/raid1/www/Hosts/bankrupt/CAR_Public/000518.MBX                  C L A S S   A C T I O N   R E P O R T E R

                  Thursday, May 18, 2000, Vol. 2, No. 97


3DFX INTERACTIVE: Reaches Settlement Agreement for Shareholder suit
BURLINGTON NORTHERN: $800,000 Paid for 4,100 Derailment Claims
CAR COMPANIES: Aussi Union Can Pursue Action over Public Holiday Pay
CELERIS CORPORATION: Wants Review of Overrule on Insurance for Suit
CHERRY CORPORATION: Forms Committee to Evaluate Buyout Proposal

CIENA CORPORATION: Announces Dismissal of Securities Complaint in MD
COREL CORP: Inprise CEO Rage over Results; Proposed Merger Terminated
DATASTREAM SYSTEMS: Shareholders Suit in SC Survives First Round
HMO: Alleged FHP Spin-Off Undervaluation Canít Meet Pleading Standards
HOLOCAUST VICTIMS: Germany to Accept Moral Financial Responsibility

HOLOCAUST VICTIMS: Labor Slaves in Austria Will Get Payment
HOME DEPOT: Lets Michigan Monitor Employment Practice
KAUFMAN FINANCIAL: Failure to Maximize Merger Value Not Breach of Duty
METHIONINE PRICE-FIXING: Feed and Grain Supplier Files Federal Lawsuit
NORTHBRIDGE EARTHQUAKE: Some Californians Sign to Recall Quackenbush

PE CORPORATION: Milberg Weiss Announces Securities Suit in CT
PE CORPORATION: Wolf Haldenstein Announces Securities Lawsuit in CT
PS GROUP: DE Carve-Out Doesnít Restrict Venue to State of Incorporation
RENT-A-CENTER: Chain Pays $2 Million to Settle Managers' Overtime Suit
SOTHEBY'S: Financial Times Says William Ruprecht Has Brought Stability

TOBACCO LITIGATION: MD Ct of Appeals Decertifies Class of Smokers
TRUE OIL: Former Employee Claims Retirement Account Made Static


3DFX INTERACTIVE: Reaches Settlement Agreement for Shareholder suit
3dfx Interactive(R) Inc. (Nasdaq: TDFX), a global leader in enabling the
emerging age of visual communications, announced on May 17 that it has
reached an agreement in principle and entered into a memorandum of
understanding with plaintiffs to settle three related shareholder class
action lawsuits against STB Systems, Inc. and certain of its officers
and directors. STB was acquired by 3dfx last May. The settlement, which
is subject to final documentation and Court approval, does not reflect
any admission of liability by STB and there has been no finding of any
violation of federal or state securities laws. The principal terms of
the agreement call for the establishment of a settlement fund consisting
of $4.7 million to be paid by insurance.

BURLINGTON NORTHERN: $800,000 Paid for 4,100 Derailment Claims
Burlington Northern-Santa Fe has paid $800,000 for 4,100 claims from the
downtown derailment May 3, and is closing its claims center.

About 400 gallons of xylene, a petroleum-based industrial solvent,
leaked from a derailed car at about a gallon an hour. Thousands of
people claim they were hurt by exposure to the chemical.

Johnnie Cochran and local attorneys Edward Jones, Joslyn Alex and
Lucretia Pecantte-Burton filed a class-action suit for people who live,
work or own businesses near the site.

Officials with the railroad company say they have done all they can
locally to satisfy claims. "We've done everything that can be done,"
said Sonny Merritt, a senior claims director with Burlington Northern.
"We've stayed here for about two weeks. We've seen all the people."

The cause of the derailment remains unknown. Burlington Northern planned
to remove a 40-foot section of track last week for examination in
Topeka, Kansas. But a team of attorneys, led by Johnnie Cochran of the
O.J. Simpson defense team, stopped the shipment.

A judge ruled last Friday that the railroad cannot take 120 feet of
track to Topeka, Kansas, for testing until lawyers for people who sued
the railroad have their own tests done. District Judge Carl Williams'
order gives the attorneys until May 22 to inspect the tracks. Officials
estimate that nearly one-third of the damage claims filed so far are
fraudulent. Claim payments have averaged a bit more than $250 each. (The
Associated Press, May 16, 2000)

CAR COMPANIES: Aussi Union Can Pursue Action over Public Holiday Pay
Australia's car unions can continue their multi-million-dollar class
action over public holiday pay. Toyota, Ford, Mitsubishi and Holden
unsuccessfully sought Australian Industrial Relations Commission
intervention in the long-running and potentially costly dispute in the
vehicle industry over unpaid public holiday entitlements. The AIRC
refused to end the "bargaining period" between the unions and car
companies over the issue. The legal battle comes after a class action
lodged in December by the Australian Manufacturing Workers' Union to
recoup six years of public holiday back-pay for about 3000 Toyota
workers. (World Reporter (TM), May 16, 2000)

CELERIS CORPORATION: Wants Review of Overrule on Insurance for Suit
Celeris Corporation (Nasdaq/NM:CRSC) announced on May 17 that the
Minnesota Court of Appeals has issued an opinion reversing a lower court
decision that had held that the Company's directors and officers
insurance policies covered claims for any monetary liabilities and
expenses associated with the Company's ongoing securities class action
litigation and Securities and Exchange Commission investigation. The
Minnesota Court of Appeals concluded that coverage is barred by the
policies' retroactive date exclusion. The Company intends to pursue a
review of the appellate decision by the Minnesota Supreme Court.

Celeris Corporation is a provider of specialty clinical research
services and information technology services that expedite and
streamline the clinical trial and regulatory submission process for
pharmaceutical, medical device and biotechnology manufacturers.

CHERRY CORPORATION: Forms Committee to Evaluate Buyout Proposal
The Cherry Corporation (Nasdaq: CHER) announced that the Special
Committee of the Company's Board of Directors, which was formed to
evaluate a proposal for the acquisition by Peter Cherry of all of the
outstanding common stock of the Company not now owned by Peter Cherry
and his affiliates, has engaged Wasserstein Perella & Co., Inc., as
independent financial advisor to assist it in evaluating the proposal.

In April 2000, four class action lawsuits were filed in the Court of
Chancery of the State of Delaware, alleging, inter alia, breach of
fiduciary duties on the part of the directors of the Company in
connection with Peter Cherry's proposal. On May 9, 2000, another class
action suit was filed in Delaware Chancery Court. The Company believes
these suits (which include requests for injunctions) are premature and
without merit.

The Cherry Corporation manufactures proprietary and custom electrical
switches, sensors, electronic keyboards and controls for the worldwide
automotive, computer, and consumer and commercial markets. The company
has two operating divisions in the United States and seven wholly owned
subsidiaries in Germany, England, France, Australia, Czech Republic,
Mexico and Hong Kong. Cherry also has 50-50 joint ventures in Japan,
Hirose Cherry Precision Company Limited, and in India, TVS Cherry

CIENA CORPORATION: Announces Dismissal of Securities Complaint in MD
CIENA Corporation (NASDAQ:CIEN) announced on May 17 that United States
District Court for the District of Maryland has dismissed the
consolidated securities class action complaint naming CIENA and certain
of its officers and directors as defendants.

The complaint, originally filed on August 26, 1998 and subsequently
dismissed and re-filed on August 20, 1999, alleged that CIENA and
certain of its officers and directors violated certain provisions of the
federal securities laws by making false statements, failing to disclose
material information and taking other actions to artificially inflate
and maintain the market price of CIENA's common stock during the Class
period of May 21, 1998 to September 14, 1998.

CIENA's motion to dismiss the second amended complaint was granted and
the action was dismissed by the order of the Honorable J. Frederick
Motz, United States District Judge for the District of Maryland.

Once a judgment is entered, the order will be subject to appeal. The
Company has no information as to whether an appeal will be taken.

COREL CORP: Inprise CEO Rage over Results; Proposed Merger Terminated
It was the kind of temptuous rage capable of unleashing a schism so deep
that it was unlikely to be repaired without significant concession.

Dale Fuller, the 41-year-old interim chief executive officer of Inprise
Corp., could barely contain his fury as he struggled to digest the
startling poor first-quarter financial results his Canadian merger
partner was about to publicly report the following week. Mr. Fuller had
flown up to Corel Corp. offices in the Ottawa suburb of Kanata in early
March from his Scotts Valley, Calif., digs at the request of senior
Corel officials to learn that Corel would be posting a net loss of
$12.4-million in the quarter. The timing was most inopportune as the
financial results were supposed to be the first test of their proposed
$1.07-billion merger, which was announced a month earlier on Feb. 7, and
a chance to silence the market naysayers who had been dragging down the
share prices of both companies.

'It's tough to do these things when you have good news, it's just that
much harder when you are battling bad news,' he said.

Based on what he learned during the acrimonious meeting, Mr. Fuller
figured there were going to be enough negative reports in the weeks and
months ahead to sound alarms south of the border. Once the shouting and
cursing subsided, Mr. Fuller stormed from the fourth-floor office of
Corel's chief financial officer, slamming the door so forcefully that it
was ripped off its hinges.

'It was not what was in the plan and any of the models we'd put together
over the previous four or five weeks,' he explained in an interview. 'It
was so much of a variance with no way to explain that variance to me.'

For the next two months, Mr. Fuller found himself beseeching for
explanations as Corel's precarious financial health deteriorated
dramatically; a loss in its first quarter, combined with projections
that the company would continue to lose money for the next two quarters,
culminating with a stunning cash-deficiency warning in a regulatory
filing with the U.S. Securities and Exchange Commission that declared
the company could run out of cash by July.

In fact, in the three months after the software companies announced
their betrothal, shareholders of both firms watched helplessly as their
stock spiraled downward. Worse, they faced the daunting prospect that
the acquiring company may not be able to live up to its end of the

'The surprise here was that the time frame between when we initially got
the projects and where we were 45 or 60 days later was quite something,'
he said.

It was becoming a tough sell for Inprise's board of directors and for
Mr. Fuller, who had joined Inprise in March, 1999, for a six-month

Management at the company quietly complained about the deal and a
culture clash was much in evidence among the rank and file. During an
employee meeting in California a few days after the deal was announced,
Michael Cowpland, the 57-year-old founder and chief executive of Corel,
spoke to Inprise employees who are far more casually attired than the
buttoned down Corel staff.

When one of the 'Birkenstock Borland' types suggested that Mr. Cowpland
remove his tie, the flamboyant executive obliged by taking off his
jacket and ripping his shirt open down to the navel. All Mr. Fuller
could do was cover his counterpart up with his jacket as those gathered
in attendance were left agog.

At the same time, Inprise shareholders were becoming increasingly
disgruntled, threatening to vote down the deal at a special meeting. A
class-action lawsuit was launched and another by Robert Coates, a major
shareholder and former director of Inprise who resigned in protest to
the deal.

Under intense pressure from some of the largest institutions in the
United States, including Merrill Lynch Asset Management, Inprise's board
of directors wanted to walk away from the deal but faced a whopping
$29.5-million termination fee.

Enter Broadview International LLC, the U.S. investment banking firm that
had advised Inprise in the deal.

While Mr. Fuller publicly declared that Inprise would continue living up
to its 'definitive merger agreement,' privately the company needed an
exit strategy.

'We brought Broadview in to validate our thinking,' Mr. Fuller said.
'The financial position of the company [Corel] was very different three
months later, needless to say. We expected each company to drive
positive cash results through the balance of 2000 and were going to use
that as a mechanism of the merged company to go forward. That's not
where we ended up.'

Instead, Inprise was handed a preliminary evaluation from Broadview that
concluded the deal with Corel under current market values was not fair
to the shareholders of the U.S. company.

After an intense week of negotiations with lawyers, professional
advisors and the boards of both companies, Inprise and Corel announced
they had mutually agreed to terminate their proposed amalgamation. 'We
both mutually agreed to walk away from the deal,' Mr. Fuller said.

Mr. Cowpland, who fought very hard for his biggest acquisition ever,
would only say, 'It seemed to be a good idea to take that position at
this time. That's all I'll say.' And what happens to the $29.5-million
breakup fee? 'I never give away my cash,' Mr. Fuller joked, with a hint
of relief.

DATASTREAM SYSTEMS: Shareholders Suit in SC Survives First Round
On January 11, 1999, several shareholders filed a putative class action
complaint in the United States District Court for the District of South
Carolina, Greenville Division, naming as defendants, the Company, Larry
G. Blackwell  and the Company's  former Chief  Financial  Officer.
Several substantially  similar  complaints were filed in the same court
shortly thereafter.

The complaints alleged violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934. Plaintiffs seek to represent a class of
individuals who purchased the Company's common stock from April 1 to
October 20, 1998. On June 25, 1999, the court ordered that the actions
be consolidated and that a single consolidated complaint be filed.

On August 13, 1999, the plaintiffs filed a consolidated amended class
action complaint. The consolidated amended complaint alleges that
defendants artificially inflated Datastream's earnings and stock price
by (i) taking certain one-time charges not in accordance with generally
accepted accounting principles in connection with Datastream's
acquisitions of Insta and SIS and (ii) materially understating the
Company's reserves for doubtful accounts in violation of GAAP. The
plaintiffs seek compensatory damages and unspecified equitable relief.

On September 13, 1999, the Company and the individual defendants moved
to dismiss the consolidated amended complaint. The court denied the
defendants' motion to dismiss on January 27, 2000. The Company filed its
answer to the consolidated class action complaint on February 24, 2000.
The Company intends to defend this action vigorously, but due to the
inherent uncertainties of the litigation process, the Company is unable
to predict the outcome of this litigation. If the outcome of the
litigation is adverse to the Company, it could have a material adverse
effect on the Company's business, financial condition and results of

HMO: Alleged FHP Spin-Off Undervaluation Canít Meet Pleading Standards
The officers and directors of FHP International Corp. assert the
Northern District of California was correct in dismissing a shareholder
suit that alleges they undervalued a spin-off so they could personally
reap $35 million in profits from a subsequent sale of the HMO. The
defendants argue the investors cannot meet the heightened pleading
standards under the Private Securities Litigation Reform Act or allege
facts giving rise to a strong inference of scienter. Brady et al. v.
Anderson et al., No. 98-56217 (9th Cir., Mar. 20, 2000).

In 1995, the defendants restructured FHP, and its physicians' practice
management operation became a wholly owned subsidiary known as Talbert.
They later sold FHP to HMO giant PacifiCare but did not include Talbert
in the sale. Under the terms of the joint merger proxy statement, FHP
shareholders received cash and PacifiCare stock worth $35 per share plus
the right (in a post-merger offering) to acquire shares in Talbert for
$21.50 per share.

According to the investors, the FHP defendants portrayed Talbert as a
loss-riddled company worth only about $60 million and dissuaded
shareholders from exercising their rights to purchase its stock. Due to
FHP's warnings about the value of Talbert, many shareholders let their
rights expire or sold them at a depressed price, the investors assert,
while the defendants snapped up the unsubscribed shares for themselves.

Three months after the Talbert offering, the FHP defendants announced
they were selling Talbert to MedPartners Inc. for approximately $200
million. The plaintiffs assert the FHP defendants, along with investment
banking firm Merrill Lynch Pierce, Fenner & Smith, knew Talbert was
worth more than they had portrayed and intentionally misled investors.

The FHP defendants counter that, even if the allegations are true, the
shareholders benefited from the sale to PacifiCare. If the joint proxy
describing the proposed acquisition understated Talbert's value and
overstated FHP's, argue the defendants, then the price PacifiCare paid
to acquire FHP was more advantageous to the shareholders. PacifiCare has
also been named as a defendant in the suit.

The defendants also contend the complaint failed to allege any facts
showing how any particular officer or director knew Talbert was
undervalued. The allegations are conclusionary, say the FHP defendants,
and the district court was correct in dismissing the action with
prejudice. Contrary to the investors' argument on appeal, say the
defendants, the ruling should be affirmed.

Regarding Merrill Lynch's involvement in the sale to PacifiCare, the
firm's fairness opinion letter specifically stated that the
consideration offered for the proposed merger with PacifiCare was "fair
to such shareholders from a financial point of view." Merrill Lynch says
it did not mislead investors because the letter did not offer an opinion
regarding the stand-alone value of Talbert.

Moreover, PacifiCare paid FHP shareholders 52 percent more than the
closing price of FHP stock on the last trading day before the offer was
announced, Merrill Lynch says.

The defendants also argue that the initial $60 million valuation placed
on Talbert was the book value and the Talbert prospectus clearly stated
that the $21.50 per share price did not reflect an estimate of the
company's fair market value.

However, the investors assert the defendants had been receiving
inquiries regarding Talbert but failed to disclose there was interest in
the company. They also say securities analysts such as Bear, Stearns &
Co. and Salomon Brothers Inc. had assigned Talbert a value of over $300
million when analyzing FHP's breakup value.

Based on comparable acquisitions of physician practice management
operations, the FHP defendants knew they could get at least $200 million
for Talbert and positioned themselves to reap million of dollars of
risk-free profits from "flipping" Talbert to a buyer, the shareholders

The plaintiffs-appellants are represented by Leonard B. Simon, Blake M.
Harper, Eric A. Isaacson, Laura M. Andracchio and Joseph D. Daley of
Milberg Weiss Bershad Hynes & Lerach in San Diego, and by Clifford W.
Roberts Jr. of Roberts & Associates in Tustin, Calif. The FHP
defendants-appellees are represented by John W. Spiegel, Kristin Linsley
Myles and Robert L. Dell Angelo of Munger, Tolles & Olson in Los
Angeles. Merrill Lynch is represented by Phillip L. Bosl and William E.
Thomson of Gibson, Dunn & Crutcher in Los Angeles. (Securities
Litigation & Regulation Reporter, April 19, 2000)

HOLOCAUST VICTIMS: Germany to Accept Moral Financial Responsibility
Germany's government and corporations will accept moral and financial
responsibility for Nazi war crimes in an agreement to be signed in early
June during US President Bill Clinton's visit to Berlin.

In a copy of the draft agreement called "Final Act" obtained by AFP, all
class action lawsuits filed against the German government and industry
will be dropped once the document is signed. In exchange, Germany will
pay 10 billion marks -- shared equally by government and industry -- to
victims of war crimes and despoilment, including forced workers, through
a special fund set up for that purpose.

The six-page document provided by one of the negotiators, says that
"both the government of the Federal Republic of Germany and German
companies accept moral responsibility arising from the use of slave and
forced laborers, from property damage suffered as a consequence of
racial persecution and from other injustices of the National Socialist
era and the Second World War." The draft agreement echoes the apology
for Nazi war crimes German President Roman Herzog made in December.

A negotiator, who asked not to be identified, called the document "a
significant moral statement, which is what we really wanted in so far as
the public ceremony is concerned." An agreement in principle on a
10-billion-mark restitution for Nazi war crime victims was reached after
years of arduous negotiations in Berlin on December 17, 1999.

The accord is to be signed by the governments of Belarus, Czech
Republic, Israel, Poland, Russia and Ukraine, the German government and
German companies, and the United States, who will act as guarantor.

The 10-billion-mark fund means that "the moral and material expectations
of the former forced laborers, other victims and their heirs have been
duly taken into account," the agreement says. "All participants consider
the overall result and the distribution of the Foundation funds to be
fair," it adds.

Given the old age of Holocaust survivors, "all participants will work
together with the foundation in a cooperative, fair and non-bureaucratic
manner to ensure that the aid reaches the victims quickly," the
agreement says. (Agence France Presse, May 17, 2000)

HOLOCAUST VICTIMS: Labor Slaves in Austria Will Get Payment
Concentration camp inmates forced into hard labor by the Nazis in
Austria will get a one-time payment of nearly $7,000 from a proposed
fund presented Wednesday by Austria, the United States and other
drafters of the plan. Details of the compensation fund for forced labor
remained open at the end of a two-day conference, chaired by Austria and
the United States and attended by delegates from Belarus, the Czech
Republic, Hungary, Poland, Russia and Ukraine. The fund about 6 billion
schillings ($ 393,400,000) would be paid for by the Austrian government
and companies that benefited from forced labor under the Nazis, said

''We took a major step forward towards the time when dignified payments
can be made to slave and forced laborers who worked in Austria during
the World War II period,'' said Deputy Treasury Secretary Stuart E.
Eizenstat. But conference participants said agreement was reached on
payments ranging from between 20,000 schillings ($ 1,311) to 105,000
schillings ($ 6,884) to the estimated 150,000 surviving victims of
forced labor.

So-called ''slave-laborers'', those forced to work in Nazi concentration
camps, many of them Jews, would be eligible for the highest payment,
while others pressed into work on farms would receive the lowest. Others
forced to work in factories would be eligible for payments of 35,000
schillings (dlrs 2,295). In addition, women who gave birth while in
Austria for forced labor would receive 5,000 schillings (dlrs 328),
while children up to age 12 who accompanied parents can claim the same
amount their parents are eligible for.

Political leaders first began acknowledging in the 1980s that Austria
was not only a victim but also a perpetrator during the Nazi era. The
discussion about how Austrians deal with their country's past has
increased in recent months, in part because of the prominence of the
far-right Freedom Party in government

Participating in government since February, the party, under Joerg
Haider, gained a reputation for anti-foreigner sentiment and Haider
himself was condemned for several statements praising the Nazi era. The
14 other European Union nations have imposed sanctions on fellow E.U.
member Austria to show their opposition to the Freedom Party's
government role.

Before and during World War II, many Austrians fervently supported Adolf
Hitler, their native son. According to the Vienna-based Jewish
Documentation Center, headed by Nazi hunter Simon Wiesenthal, Austrians
were accountable in some way for the death of 3 million Jews about half
those killed in the Holocaust.

Although more than 99 percent of Austrians purportedly voted for their
country's annexation by Germany in 1938, the postwar Austrian
constitution endorsed by the Allies in an effort to weaken postwar
sentiment for union with Germany recognizes ''that Hitler's Germany ...
annexed Austria by force.''

Maria Schaumayer, the Austrian government envoy in charge of setting up
the fund, acknowledged that parliament would still have to approve the
compensation plan. But she said that would be no problem because all
parties in parliament agreed for the need for such a fund.

Additionally, although details of who provides what amount still need to
be worked out, ''Austrian industry and business is well aware of what is
expected of them,'' she told reporters, suggesting companies were ready
to do their part in exchange for ''legal peace'' a commitment that no
further claims would be pressed against them. Eizenstat said that
Schuessel, the chancellor had told him ''that the money is there.''

Germany has set up a similar fund to total 10 billion marks (dlrs 4.6
billion) with German industry agreeing to contribute half the total, and
the government to pay the other half. But German government figures
complain that industry is dragging its feet on its share of the fund.

Payouts would probably begin in the fall said Schaumayer. ''We expect
that the fund will be open to claims from all over the world, and not
just the countries represented at the conference,'' she added.

Eizenstat also urged quick Austrian action on setting up a separate fund
to compensate others stripped of property under the Nazis.

U.S. lawyers have filed a class-action suit against Austria in a New
York City Court seeking restitution of property stolen from Jews and
other Holocaust victims.

Although Austrian Chancellor Wolfgang Schuessel has in the past
suggested that earlier postwar legislation had dealt with most cases of
property restitution, Eizenstat said that Schuessel was now receptive to
the idea of a new fund. ''The chancellor said he would seriously
consider it with an open mind,'' he said. ''It is time now to begin the
process of addressing property restitution issues.'' (AP Worldstream,
May 17, 2000)

HOME DEPOT: Lets Michigan Monitor Employment Practice
Seeking to settle a race bias complaint, Home Depot has agreed to allow
the Michigan Civil Rights Department to monitor its hiring and promotion
practices at about 20 area stores for two years.

The state agency has been investigating Home Depot's practices.
Separately, 12 employees at a store in Southfield filed a federal race
bias lawsuit against the company in January.

Atlanta-based Home Depot, the nation's leading home improvement chain
for the do-it-yourself market, said in a news release that its goal is
to "ensure fair and equal access for all, while providing an environment
where our associates can be at their best serving our customers." The
company has 8,000 employees in Michigan. It would not say how many
minority workers it has and what positions they hold, the Detroit Free
Press reported.

The agreement comes after years of discrimination allegations against
the hardware store chain. In January, the state issued a race
discrimination complaint against Home Depot after receiving several
phone calls from the company's employees. A group of 20 investors,
organized by the Interfaith Center on Corporate Responsibility, also
requested information about Home Depot's minority hiring.

In addition, 12 black workers at one of the retailer's Southfield stores
filed a $120-million racial discrimination lawsuit against the company
Jan. 4 in U.S. District Court in Detroit. They said they repeatedly were
overlooked for promotions despite high marks on evaluations. Three of
the workers said they were fired after making formal complaints. Sean
Tate, an attorney for 10 of the workers, said he expects to go to trial
in November.

In 1998, the company settled a $65-million class-action sexual
discrimination lawsuit involving 25,000 female employees in 10 western
states. The year before, it settled a sexual discrimination lawsuit
filed in Louisiana for $700,000.

Home Depot has 38 stores in Michigan and 974 in the United States,
Puerto Rico and Chile. (The Associated Press, May 16, 2000)

KAUFMAN FINANCIAL: Failure to Maximize Merger Value Not Breach of Duty
The failure of a corporation's president and CEO to obtain the maximum
value for the outstanding common stock in a merger was not a breach of
fiduciary duties to the minority shareholders, a Michigan appeals court
has ruled. Camden v. Kaufman et al., No. 214755 (Mich. Ct. App., Mar.
31, 2000).

Plaintiff Howard Camden appealed as of right from an order granting
summary disposition in favor of the defendants. The defendants, officers
and directors of H.W. Kaufman Financial Group (HWK), filed a
cross-appeal from an order granting Camden's motion for class
certification. The Michigan Court of Appeals affirmed in part and
reversed in part.

Camden, a former shareholder of HWK, alleged breach of fiduciary
obligations as a result of the cash-out of common stock of a merger
between HWK and AJK Acquisition Co. One of the defendants, Herbert W.
Kaufman, HWK's president, CEO and director, controlled 77 percent of
HWK's outstanding common stock. He later transferred and donated some
stock, and was left with 49 percent of the common stock.

Defendant Alan Kaufman, treasurer and director of HWK, was principal
owner of AJK, the successor corporation, as a result of the merger.

Camden alleged that the defendants breached their fiduciary duties to
obtain maximum fair value for the outstanding shares of HWK. Camden also
alleged that the defendants completed the merger for their own personal
benefit and to his own detriment as a shareholder. The trial court
granted Camden's motion to proceed as a class action, and also granted
the defendants' motion for summary disposition. Camden failed to dispute
that the corporate transaction had been approved by disinterested
directors and a majority of the shareholders when the proxy statement
had disclosed the circumstances surrounding the merger, the court held.

On appeal, the defendants contended that Camden could not challenge the
validity of the merger because he agreed to it by approving it as a
shareholder. The appeals court agreed, finding that Camden was precluded
from proceeding with the litigation because of his tacit approval of the
transaction. Camden could have maintained the action if he had
demonstrated that complaining to the directors or requesting different
action on their part would have been futile. Camden contended that
complaining would have been futile due to the number of shares held by
both Kaufmans.

The appeals court found Camden's arguments in his claim for breach of
fiduciary duty without merit, yet addressed his issues on appeal due to
their value in similar future cases. Camden first argued that the
directors failed to act in a manner that would obtain the maximum value
for common stock. He also alleged that a claim existed for all corporate
actions, yet the court found to the contrary, stating that Camden had
failed to identify a corporate structure ( e.g., a close corporation)
where the court would impose a breach of duty of maximum value. Camden's
contentions were rejected.

Additionally, Camden argued that the defendants breached their duty to
the minority shareholders by obtaining a fairness evaluation instead of
the maximum value. Camden alleged that the defendants were acting in
their own best interests. Camden also argued that the trial court erred
in holding that all of the material facts in the case were disclosed to
the shareholders. The appeals court found that Camden's allegations
failed to create a genuine issue of material fact regarding the
Kaufmans' disclosure actions. Camden made other allegations of failing
to disclose material facts, all of which weredetermined ineffectual by
the appeals court.

The appeals court ultimately found that Camden should have looked over
the proposed merger more carefully and sought clarification prior to
voting on it. The appeals court's conclusion that Camden did not have
standing to challenge the corporate merger required reversal of the
trial court's order granting class certification. Since Camden did not
maintain the cause of action as an individual, he was not qualified to
represent the proposed class. The trial court's decision was affirmed in
part and reversed in part. (Mergers & Acquisitions Litigation Reporter,
April 2000)

METHIONINE PRICE-FIXING: Feed and Grain Supplier Files Federal Lawsuit
Feed and grain supplier West Bend Elevator has filed a federal lawsuit
alleging that three companies conspired for 15 years to fix the price of
an amino acid used in animal feed. The lawsuit, filed this week, alleges
the price-fixing conspiracy resulted in higher prices for methionine,
and deprived West Bend Elevator, as a customer, of free and open

The lawsuit seeks damages and an order to halt the alleged price-fixing
scheme against defendants Rhone-Poulenc S.A. of France, Degussa-Huls AG
of Germany, Novus International Inc. of St. Louis, and their affiliated

Methionine is one of 10 amino acids considered essential for
single-stomach animals and is produced primarily as a supplement for
swine, poultry and dairy cattle.

The three defendants dominate the $1.3 billion market for methionine. As
of 1998, the three companies controlled 88 percent of methionine
production worldwide, the lawsuit said.

The lawsuit alleges methionine prices were level for 15 years until an
illegal price fixing agreement in 1985 nearly doubled prices over the
next six years. The companies then maintained methionine prices from
1991 to 1996 despite a significant oversupply, the lawsuit alleges.

West Bend Elevator is seeking to have the suit certified as a class
action on behalf of customers in the state that bought methionine made
by the defendants or co-conspirators from at least 1985.

Consumers have benefited from intense competition in the methionine
market and Novus has a strict policy against violating trust laws,
representative Melanie Fitzpatrick said. (The Associated Press, May 17,

NORTHBRIDGE EARTHQUAKE: Some Californians Sign to Recall Quackenbush
Fed up with charges that California Insurance Commissioner Chuck
Quackenbush accepted campaign contributions from insurers in return for
preferential treatment, some California voters are signing a petition to
recall him. (BestWire, May 17, 2000)

PE CORPORATION: Milberg Weiss Announces Securities Suit in CT
A class action lawsuit was filed in the United States District Court for
the District of Connecticut on behalf of all persons who purchased the
stock of PE Corporation Celera Genomics Group (NYSE: CRA) in a secondary
offering (the "Secondary Offering") of Celera common stock conducted by
PE Corporation on February 29, 2000.

The complaint charges PE Corporation and certain of its officers and
directors with violation of Sections 11, 12(a)(2) and 15(a) of the
Securities Act of 1933. The complaint alleges that the registration
statement and prospectus issued in connection with the Secondary
Offering were materially false and misleading because, among other
things, they failed to disclose that Celera had engaged in discussions
with the Human Genome Project (an international research organization
supported by the U.S. and U.K. governments, among others) concerning
collaborating on completing the map of the human genome and that those
discussions had terminated in December 1999 because the Human Genome
Project was opposed to Celera's demands for five-year exclusive rights
to the data.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP, Shareholder Relations
Dept., 1-800-320-5081, E-Mail: endfraud@mwbhlny.com

PE CORPORATION: Wolf Haldenstein Announces Securities Lawsuit in CT
Wolf Haldenstein Adler Freeman & Herz LLP announces that it filed a
securities class action lawsuit in the United States District Court for
the District of Connecticut on behalf of investors who bought PE
Corporation Celera Genomics Group (NYSE:CRA) stock in a secondary
offering on February 29, 2000 (the "Secondary Offering").

The lawsuit charges Celera and certain officers of the Company, with
violations of the securities laws and regulations of the United States.
The Complaint alleges that the Secondary Offering Registration Statement
and Prospectus were false and misleading because they failed to reveal
that the Company had already engaged in discussions with the Human
Genome Project (an international research organization) concerning
collaborating on completing the map of the human genome and that those
discussions were terminated in December 1999 because the Human Genome
Project was opposed to Celera's demands for five-year exclusive rights
to the data.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP, New York Michael
Miske, George Peters, Gregory Nespole, Esq., Fred Taylor Isquith, Esq.
or Shane T. Rowley, Esq., 800/575-0735 http://www.whafh.com

PS GROUP: DE Carve-Out Doesnít Restrict Venue to State of Incorporation
The Southern District of California has remanded to state court an
investor's suit against PS Group Holdings Inc. alleging breach of
fiduciary duty in connection with proxy materials for an acquisition.
The court concluded the "Delaware carve-out" provision of the 1998
Securities Litigation Uniform Standards Act does (SLUSA) not restrict
venue to the state in which the issuer is incorporated. Gibson et al. v.
PS Group Holdings Inc. et al., No. 00-0372 (S.D. Cal., Mar. 8, 2000).

Last year, plaintiff Robin Gibson initiated this class action in San
Diego Superior Court, alleging that PS Group and its officers and
directors breached their fiduciary duties in connection with a proposal
by Integrated Capital Associates Inc. to purchase all outstanding shares
of PS Group's common stock at $12.00 per share, or about $73 million.

Plaintiffs assert the company failed to disclose material facts in
connection with the acquisition, did not maximize shareholder value and
excluded competitive offers for PS Group. The complaint was subsequently
amended to add a claim for breach of the duty of candor.

In February, defendants removed the action to federal court based on the
SLUSA, which precludes action under state law where the facts are also
actionable under federal securities law.

In seeking remand, the plaintiffs argued that the suit falls outside of
the legislation's removal and preemption provisions because the
investors are only seeking equitable relief, not damages. In addition,
they argue the act specifically exempts breach of fiduciary duty claims
alleging fraud in connection with a vote on a merger or acquisition.

Initially, the court said that the amended complaint "suggests" that
plaintiffs omitted the damage claim to defeat removal to federal court.
"A rule allowing a class action to defeat removal by filing an amended
complain that omits a prayer for damages would eviscerate the SLUSA ,"
said Judge Thomas J. Whelan. Using this approach, a plaintiff could
pursue massive discovery in state court and then request damages at a
later date, said the court.

Judge Whelan concluded the case is covered under the SLUSA, but then
examined it to determine if it met the criteria for the Delaware
carve-out exception. Although the action was filed in California, it was
brought under the laws of Delaware where PS Group is incorporated.

The defendants argue that the exception only applies when an action is
actually filed in an issuer's state of incorporation. They cited a
footnote in the House Conference Committee report on the SLUSA to
support their contention.

However, the district court disagreed, stating, "Nothing in this
language suggests that Congress intended to restrict the venue of
preserved class actions to the issuer's state of incorporation. " Had
Congress intended to impose such a restriction, it would have done so,
the court concluded.

Accordingly, Judge Whelan ruled that the case qualified for the
carve-out exception and remanded the action to state court. (Securities
Litigation & Regulation Reporter, April 19, 2000)

RENT-A-CENTER: Chain Pays $2 Million to Settle Managers' Overtime Suit
A national rent-to-own retail chain has agreed to pay $3 million in
overtime pay to 500 current and former assistant managers in California
to settle a case alleging the company gave them administrative titles to
justify not paying for extra hours worked.

The employees of Texas-based Rent-a-Center Inc. claimed they were called
managers and were denied overtime, even though they didn't have
significant managerial responsibilities.

California law states that "executive" employees are exempt from
overtime compensation. Executives have discretionary authority over
employees; regular supervision of at least two workers; and more than 50
percent of their work time devoted to "managerial duties."

The plaintiffs, represented by Oakland's Saperstein, Goldstein, Demchak
& Baller, were given mostly non-discretionary tasks that occupied more
than 50 percent of their time. They said store managers, who are paid on
a salary basis and get a share of the branch profits, only occasionally
doled out managerial duties to assistants.

"It follows a pattern of cases we have seen where employers are
misclassifying personnel in exempt positions," said Saperstein partner
David Borgen. He called the cases a common feature of today's "go-go"
economy. "Of course, there would be no case if they didn't require them
to work 50 or 60 hours a week."

Rent-a-Center's lawyers, however, denied violating state labor law.
Latham & Watkins partner Joel Krischer, who represented Rent-a-Center,
said wage-and-hour claims are a "cottage industry" in California,
because exemptions are based on quantitative rather than qualitative
tests. "It reflects California's particularities in the wage-and-hour
law," Krischer said. As a result, he said there is always a risk to
companies that a group of employees will claim they are misclassified.

Several months ago the company changed those "assistant" positions from
salaried to hourly in response to the class action case, Erica Otero v.
Rent- Center, Inc., BC17038.

Krischer said it made more sense to make the change than to risk future

The settlement was preliminarily approved by a Los Angeles County
Superior Court judge last week. Final approval is expected on Aug. 4.
Reporter Michael Joe's e-mail address is mjoe@therecorder.com. (The
Recorder, May 17, 2000)

SOTHEBY'S: Financial Times Says William Ruprecht Has Brought Stability
After a 20-year career at Sotheby's during which he presided over US
operations, sold everything from Renoir paintings to vintage cars, and
earned a reputation for obtaining the prized objects that make an
auction house prosper, William Ruprecht, one might think, would have
leapt at the chance to become chief executive of one of the art world's
most famous companies.

But when Sotheby's board offered him the job in February, Mr Ruprecht
confesses that he "took a very deep breath and had a moment of

If the auctioneer was slow to drop the hammer, it was because Sotheby's
two leading executives had just hastily resigned amid allegations they
colluded with rivals at Christie's to fix prices.

Yet, as the all-important spring sales shift into high gear this week,
Sotheby's has so far managed to meet expectations. Its opening night
Impressionist and Modern art auction last week brought in an impressive
Pounds 94m. Sotheby's has also avoided an exodus of talent, and members
of the art community say day-to-day business has gone on more or less as

"Has there been a difference? I don't think there has been, and that's
probably good for them," says one art dealer, when asked to evaluate Mr
Ruprecht's brief tenure.

Or, as another less charitably puts it: "The drones at Sotheby's are
still droning away."

Back in February such an outcome seemed almost impossible. In the months
following the scandal, former clients filed a class-action lawsuit
against them. Authorities launched probes in Europe to complement an
investigation in the US. And the allegations gave encouragement to
competitors eager for a larger share of the Dollars 5bn (Pounds 3.3bn)
world auction market that Christie's and Sotheby's dominate. The two
houses seemed more in need of a crisis-management team than an arts and
antiques buff like Mr Ruprecht.

The scandal has continued to swirl. Mr Ruprecht has had to cope with
speculation that Alfred Taubman and Diana Brooks, Sotheby's former
chairman and chief executive, may go to jail, because they do not have
the conditional immunity-agreement that Christie's executives struck
with the US Justice Department. Rumours continue to crop up about a
possible change in ownership. And, most recently, the company's annual
shareholders' meeting has been postponed, since Sotheby's largest
outside shareholder protested about the composition of the board.

All this has occurred at a time of intense competition in the industry.
With the robust economy, fewer families have fallen on hard times and
been forced to turn heirlooms into cash. At the same time, there are
more auction houses grabbing what merchandise is available.

Phillips, a distant third in the industry, has made an ambitious bid to
steal business from established houses. It is suspected of offering
large guaranteed sale prices for works by Picasso, Cezanne and Malevich.

Against such a background, keeping Sotheby's stable is no mean
achievement. How has Mr Ruprecht managed it?

At first glance, he does not appear the obvious man for the job. With
his large frame and enthusiastic manner, he is something of a bull in
the delicate china shop of the art world.

But in such an intimate company, where employees are specialists and
often boast long tenures, Mr Ruprecht's familiarity with the business
has served him well.

He joined the auctioneer in 1980 after a stint as an apprentice to a
Vermont furniture maker. He began in the Oriental-carpet department,
where he learnt the nuts and bolts of auctioneering, from secretarial
work to researching and photographing items for catalogues and then
assembling them for sale.

Over the years, Mr Ruprecht rose through the ranks. He became an
auctioneer, presided over prominent sales, such as that of the estate of
the Duke and Duchess of Windsor, and eventually came to direct the
company's worldwide marketing.

"He's sort of a renaissance man, which you need to be to do that job,"
says Helaine Fendelman, an independent appraiser.

Beyond the auctioneering skills he acquired, though, Mr Ruprecht also
built close relationships with many of his colleagues.

That is the secret of his steady hand at Sotheby's. After the scandal
broke, he gathered together 700 employees to inform them of the news.
"That was certainly a confusing morning, and I think many of the staff
were enormously surprised by the news," Mr Ruprecht says.

Since then, Mr Ruprecht has continued to hold informal meetings and
lunches, and sent out company-wide e-mails to keep staff apprised of the
situation. Through it all, he has been forthright, according to
employees. "I think because he has been here so long, people trust him,"
one Sotheby's employee says. "He still chats with people in the halls."

That approachability comes in contrast to his predecessor, Mrs Brooks,
who dragged Sotheby's into the modern era. The former Citibank loan
officer drew in a new generation of buyers by embracing popular culture
and commercialisation as never before. Private boxes were added to the
auction room, while items went up for sale often more for their
celebrity cachet than their artistic merit. But she was also considered
to be a hard-driving boss. Many employees never met her personally.

Keeping Sotheby's stable has so far enabled Mr Ruprecht to avoid the
worst of what might have struck the auction house. But it also leads to
what may prove to be a disadvantage. In keeping change to a minimum, Mr
Ruprecht has, of necessity, inherited his predecessor's controversial

Sotheby's chief initiative involves the internet, with which the
256-year-old company hopes to revolutionise its stubborn cost structure.

In aclear divergence with Christie's, which has taken a cautious
approach to the internet, it launched Sothebys.com in January and, in
November, Sothebys.amazon.com in partnership with the online retailer.
The idea is to circumvent the fixed costs of selling low-priced goods by
auctioning them electronically. (Contrary to popular opinion, an
estimated 80 per cent of auctioned goods fetch Pounds 3,300 or less.)

The two sites generated Pounds 7.5m in sales during the first quarter,
and gross sales could reach Pounds 66.6m this year.

Yet the project has been closely watched, not least because of its cost.
Sotheby's spent more than Pounds 26.6m on it last year, and plans to
spend another Pounds 40m this year.

Some in management are believed to be concerned about the pay-off from
such a large investment. But Mr Ruprecht brushes aside such concerns. In
addition to the direct revenues, he says the new medium is also a way to
introduce Sotheby's to new customers who might never have considered
attending a live auction.

There is a similar motive behind another initiative consuming much of
the new chief executive's time - the auctioneer's new York Avenue
headquarters, which are due to be completed later this year.

The remodelled site will feature increased room for storage, and
permanent, museum-quality exhibition space, which should help to trim
costs. But its roof-top gallery, restaurants and retail areas are also
meant to draw in a new generation of customers.

"This is a building that is about broadening and inviting people to look
around at a variety of different art," Mr Ruprecht explains.

Stunning as the new space may be, however, it is not likely to make past
clients forget the current scandal, or others in the not- so-distant
past. Sotheby's brand has been tarnished. It will take Mr Ruprecht's
best efforts to restore its lustre. (Financial Times (London), May 16,

TOBACCO LITIGATION: MD Ct of Appeals Decertifies Class of Smokers
The tobacco industry won a legal victory in Maryland as the state's
highest court tossed out a class action against cigarette makers. Ruling
in a case known as Richardson vs. Philip Morris, et al., the Maryland
Court of Appeals said a lower court had erred in allowing a single trial
for all Maryland smokers suffering tobacco-related illnesses or
addiction to nicotine.

According to the ruling, individual differences between the claimants
predominate over common issues, thus requiring smokers to bring their
claims individually. The Maryland ruling is the latest in a string of
decisions by federal and state courts rejecting class-action status for
anti-tobacco suits. A major exception is the Engle case in Florida, the
only class-action case on behalf of smokers to go to trial. Next week, a
jury in Miami that has already found the industry guilty of fraud and of
causing the illnesses of three class representatives begins considering
punitive damages for as many as several hundred thousand Florida
smokers. (Los Angeles Times, May 17, 2000)

R.J. Reynolds Tobacco Company applauded a ruling by Maryland's highest
court overturning class certification in Richardson, et al. v. Philip
Morris, et al. The suit was filed on behalf of two classes of Maryland
smokers -- those who allegedly got sick from smoking, as well as their
spouses, and those who are allegedly "nicotine dependent." The suit also
sought funding for medical monitoring (to detect, prevent and treat
future disease, and to treat addiction) of the classes.

In the ruling, the Maryland Court of Appeals denied class certification,
noting " ... individual issues predominate over common issues" and " ...
[the trial plan] renders the presently proposed class litigation
unmanageable in much the same way as other courts have concluded."

In reversing the class certification, the Court of Appeals also found
that the trial court erred in formulating a trial plan which would have
allowed a jury to consider punitive damages before a determination that
class members are entitled to compensatory damages.

"The Maryland Court of Appeals found the Richardson class certification,
including the trial plan, to be so fundamentally flawed that it used
extraordinary measures to remedy the circuit court's decision," said
Daniel W. Donahue, senior vice president and deputy general counsel. "We
are glad that sound legal reasoning, as well as judicial common sense,
have prevailed over any temptation to contort widely accepted legal

To date, federal courts have unanimously rejected tobacco class actions,
and, with the exception of the Engle (Florida) and Scott (Louisiana)
cases, state courts have done the same. "The decision in Maryland is
consistent with, and confirms, rulings made by an overwhelming majority
of courts regarding tobacco-related class actions," Donahue said. "This
opinion reaffirms and further illustrates why class-action rules were
never intended to be applied to tobacco cases."

R.J. Reynolds Tobacco Company is a wholly owned subsidiary of R.J.
Reynolds Tobacco Holdings, Inc. (NYSE: RJR). R.J. Reynolds Tobacco
Company is the second-largest tobacco company in the United States,
manufacturing about one of every four cigarettes sold in the United
States. Reynolds Tobacco's product line includes four of the nation's
ten best-selling cigarette brands: Winston, Camel, Salem and Doral.

TRUE OIL: Former Employee Claims Retirement Account Made Static
A former oil company employee filed a class action against her former
employer, claiming the company mismanaged her retirement account. The
employee claims True Oil Co. caused her account to remain static while
others reaped big profits in the stock market. The suit, filed in
federal court in Casper, Wyo., claims more than 100 other employees also
may have lost money. Schropfer v. True Oil Co., 00CV84. (The National
Law Journal, May 15, 2000)


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. Theresa Cheuk, Managing Editor.

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

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