/raid1/www/Hosts/bankrupt/CAR_Public/011231.mbx
C L A S S A C T I O N R E P O R T E R
Monday, December 31, 2001, Vol. 3, No. 254
Headlines
ACLN LTD.: Kirby McInerney Commences Securities Suit in S.D. New York
ACLN LTD.: Milberg Weiss Initiates Securities Suit in S.D. New York
ACLN LTD.: Rabin Peckel Commences Securities Suit in S.D. New York
ARCTIC CAT: Recalls 15T ATVs Due To Defective Brake System
CALIFORNIA: San Diego Agrees To Revise Retirement Benefits Calculations
DIGITAL INSIGHT: Bernstein Liebhard Files Securities Suit in S.D. NY
DIGITAL INSIGHT: Wolf Haldenstein Commences Securities Suit in S.D. NY
ERNST YOUNG: Ademi O'Reilly Files Suit Relating To Van Wagoner Funds
HOMESTORE.COM: Milberg Weiss Files Securities Suit in C.D. California
IBP INC.: AL Court Grants Certification To Beef Market Antitrust Suit
LUCENT TECHNOLOGIES: Enters Agreement to Settle Consumer Fraud Suit
LUTHERAN BROTHERHOOD: Court Grants Partial Certification To Fraud Suit
NEIMAN MARCUS: Recalls 620 Pine Tree Candles For Potential Fire Hazard
NEW YORK: Car Owners Seek Return Of Vehicles Damaged in 9/11 Attack
NEW YORK: Workers Sue Retail Chains, Labor Agents For Wage Violations
SRI SURGICAL: Milberg Weiss Commences Securities Suit in M.D. Florida
UNITED PAN: Schiffrin Barroway Commences Securities Suit in S.D. NY
USA NETWORKS: Shareholders Sue To Block Merger With Vivendi Universal
VAN WAGONER: Cauley Geller Commences Securities Fraud Suit in Delaware
VAN WAGONER: Kirby McInerney Commences Securities Suit in E.D. WI
XO COMMUNICATIONS: Spector Roseman Initiates Securities Suit in E.D. VA
XO COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in E.D. VA
*********
ACLN LTD.: Kirby McInerney Commences Securities Suit in S.D. New York
---------------------------------------------------------------------
Kirby McInerney & Squire initiated a securities class action on behalf
of persons who acquired ACLN, Ltd. (NYSE: ASW) securities between
December 27, 1998 and December 20, 2001, inclusive. The suit is
pending in the United States District Court for the Southern District
of New York against the Company, and:
(1) Joseph Bisschops, Chairman and Managing Director,
(2) Aldo Labiad, President, Chief Executive and Operating Officer
and Managing Director, and
(3) Alex De Ridder, Vice President and Chief Financial Officer
The suit charges the above referenced defendants with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder. The action charges, among other
things, that beginning with its Public Offering on June 26, 1998, if
not before, defendants commenced a continuing scheme, ending no earlier
than December 20, 2001, to mislead the investing public and conceal the
Company's true financial state and business prospects.
The truth about the Company was undisclosed until the publication of an
investigative report by TheStreet.com on December 20, 2001. The
Company's stock price fell from $35.75 on December 14, 2001 to $26.50
on December 18, and to $9.40 on December 20.
The December 20, 2001 report disclosed that from the time ACLN went
public, on June 26, 1998, until it filed an annual report with the SEC
on June 29, 2000, as many as 2,265,221 shares held by entities
controlled by Chairman Joseph Bisschops - 29% of his total holdings -
vanished from the "principal and management shareholders" list in the
company's SEC filings. The missing shares belong to four of Bisschops'
entities, whose names also disappeared from the list: Pearlrose
Holdings International, Scott Investments, Gilbert Management and
Emerald Sea Marine.
Investigative reports also allege that defendants have been claiming
that the Company has assets that it does not in fact own - the Sea
Atef, a cargo ship. Reports charge that defendants had been booking
revenues as if the Sea Atef was in continuous operation, during a
period when defendants had represented that the Sea Atef was in fact
not in continuous operation. According to reports, defendants have been
understating their selling, general and administrative expenses. They
have been re-characterizing payments to related-parties after the fact
to conceal those payments when they were made. Further, they have been
overstating the number of cars that they sold and, consequently, their
sales revenue.
For further details, contact Ira M. Press or Melissa Fleming by Mail:
830 Third Avenue 10th Floor, New York, New York 10022 by Phone: 212-
317-2300 or 888-529-4787 by E-Mail: mfleming@kmslaw.com or visit the
firm's Website: http://www.kmslaw.com
ACLN LTD.: Milberg Weiss Initiates Securities Suit in S.D. New York
------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class
action on behalf of purchasers of the securities of ACLN, Ltd. (NYSE:
ASW) between June 29, 2000 and December 20, 2001, inclusive in the
United States District Court, Southern District of New York against the
Company and:
(1) Joseph Bisschops,
(2) Aldo Labiad and
(3) Alex De Ridder
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. Beginning on June 29, 2000, and continuing throughout the
class period, defendants issued multiple press releases and filed
quarterly and annual reports with the SEC which highlighted the
Company's growth and strong financial performance.
As alleged in the suit, these statements were materially false and
misleading because they failed to describe the true state of financial
affairs at the Company. Specifically, defendants:
(i) failed to disclose certain self-dealing transactions between
Mr. Bisschops and certain private entities which he
controlled;
(ii) overstated the Company's assets by listing a shipping vessel,
the Sea Atef, as an asset when, in fact, the Company did not
own the Sea Atef;
(iii) understated the Company's selling, general and administrative
expenses, causing its net income to be overstated; and
(iv) violated generally accepted accounting principles and the
Company's own stated policy with regard to recognition of
revenue by reporting revenue for the cars that it sold as soon
as the ship carrying the cars left the port and not when the
shipment was completed.
The truth about these statements finally came to light on December 20,
2001, in an article published by Herb Greenberg on The Street.com. In
response to the questions raised in Greenberg's article, Company shares
plunged 64%, falling $16.71 to close at $9.40 per share.
For further details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: 800-320-5081 by E-mail: ACLNcase@milbergNY.com or visit the
firm's Website: http://www.milberg.com
ACLN LTD.: Rabin Peckel Commences Securities Suit in S.D. New York
------------------------------------------------------------------
Rabin and Peckel LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons or entities who purchased ACLN, Ltd. securities
(NYSE:ASW) between June 29, 2000 and December 20, 2001, both dates
inclusive against the Company and:
(1) Joseph Bisschops,
(2) Aldo Labiad, and
(3) Christian L. Payne
The suit alleges that defendants violated Section 10(b) and 20(a) of
the Securities and Exchange Act of 1934 by issuing a series of false
and misleading statements, and omissions of material fact during the
class period, concerning:
(i) the Company's purported ownership of a $6 million ship named
the Sea Atef;
(ii) the unreported disposition of 27% of the Company's stock by
Mr. Bisschops;
(iii) the understatement of the Company's selling, general and
administrative expenses in 2000;
(iv) payments to a company controlled by Mr. Bisschops for
purported "administrative services"; and
(v) the overstatement of the number of new cars sold in the first
quarter of 2001.
The suit alleges that as a result of these false and misleading
statements the price of Company securities were artificially inflated
throughout the class period causing plaintiff and the other members of
the class to suffer damages.
For further details, contact Eric Belfi or Maurice Pesso by Mail: 275
Madison Avenue, New York, NY 10016 by Phone: 800-497-8076 or 212-682-
1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the
firm's Website: http://www.rabinlaw.com
ARCTIC CAT: Recalls 15T ATVs Due To Defective Brake System
-----------------------------------------------------------
Arctic Cat, Inc. is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 15,500 All-Terrain
Vehicles (ATVs). The pressure switch in the braking system leaks fluid.
The unexpected loss of fluid can cause the brakes to fail, posing the
risk of serious injury or death. The Company has received four reports
of problems with the pressure switches, including one consumer who
suffered a dislocated shoulder and another who suffered bumps and
bruises.
The recalled ATVs come in red and green and have the brand name written
on both sides of the ATV. The Manual Transmission model names are:
(1) Model: 2002 ATV 500 4x4 (Red), Model No. A2002ATM4AUSR,
(2) Model: 2002 ATV 300 4x4 (Green), Model No. A2002ATF4AUSG,
(3) Model: 2002 ATV 300 4x4 (Red), Model No. A2002ATF4AUSR,
(4) Model: 2002 400 4x4 (Green), Model No. A2002ATI4AUSG,
(5) Model: 2002 ATV 400 4x4 (Red), Model No. A2002ATI4AUSR,
(6) Model: 2002 ATV 500 4x4 (Green), Model No. A2002ATM4AUSG,
The Automatic Transmission models are:
(i) Model: 2002 ATV 375 2x4 (Green), Model No. A2002ATG2BUSG,
(ii) Model: 2002 TBX 500 4x4 (Green), Model No. A2002BXM4BUSG,
(iii) Model: 2002 ATV 375 2x4 (Red), Model No. A2002ATG2BUSR,
(iv) Model: 2002 ATV 375 4x4 (Green), Model No. A2002ATG4BUSG,
(v) Model: 2002 ATV 375 4x4 (Red), Model No. A2002ATG4BUSR,
(vi) Model: 2002 ATV 500 4x4 (Green), Model No. A2002ATM4BUSG,
(vii) Model: 2002 ATV 500 4x4 (Red), Model No. A2002ATM4BUSR,
The Company will help consumers determine if their ATV is part of
this recall. Company dealers nationwide sold these ATVs from July 2001
through December 2001 for between $4,200 and $6,400.
For further details, contact the Company by Phone: 800-279-9419 between
8 am and 5 pm CT Monday through Friday or visit the firm's Website:
http://www.arctic-cat.com.
CALIFORNIA: San Diego Agrees To Revise Retirement Benefits Calculations
-----------------------------------------------------------------------
San Diego County officials have agreed to settle three class actions
filed Court on behalf of the county's government employees, challenging
the way their pensions were calculated. The dispute sprang from a
landmark 1997 California Supreme Court ruling in a lawsuit against the
Ventura County government. The court ruled that 17 factors that could
enhance workers' base pay, such as automobile allowances and extra
compensation for speaking more than one language, should be included
when determining employees' highest pay rates. That is important
because workers' pensions are based in part on pay rates.
San Diego officials agreed to change their pension formula to include
the 17 factors as it was one of about a dozen counties in the state
facing similar legal challenges at that time. However, lawyer Michael
Conger challenged the calculation, saying the county should have made
the change retroactive to 1995, and that the county should add four
factors, including payment for unused vacation time, to the highest
salary calculation. In 2000, a judge ruled that the county did have to
make the changes retroactive, but did not require that the four
additional factors be included.
Under the settlement, the county will not make retroactive calculations
based on the 17 factors nor include the four additional factors.
However, it will make other improvements to the retirement plan,
affecting 30,000 current and former employees. The new retirement
benefits could cost the county about $10 million a year, officials told
SignOnSanDiego.
Both sides welcomed the settlement. Mr. Conger said, "If you're a
county employee or a retired county employee, it's great news." County
Counsel John Sansone also told SignOnSanDiego that the potential
settlement also is good news for the county because it would end a
long-standing dispute and improve workers' retirement benefits.
The settlement has yet to be approved but if all goes well, details of
the agreement will be mailed to county employees in January. A hearing
on the cases is set in February.
DIGITAL INSIGHT: Bernstein Liebhard Files Securities Suit in S.D. NY
--------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of Digital Insight Corporation (Nasdaq:
DGIN) stocks from September 30,1999 to December 6,2000.
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 September 1999, the
Company commenced an initial public offering of 3,500,000 of its shares
of common stock at an offering price of $15 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 details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 E. 40th Street, 22nd Floor, New York, NY, 10016
by Phone: 800-217-1522 by Fax: info@bernlieb.com or visit the firm's
Website: http://www.bernlieb.com
DIGITAL INSIGHT: Wolf Haldenstein Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman and Herz LLP commenced a securities
class action in the United States District Court for the Southern
District of New York on behalf of purchasers of Digital Insight
Corporation (Nasdaq: DGIN) stocks from September 30,1999 to December
6,2000.
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 September 1999, the
Company commenced an initial public offering of 3,500,000 of its shares
of common stock at an offering price of $15 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 Wolf, Haldenstein, Adler, Freeman & Herz
LLP by Mail: 270 Madison Avenue, New York, NY, 10016 by Phone: 800-575-
0735 by Fax: classmember@whafh.com or visit the firm's Website:
http://www.whafh.com
ERNST YOUNG: Ademi O'Reilly Files Suit Relating To Van Wagoner Funds
--------------------------------------------------------------------
Ademi & O'Reilly, LLP initiated a securities class action against Ernst
& Young, LLP, the auditors of the Van Wagoner Funds (Nasdaq:VWEGX)
family of mutual funds on behalf of purchasers of the Fund's shares
between April 28, 2000 and June 30, 2001, inclusive in the United
States District Court, Eastern District of Wisconsin. The suit also
names as defendants:
(1) Van Wagoner Funds, Inc.,
(2) Van Wagoner Capital Management, Inc.,
(3) Sunstone Financial Group, Inc.,
(4) Van Wagoner Emerging Growth Fund,
(5) Garrett R. Van Wagoner,
(6) Larry P. Arnold, and
(7) Robert S. Colman
The suit alleges that Ernst & Young, LLP failed to follow generally
accepted accounting practices and generally accepted auditing
standards, by specifically approving the changes in net assets utilized
by the Funds between the end of 1999 and the end of 2000. The suit
also alleges that defendants violated Sections 11, 12(a)(2) and 15 of
the Securities Act of 1933 by issuing materially false and misleading
registration statements and prospectuses.
Defendants issued materially false and misleading statements concerning
the Fund's net asset value (NAV) and performance. These statements were
materially false and misleading because:
(i) the NAV of the Fund was materially overstated as the Fund had
overvalued a material portion of their holdings of certain
private placement investments;
(ii) the Fund's performance was materially overstated as those
figures were based on its NAV; and
(iii) the risk of investing in the Fund was materially understated
as it had failed to disclose the true risk attendant to its
portfolio securities and specifically the private placement
investments.
Accordingly, defendants' statements about the risks associated with
investing in the Fund were not meaningful because they failed to advise
investors that it was materially overstating its NAV.
In June 2001, defendants' gross overvaluation of the private placement
investments was disclosed when defendants revalued nine such private
placement investments originally valued at $28.6 million on December
31, 2000 to a total of $9.00 and marked down an additional two holdings
by precisely 50% or 75%. During the class period, the Fund's value
decreased by approximately 75%.
For more information, contact Robert O'Reilly by Phone: 866-264-3995,
(toll-free) by Fax: 414-482-8001 or by E-mail: vanwagoner@ademilaw.com
HOMESTORE.COM: Milberg Weiss Files Securities Suit in C.D. California
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action in the United States District Court for the Central District of
California on behalf of purchasers of Homestore.com, Inc. (NASDAQ:HOMS)
common stock during the period between July 20, 2000 and December 21,
2001.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. In
July 2000 (after the close of the market), the Company issued a release
of its positive 2Q 00 results, causing its stock price to soar by more
than $7 (or 25%) the following trading day.
The suit alleges that as part of their effort to boost the price of the
Company's stock, defendants misrepresented the Company's true prospects
in an effort to conceal its improper acts until they were able to sell
at least $16 million of their own stock. In order to overstate revenues
and assets in 2nd, 3rd, and 4th Quarters 2000 and 1st, 2nd and 3rd
Quarters, 2001, the Company violated generally accepted accounting
principles and SEC rules by engaging in improper "roundtrip"
transactions. These transactions had the effect of dramatically
overstating revenues and assets. This came to an end (though
unbeknownst to the public) in the Company's 3rd Quarter 2001 as the its
main roundtrip partner stopped doing these transactions with the
Company.
Following the release of the Company's 3rd Quarter 2001 results, the
Company also slashed its revenue projections for 2002 from $563 million
to $375-$425 million as a result of a material decline in its business
with its main "roundtrip" partner. On this news the Company's shares
dropped by more than 50% the following trading day. Then, on December
21, 2001 (after the close of the market), the Company partially
admitted that its past accounting for its prior results was inaccurate.
On this news the Company's shares were halted and have not traded
since.
For more information, contact William Lerach by Phone: 800-449-4900 by
E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
IBP INC.: AL Court Grants Certification To Beef Market Antitrust Suit
---------------------------------------------------------------------
An Alabama federal judge granted class action status to a suit filed
against meat-packing giant IBP Inc. by a group of cattlemen accusing it
of illegally cornering the beef market and conspiring to fix prices on
the open market, Associated Press reported.
10 cattlemen originally filed the suit, claiming the Company violated
antitrust laws by buying mostly packer-owned cattle and cattle
committed to packers under long-term contracts instead of bidding on
auction markets. This was done to unfairly lower prices paid to
producers.
US District Judge Lyle Strom broadened the lawsuit to potentially
include all US cattle producers and owners who sold cattle to the
Company on a cash basis since February 1994. The ruling paves the way
for more than 30,000 cattlemen from across the country to join the suit
and makes clearer the possibility of a trial.
Attorney for the plaintiffs Joe Whatley welcomed the ruling, saying
"There's no question this is a victory for us, and a victory for
cattlemen all over the US." Lawyers have opined that without class
certification, the action would most likely have been dismissed.
An earlier suit was dismissed by Federal Judge W. Harold Albritton in
1998 after the cattlemen asked the court to include all cattlemen who
felt they had not received a fair price on the open market - a class
description different from the present suit.
Company spokesman Gary Mickelson told Associated Press they were still
reviewing the decision before deciding whether to appeal, "While we are
disappointed with the latest development in this long-running case, we
remain confident our company will ultimately prevail.Numerous studies
have proven that changes in cattle prices are due to basic supply and
demand, not packer concentration or livestock marketing agreements."
LUCENT TECHNOLOGIES: Enters Agreement to Settle Consumer Fraud Suit
-------------------------------------------------------------------
Lucent Technologies entered an agreement to settle for an undisclosed
amount a class action commenced in New Jersey State Court in April
1998, alleging that the Company improperly administered a coupon
program resulting from the settlement of a prior class action.
The suit alleges that the Company improperly limited the redemption of
the coupons from dealers by not allowing them to be combined with other
volume discount offers, thus limiting the market for the coupons. The
suit alleges breach of contract, fraud and other claims.
The settlement has yet to be given final approval by the court. In a
disclosure to the Securities and Exchange Commission, the Company
qualified that it cannot be certain that this case will not have a
material adverse effect on its business operations.
LUTHERAN BROTHERHOOD: Court Grants Partial Certification To Fraud Suit
----------------------------------------------------------------------
A Minnesota trial court granted partial class certification to a class
action brought by a group of life insurance policyholders against
Lutheran Brotherhood, a not-for-profit fraternal benefit society,
alleging it violated Minnesota's Prevention of Consumer Fraud Act
through the sale of "vanishing premium" life insurance policies.
The suit consists of persons who, between January 1, 1982, and the
present, purchased Lutheran Brotherhood life insurance policies based
on a payment method in which dividend or interest from previous premium
payments would reduce and eventually eliminate premiums altogether,
known as "vanishing premium" life insurance.
The suit stems from the sale of the Society's traditional life or
universal life insurance, both forms of cash value life insurance,
beginning in 1982. Cash value life insurance allowed insurance
companies to invest the premiums policyholders paid for their insurance
policies. Policyholders then received returns from the investment of
their premiums in the form of dividends or interest. These types of
policies were especially popular in the 1980's due to high interest
rates that allowed for greater returns.
The suit alleges that among the premium payment options marketed by the
Society for cash value life insurance was the "vanishing premium" plan.
Under this type of plan the policyholder paid higher-than-normal
premiums in the early years of a policy with the expectation that on a
specific future date, the "vanishing" date, interest earned from past
premiums would relieve the policyholder from future premium payments.
In reality, however, many policyholders were required to continue
paying premiums after the "vanishing" date due to lowering interest
rates in the early 1990's.
The suit further states that the Society knowingly marketed the
"vanishing premium" plan based on unrealistic interest and dividend
projections which, in some cases, would have required unprecedented
high interest rates for 20 or more years to be successful.
Policyholders also maintain that the Society continued to market the
plans even after it knew the policies were under-funded and in danger
of lapsing.
The court ruling held that the allegations of consumer fraud could
proceed as a class action. However, the court determined that claims
against the Society based on its alleged breach of fiduciary duty
needed to be brought by individual policyholders rather than as a class
action.
NEIMAN MARCUS: Recalls 620 Pine Tree Candles For Potential Fire Hazard
----------------------------------------------------------------------
The Neiman Marcus Group Inc. is cooperating with the US Consumer
Product Safety Commission by voluntarily recalling about 620 Pine Tree
Candles. The candles can collapse, causing the flame and hot wax to
spread and posing a fire hazard to consumers.
Another retailer received one report of a similar candle that collapsed
and spread the flame. No injuries or property damage were reported.
Neither Neiman Marcus nor Bergdorf Goodman stores have received any
reports of incidents or injuries.
The Pine Tree Candle is shaped like a pine tree, and comes in three
colors (lime green, royal blue and gold) and three sizes. The small
candle is about 8 inches tall and 5 1/2 inches wide, the medium-sized
candle is about 9 inches tall and 6 inches wide, and the tall candle is
about 111/2 inches tall and 31/2 inches wide. There is a round sticker
on the bottom of each candle that contains warnings regarding the use
of the candle, and indicates that the candle is made in Italy. The
packaging for each candle also has a sales sticker with a SKU number.
The SKU Number for the lime green candle is 3162 4045, and the SKU
Number for the royal blue candle is 3162 4037. The SKU numbers for the
gold candle are 57604026 (for the small candle), 57604034 (for the
medium-sized candle) and 57604042 (for the large candle).
Neiman Marcus stores nationwide and Bergdorf Goodman stores in New York
sold the candles from the early Fall through December 21, 2001 for $12-
$14 (for the small candle), $15 (for the medium candle), and $26 (for
the large candle).
For more information, call the Company by Phone: 800-634-6267
NEW YORK: Car Owners Seek Return Of Vehicles Damaged in 9/11 Attack
-------------------------------------------------------------------
The City of New York faces a class action status filed by the owners of
an an estimated 900 vehicles towed from the World Trade Center
neighborhood in the days after the terrorist attacks, demanding the
return of their vehicles.
Plaintiff John Diaz commenced the suit in New York Federal Court.
According to the suit, Mr. Diaz's 1993 Chevrolet Astro minivan was
parked a few blocks from the trade center. He later found it, covered
in soot and with minor damage, but city authorities told him he
couldn't remove it. He later learned his minivan was moved to a
landfill and was told that his vehicle will be crushed, according to an
Associated Press report.
His lawyer, Robert Tolchin, said the City has said the minivan could
not be returned because it and the other vehicles towed from around the
trade center were too damaged. He asserts, "We understand the city had
to clear the streets to bring in heavy equipment.But once it was
cleared out of the area, the people are entitled to have their cars
back." The City Law Office did not immediately return a telephone
message seeking comment, according to Associated Press.
NEW YORK: Workers Sue Retail Chains, Labor Agents For Wage Violations
---------------------------------------------------------------------
A New York trial court granted class certification to a class action
brought by the City's delivery workers against several retail,
supermarket and drugstore chains, alleging the Companies violated the
federal Fair Labor Standards Act and the New York Minimum Wage Act by
failing to pay minimum wages or overtime and not providing required
benefits.
The suit, which includes A&P, Gristede's Operating Corporation and
Duane Reade and labor agents Citi Express, Hudson Delivery Service and
Hudson York, name a class consisting of an estimated 1,000 persons who
worked for the supermarket and drugstore chains and labor agents as
delivery workers or dispatchers from January 13, 1994, through May 24,
2001.
The suit stems from the use of delivery workers and dispatchers,
usually unskilled immigrants, to deliver products from supermarket and
drugstore chains in New York City to retail customers according to
instructions from supervisors in the stores. The suit alleges that
although these workers often worked 60 to 84 hours per week, six or
seven days a week, they were not considered employees by either the
labor agents who assigned them to the supermarket and drugstore chains
nor by the stores themselves. Instead, both the labor agents and the
stores considered the workers independent contractors, resulting in the
action's claims that the workers were paid $1 to $2 per hour without
overtime compensation nor spread-of-hours pay, premium pay for hours
worked before the normal starting and ending time of a workday.
The suit further alleges that the workers should have been considered
employees of the supermarket and drugstore chains since these stores
routinely set their schedules, managed their pay and supervised their
work.
SRI SURGICAL: Milberg Weiss Commences Securities Suit in M.D. Florida
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of SRI Surgical
Express Inc. (NASDAQ: STRC) between July 23, 2001 and November 27, 2001
inclusive. The suit is pending in the United States District Court for
the Middle District of Florida, Tampa Division against the Company and:
(1) Richard Isel, Chief Executive Officer, and
(2) James T. Boosales, Chief Financial Officer
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between July 23, 2001 and November 27, 2001. Specifically, in
July 2001, the Company issued a press release announcing financial
results for the second quarter of 2001, which reflected an increase in
earnings and revenues from the second quarter of 2000. The press
release attributed the seemingly positive results to processing and
delivery efficiencies and a supposedly lucrative contract with Health
Trust Purchasing Group (HGP). These results were incorporated into the
Company's financial statements on Form 10-Q, filed with the Securities
and Exchange Commission on July 26, 2001.
In October 2001, the Company issued a press release announcing record
revenues for its third quarter of 2001, which the Company attributed,
in part, to the HGP contract. These statements are alleged to be
materially false and misleading because the Company's business was
being negatively impacted by the HGP contract and the Company's
seemingly impressive growth was achieved, in part, through improper
revenue recognition.
In November 2001, the Company issued a press release announcing that:
(i) it would restate its earnings and revenues for the third
quarter of 2001 because certain revenues should not properly
have been recognized in that quarter;
(ii) the Company's financial performance, as restated, does not
meet analysts' expectations for the third quarter; and
(iii) the Company will not meet analysts' expectations for the
fourth quarter of 2001 due to increased sales and
administrative expenses and startup costs associated with new
businesses.
In response to the announcement, the price of the Company's common
stock plummeted by 40%, to close at $14.63 per share on November 28,
2001.
For more information, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: 800-320-5081 or Kenneth J. Vianale or Maya Saxena by Mail: 5355
Town Center Road, Suite 900 Boca Raton, FL 33486 by Phone: 561-361-5000
by E-mail: srincase@milbergNY.com or visit the firm's Website:
http://www.milberg.com
UNITED PAN: 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 United Pan European
Communications, N.V. (NASDAQ: UPCOY) between February 11, 1999 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 1999, the
Company commenced an initial public offering of 40,000,000 of its
shares of common stock at an offering price of $32.78 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 they 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 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
USA NETWORKS: Shareholders Sue To Block Merger With Vivendi Universal
---------------------------------------------------------------------
USA Networks, Inc. faces a class action filed by two of its
shareholders in the Delaware Court of Chancery seeking to block an
"unfair" sale of the Company's assets to media giant Vivendi Universal
SA for $10.3 billion.
Shareholders Ruth and Abraham Ringel filed the suit to represent all
public shareholders of the Company and to act derivatively in behalf of
the Company itself.
The suit alleges the Company's board breached its fiduciary duty by by
failing to market and auction the company for the highest and best bid
in accordance with the "Revlon" precedent of Delaware corporate law.
The suit additionally claims that the Company's Board and its Chairman,
Barry Diller, allegedly "usurped" for themselves a business opportunity
belonging to the company and thousands of holders of its 738 million
shares of common stock, according to a Reuters report.
The suit states "The break-up of the company, through the so-called
joint venture, is wrongful, unfair and harmful to USA and USA's public
shareholders and represents an attempt by Mr. Diller and the defendants
to aggrandize their personal and financial positions and interests."
The suit further charged both Vivendi and Liberty Media Corporation,
which owns 21% of the Company's holdings, with aiding and abetting the
Company in breaching its fiduciary duties. A USA Networks spokeswoman
told Reuters that the Company declined to comment.
VAN WAGONER: Cauley Geller Commences Securities Fraud Suit in Delaware
----------------------------------------------------------------------
Cauley Geller Bowman and Coates LLP initiated a securities class action
in the Federal District Court in Delaware on behalf of all persons who
purchased or otherwise acquired shares of the Van Wagoner Emerging
Growth Fund (Nasdaq:VWEGX) between April 20, 2000 and December 11,
2001.
The suit alleges violations of the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Advisers Act of 1940
and the Investment Company Act of 1940. Specifically, the suit alleges
that the Fund and its investment advisor and investment managers
disseminated a series of prospectuses/registration statements to the
class which reflected a materially inflated net asset value (NAV) (the
price at which Fund shares are purchased and sold). The NAV was
materially inflated because the Fund had overvalued a material portion
of holdings in certain privately-held companies. In addition, the
Fund's performance was materially overstated since those figures were
based on the materially overstated NAV of the Fund.
The suit also alleges that the risk disclosures contained in the
prospectuses/registration statements disseminated during the class
period were not meaningful, and were themselves misleading, because
they failed to disclose that the Fund was materially overstating its
NAV.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 (toll-free) or by E-mail: info@classlawyer.com
VAN WAGONER: Kirby McInerney Commences Securities Suit in E.D. WI
-----------------------------------------------------------------
Kirby McInerney & Squire LLP lodged a securities class action on behalf
of purchasers of shares of the Van Wagoner Emerging Growth Fund
(Nasdaq: VWEGX) between April 28, 2000 and June 30, 2001, inclusive.
The suit is pending in the United States District Court, Eastern
District of Wisconsin against:
(1) Van Wagoner Funds, Inc.,
(2) Van Wagoner Capital Management, Inc.,
(3) Sunstone Financial Group, Inc.,
(4) Van Wagoner Emerging Growth Fund,
(5) Ernst & Young, LLP,
(6) Garrett R. Van Wagoner,
(7) Larry P. Arnold, and
(8) Robert S. Colman
The suit alleges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 by issuing materially false and
misleading registration statements and prospectuses. As alleged in the
Complaint, defendants issued materially false and misleading statements
concerning the Fund's net asset value (NAV) and performance.
These statements were materially false and misleading because:
(i) the NAV of the Fund was materially overstated as the Fund had
overvalued a material portion of their holdings of certain
private placement investments;
(ii) the Fund's performance was materially overstated as those
figures were based on its NAV, which figures were materially
overstated because the Fund had materially overstated NAV; and
(iii) the risk of investing in the Fund was materially understated
as it had failed to disclose the true risk attendant to its
portfolio securities and specifically the private placement
investments.
Accordingly, defendants' statements about the risks associated with
investing in the Fund were not meaningful because they failed to advise
investors that it was materially overstating its NAV. The complaint
also alleges that Ernst & Young, LLP failed to follow generally
accepted accounting practices and generally accepted auditing
standards, by specifically approving the changes in net assets utilized
by the Funds between the end of 1999 and the end of 2000.
In June 2001, defendants' gross overvaluation of the private placement
investments was disclosed when defendants revalued nine such private
placement investments originally valued at $28.6 million on December
31, 2000 to a total of $9.00 and marked down an additional 2 holdings
by precisely 50% or 75%. During the class period, the Fund's value
decreased by approximately 75%.
For more information, contact Ira Press, Mark A. Strauss or Orie Braun
by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by
Phone: 212-317-2300 or 888-529-4787 by E-mail: oriebraun@kmslaw.com or
visit the firm's Website: http://www.kmslaw.com
XO COMMUNICATIONS: Spector Roseman Initiates Securities Suit in E.D. VA
-----------------------------------------------------------------------
Spector Roseman & Kodroff PC commenced a securities class action in the
United States District Court for the Eastern District of Virginia, on
behalf of purchasers of the common stock of XO Communications, Inc.
(OTCBB:XOXO) during the period of April 4, 2001 through and including
November 29, 2001.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10-b(5) by, among other
things, 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 misled 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 information, contact Robert M. Roseman by Phone: 888-844-5862
(toll-free) by E-mail: classaction@srk-law.com or visit the firm's
Website: http://www.srk-law.com.
XO COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in E.D. VA
----------------------------------------------------------------------
Schiffrin and Barroway LLP initiated a securities class action in the
United States District Court for the Eastern District of Virginia on
behalf of all purchasers of the common stock of XO Communications
(Nasdaq: XOXO) from April 4, 2001 through November 29, 2001, inclusive.
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 the 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 stated that the Company had sufficient cash to
survive at least into mid 2003 without the need for further financing.
These statements were false, and on November 29, 2001, defendants
announced a transaction where the shareholders' equity was destroyed in
exchange for a cash infusion of $800 million. Trading in the Company's
stock was immediately halted.
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
*********
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 * * *