/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010921.mbx C L A S S A C T I O N R E P O R T E R Friday, September 21, 2001, Vol. 3, No. 185 Headlines BAYER CORPORATION: Kaplan Fox Files Anti-Cholesterol Drug Suit CHILD SUPPORT: Officials Sued By Parents Over Payment Errors COMMERCE ONE: Wolf Haldenstein Initiates Securities Suit in S.D. NY CORVIS CORPORATION: Sued For Securities Acts Violations in S.D. NY DIGITAL IMPACT: Wolf Haldenstein Initiates Securities Suit in S.D. NY DRUGSTORE.COM: Bernstein Liebhard Initiates S.D. NY Securities Suit DUKE ENERGY: Sued For Manipulation Of Electricity Markets In CA ECI TELECOM: Wolf Haldenstein Commences Securities Suit in E.D. VA EMBRYO DEVELOPMENT: Enters Agreement After Chairman Admits IPO Fraud EXPEDIA INC.: Wolf Haldenstein Lodges Securities Suit in S.D. NY MCDONALDS CORPORATION: Faces Another Suit Over Rigged Game Promotions MEDICAL INTER-EXCHANGE: NJ Suit Filed By Physician Members Dismissed NEOFORMA.COM: Denies Allegations In Securities Suits in S.D. NY ORGANIC INC.: Wolf Haldenstein Initiates Securities Suit in S.D. NY PACER INTERNATIONAL: Court Dismisses Suit Against Subsidiaries in CA PACIFIC GULF: Reaches Agreement-in-Principle In California Suit PHYAMERICA PHYSICIAN: Settles Securities Suit For $4.5 Mil in M.D. NC PROTON ENERGY: Bernstein Liebhard Initiates S.D. NY Securities Suit PSS WORLD: Asks Court To Drop Securities Suit Arising From FL Merger PSS WORLD: Sued By Stockholders For Securities Violations in M.D. FL REDBACK NETWORKS: Bernstein Liebhard Lodges Securities Suit in S.D. NY REPUBLIC SERVICES: Florida District Court Dismisses Securities Suit SMART CHOICE: Settles Securities Action Suits For $2.5 Million in FL SULZER MEDICA: Judge Suspends Suits Pending Final Settlement Hearing SYCAMORE NETWORKS: Bernstein Liebhard Files S.D. NY Securities Suit TERRA NETWORKS: Bernstein Liebhard Lodges Securities Suit in S.D. NY TICKETS.COM: Bernstein Liebhard Commences Securities Suit in S.D. NY ********* BAYER CORPORATION: Kaplan Fox Files Anti-Cholesterol Drug Suit -------------------------------------------------------------- The law firm of Kaplan Fox & Kilsheimer LLP filed a class action lawsuit against Bayer AG and Bayer Corporation, the manufacturer of Baycol. The suit was filed on behalf of all persons who purchased and/or ingested Baycol, and who have or may in the future have serious side effects associated with the use of the drug. On August 8, 2001, the Food and Drug Administration (FDA) announced that Bayer Pharmaceutical Division was voluntarily withdrawing Baycol (cerivastatin) from the U.S. market. This was because of reports of sometimes-fatal rhabdomyolysis, a severe muscle condition resulting from an adverse reaction to this cholesterol-lowering (lipid-lowering) product. For more information, contact Frederic S. Fox, Joel Strauss or Laurence D. King by Phone: 212-687-1980 or 800-290-1052 (toll-free) by Fax: 212- 687-7714 or by Email: mail@kaplanfox.com CHILD SUPPORT: Officials Sued By Parents Over Payment Errors ------------------------------------------------------------ A lawsuit filed in Pulaski County Circuit Court by parents who did not receive their child support payments on time was transferred to federal court. Nine women filed the suit after the state took over child-support payment distribution in July and many custodial parents didn't get payments due them. Somewhere during the transfer from the circuit clerks to the state, important information on thousands of child-support cases fell through the cracks, meaning thousands of parents expecting payments did not receive them. The suit was filed against Dick Barclay, director of the state Department of Finance and Administration, Dan McDonald, director of the state Child Support and Enforcement Office, and J.D. Gingrich, director of the Administrative Office of the Courts. The hearing set for Tuesday for class certification was canceled. Theresa Caldwell of Little Rock, the attorney for the plaintiffs, said the lawsuit has been assigned to U.S. District Court Judge James Moody and she expects a hearing to be scheduled for sometime in mid-October. The governor set a deadline of Aug. 17 for Child Support Enforcement Office to have the processing time for each check down to at least one week. McDonald said the Aug. 17 deadline had been met. A deadline to cut the processing time to two days or less by Sept. 1 also was met, he said. COMMERCE ONE: Wolf Haldenstein Initiates Securities Suit in S.D. NY ------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Commerce One, Inc. (NASDAQ:CMRC) between July 1, 1999 and December 6, 2000, inclusive, against defendants Commerce One, certain of its officers and directors, and its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Commerce One common stock pursuant to the July 1, 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 Commerce One shares to customers at the IPO price. In order to receive the allocations at the IPO price, the underwriters' brokerage customers allegedly 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 Commerce One stock rocketed upward was intended to drive Commerce One'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 Fred Taylor Isquity, Gustavo Bruckner, Thomas Burt, Michael Miske or George Peters by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com. E- mail should refer to Commerce One. CORVIS CORPORATION: Sued For Securities Acts Violations in S.D. NY ------------------------------------------------------------------ Corvis Corporation faces nine putative class action suits filed between May 7, 2001 and June 15, 2001 in the United States District Court for the Southern District of New York. The suits were filed relating to the Company's initial public offering on behalf of all persons who purchased Company stock between July 28, 2000 and the filing of the complaints. Each of the complaints names as defendants, the Company, its directors and officers and certain of the underwriters that participated in the Company's initial public offering. The complaints allege that the registration statement and prospectus relating to the Company's initial public offering contained material misrepresentations and/or omissions by failing to disclose: (1) that certain of the underwriters had solicited and received undisclosed fees and commissions and other economic benefits from some investors in connection with the distribution of the Company's common stock in the initial public offering and (2) that certain of the underwriters had entered into arrangements with some investors that were designed to distort and/or inflate the market price for the Company's common stock in the aftermarket following the initial public offering. The plaintiffs have moved to appoint lead plaintiff, to appoint lead counsel and to consolidate the actions but no discovery has yet occurred. The Company intends to vigorously defend itself and its officers and directors. The company makes switching and routing equipment that forms the backbone of high-bandwidth fiber optic networks. Corvis' transmission systems include amplifiers, gateways, multiplexers, and switches, and a software-based network management system. DIGITAL IMPACT: Wolf Haldenstein Initiates Securities Suit in S.D. NY --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Digital Impact, Inc. (NASDAQ: DIGI) between November 22, 1999 and December 6, 2000, inclusive, against defendants Digital Impact, certain of its officers and directors, and its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Digital Impact common stock pursuant to the November 22, 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 Digital Impact shares to customers at the IPO price. To receive the allocations at the IPO price, the underwriters' brokerage customers allegedly 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 Impact stock rocketed upward was intended to drive Digital Impact'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 Fred Taylor Isquith, Gregory M. Nespole, Thomas Burt, Michael Miske or George Peters by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com. E- mail should refer to Digital Impact. DRUGSTORE.COM: Bernstein Liebhard Initiates S.D. NY Securities Suit ------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP commenced a securities class action lawsuit on behalf all persons who acquired Drugstore.com, Inc. (NASDAQ: DSCM) securities between July 28, 1999 and June 15, 2001. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are Drugstore.com and the following: (1) Peter M. Neupert, (2) David E. Rostov, (3) Jeffrey P. Bezos, (5) Brook H. Byers, (6) L. John Doerr, (7) William D. Savoy, (8) Howard Schultz, (9) Jed A. Smith, (10) Morgan Stanley & Co. Incorporated, (11) Donaldson Lufkin & Jennrette, and (12) Thomas Weisel Partners LLC. 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 Drugstore.com's initial public offering of 5 million shares of common stock at $18.00 per share that was completed on or about July 28, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Drugstore.com shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Drugstore.com shares in the aftermarket at pre-determined prices. For more information, contact Ms. Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779- 1414 by E-mail: DSCM@bernlieb.com or visit the firm's Website: www.bernlieb.com DUKE ENERGY: Sued For Manipulation Of Electricity Markets In CA ---------------------------------------------------------------- Duke Energy Corporation and its subsidiaries Duke Energy North America LLC (DENA) and Duke Energy Trading and Marketing (DETM) face six class action suits filed in the State of California DENA and DETM have been named among 16 defendants in a class action lawsuit filed in the Superior Court of the State of California, San Diego County in November 2000. DETM also was named as one of numerous defendants in four additional lawsuits, filed in the Superior Court, San Diego County and Superior Court, County of San Francisco. The above suits were filed against ".generators, marketers and traders and other unnamed providers of electricity in California markets." A sixth lawsuit was brought to the Superior Court, Los Angeles County by the Lieutenant Governor of the State of California and a State Assemblywoman. The Los Angeles Suit mentions includes Duke Energy, the Company's subsidiaries and three current or former executives of Duke Energy among the numerous other corporate and individual defendants. These lawsuits generally allege that the defendants manipulated the wholesale electricity markets in violation of state laws against unfair and unlawful business practices and state antitrust laws. The Company is confident that while these matters referenced above are in their earliest stages, their resolution will not materially affect the Company's operations and financial position. Duke Energy trades electricity and gas in the United States and the international market. ECI TELECOM: Wolf Haldenstein Commences Securities Suit in E.D. VA ------------------------------------------------------------------ Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action lawsuit in the United States District Court, Eastern District of Virginia, Alexandria Division. The suit names as defendants ECI Telecom, Doron Inbar, Avi Ben-Assayag and Jonathan B. Kolber on behalf of all purchasers of the common stock of ECI Telecom, Ltd. (Nasdaq: ECIL) from May 2, 2000 through February 14, 2001, inclusive. 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 May 2, 2000 and February 14, 2001, thereby artificially inflating the price of ECI securities. Specifically, the Company repeatedly issued press releases portraying ECI as a growing company which was experiencing and would continue to experience increased demand and revenue for its products. On January 22, 2001, defendants announced that its fourth quarter loss would be wider than it had previously warned in mid-December and that it would be forced to restate its financial statements for the first three quarters of fiscal and calendar 2000. In response to this announcement, ECI shares tumbled 14.5%. On February 14, 2001, the Company further shocked investors by announcing that its previously-announced restatement was expected to move $38 million in revenue from its 1999 financial statements to its financial statements for the year 2000, and $61 million from its year 2000 financial statements to its year 2001 financial statements. Following this announcement, shares of ECI fell to approximately $13 per share, more than 66% off of their high point. For more information, contact George Peters, Michael Miske, Gregory M. Nespole or Fred Taylor Isquith by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com. All e-mail correspondence should make reference to ECI Telecom, Ltd. EMBRYO DEVELOPMENT: Enters Agreement After Chairman Admits IPO Fraud -------------------------------------------------------------------- Embryo Development Corporation reached an agreement of principle with plaintiffs in the consolidated class action after Chairman of the Board Michael Lulkin pled guilty to securities fraud. The suit asserted claims under the Securities Act of 1933, the Securities Exchange Act of 1934 and New York common and statutory law arising out of the November 1995 initial public offering of 1 million shares of the Company's common stock. According to the complaint, the underwriter of the offering, Sterling Foster & Co., Inc., which is also a defendant: (1) manipulated secondary market trading in shares of the Company's common stock following the offering and (2) covered certain short positions it created through such manipulation by purchasing shares of Company stock from persons who owned such stock prior to the offering pursuant to an arrangement with such persons that was not disclosed in the registration statement and prospectus distributed in connection with the offering. In November 1998, it was announced that Michael Lulkin pled guilty to, among other things, conspiracy to commit securities fraud. The charges were premised on allegations that Lulkin, Sterling Foster, and others had entered into an undisclosed agreement which, upon conclusion of the Company's initial public offering, they would: (i) cause Sterling Foster to release Lulkin and others who owned Embryo stock prior to the offering from certain "lock up" agreements restricting them from selling such stock; and (ii) cause Lulkin and such other persons to sell their Embryo stock to Sterling Foster at prearranged prices to enable Sterling Foster to use such stock to cover certain short positions it had created. In August 1999, an agreement of principle to settle the suit against the Company, Lulkin and Steven Wasserman, who was also a member of the Company's Board of Directors at the time of the Company's initial public offering. Under the agreement, all claims in the action against the Company, and against Lulkin and Wasserman would be dismissed in exchange for a payment of $400,000. In June 2001, definitive settlement documents were executed, which provide that the Company would pay the foregoing $100,000 by remitting to the class representatives $25,000 and a note in the amount of $75,000 payable in June 2003 with interest thereon at 7% per year. Court review of the settlement and consequent approval is pending. EXPEDIA INC.: Wolf Haldenstein Lodges Securities Suit in S.D. NY ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Expedia, Inc. (NASDAQ: EXPE) between November 9, 1999 and December 6, 2000, inclusive, against defendants Expedia, certain of its officers and directors, and its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Expedia common stock pursuant to the November 9, 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 Expedia shares to customers at the IPO price. To receive the allocations at the IPO price, the underwriters' brokerage customers allegedly 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 Expedia stock rocketed upward was intended to drive Expedia'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 Fred Taylor Isquith, Gregory M. Nespole, Gustavo Bruckner, Michael Miske or George Peters by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com. E- mail should refer to Expedia. MCDONALDS CORPORATION: Faces Another Suit Over Rigged Game Promotions --------------------------------------------------------------------- McDonald's Corporation faces another lawsuit seeking class action status filed by people who played the fast food giant's game promotions in Chicago federal court. The suit is the latest in the slew of lawsuits against McDonald's and its marketing company, Simon Worldwide, Inc. alleging that the games were rigged. The suit charges McDonalds, Simon Worldwide and its subsidiaries and employees with fraud and violations of the Racketeer Influenced and Corrupt Organization (RICO) Act. McDonald's employees were not involved in the multi-state scam, in connection with which 21 people in Florida have been indicted. The fast-food giant fired Simon Worldwide, which has now lost all its major clients and seen its stock plunge from $3.05--before the Justice Department announced on Aug. 20 the first arrests of suspects--to .26 Tuesday. Neither McDonald's nor Simon responded specifically to the latest suit. MEDICAL INTER-EXCHANGE: NJ Suit Filed By Physician Members Dismissed -------------------------------------------------------------------- The New Jersey Trial Court dismissed a class action suit filed against malpractice insurance provide Medical Inter-Exchange Insurance Group in January 1999. Five physician members of the Company filed the suit against the Company, their underwriter, their parent company MIIX Group, and certain of their officers and board members. Other parties were subsequently added as defendants in the action. The plaintiffs sought to: (1) force the Exchange to declare a dividend from surplus and reserves, (2) challenge various components of the reorganization including the stock allocation formula contained in the Plan of Reorganization and the valuation of Underwriter, (3) challenge the composition of the Board of Directors of MIIX Group as excessive, (4) challenge key executive compensation and benefit packages as excessive, (5) challenge the proposed IPO share price of MIIX Group stock as inadequate, (6) challenge the MIIX Prospectus as misleading and (7) recover unspecified monetary damages. While the action was pending, the plaintiffs also sought on numerous occasions to stay the members' vote on the Plan of Reorganization and the IPO of MIIX Group stock. All of those applications were denied. In August 1999, the trial court dismissed all of plaintiffs' claims on the grounds that the court lacked jurisdiction to hear them because they were part of the appeal of the Commissioner's Order and because they failed to state a legal claim. Plaintiffs filed a Notice of Appeal with the New Jersey Superior Court, Appellate Division seeking review of the trial court's orders. On July 11, 2001, the Appellate Division issued an opinion affirming the dismissal of plaintiffs' Complaint in all respects. NEOFORMA.COM: Denies Allegations In Securities Suits in S.D. NY --------------------------------------------------------------- Neoforma.com, Inc. vehemently denied the allegations in two securities suits filed last July 2001 in the United States District Court for the Southern District of New York. The suits arose from the Company's initial public offering and were filed on by stockholders who purchased our common stock during the period from January 24, 2000, to December 6, 2000. The lawsuits the Company's underwriters, Merrill Lynch, Pierce Fenner, Smith, Bear Stearns, and FleetBoston Robertson Stephens, as well as their Chairman and CEO and former CFO as defendants. The two lawsuits contain the identical allegations, which are: (1) that the prospectus and the registration statement for the IPO failed to disclose that the underwriters solicited and received excessive commissions from investors, and (2) that some investors in the IPO agreed to buy more shares of common stock in the secondary market, at predetermined prices, in a scheme to artificially inflate their common stock. The Company revealed in a disclosure to the Securities and Exchange Commission that the litigation could be time-consuming and costly and that it could require them to pay significant damages. Neoforma.com sells medical equipment (diagnostic systems), products (surgical instruments), and supplies (syringes, gloves) online to health care providers, including physicians, hospitals, and clinics. ORGANIC INC.: Wolf Haldenstein Initiates Securities Suit in S.D. NY ------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Organic, Inc. (NASDAQ: OGNC) between February 9, 2000 and December 6, 2000, inclusive, against defendants Organic, certain of its officers and directors, and its underwriters. The complaint alleges that defendants violated the federal securities laws by issuing and selling Organic common stock pursuant to the February 9, 2000 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 Organic shares to customers at the IPO price. To receive the allocations 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 Organic stock rocketed upward was intended to drive Organic'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 Fred Taylor Isquith, Gregory M. Nespole, Gustavo Bruckner, Michael Miske or George Peters by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com. E- mail should refer to Organic. PACER INTERNATIONAL: Court Dismisses Suit Against Subsidiaries in CA -------------------------------------------------------------------- The State of California, Los Angeles Superior Court, Central District absolved two subsidiaries of Pacer International of liability in a July 1997 class action suit. The subsidiaries, Interstate Consolidation, Inc. and Intermodal Container Service, Inc., were named defendants in the suit which alleged: (1) breach of fiduciary duty, (2) unfair business practices, (3) conversion and (3) money had and received in connection with monies allegedly wrongfully deducted from truck drivers' earnings. The defendants entered into a Judge Pro Tempore Submission Agreement dated as of October 9, 1998, where the plaintiffs and defendants have waived their rights to a jury trial, stipulated to a certified class, and agreed to a minimum judgement of $250,000 and a maximum judgement of $1.75 million. On August 11, 2000, the Court issued its Statement of Decision, in which Interstate Consolidation, Inc. and Intermodal Container Service, Inc. prevailed on all issues except one. The only adverse ruling was a Court finding that Interstate failed to issue certificates of insurance to the owner-operators and therefore failed to disclose that in 1998, the Company's retention on its liability policy was $250,000. The court has ordered that restitution of $488,978 be paid for this omission. Plaintiff's counsel has indicated he intends to appeal the entire ruling and the defendants will also be appealing the restitution issue. The Company provides integrated third-party logistics for manufacturers and retailers throughout the US and abroad. PACIFIC GULF: Reaches Agreement-in-Principle In California Suit --------------------------------------------------------------- Pacific Gulf Properties, Inc. has reached an agreement-in-principle with the plaintiffs in a class action complaint filed in the Superior Court of the State of California, County of Orange last March 2001. The suit charged the Company and its directors with breach of fiduciary duty and self-dealing relating to the Merger Agreement with FountainGlen Properties LLC. The complaint alleged that the employment agreements to be received by certain members of management from FountainGlen Properties LLC pursuant to the merger are lucrative. These agreements allegedly result in more favorable treatment of management than other shareholders in the merger. The complaint further alleged that the merger is intended to deprive the Company's shareholders of the future potential value of its properties. Under the agreement, the Company agreed to acknowledge that the pendency of the lawsuit was a factor the Company's board considered in declaring the special liquidating distribution to its shareholders of $1.15 per share in June 2001. In addition, the Company agreed that it would pay attorneys' fees, costs and expenses, subject to court approval of the settlement, in the aggregate amount of $470,000. This agreement-in-principle is subject to the completion of final documentation, preliminary approval of the court, and a final hearing on approval of the settlement. Pacific Gulf is a self-administered equity real estate investment trust (REIT) that owns more than 70 industrial properties. These properties are leased by companies focusing on light industrial distribution. PHYAMERICA PHYSICIAN: Settles Securities Suit For $4.5 Mil in M.D. NC --------------------------------------------------------------------- PhyAmerica Physician Group, Inc. entered into an agreement regarding the class action suit pending in the United States District Court for the Middle District of North Carolina. A companion case filed in the Chancery Court of Delaware will also be dismissed as part of the comprehensive settlement. Under the settlement, the plaintiff class will receive the sum of $4.65 million, which, after attorney fees and the costs, including the costs of class administration, will be divided equally between persons who sold shares of stock in the Company from August 14, 1998 through the date of settlement, and persons who are currently shareholders. Any defendants who are shareholders will not participate in the settlement distribution. The Company and the directors expressly deny any liability but believe that a settlement at this time is in the best interest of the Company. In a press release, the Company asserted that they needed to recapitalize their business and settling the case ".will enable us to move forward with a clean slate." PhyAmerica Physician Group, Inc. is an emergency medicine physician management that provides contracted services to hospitals, physician groups and healthcare organizations throughout the United States. PROTON ENERGY: Bernstein Liebhard Initiates S.D. NY Securities Suit ------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP filed a securities class action lawsuit on behalf all persons who acquired Proton Energy Systems, Inc. (NASDAQ: PRTN) securities between September 28, 2000 to December 6, 2000. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are Proton Energy and the following: (1) Walter W. Schroeder, (2) John A. Glidden, (3) Trent M. Molter, (4) Robert W. Shaw, Jr, (5) Credit Suisse First Boston Corp., (6) Salomon Smith Barney Inc., and (7) Morgan Stanley & Co., Incorporated 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 Proton Energy's initial public offering of 7,000,000 shares of common stock at $17.00 per share that was completed on or about September 28, 2000. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Proton Energy shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Proton Energy shares in the after-market at pre-determined prices. For further details, contact Ms. Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779- 1414 by E-mail: PRTN@bernlieb.com or visit the firm's Website: www.bernlieb.com PSS WORLD: Asks Court To Drop Securities Suit Arising From FL Merger -------------------------------------------------------------------- PSS World Medical, Inc. has asked Florida District Court to dismiss a securities class action suit arising out of their merger with Gulf South Medical Supply, Inc. The Court dismissed the first suit without prejudice early last year but the plaintiffs promptly filed a second amended complaint March last year. The suit was filed in the United States District Court for the Middle District of Florida, Jacksonville Division on behalf of stockholders who purchased Company stock between December 23, 1997 and May 8, 1998. The suit alleges that the defendants engaged in violations of certain provisions of the Exchange Act, and Rule 10b-5 promulgated thereunder. The allegations are based upon a decline in the Company's stock price following their announcement in May 1998 regarding the Gulf South Merger, which resulted in earnings below analyst's expectations. The Company believes that the allegations contained in the complaint are without merit and intends to defend vigorously against the claims. However, they cannot assure that the litigation will be ultimately resolved on terms that are favorable to the Company. PSS World Medical offers same-day distribution of medical supplies, equipment, and pharmaceuticals to physicians, nursing homes, and hospitals. PSS WORLD: Sued By Stockholders For Securities Violations in M.D. FL -------------------------------------------------------------------- PSS World Medical, Inc. was charged with securities acts violations in seven class action suits filed in the United States District Court for the Middle District of Florida. Certain present and former directors and officers of the Company have also been named as defendants. The suits were filed on behalf of persons who purchased or acquired the Company's common stock at various times during the period between October 26, 1999 and October 3, 2000. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seek unspecified damages. The plaintiffs allege that the defendants issued false and misleading statements and failed to disclose material facts concerning, among other things, the Company's financial condition. The plaintiffs further allege that because of the above actions, the price of the Company's common stock was artificially inflated during the class period. The Company believes that the allegations contained in the complaints are without merit and intends to defend vigorously against the claims. REDBACK NETWORKS: Bernstein Liebhard Lodges Securities Suit in S.D. NY ---------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action lawsuit on behalf all persons who acquired Redback Networks, Inc. (NASDAQ: RBAK) securities between May 17, 1999 to December 6, 2000. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are Redback and the following executive officers of Redback, Dennis L. Barsema and Geoffrey C. Darby. The complaint also names as defendants the following underwriters of Redback's initial public offering: Morgan Stanley & Co., Inc., BancBoston Robertson Stephens, Inc. and Dain Rauscher Wessels, a Division of Dain Rauscher Incorporated. 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 Redback's initial public offering of 2,500,000 shares of common stock at $23.00 per share that was completed on or about May 17, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (1) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Redback shares in the IPO in exchange for exorbitant and undisclosed commissions; and (2) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Redback shares in the aftermarket at pre-determined prices. For further details, contact Ms. Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779- 1414 by E-mail: RBAK@bernlieb.com or visit the firm's Website: www.bernlieb.com REPUBLIC SERVICES: Florida District Court Dismisses Securities Suit ------------------------------------------------------------------- The United States District Court for the Southern District of Florida dismissed the securities class action suit filed against Republic Services, Inc. The suit was filed on behalf of a purported class of purchasers of the Company's common stock between January 28, 1999 and August 28, 1999. The suit alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit asserts that the Company made materially false and misleading statements regarding the Company's growth and the assets acquired from Waste Management. In 1999, the Court consolidated these lawsuits and the plaintiffs filed an amended consolidated complaint in February 2000. The defendants filed a motion to dismiss the consolidated complaint in April 2000, which the court granted on February 2001. The plaintiffs have moved for reconsideration of the Court's order that granted dismissal of the lawsuit. Republic provides waste disposal services for commercial, industrial, municipal, and residential customers and provides landfill and transfer stations. SMART CHOICE: Settles Securities Action Suits For $2.5 Million in FL -------------------------------------------------------------------- Smart Choice Automotive Group, Inc. settled $2.5 million, two securities class action suits filed by stockholders early 1999 in the United States District Court for the Middle District of Florida. The suits were filed on behalf of the class of persons who purchased or otherwise acquired Smart Choice publicly traded securities between April 15, 1998 and February 26, 1999. These suits arose from Smart Choice's February 1999 announcement that the net income for the fiscal year ended December 31,1998 was likely overstated in a material, undetermined amount. The suits asserted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 of the Securities and Exchange Commission, as well as violation of Section 20(a) of the Exchange Act. The plaintiffs alleged that the defendants issued deceptive and materially false statements to the public, which caused the plaintiffs to purchase Smart Choice securities at artificially inflated prices. The $2.5 million settlement amount has been funded by Smart Choice's insurance carrier and is subject to final approval of the court. Smart Choice Automotive Group, Inc. operates gasoline stations and car dealerships throughout the country. SULZER MEDICA: Judge Suspends Suits Pending Final Settlement Hearing -------------------------------------------------------------------- The United States District Court of the Northern District of Ohio issued an injunction suspending more than a 1,000 product liability lawsuits against Swiss medical devices group Sulzer Medica Ltd. (NYSE:SM). The firm wants to settle a rash of lawsuits related to a December recall of 26,000 Inter-Op artificial hip joints as well as knee implants, both of which have needed to be replaced. Last August, Judge Kathleen O'Malley gave preliminary approval to Sulzer Medica's offer to settle the lawsuits on a class action basis for $780 million. She has scheduled a final hearing on the settlement for March 12,2002. The Company hailed the decision as a smart move in the best interests of everyone, saying that the judge thought it was important that all parties involved understand the settlement and its terms. Analysts say the survival of Europe's largest maker of orthopedic devices will depend on as large a number of patients as possible accepting the offer because a welter of individual suits could bankrupt Medica, based in Winterthur, Switzerland. The hip joints, made by its Austin, Texas-based Sulzer Orthopedics Inc. subsidiary, were tainted with machine oil that kept them from properly bonding with bone, resulting in painful loosening and the need for replacement operations. Shortly after the class action settlement received preliminary approval, a jury in Texas awarded three plaintiffs with faulty hip implants more than $15 million including $11 million in punitive damages in a state court suit. The company is appealing that verdict. SYCAMORE NETWORKS: Bernstein Liebhard Files S.D. NY Securities Suit ------------------------------------------------------------------- Bernstein Liebhard & Lifshitz filed a securities class action lawsuit on behalf all persons who acquired Sycamore Networks, Inc. (NASDAQ: SCMR) securities between October 21, 1999 to June 28, 2000. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are Sycamore and the following: (1) Daniel E. Smith, (2) Gururaj Deshpande, (3) Frances M. Jewels, (4) Timothy Barrows, (5) Paul Ferri, (6) Morgan Stanley & Co. Incorporated, (7) Lehman Brothers, Inc., (8) J.P. Morgan Securities, Inc., and (9) Dain Rauscher Wessels, a division of Dain Rauscher Incorporated 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 Sycamore's initial public offering of 7,475,000 shares of common stock at $38.00 per share that was completed on or about October 21, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Sycamore shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Sycamore shares in the after-market at pre-determined prices. For more information, contact Ms. Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779- 1414 by E-mail: SCMR@bernlieb.com or visit the firm's Website: www.bernlieb.com TERRA NETWORKS: Bernstein Liebhard Lodges Securities Suit in S.D. NY -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz commenced a securities class action lawsuit on behalf all persons who acquired Terra Networks, S.A. (NASDAQ: TRLY) securities between November 19, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are Terra Networks and the following: (1) Juan Villalonga Navarro, (2) Juan Perea Saenz de Buruaga, (3) Cesareo Alierta Izuel, (4) Juan Rovira de Ossa, (5) Alberto Cortina de Alcocer, (6) Alejandro Junco de la Vega, (7) Francisco Moreno de Alboran, (8) Nelson P. Sirotsky, (9) Jose Maria Mas Millet. (10) Antonio de Esteban Quintana, (11) Goldman Sachs & Co., (12) Credit Suisse First Boston Corporation, (13) J.P. Morgan & Co., and (14) Lehman Brothers, 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 Terra Networks's initial public offering of 24,929,918 Ordinary Shares in the form of Ordinary Shares or American Depositary Shares at $13.41 per share that was completed on or about November 19, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Terra Networks shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Terra Networks shares in the aftermarket at pre-determined prices. For further details, contact Ms. Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779- 1414 by E-mail: TRLY@bernlieb.com or visit the firm's Website: www.bernlieb.com. TICKETS.COM: Bernstein Liebhard Commences Securities Suit in S.D. NY -------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP initiated a securities class action lawsuit on behalf all persons who acquired Tickets.com, Inc. (NASDAQ: TIXX) (securities between November 3, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York. Named as defendants in the complaint are Tickets.com and the following: (1) Ian Sym-Smith, (2) W. Thomas Gimple, (3) John M. Markovich, (4) Michael R. Rodriquez, (5) James A. Caccavo, (6) Christos M. Cotsakos, (7) William E. Ford, (8) Howard L. Morgan, (9) Irvin E. Richter, (10) Nicholas E. Sinacori, (11) Morgan Stanley & Co., Incorporated, (12) Credit Suisse First Boston Corporation, (13) SG Cowen Securities Corporation, (14) Morgan Stanley Dean Witter Online Inc., (15) E*Offering Corp., and (16) Wit Capital Corporation 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 Tickets.com's initial public offering of 6,700,000 shares of common stock at $12.50 per share that was completed on or about November 3, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Tickets.com shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Tickets.com shares in the after-market at pre-determined prices. For more information, contact Ms. Linda Flood by Mail: 10 East 40th Street, New York, New York 10018 by Phone: (800) 217-1522 or 212-779- 1414 by E-mail: TIXX@bernlieb.com or visit the Firm's Website: www.bernlieb.com ********* 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, Aurora Fatima Antonio 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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