/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010816.mbx C L A S S A C T I O N R E P O R T E R Thursday, August 16, 2001, Vol. 3, No. 160 Headlines ALIGN TECHNOLOGY: Settles February Suit Filed By Licensed Dentists AMYLIN PHARMACEUTICALS: Bernstein Liebhard Files Lawsuit In S.D. CA BOTTOMLINE TECHNOLOGIES: Wolf Haldenstein Files Lawsuit In S.D. NY CAREMARK RX: Plaintiffs Withdraw Settlement Agreement Appeal CONAGRA FOODS: Milberg Weiss Initiates Securities Suit In Nebraska COWETA COUNTY: Lack Of Representation, Equal Treatment Sparks Suit EXODUS COMMUNICATIONS: Wolf Haldenstein Files N.D. CA Securities Suit FRONTIER CORPORATION: Harvey Greenfield Files S.D. NY Securities Suit IMANAGE INC.: Marc Henzel Commences Securities Suit In S.D. New York INVERNESS MEDICAL: Requests Court Dismissal Of Merger Challenge MICROTUNE INC.: Marc Henzel Lodges Securities Suit In S.D. New York NETPLIANCE INC.: Sued In Texas Over Misleading Ads, Billing Practices ON SEMICONDUCTOR: To Mount Vigorous Defense v. NY Shareholders Suits OPENTV CORPORATION: Bernstein Liebhard Files S.D. NY Securities Suit PREVIEW SYSTEMS: Investor, Shareholders File S.D. NY Securities Suit RAMBUS INC.: Cauley Geller Commences Securities Suit In N.D. CA RITE AID CORPORATION: $25 Million Settlement Offer Receives Final Nod ROWECOM INC.: Milberg Weiss Commences Securities Suit In S.D. New York SEA CONTAINERS: Files Motion To Dismiss Suit Over Indenture Act Breach SULZER ORTHOPEDICS: Fleming Firm Calls Settlement Terms "Ridiculous" SYCAMORE NETWORKS: Sirota & Sirota Begins Securities Suit In S.D. NY TALARIAN CORPORATION: Milberg Weiss Files Securities Suit In S.D. NY THERAGENICS CORPORATION: 1999 Securities Lawsuit In Early Discovery ******** ALIGN TECHNOLOGY: Settles February Suit Filed By Licensed Dentists ------------------------------------------------------------------ Align Technology, Inc. informed the Securities and Exchange Commission that it has decided to settle a lawsuit filed by a nationwide purported class of licensed dentists (excluding orthodontists) in February. According to the Company, the settlement involved a payment of only $400,000 for legal costs. However, over the next four years, the Company is required to train and certify 5,000 general practice dentists each year. The suit stems from an allegation that Align's policy of selling the Invisalign System exclusively to orthodontists violated the U.S. antitrust laws. Align Technology produces and sells its Invisalign System, which corrects malocclusion, or crooked teeth. Instead of using metal or ceramic mounts cemented on the teeth that are connected by wires, the system involves using an array of clear and removable dental Aligners to move a patient's teeth into a desired tooth alignment. AMYLIN PHARMACEUTICALS: Bernstein Liebhard Files Lawsuit In S.D. CA ------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP recently filed a securities class action lawsuit on behalf of all persons who acquired Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) securities between October 20, 1998 and July 26, 2001. The case is pending in the United States District Court for the Southern District of California. Amylin, and Amylin executive officers Joseph C. Cook, Jr. and Daniel M. Bradbury, are named as defendants in the suit. The complaint charges defendants with violations of sections 10(b) and 20(a) the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the Class Period, defendants concealed from investors adverse clinical studies concerning the safety of Amylin's experimental diabetes drug, pramlintide acetate (SYMLIN). This adverse information, which ultimately prevented approval of SYMLIN by an advisory committee of the United States Food and Drug Administration, was concealed from the market until July 26, 2001 when the committee voted not to recommend the approval of SYMLIN. Moreover, the Company failed to disclose material information necessary to make its prior statements not misleading. The complaint further alleges that Amylin's success and future profitability was completely dependent upon one drug - SYMLIN - and achieving FDA approval for the use and distribution of the drug. The market for a new diabetes drug of this type is significant, about $400 million according to some Wall Street forecasts. Approximately 4.5 million people in the United States use insulin to treat diabetes. >From the very beginning of the Class Period, defendants knew and failed to disclose, among other things, that: (1) pursuant to FDA protocols, the FDA would not consider Amylin's clinical development program for SYMLIN and would not approve the data from Amylin's study designs because they were inconsistent with clinical practices; (2) Amylin's design and/or conduct of the SYMLIN studies deviated so much from good medical practice that it was impossible to determine what role, if any, SYMLIN had in the treatment of patients with diabetes; (3) methods used by Amylin when conducting clinical trials were further manipulated by violating enrollment and protocol standards as well as data tracking; and (4) SYMLIN's study designs falsely created the appearance of SYMLIN's efficacy and safety. For example, Amylin failed to disclose, among other things, that (a) its clinical trials failed to determine which patients, if any, would benefit from SYMLIN or how SYMLIN would be used; (b) SYMLIN treatment caused chronic nausea and severe weight loss; (c) the use of SYMLIN was associated with major trauma, motor vehicle accidents and death; and (d) severe hypoglycemia was a problem in patients on SYMLIN. For more information, contact: Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: AMLN@bernlieb.com BOTTOMLINE TECHNOLOGIES: Wolf Haldenstein Files Lawsuit In S.D. NY ------------------------------------------------------------------ Wolf Haldenstein Adler Freeman And Herz, LLP recently initiated a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Bottomline Technologies, Inc. [Nasdaq: EPAY] securities between February 12, 1999 and December 6, 2000, inclusive. The suit names as defendants: Bottomline, certain of its officers and directors, and its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Bottomline common stock pursuant to the February 12, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. Specifically, the complaint alleges that in exchange for the excessive commissions, defendants allocated Bottomline shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Bottomline stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Bottomline's share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for a profit at inflated aftermarket prices. For more information, contact: Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 (Fred Taylor Isquith, Esq., Gregory Nespole, Esq., Thomas Burt, Esq., Gustavo Bruckner, Esq., Michael Miske, or George Peters) by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com CAREMARK RX: Plaintiffs Withdraw Settlement Agreement Appeal ------------------------------------------------------------ Caremark Rx, Inc. (NYSE: CMX) announced recently that on August 10, 2001, all of the Threshold Appreciation Price Securities holders who had filed notices of appeal in Alabama or New York withdrew their appeals, abandoned their objections to the prior court-approved class action settlement in Alabama and released the Company from all claims relating to the TAPS. These actions resulted from an agreement whereby counsel for the class plaintiff agreed to pay a portion of their legal fees received from the settlement to the TAPS holders objecting to the settlement. The Company paid no money and contributed no stock as part of this agreement. In connection with the agreement, the class plaintiff, the Company and the objecting TAPS holders each executed full, general mutual releases of all claims relating to the TAPS and the related litigation. Mac Crawford, Chairman of the Board and Chief Executive Officer of Caremark Rx, Inc. said, "This latest development marks the end of all TAPS-related litigation for Caremark and we are extremely pleased to have closed the book on these proceedings." Caremark is a leading prescription benefit manager (PBM), providing comprehensive drug benefit services to over 1,200 health plan sponsors and holding contracts to serve approximately 23 million participants throughout the U.S. CONAGRA FOODS: Milberg Weiss Initiates Securities Suit In Nebraska ------------------------------------------------------------------ Milberg Weiss Bershad Hynes & Lerach, LLP filed a class action lawsuit last week on behalf of purchasers of the securities of ConAgra Foods Inc. (NYSE: CAG) between August 28, 1998 and May 23, 2001 inclusive. The action, numbered 8:01CV427 is pending in the United States District Court for the District of Nebraska, against the following defendants: (1) Bruce C. Rohde (President since August 1996, Chief Executive Officer Since September, 1997, and Chairman since September 1998), (2) James P. O'Donnell (Chief Financial Officer and Corporate Secretary), (3) Kenneth W. DiFonzo (Senior Vice President), and (4) Jay D. Bolding (Vice President and Controller) 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 materially false and misleading statements to the market between August 28, 1998 and May 23, 2001, concerning its financial performance for the Company's fiscal years 1998, 1999, and 2000. Throughout the Class Period, defendants issued press releases reporting ConAgra's quarterly and year-end financial performance, and filed reports confirming such performance with the Securities and Exchange Commission. These statements, as alleged in the complaint, were materially false and misleading because United Agri Products, a ConAgra subsidiary, engaged in improper accounting throughout the Class Period, including improperly recognizing revenue and insufficiently reserving for bad debt. On May 23, 2001 ConAgra issued a press release announcing the Company will restate its financial results for the fiscal years 1998, 1999 and 2000. The press release revealed ConAgra will restate revenues for the Company's fiscal years 1998-2000, inclusive, which will be reduced by an estimated total of $349 million. The press release further revealed the Company estimated that, upon restatement, earnings per share will be reduced from $1.35 to $1.32 for 1998, from $1.46 to $1.41 for 1999, and from $1.67 to $1.60 for 2000. The Company is cooperating with an ongoing investigation by the SEC into the matter. For more details, contact: Milberg Weiss Bershad Hynes & Lerach LLP through Steven G. Schulman or Samuel H. Rudman by Phone: 800/320-5081 by E-mail: conagracase@milbergNY.com or visit the firm's Website: www.milberg.com COWETA COUNTY: Lack Of Representation, Equal Treatment Sparks Suit ------------------------------------------------------------------ A prominent group of Atlanta attorneys recently filed a lawsuit, seeking class action status, on behalf of a group of inmates in the Coweta County jail, stating they are seeking improvements in the system under which poor defendants are being unconstitutionally herded through Coweta County Superior Court without legal representation. Among those named as defendants, according to a recent report in The Atlanta Constitution, are Superior Court Judge William Lee and the Coweta County Commission. "People are not being represented, they are being processed," said Stephen Bright, director of the Southern Center for Human Rights. "A person who could afford a lawyer would never go through a system like this. It's not equal justice," he said. The Southern Center's investigation, found that 504 of the 954 defendants who qualified to have an appointed lawyer for free, did not have a lawyer when found guilty of an offense in 1999 and 2000. Bright said the lawsuit seeks the timely appointment of lawyers for poor defendants and requires that the county's indigent defense system have the necessary resources to adequately investigate cases. Indigent inmates awaiting trial in the Coweta jail allegedly go months without seeing the lawyer appointed to represent them, according to the lawsuit. It is also alleged that as Judge Lee conducts his court's calendar call, one defendant after another is summoned to a podium and asked to enter a plea. The defendant will talk alone with the prosecutor and sentencing will follow when a guilty plea is entered. The cases often involve felony charges such as drug possession or theft. Bright stated the process violates the guarantees provided in the landmark 1963 U.S. Supreme Court ruling, Gideon v. Wainwright, requiring states to appoint counsel to represent indigent defendants charged with serious state offenses. Bright is joined in the litigation by high-profile criminal defense attorneys Ed Garland and Don Samuel and civil litigator Al Pearson. County Attorney Mitch Powell declined to comment on the lawsuit. Judge Lee could not be reached for comment. EXODUS COMMUNICATIONS: Wolf Haldenstein Files N.D. CA Securities Suit --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz, LLP commenced recently a class action lawsuit in the United States District Court for the Northern District of California, on behalf of all purchasers of Exodus Communications, Inc. (NASDAQ: EXDS) securities between March 30, 2001 and June 20, 2001, inclusive. Named as defendants are the following: (1) Exodus, (2) Ellen M. Hancock (Chief Executive Officer and Chairman of the Board), (3) R. Marshall Case (Executive Vice President, Finance and Chief Financial Officer during part of the Class Period), (4) Dick Stoltz (temporary Chief Financial Officer during part of the Class Period), (5) Herbert A. Dollahite (Executive Vice President, Quality and Customer Services and Support), and (6) Adam W. Wegner (Senior Vice President, Legal and Corporate Affairs, General Counsel and Secretary) The complaint alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder. Specifically, the complaint alleges that the defendants were alarmed by the dramatic decline in Exodus' share price, which had declined from over $28 per share in late January to $10 per share by mid-March 2001. As a result, defendants formulated a plan to not only halt the erosion of Exodus' share price, but re-inflate it as well. Exodus' high stock price was dependent upon the appearance of its phenomenal growth rate. However, by March 2001, the complaint claims that defendants were aware that Exodus' business was falling victim both to the general economic slowdown and the bursting of the Internet bubble. Realizing that the public disclosure of Exodus' slowing growth rate would cause Exodus' stock price to decline, it is further alleged that defendants issued a series of false and misleading statements designed to keep Exodus' stock price high while certain defendants sold over 441,667 shares of Exodus common stock for proceeds of over $4.1 million. On June 20, 2001, Exodus revealed that, contrary to defendants' prior statements regarding the Company's results for the second quarter 2001 and for the 2001 fiscal year, its revenue would be significantly below expectations (and actually declined sequentially) due to a decrease in the rate of new customer installations, an increase in the rate of cancellations, reduction of orders from existing customers and an increase in reserves related to Internet company failures. This revelation shocked the market, causing Exodus' stock to plummet over 30% to $1.59 per share the following trading day on record volume of more than 185 million shares. For further information, contact: Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 (George Peters, Michael Miske, Gregory M. Nespole, Esq., or Fred Taylor Isquith, Esq.) by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com FRONTIER CORPORATION: Harvey Greenfield Files S.D. NY Securities Suit --------------------------------------------------------------------- The Law Firm Of Harvey Greenfield recently filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of all former shareholders of Frontier Corporation who acquired common stock of Global Crossing, Ltd. (NYSE: GX) by means of a Proxy Statement filed by Frontier in August of 1999. The lawsuit names as defendants Global Crossing, Frontier and certain of their officers and directors and Morgan Stanley Dean Witter. The Complaint alleges, among other things, that defendants violated Sections 11 and 12(a) of the Securities Act of 1933, Sections 10(b), 20(a) and 14(a) of the Securities Exchange Act of 1934, and certain rules promulgated by the National Association of Securities Dealers by making false and misleading material statements in a Registration Statement and Prospectus filed by Global Crossing in August 1998 and in the Proxy Statement relating to the acquisition of Frontier by Global Crossing which caused the value of Global Crossing's common shares to be distorted and/or inflated. For more information, contact: Harvey Greenfield, Esq. by Mail: 60 East 42nd Street, Suite 2001, New York, NY 10165 by Phone: 212-949-5500 or 877-949-5500 (toll free) by Fax: 212-949-0049 or by E-mail: harvey.greenfield@verizon.net IMANAGE INC.: Marc Henzel Commences Securities Suit In S.D. New York -------------------------------------------------------------------- The Law Offices of Marc S. Henzel recently lodged a securities class action lawsuit in the United States District Court for the Southern District of New York, on behalf all persons who acquired iManage, Inc. (Nasdaq: IMAN) securities between November 17, 1999 and December 6, 2000. Named as defendants in the complaint are iManage and the following executive officers of iManage: Manhood Panjwani, Mark Culhane, Rafiq Mohammadi, Mark Perry and Moez Virani. The complaint also names as defendants the following underwriters of iManage's initial public offering: BancBoston Robertson Stephens, Inc., C.E. Unterberg, Towbin and U.S. Bancorp Piper Jaffray Inc. The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with iManage's initial public offering of 3.6 million shares of common stock at $11.00 per share that was completed on or about November 17, 1999. For additional information, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106 by Phone: (888) 643-6735 or (215) 625-9999 by Fax: (215) 440-9475 by E- mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 INVERNESS MEDICAL: Requests Court Dismissal Of Merger Challenge --------------------------------------------------------------- Inverness Medical Technology, Inc. disclosed in a recent regulatory filing with the Securities and Exchange Commission that it is facing a purported class action suit in Delaware over its merger transaction with Johnson & Johnson. The suit was brought against company directors by an individual stockholder who allegedly owns 15,000 shares of Inverness common stock. That action, which is styled Bruce Katz v. Ernest A. Carabillo, Jr., Carol Goldberg, John F. Levy, Peter Townsend, Willard L. Umphrey, Ron Zwanziger, and Inverness Medical Technology, Inc., Civil Action No. 18913NC, is pending in the Chancery Court of New Castle County, Delaware. Specifically, the complaint alleges that the Inverness directors did not engage in a sales process that would have yielded the highest price for Inverness' diabetes care business, that the exchange value agreed upon does not reflect the value of the diabetes care business, and that the split-off and merger agreement should, but does not, include a "collar" or other price protection mechanism. The complaint also alleges that Inverness and its directors entered into this transaction in breach of their fiduciary duties to the plaintiff and the Inverness stockholders. The action seeks damages in an unspecified amount and seeks to enjoin completion of this transaction "without adequate safeguards." Although the complaint is styled as a class action complaint, no class has been certified at this time. "Inverness and its directors believe that these claims are without merit and are defending the action by, among other things, asking the court to dismiss the complaint," the SEC report said. MICROTUNE INC.: Marc Henzel Lodges Securities Suit In S.D. New York ------------------------------------------------------------------- The Law Offices of Marc S. Henzel recently commenced a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of the securities of Microtune, Inc. (Nasdaq: TUNE) between August 4, 2000 and December 6, 2000, inclusive. The action is pending against defendants Microtune, Goldman, Sachs & Co., Bear, Stearns & Co. Inc., and Salomon Smith Barney Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about August 4, 2000, Microtune commenced an initial public offering of 4,000,000 of its shares of common stock at an offering price of $16 per share. In connection therewith, Microtune filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of Microtune shares issued in connection with the Microtune IPO; and (2) defendants had entered into agreements with customers whereby defendants agreed to allocate Microtune shares to those customers in the Microtune IPO in exchange for which the customers agreed to purchase additional Microtune shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For more details, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106 by Phone: (888) 643-6735 or (215) 625-9999 by Fax: (215) 440-9475 by E- mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 NETPLIANCE INC.: Sued In Texas Over Misleading Ads, Billing Practices --------------------------------------------------------------------- A class action lawsuit has been brought against Netpliance Inc. recently over false and misleading advertisements and unauthorized billing practices, among others. In a regulatory document filed with the Securities and Exchange Commission, the Company revealed the suit was filed July 11 by purchasers of Internet appliance and the Company's Internet service subscribers. The complaint alleges the Company disseminated false and misleading advertisements, engaged in unauthorized billing practices and failed to provide adequate technical and customer support and service with respect to its Internet appliance and service business. The suit is awaiting resolution in a State court in Travis County, Texas. "The Company intends to defend this action vigorously," the SEC report said. "The Company could be forced to incur material expenses with respect to these legal proceedings, and in the event there is an outcome in any that is adverse to the Company, the Company's financial position and prospects could be harmed," the report noted. The Company plans to rename itself TippingPoint Technologies and focus on services for high-speed Internet access. ON SEMICONDUCTOR: To Mount Vigorous Defense v. NY Shareholders Suits -------------------------------------------------------------------- ON Semiconductor promised to mount a vigorous defense against two pending securities class action suits in New York, the Company said in a recent report to the Securities and Exchange Commission. The suit was filed last month by two purported stockholder against the Company, certain officers and directors of the Company, and five investment banking firms who acted as underwriters in connection with the Company's IPO in April 2000. The suit is pending in the United States District Court, Southern District of New York, and generally alleges the IPO offering documents failed to disclose: (1) certain underwriter fees and commissions and (2) underwriter tie-in and other arrangements with certain customers that impacted the price of the Company's stock in the aftermarket. The law firms of Milberg Weiss Bershad Hynes & Lerach, LLP and Wolf Haldenstein Adler Freeman & Herz, LLP are representing the plaintiffs. ON Semiconductor manufactures low-cost, high-volume analog, logic, and discrete semiconductors -- components that perform basic, vital power control and interface functions in nearly all electronic systems, including appliances, cell phones, computers, global positioning systems, and set-top boxes. OPENTV CORPORATION: Bernstein Liebhard Files S.D. NY Securities Suit -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP recently initiated a securities class action lawsuit on behalf all persons who acquired OpenTV Corp. (NASDAQ: OPTV) securities between November 22, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York. OpenTV and executive officers and directors of OpenTV, Jan Steenkamp and Randall S. Livingston are named as defendants in the complaint. The complaint also names underwriters of OpenTV's initial public offering, Merrill Lynch, Pierce, Fenner & Smith Incorporated as defendants. The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with OpenTV's initial public offering of 7,500,000 shares of common stock at $20.00 per share that was completed on or about November 22, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose that: (1) the Underwriter Defendant's agreement with certain investors to provide them with significant amounts of restricted OpenTV shares in the IPO in exchange for exorbitant and undisclosed commissions; and (2) the agreement between the Underwriter Defendant and certain of its customers whereby the Underwriter Defendant would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase OpenTV shares in the after- market at pre-determined prices. For additional information, contact: Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: OPTV@bernlieb.com PREVIEW SYSTEMS: Investor, Shareholders File S.D. NY Securities Suit -------------------------------------------------------------------- Preview Systems, Inc. informed the Securities and Exchange Commission it has been named in a class action suit filed in the New York over securities violations. According to the Company, Ellis Investments, Ltd. and other stockholders who purchased Preview Systems, Inc. Common Stock between December 7, 1999 and December 6, 2000 filed the suit last August 7. The complaint names the following as defendants: (1) Preview Systems, Inc., (2) BancBoston Robertson Stephens, Inc., (3) Dain Rauscher Incorporated, and (4) SoundView Technology Group, Inc., (5) Vincent Pluvinage (the Company's Chief Executive Officer until August 10, 2001) and (6) G. Bradford Solso (the Company's former Chief Financial Officer). The complaint charges defendants with violations of Sections 11, 12 and 15 of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 (and Rule 10b-5 promulgated thereunder), for issuing a Registration Statement and Prospectus that contained material misrepresentations and/or omissions. The complaint alleges that the Registration Statement and Prospectus were false and misleading because they failed to disclose that (i) the agreements between the Underwriters and certain investors to provide such investors with significant amounts of restricted Preview Systems shares in the IPO in exchange for excessive and undisclosed commissions; and (ii) the agreements between the Underwriters and certain customers under which the Underwriters would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Preview Systems shares in the aftermarket at pre- determined prices. The suit is currently pending in the U.S. District Court for the Southern District of New York. "The Company intends to vigorously defend itself against these charges," the report said. RAMBUS INC.: Cauley Geller Commences Securities Suit In N.D. CA --------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP commenced recently a class action in the United States District Court for the Northern District of California on behalf of purchasers of Rambus Inc. (Nasdaq: RMBS) common stock during the period between January 18, 2000 and May 9, 2001, inclusive. The complaint charges Rambus and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Specifically, the action charges that Rambus and certain of its officers and directors disseminated materially false and misleading statements concerning, among other things: (1) the undisclosed fact that Rambus had engaged in fraudulent activity in order to obtain purportedly valuable patents on SDRAM computer memory and memory related technologies which enable semiconductor memory devices to keep pace with faster generations of processors and controllers; (2) the true enforceability and viability of Rambus' SDRAM patents and the true risks involved with investing in Rambus stock during the Class Period; (3) the effects these adverse undisclosed actions were having and would continue to have on the Company's growth and earnings prospects; and (4) that Company insiders, certain of which are named as defendants in the action, sold or otherwise disposed of over $125 million of their privately held Rambus stock while in possession of undisclosed material adverse information regarding the true validity of the Company's SDRAM patents, including the undisclosed fact that such patents were obtained by defendants' fraud. It was only after defendants sold or otherwise disposed of their privately held stock that, on May 9, 2001, investors learned the truth about Rambus, when a jury in a patent infringement suit filed by Rambus against one of its competitors, Infineon Technologies, AG, determined that Rambus' SDRAM patents had been obtained fraudulently. For more information, contact: CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 (toll free) or by E-mail: info@classlawyer.com RITE AID CORPORATION: $25 Million Settlement Offer Receives Final Nod --------------------------------------------------------------------- The California Superior Court in San Diego recently approved the settlement offer of Rite Aid Corporation in relation to a class action suit filed by its managers, claiming back pay for overtime. In a report to the SEC, the Company said the approval was handed down June 1. The settlement deal amounts to $25 million, payable in four equal installments. The first payment is due upon final approval and the balance is payable 6, 12 and 18 months thereafter. The suit was brought by three subclasses, comprised of California store managers, assistant managers and managers-in-training. They allege that the Company, in an effort to minimize labor costs, caused its managers, assistant managers and managers-in-training to perform the duties and functions of associates for in excess of forty hours per week without paying them overtime. The Company is the No.3 drugstore chain in the United States, with about 3,800 drugstores in 30 states and Washington, DC. Rite Aid stores fill prescriptions, as well as sell health and beauty products, convenience foods, and other items. ROWECOM INC.: Milberg Weiss Commences Securities Suit In S.D. New York ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP filed Tuesday a class action lawsuit on behalf of purchasers of the securities of RoweCom, Inc. (NASDAQ: ROWE) between March 9, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York against defendants FleetBoston Robertson Stephens Inc. and Salomon Smith Barney Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about March 9, 1999, RoweCom commenced an initial public offering of 3,100,000 of its shares of common stock at an offering price of $16 per share. In connection therewith, RoweCom filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of RoweCom shares issued in connection with the RoweCom IPO; and (2) defendants had entered into agreements with customers whereby defendants agreed to allocate RoweCom shares to those customers in the RoweCom IPO in exchange for which the customers agreed to purchase additional RoweCom shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC and other regulatory agencies and organizations are investigating the underwriting practices of defendants, among others, in connection with several other initial public offerings. For more information, contact: Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by Email: rowecomcase@milbergNY.com or visit the firm's Website: www.milberg.com SEA CONTAINERS: Files Motion To Dismiss Suit Over Indenture Act Breach ---------------------------------------------------------------------- Sea Containers Ltd. said recently in a SEC regulatory report that it has filed a motion to dismiss a suit brought under the federal Trust Indenture Act of 1939. The suit was filed last May 8 by two individuals, claiming to own $479,000 of two of the four series of Sea Containers' publicly traded senior notes and $476,000 of the $125 million aggregate principal amount of Sea Containers' publicly traded senior subordinated debentures. According to the regulatory report, the Company filed its motion June 25 on grounds similar to a suit filed last year and dismissed later by the New York Supreme Court recently. The high court dismissed the suit for plaintiffs' failure to comply with the pre-suit requirements in the indentures. The plaintiffs in the instant case purport to bring their suit under the federal Trust Indenture Act of 1939 and as a class action under state law on behalf of all holders of Sea Containers' publicly-traded debt. The suit seeks, among other things, a declaratory judgment that a default has occurred under the indentures and all principal and unpaid interests are now due. "The management of Sea Containers believes that the concerns of the holders of its public debt relate primarily to the proposed spin-off distribution," the Company said. "The possibility of such a distribution is specifically raised in the indentures, and management of Sea Containers intends to effect the spin-off distribution in a manner that will not result in any violation of the indenture covenants or in a fraudulent conveyance," said the Company. "Management has concluded that the allegations of the plaintiffs in the above-mentioned lawsuit are without merit, and therefore Sea Containers will oppose vigorously any litigation relating to the proposed spin- off," the Company said in the SEC report. With General Electric, the Company runs one of the world's largest container leasing firms, GE SeaCo, which offers everything from refrigerated units to modular containers. SULZER ORTHOPEDICS: Fleming Firm Calls Settlement Terms "Ridiculous" -------------------------------------------------------------------- George M. Fleming of Fleming & Associates, L.L.P. has denounced as "ridiculous" the terms of a proposed settlement of the Sulzer Inter-Op hip implant class action. Preliminary reports are circulating that a settlement will soon be announced by the Plaintiff's Steering Committee for the Sulzer Orthopedics Multi-District Litigation and may be announced as early as this Friday at a scheduled hearing. The putative class action case, In re: Inter-Op Hip Prosthesis Product Liability Litigation, Civil No. 01-9000, is pending in federal court before Judge O'Malley of the Northern District of Ohio. On December 5, 2000, Sulzer Orthopedics USA, Inc. recalled its Inter-Op artificial hip implants after learning that machine oil had contaminated the prosthetic devices during the manufacturing process. The recalled devices included approximately 20,000 hips that had already been implanted in patients. Beginning in early Spring of last year, orthopedic surgeons using the devices started to experience high numbers of cup loosening with the artificial hips. This results in excruciating groin pain and complications for the patients and requires a second surgery to remove and replace the loose components. Preliminary reports indicate that the soon-to-be-proposed settlement for each patient involved in the putative class action will include a cash payment of $35,000 and $20,000 worth of stock in Sulzer Medica, Ltd, the Swiss parent company of the hip implant maker Sulzer Orthopedics USA, Inc., based in Austin, Texas. Fleming, a Houston attorney who represents Darrellene Loeffler in one of the first cases against Sulzer set for trial on October 15, 2001, said: "It is unclear if the reported settlement includes the cost of the revision surgery and rehabilitation, but either way, this amount is wholly inadequate for the misery these people have endured and continue to endure as a result of Sulzer's irresponsible conduct." MDL rules allow for cases filed in federal court to be consolidated in one court for coordination of pre-trial matters and ultimate class treatment. Lately, however, the MDL has been criticized as a procedural device for corporate defendants to obtain settlement of cases on a nationwide basis at a huge discount. The most recent example is the Fen-Phen diet drug MDL settlement that many allege resulted in compensation to those injured of a fraction of the amount juries awarded to individuals that elected to opt out of the class action settlement. Proponents of the settlement will likely cite Sulzer's seemingly admirable conduct in voluntarily recalling the defective implants once they learned that the machine oil was causing the implants to fail. But according to Fleming, "The discovery and investigation done thus far in our Texas cases indicates that Sulzer in fact waited over four months after discovering the hips were failing to recall the implants. "Sulzer continued to sell its hips and make a profit until it had a story it could sell the public and the doctors who had used its product. "During this time, Sulzer continued to allow doctors to implant defective hips that Sulzer knew would fail and cause people pain. There was nothing immediate or admirable about how Sulzer recalled this product." SYCAMORE NETWORKS: Sirota & Sirota Begins Securities Suit In S.D. NY -------------------------------------------------------------------- Sirota & Sirota, LLP filed a class action lawsuit Monday on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Sycamore Networks, Inc. (NasdaqNM:SCMR) between October 21, 1999 and August 10, 2001, inclusive. The lawsuit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The action, Barton v. Sycamore Networks, Inc., et al., is pending in the U.S. District Court for the Southern District of New York and has been assigned to the Hon. Shira A. Scheindlin, U.S. District Judge. The complaint alleges Sycamore Networks and certain of its officers and directors violated the federal securities laws by issuing and selling Sycamore stock pursuant to the initial public offering and secondary offering, without disclosing to investors that at least six of the underwriters of the Sycamore offerings had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, Morgan Stanley Dean Witter & Co., Inc., and Lehman Brothers, Inc., which acted as lead underwriters of both the IPO and secondary offering, Credit Suisse First Boston Corp., which acted as a lead underwriter in the secondary offering and as an underwriter in the IPO, FleetBoston Robertson Stephens, Inc., which acted as an underwriter in both the secondary offering and IPO, and The Goldman Sachs Group, Inc. and Merrill Lynch, Pierce, Fenner & Smith, Inc., which acted as underwriters in the IPO, allocated Sycamore shares to customers at the IPO price of $38.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $38.00, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Sycamore stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Sycamore's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying Sycamore stock at the $38.00 IPO price and then selling it later for a profit at inflated aftermarket prices. As a result of such artificial price inflation, Sycamore opened to the public at a price of $270.89 per share for a gain of $232.89 per share, or 613 percent over the IPO price. The complaint further alleges that Sycamore was able to price the secondary offering of Sycamore stock at the artificially high price of $150.25 (or $450.75 in pre-split pricing) per share due to the continued effects of the foregoing violations. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectuses distributed to investors and the Registration Statements filed with the SEC in order to gain regulatory approval for the Sycamore offerings contained material misstatements regarding the commissions that the underwriters would derive and had derived from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact: Sirota & Sirota, LLP through Howard B. Sirota or Saul Roffe by Phone: 212/425-9055 or by E-mail: info@sirotalaw.com TALARIAN CORPORATION: Milberg Weiss Files Securities Suit In S.D. NY -------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach, LLP filed last week a class action lawsuit on behalf of purchasers of the securities of Talarian Corporation (NASDAQ:TALR) between July 20, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against defendants Talarian Corp., Lehman Brothers, Inc., FleetBoston Robertson Stephens, Merrill Lynch, Pierce Fenner & Smith Incorporated, Paul A. Larson, Michael A. Morgan and Thomas J. Laffey. The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about July 20, 2000, Talarian Corp. commenced an initial public offering of 4,200,000 of its shares of common stock at an offering price of $16.00 per share. In connection therewith, Talarian Corp. filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) Lehman, Robertson Stephens and Merrill Lynch had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Lehman, Robertson Stephens and Merrill Lynch allocated to those investors material portions of the restricted number of Talarian Corp. shares issued in connection with the Talarian Corp. IPO; and (2) Lehman, Robertson Stephens and Merrill Lynch had entered into agreements with customers whereby Lehman, Robertson Stephens and Merrill Lynch agreed to allocate Talarian Corp. shares to those customers in the Talarian Corp. IPO in exchange for which the customers agreed to purchase additional Talarian Corp. shares in the aftermarket at pre-determined prices. For more information, contact: Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: talariancase@milbergny.com or visit the firm's Website: www.milberg.com THERAGENICS CORPORATION: 1999 Securities Lawsuit In Early Discovery ------------------------------------------------------------------- Theragenics Corporation revealed recently that the 1999 securities suit filed against it is now in early stages of discovery. The Company is convinced that the charges are without merit and intends to vigorously oppose the litigation, a regulatory document with SEC said. This lawsuit was originally filed in several separate class actions in January 1999, naming the Company and certain of its officers and directors as defendants. It alleges violations of the federal securities laws, including Sections 10(b), 20(a) and Rule 10b-5 of the Securities and Exchange Act of 1934, as amended. These actions have been consolidated into a single action pending in the U.S. District Court for the Northern District of Georgia. The complaint, as amended, purports to represent a class of investors who purchased or sold securities during the time period from January 29, 1998 to January 11, 1999. A motion to dismiss filed by the Company last March 30, 2001 was denied and a motion for reconsideration was subsequently dropped on May 16, 2001. The Company is the maker of TheraSeed product used in treating prostate cancer. Theraseed is a radioactive implant about the size of a grain of rice. The seeds are implanted in early stage prostate tumors and release radiation that kills cancerous cells with minimal damage to surrounding healthy tissue. ********* 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., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Larri-Nil Veloso and Lyndsey Resnick, Editors. Copyright 2001. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e- mail. 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