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/raid1/www/Hosts/bankrupt/CAR_Public/010830.mbx C L A S S A C T I O N R E P O R T E R Thursday, August 30, 2001, Vol. 3, No. 170 Headlines ARIBA INC.: NY Court Consolidates Pending Securities Suits ASIA PULP: Johnson & Perkinson Files Securities Suit In S.D. New York BLOCKBUSTER INC.: Asks State Supreme Court To "Stay" Illinois Trials CENDANT CORPORATION: Appellate Court Sustains Record $3.2B Settlement CREDIT SUISSE: Former Clerks File Suit In FL To Collect Overtime Pay DELANO TECHNOLOGY: Denies Allegations In New York Securities Suits DIGITAL IMPACT: Confident It Will Prevail In Pending Securities Suits DIGITAL ISLAND: Wechsler Harwood Commences Securities Suit In S.D. NY DIGITAS INC.: Labels Shareholders Suits In New York As 'Meritless' ELOQUENT INC.: Milberg Weiss Commences S.D. New York Securities Suit FOUNDRY NETWORKS: California Court To Hear Motion To Dismiss In Oct. ITXC CORPORATION: Wechsler Harwood Begins Securities Suit In S.D. NY KANA SOFTWARE: Believes It Has Valid Defense v. NY Securities Suits MODEM MEDIA: Wechsler Harwood Commences Securities Suit In S.D. NY ONI SYSTEMS: Schiffrin & Barroway Files Securities Suit In S.D. NY ORGANIC INC.: Faces Six Suits Over Securities Fraud In S.D. New York PARK PLACE: Mohawk Tribe Asks NY Court To Enforce $1.8 Billion Ruling PITTSFIELD TOWNSHIP: Builders Sue Over $2.5M Excess Permits Charge PRIMEDIA INC.: Sued Over RICO Violations By Employees In California RAMBUS INC.: Pomerantz Haudek Files Securities Suit In N.D. CA SIMON WORLDWIDE: McDonald's, Philip Morris Junk Promotions Firm VICINITY CORPORATION: Stull Stull Lodges Securities Suit In S.D. NY ********* ARIBA INC.: NY Court Consolidates Pending Securities Suits ---------------------------------------------------------- The U.S. District Court for the Southern District of New York recently consolidated the securities class actions pending against Ariba, Inc., a Company disclosure says. According to the disclosure filed with the Securities and Exchange Commission, the consolidation was ordered in a hearing June 22. The consolidated complaint includes all suits filed between March 20 and June 5 this year, the company report says. Named in the complaint are several of the Company's officers and directors, and three underwriters of its initial public offering. The complaint is brought on behalf of all the purchasers of Company common stocks since June 23, 1999, the date of the public offering. The plaintiffs allege the IPO prospectus filed with the Securities and Exchange Commission was materially false and misleading. It is alleged the prospectus failed to disclose, among other things, that Morgan Stanley, the lead underwriter, required several investors who wanted large allocations of initial public offering securities to pay undisclosed and excessive underwriters' compensation in the form of increased brokerage commissions. In addition, the underwriter allegedly also required investors to agree to buy shares of the securities after the initial public offering was completed at predetermined prices as a precondition to obtaining IPO allocations. The plaintiffs further allege that because of these purchases, the Company's post-initial public offering stock price was artificially inflated. "As a result of the alleged omissions in our prospectus and the purported inflation of our stock price, the plaintiffs claim violations of Sections 11 and 15 of the Securities Act and Section 10(b) of the Securities Exchange Act," the report says. The company's Web-based procurement software is used by some of the world's largest manufacturers, retailers, and distributors to track and manage online supply purchases. Companies such as DuPont, Federal Express, Chevron, and Honda use Ariba technology to automate buying through corporate intranets, target preferred suppliers, and connect buyers with suppliers and distributors. ASIA PULP: Johnson & Perkinson Files Securities Suit In S.D. New York --------------------------------------------------------------------- Johnson & Perkinson filed recently a class action lawsuit on behalf of purchasers of the securities of Asia Pulp & Paper Company, Ltd. (NYSE:PAP) between September 8, 1998 and April 4, 2001, inclusive. The action is pending in the United States District Court, Southern District of New York against defendants Asia Pulp & Paper, Teguh Ganda Wijaya and Hendrik Tee. 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, by issuing a series of material misrepresentations to the market between September 8, 1998 and April 4, 2001, thereby artificially inflating the price of Asia Pulp & Paper securities. The complaint alleges that, throughout the Class Period, Asia Pulp & Paper issued press releases and filed financial statements, which failed to disclose, among other things, that the Company had entered into two swap contracts involving Indonesian rupiah/US dollar and Japanese yen/US dollar swaps. On April 4, 2001, Asia Pulp & Paper finally disclosed that it was in default on $220 million in swap contracts that had not been disclosed on its financial statements for fiscal years 1997 to 2000. The stunning announcement followed a steady stream of news reports that Asia Pulp & Paper was facing a strong decline in its business and, as a result, was unable to service its debt. During the Class Period, Asia Pulp & Paper was able to raise hundreds of millions of dollars in much needed capital through the issuance of bonds and a secondary offering of its American Depositary Shares. For more information, contact: Dennis J. Johnson, Esq. or Jacob B. Perkinson, Esq. by Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone: 1-888-459-7855 (toll free) or by E-mail: JPLAW@adelphia.net BLOCKBUSTER INC.: Asks State Supreme Court To "Stay" Illinois Trials -------------------------------------------------------------------- World's largest video rental chain Blockbuster, Inc. appealed a decision by a State appellate court denying its motion to stay the pending putative class action in Illinois. The Company brought the matter to the state Supreme Court after the appellate court nixed its interlocutory appeal July 25 on an earlier denial of a motion to stay by a trial court. Following the signing of a settlement agreement in a Texas case, Blockbuster has sought the suspension of the suit in Illinois, pending settlement approval. The Texas agreement is scheduled for a fairness hearing on December 10. Blockbuster is facing at least 19 putative class actions filed by customers in state courts in California, Ohio, Maryland, New York, New Jersey, Tennessee, Delaware, Massachusetts, Washington, D.C., and Pennsylvania between February 1999 and April 2001. These cases allege common law and statutory claims for fraud and/or deceptive practices and/or unlawful business practices regarding the Company's policies for customers who choose to keep rental product beyond the prepaid initial rental period. Some of the cases also allege that these policies impose unlawful penalties and/or result in unjust enrichment. The Company believes the plaintiffs' positions in these suits are without merit and, if the settlement reached in Texas is not confirmed, it intends to vigorously defend itself in the litigation. Blockbuster is the world's largest video rental chain, with about 7,800 company-owned or franchised stores in 28 countries (about 65% are located in the US). The company rents more than 1 billion videos, DVDs, and video games at its Blockbuster Video outlets each year. CENDANT CORPORATION: Appellate Court Sustains Record $3.2B Settlement --------------------------------------------------------------------- The record $3.2 billion settlement offer of Cendant Corporation to its stockholders was granted the "go ahead" Tuesday by a federal appellate panel, the Associated Press reports. By approving the suit, the 3rd U.S. Circuit Court of Appeals rejected shareholders' claims that they are entitled to at least $8.8 billion in damages. According to the appellate court, the offer is simply equitable, and District Court Judge William H. Walls did not err in awarding the amount. The settlement deal will cover the 64 securities suits that have been consolidated before Walls' chamber, the report says. Three years ago, an accounting fraud triggered a stock meltdown that cost the Company $14 billion in losses in just one day. Thereafter, shareholders suits were filed. Under the settlement, the Company will contribute $2.83 billion to the fund, while accounting firm Ernst & Young will cover the $335 million balance. CREDIT SUISSE: Former Clerks File Suit In FL To Collect Overtime Pay -------------------------------------------------------------------- Clerical employees of Credit Suisse First Boston Corp., represented by attorney Jonathan Perlman, filed Tuesday a national class action suit claiming the international securities firm intentionally denied employees, primarily women, overtime pay. The suit says such conduct is in violation of wage provisions of the federal Fair Labor Standards Act (FLSA), which requires employers to pay hourly workers at 1.5 times their regular hourly wage for every hour worked beyond 40 hours in a week. Olga Zamora, a former sales assistant who worked in Credit Suisse First Boston's downtown Miami office, says despite being required to work over 40 hours some weeks, employees were not permitted to record the additional hours worked. In violation of the FLSA, Zamora says Credit Suisse First Boston did not record any of the hours its employees worked, nor did it post a notice to its employees of their rights under the FLSA. On behalf of his clients, plaintiff attorney Jonathan Perlman, a partner in the Miami law firm of Genovese Lichtman Joblove & Battista, is seeking unpaid wages, liquidated damages, and attorneys' fees, as provided for in the FLSA. This is not the first time a brokerage firm has been sued for failing to pay overtime compensation to thousands of sales assistants who support its stockbroker sales forces, says Perlman. He cites Prudential Securities, Merrill Lynch, Raymond James and Associates, and others as having been sued in similar class actions. "The brokerage industry's long time pattern and practice of refusing to pay its clerical workforce as required by law in order to increase their profits needs to stop," comments Perlman, who also represented plaintiffs in previous FLSA class actions against major brokerage firms. "In cases such as these, many employees realize that they are being shortchanged, but often don't think they can fight the system or don't realize the amount of compensation due to them," he said. With over $400 billion in assets, Credit Suisse First Boston Corp., formerly know as Donaldson, Lufkin & Jenrette, Inc., operates in over 87 locations worldwide and employs over 28,000. It is a subsidiary of Zurich-based Credit Suisse Group, one of the world's largest securities firms and has offices in cities throughout the U.S. including Miami, New York, Atlanta, Baltimore, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Hollywood (Florida), Houston, Los Angeles, Monterrey, Nashville, Newport Beach, Palo Alto, Pasadena, Philadelphia, San Francisco, Seattle, Tampa, and Washington, D.C. DELANO TECHNOLOGY: Denies Allegations In New York Securities Suits ------------------------------------------------------------------ "Expect a vigorous defense from our side." This appears to be the underlying message contained in a regulatory document filed by Delano Technology Corporation as it denied the allegations contained in several class actions filed recently. The Company believes it is just a victim of the recent upsurge of securities class actions, noting that 100 other companies have also been sued on identical charges. In the case of the Company, the suits trickled in beginning this month and are currently pending in the U.S. District Court for the Southern District of New York. The complaints name several Company officials and lead IPO underwriter FleetBoston Robertson Stephens. Plaintiffs accused the Company of violating several federal securities laws by making material false and misleading statements in the Company prospectus incorporated in its registration statement with the SEC in February of 2000. Delano Technology develops Interaction Suite, a software that allows clients such as Ericsson and Charles Schwab to share transactional data and customer information between back and front offices. Interaction Suite is a development platform for deploying e-business applications such as enterprise messaging, customer service, and business intelligence. Delano also offers application building, maintenance, and other support services. DIGITAL IMPACT: Confident It Will Prevail In Pending Securities Suits --------------------------------------------------------------------- Digital Impact, Inc. believes the resolution of the securities suits currently pending in New York will not have a material effect on its finances and operations. In a recent company disclosure filed with the Securities and Exchange Commission, the Company said its legal counsels are confident it will prevail over the suits. The lawsuits has named Company officials William Park and David Oppenheimer, and Credit Suisse First Boston Corporation, an underwriter in the Company's initial public offering. Plaintiffs allege violations of Section 11 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. "To date, there have been no significant developments in the litigation," says the disclosure. The suit is pending in the U.S. District Court for the Southern District of New York. The Company manages e-mail direct marketing campaigns for more than 140 clients. Through its Merchant Mail service, Digital Impact helps companies target and personalize their e-mail messages, manage their campaigns, and monitor their databases. Its Email Exchange program allows clients to build their e-mail lists by letting customers choose companies from which they would like to receive offers. DIGITAL ISLAND: Wechsler Harwood Commences Securities Suit In S.D. NY --------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer, LLP initiated recently a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Digital Island, Inc. (NASDAQ: ISLD) common stock between June 29, 1999 and December 6, 2000, inclusive. The suit is pending against defendants Digital Island, certain of its officers and directors, and certain of its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Digital Island common stock pursuant to the June 29, 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. The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group allocated Digital Island shares to customers at the IPO price of $10 per share. To receive the allocations (i.e., the ability to purchase shares) at $10, 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 Digital Island stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Digital Island's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $10 IPO price and then selling it later for a profit at inflated aftermarket prices. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the 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 Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Digital Island offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact: Wechsler Harwood Halebian & Feffer LLP through its Shareholder Relations Department: Craig Lowther by E-mail: clowther@whhf.com by Mail: 488 Madison Avenue 8th Floor New York, New York 10022 or by Phone: 877-935-7400 (Toll Free) DIGITAS INC.: Labels Shareholders Suits In New York As 'Meritless' ------------------------------------------------------------------ The securities class actions pending against Digitas Inc. in New York are meritless, declares a Company disclosure filed recently with the Securities and Exchange Commission. The same document also revealed plans by the Company to vigorously contest the suits before the U.S. District Court for the Southern District of New York. Company shareholders brought the suit beginning June 26, 2001 against the Company, several of its officers and directors, and five underwriters of its initial public offering. The purported class actions are all brought on behalf of purchasers of the Company's common stock since March 13, 2000, the date of the Offering. The plaintiffs allege, among other things, that the Company's prospectus, incorporated in the Registration Statement on Form S-1 filed with the Securities and Exchange Commission, was materially false and misleading. This, because it failed to disclose that the underwriters had engaged in conduct designed to result in undisclosed and excessive underwriters' compensation in the form of increased brokerage commissions. Accordingly, this alleged conduct of the underwriters artificially inflated the Company's stock price in the period after the Offering. The plaintiffs claim violations of Sections 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 thereunder. Formerly Bronner Slosberg Humphrey, the Company designs and implements database marketing systems, e-commerce Web sites, and customer relations systems for top-drawer clients that include AT&T, Delta Air Lines, and the NBA. In addition to technical know-how, Digitas offers strategic consulting, media planning, and creative advertising services. ELOQUENT INC.: Milberg Weiss Commences S.D. New York Securities Suit -------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP brought recently a class action lawsuit on behalf of purchasers of the securities of Eloquent, Inc. (NASDAQ:ELOQ) between February 17, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the following defendants: (1) Eloquent, (2) FleetBoston Robertson Stephens, (3) Lehman Brothers, (4) Morgan Stanley & Co. Incorporated, (5) Salomon Smith Barney, (6) Abraham Kleinfeld and (7) R. John Curson. 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 February 17, 2000, Eloquent commenced an initial public offering of 4,500,000 of its shares of common stock at an offering price of $16.00 per share. In connection therewith, Eloquent 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: (i) Robertson Stephens, Lehman Brothers, Morgan Stanley and Salomon had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Robertson Stephens, Lehman Brothers, Morgan Stanley and Salomon allocated to those investors material portions of the restricted number of Eloquent shares issued in connection with the Eloquent Corp. IPO; and (ii) Robertson Stephens, Lehman Brothers, Morgan Stanley and Salomon had entered into agreements with customers whereby Robertson Stephens, Lehman Brothers, Morgan Stanley and Salomon agreed to allocate Eloquent shares to those customers in the Eloquent IPO in exchange for which the customers agreed to purchase additional Eloquent 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 Email: eloquentcase@milbergny.com or visit the firm's Website: www.milberg.com FOUNDRY NETWORKS: California Court To Hear Motion To Dismiss In Oct. -------------------------------------------------------------------- A motion filed by Foundry Networks Inc. seeking the dismissal of a consolidated securities class action in California is scheduled for hearing this October. According to a recent disclosure filed with the SEC, the Company is confident the U.S. District Court for the Northern District of California will junk the suit for lack of merit. The pending suit alleges violation of federal securities laws and purports to seek damages on behalf of a class of shareholders who purchased Foundry common stock during the period from October 18, 2000 to December 19, 2000. The Company makes high-performance LAN and WAN switches and Internet routers, including Layer 2, Layer 3, and Layer 4-7 (designations that indicate increasingly sophisticated equipment for managing higher network traffic). Foundry's customers include Hewlett-Packard and AOL Time Warner. ITXC CORPORATION: Wechsler Harwood Begins Securities Suit In S.D. NY -------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP launched recently a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of all purchasers of the common stock of ITXC Corp. (NASDAQ: ITXC) from September 27, 1999 and December 6, 2000, inclusive. The suit is lodged against defendants ITXC, certain of its officers and directors, and certain of its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling ITXC common stock pursuant to the September 27, 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 ITXC 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 ITXC stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive ITXC'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: Wechsler Harwood Halebian & Feffer LLP through its Shareholder Relations Department: Ramon Pinon, IV by E-mail: rpinoniv@whhf.com by Phone: 877-935-7400 (Toll Free) or by Mail: 488 Madison Avenue 8th Floor, New York, New York 10022 KANA SOFTWARE: Believes It Has Valid Defense v. NY Securities Suits ------------------------------------------------------------------- Kana Software, Inc. is optimistic it has valid defenses against securities class action suits pending in federal court in New York. According to its latest SEC regulatory report, it has already examined the claims and has found out that allegations are without merit. "We intend to defend the action vigorously," the Company said. Kana Software, Inc., Michael J. McCloskey, Joseph D. McCarthy and Goldman Sachs & Co., Lehman Bros, Hambrecht & Quist LLC and Wit Capital Corp. are the named defendants in the suit. The cases allege violations of Section 11, 12(a)(2) and Section 15 of the Securities Act of 1933 and violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. Plaintiffs claim they represent a class of plaintiffs who purchased the Company's stock between September 21, 1999 and December 6, 2000 in connection with its initial public offering. Specifically, the complaints allege the underwriter defendants engaged in a scheme concerning sales of the Company' securities in the initial public offering and in the aftermarket. The suits await resolution in the United States District Court for the Southern District of New York. The Company, which is doing business as KANA, was formed in 2001 when enterprise communications software specialist Kana Communications bought customer relationship software maker Broadbase Software. The combined company offers a Web-based e-business platform for managing and personalizing customer communications, marketing campaigns, customer information, and other functions across e-mail, phone, instant messaging, and other channels. KANA's more than 1,300 customers include American Airlines, Cisco Systems, E*TRADE, Microsoft, and Williams-Sonoma. MODEM MEDIA: Wechsler Harwood Commences Securities Suit In S.D. NY ------------------------------------------------------------------ Wechsler Harwood Halebian & Feffer, LLP lodged recently a class action lawsuit on behalf of purchasers of the securities of Modem Media, Inc. (NASDAQ:MMPT) between February 5, 1999 and December 6, 2000, inclusive. The action alleges the following as defendants: Modem Media, Modem Media directors and officers Gerald M. O'Connell and Steven C. Roberts, and underwriters FleetBoston Robertson Stephens Inc. and Bear Stearns & Co., Inc. The suit is pending in the United States District Court, Southern District of New York. 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 February 5, 1999, Modem Media commenced an initial public offering of 2,600,000 of its shares of its common stock at an offering price of $16 per share. In connection therewith, Modem Media 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) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Modem Media shares issued in connection with the Modem Media IPO; and (2) the Underwriter Defendants had entered into agreements with customers whereby they agreed to allocate Modem Media shares to those customers in the Modem Media IPO in exchange for which the customers agreed to purchase additional Modem Media shares in the aftermarket at pre-determined prices. For more information, contact: Wechsler Harwood Halebian & Feffer LLP through its Shareholder Relations Department: Patricia Guiteau by E-mail: pguiteau@whhf.com by Mail: 488 Madison Avenue 8th Floor New York, New York 10022 or by Phone: 877/935-7400 (Toll Free) ONI SYSTEMS: Schiffrin & Barroway Files Securities Suit In S.D. NY ------------------------------------------------------------------ Schiffrin & Barroway, LLP commenced recently a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of all purchasers of the common stock of ONI Systems Corp. (Nasdaq: ONIS) from May 31, 2000 through December 6, 2000, inclusive. The suit names as defendants ONI, and Goldman Sachs & Co., FleetBoston Robertson Stephens, Inc., Lehman Brothers, Inc. and Salomon Smith Barney Inc. On or about May 31, 2000, ONI commenced an initial public offering of 8,000,000 of its shares of common stock at an offering price of $25.00 per share. In connection therewith, ONI filed a registration statement, which incorporated a prospectus, with the SEC. The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of ONI shares issued in connection with the ONI IPO; and (2) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate ONI shares to those customers in the ONI IPO in exchange for which the customers agreed to purchase additional ONI shares in the aftermarket at pre-determined prices. For more information, contact: Schiffrin & Barroway, LLP through Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com ORGANIC INC.: Faces Six Suits Over Securities Fraud In S.D. New York -------------------------------------------------------------------- Between June 1 and July 3, 2001, six related, putative class action lawsuits were filed in New York, Organic Inc. revealed recently. According to the Company, the plaintiffs purport to represent all persons who purchased its stock between February 9 and December 6, 2000 pursuant or traceable to an initial public offering prospectus. The plaintiffs challenge certain IPO allocation practices by the Company's underwriters and the disclosure about those practices in the IPO documents. Each complaint names as defendants Organic and three officers and/or directors at the time of the IPO, Jonathan Nelson, Michael Hudes and Susan L. Field. The various complaints also name as defendants some combination of the following underwriters: Goldman Sachs Group, Inc.; Credit Suisse First Boston Corp.; Merrill Lynch, Pierce, Fenner & Smith, Inc.; Salomon Smith Barney, Inc.; Thomas Weisel Partners LLC; and Dain Rauscher, Inc. In five of the six complaints, the plaintiffs are suing Organic and the individual defendants for alleged violations of sections 11 and 15 of the Securities Act of the 1933. In the remaining complaint, entitled Shelly v. Organic, the plaintiffs also claim that Organic and the individual defendants violated section 10(b) of the Securities and Exchange Act of 1934, section 20(a) under that Act and Rule 10b-5 under that Act. In all of the complaints, the plaintiffs assert claims against the underwriters under section 10(b) of the Exchange Act and sections 11 and 12 of the Securities Act. The complaints seek to hold all defendants liable for class damages and statutory compensation in an amount to be determined at trial, plus interest, costs and attorneys fees. The plaintiffs in these lawsuits have not yet moved to appoint a lead plaintiff, to appoint lead counsel or to consolidate the actions. The lawsuits are in their early stages and no discovery has started. The defendants' time to answer the complaints has been adjourned until after the assignment of lead plaintiffs' counsel or the filing of an amended complaint, whichever occurs later. "Because the litigation is at a very early stage, we are unable to assess the likelihood of an unfavorable outcome and can make no determination as to the amount or range of potential loss, if any," the Company said. The Company intends to contest these actions vigorously. The Company specializes in putting businesses online so they can communicate with their customers in cyberspace. Organic offers services such as marketing, branding, Web site design, e-mail promotion, media relations, and fulfillment. Organic has offices across Asia, Europe, Latin America, and North America. PARK PLACE: Mohawk Tribe Asks NY Court To Enforce $1.8 Billion Ruling --------------------------------------------------------------------- The Saint Regis Mohawk Tribe that rendered a $1.8 billion default judgment early this year against Park Place Entertainment Corporation has commenced an action in New York, seeking the recognition and enforcement of the purported tribal court ruling. The same tribe has also asked the U.S. District Court for the Northern District of New York to award punitive damages amounting to $10 million and certain other costs. The Company has refused to recognize the ruling and, according to a recent SEC disclosure, it is prepared to contest the suit in the proper forum. The suit traces its roots to April 26, 2000 when certain individual members of the Saint Regis Mohawk Tribe commenced a class action proceeding in a "tribal court" in Hogansburg, New York, against Park Place and certain of its executives. The proceeding sought to nullify Park Place's agreement with the Saint Regis Mohawk Tribe to develop and manage gaming facilities in the State of New York. "We believe that the purported tribal court in which the proceeding has been invoked is an invalid forum and is not recognized by the lawful government of the Saint Regis Mohawk Tribe or by the United States," the Company disclosure says. "Park Place is pursuing all necessary actions to enjoin any efforts to enforce the purported judgment," the disclosure adds. PITTSFIELD TOWNSHIP: Builders Sue Over $2.5M Excess Permits Charge ------------------------------------------------------------------ The Homebuilders Association of Washtenaw County and Wexford Builders Inc. of Saline recently filed a suit against Pittsfield Township, claiming its building permits cost too much. The suit, filed in Washtenaw County Circuit Court, alleges the fees exceed the costs of administering the permits, contrary to Michigan statutes and the state Constitution, mLive.com reports. Wexford Builders claims the township records show it collected as much as $2.5 million in excess of building department costs during the past six years. With interest, that amount could come to $3.5 million, the report says. The suit asks the court to declare it a class action on behalf of all builders who may have been overcharged by the township. On top in the evidence list is a document produced by the township's attorneys showing a $1.2 million cumulative surplus from 1994 through first quarter of this year, something the suit calls an admission of overcharging. PRIMEDIA INC.: Sued Over RICO Violations By Employees In California ------------------------------------------------------------------- Employees of Primedia, Inc. (NYSE:PRM) filed Tuesday a suit against their employer in United States Central District Court in California today. The suit accused Primedia Inc., as well as key executives, of violating the federal anti-racketeer statutes by committing inducement, breach of contract, promissory fraud, negligent misrepresentation, breach of covenant of good faith and fair dealing, and failure to pay wages due. The law firm of Rosenfeld, Meyer & Susman, LLP filed the class action case in the central district of California. The suit involves all of Primedia's over 500 media properties and could affect every employee of Primedia, as well as many subsidiaries. For more details, contact: Rosenfeld, Meyer & Susman, LLP through Todd Bonder by Phone: 310/858-7700 RAMBUS INC.: Pomerantz Haudek Files Securities Suit In N.D. CA -------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP filed recently a class action lawsuit against Rambus, Inc. (Nasdaq: RMBS) and certain of its officials, on behalf of all those persons or entities who purchased the securities of Rambus during the period between January 18, 2000 and May 9, 2001, inclusive. The case was filed in the United States District Court for the Northern District of California (San Jose Division). The Complaint alleges that Rambus, an intellectual property company, and nine of its top officials violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing misstatements about the Company's patents and related licensing agreements and concealing that patents were obtained by deceptive means, including Rambus' misuse of facts that it had learned at meetings of an industry standards-setting group. On May 9, 2001, investors learned the truth of these misrepresentations when a jury in a patent infringement suit filed by Rambus against one of its competitors, Infineon Technologies AG, determined that Rambus' patents in question were obtained fraudulently, resulting in a $3.5 million punitive Judgment. Rambus's stock, which had traded as high as $127 in June 2000, plummeted during the litigation and closed at $12.80 on the day of the verdict. In addition, prior to the disclosure of defendants' misconduct, and at times when Rambus' stock price was materially inflated by defendants' misleading statements, most of the individual defendants sold over $110 million worth of their Rambus stock in public markets and thereby benefited from their wrongdoing. For more details, contact: Andrew G. Tolan, Esq. by Phone: 888-476-6529 or by E-mail: agtolan@pomlaw.com SIMON WORLDWIDE: McDonald's, Philip Morris Junk Promotions Firm --------------------------------------------------------------- McDonald's Corporation and Philip Morris have cut their ties with Simon Worldwide, the marketing and promotions firm sued last week for defrauding the customers of the fast food giant. The move has put the firm in the red as both companies account for almost 75 percent of its revenues. CRMDaily.com says several other minor patrons are also planning to sever their ties with the embattled Company. Last week the FBI arrested Jerome Jacobson, a Simon security employee in its Lawrenceville, Georgia, office, following an investigation that lasted almost 18 months. Seven others in eight states fraudulently obtained high-value prizes in the fast food chain's promotional contests and developed a system for cashing them in. Before the arrest and the subsequent withdrawal by McDonald's, the Company has seen its revenue drop from $224 million in the second quarter of 2000 to $111.1 million in this year's second quarter. The company, which underwent a restructuring in the second quarter and shed its co-CEO and chief financial officer, said in a filing with the U.S. Securities and Exchange Commission prior to the McDonald's scam that its business would be adversely affected if it lost McDonald's as a client. VICINITY CORPORATION: Stull Stull Lodges Securities Suit In S.D. NY ------------------------------------------------------------------- Stull, Stull & Brody commenced Tuesday a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of the common stock of Vicinity Corporation (NASDAQ:VCNT) from between February 8, 2000 and December 6, 2000, inclusive. The suit was lodged against defendants Vicinity, J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc., U.S. Bancorp Piper Jaffray Inc., Emerick M. Woods, David Seltzer and Herbert M. Dwight, Jr. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about February 8, 2000, Vicinity commenced an initial public offering of 7,000,000 of its shares of common stock at an offering price of $17 per share. In connection therewith, Vicinity 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) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Vicinity shares issued in connection with the Vicinity IPO; and (2) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Vicinity shares to those customers in the Vicinity IPO in exchange for which the customers agreed to purchase additional Vicinity 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 information, contact: Tzivia Brody, Esq. by Phone: 1-800-337-4983 (toll-free) by E-mail: SSBNY@aol.com by Fax: 212/490-2022 or by Mail: Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017 ********* 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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