/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011214.mbx C L A S S A C T I O N R E P O R T E R Friday, December 14, 2001, Vol. 3, No. 244 Headlines ALAMOSA PCS: Schiffrin Barroway Commences Securities Suit in S.D. NY ALCO INDUSTRIES: Recalls 75T Water Fountains For Potential Fire Hazard BLOCKBUSTER, INC.: Court May Take Weeks Approving Settlement Agreement BORDERS GROUP: Overtime Suit Certification Hearing Set For April 2002 CANADA: Lawyer Sues Electronic Toll Operator For Late Fee Penalty CLICK COMMERCE: Schiffrin Barroway Lodges Securities Suit in S.D. NY CONTINENTAL CARBON: Columbus Council Joins Complaint Over Soot Nuisance CREDIT SUISSE: Reports of $100M Settlement Affects Banks, Pending Suits TEXAS: African-Americans Claim Dallas Demolished Homes Without Notice DJ ORTHOPEDICS: Marc Henzel Commences Securities Suit in S.D. New York FORD MOTOR: Judge Dismisses Shareholder Suit Alleging False Statements GAYLORD CHEMICAL: Ruling On Rail Car Explosion Opens Payout Floodgates HENRY PHIPPS: Enters $1.2 Million Settlement in SF Toxic Mold Case IMATRON INC.: Reaches Settlement Agreement in CA Securities Suits INDIANA: IPD Officers Sue Chief For "Discriminatory" Squad Car Policy JAPAN: Ex-Daiwa Bank Officers Settle Bond Trading Scam Suit For Y250M KID COOL: Recalls 5,100 Girls Jackets, Vests Due To Choking Hazard LOG ON: Wolf Haldenstein Initiates Securities Suit in Rhode Island LUMENIS LTD.: Forges Agreement To Settle Securities Suit in S.D. NY MICROSOFT CORPORATION: Senate Inquires Into Federal Suit Settlement PAC-WEST TELECOMM: Harvey Greenfield Lodges Securities Suit in S.D. NY PROFILE-DESIGN LLC: Recalls 8T Bicycle "Aero Bars" For Accident Hazard RESONATE INC.: Schiffrin Barroway Initiates Securities Suit in S.D. NY SAMARITAN HEALTH: AZ Court Rules Ex-Patients Can't Keep Full Awards VITAMIN ANTITRUST: Vitamin Companies Settle Antitrust Suit For $225M XO COMMUNICATIONS: Weiss Yourman Files Second Securities Suit in VA XO COMMUNICATIONS: Savett Frutkin Initiates Securities Suit in E.D. VA XO COMMUNICATIONS: Wechsler Harwood Lodges Securities Suit in E.D. VA ********* ALAMOSA PCS: Schiffrin Barroway Commences Securities Suit in S.D. NY -------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action on behalf of purchasers of the common stock of Alamosa PCS Holdings, Inc. (formerly Nasdaq: APCS) between February 3, 2000 and December 6, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. The suit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In February 2000, the Company commenced an initial public offering of 10,714,000 of its shares of common stock at an offering price of $17 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The suit further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. 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 ALCO INDUSTRIES: Recalls 75T Water Fountains For Potential Fire Hazard ---------------------------------------------------------------------- Alco Industries Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily announcing the recall of 75,000 water fountains with candleholders. The tea candles on the water fountains can flare up, posing fire and burn hazards to consumers. The Company has received two reports of candles flaring up, including two consumers who suffered burn injuries. The recalled water fountains have a black base and two tiers of rocks over which water flows. The decorative rocks come in various shapes and colors. Two candles are perched above the fountain, set in black candleholders, and lit behind a painted glass cover. A sticker on the bottom of the fountain reads, "Made in China." The "Submersible Pump" attached to the bottom of the fountain reads in part, "Jebo" and "Made in China" Mass Retailers nationwide sold these water fountain candle sets from February 2001 through October 2001 for between $10 and $20. For more information, contact the Company by Phone: 800.862.9816 (between 7:30 am and 5:30 pm PT Monday through Friday) or visit the firm's Website: http://www.alcoindustries.com. BLOCKBUSTER, INC.: Court May Take Weeks Approving Settlement Agreement ---------------------------------------------------------------------- Texas District Judge Milton Gunn Shuffield said recently that it could take weeks to determine if Blockbuster Inc.'s proposal to pay a $500 million class-action settlement in coupons for free video rentals or purchases, is fair and reasonable, according to a recent Associated Press report. "I don't anticipate a swift decision," Judge Shuffield told attorneys following two days of testimony at a hearing on the Dallas-based chain's settlement proposal. He added that he would probably make a decision within the next few weeks. The lawsuit, filed in Judge Shuffield's court in Beaumont, Texas, dealt with late fees charged to two customers who returned their videos late between January 1, 1992 and April 1, 2001. The plaintiffs alleged the fees were unreasonable, in most cases, almost the original rental price. Part of the proposed settlement would be $9.25 million in cash for attorney's fees. Judge Shuffield had given preliminary approval to the settlement in April, but he required Blockbuster to notify possible class-action participants before final approval would be granted. Timothy Ferguson, who serves as local counsel for the plaintiffs, said in a story in a recent issue of the Beaumont Enterprise that he agrees with the proposed settlement. "This is very fair and reasonable," said Mr. Ferguson. BORDERS GROUP: Overtime Suit Certification Hearing Set For April 2002 --------------------------------------------------------------------- The Superior Court of California for the County of San Francisco has rescheduled for April 19, 2002 the class action certification hearing for the complaint filed against retailer Borders Group. Two former employees filed the suit individually and on behalf of all current and former employees, who worked as assistant managers in Borders stores in California at any time between April 10, 1996, and the present. The suit alleges that: (1) the individual plaintiffs and the purported class members worked hours for which they were entitled to receive, but did not receive, overtime compensation under California law; and (2) that they were classified as "exempt" store management employees but were forced to work more than 50% of their time in non-exempt tasks. The suit, which was later amended to include two additional plaintiffs, alleges violations of the California Labor Code and the California Business and Professions Code. The Company intends to vigorously defend itself against the action. Borders intends to contest the certification of the action as a class action. CANADA: Lawyer Sues Electronic Toll Operator For Late Fee Penalty ----------------------------------------------------------------- An Ontario lawyer filed a class action against 407 International, Inc., operators of the world's first electronic toll highways after he was charged with a C$30.00 (US$19.10) late fee on a balance of 12 Canadian cents, according to a Reuters Report. The suit also names as defendants: (1) 407 ETR Concession Co. Ltd., a consortium including subsidiaries of Spanish construction company Ferrovial and Quebec's public pension fund manager Caisse de depot et Placement, (2) the Ontario Ministry of Privatization and (3) the province's Attorney General Plaintiff Richard Prendiville says the late qualified as "interest", and exceeds the maximum annual "criminal rate" of interest in Canada, which is 60%. Mr. Prendiville seeks to force the highway's operators and the Ontario provincial government to refund all of the late penalties charged to users of Highway 407, north of Toronto, since it opened on June 7, 1997. Lawyers representing Prendiville said in a statement the late payment policy "borders on highway robbery, and the tacit continuing approval of the province of Ontario in this policy is unconscionable." According to Reuters, spokesmen for the Company declined to comment on the lawsuit, saying it would not be appropriate while the matter was before the courts. CLICK COMMERCE: Schiffrin Barroway Lodges Securities Suit in S.D. NY -------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action on behalf of purchasers of the common stock of Click Commerce, Inc. (NASDAQ:CKCM) between June 26, 2000 and December 6, 2000, inclusive in the United States District Court, Southern District of New York, against the Company, certain of its officers and its underwriters. The suit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In June 2000, he Company commenced an initial public offering of 5,000,000 of its shares of common stock at an offering price of $10 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The suit further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. 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 visit the firm's Website: info@sbclasslaw.com CONTINENTAL CARBON: Columbus Council Joins Complaint Over Soot Nuisance ----------------------------------------------------------------------- The Columbus, Georgia Council has voted to join a class-action lawsuit, filed in US District Court in Montgomery, Alabama, against Continental Carbon Company, an Alabama company, the Associated Press recently reported. The lawsuit charges that the Company is responsible for a black powder fallout that has been a continuing nuisance for the city. The first court hearing has been scheduled for October of 2002. Although Continental's officials have said that their plant is not the cause of soot that falls on south Columbus, an investigation by the Environmental Protection Agency concluded that carbon black has been released from Continental. Following the EPA's investigation, John Tharpe, owner of Action Marine, Inc., filed suit against Continental, alleging that carbon black had fallen on his boat dealership. Mr. Tharpe, lead plaintiff in the lawsuit, contends that the same substance has damaged his boats and equipment for years, forcing him to sell his stock at a discount. Mayor of Columbus, Bobby Peters, said the city hopes to recover damages and end the problem, which is damaging to both health and property. "We think the environmental concerns are paramount over the monetary issues," Mayor Peters said. "The main thing is to prevent a continuing nuisance for the residents out in that area." CREDIT SUISSE: Reports of $100M Settlement Affects Banks, Pending Suits ----------------------------------------------------------------------- Credit Suisse First Boston will reportedly settle for $100 million a federal investigation on the charges that it fraudulently handled stock offerings during the 1990 bull market, news that has begun speculations through several investment banks, and thousands of individual investors that filed securities suits against the Company and other investment banks. The Company is talking with the Securities and Exchange Commission and the regulatory arm of the National Association for Securities Dealers to settle the agencies' investigation on whether Wall Street firms required customers to buy more IPO shares on the first day of trading to guarantee a newsworthy jump in the stock price, according to a Wall Street Journal report. The probe involves many of Wall Street's biggest firms, and has resulted in a flood of civil law suits by disgruntled investors. Rivals Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc. unit, Salomon Smith Barney are also under investigation and are being targeted in the more than 1,000 IPO-related lawsuits. If the Company announces the settlement, other firms would probably follow suit to avoid negative publicity of a prolonged investigation, according to a Reuters report. Analyst Dave Trone at Prudential Securities also told Reuters, "The issue is not dead yet for the other firms.There will be a few more settlements, (but) not of that magnitude," assuming the $100 million figure is accurate. Additionally, the settlement may help plaintiffs in the securities suits against dozens of investment banks, and provide investors with additional ammunition to pursue charges of fraud in the way the investment banks doled out IPO shares. According to documents in the US District Court for the Southern District of New York, forty-two investment banks and 263 companies face more than 1,000 securities lawsuits. John Coffee, Professor of Law at Columbia University, said in a Reuters interview, "The settlement doesn't imply a formal finding of liability.But may subjectively influence the court, which may not want to dismiss a case that has already been deemed as nonfrivolous." Milberg Weiss, of the law firm Milberg Weiss Bershad Hynes and Lerach said the settlement would have a "strong psychological effect" that would help their cases, "It is one of the highest fines in the history of Wall Street. Everybody can see that there must be a reason." CSFB and its Wall Street rivals rode the tech wave of the late 1990s and early 2000 to capitalize on an insatiable demand for tech IPOs, pulling in billions of dollars in underwriting fees and shattering previous profit records, according to a Reuters report. A CSFB spokesperson, as well as spokespersons for the federal agencies declined to comment on the matter, but one CSFB source told Reuters the company and regulators have yet to sign anything definitive. TEXAS: African-Americans Claim Dallas Demolished Homes Without Notice --------------------------------------------------------------------- African-American homeowners have sued the City of Dallas alleging the city demolished repairable single-family homes without proper notice, without due process in violation of the Fifth and Fourteenth Amendments, and without a warrant, in violation of the Fourth Amendment. The suit was filed on behalf of all property owners who had a repairable single-family structure demolished by the City of Dallas' Urban Rehabilitation Standards Board (URSB) and who were not provided advance notice of, or the opportunity to contest, the demolition, or whose homes were demolished without a warrant. The suit stems from the demolition, between 1992 and 1996, of 580 repairable single-family homes in predominantly African-American neighborhoods in Dallas. The homes were considered repairable if the cost of repairs was less than the tax assessment value of the property or if the URSB had previously ordered repairs to the structure. The suit claims that notices of demolition were often sent to the wrong address and never received by homeowners, even when homeowners paid property taxes on the homes, and that after demolition liens were placed on the properties for the cost of demolition. In addition, the action maintains that the city used overt racial classifications to determine the neighborhoods in which the URSB would focus its demolition activities, resulting in the demolition of homes in African- American neighborhoods at a much higher rate than in non-minority areas. On June 18, 2001, an appeals court modified the trial court's decision certifying the class action. While affirming the trial court's ruling allowing the action to proceed as a class claim based on violations of proper notice and warrant requirements, the appeals court reversed the trial court decision to also allow the class action to proceed based on racial discrimination claims. The class action will now return to the trial court to continue in accordance with the appeals court's decision. DJ ORTHOPEDICS: Marc Henzel Commences Securities Suit in S.D. New York ---------------------------------------------------------------------- The Law Office of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all shareholders that acquired the common stock of DJ Orthopedics, Inc. (NYSE:DJO) pursuant or traceable to an initial public offering on November 15, 2001, against the Company, certain of its officers and directors and its underwriters. The suit alleges that defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, by issuing a registration statement and prospectus in connection with an initial public offering of common stock which contained materially false and misleading statements and omissions. Specifically, the suit alleges that shortly after the commencement of trading on November 15, 2001, the IPO share price dropped precipitously from $17 per share upon news that analysts adjusted downward the Company's fourth quarter earnings forecast. Fourth quarter earnings estimates were touted by defendants in "road shows" to investors prior to the IPO. Defendants did not halt the IPO or trading in the stock, even though the registration statement and prospectus failed to disclose, that the fourth quarter estimates were adjusted downward. The news drove the price of the Company's shares down by at least 10%, to close at $15.25 per share, on heavy trading volume of 7.3 million shares. By its third full day of trading, the Company's shares were down to $13.16 per share, or over 22% off the IPO price. For more information,contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888.643.6735 or 610.660.8000 by Fax: 610.660.8080 by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. FORD MOTOR: Judge Dismisses Shareholder Suit Alleging False Statements ---------------------------------------------------------------------- US District Judge Arthur Tarnow dismissed several class actions against Ford Motor Co. (NYSE:F), alleging that the automaker misled investors about the safety of the Explorer sport utility vehicle and its potential liabilities for hundreds of deaths and injuries. The Company and Firestone recalled 6.5 million tires in August 2000 and an additional 13 million early this year. The accidents and the recall has spurred many private class actions, cost the Company about $2.6 billion, and severed its nearly 100-year-old relationship with Firestone after the two companies traded accusations over who was liable for the accidents. According to an Associated Press report, Judge Tarnow ruled that the plaintiffs had failed to show that the Company made misleading statements about the Explorer SUV, which figured in a federal investigation linking it to more than 200 fatal rollover accidents involving Firestone tires. He also ruled that the world's second- largest automaker was not bound by law to forecast in its financial statements the costs of the recall of Firestone tires on Ford vehicles and lawsuits related to the problems. The Judge said the Company's corporate statements contained "vague, corporate puffery" but were not misleading or inaccurate. Lawyers for the lead plaintiffs did not immediately return calls seeking comment, according to Associated Press. "Although Ford must be accountable and speak fully and truthfully as to matters it chooses to speak about, the company need not publicly conjecture about every scenario and every item that it has in stock," Judge Tarnow said in his opinion. GAYLORD CHEMICAL: Ruling On Rail Car Explosion Opens Payout Floodgates ---------------------------------------------------------------------- The insurance carriers for Gaylord Chemical Company may have lost their last chance to avoid a potential $126 million in payouts because of a 1995 rail car explosion that sent a noxious gas cloud over an area surrounding the chemical company's Bogalusa, Louisiana plant. The 10 insurers had asked the Louisiana Supreme Court to hear arguments that the hazardous gas release should be considered as "environmental pollution," which is exempt from insurance coverage. The Supreme Court, in a 5-2 vote, recently denied their request, The Associated Press reported, ending five years of litigation between the insurers and the Company. "The battle is now over," said Thomas Kuhns, who represents Gaylord. "Gaylord has now got a declaration of full policy coverage." The Company had argued that the gas release was subject to insurance coverage because it was caused by an accidental fire inside the tank car," Mr. Kuhns said. Gary Zwain, who represents Federal Insurance Company, and who is lead attorney for the insurance companies, said the carriers are "considering our options." Among other things, they can ask the court to reconsider. If the court denies a request to reconsider, said Mr. Zwain, attorneys would then focus on winning the pending class action lawsuit filed in Louisiana by hundreds of people who claim they were injured by breathing in the gaseous fumes. The Company and several other defendants in the class-action lawsuit, including five of the 10 insurers, agreed to settle earlier this year. The five remaining insurance companies and Union Tank Car Company, which owned the rail car that exploded, are preparing to go to trial on September 16 of next year in Washington Parish. Mr. Zwain said that that the damages alleged in the class-action suit will not rise to the $50 million mark, at which point his client's coverage kicks in. Coverage provided by the four other carriers that did not settle kicks in at even higher levels, he said. "The class would have to exceed in excess of $50 million before they could collect a single dollar from us," Mr. Zwain said. In their appeal to the Supreme Court, the insurers argued that the state's 1st Circuit Court of Appeal, which earlier this year upheld a trial court's 1999 decision requiring insurance coverage, erroneously failed to apply a three-step legal test to determine if a release into the air is environmental pollution. Mr. Zwain asserted if the appeals court had applied the three-step test, which was outlined in an earlier Supreme Court ruling on a similar case, the insurers would have won their pollution exemption. Mr. Zwain further argued that there are now, in Louisiana, two conflicting legal precedents regarding these types of cases. This is because, the attorney said, the 4th Circuit Court of Appeal, unlike the 1st Circuit, did apply the three-step test in a case similar to the Gaylord case. "We were disappointed that the Supreme Court passed on the opportunity to clarify the law." HENRY PHIPPS: Enters $1.2 Million Settlement in SF Toxic Mold Case ------------------------------------------------------------------ San Francisco apartment leaser Henry Phipps Plaza Associates has settled a class action in which hundreds of tenants sued their Manhattan landlord, alleging that toxic mold in their two Kips Bay-area apartment buildings had damaged their skin, lungs and brains has been settled, according to a recent Associated Press report. Steven Goldman, the tenants' attorney, said the case was the first in which sickness from mold was allowed as a personal injury claim, as being hit by a car would be. Although the lawsuit named seven tenants as plaintiffs, about 160 families will receive money from the settlement just as if Justice Louise Gruner-Gans had certified the case as a class action. Mr. Goldman said that the Company agreed to settle about six weeks into a trial that was under way in Manhattan's state Supreme Court. Mr. Goldman, citing a confidentiality pact, would not reveal the amount of the settlement, but sources familiar with the case said the tenants will receive a total of about $1.2 million. He added that tenants will receive money according to mold conditions in their homes and the seriousness of the health conditions they suffered and that Mr. Phipps promises to keep trying to get rid of the mold. When the trial opened, Mr. Goldman told jurors that water leakage at 444 Second Avenue and at 330 East 26th Street caused conditions that facilitated green, purple and black mold growth on apartment walls. He said that the poisonous airborne spores attacked tenants' bodies, causing skin rashes, infecting their lungs and mouths and causing bleeding from their noses and gums. In some cases, he said, victims suffered short-term memory loss and constant fatigue, in other cases, deaths may have been hastened by the mold. Colleen Roche, spokeswoman for the landlord, did not disclose the terms of the agreement, but she said that Mr. Phipps was satisfied with the disposition of the case. She said the case was sealed and that the landlord did not admit liability. IMATRON INC.: Reaches Settlement Agreement in CA Securities Suits ----------------------------------------------------------------- Imatron, Inc. (NASDAQ: IMAT) has reached a settlement agreement in the two class action suits pending against it in the Superior Court for the State of California for the County of San Mateo challenging its merger with General Electric Company (GE) that will lead to the Company becoming a wholly owned subsidiary of GE. The suit sought to enjoin the merger and to recover monetary relief for alleged breaches of fiduciary duty by the Company's Board of Directors. Named as defendants were: (1) Douglas P. Boyd, (2) Allen M. Chozen, (3) John L. Couch, (4) William J. McDaniel, (5) S. Lewis Meyer, (6) Richard K. Myler, (7) Terry Ross and (8) Aldo J. Test The Company denied any liability in these matters despite the settlement agreement. INDIANA: IPD Officers Sue Chief For "Discriminatory" Squad Car Policy --------------------------------------------------------------------- Three Indianapolis Police Department (IPD) officers accused their chief of discrimination for not allowing them to take their squad car home because they resided outside Marion County. The department reportedly had a policy that allows only residents of Marion County to take a squad car home. Plaintiffs Sgt. Michael Duke, Lt. Jeffrey Decker and Officer James Trythall filed the suit in Indiana Federal Court against Police Chief Jerry Barker saying the policy prevents them from stopping dangerous motorists on his way home and forces them to spend time before and after work, transferring police gear between their personal cars and squad cars. Sgt. Duke says his personal car is not equipped to pursue anyone. "And I'm sure Allstate wouldn't be pleased (if I did pursue)," Duke said, referring to his insurance agency. He added that transferring the gear takes about 15 to 20 minutes. Chief Barker stood fast behind his policy, telling Indiana station RTV6 that take-home squad cars were a privilege, not a right. He did not comment further. IPD officers are allowed by law to live outside of Marion County. Members of Marion County's other main police agency, the Marion County Sheriff's Department, are required to reside within county borders. JAPAN: Ex-Daiwa Bank Officers Settle Bond Trading Scam Suit For Y250M --------------------------------------------------------------------- Former executives of Daiwa Bank recently agreed to pay a total of 250 million yen to settle a shareholders' class action suit over an illicit bond trading scandal at the bank's New York branch, according to Jiji Press English News Service. The out-of-court settlement, reached at the Osaka High Court, calls for payments by 49 present and former bank executives, including former President Akira Fujita, incumbent President Yasuhisa Katsuta and incumbent Chairman Takashi Kaiho. Shareholders lodged a class action in November 1995, demanding damages of $1.45 billion, including $1.1 billion in losses on unauthorized trading in U.S. government securities by an employee at the New York branch. Osaka District Court ordered 11 former bank executives to pay $775 million, or 82.9 billion yen, in damages, the largest ever amount ordered in a class-action lawsuit in Japan. Nonetheless, defendants and plaintiffs filed appeals against the order with the Osaka High Court. The settlement came accompanied by a possibility that the High Court might reject the appeal. This uncertainty was due to the fact that the imminent official launch of Daiwa Bank Holdings Inc. as owner of Daiwa Bank, and two other banks, would convert shareholders of Daiwa Bank into shareholders of Daiwa Bank Holdings. The Daiwa Bank announced an-out-of-court settlement, however, which said that both defendants and plaintiffs shared the view that settlement, rather than continued court action, would benefit both the bank and the shareholders. Mr. Katsuta, President of Daiwa Bank Holdings, told reporters that the lawsuit was settled in a manner satisfactory to Daiwa Bank Holdings, Daiwa Bank and shareholders. However, he denied bank executives' responsibility for the bond-trading scandal. KID COOL: Recalls 5,100 Girls Jackets, Vests Due To Choking Hazard ------------------------------------------------------------------ Kid Cool LLC is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 5,100 Baby Cool and Kid Cool girls' jackets and vests. The zipper pull and metal ring on these garments can detach, posing a choking hazard to young children. The jackets and vests were sold exclusively at Sears department stores nationwide from September 2001 through October 2001 for between $16 and $19. The Company has received one report of a child who removed the zipper pull, placed it in her mouth and began to choke on the metal ring that attaches the zipper pull to the jacket. The recalled garments are 100- percent polyester girls' fleece- hooded jackets and sleeveless vests. The garments are pink or violet in color and were sold in both infant sizes 9-24 months and toddler sizes 2T-4T. The garments have a zipper front with a rubber zipper pull attached by a metal ring. Two pockets on the front of the garment have flowers on them. A label sewn on the inside neck of the garments reads "Baby Coolc," "Kid Cool Collections," and "Made in Hong Kong." For more information, contact Kid Cool LLC by Phone: 800.315.2376 Ext. 183 (between 10 am and 6 pm ET Monday through Friday) or visit the Sears Website: http://www.sears.com. LOG ON: Wolf Haldenstein Initiates Securities Suit in Rhode Island ------------------------------------------------------------------ Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class action in the United States District Court for the District of Rhode Island, on behalf of purchasers of Log On America, Inc. (NASDAQ:LOAX) securities between April 22, 1999 and November 20, 2000, inclusive, against the Company and the following: (1) David R. Paolo, Chairman, Chief Executive Officer and founder; and (2) Kenneth M. Cornell, Chief Financial Officer 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, by issuing materially false and misleading statements to the market. Specifically, throughout the class period, defendants repeatedly issued statements indicating that, among other things, the Company was on track to achieve the goals of its business plan and that it was successfully growing its service offerings and customer base through its numerous acquisitions. The suit alleges that these statements were materially false and misleading because, among other things, they failed to disclose or misrepresented: (i) that the revenues the Company was generating from its customer base, which was predominantly consumer-focused, were not sufficient to offset the extensive capital costs that the Company was incurring in order to build out its network and provision its products; (2) that the Company's "growth-by-acquisition" strategy was not meeting with success as the Company had acquired a collection of disparate businesses which it was unable to effectively integrate into its existing business; (3) that the Company was experiencing weakening demand for its products and services and was attempting to transition into different markets in order to reinvigorate its sales growth; and (4) that as a result of the foregoing adverse factors, the Company would not be profitable in the near-term, if at all, and would have to completely restructure its operations and slash costs. For more information, contact Fred Taylor Isquith, Gregory M. Nespole, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800.575.0735 or by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com.Your e-mail should refer to Log On America. LUMENIS LTD.: Forges Agreement To Settle Securities Suit in S.D. NY ------------------------------------------------------------------- Lumenis Ltd. (NASDAQ:LUME) has reached an agreement to settle the consolidated securities class action filed in 1998 in the United States District Court for the Southern District of New York. The consolidated suit names the Company, Salomon Smith Barney Inc., and several additional current and former directors and officers as defendants. The suit alleges irregularities in the way in which the Company reported its financial results and disclosed certain facts throughout 1997 and 1998 and in the alleged "tipping" of non-public information to Salomon Smith Barney Inc. in September 1998. In December 1999, the Company moved to dismiss the consolidated amended complaint. The Court later entered an order dismissing the claim against the Company's director and officer defendants and denying the remaining dismissal counts. The parties then entered into a scheduling order and have commenced discovery. The terms of the settlement, which is subject to Court approval, include a cash payment of $4.5 million and the issuance of between 420,000 and 500,000 shares of Company stock to plaintiffs. Due to the resolution of a dispute with one of the two re-insurers, the total consideration to be paid is less than previously announced and provided for in 2nd Quarter of 2002. As a consequence the Company will recognize a gain in connection with the settlement. The final number of shares to be issued will be based upon the average closing share price over the 15 trading days prior to the final court hearing on the settlement. The shares will be freely tradable upon issuance to members of the settlement class. "I am pleased that we have finally settled this claim, one of the last of several large suits inherited from the previous management," said Yacha Sutton, President and CEO of Lumenis, in a statement. "The Company intends to pursue reimbursement of the $4.5 million and expenses as a creditor of Reliance Insurance Company, which is now in liquidation." The settlement agreement is subject to preliminary and final approval from the Court after notice to the class and the opportunity for consideration of any objections. The Court is likely to hold a hearing on final approval of the settlement in the first half of 2002. MICROSOFT CORPORATION: Senate Inquires Into Federal Suit Settlement ------------------------------------------------------------------- Controversial Microsoft Corporation faced the Senate Judiciary Committee last week to allow lawmakers to ask the Company and the Justice Department about the settlement that ended the historic antitrust case, according to an Associated Press report. Justice antitrust head Charles A. James and Microsoft lawyer Charles "Rick" Rule faced a skeptical committee, which included Sen. Orrin Hatch, R-Utah, who was instrumental in the inception of the antitrust case during the Clinton administration. Last month, Sen. Hatch sent a list of detailed questions about the settlement to Mr. James. According to the Associated Press, Sen. Charles Schumer, D-NY, also called for hearings about the Company's new Windows XP operating system and said the Company intentionally shut out the Eastman Kodak Co., which makes digital cameras. Others on the witness list included Stanford University professor Lawrence Lessig and two executives from Company competitors Red Hat Software and Liberate Technologies. Both parties entered the settlement to get immediate relief for consumers, according to officials. Under the settlement, the Company would allow consumers to remove some features in Windows and release some of the Windows blueprints to competitors so they can write compatible software. Nine states have endorsed the settlement, but nine other states have been adamant in their opposition to it and continue to pursue their claims, seeking stronger penalties, stricter enforcement requirements and to make Microsoft sell a version of Windows without added features. A Federal Judge will decide in March 2002 whether the settlement is fair to consumers or not. PAC-WEST TELECOMM: Harvey Greenfield Lodges Securities Suit in S.D. NY ---------------------------------------------------------------------- The Law Firm of Harvey Greenfield commenced a securities class action on behalf of purchasers of the securities of Pac-West Telecomm, Inc. (NASDAQ: PACW) between November 3, 1999 and December 6, 2000, inclusive in the United States District Court, Southern District of New York against the Company and: (1) Wallace W. Griffin, (2) Richard E. Bryson, (3) Dennis V. Meyer, (4) Bear Stearns & Co., Inc., (5) Merrill Lynch, Pierce Fenner & Smith Incorporated, (6) Goldman, Sachs & Co. and (7) Salomon Smith Barney, Inc. The suit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In November 1999, the Company commenced an initial public offering of 12,600,000 of its shares of common stock at an offering price of $10 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriter defendants allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby the underwriter defendants agreed to allocate shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For further details, contact Harvey Greenfield by Mail: 60 East 42nd Street, Suite 2001, New York, NY, 10165 by Phone: 212.949.5500 by Fax: (212) 949-0049 or visit the firm's Website: harvey.greenfield@verizon.net. PROFILE-DESIGN LLC: Recalls 8T Bicycle "Aero Bars" For Accident Hazard ---------------------------------------------------------------------- Profile-Design LLC is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 8,400 "aero bars" used on racing bicycles. The aero bars are handlebar extensions that either mount in the center of the handlebars or are sold as a complete handlebar and stem system. The aero bars allow riders to ride in an aerodynamic crouching position. The brackets that attach the aero bars' forearm pads, where riders rest their arms, can loosen or separate during use, causing the rider to lose control and crash. The Company has received one report of a bracket on one of the aero bars loosening, resulting in a rider crashing and suffering a broken rib and abrasions. The recall includes "Carbon X" and "Carbon Stryke" aero bars. The Carbon X aero bar is a complete bicycle handlebar and stem system, and includes the writing "Profile Design" and "Carbon X." The Carbon Stryke aero bar attaches to existing bicycle handlebars, and includes the writing "Profile Design" and "Carbon Stryke." Both aero bars are black. Independent bicycle stores worldwide sold the recalled aero bars. The Carbon X aero bars were sold from August 1999 through November 2001 for about $349, and the Carbon Stryke aero bars were sold from May 1999 through November 2001 for about $139. For more information, contact the Company by Phone: 888.800.5999 (between 9 am and 5 pm PT Monday through Friday) or visit the firm's Website: http://www.profile-design.com. Aero bar ZB brackets that are welded together or have a spring- loaded flip-up design are not part of the recall. RESONATE INC.: Schiffrin Barroway Initiates Securities Suit in S.D. NY ---------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action on behalf of purchasers of the common stock of Resonate, Inc. (NASDAQ:RSNT) between August 2, 2000 and December 6, 2000, inclusive in the United States District Court, Southern District of New York, against the Compapy, certain of its officers and its underwriters. The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In August 2000, the Company commenced an initial public offering of 4,000,000 of its shares of common stock, at an offering price of $21 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. 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 or by E-mail: info@sbclasslaw.com SAMARITAN HEALTH: AZ Court Rules Ex-Patients Can't Keep Full Awards ------------------------------------------------------------------- Arizona's Court of Appeals recently upheld a trial Judge's ruling in a class action lawsuit filed by nine former hospital patients, the Associated Press recently reported. Both courts held that accident victims who win lawsuits and are awarded compensation based on hospitals' regular rates are not entitled to keep all the money if they were treated at discounted rates negotiated by insurers. Judge Michael A. Yarnell of Maricopa County Superior Court had ruled, after the trial proceedings, that so-called "medical liens" filed by hospitals against the former patients' awards or settlements were valid even though the hospitals' original bills indicated that the discounted payments were "payment in full." Courts in Texas, New Mexico, Illinois and Wisconsin have ruled that hospitals' acceptance of discounted rates as "payment in full" meant that no debt remained. However, the Arizona Court of Appeals said state law allows medical liens for hospitals' "customary charges." The former patients were pressed by their respective hospitals to repay money they won that exceeded payments to the hospitals under contracts they (the hospitals) had negotiated with the former patients' health insurers. Although the hospitals cannot seek full repayment directly from the patients because of their insurance coverage, they can go after lawsuit awards or settlements won against those at fault in the accidents, the Court of Appeals ruling said. Tom Hagen, the former patients' attorney, said he would appeal the ruling by the three-judge Court of Appeals panel to the Arizona Supreme Court. Mr. Hagen said the former patients should be allowed to keep the full awards and judgments because they had paid for the health coverage that entitled the insurance companies to pay lower rates to the hospitals. "The patient owes the hospital nothing beyond that, other than co-payments and deductibles," he added. A lawyer for the Samaritan Health System and Banner Health Systems, two hospital companies sued by the former patients in an attempt to block the liens, did not immediately return a call for comment. VITAMIN ANTITRUST: Vitamin Companies Settle Antitrust Suit For $225M -------------------------------------------------------------------- Six vitamin makers have agreed to settle for $225 million a consolidated class action brought by the Attorneys General of the District of Columbia and 22 states against several vitamin manufacturers. The suit claims that the makers violated state consumer protection laws by conspiring to fix vitamin prices. The vitamins were sold to manufacturers that use them in their products. Named as defendants are: (1) Hoffmann-LaRoche of Switzerland, (2) BASF AG of Germany, (3) Aventis Animal Nutrition, S.A. (formerly Rhone-Poulenc SA) of France, (4) Daiichi Pharmaceutical Co. of Japan, (5) Eisai Co. of Japan, and (6) Takeda Chemical Industries Ltd. of Japan The suit was labeled the "indirect vitamin products" class action because consumers bought the vitamins indirectly, through the product manufacturer or distributor, from the vitamin makers. The suit contends that consumers paid higher prices for these products because the product manufacturers paid unlawfully high prices for the vitamins included in the products. Under the settlement, the State Attorneys General will receive $107,625,000 on behalf of consumers. The same amount will be made available to businesses that file proper claims, and a State Economic Impact Fund of $10 million will be provided for the benefit of businesses or consumers in the discretion of the Attorneys General. Due to the high cost of providing relatively small refunds directly to injured consumers, the consumer recovery will be distributed by the Attorneys General expressly for the purpose of improving the health and nutrition of citizens in the participating states or the advancement of nutritional, dietary, or agricultural science. The money will be used only to support activities that have not been funded and that, without the settlement funds, would not be fully capitalized. The amounts that each state will receive are: (i) Arizona - $4,691,000; (ii) the District of Columbia - $522,000; (iii) Florida - $14,988,000; (iv) Hawaii - $1,195,000; (v) Idaho - $1,235,000; (vi) Illinois - $12,105,000; (vii) Kansas - $2,642,000; (viii) Maine - $1,245,000; (ix) Michigan - $9,865,000; (x) Minnesota - $4,751,000; (xi) Nevada - $1,758,000; (xii) New Mexico - $1,748,000; (xiii) New York - $18,264,000; (xiv) North Carolina - $7,584,000; (xv) North Dakota - $643,000; (xvi) Puerto Rico - $3,827,000; (xvii) Rhode Island - $994,000; (xviii) South Dakota - $743,000; (xix) Tennessee - $5,455,000; (xx) Vermont - $592,000; (xxi) Washington - $5,716,000; (xxii) West Virginia - $1,818,000; and (xxiii) Wisconsin - $5,244,000 The state of California has entered into a separate settlement and is not considered a settling state for the purposes of this class action. The multi-state settlement will not be effective until it receives final approval at fairness hearings to be held in each participating state and the District of Columbia. XO COMMUNICATIONS: Weiss Yourman Files Second Securities Suit in VA ------------------------------------------------------------------- Weiss and Yourman initiated a second securities class action against XO Communications, Inc. (NASDAQ:XOXO) and certain of its officers and directors in the United States District Court for the Eastern District of Virginia, on behalf of purchasers and/or owners of XO securities between April 4,2001 and November 29,2001. The new lawsuit has added Forstmann Little & Co. as a defendant and has added a claim under state law for breach of fiduciary duties. The suit charges the defendants with violations of the Securities Exchange Act of 1934 and of breaches of fiduciary duty. The complaint alleges that defendants failed to disclose material adverse information and misrepresented the truth about the Company and caused plaintiff and other members of the class to purchase the Company's common stock at artificially inflated prices. It also alleges that the defendants are violating their obligations of good faith, fair dealing, loyalty, candor and due care to all of the Company's public shareholders. For more information, contact James E. Tullman, Mark D. Smilow, or David C. Katz by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New York NY 10176 by Phone: 888.593.4771 or 212.682.3025 or by E- mail: info@wynyc.com XO COMMUNICATIONS: Savett Frutkin Initiates Securities Suit in E.D. VA ---------------------------------------------------------------------- Savett Frutkin Podell & Ryan PC filed a securities class action on behalf of persons who purchased the common stock of XO Communications, Inc. (NASDAQ:XOXO) between April 4, 2001 and November 29, 2001 in the United States District Court for the Eastern District of Virginia. The suit names as defendants the Company and: (1) Daniel F. Akerson, Chief Executive Officer and Chairman; (2) Nathaniel A. Davis, its Chief Operating Officer; and (3) Craig O. McCaw, its founder and controlling shareholder The suit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) by issuing false and misleading statements regarding the Company's financial condition as well as its present and future business prospects. In particular, the suit alleges that defendants mislead the investing public concerning the ability of the Company to survive until it would be cash flow positive. Throughout the class period, defendants stated that the Company would be able to survive at least into the middle of 2003 without the need for further financing. However, on November 29, 2001, defendants announced a transaction where the shareholders' equity was destroyed in exchange for an investment of $800 million. Trading in the Company's stock was quickly halted. For more details, contact Robert P. Frutkin or Renee C. Nixon by Phone: 800.993.3233 or by E-mail: mail@savettlaw.com or visit the firm's Website: http://www.savettlaw.com/ XO COMMUNICATIONS: Wechsler Harwood Lodges Securities Suit in E.D. VA --------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities fraud class action in the United States District Court for the Eastern District of Virginia, on behalf of purchasers of XO Communications, Inc. (NASDAQ:XOXO) common stock between April 4, 2001 and November 29, 2001, inclusive. The suit names as defendants the Company and: (1) Daniel F. Akerson, Chief Executive Officer and Chairman of the Board of Directors; (2) Nathaniel A. Davis, President, Chief Operating Officer and Director; and (3) Craig O. McCaw, the Company's founder, controlling shareholder, and Director The suit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by, among other things, issuing false and misleading statements regarding the Company's financial condition as well as its present and future business operations. In particular, the suit alleges that defendants misled the investing public concerning the Company's ability to finance its business operations until it becomes cash-flow positive. Throughout the class period, defendants falsely stated that the Company had sufficient cash to meet cash requirements into mid-2003 without the need for further financing. On November 29, 2001 to the market's surprise, the Company, strapped for cash, announced a transaction that would virtually eliminate existing shareholders' equity resulting from the conditional investment and proposed related restructuring by a buy-out firm and foreign investor. Upon the announcement, the NASD immediately halted trading in the Company's stock. The NASD announced that trading in the Company's securities will remain halted until the Company "has fully satisfied the NASDAQ's request for additional information." For more information, contact Craig Lowther by Mail: 488 Madison Avenue 8th Floor, New York, New York 10022 by Phone: 877.935.7400 (Toll Free) by E-mail: clowther@whhf.com or visit the firm's Website: http://www.whhf.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 * * *