/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020121.mbx C L A S S A C T I O N R E P O R T E R Monday, January 21, 2002, Vol. 4, No. 14 Headlines APPLEBEE'S GRILL: Asks Wisconsin Court To Dismiss Discrimination Suit BAYER AG: Additional Suits Regarding PPA in Alka Seltzer Likely BAYER AG: Faces Multiple Antitrust Suits Over Sale of Anti-Anthrax Drug MARK INTERNATIONAL: Faces Suit Due To Deceptive Weight Loss Product NATIONAL RAILROAD: Sued For Discriminating Against Blacks in DC Court REZULIN LITIGATION: CA Court Refuses To Certify Suit V. Warner-Lambert SONY PICTURES: Plaintiffs in Fake Critic Suit Offer To Settle For $4.5M TOPPS COMPANY: CA Court Hearing on CUBPA Suit Set For February 27, 2002 TOPPS COMPANY: Appellate Court Still To Decide on RICO Suit Dismissal Securities Fraud ACLN LTD.: Schatz Nobel Commences Securities Fraud Suit in S.D. NY ACLN LTD.: Weinstein Kitchenoff Initiates Securities Suit in S.D. NY CABLETRON SYSTEMS: Plaintiffs Appeal Securities Suit Dismissal COMDISCO INC.: Mounting Vigorous Defense Against Securities Suit in IL dELiA*s CORPORATION: Settles Securities Suit Over iTurf Merger in DE DIGI INTERNATIONAL: 8th Appeals Court Upholds Dismissal of MN Suits INFONET SERVICES: Bernstein Liebhard Lodges Securities Suit in C.D. CA MCLEODUSA INC.: Marc Henzel Commences Securities Suit in N.D. Iowa RENT-A-CENTER INC.: Marc Henzel Commences Securities Suit in E.D. Texas RHYTHMS NETCONNECTIONS: Marc Henzel Commences Secutities Suit in CO RICA FOODS: Dismissal Request Planned For FL Securities Violations Suit RICA FOODS: Marc Henzel Commences Securities Fraud Suit in S.D. Florida RICA FOODS: Schiffrin Barroway Commences Securities Suit in S.D. FL SYNSORB BIOTECH: Wolf Haldenstein Commences Securities Suit in S.D. NY UNITED PAN: Denies "Meritless" Securities Suit Allegations in S.D. NY VALICERT INC.: Response Time Stayed Re Securities Suit in S.D. NY VSI HOLDINGS: Sues SPX Corp. For Failure To Comply With Merger Pact *CCA-treated Wood Products: Liability Looming For Manufacturers? ********* APPLEBEE'S GRILL: Asks Wisconsin Court To Dismiss Discrimination Suit --------------------------------------------------------------------- Applebee's Neighborhood Grill and Bar has asked the US District Court for the Western District of Wisconsin to reject class certification for a lawsuit filed by Michael O'Neill, a member of the Red Lake Band of Chippewa Indians over alleged race discrimination at the Company's Superior branch. Mr. O'Neill filed the suit after an Applebee's waitress refused to honor his tribal Identification Card as proof of age when he tried to order a brandy while dining with his family at the restaurant in November 2000. The suit alleges violations of Title II of the U.S. Civil Rights Act of 1964 and the Wisconsin Public Accommodations and Amusements Law. Mr. O'Neill also asserts in his suit that the restaurant violated his civil rights due to his race and ancestry. In their response, the Company stated that the restaurant maintains a policy that a person who appears to be under 40 be carded, or asked for proof of age, using one of the forms of identification acceptable to the Company. A tribal identification card is not one of those documents. The response further states that they admit to basic facts in the case as it relates to the wait staff not honoring the card as a proof of age because company policy doesn't list the card as an acceptable proof of age, according to a Daily Press report. The Company further said that the "plaintiff has failed to satisfy even the rudimentary basics for alleging a.class action" because Mr. O'Neill "seeks recovery based on two separate theories." Those theories include: (1) "Gourmet Systems refused to serve him alcohol because of his ancestry/race." (2) "His complaint asserts a claim that Gourmet Systems' policy of limiting the acceptable form of I.D. which may be presented for alcohol purchase (and excluding tribal identification cards), has a disparate impact on American Indians." The Company further asserted that Mr. O'Neill doesn't allege that its policy of accepting limited documents as proof of age "intended to" or was "designed to ban American Indian patrons from consuming alcoholic beverages." BAYER AG: Additional Suits Regarding PPA in Alka Seltzer Likely --------------------------------------------------------------- Pharmaceutical giant, Bayer Corporation expects additional class actions to be filed against the Company relating to Alka Seltzer Plus effervescent medicines. It discontinued marketing Alka Seltzer Plus in 2000 in the United States, Canada and various Latin American countries in response to a recommendation from the US Food and Drug Administration to all manufacturers of drugs and medicines containing phenylpropanolamine (PPA). The FDA issued this recommendation after one epidemiological study of a small number of patients suggested a possible association between PPA and hemorrhagic stroke in women of certain ages. Over 326 class and individual lawsuits have been initiated in the United States against Bayer Corporation. Bayer AG has also been named a defendant in some of the cases, but has not been served with process. The MDL Panel has assigned management of the federal court cases to the US District Court for the Western District of Washington. Bayer Corporation believes it has meritorious defenses to these actions and intends to defend them vigorously. BAYER AG: Faces Multiple Antitrust Suits Over Sale of Anti-Anthrax Drug ----------------------------------------------------------------------- Bayer Corporation faces multiple class actions filed in a number of US state and federal courts alleging violations of federal and state antitrust and unfair trade practices laws relating to the sale of anti- anthrax drug Cipror. The Company has been named as a defendant in 38 putative class action lawsuits, one individual lawsuit and one consumer protection group suit. Also named as defendants in one or more of these suits are: (1) Barr Laboratories, (2) Aventis SA, (3) Hoechst Marion Roussel, Inc., (4) Rugby Laboratories, Inc. and (5) Watson Pharmaceuticals, Inc. The plaintiffs in these suits allege that they are direct or indirect purchasers of Cipror who were damaged because the Company's settlement of the Barr ANDA (IV) litigation prevented generic manufacturers from selling a generic version of Cipror. The plaintiffs allege that the defendants violated various federal antitrust and state business, antitrust, unfair trade practices and consumer protection statutes. These proceedings are at an early stage. None of the relevant courts has certified a class. The Judicial Panel on Multidistrict Litigation transferred 35 of these cases to the US District Court for the Eastern District of New York for coordinated pre-trial proceedings. The Federal Court ordered nine of those cases remanded to various state courts in October 2001. Nine cases are currently pending in a California state court, where they should be coordinated under state law rules. Bayer is also involved in state court proceedings occurring in Florida, New York, Kansas, Tennessee and Wisconsin. The settlement with Barr Laboratories is also the subject of ongoing antitrust investigations by the US Federal Trade Commission and a number of state attorneys general. Because these cases in the aggregate allege substantial unquantified damages and also seek treble and punitive damages and penalties, it is possible that the ultimate liability could be material to the Company's results of operations and cash flows. In a disclosure to the Securities and Exchange Commission, the Company stated that it has meritorious defenses to the antitrust allegations and that it intends to defend against the suits vigorously. MARK INTERNATIONAL: Faces Suit Due To Deceptive Weight Loss Product ------------------------------------------------------------------- A resident of Dade City, Florida filed a class action against Mark Nutritionals, the manufacturer of "Body Solutions," a diet supplement that allegedly allows people to lose weight while they sleep. When Janet Makinen, 50, When Janet Makinen heard about Body Solutions on the radio it sounded easy: Take the Body Solutions supplement before going to bed, and she would lose weight while she slept. However, after taking the supplement as directed for two months, Ms. Makinen found she had gained weight. She called the Company to complain, but the operator only tried to sell her more diet products. The suit claims the Company deceived consumers by saying "lose weight while you sleep." Furthermore, the Company never alerted consumers to the fact their program entailed the purchase of additional products, including a product that contains ephedrine, which can pose health problems for some people, the lawsuit states. The suit also alleges the Company trains its telephone operators to sell more products when people call up to complain that they haven't lost weight. Ms. Makinen's lead attorney, Christa Collins of law firm James, Hoyer, Newcomer and Smiljanich said "Body Solutions is designed to fatten profits, not shed pounds.Mark Nutritionals took advantage of vulnerable people who wanted only to lose weight." The Federal Trade Commission has previously cited the phrase "Lose Weight While You Sleep" as an example to warn consumers that "claims for diet products and programs that promise weight loss without effort are phony." For more information, contact Christa Collins by Phone: 1-813-286-4100 or by E-mail: ccollins@jameshoyer.com NATIONAL RAILROAD: Sued For Discriminating Against Blacks in DC Court --------------------------------------------------------------------- The National Railroad Passenger Corporation, better known as Amtrak, faces an amended class action filed in the US District Court for the District of Columbia alleging race discrimination with regard to hiring, promotion, training, terms and conditions, discipline and creating a hostile work environment. The suit was later amended to include 73 named individuals and one union, and purports to represent a class of all African-American employees who have applied for employment, have worked in the past or currently work at the Company. Members of the Brotherhood of Maintenance of Way Employees union within the Company's Northeast Corridor strategic business unit are excluded. In January 2001, the Court denied the Company's motion to dismiss class claims. On September 6, 2001, the trial court granted in part the Company's motion for more definite statement with respect to the individual claims. As a result, the Court ordered the plaintiffs to file an amended complaint. The plaintiffs did so in December 2001. The Company's response is due on February 2, 2002. REZULIN LITIGATION: CA Court Refuses To Certify Suit V. Warner-Lambert ---------------------------------------------------------------------- The Superior Court in Los Angeles refused to certify a proposed class action alleging that the Warner-Lambert Company's advertising for Rezulin, a prescription diabetes medicine on the market from 1997 to 2000, did not fully inform consumers of all the known risks of the medication. The Court noted that the medical experience of Rezulin patients varied on an individual basis and added that the plaintiffs had not demonstrated that common questions of law and fact predominate in the case. The decision is the second denial of a proposed class action involving Rezulin, following a similar finding in West Virginia in November 2001. The suit alleges claims under California's Unfair Competition Law and Consumer Legal Remedies Act and purported to represent the interests of some 200,000 Californians estimated to have taken Rezulin. Like all but a small percentage of patients treated with Rezulin, both of the two proposed class representatives found the medication effective, and neither of them suffered any side effect or physical injury of any kind from taking Rezulin. Approved by the Food and Drug Administration in 1997 for the treatment of type II diabetes, Rezulin was supplied by Warner-Lambert and, following the introduction of two newer medicines of the same class, withdrawn from the market in March 2000 before Pfizer acquired Warner- Lambert in June of that year. In November 2001, the Circuit Court of Raleigh County, West Virginia, denied class certification to a suit filed under that state's consumer protection law. In a 55-page decision reached after a two-day hearing, the Court concluded that there was no scientific basis for the plaintiffs' claims of latent liver injuries nor for their proposed medical-monitoring remedy. Warner-Lambert's parent company Pfizer, Inc. also believes plaintiffs' claims are without merit. The pharmaceutical giant said that Warner- Lambert's communications to consumers and physicians alike fairly disclosed Rezulin's known risks and complied with Food and Drug Administration (FDA) requirements. In accordance with FDA regulations, for example, all Rezulin advertisements addressed either to doctors or the public were submitted in advance to the FDA and carried the medicine's complete labeling. No ad ran until the FDA had indicated it had no objection to the ad's content. SONY PICTURES: Plaintiffs in Fake Critic Suit Offer To Settle For $4.5M ----------------------------------------------------------------------- Two moviegoers who filed a class action against Sony Pictures Entertainment for including review blurbs attributed to a fictional critic in its advertisements for the medieval drama "A Knight's Tale" offered to settle the suit for $4.5 million, according to an iWon report. Moviegoers Omar Rezec of Los Angeles and Ann Belknap of suburban Sierra Madre claimed that they were encouraged to see the movie after reading glowing appraisals for the film in its advertisements. One such ad for "A Knight's Tale" referred to the film's leading man, Heath Ledger, as "this year's HOTTEST NEW STAR!" In June, Newsweek magazine exposed the critic, David Manning, as a fabrication. The Manning blurbs were later discovered to have featured prominently in advertisements for other Sony-Columbia Pictures films, such as "Hollow Man," "Vertical Limit," and "The Animal." After the hoax was discovered, Columbia suspended ad executives without pay for their roles in the fiasco, and a week later, the studio admitted that two of its employees posed as fans in a television testimonial for another one of its movies. Under the settlement, the Company would establish a $4.5 million fund to reimburse film-goers who believe they were misled into seeing any of the four movies touted by the Manning blurbs. According to attorney for the plaintiffs, Norman Blumenthal, "The goal was to give people their money back.We're taking the hard-line position that we won't settle the case until the people who were deceived by their false advertising are paid. The bottom line is you can't cheat to compete." Sony Pictures Entertainment is the film studio group of Japanese electronics giant, Sony Corporation. TOPPS COMPANY: CA Court Hearing on CUBPA Suit Set For February 27, 2002 ----------------------------------------------------------------------- The Superior Court of the State of California for the County of Alameda will decide whether to grant class certification to a suit against Topps Company, Inc. in a hearing set for February 27, 2002. The suit was commenced in August 2000, also naming as defendants other trading card companies, including The Upper Deck Company. The suit alleges that the Company and other manufacturers and licensors of sports and entertainment trading cards committed unlawful, unfair and fraudulent business acts under the California Unfair Business Practices Act (CUBPA) and the California Consumer Legal Remedies Act by the practice of selling trading cards with randomly-inserted "insert" cards allegedly in violation of state and federal anti-gambling laws and state consumer laws. The suit seeks relief on behalf of a purported nationwide class of trading card purchasers. The plaintiffs amended their complaint in October 2000, which included a demand compensatory and punitive damages and restitution. In December 2000, the plaintiffs moved for summary judgment on one of the CUBPA claims. In the same month, all defendants filed: (1) a motion to dismiss two of the claims for failure to state a claim upon which relief can be granted; (2) a motion for summary judgment dismissing the remaining claim; and (3) a motion to strike all allegations of fraudulent or deceptive representations and all references to plaintiff's prayer for monetary relief. In March 2001, the Court issued a tentative ruling granting defendants' motion for summary judgment, on the grounds that defendants' practices do not constitute illegal gambling as a matter of law, but denying the motion to dismiss to the extent that the remaining two claims allege false or misleading advertising practices unrelated to the gambling issue. On March 30, 2001, in accordance with California State practice, the Court heard oral arguments on whether or not its tentative ruling should stand as a final ruling. Thereafter, the Court issued a tentative ruling denying the motion for summary judgment and motion to dismiss, and set a hearing for June 1, 2001 to hear additional arguments on the motions. In June 2001, the Court entered an order denying defendants' motion for summary judgment and their motions to dismiss and to strike. At a case management conference on June 29, 2001, the Court stayed discovery pending defendants' appeal of the summary judgment decision and ruled that, if the appeal is denied, the parties are to address issues relating to the certification of a plaintiff class before proceeding to merits discovery. In addition, the Court ruled that plaintiff's motion for summary judgment will not be heard until it has ruled on the class certification issue. Subsequently, review of the Court's decision denying defendants' motion for summary judgment was denied by the California Court of Appeal and the California Supreme Court. In September 2001, the plaintiff moved for class certification. Completion of briefing and discovery concerning the class certification issue is not expected until January 2002. TOPPS COMPANY: Appellate Court Still To Decide on RICO Suit Dismissal --------------------------------------------------------------------- The Ninth Circuit Court of Appeals has yet to issue a decision on the appeal of a California federal court's decision to dismiss a class action against Topps Company, Inc. for alleged violations of state and federal anti-gambling laws. The suit was commenced in November 1998 in the United States Disctrict Court for the Southern District of California. The suit alleged that the Company violated the Racketeer Influenced and Corrupt Organizations Act (RICO) and the California Unfair Business Practices Act, through its practice of selling sports and entertainment trading cards with randomly-added "insert" cards. The suit names as a class all individuals who purchased packs of cards, at least in part, to obtain an "insert" card over a four-year period. In January 1999, the plaintiffs moved to consolidate the suit with similar class actions pending against several of the Company's principal competitors and licensors in the California Court. On the same month, the Company moved to dismiss the complaint, or, alternatively, to transfer the suit to the US District Court for the Eastern District of New York or stay the suit pending the outcome of the declaratory judgment action pending in the Eastern District of New York. In May 1999, the California Court denied the Company's motions to dismiss or transfer the suit but granted its motion to stay the suit pending the outcome of the declaratory judgment action. The Court also denied plaintiffs' motion to consolidate the suit with other similar actions. In April 2000, the California Court entered an order requiring plaintiffs in the suit as well as in the other suits to show cause why all such actions should not be dismissed. In a June 2000 order, the California court vacated its May 14, 2000 order denying the Company's motion to dismiss the suit, dismissed the RICO claim with prejudice and without leave to re-plead, and dismissed the pendent state law claims without prejudice. The plaintiffs then filed a notice of appeal of the California Court's decision to the United States Court of Appeals for the Ninth Circuit in July 2000. Briefing has been completed, and oral argument was held in December 2001, but the appellate court has not yet issued a decision. The Company is prepared to mount a vigorous defense if the suit was reinstated on appeal. An adverse outcome in the suit could materially effect the Company's future plans and results, the Company revealed in a disclosure to the Securities and Exchange Commission. Securities Fraud ACLN LTD.: Schatz Nobel Commences Securities Fraud Suit in S.D. NY ------------------------------------------------------------------ Schatz and Nobel PC initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased stock of ACLN, Ltd. (NYSE:ASW) between June 29, 2000 and December 20, 2001, inclusive. The complaint alleges that the Company, a Cypriot corporation located in Belgium and engaged in the sale and distribution of automobiles between Europe and Africa, along with three of its top officers, misled the investing public during the class period by failing to describe the true state of the Company's financial condition. As alleged in the suit, while publicly representing throughout the class period that ACLN was enjoying continuous growth and solid financial performance. The suit alleges that the defendants: (1) failed to disclose transactions between the Company and entities controlled by the Company's Chairman and Managing Director; (2) overstated the Company's assets by listing at least one ship as an asset when it was not even owned by the Company; (3) understated the Company's selling, general and administrative expenses; and (4) violated generally accepted accounting principles by recognizing revenue on automobiles it sold not when they reached their destination, but rather as soon as the ship carrying the cars left port. When a December 20, 2001, article, written by Hank Greenberg of The Street.com revealed these financial improprieties, the share price of the Company fell 64%, and closed at $9.40 per share. More recently, on January 4, 2002, ACLN confirmed that it was under investigation by the SEC. For more information, contact Andrew M. Schatz, Patrick A. Klingman or Wayne T. Boulton by Phone: 800-797-5499 by E-mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net. ACLN LTD.: Weinstein Kitchenoff Initiates Securities Suit in S.D. NY -------------------------------------------------------------------- Weinstein Kitchenoff Scarlato & Goldman Ltd. commenced a securities class action in the United States District Court for the Southern District of New York on behalf of persons who purchased shares of the common stock of ACLN, Ltd. (NYSE: ASW) between June 29, 2000 and December 20, 2001, inclusive, against the Company and: (1) Joseph Bisschops, its Chairman and Managing Director, (2) Aldo Labiad, its President, Chief Executive Officer, Chief Operating Officer and Managing Director, and (3) Alex De Ridder, its Chief Financial Officer The suit charges the defendants with violating the federal securities laws by, among other things, issuing materially false and misleading statements which artificially inflated the price of ACLN's stock. The suit alleges that 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 were false and misleading. According to the complaint, those statements: (i) failed to disclose certain self-dealing transactions between defendant Bisschops and certain private entities which he controlled; (ii) overstated the Company's assets by listing a shipping vessel as an asset which the company did not own; (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 in reporting revenue for the cars that it sold. The truth about these statements finally came to light on December 20, 2001, in an article published by TheStreet.com. In response to the questions raised in the article, shares of the Company plunged 64%, falling $16.71 to close at $9.40 per share. For more information, contact Paul Scarlato or Andrew Henry by Phone: 888-545-7201 or by E-mail: scarlato@wksg.com or henry@wksg.com. CABLETRON SYSTEMS: Plaintiffs Appeal Securities Suit Dismissal -------------------------------------------------------------- Plaintiffs in the consolidated class action against Cabletron Systems, Inc. have appealed Rhode Island Federal Court's decision to dismiss with prejudice the class action against Cabletron Systems, Inc. and several of its officers and directors, alleging violations of federal securities laws. The suit was originally filed in the United States District Court for the District of New Hampshire on behalf of purchasers of the Company's stock from March 3,1997 to December 2, 1997. It alleges that the defendants made materially false and misleading statements about Cabletron's operations and acted in violation of Section 10(b) of and Rule 10b-5 under the Securities Exchange Act of 1934. The suit also alleges that the Company's accounting practices resulted in the disclosure of materially misleading financial results during the same period. More specifically, the suit challenged the Company's revenue recognition policies, accounting for product returns, and the validity of some sales. The suit was later transferred to the US District Court for the District of Rhode Island. The plaintiffs filed a second consolidated class action and the Cabletron filed a motion to dismiss this complaint. In May 2001, the Court dismissed this complaint with prejudice. The plaintiffs have appealed this ruling to the First Circuit Court of Appeals. If the plaintiffs prevail on appeal, and ultimately prevail on the merits of the case, the Company could be required to pay substantial damages. Any involvement in this litigation could be protracted and may result in a diversion of management and other resources. The payment of substantial legal costs or damages, or the diversion of our management and other resources, could have a material adverse effect on the Cabletron's business, financial condition or results of operations. COMDISCO INC.: Mounting Vigorous Defense Against Securities Suit in IL ---------------------------------------------------------------------- Comdisco, Inc. labeled without merit the consolidated securities class action pending in the United States District Court for the Northern District of Illinois for alleged violations of securities laws on behalf of purchasers of the Company's stock between January 25,2000 to October 3, 2000. The suit alleges violations of Section 10(b) and Section 20(a)of the Securities Exchange Act of 1934, as amended and names as defendants the Company and: (1) Nicholas K. Pontikes, former chief executive officer and presently, director, and (2) John J. Vosicky, formerly director, executive vice president, and chief financial officer According to the plaintiffs, Comdisco, with the knowledge and assistance of the individual defendants, made certain material misrepresentations and failed to disclose certain material facts about its operations and its Prism Communication Services, Inc. subsidiary during the class period. The suit arose from fifteen similar class actions filed in the same court, which were effectively combined into a single action. The Court has appointed a lead plaintiff and lead counsel for the putative class. In July 2001, the Company along with fifty of its domestic US subsidiaries filed for Chapter 11 bankruptcy and as a result, the lawsuit against Comdisco is currently subject to the automatic stay in Bankruptcy Court. The lead plaintiff filed a motion to lift the automatic stay in order to permit the lawsuit to proceed against the Company, and the Bankruptcy Court denied this motion. The lawsuit is allowed to proceed against defendants, Pontikes and Vosicky. The lead plaintiff has not yet filed an amended and consolidated complaint. Comdisco believes that these suits are without merit, and to the extent that the claims are not altered by the Chapter 11 proceeding and are allowed to proceed in whole or in part by the Bankruptcy Court, the Company intends to defend them vigorously. Management believes, based on information currently available, that the ultimate resolution of this litigation will not have a material adverse effect on the financial condition or results of the operations of the Company. dELiA*s CORPORATION: Settles Securities Suit Over iTurf Merger in DE -------------------------------------------------------------------- dELiA*s Corp. (Nasdaq:DLIA), a multichannel retailer to teenage girls and young women, will settle a class action suit pending in Delaware Chancery Court since August 2000 on behalf of shareholders of iTurf Inc., a partly-owned subsidiary of the Company at the time against: (1) iTurf Inc., (2) dELiA*s Inc. and (3) each of iTurf's directors. The suit relates primarily to the valuation used in the acquisition by iTurf Inc. of the Company, after which iTurf Inc. was renamed dELiA*s Corp. The suit alleges that the defendants breached their fiduciary duties to iTurf's public stockholders and that the merger exchange ratio was unfair to iTurf's public stockholders. In accordance with the settlement agreement, in the first quarter of fiscal 2002, the Company will issue and deliver one million shares, adjusted, if necessary, to provide a minimum settlement value of $3.25 million to the plaintiff class. The Company plans to take a non-cash charge to reflect the value of the settlement. Stephen Kahn, Chief Executive Officer, stated, "We are pleased to have this issue behind us. We continue to believe the suit is without merit, but feel that resolving it allows us to eliminate the risks, expense and disruption of continuing litigation and will enable our team to focus exclusively on running the dELiA*s business." For more information, contact Amanda Mullin, Corporate Communications, by Phone: 212-807-9060 DIGI INTERNATIONAL: 8th Appeals Court Upholds Dismissal of MN Suits ------------------------------------------------------------------- Digi International, Inc. prevailed as the United Eighth Circuit Court of Appeals upheld a Minnesota federal court's decision dismissing two class actions pending against the Company and certain of its previous officers for violations of federal securities laws. The first suit arose from several class actions commenced in January 1997 in the United States District Court for the District of Minnesota by 21 lead plaintiffs on behalf of purchasers of the Company's common stock during the period January 25, 1996 through December 23, 1996. The suits were thereafter consolidated. The consolidated amended suit alleges that Digi and certain of its previous officers violated the federal securities laws by, among other things, misrepresenting and/or omitting material information concerning the Company's operations and financial results. Another suit was commenced in February 1997 in the United States District Court for the District of Minnesota by the Louisiana State Employees Retirement System. The Louisiana suit made basically the same allegations as the first suit. In a decision issued on May 22, 1998, the Court dismissed, without leave to re-plead, all claims asserted in both cases, including all claims asserted against defendant Gary L. Deaner, except for certain federal securities law claims based upon alleged misrepresentations and/or omissions relating to the accounting treatment applied to the Company's AetherWorks investment. The Court also limited the claims asserted in the Louisiana suit to the 11,000 shares of the Company's stock held subsequent to November 14, 1996. In August 2000, the Court granted defendants' motions for summary judgment and dismissed with prejudice both complaints. Although the 21 lead plaintiffs in the first suit had previously moved for class certification, the Court dismissed the actions before ruling on that motion. The plaintiffs in both suits then filed appeals in the United States Court of Appeals for the Eighth Circuit. The Appellate Court affirmed the lower court's decisions and ordered that judgment be entered in favor of defendants on the claims alleged in both suits. In September 2001, the Appellate Court denied a petition for rehearing en banc filed by the 21 lead plaintiffs in the first suit. INFONET SERVICES: Bernstein Liebhard Lodges Securities Suit in C.D. CA ---------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf of all persons who acquired Infonet Services Corporation (NYSE:IN) securities between December 16, 1999 and July 31, 2001, inclusive, including those who purchased their shares pursuant to the December 16, 1999 Initial Public Offering in the United States District Court for the Central District of California. The suit names as defendants the Company and: (1) Jose A. Collazo, (2) Akbar H. Firdosy, (3) Douglas C. Campbell, (4) Eric M. de Jong, (5) Morgan Ekberg, (6) Masao Kojima, (7) Joseph Nancoz, and (8) Rafael Sagrario The complaint charges the defendants with violations of the Securities Exchange Act of 1934. The suit alleges that during the class period, Infonet saw its stock price soar from its IPO price of $21 per share to as high as $32.93 per share as the Company misrepresented the true status of its AT&T-Unisource Communications Services N.V. (AUCS) business, concealing the fact that: (i) the Company would be required to migrate the customer before offering new services, which required, among other things, reconnecting each customer to a new platform, a time- consuming, complicated and expensive process; (ii) the complexity of migration (from company X to the Company) caused massive disruption to the Company's ability to "upsell" its new products; and (iii) the Company's AUCS business required massive upgrades, both in its financial data and billing systems, preventing the Company from billing its customers on a monthly basis and delaying the recognition of material revenue for 1-1/2 years until the upgrades could be completed. The individual defendants knew that disclosure of these problems with its AUCS business would devastate the Company's chances of going public which allowed it to raise $1.1 billion in its December 16, 1999 IPO. Infonet's top executives were determined to conceal the news of the problems associated with its AUCS business. As a result of the defendants' false statements/omissions, Company stock traded at inflated levels during the class period, increasing to as high as $32.93 on March 3, 2000. Infonet's shares began to fall as defendants partially revealed the status of its AUCS business, tumbling to $3.55 on August 1, 2001. 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: IN@bernlieb.com or visit the firm's Website: http://www.bernlieb.com MCLEODUSA INC.: Marc Henzel Commences Securities Suit in N.D. Iowa ------------------------------------------------------------------ The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Iowa on behalf of purchasers of the securities of McLeodUSA Inc. (NASDAQ: MCLD) between January 30, 2001 and December 3, 2001 inclusive, against the Company and: (1) Clark McLeod, Chairman and Co-CEO, (2) Steve Gray, President and Co-CEO and (3) Chris Davis, Chief Operating and Financial Officer since August 1, 2001 The suit charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, 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 January 30, 2001 and December 3, 2001. The suit alleges that MacLeodUSA issued a series of materially false and misleading statements regarding its business, operations and financial statements that failed to disclose: (i) that the Company was failing to timely and properly recognize hundreds of millions of dollars in impairment losses in connection with certain acquisitions, such as Splitrock Services, Inc. and Caprock Communications Corp.; (ii) that the Company did not have the funds necessary to complete its National network and that it would soon have to abandon its plans to finish the network; and (iii) that the Company was unable to service its substantial debt and lacked the financial flexibility necessary to avoid a restructuring. During the class period, prior to the disclosure of the true facts about the Company, the Company purchased Intelispan for $40 million in stock For more information, contact Marc Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 RENT-A-CENTER INC.: Marc Henzel Commences Securities Suit in E.D. Texas ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Eastern District of Texas, on behalf of purchasers of the securities of Rent-A-Center Inc. (NASDAQ: RCII) between April 25, 2001 and October 8, 2001 inclusive against the Company and: (1) J. Ernest Talley, Chairman and CEO until October 8, 2001, (2) Mitchell E. Fadel, President and Director, (3) Robert D. Davis, CFO and Treasurer and (4) Mark E. Speese, Director until October 8, 2001, thereafter Chairman and CEO The complaint 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 April 25, 2001 and October 8, 2001. For example, on April 25, 2001, Rent-A-Center issued a press release announcing record results for the first quarter of 2001 and highlighting its resilience in a weakening economy. The representations in the press release were, according to the allegations of the complaint, materially false and misleading because the Company did not disclose that its expenses were rising dramatically as it attempted to combat weakening demand with deep discounts and promotions. While in possession of this adverse non-public information, the Company completed a secondary offering of 3,200,000 shares of its common stock at $42.50 per share, on May 25, 2001. Defendant Talley sold 1,700,000 shares in the secondary offering, grossing over $72 million, and defendant Speese sold 500,000 shares, grossing over $21 million. Then, on May 31, 2001, defendant Talley sold an additional 1,955,000 shares of common stock at $40.38 per share, grossing over $78 million. Subsequently, on October 8, 2001, only five months after the secondary offering, Rent-A-Center issued a press release announcing that earnings for the third and fourth quarter of 2001 would be significantly less than its previous guidance to the market, due to rising expenses. In response to this announcement, Company stock price dropped by 19% in one day on heavy trading volume. For more information, contact Marc Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 RHYTHMS NETCONNECTIONS: Marc Henzel Commences Secutities Suit in CO ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Colorado on behalf of purchasers of Rhythms NetConnections, Inc. (OTC: RTHMQ) publicly traded securities during the period between January 6, 2000 and April 2, 2001, inclusive. The suit charges the Company and certain of its officers and directors with issuing a series of material misrepresentations to the market. Throughout the class period, the Company portrayed itself as a fast- growing and expanding provider of DSL services and repeatedly represented that it could continue to expand its broadband network throughout the United States and reassured investors that it was financially able to continue this expansion. As alleged in the suit, the defendants' statements issued throughout the class period were materially false and misleading when made as they failed to disclose the following adverse facts which were then known to defendants or recklessly disregarded by them: (1) that the Company lacked the financial resources necessary to execute its business plan of a full national network expansion; (2) that the Company's efforts to scale back its expansion plans were not meeting with success as the Company was unable to generate the necessary financing; (3) that the Company was not well-funded or well-positioned to continue its growth, as the Company's expenses, including its ongoing debt payment obligations, were far outpacing its revenues and rapidly depleting the Company's cash reserves; (4) that the Company did not have adequate cash reserves and was not sufficiently "stable" and "financially strong" that it would be able to fund its operational needs into the first quarter of 2002, as defendants repeatedly promised investors - defendants were not even able to keep the Company running through 2001, as it had earlier guaranteed, and (5) that without the influx of additional capital, the Company would be forced to seek bankruptcy protection, which would render the Company's common stock worthless. While in possession of the true facts about the Company and its business, the individual defendants and other insiders collectively sold 600,000 shares of common stock for gross proceeds in excess of $16 million, of which over $12.6 million was received by one defendant, Catherine Hapka. The Company raised hundreds of millions of dollars in preferred stock sales and debt issuances. For more information, contact Marc Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 RICA FOODS: Dismissal Request Planned For FL Securities Violations Suit ----------------------------------------------------------------------- Rica Foods, Inc. labeled "without merit" the class action suit filed in the United States District Court for the Southern District of Florida on behalf of persons who acquired the Company's securities between January 16, 2001 and December 28, 2001 against the Company and: (1) Calixto Chaves, Chairman, Chief Executive Officer and President, (2) Jose Pablo Chaves, former Chief Operating Officer, (3) Randall Piedra, former Chief Financial Officer, and (4) Monica Chaves, Secretary The suit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges, among other things, that, during the class period, the defendants filed documents with the US Securities and Exchange Commission which failed to disclose that the Company was not in compliance with the Pacific Life Amended and Restated Note Purchase Agreement. The suit also alleges that the Rica knew that the filings were false and misleading, and that the misrepresentations of the Company caused the price of its common stock to be artificially inflated during the class period. The Company has twenty days to answer the complaint and, among other things, intends to file appropriate motions, including a motion to dismiss, a motion to quash and an objection to the class certification. RICA FOODS: Marc Henzel Commences Securities Fraud Suit in S.D. Florida ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of all persons who acquired Rica Foods, Inc. (Amex: RCF) common stock between January 16, 2001 and December 28, 2001 against the Company and: (1) Calixto Chaves, Chairman and CEO, (2) Randall Piedra, CFO and (3) Jose Pablo Chaves, COO The suit charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges, among other things that throughout the class period defendants filed documents with the SEC, which failed to disclose that the Company was not in compliance with the credit agreement entered into with Pacific Life Insurance Company on January 16, 2001. The suit alleges that defendants knew that Rica's SEC filings were false and misleading. The suit further alleges that defendants' misrepresentations caused the price of the Company's common stock to be artificially inflated throughout the class period. For more information, contact Marc Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 RICA FOODS: Schiffrin Barroway Commences Securities Suit in S.D. FL ------------------------------------------------------------------- Schiffrin & Barroway initiated a securities class action in the United States District Court for the Southern District of Florida, Miami Division, on behalf of all purchasers of the common stock of Rica Foods, Inc. (Amex: RCF) from January 16, 2001 through December 28, 2001, inclusive. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges, among other things, that throughout the class period defendants filed documents with the US Securities and Exchange Commission (SEC), which failed to disclose that Rica was not in compliance with the credit agreement entered into with Pacific Life Insurance Company on January 16, 2001. The complaint charges that defendants knew that the Company's SEC filings were false and misleading, and further alleges that defendants' misrepresentations caused the price of Rica's common stock to be artificially inflated throughout the class period. 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 SYNSORB BIOTECH: Wolf Haldenstein Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of Synsorb Biotech Inc. (Nasdaq: SYBB) securities between April 4, 2001 and December 10, 2001, inclusive, against the Company and certain of its officers. The suit alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. The complaint alleges that throughout the Class Period, defendants touted the successful progression of its SYNSORB Cd(R) Phase III clinical trials while concealing from the public that: (1) in fact, defendants had "concerns about enrollment;" (2) that defendants knew that "the completion of the trial would reach out years beyond" what they had forecast; (3) the FDA had directed defendants to use a more stringent protocol in its Phase III trials; (4) defendants had repeatedly failed to increase enrollment in the Phase III trials during the class period; (5) defendants had been experiencing "unacceptably high drop out rates;" (6) defendants could not afford to continue to finance the Phase III clinical trials After the market closed on December 10, 2001, the Company issued a press release announcing the termination of its SYNSORB Cd(R) development program. In a conference call the next morning, revealed the true facts concerning the Phase III clinical trials. These shocking revelations made in the press release and in the conference call had a dramatic effect on the price of the Company's stock, causing the stock to plummet over 52%. For more information, contact Fred Taylor Isquith, Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. UNITED PAN: Denies "Meritless" Securities Suit Allegations in S.D. NY --------------------------------------------------------------------- United Pan-European Communications NV labeled "without merit" the securities class action filed in November 2001 in the United States District Court, Southern District of New York, against the Company and certain of its officers and underwriters, on behalf of purchasers of the Company's common stock between February 11, 1999 and December 6, 2000, inclusive. 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. The alleged violations are said to involve commissions that the underwriters received from certain investors, wrongful allocations of shares by the underwriters to their customers, and inadequate disclosure. The Company denied the allegations in the suit and expressed its intention to vigorously defend the lawsuit in a disclosure to the Securities and Exchange Commission. VALICERT INC.: Response Time Stayed Re Securities Suit in S.D. NY ------------------------------------------------------------------ Valicert, Inc. faces a securities class action pending in the United States District Court for the Southern District of New York alleging violations of federal securities laws. The suit is brought on behalf of all persons who purchased common stock of from July 27, 2000 through December 6, 2000. The suit names as defendants the Company and: (1) Joseph (Yosi) Amram, President, Chief Executive Officer, and member of the Board of Directors, (2) Timothy Conley, Vice President, Finance and Chief Financial Officer; and (3) an investment banking firm that served as an underwriter for the Company's initial public offering in July 2000. The suit alleges violations of Section 11 and 15 of the Securities Act of 1933 against all defendants, and Section 10(b) of the Securities Exchange Act of 1934 against the underwriter, on the grounds that the prospectus incorporated in the registration statement for the offering failed to disclose, among other things, that: (i) the underwriter had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriter allocated to those investors material portions of the shares of the Company's stock sold in the initial public offering, and (ii) the underwriter had entered into agreements with customers whereby the underwriter agreed to allocate shares of the Company's stock sold in the initial public offering to those customers in exchange for which the customers agreed to purchase additional shares of the Company's stock in the aftermarket at pre-determined prices. Valicert is aware that similar allegations have been made in lawsuits relating to more than 300 other initial public offerings conducted in 1999 and 2000. Those cases have been consolidated for pretrial purposes before the Honorable Judge Shira A. Scheindlin. The defendants' time to respond to the suit has been stayed pending a plan for further coordination. The Company believes that the allegations in the suit are without merit and intend to contest them vigorously. However, the litigation is in the preliminary stage, and its outcome cannot be predicted. Valicert cautions that if outcome of the litigation is adverse and if, in addition, it is required to pay significant monetary damages, its business will be significantly harmed. VSI HOLDINGS: Sues SPX Corp. For Failure To Comply With Merger Pact ------------------------------------------------------------------- VSI Holdings, Inc. initiated a class action suit against SPX Corporation and its directors after SPX allegedly failed to perform its obligations under an agreement and plan of merger between the Company and SPX. The suit, filed on behalf of the Company's approximately 1,600 shareholders and option-holders, asks that the Court either require SPX Corporation to complete the proposed merger with VSI or award the Company and the plaintiff class damages. In late December 2001, the defendants in this action filed an answer denying the Company's allegations and a counterclaim alleging breach of contract and seeking recovery of damages and a termination fee of approximately $9,000,000. As this matter is in a very preliminary stage and its outcome is not presently determinable, VSI has not recorded any contingent receivable or liability related to its outcome. *CCA-treated Wood Products: Liability Looming For Manufacturers? ---------------------------------------------------------------- The signs are there. Public pressure is mounting and the industry, it seems, is preparing for the worst. Is the end near for the treated- wood industry's star player? For 25 years, CCA-treated lumber has been the best-selling product of the treated-wood industry. Most playgrounds, picnic tables, fences, walkways, and even docks and wharves in the United States are made of CCA-treated woods. So popular is this product that manufacturers churn out seven billion board feet of lumber, raking in US$4 billion a year in revenues. It is one of the anchors of the multi-billion-dollar home-improvement industry. Two years ago, however, an inquisitive Florida newspaper began investigating the possibly hazardous effects of CCA-treated woods. The Gainesville Sun broke the story about CCA-treated wood leaching arsenic into a Gainesville playground. That started the ball rolling. In March last year, a Miami-Dade resident sued two of the three largest manufacturers of CCA in the United States, Osmose, Inc. and Arch Chemicals, Inc. The suit also names eight other wood treatment companies and retailers Home Depot and Lowe's. Complainant Jerry Jacobs has a pending application for class action certification. Late last year heightened public pressure forced the U.S. Environmental Protection Agency to review its classification of CCA. Environmental groups likewise pressured the U.S. Consumer Product Safety Commission in December to study the levels of "dislodgeable" arsenic, chromium and copper in playground equipment. What is CCA? Chromated copper arsenate or CCA is a powerful pesticide. Wood treated with CCA can resist rot and termites for up to 30 years. Arsenic, first on the federal government's priority list of Top 20 hazardous substances, protects the lumber from termites. Combined with Copper, it combats fungi. The chromium bonds the arsenic and copper to the wood. According to industry officials, treated lumber is safe if handled properly. They say the vacuum and pressure process used to apply the pesticide fixes it deeply in the wood, preventing harmful amounts of arsenic from leaching. Numerous studies show otherwise. An estimated 10% to 20% of arsenic in treated boards will leach out over 25 years, according to scientists in a report by the Los Angeles Times. In 1990, a study published by J. Warner and K. Solomon of the University of Guelph found, at all pH levels, copper, chromium and arsenic leaching from new and weathered woods, with higher metal concentrations in acidic conditions. This, according to an article by the Watershed Sentinel, raises concern for the amount of leaching caused by acid rainfall along eastern areas of Canada and the United States. Meanwhile, a study performed for the Health and Welfare Canada in 1991 also found that the soil under playground equipment made from treated wood had arsenic concentrations up to 24 times higher than areas just 10 meters away, the Watershed Sentinel says. Arsenic is a naturally occurring chemical element found at low levels in soil. It is, however, fatal when ingested, and chronic exposure can lead to lung and skin cancer, as well as to nerve, organ and reproductive damage. Accordingly, health problems from long-term exposure may not show up for years, the Los Angeles Times says. Due to potential health risks and environmental hazards, Governor Jeb Bush ordered a halt to the use of arsenic as a preservative in Florida's wood-treatment plant in Raiford last year. In California, the State Legislature has prohibited the use of state funds to purchase CCA-treated playground equipment. Outside the United States, CCA is banned as a wood preservative in Switzerland, Vietnam, Indonesia, Japan, Denmark, Sweden, Germany, Australia and New Zealand. Lawsuits The only known pending purported class action suit related to CCA- treated wood is that of Mr. Jacobs in the U.S. District Court in Miami. It is seeking payment from a number of wood manufacturers for the removal of decks, playgrounds and other CCA-treated structures. He also wants contaminated soil to be cleaned up, payment for medical expenses of people that may be at risk and punitive damages. However, this is not the first or only CCA-related suit. According to a report by the Los Angeles Times, in 1992 a Seattle-area science teacher, Rick Feutz, settled a suit against a CCA manufacturer, wood treater and lumber store where he bought treated boards. The same report also says Mr. James Sipes, a former employee at the Hoosier National Forest in Indiana vomited large amounts of blood in 1983 and 1984 after sawing CCA-treated wood to make picnic tables. He retired in 1985 on total disability. Later, a jury awarded him damages of US$100,000 from a chemical manufacturer and a settlement of US$667,000 from other wood-related companies. EPA Report Crucial On February 15, the U.S. Environmental Protection Agency is expected to release a status report on its investigation into CCA safety. According to industry observers, this report will make or break the CCA-treated wood sector. In an interview, Gary Hurst, a general manager of Robins Manufacturing in Tampa, one of the biggest wood-treatment plants in Florida, told The Gainesville Sun that there are signs the end for CCA-treated lumber is near. "From what we're hearing, it's not favorable to CCA," says Hurst of the EPA report. In 1986, the U.S. Environmental Protection Agency banned most arsenic- based pesticides. CCA, also classified as pesticide, however, was made an exception for use as wood preservative after the Agency concluded that it did "not pose unreasonable risks to children or adults," says Mr. Allan Miller of the Los Angeles Times. Should the EPA report recommend the ban of CCA, industry observers believe it will be the end of the sector. Industry: Silently Awaits Impact Within the industry, a number of manufacturers are already feeling it. According to The Gainesville Sun, some wood-treatment plants are retooling operations to offer arsenic-free alternatives. Smaller lumber retailers are putting CCA-free alternatives on their shelves. Recently, a trade group representing 7,000 independent lumber dealers told members to consider getting product-liability and product-recall insurance. A recent newsletter of the National Lumber and Building Material Dealers Association also advised members to "carefully consider how CCA treated wood claims could impact them directly." "Clearly, members should consider all options (including obtaining product liability and product recall insurance) that might prove helpful if regulatory, legal and public relations developments result in increased exposures for these products," the newsletter said. "I don't think this thing is going to last much longer. I think, personally, you got six months," says Wisconsin wood-treater, Pat Bischel, of the likely demise of the CCA-treated wood sector. Hap Veley, owner of Central Builder Supplies in Gainesville, which began offering customers a CCA alternative six months ago, believe that that an industry switch is "inevitable." "People are starting to get more concerned about what they're reading in the paper," Mr. Veley told The Gainesville Sun. Facing Uncertain Future More than anything, the EPA report will only raise questions than answers. Among them: how could a hazardous product remain in the market all these years? As early as 1994, industry players had informed the EPA that its efforts to increase public awareness regarding how to handle and dispose of the product were ineffective. At that time, the manufacturers and retailers were required to handout notices to buyers regarding the hazards pose by the product. The system has changed little since then. Consequently, the CCA-treated products have remained popular among consumers and led to their proliferation in the market. But times are changing. More and more government officials, including Senator Bill Nelson of Florida, who prodded the EPA to conduct the re- evaluation of CCA-treated products, are looking for answers. An answer may be found in the EPA report come mid-February. At the very least, observers say, the CCA-treated wood industry will be faced with a huge product recall. ********* 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 * * *