/raid1/www/Hosts/bankrupt/CAR_Public/000616.MBX
C L A S S A C T I O N R E P O R T E R
Friday, June 16, 2000, Vol. 2, No. 117
Headlines
21ST CENTURY: Bailey & Peterson Files Lawsuit in NY over IPO
ALPHARMA INC: Acquired Cox Investigated By UK OFT for Medicine Pricing
ALPHARMA INC: Clears of Fen-Phen Suits; Bacitracin zinc Banned in EU
AUTO INSURANCE: Dismissal of Single Policy Stacking Premium Case Upheld
BAKERSFIELD POLICE: Gay Man Sues over Sting Operations in Public Parks
BRUGNARA PROPERTIES: To Pay for Biohazardous Waste in City Atty.'s Case
CITRIX SYSTEMS: Bernstein Liebhard Files Securities Lawsuit in Florida
CITRIX SYSTEMS: Burt & Pucillo Announces Securities Suit in Florida
CITRIX SYSTEMS: Wolf Haldenstein Commences Securities Suit in Florida
COLUMBIA LABORATORIES: Abbey, Gardy Files Securities Lawsuit in Florida
DEPT OF CHILDREN: Reform of Florida Foster Care System Sought
FEDERAL-MOGUL CORP: Milberg Weiss Announces Securities Suit in Michigan
FLOORING AMERICA: Berman, DeValerio Files Securities Suit in Georgia
FLOORING AMERICA: Wolf Haldenstein Files Securities Fraud Suit in GA
IMPERIAL CREDIT: Stanbury Fishelman Announcess Securities Suit to Go on
LUFKIN INDUSTRIES: 5th Cir in LA OKs TX's Cert. Of Employee Racism Case
MICROSOFT CORP: Oregon Consumer Antitrust Suit over Windows 98 Tossed
NATIONAL COLEGIATE: Settlement Payout for Earnings Restriction Argued
OPERN MARKET: Bernard M. Gross Files Securities Suit in Masachusetts
OPEN MARKET: E-Business Solutions Provider Announces Securities Suit
OPEN MARKET: Milberg Weiss Announces Securities Suit in Massachusetts
OPEN MARKET: Securities Suit Filed in MA, Announces Cauley & Geller
OPEN MARKET: Schiffrin & Barroway Files Securities Suit in Massachutts
RAYTECH CORP: Asbestos Claims Included in Ch 11 Plan of Reorganization
SAVANNAH RIVER: Black Workers Ask Judge to Reconsider Class Status
TOBACCO LITIGATION: B&W CEO Acknowledges Smoking's Dangers
UNICAPITAL CORPORATION: Cauley & Geller Files Securities Suit in FL
* House OKs E-Signature by 426-4 Vote
* Senate Panel to Consider Measure Changing Class Action Venue
* Texans for Lawsuit Reform Working on "Offer of Settlement"
*********
21ST CENTURY: Bailey & Peterson Files Lawsuit in NY over IPO
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A class action has been commenced in the United States District Court for
the Southern District of New York on behalf of all purchasers of 21st
Century Holding Company (Nasdaq:TCHC) at the company's initial public
offering on November 5, 1998, including those persons whose purchases can
be traced to the initial public offering.
The Complaint charges 21st Century Holding Company, and certain of its
officers and directors, with violations of federal securities laws.
Specifically, plaintiffs have brought claims under sections 11 and 15 of
the Securities Exchange Act of 1933. Plaintiffs claim that, in the
Registration Statement for the initial public offering, defendants issued
materially false and misleading statements and omitted other material facts
necessary not to make the remaining representations false and misleading
regarding the financial condition and accounting policies and practices of
21st Century Holding Company, which artificially inflated the price of 21st
Century Holding Company's securities.
Contact: Bailey & Peterson, P.C., Denver James S. Bailey, Jr., 303/837-1660
bailey@b-p-law.com Randall M. Livingston, 303/837-1660
livingston@b-p-law.com
ALPHARMA INC: Acquired Cox Investigated By UK OFT for Medicine Pricing
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The United Kingdom Office of Fair Trading ("OFT") is conducting an
investigation into the pricing and supply of medicine by the generic
industry in the United Kingdom. As part of this investigation, Arthur H.
Cox & Co., a U.K. and English company acquired by Alpharma, received in
February 2000 a request for information from the OFT. The request states
that the OFT is particularly concerned about the sustained rise in the list
price of a range of generic pharmaceuticals over the course of 1999 and is
considering this matter under competition legislation. In December 1999 Cox
received a request for information from the Oxford Economic Research
Association ("OXERA"), an economic research company which has been
commissioned by the United Kingdom Department of Health to carry out a
study of the generic drug industry. The requests related to certain
specified drugs and the Company has responded to both requests for
information. The Company is unable to predict what impact the OFT
investigation or OXERA study will have on the operations of Cox and the
pricing of generic pharmaceuticals in the United Kingdom.
ALPHARMA INC: Clears of Fen-Phen Suits; Bacitracin zinc Banned in EU
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The Company was originally named as one of multiple defendants in 62
lawsuits alleging personal injuries and six class actions for medical
monitoring resulting from the use of phentermine distributed by the
Company and subsequently prescribed for use in combination with
fenflurameine or dexfenfluramine manufactured and sold by other defendants
(Fen- Phen Lawsuits).
None of the plaintiffs have specified an amount of monetary damage. Because
the Company has not manufactured, but only distributed phentermine, it has
demanded defense and indemnification from the manufacturers and the
insurance carriers of manufacturers from whom it has purchased the
phentermine. The Company has received a partial reimbursement of litigation
costs from one of the manufacturer's carriers. The Company has been
dismissed in all the class actions and the plaintiffs in 52 of the
lawsuits have agreed to dismiss the Company without prejudice. Based on an
evaluation of the circumstances as now known, including but not solely
limited to, 1) the fact that the Company did not manufacture phentermine,
2) it had a diminimus share of the phentermine market and 3) the
presumption of some insurance coverage, the Company does not expect that
the ultimate resolution of the current Fen-Phen lawsuits will have a
material impact on the financial position or results of operations of the
Company.
Bacitracin zinc, one of the Company's feed additive products has been
banned from sale in the European Union (the "EU") effective July 1, 1999.
While initial efforts to reverse the ban in court were unsuccessful, the
Company is continuing to pursue initiatives based on scientific evidence
available for the product, to limit the effects of this ban. In addition,
certain other countries, not presently material to the Company's sales of
bacitracin zinc have either followed the EU's ban or are considering such
action. The existing governmental actions negatively impact the Company's
business but are not material to the Company's financial position or
results of operations. However, an expansion of the ban to additional
countries where the Company has material sales of bacitracin based products
could be material to the financial condition and results of operations of
the Company.
AUTO INSURANCE: Dismissal of Single Policy Stacking Premium Case Upheld
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A three-judge panel of the Superior Court has upheld a Lancaster County
trial court judge's decision to dismiss a class action lawsuit against
several insurers accusing them of unlawfully charging single automobile
policyholders with premiums for stacked coverage.
The court said that the language of the law shows the Legislature did not
intend to give certain policyholders the right to waive stacking benefits.
"Had the Legislature intended all named insureds to waive stacking, it
would have utilized different language ...," Judge Michael T. Joyce wrote
for the unanimous panel in In Re: Insurance Stacking Litigation. "The fact
that it did not do so thus suggests that the Legislature only intended to
allow named insureds who have more than one vehicle insured under a policy
to waive stacking."Commonly, "stacking" refers to a cumulation of available
coverages from more than one source designed to create a greater pool of
recoverable benefits.
The Insurance Commissioner has broken stacking down into two types:
intrapolicy and interpolicy stacking. The Motor Vehicle Financial
Responsibility Law does not differentiate between the two. Under
intrapolicy stacking, an insured could use the uninsured motorist and
underinsured motorist coverage available on other vehicles insured under
his or her policy if the coverage on the vehicle in which the insured was
injured is drained. Under interpolicy stacking, a claimant could receive
benefits from more than one policy.
The case was against Donegal Mutual Insurance Co., United States Fidelity
and Guaranty Co., Nationwide Insurance, Kemper National Insurance Co. and
Liberty Mutual Insurance Co. The complaint asserted causes of action for
negligence, breach of fiduciary duty, bad faith, fraud, punitive damages,
unjust enrichment and violations of MVFRL.
In the class action, each of the plaintiffs had purchased an auto insurance
policy that provided UM/UIM coverage for only one vehicle. Each motorist
did not return a form waiving the stacking option, which, under MVFRL,
meant that they had chosen the stacking option.Those who sent their waiver
forms back had "non-stacking" policies which included an "other insurance"
clause such as: "In any event, if more than one policy applies, total
limits applicable will be considered not to exceed the highest limits
amounts of any one of them."
The plaintiffs said that interpolicy stacking did not in fact exist and
therefore charging a premium for stacking in a single-vehicle policy, under
which intrapolicy stacking was necessarily not available, was unlawful. The
plaintiffs also said that avoiding the non-stacking clause creates "gap"
insurance, which the Superior Court had previously determined to be
unlawful.
The insurance companies all filed preliminary objections in the case,
asserting that the matter should be heard by the insurance commissioner
because the plaintiffs "were essentially challenging the rates charged by
the insurers."
The trial court denied some preliminary objections but agreed with the
insurers that the insurance commissioner had primary jurisdiction. The
trial court stayed the litigation and transferred the case to the
commissioner to determine whether the premiums wrongfully included the
charge for stacking. The commissioner concluded the premium charge for
stacking was lawful under Section 1738 of MVFRL. The trial court
subsequently granted the insurers' preliminary objections and dismissed the
case. The plaintiffs appealed.
The middle appeals court first noted that the trial court did not err by
"giving deference" to the commissioner's interpretation of Section 1738.
"The Legislature has specifically reserved questions of unfair insurance
practices and automobile insurance rates to the insurance commissioner,"
Joyce wrote. "Moreover, it is clear from the trial judge's opinion that he
viewed the instant case as a challenge to the insurers' practices and
premiums, in light of Section 1738, rather than a pure question of
statutory interpretation." The court said the issue fell within the
commissioner's area of "peculiar expertise." The court next turned its
attention to the proper analysis of Section 1738. Subsection (a) of the act
provides for the apparently mandatory stacking of uninsured or underinsured
benefits whenever more than one vehicle is insured under one or more
policies. Under subsection (b), however, any named insured may waive the
stacking benefit. "While the statute is clear up to this point, ambiguity
arises in attempting to construe subsections (a) and (b) with the remaining
provisions," the court said. "Under subsection (c), the legislature has
specifically required that named insureds who purchase uninsured or
underinsured benefits for more than one vehicle under a policy must be
provided with the opportunity to waive stacking." The court said the
language in subsection (c) makes it clear that the Legislature intended
that only those with more than one vehicle under a single policy be
entitled to waive stacking coverage. "If we were to construe Section 1738
to require that notice be given to all named insureds, we would necessarily
have to disregard the limiting language contained in subsection (c), a
result that violates our rules of statutory construction," Joyce wrote.
Having found that Section 1738 does not require insurers to give single
auto policyholders the opportunity to waive stacking, the court concluded
the trial court was correct to sustain the insurers' preliminary
objections. "All of appellants' causes of action are premised upon their
belief that [the insurers'] conduct violates Section 1738 by charging
appellants a premium for an illusory benefit and in failing to inform them
of their opportunity to waive stacking." But Joyce said he agreed with the
insurance commissioner that Section 1738 does not preclude an insurer from
charging a single policy insured the stacked rate. "By confining the class
of those who can waive stacking to named insureds who purchase coverage for
more than one vehicle under a single policy," the Legislature has expressed
a clear preference in favor of stacking, the court said. Citing the
legislative history of the act, Joyce concluded, "the Legislature
contemplated that those individuals who purchase coverage for only one car
will pay increased premiums to help subsidize the higher costs associated
with Pennsylvania's virtually mandatory stacking policy." The court also
noted that the benefit of interpolicy stacking is not "illusory," as the
plaintiffs alleged. "There are instances, such as when a person is injured
while occupying a vehicle that is not his own, in which he may be entitled
to recover uninsured or underinsured benefits under the host vehicle's
policy as well as his own policy," Joyce wrote.
The Superior Court dismissed the plaintiffs' remaining claims, upholding
the trial court's dismissal of the case.Lancaster attorney Joseph F. Roda,
who filed the class action, said he was "disappointed" with the decision
and will petition the Superior Court for a rehearing en banc. If denied, he
said he would petition the state Supreme Court to review the case. (Copies
of the 18-page opinion in In Re: Insurance Stacking Litigation, PICS NO.
00-1083, are available from The Legal Intelligencer.) (The Legal
Intelligencer, June 14, 2000)
BAKERSFIELD POLICE: Gay Man Sues over Sting Operations in Public Parks
----------------------------------------------------------------------
Attorneys Geoffrey Kors and Bryan Miller, of San Francisco's Wotman Kors &
Cloutier, LLP, announced on June 15 the filing of a class action federal
lawsuit against the Bakersfield Police Department and others alleging that
the Constitutional Rights of gay and bisexual men were violated during
sting operations in public parks. The suit was filed on behalf of Roger
Hartley, a Bakersfield resident, and all men who have been or will be
targeted for arrest and/or arrested because they are perceived to be
interested in intimate association with other men.
According to the allegations in the complaint, Hartley was approached by an
undercover police officer who initiated a conversation with Hartley. The
police officer then told Hartley that he liked to have sex in public parks
and public restrooms. According to the officer's own report, the officer
began the conversation and brought up the subject of sex. When Hartley
walked away from the Police Officer and went to the restroom to use the
facilities, the officer followed him into the restroom and arrested him,
charging him for soliciting a lewd act in public even though no such crime
occurred.
"This entire sting operation is unconstitutional and illegal," stated Kors.
A government entity cannot select one group of individuals -- in this case
gay and bisexual men -- and target them for arrest," Kors explained. "By
engaging in this type of conduct, Bakersfield is illegally and
unconstitutionally discouraging gay and bisexual men from meeting one
another in public parks in the City," Kors said. "It is no more illegal for
a gay man, while in a park, to indicate to another man that he wants to
have sex than it is for a heterosexual man, while in a bar or at the beach,
to ask a woman to have sex," Kors noted. "To target one group of
individuals based on their sexual orientation or gender of their preferred
sexual partner is discriminatory and blatantly unconstitutional," Kors
said.
"A review of the police reports for arrests of this nature occurring on or
near the same day as Hartley was arrested demonstrates that it was the
police, not the individuals, who were doing the soliciting," noted Miller.
"To be a crime, the individual must solicit the sexual act to occur in a
public place in the presence of someone the individual believes would be
offended," Miller explained. "When the police officer, as is the case here,
initiates the encounter and states that he wants to have sex in public,
there is no reason for the individual to believe anyone who is present
would be offended," Miller stated. "Accordingly, even if the individual
agrees to have sex -- something Hartley never even agreed to -- no crime is
committed since the officer indicated he was interested in having sex," he
concluded.
"It is truly outrageous that as we enter the 21st Century, Police are still
targeting gay men for arrest and falsely arresting them in an apparent
attempt to drive gay men in Bakersfield back into the closet," Kors said.
"We are asking the Court not only to compensate the individuals subjected
to this unconstitutional treatment, but also to issue an injunction
prohibiting the Police from engaging in this conduct in the future," Kors
added. "We hope that lawsuits such as this will end this practice
throughout the State," Kors concluded.
Contact: Geoffrey Kors of Wotman Kors & Cloutier, LLP, 415-647-2200
BRUGNARA PROPERTIES: To Pay for Biohazardous Waste in City Atty.'s Case
-----------------------------------------------------------------------
A real estate mogul has been ordered to pay more than $1 million in
penalties for illegally disposing of biohazardous waste in a case brought
by the San Francisco city attorney's office.
In City and County of San Francisco v. Brugnara Properties III, 300-708,
Superior Court Judge William Cahill ordered property owner Luke Brugnara to
pay penalties stemming from more than 100 violations of state and city
codes at the Medico-Dental Building, 490 Post St.
According to Thomas Lakritz, the deputy city attorney who led the case,
Brugnara's violations posed a serious risk to janitors and trash collectors
who handled the waste which contained blood-soaked swabs and syringes.
Brugnara was ordered to pay $1,124,200 in civil penalties and for a
contempt- of-court citation for failing to adhere to a preliminary
injunction issued in February 1999.
The city sued Brugnara in January 1999, responding to tenants who
complained the building's waste disposal methods failed to meet state and
city regulations.
In addition to Lakritz, City Attorney Louise Renne and Deputy City
Attorney, Rose-Ellen Heinz assisted in the case.
A. Nick Shamiyeh, a solo practitioner in Walnut Creek, represented
Brugnara. San Francisco v. Brugnara (The Recorder, June 15, 2000)
CITRIX SYSTEMS: Bernstein Liebhard Files Securities Lawsuit in Florida
----------------------------------------------------------------------
A securities class action lawsuit was commenced on behalf of purchasers of
the publicly-traded securities of Citrix Systems, Inc. (Nasdaq: CTXS),
between October 20, 1999 and June 9, 2000, inclusive (the "Class Period").
A copy of the complaint is available from the Court. The case is pending in
the United States District Court for the Southern District of Florida, Fort
Lauderdale Division, located at 299 E. Broward Boulevard, Ft. Lauderdale,
Florida, 33301. The case number is CV 00-6818. Named as defendants in the
complaint are Citrix, Mark B. Templeton (President and Chief Executive
Officer), John P. Cunningham (Chief Financial Officer), and Edward E.
Iacobbucci (Chairman of the Board). The case has been assigned to Judge
Lock. The complaint charges defendants 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 information concerning, among other things, the Company's
financial and operating condition and the Company's prospects.
For example, as alleged in the complaint, on January 19, 2000 defendants
reported record operating results for the Company's fourth quarter and
fiscal year 1999 and stated that customer demand for the Company's
products, along with its business strategy, favorably position the Company
as a leading provider of information technology in the new millennium. This
statement was materially false and misleading because it did not disclose
what the Company knew or recklessly disregarded, primarily that the
Company's true financial status was deteriorating, and that its seemingly
stellar growth was not likely to continue into 2000.
On April 19, 2000, defendants reported record operating results for its
first fiscal quarter of 2000, and stated that its results were fueled by
the release of three new products, key acquisitions of companies in Asia
which expanded its market, and the launching of an advertising campaign to
raise its market visibility. In fact, the Company knew, or was reckless in
disregarding that its market had shifted to a different type of program
delivery and installation system than the Company was then offering, that
its gross margins were declining, and that its sales in the Asian market
were decreasing.
When the Company announced, on June 12, 2000, that its first quarter 2000
financial results would be dramatically lower than the market had been led
to believe, due to, among other things, poor overall sales attributable to
a market shift towards an electronic delivery of programs and upgrades, and
particularly poor sales in its Asian market, the price of Citrix common
stock dropped by 48%. Plaintiff seeks to recover damages on behalf of all
those who purchased or otherwise acquired Citrix securities during the
Class Period.
Contact: Mark Punzalan, Director of Shareholder Relations, Bernstein
Liebhard & Lifshitz, LLP, 800-217-1522, 212-779-1414, or CTXS@bernlieb.com
CITRIX SYSTEMS: Burt & Pucillo Announces Securities Suit in Florida
-------------------------------------------------------------------
Pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange Act of 1934,
on June 14, 2000, a class action lawsuit alleging violations of the federal
securities laws was filed in the United States District Court for the
Southern District of Florida against Citrix Systems Inc. (Nasdaq:CTXS),
Mark Templeton, John P. Cunningham and Edward Iacobucci. The action is
brought on behalf of a class of persons who purchased the common stock of
Citrix Systems, Inc. during the period from October 20, 1999 through June
9, 2000 (the "Class Period").
The Complaint charges Citrix and the above-named officers and directors
with violations of Sections 10(b) and 20(a) of the Security Exchange Act of
1934. The Complaint alleges that during the Class Period the Defendants
failed to timely disclose deteriorating gross margins and slowing expansion
of revenues. The Complaint further alleges that while revenues and gross
margins were starting to deteriorate, the Defendants sold over $40 million
of Citrix stock at or near the highest price at which said shares traded
during the Class Period.
The action was filed by the firm of Burt & Pucillo, LLP of West Palm Beach,
Florida. Contact: Burt & Pucillo, LLP, West Palm Beach Michael J. Pucillo
or Wendy H. Zoberman 561/835-9400 or 800/349-4612 or e-mail address:
law@burt-pucillo.com or burtpucill@aol.com www.burtpucillo.com
CITRIX SYSTEMS: Wolf Haldenstein Commences Securities Suit in Florida
---------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP announces that a class action
lawsuit has been commenced in the United States District Court for the
Southern District of Florida on behalf of purchasers of the securities of
Citrix Systems, Inc. ("Citrix" or the "Company") (NASDAQ: CTXS) between
October 20, 1999 and June 9, 2000, inclusive (the "Class Period"). A copy
of the complaint filed in this action is available from the Court, or can
be viewed on the Wolf Haldenstein website at www.whafh.com.
The complaint alleges that the Company and certain of its officers and
directors violated the federal securities laws, namely, Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements about the Company's financial condition and future growth
potential. Specifically, the complaint alleges that on January 19, 2000,
the Company reported record operating results and stated that customer
demand for the Company's product was favorable, when in fact, the Company
knew or recklessly disregarded the fact that the Company's true financial
condition was deteriorating and that its seemingly stellar growth was not
likely to continue into the year 2000. As a result of these false and
misleading statements, the Company's stock traded at artificially inflated
prices during the Class Period. On June 12, 2000, when the Company shocked
the investment community and revealed that its first quarter financial
results would be lower than the market had been led to believe, the price
of the stock plummeted by nearly 50%.
Contact: Wolf Haldenstein Adler Freeman & Herz LLP 800/575-0735 or our
website at www.whafh.com.
COLUMBIA LABORATORIES: Abbey, Gardy Files Securities Lawsuit in Florida
-----------------------------------------------------------------------
A class action against Columbia Laboratories, Inc. (Amex: COB) and certain
of its officers and directors has been commenced in the United States
District Court for the Southern District of Florida on behalf of all
persons who purchased shares of Columbia common stock between November 8,
1999 and June 9, 2000 inclusive (the "Class Period").
In brief, the Complaint charges that Columbia 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 Columbia. On June 12, 2000, defendants shocked the market by
revealing that, contrary to the Company's misleading representations during
the Class Period, Advantage-S was not a viable product for stopping the
transmission of AIDS. In response, the price of Columbia stock lost over
50% of its value, dropping from nearly $13 per share on June 9, 2000, to $6
1/8 on June 12, 2000.
Contact: Mark C. Gardy or Maria Criscitiello, mcriscitie@a-g-s.com, both of
Abbey, Gardy & Squitieri, LLP, 800-889-3701 or 212-889-3700
DEPT OF CHILDREN: Reform of Florida Foster Care System Sought
-------------------------------------------------------------
Florida children who have been languishing in the state's foster care
system for extended periods of time may finally be placed in permanent
homes, depending on the outcome of a class action lawsuit filed in West
Palm Beach, naming Governor Jeb Bush, Department of Children and Families
(DCF) Secretary Kathleen Kearney and 15 district administrators as
co-defendants. A team of attorneys representing foster children from around
the state has instigated the action to force the foster care system into
compliance with state and federal law once and for all.
Robert M. Montgomery and Theodore Babbitt are two of the West Palm Beach-
based attorneys comprising the team of 22 attorneys that is taking the case
on behalf of Florida's foster children. Other attorneys from around the
state of Florida include Michael Barnes (Key West), Barbara Burch (West
Palm Beach), Bill Chanfrau (Daytona Beach), Jerold Feuer (Miami), Karen A.
Gievers (Tallahassee), Donald Hadsock (Bradenton), Michelle Hankey (West
Palm Beach), Wayne Hogan (Jacksonville), Kristi Kassebaum (Miami), Robert
G. Kerrigan (Pensacola), John B. Ostrow (Miami), Bernard P. Perlmutter
(Miami), Carolyn Salisbury (Miami), Gregory A. Samms (Miami), Brenda B.
Shapiro (Miami), Neil Spector (Tampa), Susan L. Stockham (Sarasota), Jim
Walsh (West Palm Beach), John Walsh (West Palm Beach) and Dianne Weaver
(Fort Lauderdale).
"The Florida foster care system is a disaster," said children's advocate
Karen Gievers. "The only people benefiting from the system right now are
the bureaucrats and their contract providers. The abuse, neglect and
financial exploitation of these children that is occurring is shocking and
simply must not continue." More than 14,000 children, many of whom have
been removed from their families by the state because of alleged parental
abuse or neglect, are currently in Florida's foster care system. Federal
law limits the length of time children can be held in "temporary" state
custody to 12 months. According to Gievers, children in Florida are held in
foster care much longer, with the average length of stay nearly three times
longer than the legal limit. The result is a grossly overcrowded system and
greatly increased risks of harm to the children being held. The text of the
lawsuit contains a number of specific instances in which children have been
abused and neglected by the very system that was intended to protect and
nurture them.
"I just don't understand how the people with the authority to end this
madness can sleep at night," said Robert Montgomery. "It's this simple: if
the system was being operated in the fashion that it was intended,
innocent, helpless children would be in loving homes, and not left
indefinitely in bureaucratic limbo."
"The State is not doing its job, and thousands of children are suffering as
a result of that inaction," said Theodore Babbitt. "This has been going on
for years. We simply will not stand for it any longer." Gregory Samms
added, "I have worked with Karen Gievers in the past on children's issues,
and I believe this case will force changes in a system sadly unresponsive
to children, particularly minorities, in foster care."
The lawsuit asks the federal court to mandate immediate compliance with
existing laws relating to care for foster children and also asks for the
appointment of a child advocate or ombudsman to monitor compliance. No
monetary damages are sought, just prompt reform of the system.
"Florida's foster care system has been described as the worst in America,"
said Gievers. "Children cannot be properly and safely raised by
bureaucratic committees. They need real families and good permanent homes
to help them reach their full potential."
FEDERAL-MOGUL CORP: Milberg Weiss Announces Securities Suit in Michigan
-----------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on June 14, 2000, on behalf of purchasers of
the securities of Federal-Mogul Corp. (NYSE: FMO news) between October 22,
1998 and May 25, 2000, inclusive. A copy of the complaint filed in this
action is available from the Court, or can be viewed on Milberg Weiss'
website at: http://www.milberg.com/federalmogul/
The action, numbered 00-72682, is pending in the United States District
Court for the Eastern District of Michigan, located at 231 W. Lafayette
Blvd., Detroit, Michigan 48226, against defendants Federal-Mogul and
Richard A. Snell (Chairman of the Board of Directors, Chief Executive
Officer, President and Director). The Honorable Bernard A. Friedman is the
Judge presiding over the case.
The complaint charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
October 22, 1998, and May 25, 2000. For example, as alleged in the
complaint, on October 22 ,1998, Federal-Mogul issued a press release
announcing solid third quarter results and praised the Company's continued
progress in its acquisitions. This statement was materially false and
misleading because it did not disclose that the Company's rapid expansion
was causing serious operational difficulties in that the numerous smaller
companies acquired by Federal-Mogul were proving much more difficult to
integrate into Federal-Mogul's ongoing concern. These acquisition
integration problems were negatively impacting earnings margins and caused
the Company to miss revenue expectations. After the close of the market on
May 25, 2000, the Company announced that its second quarter 2000 and
full-year 2000 financial results would be dramatically lower than the
market had been led to believe. The next trading day, May 26, 2000, the
price of Federal-Mogul common stock dropped by more than 20%.
Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G.
Schulman or Samuel H. Rudman (800) 320-5081 Email:
Openmarketcase@milbergNY.com Website: http://www.milberg.com
FLOORING AMERICA: Berman, DeValerio Files Securities Suit in Georgia
--------------------------------------------------------------------Flooring
America, Inc. (NYSE: FRA) was named as a defendant in a shareholder class
action filed in the United States District Court for the Northern District
of Georgia. The action, brought by Berman, DeValerio & Pease, LLP,
www.bermanesq.com, seeks damages for violations of the federal securities
laws on behalf of all investors who purchased FRA common stock between
November 11, 1999 through and including May 22, 2000 (the "Class Period").
The lawsuit charges FRA and certain of its officers, with violations of the
federal securities laws by issuing materially false and misleading
financial statements. The Company, on May 22, 2000, revealed that it would
be restating its previously reported financial results for the first two
quarters of the fiscal year 2000. In total, losses for these two periods
were understated by more than $7 million. After the Company's announcement,
FRA shares fell to $2 9/16 per share from a high of $6 15/16 during the
class period, as the market fully absorbed the impact of these disclosures.
Contact: Julayne M. Lazar or Jeffrey C. Block, Esq. of Berman, DeValerio &
Pease LLP, 800-516-9926, bdplaw@bermanesq.com
FLOORING AMERICA: Wolf Haldenstein Files Securities Fraud Suit in GA
---------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP announces that a class action
lawsuit has been commenced in the United States District Court for the
Northern District of Georgia on behalf of all persons who purchased or
otherwise acquired common stock issued by Flooring America, Inc. from
November 11, 1999, through and including May 22, 2000 (the "Class Period").
A copy of the complaint may be read and/or printed from the Wolf
Haldenstein web site at www.whafh.com.
The complaint alleges that Flooring America and certain of its top officers
violated the federal securities laws by issuing false and misleading
statements (which were prepared in violation of Generally Accepted
Accounting Principles) that caused Flooring America stock to trade at
artificially high prices during the Class Period.
On May 22, 2000, Flooring America announced a delay in the filing of its
Annual Report on Form 10-K with the Securities and Exchange Commission for
the year ended February 5, 2000, and further announced that the Company
would restate its financial results for the first two quarters of the
fiscal year 2000, as a result of the year-end audit process.
When the results of these restatements were announced, Flooring America's
common stock price, which closed as high as $6 15/16 during the Class
Period, fell to $2 9/16. Plaintiffs seek to recover damages on behalf of
all those who purchased Flooring America common stock during the Class
Period.
Contact: Wolf Haldenstein Adler Freeman & Herz LLP, New York Gregory M.
Nespole, Esq, 800/575-0735 nespole@whafh.com Gnespole@aol.com
classmember@whafh.com whafh@aol.com Michael Miske, 800/575-0735
classmember@whafh.com whafh@aol.com www.whafh.com
IMPERIAL CREDIT: Stanbury Fishelman Announcess Securities Suit to Go on
-----------------------------------------------------------------------Stanbury
Fishelman Wisner & Adsit announced that plaintiff will continue efforts to
recover damages on behalf of all purchasers of Imperial Credit Commercial
Mortgage Investment Corporation's ("ICCMIC") (formerly, Nasdaq:ICMI) common
stock during the period between Oct. 22, 1997 and Oct. 21, 1999 (the "Class
Period").
On June 7, 2000, the United States District Court for the Central District
of California denied Defendants' Rule 12(b)(6) Motion to Dismiss
Plaintiff's Class Action Complaint alleging violations of the Securities
Act of 1933.
In denying Defendants' Motion to Dismiss and permitting Plaintiff to
proceed against ICCMIC and certain of its directors, the Court said, "The
Prospectus is a part of the Registration Statement and the Prospectus fails
to describe that ICCMIC must pay for the Manager's operating expenses."
ICCMIC filed a Registration Statement and Prospectus with the Securities
and Exchange Commission on or about August 1, 1997. The complaint alleges
that Prospectus contained false statements, including a variety of false
statements related to the compensation paid to a management entity hired to
operate the investment fund and undisclosed conflicts of interest.
For example, the complaint alleges that misrepresentations about the costs
associated with terminating the management entity have cost ICCMIC
investors nearly 10% of the current fund value, which was the single
greatest operating loss sustained by ICCMIC after its inception.
Contact: Stanbury Fishelman Wisner & Adsit 310/278-1800 Bruce C. Fishelman,
bcfishelman@stanfish.com Alec B. Wisner, abwisner@stanfish.com
LUFKIN INDUSTRIES: 5th Cir in LA OKs TX's Cert. Of Employee Racism Case
-----------------------------------------------------------------------
A class action complaint was filed in the United States District Court for
the Eastern District of Texas on March 7, 1997 by an employee and a former
employee which alleged race discrimination in employment. Certification
hearings were conducted in Beaumont, Texas in February of 1998 and in
Lufkin, Texas in August of 1998. The District Court in April of 1999 issued
a decision that certified a class for this case which includes all persons
of a certain minority employed by the Company from March 6, 1994 to the
present. The Company appealed this class certification decision by the
District Court to the 5th Circuit United States Courts of Appeals in New
Orleans, Louisiana. This appeal was denied on June 23, 1999.
The Company is defending this action vigorously. Furthermore, the Company
believes that the facts and the law in this action support its position and
is confident that it will prevail if this case is tried on the merits.
MICROSOFT CORP: Oregon Consumer Antitrust Suit over Windows 98 Tossed
---------------------------------------------------------------------
Microsoft Corp. persuaded a state judge to dismiss a consumer antitrust
lawsuit over the Windows 98 operating system, a company spokesman said.
Multnomah County Circuit Judge John Wittmayer's decision is the first to
dismiss an antitrust suit against Microsoft in the United States since
November, when a federal judge decided the world's largest software company
monopolizes personal computer operating systems, the company said.
Microsoft spokesman Jim Cullinan said the Oregon case is among 137 filed
against the company in 34 states and the District of Columbia. Wittmayer's
decision Tuesday was based on a U.S. Supreme Court ruling that denies
consumers the right to bring an antitrust lawsuit unless they purchased a
product directly from a company.
The Windows operating system is generally bought by manufacturers and
loaded on computers before they're sold to consumers. Consumers, however,
have to agree to Microsoft's licensing terms before using the software.
While Oregon and most states' laws mirror federal antitrust law, California
and 15 others have modified their laws to allow indirect purchasers to
bring antitrust claims, one legal expert said. "All the Oregon judge's
decision should really mean is that there may not be a claim under Oregon
law, but there may be a claim under the other 16 state laws," said San
Francisco-based antitrust lawyer Mark LeHocky.
Plaintiffs' attorney David Dean couldn't immediately be reached for
comment.
The lawsuit, filed by consumers Hafez Daraee and Brooks Cooper, sought
class-action status on behalf of Oregon consumers who are end-user
licensees of Windows 98. The suit alleged that Microsoft charged consumers
too much for the operating system and "unlawfully wielded its monopoly
power." It sought unspecified damages.
Shares of Redmond, Wash.-based Microsoft rose $ 2.63 to $ 70.50 on the
Nasdaq Stock Market. (Sun-Sentinel (Fort Lauderdale, FL), June 15, 2000)
NATIONAL COLEGIATE: Settlement Payout for Earnings Restriction Argued
---------------------------------------------------------------------
Only one person appeared in a Kansas City, Kan., federal court Tuesday to
contest the proposed distribution of $36 million among about 1,700 college
assistant coaches. The ruling will affect coaches whose earnings were
restricted by a rule of the National Collegiate Athletic Association.
The coaches won the money last year in the settlement of a class action
anti-trust case that the NCAA had lost in a jury trial and had appealed to
the 10th U.S. Circuit Court of Appeals in Denver. The settlement was for
$54.5 million, but attorney fees and costs have taken about $18 million.
The rule, limiting some assistant coaches' earnings to $12,000 during the
school year and $4,000 in the summer, was in effect from 1991 to 1995 when
U.S. District Judge Kathryn H. Vratil ruled it violated anti-trust laws.
A lawyer representing Woodrow Wilson, an assistant men's basketball coach
at the University of Wisconsin at Green Bay, objected to the formula that
awarded coaches who made less that $7,900 a year under the rule an award
equal to 100 percent of their actual salaries.
Men's basketball coaches that made more than $7,900 while under the rule
are a good example. The coaches are to receive 83 percent of the amount
made by the lowest-paid coach the rule didn't affect at their particular
school.
The lawyer, Gary Weidner, asserted that the $7,900 break point - the amount
varies from sport to sport - in effect unfairly created two unequal
classes. He argued that coaches who made less than $7,900 in salary should
be permitted to count non-cash compensation, like the use of a car, room
and board or training table meals to push them over the $7,900 line.
Weidner said Wilson's award would be reduced from $120,000 to $44,000 by
the formula designed by the class action attorneys and their economist.
About 25 other coaches sent in affidavits opposing or questioning the
distribution plan.
Dennis Cross, one of the class attorneys, said the differential was
necessary because the figures showed that after the rule was lifted, the
salaries of those making less than $7,900 went up very little while the
salaries of those making more than $7,900 increased a lot more. For
example, Cross said that after the rule was lifted, Wilson's salary went up
to only $9,000 a year. Cross also told the judge that it was virtually
impossible to get accurate information on non-salary compensation received
by the coaches. Vratil took the distribution issue under advisement. (The
Kansas City Star, June 14, 2000)
OPEN MARKET: E-Business Solutions Provider Announces Securities Suit
--------------------------------------------------------------------
Open Market, Inc. (Nasdaq: OMKT), a provider of integrated enterprise
e-business solutions, announced on June 15 that a purported class action
lawsuit has been filed naming the Company and certain of its current and
former officers and directors as defendants alleging violations of certain
securities laws. The complaints allege, among other matters, that the
Company made false statements commencing in November 1999 regarding its
current and future products and competitive position. The Company believes
it has meritorious defenses to the lawsuits and intends to defend them
vigorously.
OPERN MARKET: Bernard M. Gross Files Securities Suit in Masachusetts
--------------------------------------------------------------------
A class action lawsuit was filed on June 14, 2000, in the United States
District Court for the District of Massachusetts, on behalf of all persons
and entities who purchased or otherwise acquired the common stock of Open
Market, Inc. (NASDAQ: OMKT), between November 8, 1999 and April 18, 2000,
inclusive (the "Class Period") on an American Exchange.
The Complaint charges Open Market and its senior officers with violations
of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The
Complaint alleges that defendants issued false and misleading statements
about the Company's ability to deliver a new suite of products before the
end of the year that would include less expensive of its software, with
simpler tools for setting up electronic store fronts, and that this product
line would reinforce the Company as a market leader. The false and
misleading statements resulted in artificially inflated stock prices during
the class period.
Contact: Law Offices Bernard M. Gross, P.C. Susan Gross, Esq., 800/849-3120
or 215/561-3600 susang@bernardmgross.com tina@bernardmgross.com
http://www.bernardmgross.com
OPEN MARKET: Milberg Weiss Announces Securities Suit in Massachusetts
---------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on June 14, 2000, on behalf of purchasers of
the securities of Open Market, Inc. (NASDAQ: OMKT) between November 8,
1999, and April 18, 2000, inclusive. A copy of the complaint filed in this
action is available from the Court, or can be viewed on Milberg Weiss'
website at: http://www.milberg.com/openmarket/
The action, numbered 00 CV 1162NG, is pending in the United States District
Court for the District of Massachusetts, located at One Courthouse Way,
Ste. 2300, Boston, MA, 02210, against defendants Open Market, Jeff Bussgang
(Vice President of Marketing until January 6, 2000), Gary Eichorn (Chief
Executive Officer and director until February 5, 2000), Shikhar Ghosh
(Chairman of the Board), and Ron Matros (President, and Chief Executive
Officer since February 5, 2000). The Honorable Nancy Gertner is the Judge
presiding over the case.
The complaint charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
November 8, 1999, and April 18, 2000. For example, as alleged in the
complaint, on November 8, 1999, defendants reported that the Company was
executing its business strategy better than ever, and that it was poised to
take advantage of its position as a very competitive Internet growth
company. Defendants knew, or recklessly disregarded, that the statement was
false and misleading because the Company continued to post operating
losses, and that it was not poised for greater growth because its market
share was declining in the face of overwhelming competition. On December 7,
1999, defendants reported that the availability of its new product, Golden
Gate, would allow it to compete effectively with larger industry rivals,
and that Open Market is leading, and would continue to lead, the e-commerce
marketplace. In fact, defendants knew, or recklessly disregarded, that
Golden Gate was still in its early stages of development, and that
competitors were offering more flexible products which buyers could more
easily adapt and customize. When the Company announced, on April 18, 2000,
that its first fiscal 2000 quarter would see greater than expected losses,
its stock price dropped by 23% from the prior day's close, and 83% from its
class period high.
Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G.
Schulman or Samuel H. Rudman (800) 320-5081 Email:
Openmarketcase@milbergNY.com Website: http://www.milberg.com
OPEN MARKET: Securities Suit Filed in MA, Announces Cauley & Geller
-------------------------------------------------------------------
The Law Firm of Cauley & Geller, LLP announced that it has filed a class
action in the United States District Court for the District of
Massachusetts on behalf of all individuals and institutional investors that
purchased the securities of Open Market, Inc. (Nasdaq: OMKT) between
November 8, 1999 and April 18, 2000, inclusive (the "Class Period").
The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading statements regarding the Company. Specifically, as
alleged in the complaint, on November 8, 1999, defendants reported that the
Company was executing its business strategy better than ever, and that it
was poised to take advantage of its position as a very competitive Internet
growth company. Defendants knew, or recklessly disregarded, that the
statement was false and misleading because the Company continued to post
operating losses, and that it was not poised for greater growth because its
market share was declining in the face of overwhelming competition. On
December 7, 1999, defendants reported that the availability of its new
product, Golden Gate, would allow it to compete effectively with larger
industry rivals, and that Open Market is leading, and would continue to
lead, the e-commerce marketplace. In fact, defendants knew, or recklessly
disregarded, that Golden Gate was still in its early stages of development,
and that competitors were offering more flexible products which buyers
could more easily adapt and customize. When the Company announced, on April
18, 2000, that its first fiscal 2000 quarter would see greater than
expected losses, its stock price dropped by 23% from the prior day's close,
and 83% from its class period high.
Contact: Cauley & Geller, LLP, Boca Raton, FL Sue Null or Jackie Addison
Toll Free: 1-888-551-9944 E-mail: Cauleypa@aol.com
OPEN MARKET: Schiffrin & Barroway Files Securities Suit in Massachutts
----------------------------------------------------------------------
A class action lawsuit was filed in the United States District Court for
the District of Massachusetts on behalf of all purchasers of the common
stock of Open Market, Inc. (Nasdaq: OMKT) from November 8, 1999 through
April 18, 2000 inclusive (the "Class Period").
The complaint charges Open Market and certain of its officers and directors
with issuing false and misleading statements concerning the Company's
business and financial condition. Among other things, the Complaint alleges
that on December 7, 1999, defendants reported that the availability of its
new product, Golden Gate, would allow the Company to continue to lead the
e-commerce marketplace.
In fact, defendants knew that Golden Gate was still in its early stages of
development, and that competitors were offering more technologically
advanced products. On April 18, 2000, the Company announced a wider than
expected first quarter 2000 loss, and its stock price dropped by 23% from
the prior day's close, and 83% from its Class Period high.
Contact: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Robert B. Weiser,
Esq. 888/299-7706 (toll free) or 610/667-7706 info@sbclasslaw.com
RAYTECH CORP: Asbestos Claims Included in Ch 11 Plan of Reorganization
----------------------------------------------------------------------
Raytech Corporation was incorporated in June, 1986 in Delaware and held as
a subsidiary of Raymark Corporation. In October 1986, Raytech became the
publicly traded (NYSE) holding company of Raymark stock through a
triangular merger restructuring plan approved by Raymark's shareholders
whereby each share of common stock of Raymark was automatically converted
into both a share of Raytech common stock and a right to purchase a warrant
for Raytech common stock.
Prior to the formation of Raytech, Raymark had been named as a defendant in
more than 88,000 lawsuits claiming substantial damages for injury or death
from exposure to airborne asbestos fibers. Subsequent to the divestiture
sale of Raymark in 1988, lawsuits continued to be filed against Raymark at
the rate of approximately 1,000 per month until an involuntary petition in
bankruptcy was filed against Raymark in February 1989, which stayed all its
litigation. In August 1996, the involuntary petition filed against Raymark
was dismissed following a trial and the stay was lifted. However, in March
1998, Raymark filed a voluntary bankruptcy petition again staying the
litigation.
In May 1988, following shareholder approval, Raytech sold all of the
Raymark stock to Asbestos Litigation Management, Inc., thereby divesting
itself of Raymark. The purchase price of the stock was affected by
Raymark's substantial asbestos-related liabilities.
Despite the restructuring plan implementation and subsequent divestiture of
Raymark, Raytech was named a co-defendant with Raymark and other named
defendants in approximately 3,300 asbestos-related lawsuits as a successor
in liability to Raymark. Until February 1989, the defense of all such
lawsuits was provided to Raytech by Raymark in accordance with the
indemnification agreement included as a condition of the purchase of the
Wet Clutch and Brake Division and German subsidiary from Raymark in 1987.
However, subsequent to the involuntary bankruptcy proceedings against
Raymark, a restrictive insurance funding order was issued by an Illinois
Court, denying defense costs, and another Raymark insurance carrier had
been declared insolvent. These circumstances caused Raymark to be unable to
fund the costs of defense to Raytech in the asbestos-related lawsuits. It
has also been informed that as a result of the dismissal of the involuntary
petition, Raymark encountered newly filed asbestos-related lawsuits but had
received $27 million from a state guarantee association to make up the
insurance policies of the insolvent carrier and had $32 million in other
policies to defend against such litigation. In March 1998, Raymark filed a
voluntary bankruptcy petition as a result of several large asbestos-related
judgments.
In an asbestos-related personal injury case decided in October 1988 in a
U.S. District Court in Oregon, Raytech was ruled under Oregon equity law to
be a successor to Raymark's asbestos-related liability. The successor
ruling was appealed by Raytech and in October 1992 the Ninth Circuit Court
of Appeals affirmed the District Court's judgment on the grounds stated in
the District Court's opinion. The effect of this decision extends beyond
the Oregon District due to a Third Circuit Court of Appeals decision in a
related case cited below wherein Raytech was collaterally estopped
(precluded) from relitigating the issue of its successor liability for
Raymark's asbestos-related liabilities.
As the result of the inability of Raymark to fund Raytech's costs of
defense recited above, and in order to obtain a ruling binding across all
jurisdictions as to whether Raytech is liable as a successor for
asbestos-related and other claims, including claims yet to be filed
relating to the operations of Raymark or its predecessors, on March 10,
1989, Raytech filed a petition seeking relief under Chapter 11 of Title 11,
United States Code in the United States Bankruptcy Court, District of
Connecticut. Under Chapter 11, substantially all litigation against Raytech
has been stayed while the debtor corporation and its non-filed operating
subsidiaries continue to operate their businesses in the ordinary course
under the same management and without disruption to employees, customers or
suppliers. In the Bankruptcy Court a creditors' committee was appointed,
comprised primarily of asbestos claimants' attorneys.
In June 1989 Raytech filed a class action in the Bankruptcy Court against
all present and future asbestos claimants seeking a declaratory judgment
that it not be held liable for the asbestos- related liabilities of
Raymark. After a series of actions as related in the company’s report to
the SEC, the ruling leaves the Oregon case, as affirmed by the Ninth
Circuit Court of Appeals, as the prevailing decision holding Raytech to be
a successor to Raymark's asbestos-related liabilities.
In March and April 1998, Raymark and its parent, Raymark Corporation, filed
voluntary petitions in bankruptcy in a Utah Court. In connection with its
attempt to assert control over Raymark and its assets, the creditors'
committee, joined by Raytech, the Guardian ad litem for Future Claimants,
the equity committee and the government agencies moved to have the venue of
the Raymark bankruptcies transferred from Utah to the Connecticut Court. In
July 1998, the Bankruptcy Court issued an order on the motions and
transferred venue to the Connecticut Court.
In October, 1998 Raytech reached a tentative settlement with its creditors
and entered into a Memorandum of Understanding with respect to achieving a
consensual plan of reorganization (the "Plan").
In August 1999, a bar date was set for filing claims against Raytech by the
Bankruptcy Court. The total amounts claimed, not including unliquidated
claims, exceeded $300 billion. Claims believed invalid by the debtor were
objected to and the Bankruptcy Court expunged many claims following
hearings in February 2000. Allowed claims under the Plan will fall into
five classes, including priority, secured, general unsecured, affiliate and
shareholder. Most allowed claims will fall into the general unsecured class
and will be paid through the 90% equity contribution, including all
asbestos-related claims, environmental claims, employee-related claims and
contractual and general claims.
It is possible that the confirmation of the plan will occur in 2000.
SAVANNAH RIVER: Black Workers Ask Judge to Reconsider Class Status
------------------------------------------------------------------
A federal judge is being asked to reconsider her decision denying
class-action status to a lawsuit filed by some black workers at the
Savannah River Site against their employers.
U.S. District Judge Cameron Currie on May 25 rejected class-action status
to the racial discrimination lawsuit by 99 workers at the nuclear weapons
complex. Currie ruled the policies' subjectivity alone was insufficient for
class-action status.
The suit alleges the contractors discriminated against black employees in
awarding pay raises and promotions, and that black employees were assigned
to jobs that could expose them to radiation more often than were white
workers. Class-action status would allow the suit to represent the
interests of about 4,000 past, present and future black employees. Currie's
ruling means the court will have to hear the cases of the 99 plaintiffs
individually. The workers' lawyers asked for class-action status based on
allegations that evaluation policies were flawed and too subjective,
allowing managers to discriminate against black employees.
Westinghouse Savannah River Co., Bechtel Savannah River Inc., Babcock &
Wilcox Savannah River Co. and British Nuclear Fuels Ltd. Savannah River
Corp., are the defendants. (The Associated Press State & Local Wire, June
14, 2000)
TOBACCO LITIGATION: B&W CEO Acknowledges Smoking's Dangers
----------------------------------------------------------
The head of the nation's No. 3 cigarette maker testified Thursday that
smoking is addictive and causes lung cancer and other diseases, says a
report on the Associated Press.
Nicholas G. Brookes, chairman and CEO of Brown & Williamson Tobacco Corp.,
told the jury hearing the class-action suit filed by sick Florida smokers
that the industry should have been more open about smoking's health
hazards. "There is nothing that would have prevented us to communicate that
earlier," he said. "I regret not having done that."
Brookes went further in assessing blame on the companies than Michael
Szymanczyk, the CEO of Philip Morris, the nation's top cigarette maker,
according to the Press. Szymanczyk was on the stand earlier this week. He
testified that smoking is unhealthful but would not be more specific and
said that while it is addictive, smokers can break the habit if they
choose.
Responding to questions by company attorney Gordon Smith, Brookes testified
that his company is the industry leader in providing information about
smoking's dangers to the public.
Brookes, who became CEO in 1995, pointed to the company's computer website,
where information about smoking's dangers, stop-smoking programs and the
ingredients of its cigarettes are available. "We want to have an open
dialogue with the public," Brookes said, adding that the company wants
consumers to know "what risks you run if you choose to smoke."
Brookes will later be cross-examined by smokers' attorney Stanley
Rosenblatt.
The CEOs of the other three tobacco companies are expected to follow
Brookes to the witness stand.
Brown & Williamson is based in Louisville, Ky., and controls 11.6 percent
of the
U.S. cigarette market, down from 13 percent last year. It sells 20 domestic
brands including Kool, Lucky Strike and Pall Mall. It is a subsidiary of
London-based British American Tobacco Industries.
Other CEOs expected to testify are Andrew Schindler of R.J. Reynolds
Tobacco Co., Martin Orlowsky of Lorillard Tobacco Co. and Bennett LeBow of
Liggett Group Inc.
On the Net: Tobacco links: http://www.umich.edu/(tilde)umtrn/websites.html
(The Associated Press State & Local Wire, June 15, 2000)
UNICAPITAL CORPORATION: Cauley & Geller Files Securities Suit in FL
-------------------------------------------------------------------
The Law Firm of Cauley & Geller, LLP announced that it has filed a class
action in the United States District Court for the Southern District of
Florida on behalf of all individuals and institutional investors that
purchased the common stock of UniCapital Corporation Inc. (Nasdaq:UCP)
between May 14, 1998 and May 15, 2000, inclusive (the "Class Period").
The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading statements regarding the Company. Specifically, as
alleged in the complaint, on May 14, 1998, the Company represented in the
prospectus issued in connection with the Company's Initial Public Offering
(the "Prospectus") that it recognized $588.7 million in goodwill as an
asset in connection with twelve corporate acquisitions. UniCapital,
however, did not disclose that it overvalued the acquisitions. In addition,
the prospectus failed to disclose that the company would have to comply
with federal noise abatement statutes thereby requiring the phasing-out of
certain types of the Company's aircraft which would, and did, negatively
impact the Company's operations. When the Company announced, on May 15,
2000, that its first quarter 2000 financial results would be dramatically
lower than the market had been led to believe, due to, among other things,
an $8.5 million operating loss, as well as a$239.3 million write off of the
impaired goodwill, the stock price of UniCapital dropped by 28%.
Contact: Cauley & Geller, LLP, Boca Raton Sue Null or Jackie Addison Toll
Free: 888/551-9944 Email: Cauleypa@aol.com
* House OKs E-Signature by 426-4 Vote
-------------------------------------
In what lawmakers called a revolutionary step, the House voted Wednesday to
authorize electronic signatures in most on-line transactions and eliminate
the need for paper in the purchase of homes, cars, even entire companies.
The measure, approved 426-4, would give a major boost to the growing
e-commerce industry by making an electronic signature legally equivalent to
a written signature for a wide range of transactions, removing a major
obstacle to on-line dealings.
The Senate is expected to approve the bill later in the week. President
Clinton said he intended to sign it. "It will encourage the information
technology revolution that has helped lower inflation, raise productivity,
and spur new research and development," the president said in a statement.
"This bill will transform the way we work and the way we're governed," said
Rep. David Dreier (R-Calif.). Added Rep. Tom Bliley (R-Va.), chairman of
the House Commerce Committee: "This bill will further move us from the
paper age to the digital age."
E-commerce is growing rapidly in America, the lawmakers noted. Last year,
it amounted to a $500 billion industry but will grow to $1.6 trillion by
2003.
William Archey, president and chief executive officer of the American
Electronics Association, said enactment of the legislation would remove
legal uncertainties and "help ramp up e-commerce to a whole new level of
rapid development."
Representatives saw little downside to the measure. Anticipating consumer
fears that signatures could be fraudulently used, most said that an
electronic "John Hancock" in today's sophisticated technological
environment can be even more secure than a written one.
An electronic signature can be based on a retina scan, a thumbprint, an
actual signature or other hard-to-copy means, said Rep. Bill Tauzin
(R-La.), one of the bill's prime supporters, and can be encrypted when
shipped back and forth on-line.
Americans had similar fears when the telegraph arrived, he said, but as
they became more comfortable with the technology, they embraced it. The
same will happen with e-commerce, he said.
In many complex transactions between two parties, third-party firms that
specialize in electronic signatures likely would be called in to validate
them, said House Commerce Committee staff members. Software already has
been developed that would keep the signatures secure, they added.
The measure envisions that consumers and businesses will be able to conduct
many transactions on-line by transmitting electronic contracts back and
forth and by sealing deals with an electronic signature.
But not every transaction would be covered. For example, paper
notifications still would be required for recalls of a product;
cancellation of utility services such as water, heat or power; defaults;
evictions; or foreclosures. Also, court orders involving wills and trusts
or adoption, divorce and family matters also could not be handled totally
by electronic means.
Consumers still could request that a written document of the transaction be
mailed, but this no longer would be deemed a business necessity if both
sides agreed that everything could be handled electronically.
The legislation also would allow most records kept by businesses to be in
electronic form, a provision members of Congress said could eliminate the
need for millions of filing cabinets in America.
Documents also can be notarized electronically through electronic
signatures, the measure provides.
The bill authorizes use of the electronic signature by Oct. 1, but because
the records provision would not be effective until March 1, 2001, the
explosion in e-commerce that could be triggered by the measure likely will
not occur until next year at the earliest. That's because consumers who
agree to use electronic signatures also must consent to receiving
electronic records.
Current consumer protection laws would still apply. In one provision added
to protect people, the measure provides that companies must "reasonably
demonstrate" that consumers can access the electronic records once they
have consented to a deal. This provision means that companies must show
that the consumer has the hardware and software to receive the documents.
Tauzin said the phrase "reasonably demonstrate" could be open to legal
interpretation when conflicts develop between companies and consumers over
whether their consent is valid.
This could expose companies to class-action lawsuits, he said, adding that
he would try to change the provision next year.
But any attempt to soften consumer protections in the future likely would
be met with strong opposition.
The Clinton administration had opposed earlier versions of the bill on
grounds that they failed to adequately protect consumers who lacked
computer skills or the technology to deal with electronic information.
Without the protections in the bill, the administration argued, businesses
could bind unsuspecting consumers to higher fees or price increases. The
group Consumers Union said in a statement that the bill adequately protects
consumers.
Rep. Zoe Lofgren (D-Calif.), a member of the House Judiciary Committee,
agreed. She said e-commerce is no riskier than ordinary commerce. Consumers
also can decide whether to opt in or out of e-commerce, she said.
Supporters say on-line signature may be safer than written one. (Chicago
Tribune, June 15, 2000)
* Senate Panel to Consider Measure Changing Class Action Venue
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CQ (6/14, Fagan) reported the Senate Judiciary Committee "is scheduled to
mark up legislation (S 353) Thursday that would transfer many class action
lawsuits from state to federal court, but some sources indicate that it
will be held over another week."
Committee Chairman Orrin G. Hatch "has been working on a manager's
amendment designed to bring the bill closer in line with a House-passed
bill (HR 1875)." Under the measure, "either party in a class action case
could seek a transfer to federal court if the defendant and at least one
plaintiff live in different states.
Supporters of the bill say the current law allows plaintiffs to forum-shop
among states in search of a 'home field advantage.'" They also "contend
that plaintiffs often are misled into accepting objectionable settlements,
in which they receive little compensation and their lawyers receive
millions of dollars." The measure would "implement several provisions
designed to prevent that. But opponents, including the White House, say the
bill will not stop such abuses but simply transfer cases to federal courts
where the same abuses exist; stifle plaintiffs' rights; further clog
already overloaded federal court dockets; and make it less convenient and
more expensive for many plaintiffs to seek legal redress." (The Bulletin's
Frontrunner, June 15, 2000)
* Texans for Lawsuit Reform Working on "Offer of Settlement"
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Richard Weekley, president of Texans for Lawsuit Reform, appeared on the
rubber chicken circuit in Austin May 16, soliciting new members to continue
the group's tort reform agenda. Weekley spoke to more than 150 people at a
Rotary Club luncheon held in the decrepit City Coliseum.
Decrying class actions, huge legal fees and excessive damages, Weekley said
TLR is working on "offer of settlement" legislation. He said the
legislation would provide incentives for plaintiffs to make reasonable
demands and for defendants to make reasonable settlement offers. "Offer of
settlement is better than loser pays," said Weekley, because it doesn't
have "a draconian impact on those folks who have trouble getting to the
courthouse." (Texas Lawyer May 22, 2000)
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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.
This material is copyrighted and any commercial use, resale or
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