operates with
Britain through an intelligence alliance dating back to 1947. The EU
study was prepared for the European Parliament's Scientific and
Technical Options Assessment Office by Duncan Campbell, who is also a
journalist who has written for the British newspaper, the Guardian.

The EU is also looking into claims that Echelon was used to block a
multibillion dollar deal between the European Airbus consortium and the
Saudi national airline. The EU report says information gathered by
Echelon was used to alert the Saudi government that Airbus agents had
allegedly offered bribes. U.S. firms Boeing and McDonnell Douglas won
the contract. (United Press International, February 22, 2000)

WAR VICTIMS: Milberg Files Suit in CA for Compensation from Japanese
Two multi-billion dollar class-action lawsuits were filed February 22 in
California Superior Court in Orange County against the Japanese
corporations Mitsubishi and Mitsui for the brutal exploitation of
thousands of slave laborers in China and Japan during World War II. With
the help of the Japanese government, prisoners were forced to work in
unsafe coal mines, factories and other facilities owned by Mitsubishi,
Mitsui and other Japanese corporations, and were regularly subjected to
starvation, beatings and torture.

Representing these former U.S. POWs and Chinese civilians (now U.S.
citizens) is the law firm of Milberg Weiss Bershad Hynes & Lerach LLP.
Milberg Weiss was the lead law firm in the settlements that resulted in
more than $5 billion in compensation from major German corporations who
profited greatly by leasing laborers from the Nazis and forcing them to
work under equally inhumane conditions.

"The tens of thousands of slave laborers who suffered at the hands of
Japanese corporations deserve justice. Japanese corporations should take
responsibility for these atrocities, just as German companies have
finally recognized their obligation to former Nazi slave laborers," said
Bill Lerach, a partner with Milberg Weiss Bershad Hynes & Lerach LLP.

During World War II, Japanese corporations cooperated with the Japanese
government, following a plan similar to the Nazi "extermination through
work" program. They captured Chinese, Vietnamese and other civilians, as
well as Allied soldiers, forcing them to work for Japanese corporations
as part of the war effort. Slave laborers performed tasks under inhumane
conditions for little or no compensation. "My story -- and the stories
of many others -- is one of the untold horrors of World War II. Nothing
can replace the years of our lives lost in the mines and factories,"
said Shang-Ting Sung, one of the lead plaintiffs, who was captured at
the age of ten by the Japanese and forced to work for three years in
coal mines owned and operated by Mitsubishi and Mitsui. "These lawsuits
are an important step toward addressing the human rights abuses
committed at the hands of Japanese corporations."

Mr. Sung, a child during his enslavement, was forced to crawl through
small openings in mine shafts where cave-ins had occurred in order to
dig out dead bodies. At the Mitsubishi/Mitsui mining complex where he
worked, slave laborers were frequently beheaded in front of assembled
workers as a warning to others.

Japanese officials have argued that the 1951 Treaty between the United
States and Japan prevents all American claims for reparations from Japan
and any Japanese entity. However, many international legal scholars
assert that the violation of certain universally accepted human rights
may not ever be impaired by an agreement among states. Moreover, Asian
nations such as China and Vietnam, which were victims of Japanese
enslavement during World War II, were not parties to the 1951 Treaty or
to any treaty that would prohibit civilian claims.

"No treaty among nations can nullify slave laborers' claims for
violations of fundamental human rights. In fact, the claims by Chinese
and Vietnamese civilians are not barred by any treaty or agreement,"
said Lerach.

The lawsuits were filed under a statute enacted in July 1999 by the
state of California which extends the time to file claims for forced
labor by Nazis and their co-conspirators during World War II to December
31, 2010.

"The offenses committed pervaded every facet of the Japanese war effort,
including coal mining, ship building, bomb making and the development of
biological and chemical weapons through human experimentation on slave
laborers," said Dr. Sheldon Harris, an expert on World War II POWs and
Emeritus Professor of History at the California State University,

"Archived records in Allied countries, China and Japan confirm the
extent of Japanese industries' involvement."

Contact: Elizabeth Buchanan or Valerie Holford of Fenton Communications,
202-822-5200, for Milberg Weiss Bershad Hynes & Lerach LLP


S U B S C R I P T I O N  I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC.   Romeo John D. Piansay, Jr., editor, Theresa Cheuk,
Managing Editor.

Copyright 1999.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.

Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at 301/951-6400.

                    * * *  End of Transmission  * * *