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/raid1/www/Hosts/bankrupt/CAR_Public/000309.MBX C L A S S A C T I O N R E P O R T E R Thursday, March 9, 2000, Vol. 2, No. 48 Headlines AETNA INC: Ct Moves for Transfer of RICO & ERISA Case from NJ to PA AETNA INC: Ct Suspends ERISA Case in MS Pending Case of Another HMO AETNA INC: ERISA Case in PA Suspended Pending Resolution of Maio Appeal AETNA INC: Moves for Stay of CA Lawsuit over Business Practices AETNA INC: MS Case under RICO and ERISA Stayed Pending Another HMO Case AETNA INC: Says Ross Complaint in CA under ERISA at Early Stages AETNA INC: Takeover Bid Alters Succession Picture, Outside Banker Named AETNA INC: Trial for PA Securities Suit in Second Quarter 2000 AETNA INC: AL Suit Alleging Violations of RICO Filed in Jan 2000 ANALYTICAL SURVEYS: Restates Results; Wolf Popper Files Securities Suit BREAST IMPLANT: Cases Settled; Dispute between TX, Canadian Firms Go on CENTENNIAL TECHNOLOGIES: Settles Securities Litigation in MA CINAR CORPORATION: Jeffrey S. Abraham Files Securities Lawsuit COCA-COLA: Signals a Desire to Settle Racial Bias Lawsuit FOCUS ENHANCEMENTS: Kirby, McInerney Files Securities Suit in MA FORD MOTOR: Extends Warranty for Allegedly Defective V-6 Engine GAMING LOTTERY: Ct OKs Professor's Calculation in Securities Case GUN MANUFACTURERS: County in NJ Subpoenas the ATF for Information MICROSOFT CORP: Report Suggests Progress in Talks on Antitrust Case PALM BEACH: City Will Dredge Canals, Install Catch Basins to End Suit PS GROUP: In Tentative Settlement for Charges on Proposed Acquisition READ-RITE CORP: Federal Court in CA Dismisses Shareholder Suits SAFETY-KLEEN CORP: Abbey, Gardy Files Securities Suit in SC SAFETY-KLEEN CORP: Bernstein Liebhard Files Securities Suit in SC SAFETY-KLEEN CORP: Milberg Weiss Files Securities Lawsuit in SC SAFETY-KLEEN CORP: Pomerantz Haudek Files Securities Lawsuit in SC SAFETY-KLEEN CORP: Wechsler Harwood Retained to Bring Securities Suit SONUS PHARMACEUTICALS: Discloses Securities Litigation in Washington ********* AETNA INC: Ct Moves for Transfer of RICO & ERISA Case from NJ to PA ------------------------------------------------------------------- A purported class action complaint was filed in the United States District Court for the District of New Jersey on December 3, 1999 by Michael V. Amorosi (the "Amorosi Complaint"). The Amorosi Complaint seeks various forms of relief, including unspecified damages, treble damages and restitutionary relief for unjust enrichment, from Aetna Inc. and Aetna U.S. Healthcare Inc. for alleged violations of RICO and ERISA. The Amorosi Complaint alleges that defendants told subscribers that coverage and treatment decisions would be based on medical necessity but instead took into account undisclosed cost-based criteria that were unrelated to members' medical needs. On January 7, 2000, the Company moved to stay, dismiss or transfer the action to the United States District Court for the Eastern District of Pennsylvania based on the fact that the Maio and Conte Complaints were filed in that court. This litigation is in the preliminary stages. The Company intends to defend the action vigorously. AETNA INC: Ct Suspends ERISA Case in MS Pending Case of Another HMO ------------------------------------------------------------------- A purported class action complaint was filed in the United States District Court for the Southern District of Mississippi on October 7, 1999 by Jo Ann O'Neill (the "O'Neill Complaint"). An Amended Complaint was filed on November 9, 1999 by Jo Ann O'Neill, Lydia K. Rouse and Danny E. Waldrop. The O'Neill Complaint seeks various forms of relief, including unspecified damages and treble damages, from the Company, Aetna U.S. Healthcare Inc., Richard L. Huber and unnamed members of the Board of Directors of Aetna Inc. for alleged violations of ERISA and RICO. The O'Neill Complaint alleges that defendants are liable for alleged misrepresentations and omissions relating to advertising, marketing and member materials directed to Aetna HMO members. On November 22, 1999, defendants moved to stay, dismiss or transfer the action to the United States District Court for the Eastern District of Pennsylvania based on the Conte and Maio complaints filed in that court. On January 25, 2000, the Court suspended further proceedings pending resolution of a motion by another managed care company in separate cases to consolidate those actions in a single court for pretrial purposes. This litigation is in the preliminary stages. Defendants intend to defend the action vigorously. AETNA INC: ERISA Case in PA Suspended Pending Resolution of Maio Appeal ----------------------------------------------------------------------- A purported class action complaint was filed in the United States District Court for the Eastern District of Pennsylvania on October 4, 1999 by Anthony Conte (the "Conte Complaint"). The Conte Complaint seeks various forms of relief, including unspecified damages, from Aetna U.S. Healthcare Inc. for alleged violations of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Conte Complaint alleges that Aetna U.S. Healthcare does not make adequate disclosure of provider compensation arrangements in the literature that it makes available to actual or prospective members. The Company intends to defend the action vigorously and on November 1, 1999, filed a motion to dismiss the litigation for failure to state a claim upon which relief can be granted. On December 15, 1999, the Court suspended further proceedings pending the resolution of the Maio appeal by the Third Circuit Court of Appeals. The Maio appeal has been reported in the CAR. AETNA INC: Moves for Stay of CA Lawsuit over Business Practices --------------------------------------------------------------- A purported class action complaint was filed in the Superior Court of California, County of Contra Costa on October 28, 1999 by Jeanne E. Curtright in her individual capacity and on behalf of the general public of the State of California (the "Curtright Complaint"). The Curtright Complaint seeks various forms of relief, including injunctive relief, restitution and disgorgement of amounts allegedly wrongfully acquired, from the Company, Aetna U.S. Healthcare Inc., Aetna U.S. Healthcare of California Inc. and unnamed "John Doe" defendants for alleged violations of California Business and Professions Code Sections 17200 and 17500, California Civil Code Section 1750 and state common law in connection with the sale and marketing of health plans in California. The Curtright Complaint alleges that defendants are liable for alleged misrepresentations and omissions relating to advertising, marketing and member materials directed to Aetna HMO, POS and PPO members and members of the general public. On December 16, 1999, defendants removed the action to the United States District Court for the Northern District of California. On January 18, 2000, plaintiff moved to remand the action to state court. On the same date, the Company moved to dismiss the Curtright Complaint for failure to state a claim upon which relief can be granted and moved for a stay of the action pending resolution of the Maio and Conte matters. This litigation is in the preliminary stages. Defendants intend to defend the action vigorously. AETNA INC: MS Case under RICO and ERISA Stayed Pending Another HMO Case ----------------------------------------------------------------------- A purported class action complaint was filed in the United States District Court for the Southern District of Mississippi on November 22, 1999 by Raymond D. Williamson, III (the "Williamson Complaint"). The Williamson Complaint names as defendant The Prudential Insurance Company of America, and also names as defendants Aetna Inc. and Aetna U.S. Healthcare Inc. Aetna asserts that it has been named solely to the extent that the Company has assumed liability for the actions of Prudential in connection with the Company's acquisition of the Prudential health care business. The Williamson Complaint seeks various forms of relief from defendants, including unspecified damages, treble damages and imposition of a constructive trust, for alleged violations of RICO and ERISA. The Williamson Complaint alleges that the Prudential Health Plans engaged in a nationwide fraudulent scheme of misrepresentation by stating that coverage and treatment decisions were made on the basis of medical necessity when Prudential allegedly implemented undisclosed policies designed to deny or limit claims and medical services. On December 30, 1999, the Company moved to stay, dismiss or transfer the action to the United States District Court for the Eastern District of Pennsylvania based on the fact that the Maio and Conte Complaints were filed in that court. On January 25, 2000, the Court suspended further proceedings pending resolution of a motion by another managed care company in separate cases to consolidate those actions in a single court for pretrial purposes. This litigation is in the preliminary stages. The Company intends to defend the action vigorously. AETNA INC: Says Ross Complaint in CA under ERISA at Early Stages ---------------------------------------------------------------- A complaint was filed in the Superior Court of the State of California, County of San Diego on November 5, 1999 by Linda Ross and The Stephen Andrew Olsen Coalition for Patients Rights, purportedly on behalf of the general public of the State of California (the "Ross Complaint"). The Ross Complaint seeks various forms of relief, including injunctive relief, restitution and disgorgement of amounts allegedly wrongfully acquired, from Aetna Inc., Aetna U.S. Healthcare Inc., Aetna U.S. Healthcare of California, Inc. and additional unnamed "John Doe" defendants for alleged violations of California Business and Professions Code Sections 17200 and 17500. The Ross Complaint alleges that defendants are liable for alleged misrepresentations and omissions relating to advertising, marketing and member materials directed to Aetna HMO, POS and PPO members and the general public and for alleged unfair practices relating to contracting of doctors. Aetna says this litigation is in the preliminary stages, and the Company intends to defend the action vigorously. AETNA INC: Takeover Bid Alters Succession Picture, Outside Banker Named ----------------------------------------------------------------------- Before Aetna Inc. chairman and chief executive Richard L. Huber resigned under fire late last month, Michael J. Cardillo and two other potential successors stood in the wings waiting for a shot at the top job after his scheduled retirement late next year, according to The Philadelphia Inquirer. Now that the company has become a takeover target and named an outside director, investment banker William H. Donaldson, to replace Huber, the fates of those three would-be heirs to the throne hang in the balance, the article says. Cardillo is the president of Aetna's Blue Bell-based managed care unit, the nation's largest health insurer. Quiet and low-profile, he might have eventually been tapped as an antidote to his outspoken, headline-grabbing former boss, who generated legal and public relations problems for a company already fighting a negative image, The Philadelphia Inquirer remarks. Since the recent changes at Aetna have derailed succession planning, Cardillo along with Aetna chief financial officer Alan J. Weber and retirement unit president Thomas J. McInerney start over with a new boss. "Their opportunity to be CEO is gone," The Philadelphia Inquirer quotes William McKeever, an analyst at PaineWebber in New York. "Donaldson is there permanently. He has no intentions of quickly turning over the reins." McKeever added that while competition among the trio to run the company has probably ended, none of them is likely to be shown the door soon. Cardillo, 56, came up through the sales and marketing ranks, The Philadelphia Inquirer reveals. He joined the company as a salesman 15 years ago, when it was known as U.S. Healthcare and had 250,000 members. Previously, he worked at Xerox Corp. for 16 years and had a short stint as president of a French company, KIS Color Systems Inc., the report goes on. "I did not come from a health-care background," Cardillo said. According to The Philadelphia Inquirer, Cardillo is one of the most powerful people in healthcare today, in charge of a corporate unit that insures more than 21 million Americans, or 85 times as many members as in 1985. The health-care unit is Aetna's largest, accounting for about 75 percent of the parent company's $ 30 billion annualized revenues. Yet Cardillo is still relatively unknown outside his own company, which employs 44,000 people, 3,000 of them in this region. He has a reputation as an intensely private man, an introvert who, like his former mentor U.S. Healthcare founder Leonard Abramson, shuns the spotlight. He might even be called the anti-Huber, The Philadelphia Inquirer says. The article further describes Cardillo as modest when talking about himself, even with close colleagues, and rarely gives interviews. He keeps a media toteboard on a wall in his office, tracking whether news organizations have positively or negatively portrayed the company in their coverage. News stories, however, rarely mention him, The Philadelphia Inquirer notes. He said he spends almost half of his time "in the field" but, through company spokeswoman Jill Griffiths, declined requests to observe him with customers or healthcare providers in either friendly meetings or tense confrontations. At a time when there has been a loud national outcry -- and class action suits filed by well-financed attorneys who took on the tobacco industry -- about the cost containment measures of insurers such as Aetna, Cardillo senses another mood, The Philadelphia Inquirer says. According to the article, Cardillo says he gets "some wonderful letters" from members every day. "I don't sense a difficult environment with our members," he said. As for hospitals and other healthcare providers who complain that the company denies too many claims or is slow to pay them, he says that "misunderstandings" sometimes occur but Aetna tries hard to pay them within 30 days. Electronic transactions will speed that process, he adds. Cardillo, according to his lieutenants, is as involved in the health-care unit's daily operations as he needs to be. "He participates but he doesn't dominate," said Tracy South, head of human resources for the health-care unit. His managers said he expects a lot from them but is loyal to those who work hard and produce. After he summoned health-care unit chief financial officer Dan Messina back from vacation last fall amidst one of the company's stock drops, Cardillo called Messina's wife to apologize. But as Aetna faces a possible breakup and sell off of any or all of its three main businesses, investors want more than an apology from management, The Philadelphia Inquirer notes. As remarded in the article, investors won't settle for anything less than what it takes to improve results. McKeever of PaineWebber is blunt. "Right now the Wall Street perception of Cardillo and the others is that they have not executed," he said. AETNA INC: Trial for PA Securities Suit in Second Quarter 2000 -------------------------------------------------------------- As reported in the CAR, Class Action Complaints were filed in the United States District Court for the Eastern District of Pennsylvania on November 5, 1997 by Eileen Herskowitz and Michael Wolin, and on December 4, 1997 by Pamela Goodman and Michael J. Oring. Other Class Action Complaints were filed in the United States District Court for the District of Connecticut on November 25, 1997 by Evelyn Silvert; on November 26, 1997 by the Rainbow Fund, Inc.; and on December 24, 1997 by Terry B. Cohen. The Connecticut actions were transferred to the United States District Court for the Eastern District of Pennsylvania for consolidated pretrial proceedings with the cases pending there. The plaintiffs filed a Consolidated and Amended Complaint seeking, among other remedies, unspecified damages resulting from defendants' alleged violations of federal securities laws. The Complaint alleged that the Company and three of its current or former officers or directors, Ronald E. Compton, Richard L. Huber and Leonard Abramson, are liable for certain misrepresentations and omissions regarding, among other matters, the integration of the merger with U.S. Healthcare and the Company's medical claim reserves. The Company and the individual defendants filed a motion to dismiss the Complaint on July 31, 1998. On February 2, 1999, the Court dismissed the Complaint, but granted the plaintiffs leave to file a second amended complaint. On February 22, 1999, the plaintiffs filed a second amended complaint against the Company, Ronald E. Compton and Richard L. Huber. The Company and the remaining individual defendants filed a motion to dismiss the second amended complaint, and the Court denied that motion in March 1999. On August 9, 1999, the Court entered an order certifying as plaintiffs those persons who purchased Company common stock on the market from March 6, 1997 through 7:00 a.m. on September 29, 1997. Merits discovery was completed in early 2000. On February 3, 2000, defendants filed motions for summary judgment dismissing the complaint. Also on February 3, 2000, plaintiffs moved for permission to file a third amended complaint and file expert reports. Proceedings regarding defendants' summary judgment motions, along with the remaining exchange of expert reports and expert discovery, are scheduled to be completed in the second quarter of 2000. Trial is scheduled to begin in the second quarter of 2000. Defendants are defending the actions vigorously. AETNA INC: AL Suit Alleging Violations of RICO Filed in Jan 2000 ---------------------------------------------------------------- A purported amended class action complaint was filed in the United States District Court for the Northern District of Alabama on January 19, 2000 by Eugene Mangieri, M.D. (the "Mangieri Complaint"). The Mangieri Complaint seeks various forms of relief, including unspecified damages, treble damages and punitive damages, from Aetna Inc., Aetna U.S. Healthcare Inc. and Richard L. Huber for alleged violations of RICO. The Mangieri Complaint claims that physicians suffer actual and potential harm from allegedly coercive terms contained in their contracts with the Company. This litigation is in the preliminary stages. Defendants intend to defend the action vigorously. ANALYTICAL SURVEYS: Restates Results; Wolf Popper Files Securities Suit ----------------------------------------------------------------------- Wolf Popper LLP, issues press release which says that Analytical Surveys, Inc. ("ASI") (Nasdaq: ANLT) announced that it has restated its previously reported financial results for all four quarters of the fiscal year ended September 30, 1999. Net income for the year was restated to $ 3.0 million or 41 cents per diluted share compared with previously reported net income of $9.3 million or $1.29 per diluted share. Wolf Popper LLP has filed a class action lawsuit against ASI and certain of its officers, who are charged with committing securities fraud. That lawsuit was filed on behalf of all persons who purchased ASI securities from January 25, 1999 to January 27, 2000. The Complaint charges that defendants manipulated ASI's stock price by reporting fiscal year 1999 financial results artificially inflated by defendants' improper recognition of revenue in violation of generally accepted accounting principles. The Complaint further alleges that the former Chief Executive Officer and Chairman of the Board of ASI profited from the accounting manipulations by receiving more than $1.3 million in proceeds from sales of ASI stock at prices artificially inflated by defendants' illegal actions. Contact: Lawrence D. Levit, Esq. (212-451-9621) or Doug Rotella, Investor Relations Representative (212-451-9625), WOLF POPPER LLP, 845 Third Avenue, New York, NY 10022-6689, Toll Free: 1-877-370-7703, Facsimile: 212-486-2093 or 212-486-2238, E-Mail: llevit@wolfpopper.com or IRRep@wolfpopper.com Website: http://www.wolfpopper.com BREAST IMPLANT: Cases Settled; Dispute between TX, Canadian Firms Go on ----------------------------------------------------------------------- The Southern District of Texas has refused to dismiss litigation between two Canadian law firms and a Texas firm over $6 million in attorneys' fees due from breast implant litigation. Acheson & Co. and Connell Lightbody of British Columbia asserted Texas does not have jurisdiction over the breach of contract claims made by Houston's Sydow & McDonald. Sydow v. Acheson & Co., No. G-99-360 (SD TX, Jan. 26, 2000). In 1994, the Canadian firms entered into a contract with Sydow & McDonald to jointly pursue the claims of 84 Canadian breast implant litigants in Texas state court. Although these suits were eventually dismissed based on forum non conveniens, a second contract was signed the following year. Under the terms of the 1995 agreement, Sydow & McDonald was to assist the Canadian firms in representing 109 Canadian breast implant claimants in Dow Corning's bankruptcy proceedings. The contract called for plaintiff to aid the foreign firms in liquidating their clients' claims, regardless of whether the liquidation occurred in the Eastern District of Michigan or in a Canadian class action. In addition, Sydow & McDonald agreed to assist the Canadian firms in enforcing all judgments in the U.S. bankruptcy court. In return, the Texas firm was to receive a 50 percent share of the contingency fees obtained by the defendants. The Canadian claims were eventually settled with Dow Corning for $25 million, with payments to begin later this year. Approval of the settlement is now pending in the U.S. court system. Sydow & McDonald alleges the Canadian firms have reneged on their contract and refuse to compensate it once the fees become available. The Texas firm sued the defendants for breach of contract, breach of fiduciary duty, fraud, conversion, and promissory estoppel. In response, the Canadian firms requested that the district court dismiss the case for lack of jurisdiction or, alternatively, forum non conveniens. Initially, Acheson & Co. asserted the controversy was not ripe for adjudication because the fees are still pending. However, the court was not persuaded by this argument, finding that it is likely the defendants will receive the money. Therefore, it concluded Texas has subject matter jurisdiction over the suit. The court also found that the Canadian firms have the "minimum contacts" required for personal jurisdiction and had "purposefully availed" themselves of the benefits of the forum state. According to the opinion, defendants allegedly sought out the services of Sydow & McDonald and purposefully entered into contracts that required them to perform a substantial portion of their obligation in Texas. In addition, the plaintiffs collected and stored numerous discovery and bankruptcy documents for the defendants, continued the court, and certain Canadian associates traveled to Texas to review the documents and attend meetings and seminars regarding the multidistrict litigation. "The Court finds it rather duplicitous for Defendants to first invoke the power and protection of the laws of Texas and then later reverse course and claim insufficient contacts with Texas when another party seeks relief from Defendants based on a violation of Texas contracts law," said Judge Samuel B. Kent. "This type of gamesmanship is unacceptable," chastised the court. Except for one associate who did not have any substantiated involvement with the business relationship, the court denied defendants' motion to dismiss based on personal jurisdiction. The court was also unpersuaded by Acheson & Co.'s motion to dismiss based on forum non conveniens. It is "disingenuous" for the defendants to say Texas is inconvenient to resolve the claims when they originally sought out Sydow & McDonald to file suit and perform legal work in the state, said the court. Trial is schedule for July 2000. Sydow & McDonald is represented by Richard Lee Melancon, Michael W. Hogue, and Anthony G. Buzbee of Melancon & Hogue in Friendswood, TX. Acheson & Co. is represented by George W. Vie III of Mills Shirley in Galveston, TX, and Gary M. Polland of Polland and Cook in Houston. Connell Lightbody is represented by Wade B. Williams of Lewis and Williams in Galveston. (Breast Implant Litigation Reporter, February 14, 2000) CENTENNIAL TECHNOLOGIES: Settles Securities Litigation in MA ------------------------------------------------------------- Since the Company's announcement on February 11, 1997 that it was undertaking an inquiry into the accuracy of its prior reported financial results, and that preliminary information had raised questions as to whether reported results contained material misstatements, approximately 40 purported class action lawsuits were filed in or transferred to the United States District Court for the District of Massachusetts. These complaints asserted claims against the Company and the Company's Board of Directors, officers and former independent accounts, among others, under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "1934 Act") and Rule 10b-5 promulgated thereunder, and related state law claims of fraud, deceit and negligent misrepresentation. These class action lawsuits were purportedly brought by and on behalf of purchasers of the Company's Common Stock (i) between the Company's initial public offering on April 12, 1994 and on February 10, 1997 or (ii) on February 25, 1997. On February 9, 1998, these class action lawsuits were consolidated, and the Company and lead counsel representing the plaintiffs in the Consolidated Litigation filed a Stipulation of Settlement, whereby the Company and certain of its officers and directors would be released from liability arising from the allegations included in the Consolidated Litigation. In return, the Company agreed to pay the plaintiffs in the Consolidated Litigation $1.475 million in cash and to issue to these plaintiffs 37% of the Company's Common Stock. The Company also agreed to adopt certain corporate governance policies and procedures. The Settlement Agreement became effective on July 20, 1998. The Company has issued 854,300 shares of common stock pursuant to the Settlement Agreement. All shares issued in connection with the Consolidated Litigation are included in the weighted average shares outstanding calculation from July 20, 1998 forward. A significant number of class members elected not to participate in the Settlement Agreement described above. In September 1999, the Company reached an agreement with a number of these parties which calls for the Company to pay $500,000 in cash to settle these claims (the "Additional Settlement Agreement"). For the remaining parties who did not participate in the Settlement Agreement or the Additional Settlement Agreement, the Company believes that the applicable Federal statue of limitations has likely expired and that it does not have material exposure to these parties. In connection with the above, the Company has revised its original estimate of the allocation between cash and common stock of the $20 million provision for settlement of all such shareholder litigation recorded during its fiscal year ended March 31, 1997 related to the Class Action Litigation. Accordingly, the Company has reclassified $750,000 in the second quarter of fiscal 2000 from the original settlement reserve to accrued liabilities, representing the $500,000 Additional Settlement Agreement described above and a remaining estimate of the probable costs to be incurred in connection with the remaining parties not a party to the Settlement Agreement or the Additional Settlement Agreement. In January 2000, the Company made a partial payment of $188,000 in settlement of certain of these claims. The Company expects the remaining amount to be paid in the next quarter. The plaintiffs in the Consolidated Litigation have reached an agreement with the Company's former Interim Chief Executive Officer, Lawrence J. Ramaekers, and his employer, Jay Alix & Associates ("Jay Alix"), regarding the plaintiffs' alleged claims against them. In return for the Company's agreement to reimburse Jay Alix and Mr. Ramaekers in the third quarter of fiscal 2000 $1.0 million for legal fees incurred, Jay Alix and Mr. Ramaekers have released any and all claims against the Company and its affiliates and directors, including any claims to indemnification and defense costs incurred by Jay Alix and Mr. Ramaekers in defending the claims brought by the plaintiffs against them. The Plaintiffs in the Consolidated Litigation have retained their claims against the Company's former Chief Executive Officer, Emanuel Pinez, and the Company's former Chief Financial Officer, James M. Murphy. CINAR CORPORATION: Jeffrey S. Abraham Files Securities Lawsuit -------------------------------------------------------------- The Law Offices of Jeffrey S. Abraham announced that it has filed a class action on behalf of a class consisting of all individuals and institutional investors that purchased the common stock of CINAR Corporation (Nasdaq:CINR) between March 3, 1999 and February 18, 2000, inclusive. The complaint charges that the Company and its co-chief executive officers and controlling shareholders, Micheline Charest and Ronald Weinberg, violated the federal securities laws by failing to disclose that the Company was falsely representing that scripts for television productions written by United States citizens were written by Canadian citizens in order to obtain favorable tax credits and that, as a result, the Company's financial results were inflated. The complaint further alleges that these false and misleading statements caused the Company's stock to trade at artificially inflated prices during the Class Period and that prior to disclosing these facts, the defendants took advantage of the inflated stock price by selling more than $150 million of CINAR stock in a public offering. When the truth about the Company was revealed, the price of CINAR's stock dropped significantly. Since the time the initial complaint was filed, additional information concerning activities at CINAR has been disclosed including that $122 million in funds were invested without approval of the Company's board of directors. These disclosures have resulted in the removal of Micheline Charest and Ronald Weinberg, defendants in the class action, from their positions as co-chief executives of the Company and, more importantly for investors, a further precipitous drop in the price of CINAR common stock. As a result, it is expected that the Complaint will be amended to include these allegations and extend the proposed Class Period. Contact: Jeffrey S. Abraham of the Law Offices of Jeffrey S. Abraham, toll-free at 800-938-0015 or via Internet e-mail at Jsalaw@aol.com or by writing the Law Offices of Jeffrey S. Abraham, The Lincoln Building, 60 East 42nd Street, 47th Floor, New York, N.Y. 10165. COCA-COLA: Signals a Desire to Settle Racial Bias Lawsuit --------------------------------------------------------- Coca-Cola Chairman Doug Daft appears intent on trying to settle the racial discrimination lawsuit against the company as quickly as possible. In an e-mail memo of March 7 to all employees, Daft said he knows the suit is on the minds of many of them. "We are now in mediation and are working toward an expedient and equitable resolution," Daft told employees. Last month U.S. District Judge Richard Story ordered both sides to try to settle the case by holding talks with a mediator, who is supposed to facilitate the discussions. No talks have yet been held. Plaintiffs' attorney Cyrus Mehri said he was glad to hear about Daft's memo. "We are pleased to learn about the company's good-faith interest in settlement," Mehri said. "Daft has an opportunity to make full amends for the past and set the gold standard for the future." Daft's memo to employees came only three days after a meeting and rally about the suit by about 500 current and former African-American employees and their supporters. They vowed to keep pressuring the company to treat black employees better. Daft said that "diversity is one of the fundamental values" of the company. He also said the company's Diversity Advisory Council, which was formed after the suit was filed last April, has come up with recommendations that will be announced in the near future. The suit, filed by eight current and former employees, claims the company has discriminated against African-Americans in pay, promotions and performance evaluations. The company has denied the allegations. The plaintiffs are seeking class-action status so they can represent about 2,000 black salaried employees in the United States. A decision on class certification is at least several months away. Legal experts said most class-action cases are settled prior to trial. Some said a settlement in this case could be a wise move for the company because its reputation as a progressive employer has been called into question. Still, the settlement discussions are likely to be difficult. For example, will the company come up with enough money to compensate a proposed class of employees? Another important issue is the company's employment practices. The plaintiffs have said they want to make them fairer, while the company has defended them as being equitable. If a settlement is reached in mediation, the judge would still have to approve it. (The Atlanta Journal and Constitution, March 8, 2000) FOCUS ENHANCEMENTS: Kirby, McInerney Files Securities Suit in MA ---------------------------------------------------------------- A class action lawsuit has been commenced on behalf of all purchasers of Focus Enhancements, Inc. (Nasdaq: FCSE) securities between April 29, 1999 and March 1, 2000. The action, filed in the United States District Court for the District of Massachusetts, asserts claims against Focus Enhancements and certain of its officers for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by reason of material misrepresentations and omissions. The complaint charges that Focus Enhancements issued false and misleading financial statements for and during 1999. On March 1, 2000, Focus Enhancements announced that its independent auditors, while performing their audit, brought to the Company's attention certain 'financial controls issues.' As a result of the auditor's discovery: (i) Focus, after reporting three consecutive profitable quarters during 1999, now expects to report a loss for the year; and (ii) two top officers have taken a paid leave of absence, while (iii) a Board Committee investigates the matter. In the ensuing two days, shares in Focus Enhancements lost half of their value. Contact: Kirby Mcinerney & Squire, LLP, New York Jeffrey Squire, Esq. Lewis Sandler, Esq. Danielle Feman, Paralegal Telephone: (212) 317-2300 Toll Free (888) 529-4787 E-Mail: kms@kmslaw.com FORD MOTOR: Extends Warranty for Allegedly Defective V-6 Engine --------------------------------------------------------------- Facing a consumer backlash over its defective 3.8-liter V-6 engine, Ford Motor Co. has agreed to extend its warranty to 100,000 miles or seven years on some models to cover a rash of blown head gaskets across the nation. The warranty extension is one of the biggest in the industry in years, covering 717,680 vehicles produced in 1994 and 1995, though it still excludes prior-year models that used the 3.8-liter engine. Ford's extended warranty covers the 1994 and 1995 Ford Taurus and Mercury Sable, the 1994 Lincoln Continental and the 1995 Ford Windstar minivan. Ford, the world's second-largest auto maker, said that it was taking the move "in the interest of customer satisfaction." The company did not have any estimate of the potential cost of the repairs. Independent experts and consumer advocates say that as many as half the Ford vehicles under the recall experience head-gasket failures by 100,000 miles. If such estimates are correct, Ford could get stuck paying for more than 350,000 engine repairs that run as much as $ 4,000 apiece--meaning the repair program would cost Ford hundreds of millions of dollars and perhaps approaching $ 1 billion. The problem, by now familiar to mechanics across the country, involves failure of the head gasket that provides a seal between the engine block and the cylinder head. The failure allows engine coolant to get into the combustion chamber, causing overheating, cracked heads and sometimes block damage. Ford had already extended the warranty on the vehicles to 70,000 miles, but consumer advocates complained that program was insufficient, since Ford's own maintenance documents indicated that the gaskets should last 120,000 miles. Ford's vehicle service and programs director, Ann O'Neill, said the additional warranty coverage was based on what she termed "new data" showing that owners were having failures outside the first warranty-extension program. No doubt that new data involved a deluge of dissatisfaction on the part of owners, who have flooded the Internet with complaints and filed a class-action lawsuit in Chicago. After Highway 1 published two columns (Jan. 19 and Feb. 9) discussing the program, The Times was inundated with more than 100 letters, phone calls and e-mails from outraged Ford owners. Among those readers were many who own 3.8-liter V-6 Taurus, Sable and Ford Mustang and Thunderbird models built before 1994 and not covered by any extended warranty. "I now have 76,000 miles and have had to spend $ 8,730.81 on repairs alone," wrote Pattee Chapman, who said she replaced her engine as well as her transmission, power steering pump and other items on her 1992 Sable. "I'm a retired senior and enough already." Ford spokesman Mike Vaughn said the earlier models were not included because engineering changes in the model-year 1994 vehicles accounted for a higher failure rate. Those changes involved the water pump, cooling system, air-conditioning refrigerant and head-bolt tightening specifications. "We believe we have gotten to those vehicles with the highest failure rate, but we are still looking at the failures because customer satisfaction is our No. 1 priority," he said. The company redesigned the engine in 1996 and began supplying an improved aftermarket gasket for repairs in 1998. Still, scores of owners say they have experienced multiple head gasket failures. Under the extended warranty, Ford will repair or replace the engines. If the company is unable to supply enough engines, it will buy back the vehicles at wholesale value and provide customers with a $ 3,000 discount toward a new Ford product, Vaughn said. (Los Angeles Times, March 8, 2000) GAMING LOTTERY: Ct OKs Professor's Calculation in Securities Case ----------------------------------------------------------------- At an inquest hearing for securities litigation, plaintiffs presented the expert testimony of a professor of finance and the finance area coordinator at the University of Rochester's School of Business. The professor performed an analysis of the damages sustained by plaintiffs by virtue of defendants' actions. He calculated that the plaintiffs' damages totaled $ 22 million. The court noted that the professor had testified in other cases, and it also noted that he was questioned closely by the court on his calculation methods and that his answers satisfied the court that they were well founded. Accordingly, in view of the detailed analysis that the professor conducted and his responses to the court's questions, the court accepted the professor's damages calculations and ordered judgment for plaintiffs against defendants for $ 22 million. Judge Patterson In Re Gaming Lottery Securities Litigation QDS:02762149, on Wednesday, February 9, 2000, the Court held the inquest as ordered at the hearing on January 25, 2000 after the default in appearance by defendants Gaming Lottery Corp., formerly known as Laser Friendly, Inc., now known as GalaxiWorld.com Limited, and Jack Banks, its chief executive officer. Copies of the Court's order for the inquest were served on GalaxiWorld and Jack Banks. They did not appear. At that hearing, plaintiffs presented the expert testimony of Michael J. Barclay, Ph.D., Professor of Finance and the Finance Area Coordinator at the University of Rochester's William E. Simon Graduate School of Business Administration. Professor Barclay performed an analysis of the damages sustained by the members of the plaintiff class by virtue of the defendants' actions enumerated in the consolidated amended class action complaint, as well as the issues of materiality and causation (Tr. at 38). To determine whether there were material omissions or misstatements, Professor Barclay constructed a full chronology of Gaming Lottery's stock prices and linked that chronology to all publicly available news sources about the company and examined whether statements related to allegations in the complaint did have a significant impact on the stock prices. He found that those public statements contained in the complaint and Table I of his report (Report of Professor Michael J. Barclay (" Barclay Report")) were material. (Tr. at 39.) Professor Barclay's analysis was based on the event study method, an accepted method for the evaluation of materiality damages to a class of stockholders in a defendant corporation. See Fama, L. Fisher, M. Jensen and R. Roll, "The Adjustment of Stock Prices to New Information," 10 International Economic Review 1 (1969); Mark Mitchell and Jeffrey Netter, "The Role of the Efficient Markets Hypothesis in Insider Trading and Other Securities Fraud Cases at the Securities and Exchange Commission," The Business Lawyer, Vol 49 (1994); David Tobak and Frederick Dunbar, "Materiality and Magnitude: Event Studies in the Courtroom," NERA Working Paper, April 1999. First, after examining the trading volumes in Gaming Lottery stock on the Toronto Stock Exchange and on NASDAQ, Professor Barclay used a statistical test called the Durbin-Watson test to determine whether the Gaming Lottery stock return (percentage [of] change in price over a particular interval) had a normal relation to the change in the NASDAQ corporate index, i.e., exhibited auto-correlation. Professor Barclay found that the test showed no auto-correlation and, therefore, that the market for Gaming Lottery common stock on the Toronto Stock Exchange and NASDAQ was at least "weak form efficient." Based on his study, he found that the market for Gaming Lottery stock was an efficient market during the class period. Professor Barclay also reviewed all the news stories covering Gaming Lottery during the class period (Barclay Report, Ex. D) and examined the reaction of Gaming Lottery's stock price in those markets to the new information (Barclay Report, Ex. C) to determine whether Gaming Lottery's stock return, when the new information was released, was significantly different from the normal relation between the stock return in the overall market (Tr. at 44). To determine the normal volatility of the base return on Gaming Lottery's common stock over the market return, Professor Barclay studied the base return (percentage of change of the price of Gaming Lottery in relation to the market return for all stocks trading on the Toronto Stock Exchange for the period June 2, 1994 to May 30, 1995) (Id. at 45). Professor Barclay next examined the Gaming Lottery market prices during the class period to determine if the stock price return was outside the stock's normal volatility. If, during the class period, Gaming Lottery's price was outside its normal volatility, Professor Barclay calculated the "excess returns" each day net of market-wide or industry-specific influences and also calculated cumulative excess return figures each day during the class period. Professor Barclay testified that his review of the events listed on Table 1 to his Report corroborated that the artificial inflation and stock price drops for Gaming Lottery had been caused by the enumerated events in Table I and concluded that the cumulative excess returns, both plus in the initial part of the period and minus in the last part of the period, were as stated in Table II. Professor Barclay calculated Section 10(b) damages for members of the class who purchased shares between February 1, 1995 and May 24, 1996, by calculating the number of shares purchased each day and the artificial inflation for each day. (Tr. at 49 - 54; Barclay Report, Ex. C.) He then calculated the number of shares that were purchased each day of the class period and resold during the class period (the "'ins' and 'outs' shares"), (Barclay Report, Ex. E), and the number of shares that were purchased each day and held throughout the class period ("retained shares") (Tr. at 60). Damages for the retained shares were calculated as the amount of artificial inflation at the time of purchase, limited by the damages limitation provisions of the Private Securities Litigation Reform Act of 1995. Damages for the "ins" and "outs" shares were calculated as the artificial inflation at day of purchase less the artificial inflation at day of sale. See B. Cornell and R. G. Morgan, "Using Finance Theory to Measure Damages in Fraud on the Market Cases," U.C.L.A. Law Review, June 1990, (37 U.C.L.A. L. Rev. 883), p. 17. Professor Barclay's analysis depended in part on his calculation as to "the float," the number of shares available to the public market for trading. To determine "the float," he deducted from Gaming Lottery's total outstanding shares, non-public shares, including shares held by insiders and those shares held and reported by financial institutions to the Securities & Exchange Commission ("SEC") as remaining in the institutions' possession throughout the class period, and also adjusted for the reported short interest over the class period. He also examined the total reported trading volumes for Gaming Lottery, during the class period, 66.3 million shares, and, based on "the float" and an assumption that each Gaming Lottery share purchased on the Toronto Stock Exchange during the class period was 1.25 times more likely to be traded on a subsequent day than any other potentially traded outstanding share and each share traded on the NASDAQ was 2.4 times more likely to be traded, Professor Barclay calculated that 7,066,458 shares were purchased and held throughout the end of the class period to the damage of the shareholder and that 7,119,451 "ins" and "outs" shares suffered damages during the class period. (Barclay Report, Ex. E). Using a regression analysis, Professor Barclay computed damages by calculating the damages for shares purchased each day in the class period (Barclay Report, Ex. E) and limited those damages to the 90 - day period beginning on the date (Barclay Report, Table I) the information correcting the misstatement or omission was disseminated as required by the Private Securities Litigation Reform Act of 1995. By this method, he found damages for retained shares of $ 11,887,335 as shown on Exhibit E (column 18) and for "ins" and "outs" shares of $ 10,197,510 as shown in Exhibit E (column 19) of his Report. (Barclay Report, Table 4.) Total @ 10(b) damages were $ 22,084,844. Professor Barclay has testified in other cases including In re NASDAQ Market Makers Antitrust Litigation, MDL No. 1023 (S.D.N.Y.), 94 Civ. 3996 (RWS), Cooper, et al. v. E Trade Group, Inc., (Superior Ct. of the State of California, Santa Clara County, 1999), and Orman v. American Online, Inc., U.S.P.C., (E.D.Va.) (97 Civ. 264A (1998)), as well as in a number of arbitrations. He was questioned closely by the Court on the methods by which he arrived at his conclusions and his answers satisfied the Court that they were well founded. In view of the detailed analysis he conducted and Professor Barclay's responses to the Court's questions, the Court accepts his damages calculation and will order judgment to be entered for plaintiffs against GalaxiWorld for $ 22,084,844 as of May 24, 1996. (New York Law Journal, February 28, 2000) GUN MANUFACTURERS: County in NJ Subpoenas the ATF for Information ----------------------------------------------------------------- Attorneys representing Camden County in its federal lawsuit against several firearms manufacturers served a subpoena on the United States Bureau of Alcohol, Tobacco and Firearms ("ATF"), seeking the production of documents and information that would show the distribution channels through which guns get from manufacturers into the hands of criminals. The ATF, a division of the United States Treasury Department, maintains several computer databases that trace each gun used in a crime in Camden County and the United States back to its manufacturer. This information may help prove that the manufacturers, who are informed each time one of their guns is being traced, have long known that selling guns to certain distributors and through certain distribution channels result in a disproportionate amount of guns ending up in the hands of criminals. "This marks the first time that this data has been subpoenaed from the ATF in any of the recent suits brought by municipalities against the gun manufacturers and distributors," said Jeffrey L. Nash, Director of the Board of Freeholders of Camden County. Nash explained that: "Ours is one of only two cases of its kind brought in federal court, and thus one of the only cases in which federal subpoena power could be invoked." Attorneys for the County hope to use the ATF data to analyze the distribution systems through which crime guns are flooded into Camden County. "Every time a crime involving a handgun occurs in the United States, the ATF is notified. The ATF informs the handgun manufacturer of the trace, and the manufacturer responds by telling the ATF the identity of the distributor to whom that gun was sold. The ATF then asks the distributor who it sold the gun to, and on down the line. All of this 'trace' information is then stored in a database maintained by the ATF," explained Eric L. Cramer, an attorney with Berger & Montague, P.C., a Philadelphia law firm specializing in complex and class action litigation, one of the firms representing Camden County. Mr. Nash said that he expects that "the ATF gun trace data will help demonstrate that the handgun manufacturers supply and market handguns through certain 'dirty' distribution channels, despite knowing that a disproportionate amount of guns sold through these channels end up being used in crimes in Camden County and elsewhere." Camden County is seeking to recover costs associated with impacts of gun violence upon the County, such as the costs of responding to incidents of handgun violence and crime, and the costs of the resulting, substantially enlarged criminal justice administration. The suit also seeks an injunction restraining the firearms manufacturers from the knowing and reckless marketing and distribution of handguns in a manner which facilitates access to guns by persons prohibited to purchase or possess them under New Jersey or federal law. The suit charges that these manufacturers have created and maintained a public nuisance that unreasonably interferes with the health, safety, well- being, and quality of life of the people of Camden County -- a county whose levels of shooting deaths and injuries exceed those of almost every other area of the world not at war. The subpoena on the ATF was served following a February 16, 2000 ruling by U.S. District Court Judge Jerome B. Simandle, which granted Camden County leave to file a Second Amended Complaint, and ordered that "discovery may commence with respect to evidence to be gathered from third parties potentially possessing relevant information connected with this case, such as the Bureau of Alcohol Tobacco and Firearms." The Court also ordered that the defendants preserve all evidence in their possession relating to trace inquiries by the ATF regarding guns used in crimes. The case is Camden County Board of Chosen Freeholders v. Beretta, U.S.A. Corp., et al. Case No. 99-cv-2518 (JBS), United States District Court for the District of New Jersey, Camden Vicinage Contact: Eric L. Cramer of Berger & Montague, P.C., 215-875-3009, or Jeffrey L Nash, Camden County Freehold Director, 856-225-5465, or Robert Millenky, Camden County Counsel, 856-757-8239, or Prof. David Kairys of Temple Law School, 215-204-8959 MICROSOFT CORP: Report Suggests Progress in Talks on Antitrust Case ------------------------------------------------------------------- Microsoft stock rose 2.5% to $ 92 7/8 on March 7 on an analyst report suggesting there has been progress in settlement talks with the government on the landmark antitrust case. "There appears to be a flurry of activity on the settlement front but no way of gauging probabilities," Rick Sherlund of Goldman Sachs says in a research note. Sherlund's note was based on an analysts' meeting with Microsoft's new chief financial officer, John Connors. Meanwhile, Walter Winnitzki of Chase Hambrecht & Quist, who also attended the meeting, told Reuters: "The feeling was there was a near-term opportunity to have this settled, some language being given they wouldn't have any change in culture or structure." Since the talks began in November, people close to the discussions have said there has been no movement. The government, emboldened by Judge Thomas Penfield Jackson's findings that Microsoft bullied rivals and stifled innovation, has proposed a breakup of the company. Microsoft has suggested limited restraints on its conduct. William Epifanio of J.P. Morgan Securities, who met privately with Connors, says the market overreacted to the report. "Microsoft is working diligently to settle the case, but (Connors) did not say they're close to a settlement." Both sides are under strict orders from the court-appointed mediator, Judge Richard Posner, not to discuss the talks. Connors' comments could be a signal to Jackson "to hold off" on his ruling while the two sides make headway, says antitrust expert Herbert Hovenkamp of the University of Iowa Law School. Some experts say Microsoft is motivated to settle in the next few weeks, before a likely ruling that it broke antitrust laws. Such a decision could be used by plaintiffs in class-action lawsuits against the giant. But Mark Popofsky, a former Justice lawyer who worked on the case, says, "I think ( Microsoft's) motivation (to settle) will be higher after the opinion comes out." It's not clear, he says, whether Jackson's ruling could be used as evidence before it's appealed. And Microsoft might think Jackson will find narrower violations than his fact findings suggest, says Popofsky, now with law firm Kaye Scholer in Washington. Microsoft also dropped out of the Software and Information Industry Association Tuesday, March 7. The group has opposed Microsoft in the case, recently writing a brief supporting the government. Microsoft, which paid dues of $ 125,000 a year, was its largest member. (USA TODAY, March 8, 2000) PALM BEACH: City Will Dredge Canals, Install Catch Basins to End Suit --------------------------------------------------------------------- The city agreed on March 7 to settle a class-action suit that claimed it has long neglected to remove sediment buildup in canals feeding the Intracoastal Waterway. The settlement, approved unanimously by the City Commission without discussion, guarantees that the city will dredge on a one-time basis 13 of the 18 canals within the Tropic Isle neighborhood. The city will also install catch basins in the existing drains in the same area to reduce the development of sediment, according to the settlement. It agreed additionally to pay attorneys' fees for the plaintiffs in the amount of $ 37,782 in a lump sum figure or $ 45,000 in three years. The settlement ended a 2-year-old suit filed initially by three residents in Palm Beach County Circuit Court, then upgraded into a class-action suit on behalf of more than 300 residents of Tropic Isle, which is located along canals between Linton Boulevard and Jasmine Drive. "This takes care of the city's obligation," said Commissioner Patricia Archer. The suit sought $ 4 million in damages and alleged that the city should have dredged the canals, whose bottoms are now covered in muck and storm water runoff. The suit said that in 1956, the city entered into a contract with a developer of the houses in the neighborhood and, as part of the deal, annexed the canals. The suit also claimed that residents are required to pay higher assessments for owning waterfront properties, so the city should maintain the canals. The city once estimated that the cost to dredge the canals would be about $ 3.8 million. The dredging will begin within 90 days after the settlement is approved by the court. The catch basins will be installed within five years after approval of the settlement. (Sun-Sentinel (Fort Lauderdale, FL), March 8, 2000) PS GROUP: In Tentative Settlement for Charges on Proposed Acquisition --------------------------------------------------------------------- PS Group Holdings, Inc. (NYSE: PSG) announced that it has reached a tentative settlement of litigation challenging its proposed acquisition by an affiliate of Integrated Capital Associates. On December 20, 1999, the Company announced a proposed merger under which its stockholders would receive $12.00 a share in cash, to be financed 20% by equity from the principals of Integrated Capital Associates, Inc. and 80% by a secured loan from GATX Capital Corporation. On December 27, 1999, a stockholder class action was filed against PS Group Holdings and its directors in California Superior Court in San Diego. In his amended complaint, the plaintiff alleges that the defendants breached their fiduciary duties in connection with the proposed merger by, among other things, failing to implement an auction or other procedure to maximize stockholder value and failing to disclose certain information in the proxy statement sent to the company stockholders on February 11, 2000. On February 23, the defendants removed the lawsuit from state court to U.S. District Court in San Diego. The plaintiff made a motion to remand the case back to the state court and the defendants filed an opposition to that motion. Under the tentative settlement, Integrated Capital Associates' affiliate has irrevocably waived $1.25 million of the $2.5 million fee payable to it by PS Group Holdings if the merger agreement is terminated under certain circumstances. This 50% lowering of the termination fee is intended to reduce the impediment to any other party making a competing acquisition proposal that could be potentially superior to the pending transaction. In addition, the tentative settlement calls for PS Group Holdings to send to its stockholders a supplement to its February 11 proxy statement which will contain the 1999 year-end financial results, as well as the price at which its oil and gas development and distribution subsidiary, Statex Petroleum, would be sold to that subsidiary's two senior officers under the letter of intent announced on December 20 at the same time as to the announcement of the proposed merger transaction. The supplement will also disclose the reduction in the termination fee provided for in the merger agreement. The tentative settlement is subject to the execution of a definitive settlement agreement and to court approval. Pending court approval, the plaintiff will not seek to block the closing of the proposed merger. PS Group Holdings had previously scheduled a special meeting of its stockholders to vote on the proposed merger on March 13, 2000. Under the tentative settlement announced, when the meeting is convened on March 13, the only action that will be taken will be to adjourn the meeting until March 23. The Company will announce a specific time and place for the reconvened meeting when it calls the meeting to order on March 13 and this information will also be contained in its supplemental proxy material, which will include a new proxy card for use by stockholders who have not yet voted or might wish to change their vote. READ-RITE CORP: Federal Court in CA Dismisses Shareholder Suits --------------------------------------------------------------- Read-Rite Corporation (Nasdaq: RDRT) announced that the U.S. District Court in San Jose has dismissed the two federal class action lawsuits filed against Read-Rite and certain of its officers and directors. In one suit, covering a class of plaintiffs who purchased Read-Rite stock during the period from April 19, 1995 through January 22, 1996, the court's order precludes the plaintiffs from refiling their case. The other class action, covering a group of plaintiffs who purchased Read-Rite stock during the period from March 2, 1996 through June 2, 1996, was also dismissed, but the judge's decision gave the plaintiffs in this case thirty (30) days to file an amended complaint in an attempt to remedy deficiencies in their prior pleadings. SAFETY-KLEEN CORP: Abbey, Gardy Files Securities Suit in SC ----------------------------------------------------------- The law firm Abbey, Gardy & Squitieri, LLP announces that a class action against Safety-Kleen, Corp. (Nasdaq: SK) and certain of its officers and directors has been commenced in the United States District Court for the Souther District of South Carolina on behalf of all persons who purchased shares of Safety-Kleen common stock between July 7, 1998 and March 6, 2000. In brief, the Complaint charges that Safety-Kleen and certain of its officers and directors, violated the federal securities laws. The Complaint alleges that during the Class Period defendants made materially false and misleading statements regarding, among other things, the financial condition of Safety-Kleen. On March 6, 2000, the Company announced that it had discovered possible accounting irregularities that may have affected the previously reported financial results of the Company since fiscal year 1998. A committee has been formed by the board to investigate the matter. Contact: Lee Squitieri, Nancy Kaboolian (nkaboolian@a-g-s.com), Maria Criscitiello (mcriscitie@a-g-s.com), Abbey, Gardy & Squitieri, LLP, 800-889-3701 (toll free) or 212-889-3700 SAFETY-KLEEN CORP: Bernstein Liebhard Files Securities Suit in SC ----------------------------------------------------------------- A securities class action lawsuit was commenced on behalf of purchasers of the common stock of Safety-Kleen, Inc. (NYSE: SK) between July 7, 1998 and March 6, 2000, inclusive, in the United States District Court for the District of South Carolina. The complaint charges Safety-Kleen 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 that the defendants issued materially false and misleading financial statements that materially overstated the Company's revenues, income and earnings during the Class Period. Additionally, the complaint alleges that the Company announced on March 6, 2000 that a committee had been formed to investigate possible accounting irregularities in its reported financial results since 1998 and that the Company's top officers had been placed on administrative leave pending the outcome of the investigation. Safety-Kleen's stock dropped more than $2.00 per share and has declined over 89% from its class period high of $19.25. Contact: Mr. Mark Punzalan, Director of Shareholder Relations at Bernstein Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, 800-217-1522 or 212-779-1414 or by e-mail at Mark@bernlieb.com SAFETY-KLEEN CORP: Milberg Weiss Files Securities Lawsuit in SC --------------------------------------------------------------- A class action lawsuit was filed on March 7, 2000, in the United States District Court for the District of South Carolina on behalf of all persons who purchased or otherwise acquired the common stock of Safety-Kleen Corp. (NYSE: SK) between July 7, 1998 through March 6, 2000 Contact: Shareholders Services Dept. E-Mail: endfraud@mwbhlny.com 1-800-320-5081 SAFETY-KLEEN CORP: Pomerantz Haudek Files Securities Lawsuit in SC ------------------------------------------------------------------ Pomerantz Haudek Block Grossman & Gross LLP (http://www.pomerantzlaw.com)has filed a class action suit against Safety-Kleen, Corp. (Nasdaq: SK) and three of the Company's senior executives. The case was filed in the United States District Court for the District of South Carolina on behalf of all those who purchased the securities of Safety-Kleen during the period between July 7, 1998 and March 6, 2000, inclusive. The Complaint charges that Safety-Kleen and its executives violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements during the Class Period regarding the Company's operating results following its 1998 merger with Laidlaw, which led to the inflation of the Company's financial results during the Class Period. On March 6, 2000, Safety-Kleen stunned the market when it announced that its three most senior executive officers were being placed on administrative leave to permit the Company to conduct an "internal investigation" of its prior reported financial results, as well as to investigate the Company's accounting policies and practices following receipt of information by the Company's Board alleging possible accounting irregularities. Safety-Kleen also announced that it had appointed a special committee consisting of four independent outside directors to conduct an internal investigation to determine the extent to which the Company would need to restate its financial reports dating back to the end of fiscal year 1998. The market reaction to the news was disastrous; the price of Safety Kleen's common stock fell nearly 50 percent while the price of Safety-Kleen bonds also fell in value by more than 15 percent. Contact: Andrew G. Tolan, Esq. of Pomerantz Haudek Block Grossman & Gross LLP, 888-476-6529 (888-4-POMLAW) or agtolan@pomlaw.com SAFETY-KLEEN CORP: Wechsler Harwood Retained to Bring Securities Suit --------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP (http://www.whhf.com)announces that it has been retained to bring a class action lawsuit for violations of the Federal securities laws against Safety-Kleen Corp. (NYSE: SK) and certain of its officers and directors on behalf of the shareholders who purchased the common stock of Safety-Kleen between May 18, 1998 and March 6, 2000, including those shareholders who acquired the securities of Laidlaw Environmental Services, Inc. in connection with the 1998 merger between Safety-Kleen and Laidlaw. Contact: Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, New York New York 10022 Telephone: 877-935-7400 (toll free). Contact: Robert I. Harwood, Esq. rharwood@whhf.com Daniella Quitt, Esq. dquitt@whhf.com Frederick W. Gerkens, III, Esq. fgerkens@whhf.com SONUS PHARMACEUTICALS: Discloses Securities Litigation in Washington -------------------------------------------------------------------- In August and September 1998, various class action complaints were filed in the Superior Court of Washington (the "State Action") and in the U.S. District Court for the Western District of Washington (the "Federal Action") against SONUS and certain of its officers and directors, alleging violations of Washington State and U.S. securities laws. In October 1998, Sonus, and the individual defendants, moved to dismiss and stay the State Action. In the State Action state law claims were later brought in the Federal Action and the State Action was dismissed. In February 1999, plaintiffs filed a consolidated and amended complaint in the Federal Action, alleging violations of Washington State and U.S. securities laws. In March 1999, Sonus and the individual defendants, filed a motion to dismiss the consolidated amended complaint in the Federal Action. In July 1999, the Court entered an order denying in part and granting in part the motion to dismiss the complaint in the Federal Action. In November 1999, Sonus filed motions for summary judgement and to stay discovery. On December 15, 1999, the Court denied in part and granted in part the motion to stay discovery. The motion for summary judgment is currently noted for July 10, 2000. The Company does not believe there is any merit to the claims in these actions and intend to defend vigorously. While denying wrongdoing, the Company says there can be no assurance that this stockholder litigation will be resolved in Sonus favor. The Company believes that any settlement or adverse judgment in excess of available insurance could have a material adverse affect on its business, financial condition and results of operations. ********* 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. 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