/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020103.mbx C L A S S A C T I O N R E P O R T E R Thursday, January 3, 2002, Vol. 4, No. 2 Headlines CONTINENTAL ALUMINUM: MI Residents Sue For Damaging Factory Emissions DECONNA ICE: FL Court Certifies Lawsuit Over Ice Cream Labeling Error FIDELITY GROUP: South Carolina Employees Prepare Suit Against Agents FORD MOTOR: Judge Says Evidence Shows Exaggeration In Tire Differences GERMANY: Nazi Slave Workers Seek Payout Application Deadline Extension MAINE: State Hospital Compliance With Court Decree Misses Deadline MENORAH GARDENS: Officials Acknowledge Earlier Evidence of Misconduct ORLEANS HOMEBUILDERS: Sued By Homeowners For Carbon Monoxide Hazard PACIFIC GAS: Bankruptcy Could Imperil California Environmental Suit PFIZER INC.: Settles TX Rezulin Suit After Jury Awards $43M To Claimant PITTSTON COAL: Employees File Suit To Gain Promised Retirement Benefits PT KERETA: Indonesian Consumer Group To Sue Over Railway Accidents RACIAL BIAS: Nuclear Plant Workers File Suit Alleging Racial Bias Securities Fraud ACLN LTD.: Weiss Yourman Initiates Securities Suit in C.D. California ACLN LTD.: Kirby McInerney Initiates Securities Suit in C.D. California F5 NETWORKS: Says Pending New York Securities Suits "Part of Trend" HOMESTORE.COM: Bernstein Liebhard Commences Securities Suit in C.D. CA HOMESTORE.COM: Weiss Yourman Lodges Securities Suit in C.D. California SAGENT TECHNOLOGY: Bernstein Liebhard Files Securities Suit in N.D. CA STARMEDIA NETWORK: Bernstein Liebhard Commences Securities Suit in NY TAKE-TWO INTERACTIVE: Weiss Yourman Files Securities Suit in S.D. NY TAKE-TWO INTERACTIVE: Bernstein Liebhard Lodges Securities Suit in NY ********* CONTINENTAL ALUMINUM: MI Residents Sue For Damaging Factory Emissions --------------------------------------------------------------------- Residents of Oakland County, Michigan have sued the Continental Aluminum Company, alleging that emissions from its Lyon Township foundry have damaged their health. About 150 residents filed a class action, saying the emissions resulted in nosebleeds, respiratory problems and sleeplessness. However, the state says tests revealed no health problems. Plaintiff Darcy Hollon says "The company has been given ample time, and they only respond or take care of things when they're forced into a corner.I'm worried about what they aren't detecting." Despite the pending suit, Michigan issued an air permit allowing the expansion of the Company's foundry. The permit from the State Department of Environmental Quality allows the company to increase the height of its smokestack from 50 to 80 feet, The Detroit News reported Tuesday. It also directs the company to pay a $30,000 settlement for past pollution. Dennis Drake, State Air Quality Division Chief said, "I am confident that the operation of the facility.will not adversely affect neighboring residents." Continental Aluminum melts down scrap aluminum into ingots for Ford Motor Co., General Motors Corp. and their parts suppliers. It has received six pollution violations since moving to the township in 1998. DECONNA ICE: FL Court Certifies Lawsuit Over Ice Cream Labeling Error --------------------------------------------------------------------- Florida State Court granted class action status to a lawsuit filed against DeConna Ice Cream by a disgruntled consumer of one of the Company's products, reduced-fat Big Daddy ice cream. The suit alleges that the product, once a favorite among dieters, was mislabeled. The Company claimed that Big Daddy had 100 calories and two grams of fat for a 12-ounce serving, a claim that none of its competitors could come remotely close to. In June 2001, however, The South Florida Sun- Sentinel had the ice cream sent to a laboratory, amidst its growing popularity discovered the product actually had triple what was claimed. The Company later said they committed a "labeling error", the product should have read "3 servings" instead of only one. The company relabeled the product in June to show the strawberry, vanilla, and chocolate flavors of ice cream has 94 calories and two grams of fat for a 4-ounce serving. Big Daddy plans to make amends with customers through a coupon offer. Howard Tescher, attorney for the plaintiff, says his client ".was eating one container per day not realizing it had the same number of Weight Watchers points as a doughnut.She was angry." Mr. Tescher contends the Company violated Florida's Unfair and Deceptive Trade Practices Act because consumers were misled into buying the ice cream by erroneous labels. The Court ruling made anyone who bought Big Daddy ice cream between May 1 and June 17, 2001, eligible for compensation. Approximately 900,000 to 1.6 million containers of the ice cream were sold during that time. FIDELITY GROUP: South Carolina Employees Prepare Suit Against Agents -------------------------------------------------------------------- Some 1,400 employees in South Carolina with more than US$1 million in unpaid medical bills are bent on pursuing a class action suit against Florida-based Healthplan Services Inc. and Third Party Claims Management Inc., says the Tribune Business News. This after U.S. District Judge P. Michael Duffy ruled this summer that they could pursue a class action suit against the administrators that handled claims for Fidelity and roughly 10 agencies that have sold the company's policies. According to the report, as much as 2,900 claims might be involved in the suit, which lawyer Justin Kahn is preparing to lodge. Fidelity plans became popular in South Carolina in 1996 due to its attractive benefits, liberal requirements on pre-existing medical conditions and low premiums. In 1997, however, complaints from South Carolina and other states started pouring in, alleging that the company had refused paying claims. An investigation was eventually conducted by the U.S. Department of Labor in New York. The South Carolina Department of Insurance in June 1997 ordered agents to stop marketing the policies. Mr. Kahn says the suit against the brokers and agents of Fidelity will be hinged on their negligence in not thoroughly examining the Fidelity plans before offering them. The administrators and various agents of Fidelity currently have an appeal pending in the Fourth Circuit Court of Appeals, questioning Judge Duffy's decision last summer. FORD MOTOR: Judge Says Evidence Shows Exaggeration In Tire Differences ---------------------------------------------------------------------- Ford Motor Company and Bridgestone/Firestone failed to show substantial differences among the various makes and models of Ford Explorers and Firestone tires that have been the subject of hundreds of lawsuits, US District Judge Sarah Evans Barker said in an opinion explaining her earlier ruling granting class action status to dozens of "economic loss lawsuits" against both Companies. More than a million car and tire owners filed the suits, after the rollover accidents occurred in 2000 involving Ford's popular Explorer sports utility vehicle, which uses Firestone tires. The accidents, which caused 271 deaths and more than 800 injuries, were reportedly caused when the tread separated from the vehicle's tires. The accidents led to a recall of 6.5 million tires in August 2000 and an additional 13 million in early 2001. The accidents and the recall have spurred many private class actions and severed the nearly 100- year-old business relationship of the two Companies after they traded accusations over who was liable for the accidents. The above suits are unique from other suits because they don't involve cases where people were injured or killed because of tire blowouts or vehicle rollovers, by far the most publicized elements of the case. Instead, the suits consolidate claims from millions of people across the country for a variety of reasons, including loss of value and violations of consumer protection laws and the federal warranty act. Judge Barker added that attorneys for the owners presented "persuasive evidence" that Firestone exaggerated differences among about 280 types, brands and sizes of tires. The tires, manufactured since about 1990, were marketed mostly toward owners of sport utility vehicles and light trucks. Attorneys for the owners contend these tires, particularly when mounted on Explorer sport utility vehicles, have been more prone to tread separations, leading to vehicle rollovers, more than 250 deaths and hundreds of injuries. Earlier, Bridgestone and Ford contested the class action status of the suits, saying the non-injury cases are too different to treat as a whole. Company spokeswoman Jill Bratina earlier told the Associated Press the proposed class would involve nearly 300 different populations of tires, including different sizes and types, which would present an unmanageable case for a jury to consider, according to an earlier report in the Class Action Reporter. Judge Barker refuted this, saying the underlying issue is whether the vehicles and tires were defective. She noted that some evidence suggests problems began after Firestone made the tires lighter to reduce manufacturing costs. GERMANY: Nazi Slave Workers Seek Payout Application Deadline Extension ---------------------------------------------------------------------- A group representing people forced to work for the Nazis called on the German Parliament to extend the deadline on applications for compensation until at least the end of 2002, Agence France Presse recently reported. Many of the Nazi-era slave laborers could be prevented from receiving payments due to "bureaucratic obstacles" if the deadline is not pushed beyond the end of 2001, said Lothar Eberhardt, a member of the "Listen to the Nazi victims" campaign. The organization represents laborers forced to work in a number of concentration camps under Hitler's Third Reich, including Auschwitz and Mauthausen. Germany, by early 2002, will have paid compensation to some 600,000 slave laborers, most of them from eastern Europe, through the "Remembrance, Responsibility and the Future Foundation" announced earlier this month. Compensation of forced laborers began in Germany on June 23, more than 55 years after the fall of the Nazi regime, after a number of class action suits in the United States were dropped. The German foundation is to pay a total of $4.5 billion (5.1 billion euros) to up to 1.5 million surviving former slave laborers in Belarus, the Czech Republic, Poland, Russia and Ukraine. Half the money was pledged by the German government and half by German industry. The foundation has received compensation claims from seven international organizations, including the Jewish Claims Conference, which in turn distributes allocated funds to victims. MAINE: State Hospital Compliance With Court Decree Misses Deadline ------------------------------------------------------------------ Maine mental health officials have missed a year-end deadline to comply with all the requirements of a court decree to improve conditions at the state mental hospital, the Associated Press recently reported. The consent decree ordering the improvements, was created as a settlement for a class action in which patients at the Augusta Mental Health Institute (AMHI) claimed they were subjected to substandard conditions. The settlement also called for a reduction in the size of the state hospital and the development of a comprehensive community mental health system. State mental health officials said in their previous report that they were in compliance with all but eight or nine sections of the court order. However, State Department of Behavioral and Developmental Services spokeswoman Katie Sanborn said the Court Administrator Gerald Rodman recently received a new report declaring that the department now has met all but four of the consent decree's requirements. Improved staffing of physicians and psychologists and the development of supportive living centers for difficult, extended-stay patients are among the improvements made since Behavioral and Developmental Services Commissioner Lynn F. Duby promised to complete the requirements of the consent decree in April, Ms. Sanborn said. Under the terms of the consent decree, the court will continue monitoring the state's performance for at least a year after Superior Court Justice Nancy Mills determines that the state has met all requirements. Helen Bailey, a lawyer with the Augusta-based Disability Rights Center and one of the authors of the consent decree, said last week that she believed the state would need until at least March to claim compliance. Ms. Bailey said that lawyers for the patients and state mental health officials still disagree over the interpretations of some parts of the consent decree. State officials originally promised to complete the terms of the consent decree by September 1995. Maine has been held in contempt of court twice by two different judges for failing to meet deadlines. Ms. Sanborn said the state still needs to work on assigning case-management services to patients, documenting treatment hours for patients at AMHI and upgrading the quality of mental health services. MENORAH GARDENS: Officials Acknowledge Earlier Evidence of Misconduct --------------------------------------------------------------------- Lawyers for the families who have filed a class action against Florida- based Menorah Gardens and Funeral Chapel asserted that state regulators discovered incorrectly buried bodies and grave desecration at the cemetery as early as 1996 but failed to follow through with the investigation. The suit, which also names the cemetery's parent, Houston-based Service Corporation International (SCI), as defendant, was filed on behalf of several South Florida families who contend the numbering problem led cemetery personnel to tamper with graves to make room for new burials, rather than admit the mistake to customers. In 1996, state officials allegedly indicated they were aware that at least 129 burial spaces needed to be renumbered in the Ben Gurion West section of the cemetery. A second investigation in 1998 uncovered three bodies weren't buried where records indicated they should be. The 1998 investigation also revealed these grisly facts: (1) a pair of amputated legs were lost; (2) two bodies were buried in the wrong plots; (3) three bodies were disinterred without their family members being notified; and (4) at least one plot was sold to two different people. After the probe, the company received a harsh letter from the comptroller's office ordering the company to "PLEASE GOVERN YOURSELF ACCORDINGLY," and pledging disciplinary action if further evidence emerged. The company was forced to pay a $5,000 fine but no other punishment was given after Menorah Gardens made assurances that the problem was being addressed, a claim the Comptroller's Office apparently never verified. Ervin A. Gonzalez, attorney for the plaintiffs, told the Tribune Business News, "The comptroller's report shows us there was a lot of smoke coming out, but Menorah Gardens once again dodged the bullet." Brenda Liberti, Regional Director of the comptroller's West Palm Beach office, said "Clearly, it's something I wish we would have followed up on.the department should have pressed them harder.I think at the time we had faith that SCI would clean up the problem," Company spokesman Don Mathis said that Menorah Gardens has been acting in good faith and is working to remedy the problem. He asserts the Company has been contacting families as discrepancies in records and burials become apparent. Diana Evans, Director of the comptroller's Bureau of Funeral and Cemetery Services, said the underlying problem seemed to be the need to renumber the Ben Gurion section, which was the fault of a previous owner. Ms. Evans was the one who signed the 1998 letter of reprimand to SCI. She asserts the report didn't show that "they had lost a body. You can't make charges that you don't have evidence for." According to the Tribune Business News, the 1998 examination report said the Company denied the examiner's request for a letter explaining the company's plans for remedying the problem. However, a month later, the company wrote it had corrected the burial records for the three bodies and was "in the process of resolving the problems in the Ben Gurion section." State regulators however, acknowledged they don't have any record of following up on the company's response to verify if it had notified families or if the cemetery successfully renumbered the Ben Gurion section. About 500 people have visited the cemetery in western Palm Beach County to check on their loved ones or pre-purchased plots since the lawyers who represented Cohen filed a second class-action lawsuit last week. The suit claims more than 600 bodies may have been mishandled or incorrectly buried at two cemeteries in western Broward and Palm Beach counties. Some clients are provided written documentation, others ask for a cemetery worker to drive a stake into the ground to confirm the existence of the concrete vault holding the coffin. ORLEANS HOMEBUILDERS: Sued By Homeowners For Carbon Monoxide Hazard ------------------------------------------------------------------- Owners of townhouses and condominiums built by Orleans Homebuilders, Inc. initiated a class action in state Superior Court in Burlington County, Pennsylvania, alleging that the buildings had several "design defects" that could pose carbon monoxide dangers. The Company designed the houses containing one utility room housing the hot water heater, washing machine, dryer, and furnace in each unit. The suit alleges that because the appliances are near each other, dryer lint may be sucked into the heating unit and, over time, cause the heater to malfunction, resulting in elevated carbon monoxide levels. This design, according to the suit, is "unsafe". Donald and Debora Melnick, Heather Roberts and William McDade were named as plaintiffs. They want to form a class action suit with all current owners of townhouses and condos with no basement and one utility room built by Orleans in Mount Laurel after 1991. Ms. Roberts allegedly received a warning in 2000 from her homeowners association that the layout of her townhouse could lead to a buildup of high levels of the gas. She purchased and installed two carbon monoxide detectors, and in January 2001, one signaled the presence of dangerous levels of the gas. A representative from the Public Service Electric & Gas Co. found that her home had "dangerously high levels of carbon monoxide gas." The representative The PSE&G representative advised Roberts and her son to leave for a day to let the air clear, according to the suit. According to Philip Stephen Fuoco, the lawyer representing the homeowners, "The thing we are interested in is correcting the problem, however that has to be done.and assurances so people know it's a safe facility to live in." The suit asks that the company install carbon monoxide detectors in every unit, establish an inspection program, and provide information to residents about the potential for danger. The suit also wants the builder ordered to repair the homes to add ventilation. It also seeks a court-administered program for the periodic inspection and monitoring for carbon monoxide, an odorless and colorless gas that can be fatal at high enough levels. Mr. Fuoco said some measures needed to fix the problem are simple, such as replacing a solid door with a vented door to increase air circulation in the utility room. PACIFIC GAS: Bankruptcy Could Imperil California Environmental Suit ------------------------------------------------------------------- Pacific Gas & Electric Company's bankruptcy could jeopardize a class action filed by 1,200 people who allege they were exposed to contaminated water at the utility's Kettleman Hills facility in California, Associated Press recently reported. Lawyers for both sides are scheduled to appear this week in a San Francisco bankruptcy court to argue whether the case will be heard by a state or federal court and whether the bankruptcy will limit a judgment or settlement. The suit alleges the plaintiffs, most of whom have some connection to the utility's Kettleman Compressor Station in western Kings County, were exposed to water contaminated with chromium 6 through a contaminated well. They are suing the utility for $500 million. The company's employees cannot join the suit unless they were exposed to chromium 6 at the station before they started working there. Otherwise, it would be handled as a workers' compensation claim. From 1959 to 1979, the company mixed a powdered form of chromium in its cooling system to prevent rust. The runoff from the towers ended up in an unlined settling pond about 90 yards from Well Number 4, the alleged source of the contamination. Pacific Gas & Electric denies any wrongdoing. PFIZER INC.: Settles TX Rezulin Suit After Jury Awards $43M To Claimant ----------------------------------------------------------------------- Pharmaceutical giant Pfizer, Inc. has agreed to settle a class action in Texas Federal Court relating to the diabetes drug Rezulin after a Corpus Christi jury awarded $43 million in actual damages last week to Margie Sanchez, the first plaintiff nationwide to prevail in the courtroom with a Rezulin claim. The Company withdrew Rezulin from the market in March 2000 after reports linking the drug to possible "latent" liver injuries or injuries that might develop after the patient had stopped taking it. Both sides have refused to reveal the actual settlement amount. In a statement, Pfizer indicates, without noting explicit figures, that the settlement amount is low when compared to the verdict. The company headlines its two-page statement with the news that "Settlement is Substantially Below Compensatory Award." Lawyer for the plaintiffs Mikal Watts refused to refer to any settlement figure, citing a confidentiality provision in a statement which says, "The only statement to be made by the Plaintiffs and their attorneys regarding the settlement of the case is that the parties have mutually agreed to resolve their differences in a settlement agreement." It was a concession, Watts says, that he granted without hesitation. In exchange for the concession, the Company has promised to pay the settlement more quickly than usual for this kind of case. A lawyer familiar with the settlement who requests anonymity says the company agreed to pay slightly more than $10 million to Sanchez. The Los Angeles Times reported, however, that the company agreed to pay more than $30 million, an estimate the lawyer says is too high. In the settlement, Pfizer does not admit liability. Jay Mayesh, a partner in New York's Kaye, Scholer, Fierman, Hays & Handler who supervises the Rezulin litigation nationally for Pfizer, will not confirm a specific settlement amount. PITTSTON COAL: Employees File Suit To Gain Promised Retirement Benefits ----------------------------------------------------------------------- Mine owner Pittston Coal Company faces a class action filed by 125 current and former employees in the United States District Court in Knoxville, Tennessee, alleging the Company is cheating them out of their retirement benefits. Lawyers James A. Holifield Jr. and William S. Lockett filed the suit against the Company and: (1) Paramont Coal Co. Inc., (2) the Pension-Retirement Plan of Pittston Co. and its subsidiaries and (3) the administrative committee for the retirement plan. The plaintiffs originally worked for Paramont Coal before it was taken over by the Company in 1986. The suit alleges the Company promised to count the years the plaintiffs worked for Paramont before the takeover toward their retirement benefits. However, the Company recently indicated it would not do so. According to the suit, "in or about the year 2000, the defendants began to inform plaintiffs that their pension benefits would not be calculated based on their combined Paramont and Pittston years of employment." The employees have asked the court to force the Company to pay them the benefits based on their combined years of service with both companies. The defendants have not been served with the suit and a trial date had not been set, according to court officials. PT KERETA: Indonesian Consumer Group To Sue Over Railway Accidents ------------------------------------------------------------------ The Indonesian Consumers' Foundation (YLKI) plans to launch a class action against state-owned railway company PT Kereta Api Indonesia (PT KAI) to gain compensation suffered by victims of the railway's accidents. The most recent accident occurred last week as economy- class train Empu Jaya from Jakarta collided head-on with the Jakarta- bound Gaya Baru Malam, which was stopped on the same track at Ketanggungan station in Brebes, Central Java, killing at least 30 passengers and injuring dozens of others. The Company set up a compensation fund, with insurance firm PT Jasa Raharja amounting to Rp 16 million (about US$1,500) for each victim's family and three-year scholarships for two of the victims' relatives. However, YLKI said the amount was not adequate. The Company's Board of Directors resigned en masse late last week. Company President and Director Badar Zaini saying, "All of us have decided to resign as we accept moral responsibility for the recent events." Mr. Zaini made his statement after a meeting with Minister of Transportation Agum Gumelar and State Minister of State-Owned Enterprises Laksamana Sukardi in Jakarta. Mr. Laksamana hailed the resignation, saying "I am personally touched by their willingness to open a new door to a better environment." He also added that independent auditors would audit the Company with regard to operational, financial and safety issues. Indonesian Vice President Hamzah Haz also welcomed the resignations, saying the former directors could serve as a new paradigm and example for those who failed to live up to expectations. "Although their resignations do not necessarily prove that they are guilty, it should serve as a new model of accountability that other state companies should follow." YLKI, however, criticized the resignations, saying the move was only an attempt to evade responsibility for numerous train accidents over the past few months. Chairwoman Indah Suksmaningsih asserts "The resignations were engineered. If they were a form of public accountability why didn't they resign straight away after the crash?" "Neither the resignations nor the payment of compensation alters the PT KAI directors' legal accountability in relation to consumer services and protection," YLKI Executive for Legal Affairs Sudarjatmo said, as quoted by Antara. RACIAL BIAS: Nuclear Plant Workers File Suit Alleging Racial Bias ----------------------------------------------------------------- More than a dozen current and former Y-12 employees allege systematic racial discrimination in a federal class action against the contractors that direct operations at the Oak Ridge nuclear weapons plant, according to a recent report by the Associated Press. The plaintiffs, all black, with an average of more than 23 years of service at Y-12, say they were subject to discrimination "in promotion, pay, discipline policies, practices and procedures, the terms and conditions of employment and in the creation of a racially hostile work environment." The lawsuit further alleges, "the higher the level of the job classification, the lower the percentage of African-American employees holding it." The law firm Gordon Silberman Wiggins and Childs, filed the suit in behalf of the plaintiffs. Also filing the lawsuit were Grant Morris of Washington, DC and Knoxville attorney, JD Lee. The suit names as defendants: (1) BWXT Y-12, which operates Y-12; (2) Lockheed Martin Energy Systems Inc., the former contractor at the plant; and (3) Wackenhut Services Inc., which provides security The suit is somewhat unusual because it splits the plaintiffs into two groups. The first is composed of seven security officers who are suing as individuals and as a potential class action on behalf of any black security officers who have worked either for Lockheed Martin or Wackenhut. The second group involves eight other current or former employees who perform other duties at Y-12 and who are suing only as individuals. Lockhheed Martin and BWXT are the defendants in that part of the lawsuit. Both groups make the same claim and are seeking back pay, compensatory and punitive damages and "promotion into the highest position which (they) would have achieved but for (the companies) discrimination," among other requests for relief. BWXT spokeswoman Sandra W. Plant denied the allegations, saying "No, we don't knowingly discriminate. Everything we do is geared to being open and honest and fair to all employees, potential employees and the community." Officials for the other defendants did not comment. Securities Fraud ---------------- ACLN LTD.: Weiss Yourman Initiates Securities Suit in C.D. California --------------------------------------------------------------------- Weiss and Yourman commenced a securities class action on behalf of all persons who acquired ACLN Ltd. (NYSE:ASW) common stock between September 30, 2000 and December 20, 2001, inclusive in the United States District Court for the Central District of California. The complaint charges that defendants, including the Company and some of its officers and directors, 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 ownership of key assets and its financial condition, including discrepancies in its publicly reported earnings and the ownership and disposition of million of shares of the Company's stock, which vanished from the "principal and management shareholders" list in the Company's filing. The Company has still failed to explain these irregularities which only came to light as a result of the efforts of an investigative financial journalist, Herb Greenberg of TheStreet.com. As a result of the eventual disclosure of this concealed information, the price of the Company's stock plunged over 60% in one day. For more information, contact Weiss & Yourman by Phone: 800-437-7918 or 310-208-2800 by E-mail: info@wyca.com or visit the firm's Website: http://www.wyca.com ACLN LTD.: Kirby McInerney Initiates Securities Suit in C.D. California ----------------------------------------------------------------------- Kirby McInerney & Squire LLP commenced a securities class action on behalf of purchasers of ACLN, Ltd. (NYSE: ASW) securities between December 27, 1998 and December 20, 2001, inclusive in the United States District Court for the Central District of California, against the Company and Company officers: (1) Joseph Bisschops, (2) Aldo Labiad, and (3) Alex De Ridder The suit charges the defendants with violations of the Securities Exchange Act of 1934. The action charges, among other things, that defendants concealed the Company's true financial state throughout the class period. The truth about the Company was undisclosed until December 20, 2001 when TheStreet.com reported among other things, that: (i) As many as 2,265,221 shares held by entities controlled by Chairman Joseph Bisschops vanished from the "principal and management shareholders" list in the Company's SEC filings; (ii) the Company misrepresented its non-ownership of the Sea Atef cargo ship; (iii) defendants made conflicting claims about the Sea Atef's operations and understated their selling, general and administrative expenses, and overstated the number of cars that they sold. For more information, contact Ira M. Press or Melissa Fleming by Phone: 888-529-4782 by E-mail: mfleming@kmslaw.com or visit the firm's Website: http://www.kmslaw.com F5 NETWORKS: Says Pending New York Securities Suits "Part of Trend" ------------------------------------------------------------------- F5 Networks believes the securities suits pending against it in the United States District Court for the Southern District of New York, were spurred by the current trend of suing companies who made initial public offerings in the last two years for alleged securities act violations. The first suit was commenced in August 2001, against the Company, certain of its underwriters, and several of its officers and directors, alleging violations of Sections 11 and 15 of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 promulgated thereunder and Section 20(a) of the Securities Exchange Act of 1934. The suit seeks unspecified damages on behalf of a purported class that purchased the Company's common stock between June 4, 1999 and December 6, 2000. Other substantially identical complaints have been filed, naming the same defendants, containing virtually identical claims. identical class period. These cases have all been assigned to the Hon. Shira A. Scheindlin for coordination and decisions on pretrial motions, discovery, and related matters other than trial. The Company stated in a disclosure to the Securities and Exchange Commission that they have meritorious defenses to the suits and will defend themselves vigorously. HOMESTORE.COM: Bernstein Liebhard Commences Securities Suit in C.D. CA ---------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf of all persons who acquired Homestore.com, Inc. (NASDAQ: HOMS) securities between July 20, 2000 and December 21, 2001, inclusive in the United States District Court for the Central District of California against the Company and: (1) Stuart H. Wolff, Chairman and CEO, (2) Peter B. Tafeen, Executive Vice President of Business Development and Sales, (3) Joseph J. Shew, Chief Financial Officer The suit charges the defendants with violations of the Securities Exchange Act of 1934. On 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 the 2nd, 3re and 4th Quarters 2000 and in the 1st, 2nd and 3rd Quarters 2001, the Company violated generally accepted accounting principles and SEC rules by engaging in improper "round-trip" 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 its main round-trip partner stopped doing these transactions with the Company. Following the release of the Company's 3rd Quarter 2001 results, it 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 "round-trip" partner. On this news the Company's shares dropped by more than 50% the following trading day. Then, on December 21, 2001, after the market closed, 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 Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: HOMS@bernlieb.com or visit the firm's Website: http://www.bernlieb.com HOMESTORE.COM: Weiss Yourman Lodges Securities Suit in C.D. California ---------------------------------------------------------------------- Weiss and Yourman commenced a securities class action against Homestore.com, Inc. (NASDAQ:HOMS) and certain individuals associated with the Company in the United States District Court for the Central District of California on behalf of investors who purchased Company securities between July 20, 2000 and December 21, 2001, inclusive. The suit charges defendants with violations of the Securities Exchange Act of 1934 and the Securities Act of 1933. The complaint alleges that defendants issued materially false and misleading statements and failed to disclose that the Company was overstating its revenues and assets, causing its common stock to trade at artificially inflated prices. For more information, contact Weiss & Yourman by Phone: 800-437-7918 or 310-208-2800 by E-mail: info@wyca.com or visit the firm's Website: http://www.wyca.com SAGENT TECHNOLOGY: Bernstein Liebhard Files Securities Suit in N.D. CA ---------------------------------------------------------------------- Bernstein Liebhard and Lifshitz initiated a securities class action on behalf all persons who acquired Sagent Technology, Inc. (Nasdaq: SGNTE) securities between May 11, 2001 and November 28, 2001 in the United States District Court for the Northern District of California against the Company and two of its executive officers, Ben C. Barnes and David Eliff. The suit charges defendants with violations of sections 10(b) and 20(a) the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges that during the class period, defendants issued to the investing public false and misleading financial statements and financial information that materially misstated the Company's condition and prospects. Moreover, the Company failed to disclose material information necessary to make its prior statements not misleading. The suit further alleges that during the class period, defendants caused the Company's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. As a result of this inflation, the Company was able to complete a private placement offering of 9.1 million shares, raising net proceeds of $16.8 million on August 1, 2001. In November 2001, just months after this offering was completed, the Company revealed that its 3rd Quarter results, and possibly other quarters, were false when issued. The stock dropped below $.70 per share on this news. Then, on November 28, 2001, after the market closed, defendants revealed that the Company's 1st to 3rd quarter 2001 results had been materially misstated and would have to be restated. For more information, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 by E-mail: SGNTE@bernlieb.com or visit the firm's Website: http://www.bernlieb.com STARMEDIA NETWORK: Bernstein Liebhard Commences Securities Suit in NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf all persons who acquired StarMedia Network, Inc. (Nasdaq: STRM) securities between April 11, 2000 and November 19, 2001 in the United States District Court for the Southern District of New York, against the Company and executive officers Fernando J. Espuelas and Steven J. Heller. The complaint charges defendants with violations of sections 10(b) and 20(a) the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the class period, defendants issued to the investing public false and misleading financial statements and press releases concerning the Company's publicly reported revenues, earnings and net income. Moreover, the Company failed to disclose material information necessary to make its prior statements not misleading. On November 19, 2001, the Company shocked the investing community by announcing that it was restating its previously reported financial results for fiscal year 2000 and the first two quarters of fiscal 2001, due to accounting errors and improper accounting practices at two of the Company's Mexican subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de C.V. As a result of these improper accounting practices, the Company's reported revenues and earnings were overstated by at least $10 million. Additionally, the Company announced that its Chief Financial Officer had resigned. These disclosures contradicted much of the information provided by defendants to the market during the class period concerning its financial results. In response, Nasdaq halted trading in the Company's shares. For further details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: STRM@bernlieb.com or visit the firm's Website: http://www.bernlieb.com TAKE-TWO INTERACTIVE: Weiss Yourman Files Securities Suit in S.D. NY -------------------------------------------------------------------- Weiss and Yourman initiated a securities class action against Take-Two Interactive Software, Inc. (NASDAQ:TTWO) and certain of its officers and directors in the United States District Court for the Southern District of New York, on behalf of purchasers of the Company's securities between February 24, 2000 and December 17, 2001. The suit charges the defendants with violations of the Securities Exchange Act of 1934. 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 Company stock at artificially inflated prices. 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, New York 10176 by Phone: 888-593-4771 or 212-682-3025 by E-mail: info@wynyc.com or visit the firm's Website: http://www.wynyc.com TAKE-TWO INTERACTIVE: Bernstein Liebhard Lodges Securities Suit in NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf all persons who acquired Take-Two Interactive Software Inc. (NASDAQ: TTWO) securities between February 24, 2000 and December 17, 2001, inclusive in the United States District Court for the Southern District of New York against the Company and: (1) Ryan A. Brant, CEO until February 26, 2001, thereafter Chairman, (2) Kelly G. Sumner, director until February 26, 2001, thereafter CEO, (3) James H. David Jr., CFO from the Company's third quarter of fiscal year 2000, (4) Paul Eibeler, President and director and (5) Larry Muller, CFO until the third quarter of the Company's fiscal year 2000 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 materially false and misleading statements to the market between February 24, 2000 and December 17, 2001, concerning its financial performance for the Company's fiscal year 2000 and the first three quarters of its fiscal year 2001. Throughout the class period, defendants issued press releases reporting the Company's quarterly and year-end financial performance, and filed reports confirming such performance with the United States Securities and Exchange Commission. These reports positively portrayed the Company's performance during the class period and discussed several quarters of supposedly "record" results. These statements, as alleged in the complaint, were materially false and misleading because the Company had, throughout the class period, improperly recognized revenues, thereby inflating its reported sales and earnings. On December 14, 2001, the price of the Company's stock plunged 31%, falling from $15.05 to $10.33, as news leaked that it will likely restate previously filed financial reports. On December 17, 2001, the Company issued a press release announcing that it will restate its financial results for its fiscal year 2000 and the first three quarters of its fiscal year 2001. According to the press release, the Company had improperly recognized revenue on products that were subsequently returned to the Company. For fiscal year 2000, the restatement will have the effect of decreasing net sales by $12-$15 million and decreasing net income by $3.1-$3.7 million. For the three quarters of 2001, the restatement will have the effect of decreasing net sales by approximately $9.5 million and increasing net income by $0.3 million. For more information, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: TTWO@bernlieb.com or visit the firm's Website: http://www.bernlieb.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. 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 * * *