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/raid1/www/Hosts/bankrupt/CAR_Public/011022.mbx C L A S S A C T I O N R E P O R T E R Monday, October 22, 2001, Vol. 3, No. 206 Headlines AMAZON.COM: Bernard Gross Initiates W.D. Washington Securities Suit CANADA: Supreme Court Refuses Class Certification In Landfill Suit CARESCIENCE INC.: Bernard Gross Initiates Securities Suit in E.D. PA CLARENT CORPORATION: Schiffrin Barroway Initiates CA Securities Suit CREDIT CARDS: Court Upholds Class Certification in Retailers' Suit CVS CORPORATION: Schiffrin Barroway Commences Securities Suit in MA DELTA FINANCIAL: NY Federal Court Refuses To Dismiss Securities Suit DQE INC.: Schiffrin Barroway Commences Securities Suit in Pennsylvania FLORIDA: Thirteen Firefighters Sue State Due To Inadequate Health Care GENESISINTERMEDIA INC.: Milberg Weiss Files Securities Suit in C.D.CA GRAND COURT: Three Law Firms Commence Securities Suit in New Jersey INTELLI-CHECK: Speziali Greenwald Commences NJ Securities Suit NCI BUILDING: Berger Montague Commences Securities Suit IN S.D. TX NIKE INC.: Bernard Gross Commences Securities Suit in Oregon Court NORTEL NETWORKS: Bernard Gross Commences Securities Suit in E.D. NY OPUS360 CORPORATION: Bernard Gross Initiates S.D. NY Securities Suit PENN TREATY: Berger Montague Commences Securities Suit in E.D. PA PENNSYLVANIA: Online School Parents Consider Suing 300 School Boards PINNACLE HOLDINGS: Bernard Gross Initiates Securities Suit in M.D. FL PURCHASEPRO.COM: Bernard Gross Initiates Securities Suit in Nevada REMEDYTEMP: Lionel Glancy Lodges Securities Suit in CA Superior Court SHOPKO STORES: Berger Montague Commences Securities Suit in E.D. WI SOUTH KOREA: KCCI Joins Business Groups In Attacks On Lawsuits TD WATERHOUSE: Faces Nine Securities Suits in Delaware Chancery Court TEXAS: Harris County To Refund Court Fees in $1.4 Million Settlement US INTERACTIVE: Weiss Yourman Commences PA Securities Suit ********* AMAZON.COM: Bernard Gross Initiates W.D. Washington Securities Suit ------------------------------------------------------------------- Bernard M. Gross P.C. filed a securities class action lawsuit on behalf of purchasers of Amazon.com, Inc. (NASDAQ: AMZN) common stock between February 2, 2000 and March 9, 2001. The suit, filed in the U.S. District Court for the Western District of Washington, names as defendants the Company and two of its executive officers, Jeffrey P. Bezos and Warren C. Jensen. The suit alleges violations of Section 10(b) and 20(a) of the Securities Act of 1934 and Rule 10b-5 promulgated thereunder arising from material misstatements and omissions during the class period. The suit further alleges that during the class period, Amazon.com announced, publicized, invested in and operated a number of joint ventures with other retailers and on-line companies, collectively constituting the "Amazon Commerce Network". These joint ventures were touted as an additional source of (much needed) high margin revenue. In February 2000, the Company completed an offering of Euro 690 million in 6.875% convertible subordinated notes due 2010, pursuant to a prospectus dated February 11, 2000. This prospectus provided that the Company would receive $663 million in net proceeds. In fact, the payments from the partnerships would be in stock, not cash, and the actual receipt of this money was uncertain at best. So, the agreements did not satisfy the Company's pressing need for increased cash balance. The Company's cash concerns have only intensified and the aforementioned agreements have provided little in the way of cash. Then, it was revealed the Company's CEO, Jeffrey Bezos, was being investigated for selling 800,000 shares of Amazon.com prior to a negative report by an analyst. The Company's stock has now dropped to below to below $12 per share, some 86% below the class period high of $85-15/16. For more information, contact Susan Gross or Deborah R. Gross by Mail: 1500 Walnut Street, Suite 600 Philadelphia, PA 19102 by Phone: 866- 561-3600 or 800-849-3120 (toll-free) or 215-561-3600 by E-mail: susang@bernardmgross.com or tina@bernardmgross.com or visit the firm's Website: www.bernardmgross.com CANADA: Supreme Court Refuses Class Certification In Landfill Suit ------------------------------------------------------------------ The Supreme Court of Canada denied class action status in the lawsuit brought by the plaintiff, John Hollick, against the City of Toronto regarding its operation of the Keele Valley Landfill Site. The Supreme Court of Canada decided that a class action was not the preferable procedure in this case. The lawsuit was initially certified as a class action in 1998, but the certification order was subsequently set aside by the Ontario Divisional Court and the Ontario Court of Appeal. Angelos Bacopoulos, General Manager of Solid Waste Management Services said the City was pleased with the decision. Bacopoulos said, "The City of Toronto remains committed to operating the Keele Valley Landfill Site to the highest environmental and regulatory standards, regardless of this decision." The Keele Valley Landfill is scheduled to close in 2002. The City is undertaking a series of additional measures to expand recycling in order to reduce disposal needs. CARESCIENCE INC.: Bernard Gross Initiates Securities Suit in E.D. PA -------------------------------------------------------------------- Bernard M. Gross P.C. commenced a securities class action on behalf of purchasers of Care Science Corporation (NASDAQ: CARE) common stock between June 29, 2000 and November 1, 2000, inclusive. The action, is pending in the United States District Court for the Eastern District of Pennsylvania against the Company, David J. Brailer, Steven Bell and Ronald Paulus. The complaint alleges the defendants violated of Sections 11, 12 and 15 of the Securities Act of 1933 by issuing a false and misleading prospectus. Carescience allegedly issued materially false and misleading statements regarding its development of Careleader.com and Caresense.com, its ability to recognize growth and remain profitable given the environment for Internet-based health applications. The Company failed to reveal that it would not be able to complete the development of Careleader.com and Caresense.com products given the environment for Internet-based health application. Carescience also failed to disclose that it would have to abandon the development of Careleader.com and Caresense.com and that the sales the Company expected from those products would not occur. In November 2000, the Company announced that it was revising its revenue estimates for 2001, in part, because of its decision to discontinue its Careleader.com and Caresense.com products. In response to this announcement, the Company's share price dropped to $1.6875 per share. For more details, contact Susan Gross or Deborah R. Gross by Mail: 1515 Locust Street, 2nd Floor Philadelphia, PA 19102 by Phone: 866-561-3600 (toll free) by E-mail: susang@bernardmgross.com or visit the firm's Website: www.bernardmgross.com CLARENT CORPORATION: Schiffrin Barroway Initiates CA Securities Suit -------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a class action suit in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of Clarent Corporation (Nasdaq: CLRN) from April 20, 2001 through August 31, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that on Sept. 4, 2001, the Company announced in a press release that it had discovered information suggesting that its previously reported revenues for the first and second quarters of fiscal 2001 may have been materially overstated, and that the Company's Board of Directors was forming a special committee to investigate a number of transactions that placed in question the Company's historical financial results. Clarent also stated that its first quarter 2001 revenues, as released on April 19, 2001, and its second quarter 2001 revenues, as released on July 19, 2001, will be reduced and the related net losses will increase upon conclusion of the review. In addition, the Company anticipates that its revenues for the second half of fiscal 2001 and for fiscal 2002 will be substantially below previously anticipated levels, and that the related losses will be significantly larger than expected. Clarent also announced that several of its officers had been placed on administrative leave. On this news trading halted at $5.37. For more information, contact Marc A. Topaz or Stuart L. Berman 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 by E-mail: info@sbclasslaw.com or visit the firm's Website: www.sbclasslaw.com CREDIT CARDS: Court Upholds Class Certification in Retailers' Suit ------------------------------------------------------------------ The Second U.S. Circuit Court of Appeals upheld class action status in antitrust case filed against credit card companies Visa USA Inc. and Mastercard International by U.S. retailers. Wal-Mart Stores Inc. filed the suit, along with other retailers, which include: (1) the Limited Inc., (2) Sears Roebuck & Co., (3) Safeway Inc., (4) Circuit City Stores Inc., (5) the National Retail Federation, (6) the Food Marketing Institute, and (7) the International Mass Retail Association. The suit alleges that the two Companies have a monopoly in credit cards and have tried to extend their dominance to debit cards. The suit further asserts that the two Companies charged excessive transaction fees for the debit card clearing process. The merchants have challenged the credit card companies "honor all cards" policy, which requires that if they accept any Visa or MasterCard, they have to accept all cards, including debit cards. It was the second court ruling to go against Visa and MasterCard this month. On Oct. 10, a federal judge ruled that the Visa and MasterCard associations must allow their member banks to issue other credit cards, clearing the way for American Express and Discover to more widely distribute their products in America. In the current case, the retailers won class action status in February 2000 in pretrial hearings before U.S. District Judge John Gleeson of Brooklyn. The appellate court affirmed the decision in a 35-page ruling, voting 2-to-1. Attorney for the retailers Lloyd Constantine, hailed the decision saying, "the entire issue will be determined in one, efficient case." Visa said it would seek a rehearing of the decision by the judges from the 2nd U.S. Circuit Court of Appeals, while MasterCard said it was studying the ruling. Paul Allen, Visa's general counsel expressed confidence that they would prevail in the suit saying that the "honor all cards" policy was "designed to assure consumers that they can use any of their Visa cards, regardless of type, anywhere they see the Visa logo." By some estimates, a ruling in favor of the retailers could result in an award of $24 billion in damages. CVS CORPORATION: Schiffrin Barroway Commences Securities Suit in MA ------------------------------------------------------------------- Schiffrin and Barroway, LLP initiated a class action lawsuit in the United States District Court for the District of Massachusetts on behalf of all purchasers of the common stock of CVS Corporation (NYSE: CVS) from February 6, 2001 through June 27, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements regarding its business and financial condition. Specifically, the complaint alleges that the Company issued positive statements concerning its business and operations, which failed to disclose: (1) that the Company was unable to successfully address the national shortage of pharmacists and that this shortage was negatively impacting their business; (2) that the Company's expansion plans would have to be scaled back in light of the difficulties facing the Company When this information became publicly known on June 27, 2001, the price of Company common stock dropped sharply, falling from $44.10 per share to $36.51 per share on extremely heavy trading volume. During the Class Period, Company insiders were able to dispose of shares of their personally-held stock for gross proceeds in excess of $8 million. The Company was also able to raise $300 million through the issuance of notes on highly favorable terms. For more information, contact Marc A. Topaz or Stuart L. Berman 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 or visit the firm's Website: www.sbclasslaw.com DELTA FINANCIAL: NY Federal Court Refuses To Dismiss Securities Suit -------------------------------------------------------------------- The United States District Court for the Eastern District of New York refused to dismiss a securities class action suit against Delta Financial Corporation. The suit was commenced in 1999, alleging the Company violated federal securities laws in in connection with its initial public offering in 1996 and its reports subsequently filed with the Securities and Exchange Commission. The complaint alleges that the scope of the violations recently alleged in the consumer lawsuits and regulatory actions indicate a pervasive pattern of action and risk that should have been more thoroughly disclosed to investors in its common stock. In May 2000, the court consolidated this case and several other lawsuits that purportedly contain the same or similar allegations. In August 2000, plaintiffs filed their consolidated amended complaint. Delta filed a motion to dismiss the consolidated amended complaint in October 2000. The court dismissed the motion last month. The Company said that they cannot estimate with any certainty its ultimate legal or financial liability, if any, with respect to the alleged claims. DQE INC.: Schiffrin Barroway Commences Securities Suit in Pennsylvania ---------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action lawsuit in the U.S. District Court for the Western District of Pennsylvania on behalf of all purchasers of the common stock of DQE, Inc. (NYSE: DQE) from December 6, 2000 through April 30, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges DQE issued positive statements concerning the significant and positive impact that DQE Enterprises, Inc., the Company's investment subsidiary, was having, and would continue to have, on their financial results. During this time, the market for initial public offerings had dramatically slowed down. Accordingly, the ability of the companies in DQE Enterprises' investment portfolio to go public was substantially impaired. Defendants, however, issued a stream of positive statements concerning the Company's operations and prospects, but failed to disclose the impaired nature of DQE Enterprises' investments. The Company also failed to disclose that they would not realize the investment gains that defendants had caused the market to expect. As a result, defendants' estimates, projections and opinions as to the Company's operations, products, earnings and income were knowingly lacking in a reasonable basis at all relevant times. This information finally became publicly known in April 2001, when the Company reported its earnings for the first quarter of 2001 and revised its earnings outlook for the full year, based in part, on the weakened outlook for DQE Enterprises. In response to this negative announcement, when trading resumed on May 1, 2001, the price of the Company's common stock dropped from $30.43 per share to $23.75 per share on extremely heavy trading volume. For further details, contact Marc A. Topaz or Stuart L. Berman 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 by E-mail: info@sbclasslaw.com or visit the firm's Website: www.sbclasslaw.com FLORIDA: Thirteen Firefighters Sue State Due To Inadequate Health Care ---------------------------------------------------------------------- Thirteen firefighters filed a class action against the City of Florida alleging that city administrators intentionally compromised medical care to cut costs at their expense. The suit, filed in July, alleged that the doctors in the city's employee health clinic failed to them about years of abnormal test results that showed up during physical exams. Serious maladies, including hepatitis, heart disease and lung disorders, went untreated. But until now, the firefighters' attorneys were careful not to describe the city's actions as anything more than shoddy care. "I don't believe the mayor or the city managers intended to hurt these firemen," attorney Mark Morsch said. "What the city tried to do was save money." The three firefighters had physical exams at the city clinic in 1992 that turned up elevated levels of liver enzymes, a possible sign of hepatitis infection and were referred to another physician. However, three city firefighters who had similar test results during the same period weren't informed of any problem, Morsch said. All three have hepatitis C and one, Bob Flamily, is dying from the blood-borne disease that, if untreated, can cause liver failure. The firefighters are asking a circuit court judge to let them include the new allegations - fraud and conspiracy to commit fraud and add 16 more plaintiffs, including two police officers. The new charges center on the involvement of the city's Risk Management Division in patient-care decisions at the employee medical clinic. The firefighters have argued that the division, which is responsible for minimizing the city's liability and handling lawsuits and worker's compensation claims against the city, should have no role in the administration of the clinic. On Monday, City Council member Don Ammerman called for the resignation of two staffers in the Risk Management Division over the treatment of Larry Crumbley, one of the firefighters suing the city. City officials scheduled a medical appointment for Crumbley, who suffers from hepatitis-related liver disease, but the letter notifying him wasn't mailed until three days after the appointment. Because Crumbley didn't show up, city officials tried to have his worker's compensation claim dismissed, Ammerman said. Richard Levey, the city's Chief Administrative Officer, said he has been meeting with the firefighter's union officials behind closed doors for several weeks to repair that relationship. They're negotiating a process to review firefighters' medical records and investigate the quality of care at the clinic. Mayor Glenda Hood's office referred questions to the attorney representing the city, who did not return a call. GENESISINTERMEDIA INC.: Milberg Weiss Files Securities Suit in C.D.CA --------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP commenced a securities class action on behalf of purchasers of GenesisIntermedia Inc. (NASDAQ:GENI) publicly traded securities during the period between Dec. 21, 1999 and Sept. 25, 2001. The suit, filed in the United States District Court for the Central District of California, charges the Company, CEO Ramy El-Batrawi, certain of its officers, directors and financial commentator Courtney Smith with violations of the Securities Exchange Act of 1934. The complaint alleges that in December 1999, defendants plotted and unleashed their scheme to inflate the price of the Company's shares. The Company allegedly gave shares worth more than $3 million to a financial commentator who helped send the stock soaring after he agreed to issue allegedly false, positive recommendations for it on CNN, CNBC and Bloomberg Television. However, the complaint alleges defendants concealed the payment of 216,000 shares to Smith, in order to induce the purchase of Company shares and raise tens of millions of dollars via multiple private securities offerings. As a result of defendants' false statements, the Company's stock price traded at inflated levels during the class period, increasing to as high as $25 in June 2001. Then after the close of the market in September 2001, the Company's shares were halted pending the resolution of an investigation. The Company's shares remain halted and are in essence, worthless. However, just hours before the announcement of the investigation and "halt," El-Batrawi sold over $1.7 million dollars worth of his own shares. For further details, contact William Lerach or Darren Robbins by Phone: (800) 449-4900 or by E-mail: wsl@milberg.com or visit the firm's Website: www.milberg.com/genesis/ GRAND COURT: Three Law Firms Commence Securities Suit in New Jersey ------------------------------------------------------------------- Seeger Weiss LLP, Frydman & Bergman and Morris and Morris filed an amended class action complaint on behalf of all persons who purchased Grand Court Lifestyles, Inc. 13.125% Retirement Financing Notes due November 30, 2003. The action is pending in the United States District Court for the District of New Jersey. Grand Court Lifestyles, Inc. was in the business of building and managing assisted living facilities for the elderly and was affiliated with approximately 53 such communities located across the country. The amended complaint asserts causes of action for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, as well as conspiracy to violate Section 10(b). The amended complaint alleges that certain officers and directors of the Company, made false and misleading statements and/or omissions concerning the then existing financial condition and business prospects of the Company in connection with the release of a Private Placement Memorandum dated November 10, 1999. These misrepresentations and omissions included, that at the time the PPM was issued, the Company had enough working capital to maintain its development plan for at least six months at the projected rate of development, when in fact the Company did not have such funds and was in the process of retaining bankruptcy counsel. As alleged in the amended complaint, since disclosure of the true facts would have had a chilling effect on their ability to sell the Notes, defendants set out to conceal the truth about the Company's condition and ensure that the private placement was successful. The amended complaint further alleges that, as a result of defendants' false and misleading statements, purchasers of the Notes bought notes that would not have been marketable had the truth been disclosed, and are currently in default. For more information, contact David K. Bergman of Frydman & Bergman by Mail: 18 East 48th Street, Tenth Floor, New York, NY 10017 by Phone: (212) 355-9100 by E-Mail: dbergman@frydmanbergman.com You can also contact Christopher A. Seeger or Stephen A. Weiss of Seeger Weiss LLP by Mail: One William Street, New York, New York 10004 by Phone: (212) 584-0700 by E-Mail: cseeger@seegerweiss.com or sweiss@seegerweiss.com INTELLI-CHECK: Speziali Greenwald Commences NJ Securities Suit -------------------------------------------------------------- Speziali, Greenwald & Hawkins PC initiated a securities class action on behalf of short-sellers of the securities of Intelli-Check, Inc., (AMEX:IDN) between January 1, 2001 and the present. The action is pending in the United States District Court for New Jersey against defendants: (1) the Company, (2) Frank Mandlebaum, Chairman of the Board and Chief Executive Officer, (3) Kevin Messina, Director, (4) Paul Cohen, Director, (5) Edward Winiarz, Director and Chief Financial Officer and (6) W. Robert Holloway, Senior Executive Vice President The complaint charges that defendants violated Sections 10 (b) and 20 (a) of the Securities and Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The defendants allegedly issued a series of materially false and misleading statements to the market during the class period concerning its supposedly strong and growing sales thereby artificially inflating the value of the Company's stock price. In fact, sequential sales from 4th Quarter 2000 to the 1st and 2nd Quarters 2001 have substantially decreased. Specifically, during the class period defendants reported materially inflated revenue for the Company by: (i) manipulating the reporting of sales and revenue in its filings with the Securities and Exchange Commission and in its press releases; and (ii) failing to disclose significant competition having a material impact on the Company and the sale of its products In May 2001, the defendants announced significant increases in revenue for the second consecutive quarter when in fact shipments and sales of products had actually decreased. The defendants later announced that revenues for the second quarter of 2001 increased nearly 15 fold from the second quarter of 2000 and 10 fold for the first six months compared with the year ago period. However, the defendants failed to disclose a possible change in the method of accounting for distributor sales impact on revenue and deferred revenues reported in its financial statements. It is also alleged that the misleading disclosures have materially and artificially inflated the price of Company shares thereby allowing certain of the defendants to sell shares at substantial gains and allowing the shares to close at or above $10.50 per share since September 24, 2001. If share price closes at or above $10.50 per share each day through October 19, 2001, the Company will be able to force the exercise of 979,076 stock rights at a price of $8.50 per share thereby forcing the sale of stock at an artificially inflated price. At all times relevant defendants allegedly benefited, by virtue of substantial ownership interests, through sales and otherwise, from the artificially inflated stock price and rights offering, all to the detriment of the class of short-sellers. For more information, contact David A. Speziali by Mail: 37 Oak Ridge Drive PO Box 1787 Voorhees, New Jersey 08043 by Phone: (856) 772-1006 or by E-mail: dspeziali@home.com NCI BUILDING: Berger Montague Commences Securities Suit IN S.D. TX ------------------------------------------------------------------ Berger & Montague P.C., filed a class action suit on behalf of purchasers of NCI Building Systems, Inc. (NYSE: NCS) securities during the period from August 25,1999 through April 12, 2001, inclusive. The suit was filed against the Company and two of its principal officers in the United States District Court for the Southern District of Texas. The complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for knowingly or recklessly engaging in improper accounting practices that forced the Company to restate its financial statements for the fiscal year that ended October 31, 2000, and for the quarter that ended January 31, 2001. In addition, NCI said that those same "accounting errors" could result in changes to financial statements for the third and fourth quarters of 1999. Furthermore, the Company said that a computer system installed in May of 1999 routinely processed some accounting entries incorrectly -- and that employees later altered the Company's books manually to mask the errors made by the automated system. NCI says it fired the employees responsible for the accounting irregularities. News of the accounting errors sent the Company's share price down 32%, from a closing price of $18 19/64 a share on April 12, 2001, to $12 29/64 a share at the close of the next trading day, April 16, 2001. For further details, contact Sherrie R. Savett, Michael T. Fantini, or Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: www.investorprotect.com NIKE INC.: Bernard Gross Commences Securities Suit in Oregon Court ------------------------------------------------------------------ Bernard M. Gross P.C. initiated a securities class action on behalf of purchasers of Nike Inc. (NYSE:NKE) common stock between December 20, 2000 and February 26, 2001. The suit, filed in the United States District Court for the District of Oregon, charges the Company and certain of its executive officers with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the suit alleges that the defendants repeatedly issued materially false and misleading statements regarding its third quarter earnings and revenues. The defendants knew or recklessly disregarded the material facts that the Company was having problems since the summer with its demand and supply chain management system which caused it to sustain reduced revenues and profits in the third quarter. In February 2001, Nike issued a press release that stated that the Company expects to earn between $0.34 and $0.38 per share for the third quarter ending February 28, 2001, versus its previously stated guidance of $0.50 to $0.55 per share. Donald Blair, Vice President and Chief Financial Officer stated that "these supply chain issues resulted in significant amounts of excess inventory of some footwear models, while other models have been in short supply or delivered late." He further said "Also, during this time period, certain officers and directors sold their shares of Nike stock for proceeds in excess of $12 million.." For more information, contact Susan Gross or Deborah R. Gross by Mail: 1500 Walnut Street, Suite 600 Philadelphia, PA 19102 by Phone: (866) 561-3600 (Toll Free) or (800) 849-3120 (Toll Free) or 215-561-3600 by E-mail: susang@bernardmgross.com or debbie@bernardmgross.com or visit the firm's Website: www.bernardmgross.com NORTEL NETWORKS: Bernard Gross Commences Securities Suit in E.D. NY ------------------------------------------------------------------- Bernard M. Gross P.C. filed a securities class action suit on behalf of purchasers of Nortel Networks Corporation (NYSE:NT) common stock between November 1, 2000 and February 15, 2001. The suit was filed in in the United States District Court for the Eastern District of New York. The complaint charges the Company and certain of its executive officers with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that the defendants repeatedly issued materially false and misleading statements overstating sales growth and revenues for the company's services and products for the year 2000 and especially strong fourth quarter 2000 performance. The Company boasted that the Company's "industry leading portfolio" would allow it to "continue to outpace the market and gain profitable market share" despite the tightening of capital within the telecom sector. The Company also projected that they would achieve 30% growth in revenues and earnings per share in 2001. The defendant's statements were materially false and misleading because at the time they made these statements, defendants were aware that the economy in the United States had slowed down dramatically. As a result, the defendants' misrepresentations caused the price of Company securities to be inflated, allowing certain defendants to collectively sell over $7 million of personally held stock. On February 2001, the Company shocked investors by issuing a press release announcing that it would not meet previous sales expectations and would reduce its workforce by 10,000 employees. For more information, contact Susan Gross or Deborah R. Gross by Mail: 1500 Walnut Street, Suite 600 Philadelphia, PA 19102 by Phone: (866) 561-3600 (Toll Free) (800) 849-3120 (Toll Free) or 215-561-3600 by E- mail: susang@bernardmgross.com or debbie@bernardmgross.com or visit the firm's Website: www.bernardmgross.com OPUS360 CORPORATION: Bernard Gross Initiates S.D. NY Securities Suit -------------------------------------------------------------------- Bernard M. Gross P.C. lodged a securities class action on behalf of purchasers of Opus360 Corporation (NASDAQ: OPUS) common stock at, or traceable to, the company's April 7, 2000 initial public offering (IPO), up through and including March 20, 2001. The suit, filed in the United States District Court for the Southern District of New York, names as defendants the Company and executive officers: (1) Ari Horowitz, Chief Executive Officer, Chairman of the Board, (2) Richard Miller, President and Chief Operating Officer, (3) Richard McCann, Chief Financial Officer until September 11, 2000, (4) John Harvey, director, (5) James Cannavino, director, (6) John Drew, director, (7) Irwin Lieber, director, (8) William Nuti, director, (9) Barry Rubinstein, director, (10) Roger Weiss, director (11) Fleet Boston Robertson Stephens Inc., (12) J.P. Morgan Securities Inc., (13) E*Offering Corp., (14) Bear Stearns & Co., Inc. (15) Safeguard Scientifics Inc., selling shareholder and (16) CompuCom Systems Inc., selling shareholder The suit alleges the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. In April 2000, the Company commenced an IPO of 7 million of its shares of common stock at an offering price of $10 per share. In addition, Safeguard Scientifics, Inc., and CompuCom Systems, Inc., together sold 700,000 shares of Opus common stock at $10 per share on April 7, 2000. In connection therewith, Opus filed a registration statement, which incorporated a prospectus with the Securities and Exchange Commission. The complaint alleges, that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) OPUS XCHANGE, a product that the prospectus touted as a sophisticated professional matching and project management software system, was fatally flawed and could not perform many of the functions detailed in the prospectus; and (2) that the Company had no basis for stating that the funds earned from the IPO would suffice to fund its aggressive expansion plan for at least 12 months following the IPO without additional financing. In March 2001, the Company filed its financial results for the year 2000 with the SEC on Form 10-K. The 10-K contained a letter from KPMG, LLP, Opus's outside auditors, which revealed that there was substantial doubt about their ability to continue as a going concern. The Company's common stock closed at $0.15 per share on April 20, 2001, a 98% decrease from the IPO price of $10 per share. For more information, contact Susan Gross or Deborah R. Gross by Mail: 1500 Walnut Street, Suite 600 Philadelphia, PA 19102 by Phone: 866- 561-3600 or 800-849-3120 (toll-free) or 215-561-3600 by E-mail: susang@bernardmgross.com or tina@bernardmgross.com or visit the firm's Website: www.bernardmgross.com PENN TREATY: Berger Montague Commences Securities Suit in E.D. PA ----------------------------------------------------------------- Berger & Montague P.C. lodged a class action complaint on behalf of purchasers of Penn Treaty American Corporation (NYSE: PTA) securities during the period from November 7, 2000 through March 29, 2001, inclusive. The suit, in the United States District Court for the Eastern District of Pennsylvania, asserts that the Company defrauded its investors by reporting during the Class Period that the Company was experiencing substantial growth that would not affect its fiscal well-being. In fact, the Company did not disclose that its reserves were well under the amount required by regulators, causing it to face possible liquidation. When the Company announced in March 2001 that its ability to remain solvent was at risk, the price of Company stock dropped 42% in one day. The Complaint charges the Company and its senior officers with violations of sections 10 and 20(a) of the Securities and Exchange Act of 1934 for materially false and misleading statements and filings with the Securities and Exchange Commission. For more details, contact Sherrie R. Savett, Karen S. Orman, Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.investorprotect.com PENNSYLVANIA: Online School Parents Consider Suing 300 School Boards -------------------------------------------------------------------- Parents of students of The Einstein Academy Charter School (TEACH) are preparing to file one of the largest class action lawsuit of its kind against over 300 Pennsylvania School Boards. The parents are discussing the possibility of an action after the school boards refused to remit state-legislated funding to the school, the largest online K-12 school, therefore causing severe disruptions at TEACH. At present, various Pennsylvania school districts have accumulated a total of over $5 million dollars in past due obligations to the school since the school year began in July of this year. The refusal to pay has severely affected the transmission of materials and instruction to the Einstein students who are located throughout the Commonwealth. The accusations in the suit include: (1) misappropriation of public funds, (2) corrupting the morals of minors, (3) defrauding taxpayers, (4) abuse of power, (5) unethical behavior on the part of elected officials, (6) the intentional infliction of emotional distress and (7) a number of related civil rights issues The group also intends to name individual School Superintendents, Schools Board Presidents and individual School Board members who have actively participated in or endorsed the illegal actions. Einstein Board President Murray Popkave says, "School districts have avoided sending the required funds because they dislike losing the allocated per-student funding when that student transfers from their school to The Einstein Academy." Many school superintendents hope that they can get legislators to change the current laws, which support cyber charter schools. Popkave further alleges that "school administrators have intimidated and abused both parents and their children, attempting to get them to leave The Einstein Academy with tactics ranging from threats of truancy and reports to Child and Youth Services, to financial fines." Robert Crowe, President of The Einstein Academy Parent Teachers Organization, said that the school districts intentionally and defiantly refused to transfer the allocated funds to TEACH. Crowe says that they ".will be naming a number of individual School Superintendents, Board Presidents and Board members. These actions are so egregious that they far exceed the scope of individual liability protection provided to school board members for misconduct of the Board Members." PINNACLE HOLDINGS: Bernard Gross Initiates Securities Suit in M.D. FL --------------------------------------------------------------------- Bernard M. Gross P.C. commenced a class action lawsuit on behalf of purchasers of the securities of Pinnacle Holdings, Inc. (Nasdaq: BIGT) between January 18, 2000 and March 17, 2001, inclusive. The suit was filed in the U.S. District Court for the Middle District of Florida. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The defendants allegedly issued a series of material misrepresentations to the market between January 18, 2000 and March 17, 2001, thereby artificially inflating the price of Company securities. The Complaint alleges that the Company repeatedly issued press releases highlighting the Company's increasing financial strength through its numerous acquisitions of wireless tower sites and its financial results. In August 2000, the Company revealed that the Securities and Exchange Commission (SEC) was investigating the independence of its accounting firm, PricewaterhouseCoopers. They also revealed that the SEC was investigating the Company's accounting for certain aspects of its recent acquisition of certain assets from Motorola, Inc. The Company, however, stated that its publicly issued financial statements were, at all times, prepared in complete conformity with generally accepted accounting principles. The Company further stated that the SEC investigation was nothing more than a "political" issue to further the SEC's new provision dealing with accountant independence. Then in March 2001, the Company shocked investors by announcing that the Company's previously issued financial statements for the fiscal year ended December 31, 1999 and its quarterly reports for the three months ended September 30, 1999, March 31, 2000, June 30, 2000 and September 30, 2000 would have to be revised. The defendants also disclosed that the restatements would be necessary in order to properly account for the Motorola acquisition. In March 2001, Company stock traded at slightly below $9 per share, an 88% decline from its class period high of $75. For more details, contact Susan Gross or Deborah R. Gross by Mail: 1500 Walnut Street, Suite 600 Philadelphia, PA 19102 by Phone: 866-561-3600 or 800-849-3120 (toll free) or 215-561-3600 by E-mail: susang@bernardmgross.com or debbie@bernardmgross.com or visit the firm's Website: www.bernardmgross.com PURCHASEPRO.COM: Bernard Gross Initiates Securities Suit in Nevada ------------------------------------------------------------------ Bernard M. Gross P.C. commenced a securities class action lawsuit on behalf of all persons who acquired Purchasepro.com, Inc. (NASDAQ: PPRO) common stock between February 12, 2001 and April 25, 2001. The suit was filed in the United States District Court for the District of Nevada against the Company and Charles Johnson, Jr., the Company's Chairman and CEO. The suit charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges that the defendants issued materially false and misleading information that misrepresented the company's financial condition and prospects. The defendants improperly recognized revenue in order to artificially inflate the price of the Company's common stock. The complaint further alleges that defendant Johnson was motivated to inflate the price of the Company's stock because he had used his stockholdings as collateral to borrow millions of dollars and would be forced to sell his stock if the loan to value ratio was less than 25%. The Defendants' alleged misrepresentations caused the price of the Company's common stock to be artificially inflated through the class period. For more information, contact Susan Gross or Deborah R. Gross by Mail: 1500 Walnut Street, Suite 600 Philadelphia, PA 19102 by Phone: (866) 561-3600 (Toll Free) or (800) 849-3120 (Toll Free) or 215-561-3600 by E-mail: susang@bernardmgross.com or debbie@bernardmgross.com or visit the firm's Website: www.bernardmgross.com REMEDYTEMP: Lionel Glancy Lodges Securities Suit in CA Superior Court --------------------------------------------------------------------- Lionel Z. Glancy commenced a securities class action in the Superior Court of California for the County of Los Angeles on behalf of all franchisees and licensees of RemedyTemp, Inc. (NASDAQ:REMX). The suit charges the Company and certain of its officers and directors with wrongfully inducing the class members to purchase franchises and licenses. The Company allegedly used misleading financial pro formas and thereafter making it financially unviable for Remedy's franchisees and licensees to stay in business. This eventually forced such franchisees and licensees to abandon their franchises or sell them back to the Company for pennies on the dollar, after building the Company name within their franchise territory. For more information, contact Tracy L. Thrower by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 by Phone: (310) 201-9150 or (888) 773-9224 (toll-free) by E-mail: info@glancylaw.com. SHOPKO STORES: Berger Montague Commences Securities Suit in E.D. WI ------------------------------------------------------------------- Berger & Montague P.C. filed a securities class action on behalf of all persons or entities who purchased securities of ShopKo Stores, Inc. (NYSE:SKO) during the period from March 9, 2000 through November 9, 2000, inclusive. The suit was filed in the United States District Court for the Eastern District of Wisconsin. The Complaint alleges that the Company violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Company allegedly issued a series of material misrepresentations to the market between March 9, 2000 and November 9, 2000, thereby artificially inflating the price of their securities. Throughout the class period, defendants issued statements concerning: (1) the integration of its acquisition of Pamida Holding Corp. (the owner and operator of Pamida discount stores); (2) the Company's financial results and the Company's prospects These statements were materially false and misleading because they failed to disclose that the Company was experiencing significant shipping and inventory control problems at Pamida's distribution centers. In November 2000, the Company issued a press release announcing its earnings for the third quarter of 2000 reporting a loss of ($0.23) per share - far below the $.02 to $.07 per share previously represented. The Company also revealed that they were experiencing problems at Pamida's distribution centers and that those problems accounted for their reduced earnings. For more details, contact Sherrie R. Savett, Robin Switzenbaum, Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.investorprotect.com SOUTH KOREA: KCCI Joins Business Groups In Attacks On Lawsuits -------------------------------------------------------------- The Korea Chamber of Commerce and Industry yesterday expressed rejection to the government's planned implementation of a securities- related class action suit system against companies that inflict losses on minority shareholders through illegal acts. In a statement, KCCI recommended that the government delay the implementation of the system scheduled to begin next April, saying the system could result in serious repercussions for corporate operations unless the minimum prerequisites are in place. KCCI also demanded that the government reconsider the enforcement of the system as an economic recession is feared to continue following the Sept. 11 attacks on the United States. "The strict implementation of various measures, instituted by the government following the late 1997 economic crisis, more than serves the intended purpose of a class action suit by enhancing the transparency of corporate management," it said. "The measures include the required seating of outside directors on company boards and the introduction of consolidated financial statements for business groups to prevent cross guarantees and hidden losses." On Wednesday, the nation's top-50 conglomerates issued a similar statement against the class action suit system after a meeting at the Federation of Korean Industries. The government has unveiled a draft bill aimed at allowing minority shareholders to file class action suits against losses incurred as a result of illegal practices such as stock price manipulation or accounting fraud. TD WATERHOUSE: Faces Nine Securities Suits in Delaware Chancery Court --------------------------------------------------------------------- TD Waterhouse Group faces nine securities class actions filed in the Delaware Chancery Court arising from the acquisition of the Company by its parent Company, Toronto-Dominion Bank. Last October 10, 2001, Toronto-Dominion Bank offered to acquire all of the outstanding shares of the Company, it does not already own, for $9.00 per share cash. The transaction is structured as a first-step tender offer, second-step merger. Each of the suits was brought on behalf of all holders of Shares other than the defendants and persons related to or affiliated with the defendants. The suits similarly allege that: (1) the defendants breached their fiduciary duties as a result of the tender offer; (2) the offer price is inadequate; and (3) Toronto-Dominion Bank is engaging in unfair self-dealing, and not acting in good faith towards the Company's public stockholders; (4) the Company breached fiduciary duty towards its shareholders The suits name as defendants the Company, Toronto-Dominion Bank and officers: (i) Richard J. Rzasa, director, (ii) John Thompson, director, (iii) Leo J. Hindery, Jr., director, (iv) A. Charles Baille, Jr., Chairman of the Board, (v) Steven B. Dodge, director, (vi) Stephen D. McDonald, director, (vii) Wendy K. Dobson, director, (viii) Lawrence M. Waterhouse, Jr., director, (ix) John See, director The Company stated its intent to vigorously oppose these suits in a disclosure to the Securities and Exchange Commission. TEXAS: Harris County To Refund Court Fees in $1.4 Million Settlement ---------------------------------------- ---------------------------- Harris County settled for $1.4 million a class action brought against them for assessing a $10 bailiff fee for every lawsuit filed in the Harris County federal and state court. Eligible for refunds will be those who filed suit with the Harris County District clerk from Dec. 14, 1997, through Dec. 31, 1998, and with the Harris County clerk from Dec. 14, 1997, through May 11, 2001. The county will pay nearly $1.4 million to settle the case, but $360,000 of that will go to lawyers for Ron Proler and Bette Kelley, the plaintiffs. Proler and Kelley will receive $2,500 and $1,000, respectively, as representatives of the class while more than $1 million will be left for refunds. In 1998, a Dallas court proclaimed unconstitutional a state law that allowed county clerks to assess a $10 bailiff fee per lawsuit. The district court then stopped charging the fee in 1999 while the state court to stop charging the fee as part of the settlement negotiations in the Houston case. The plaintiffs said it was illegal to collect the fees, stating in court documents, "Collection of a fee where no services are rendered is not authorized by statute." Assistant County Attorney Linda Storey Mahar said the state intended the money to hire sheriff deputies who serve in courtrooms. The county admitted no wrongdoing in the written settlement. Anyone who objects to the settlement can attend a hearing Jan. 28 before state district Judge Bruce Oakley, who then is expected to give final approval to the agreement. US INTERACTIVE: Weiss Yourman Commences PA Securities Suit ---------------------------------------------------------- Weiss & Yourman commenced a class action suit on behalf of all persons who acquired U.S. Interactive, Inc. (NASDAQ: USIT) securities between February 10, 2000 and November 8, 2000, inclusive. The suit, filed in the U.S. District Court for the Eastern District of Pennsylvania, charges certain officers and directors of the Company with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Company was not named as a defendant because it filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. The complaint alleges that defendants embarked on a scheme to defraud investors in order to artificially boost the Company's stock price so that they could sell their own Company stock for proceeds of over $5 million. The complaint alleges that, while representing the strength of the Company's business condition and prospects, defendants failed to disclose adverse facts that made their statements false and misleading. The defendants allegedly failed to disclose that: (1) an $80 million debt owed by the Company in connection with its acquisition of SoftPlus, Inc. would not be paid off and would hamper the Company's ability to reach profitability; (2) the Company was being adversely affected by dot-com customers which were having financing difficulties; and (3) the Company was being adversely affected by the lengthening of the sales cycle In September 2000, the Company pre-announced that its third quarter performance would be lower than expected due to rapid changes in the Internet professional services market, including lengthening sales cycles, re-evaluation of e-business initiatives by clients and prospects, and reduced funding available to dot-com clients. Following this surprising disclosure, Company stock dropped over 33% from the day before on record volume of 2,105,500 shares, to close at $12.937. The September 20 disclosure, however, did not reveal the full extent of their problems. On November 8, 2000, the Company disclosed that not only was its third quarter financial results worse than the Company had pre-announced but that the Company wrote-off $8.8 million of non-collectible accounts receivable during the third quarter, which amounts were primarily related to services performed for dot-com organizations. Following this full disclosure, the Company's stock dropped further on high volume of 1.5 million shares, to close at $0.81 per share. The Company's 10-Q for its third quarter later disclosed that, of the amounts written off, $3.9 million was written off for NetSmart, and $1.1 million was written off for Exist Corporation, companies which were owned in part by certain of the defendants. For more information, contact Weiss and Yourman by Mail: 10940 Wilshire Blvd., 24th Floor, Los Angeles CA 90024 by Phone: (310) 208-2800 by Fax: (310) 209.2348 by E-mail: info@wyca.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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *