/raid1/www/Hosts/bankrupt/CAR_Public/020205.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, February 5, 2002, Vol. 4, No. 25
Headlines
AMERITRADE INC.: Appeals Court Allows Stock Quote Suit To Continue
APPLE COMPUTER INC.: Lawsuit Charges Firm With "Planned Obsolescence"
COMMONWEALTH EDISON: Faces Suit For 1999 Service Interruptions in IL
CONSECO INC.: Groups Say Settlement in PA Insurance Suit "Inadequate"
DOW CORNING: Australian Women To Sue After US Court Rejects Settlement
DVT LITIGATION: 20 New Zealanders To File Damage Suit Against Airlines
FOX ENTERTAINMENT: Extras Sue For Exposure To Carcinogenic Powder in CA
INDIANA: State Supreme Court Refuses To Hear Special Education Case
LOUISIANA: To Settle For $291M Suit Due To Program Damaging Oyster Beds
MICROSOFT CORPORATION: Lawyer's Group Asks Judge To Block Settlement
NEW YORK: Irondequoit Retirees Ask Federal Court To Rule In Their Favor
OKLAHOMA: Woman Sues Tulsa Police Department For Racial Discrimination
PRUDENTIAL LIFE: Escapes Damages, Ordered To Pay $66T To Settle Suit
SIX FLAGS: Denies Allegations in Racial Bias Suit in California
SULZER MEDICA: Texas City Sues Subsidiary Over Aborted Move To Suburb
SULZER MEDICA: Expects Positive Settlement Development in Implants Suit
TELECOMMUNICATIONS COMPANIES: Firms Join Forces In "Right-Of-Way" Suit
TUBE TURNS: Faces Suit Relating To LA Exxon Mobil Coker Plant Explosion
Securities Fraud
COMPUTER ASSOCIATES: Settling Shareholder Derivative Suits in DE, NY
CRITICAL PATH: Milberg Weiss Commences Securities Suit in N.D. CA
DECODE GENETICS: Sued For Securities Laws Violations in S.D. New York
DYNACQ INTERNATIONAL: Charles Piven Lodges Securities Suit in S.D. TX
ENRON CORPORATION: Two Employees Sue Andersen, Former Enron Executives
ENRON CORPORATION: Collapse Costs Hawaii's Pension System $11.3 Million
GLOBAL CROSSING: Green Fauth Files Securities Suit in LA Court
IMMUNEX CORPORATION: Shareholders Sue Over American Homes Merger in WA
PNC FINANCIAL: Shareholder Files Suit After 2001 Earnings Restatement
SAGENT TECHNOLOGY: Asks CA State Court To Dismiss Derivative Suits
SAGENT TECHNOLOGY: CA Suits Could Adversely Affect Business Operations
TALARIAN CORPORATION: To Vigorously Oppose CA Suit Over Tibco Merger
TALX CORPORATION: Vigorously Opposing Securities Suit in E.D. Missouri
WILLIAMS COMPANIES: Federman Sherwood Lodges Securities Suit in N.D. OK
*********
AMERITRADE INC.: Appeals Court Allows Stock Quote Suit To Continue
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The 8th US Circuit Court of Appeals ruled recently that a Los Angeles
man's class action charging Omaha-based online discount brokerage
Ameritrade, Inc., with breaking its promises to provide customers with
"real-time" stock quotes, could continue in State Court. The suit
potentially could involve thousands of customers across the country,
the Associated Press recently reported.
The 8th Circuit upheld an earlier ruling by US District Court Judge
Richard Kopf of Lincoln, who rejected the Company's argument that The
Securities Litigation Uniform Standards Act of 1998 prohibits such
lawsuits against brokers. Judge Kopf ruled that the lawsuit was a
contractual dispute and therefore not covered by the federal law.
Los Angeles resident Mitchell Green filed the suit. Mr. Green agreed
in 1998 to pay $20 a month for a Company service in order to get
real-time information on stocks and quotes. He alleges that the
information on the options, agreements to buy or sell a
stock at a certain time or price, was "stale."
"Ameritrade tells people it provides this service, and it's not
provided," said attorney Mark Ozzello of Los Angeles, who is helping
represent Mr. Green. "With respect to certain options, the quotes
given by Ameritrade are thousands of trades behind."
Attorneys representing Ameritrade and company spokesman Matt Ord did
not immediately return telephone calls seeking comment.
Founded by Joe Ricketts of Omaha, Ameritrade exploded in growth in
1997, when it began offering rates as low as $8 a trade during the
market's heyday. It is now among the top 10 online brokers in numbers
of trades.
APPLE COMPUTER INC.: Lawsuit Charges Firm With "Planned Obsolescence"
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Four named plaintiffs recently filed a lawsuit seeking class action
status in Los Angeles Superior Court, alleging that Apple Computer Inc.
misled customers and made low-quality software upgrades for older
computers in order to "accelerate a deliberate policy of planned
obsolescence," the Associated Press reported recently.
According to the lawsuit, the Cupertino-based Company, encouraged
customers in 1998 and 1999, to buy their latest Power PC G3 computers,
while promising the units would be capable of running its next-
generation operating system called OS X. Apple also said,
the lawsuit further stated, that OS X would be "fully optimized" to run
on those G3 models.
However, the Company, which released Mac OS X last year, broke both
promises, the lawsuit alleges. Thomas Ferlauto, one of the four named
plaintiffs and a Los Angeles attorney in the case, said, "Computers
have a short life span compared to other assets, that's for sure. But
when a company makes claims to spur sales, they ought to live up to
their claims."
COMMONWEALTH EDISON: Faces Suit For 1999 Service Interruptions in IL
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Commonwealth Edison Company faces a consolidated class action pending
in the Circuit Court of Cook County, Illinois, seeking damages for
personal injuries, property damage and economic losses related to a
series of service interruptions that occurred in the summer of 1999.
The combined effect of these interruptions resulted in over 168,000
customers losing service for more than four hours.
The Court granted class certification for the sole purpose of exploring
settlement talks. However, the Company filed a motion to dismiss the
suits and in April 2001, the Court dismissed four of the five counts of
the consolidated complaint without prejudice and the sole remaining
count was dismissed in part.
In June 2001, the plaintiffs filed a second amended consolidated
complaint. Settlement discussions between the parties in the suit are
ongoing.
CONSECO INC.: Groups Say Settlement in PA Insurance Suit "Inadequate"
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Several consumer advocates and state officials are saying that a
class action settlement insurance company Conseco Inc. has offered to
about 700,000 current and former holders of its nursing-home and home-
care policies is inadequate to compensate the elderly consumers for
unexpected premium increases, The Wall Street Journal recently
reported.
The suit, filed in the Court of Common Pleas for Philadelphia County in
Philadelphia, alleges the Company misled policyholders about the
likelihood of premium increases on its long-term-care insurance
policies. Company marketing material implied, the lawsuit contends,
that rates would remain stable as a person aged. However, the premiums
for hundreds of thousands of elderly consumers shot up by as much as 10
percent to 40 percent at a time and in some cases, several years in a
row.
The Company's sales practices were the subject of a Page One Wall
Street Journal article in June 2000. The Company has said that it
disclosed the risk of rate increases and is settling to avoid further
litigation. A judge will hold a hearing on approval of the settlement
February 13.
The settlement covers policyholders of about a dozen smaller insurers
the Company acquired over the past several years. It offers
policyholders three main options:
(1) keeping their present policy and taking their chances with
future rate increases;
(2) a five percent discount on current Company long-term care
insurance or other products; or
(3) a credit for future coverage, equal to the premiums paid, less
any claims already paid on their behalf. People who dropped
their policies within 60 days of a rate increase can also ask
for this credit.
Objectors to the proposed settlement include:
(i) the AARP, the national group formerly known as the American
Association of Retired Persons,
(ii) the Consumer Protection Division of the Texas Attorney
General, which has a separate suit pending against the
Company, and
(iii) other senior-citizens groups.
They have criticized the proposed settlement because the proposal
offers no cash settlement to the plaintiffs, and gives people several
untenable options, including buying new policies at potentially much
higher rates based on their current health and age or a credit toward
future medical care that shrinks significantly if they already have
collected some benefits.
"The settlement confers little, if any, real benefit," says an
objection and motion to intervene filed by an attorney retained by AARP
to represent two policyholders. Critics also contend that elderly
plaintiffs were given too little time to review the terms. Many class
members did not get settlement notices in the mail until early January,
and policyholders had to notify the court by January 22 if they wished
to opt out and reserve the right to sue separately. Plaintiffs have
until next Monday to select any of the other options.
"At the least, these people should have had three months" to review
terms, says Bonnie Burns, a member of a consumer board with the
National Association of Insurance Commissioners.
Company spokesman Mark Lubbers said that objection to the proposed
settlement constitutes "pretty obvious grandstanding by people who
don't get it that Conseco would win this case if it went to trial.
We'd rather spend money on benefits for customers than on legal
expenses to win. And as a leader in the long-term-care market, we'd
rather do something positive than negative."
No less harsh is a statement by one of the plaintiffs' own attorneys,
Allan Kanner of New Orleans, who calls the settlement fair given
"Conseco's deteriorating financials." For the third quarter, the
Company reported a loss of $407.5 million, or $1.21 a share, and
several ratings agencies have downgraded the Company's debt, citing
concerns over its liquidity. Mr. Kanner also pointed to the fact that
Conseco could have argued that many policyholders effectively consented
to future rate increases by continuing to pay their premiums. Mr.
Kanner even defended the short decision period given the policyholders
in the proffered settlement, saying his "experience has been.that with
old people, if you give them a short deadline, it sits and they forget
about it."
Further, when Sylvia Levine, an 86-year-old widow from South Florida,
objected to the proposed legal fees and costs of $4.5 million, Mr.
Kanner called the fees "pretty reasonable" and said, "I think we've
earned it."
Evidencing concern about the elderly policyholders, Kevin Hennosy, a
former National Association of Insurance Commissioners spokesman, who
now publishes an insurance newsletter, said that he, and regulators he
has spoken with, worry that the settlement leaves those, who keep their
old policy, in a group "laden with unhealthy policyholders and doomed
to either huge premium increases leading to lapses, or insolvency."
DOW CORNING: Australian Women To Sue After US Court Rejects Settlement
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Hundreds of Australian women may be suing the local subsidiary of Dow
Corning, United States breast implant manufacturer, after a US court
rejected the Company's worldwide compensation plan, AAP News
(Australia) recently reported.
About 1,000 women, who allege injuries due to ruptured breast implants,
are asking the New South Wales Supreme Court to consider whether
Australian women have the right to pursue action for compensation
against Dow Corning's Australian subsidiary. This course of action was
opened to the women after a US appeals court refused a Dow Corning
settlement plan that would have stopped any further legal action
against it or its subsidiaries.
The lawyer for the Australian women, Peter Cashman, said Dow Corning's
settlement offer also had discriminated against them, because it
offered foreign claimants just 60 percent of what American women were
offered. The worldwide settlement plan has been referred back to a
lower court for further consideration, where it still could be approved
after changes made in accordance with the appeal court's ruling.
Mr. Cashman said the "door is still open" for Australian women to
litigate their claims in Australia. "There are still hurdles to be
overcome, but at least one of the hurdles is out of the way," Mr.
Cashman added.
The announcement about the appeal court's disapproval of the worldwide
settlement came on the eve of the first compensation payments being
made to some 2,400 Australian women who settled with the US parent
company in a separate class action last year. The compensation comes
after a 10-year legal battle.
Melbourne law firm Slater & Gordon said 300 women would receive their
share of more than $38.4 million in compensation in February, while the
remaining women would receive payments by the middle of the year. The
Australian women are the first in the world to receive compensation
from the company, and are expected to receive lump sum payments of up
to $50,000 each.
The Company initially agreed to this compensation deal three years ago,
but payment was delayed as the company restructured its finances to
raise the necessary funds. Slater & Gordon spokesman Andrew Grech said
the compensation was a breakthrough for Australian women, because it
offered larger settlements than those offered to many other foreign
claimants, and much faster. Mr. Grech said American and foreign
claimants would be paid over a 15-year program.
Some 200,000 women worldwide allegedly have suffered auto-immune and
other disorders as a result of the silicone implants, 80 percent of
which were for cosmetic purposes.
DVT LITIGATION: 20 New Zealanders To File Damage Suit Against Airlines
----------------------------------------------------------------------
About 20 New Zealand individuals and families are suing airlines for
damages after suffering DVT, or deep-vein thrombosis, as a result of
air travel, the Associated Press reported recently. Roger Chapman of
the Wellington law firm Johnston Lawrence said some of the claims
involve significant damages from DVT after long-haul air travel "We
also represent a small number of families of people who died as a
result of their travel," Mr. Chapman said.
DVT, also dubbed economy class syndrome, is caused by blood clots
forming in the legs because of immobility. A clot can be deadly if it
moves to the lungs. The condition has been linked to long-haul airline
flights and claimants allege that airlines knew it was a problem, but
did not warn passengers of the risks or take measures to prevent it.
Sufferers and the families of people who allegedly have died from the
condition have commenced legal action in different parts of the world.
Mr. Chapman said that about a dozen claims already have been filed in
New Zealand courts to protect the claimants from time limits. A claim
must be filed within two years of the flight to be accepted by an
airline as valid. Seven or eight airlines involved will be served with
claims in the next few months, Mr. Chapman said, but he declined to
name them until they had been informed of the cases.
Developments in other countries would affect how New Zealand claims
proceed, Mr. Chapman continued. "What we are doing is keeping a close
eye on developments overseas, especially in Australia," he said.
In Great Britain, a court cleared the way for a class action over
DVT, against up to 30 airlines worldwide. Lawyers representing both
sides effectively agreed on a draft order to open the class action at
the High Court in London. The Court will seek approval of the draft
order from the Lord Chief Justice of England before the legal battle
begins later this year.
FOX ENTERTAINMENT: Extras Sue For Exposure To Carcinogenic Powder in CA
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Hundreds of movie extras in the Tim Burton movie "Planet of the Apes"
commenced a suit against Fox Entertainment Group, alleging that they
were exposed to "Fuller's Earth," an allegedly cancer-causing powder
used in the movie. Actors were allegedly exposed to the dust for six
to eight hours a day, without the use of masks recommended by the
powder's manufacturers. The suit includes claims of fraud and deceit,
battery and intentional infliction of emotional distress.
Jeffrey Clark filed the suit in Los Angeles last week, on behalf of
other extras. The suit demands unspecified compensation and punitive
damages, as well as any profits made from the movie.
INDIANA: State Supreme Court Refuses To Hear Special Education Case
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The Indiana Supreme Court, in a recent 4-1 decision, has declined to
hear a class action suit challenging the state requirement that
learning-disabled students pass a graduation exam before earning a high
school diploma, the Associated Press recently reported. The decision,
with Justice Frank Sullivan Jr. as the lone dissenter, involved the
ISTEP-Plus graduation exam and came one day after the justices heard
preliminary arguments.
"I'm extremely disappointed," said Indiana Civil Liberties Union (ICLU)
Attorney Kenneth J. Falk, who filed the suit on behalf of the state's
special-education students. The ICLU has not yet decided whether to
appeal to the US Supreme Court, said Mr. Falk.
Before reaching the State's Supreme Court, the Indiana Court of Appeals
upheld a trial court ruling in favor of the state. Some parents of
learning-disabled children hope the ICLU continues pursuing the suit.
The ICLU has said that Indiana's requirement of a graduation
examination for students with learning disabilities violates a 1975
federal law on special education and due-process rights in the US and
state constitutions. State officials, on the other hand, have argued
that special-education students are afforded plenty of remedial
learning opportunities, and can retake the test.
The case was originally filed against Suellen Reed, the State
Superintendent of Public Instruction, on behalf of a Marion County
student and several others with learning disabilities. The lead
plaintiff, Meghan Rene, now 20, was on track to graduate from Ben Davis
High School, but she did not because she could not pass the graduation
test.
The exam, based on ninth-grade standards, is given to 10th graders
under the Indiana Statewide Testing for Educational Progress-Plus.
High school students have five chances to pass the test to earn their
diplomas. The ICLU has argued that this requirement for students with
learning disabilities is unfair, and that they should be exempt from
taking the exam until they have been properly prepared.
LOUISIANA: To Settle For $291M Suit Due To Program Damaging Oyster Beds
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Thirty-six plaintiffs were awarded $291 million by State District Court
Judge Manuel Fernandez of St. Bernard Parish, Louisiana, for Breton
Sound oyster beds allegedly ruined by a fresh-water diversion program.
The judgment, which attorneys for the state plan to appeal, involved
thousands of acres of oyster beds harvested through leases awarded by
the State.
The largest individual award, more than $56 million, went to Peter J.
Tesvich for more than 2,600 acres of oyster leases in Breton Sound in
St. Bernard Parish, allegedly ruined by the Louisiana's 1991 Caernarvon
Freshwater Diversion Program. Judge Fernandez likened his recent
decision to that of the December 2000 case involving five plaintiffs
awarded $48 million by a Plaquemines Parish jury for oyster leases
rendered worthless in Breton Sound due to sediment and freshwater
stemming from the Caernarvon Project.
Plaintiffs' attorneys Glenn Diaz, J. Wayne Mumphrey, Carlos Zelaya,
Daniel Vidrine and David Vidrine sought the judgment from Judge
Fernandez, amounting to more than $21,000 per acre, the same amount
awarded in the Plaquemines Parish case. Andy Wilson, lead plaintiff
for the State, said that Louisiana opposed simply awarding the $291
million on the assumption that the St. Bernard plaintiffs were in the
same situation as the Plaquemines plaintiffs. "We felt each plaintiff
should have to go through the burden of proof to show damages," he
said.
A separate lawsuit being argued in Judge Fernandez's court, involving
oyster beds in Lake Borgne in St. Bernard Parish, could cost the state
millions more if it is found responsible. Louisiana also opposes the
damages in the Lake Borgne case, Mr. Wilson said.
After the Lake Borgne case started, the State asked that Judge
Fernandez disqualify himself because he had worked for then-Governor
Buddy Roemer's office in the late 1980s on State oyster leases.
However, State District Court Judge Robert Buckley of St. Bernard
Parish, turned down Louisiana's request, saying it did not file the
objection in time.
The Plaquemines jury judgment is already on appeal to a state court.
If that judgment is upheld, it could translate into a total of more
than $700 million plus interest and attorneys' fees for the remaining
125 claimants in the Plaquemines class action suit.
The suit claimed that a total of 35,000 acres of Breton Sound oyster
beds were damaged. The Louisiana Department of Natural Resources
insists the Caernarvon Freshwater Diversion Project, designed to create
new wetlands, did not harm productive oyster-fishing areas and contends
there is evidence of oyster production in southern Breton Sound. State
officials also have said that leases at risk from the project were
identified before construction began and were not renewed.
More than 144 billion gallons of water and silt per year are pumped
into the marsh by the freshwater-diversion project. The project allows
Mississippi River water and sediment to enter Breton Sound east of the
river. The diversion is designed to reduce saltwater intrusion and
funnel sediment into the Sound to create new wetlands. It is also
supposed to increase oyster production on the Sound's eastern and
southern shores.
MICROSOFT CORPORATION: Lawyer's Group Asks Judge To Block Settlement
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The American Antitrust Institute is asking Federal Judge Colleen
Kollar-Kotelly to stop the settlement process in the antitrust class
action against Microsoft Corporation, until she decides whether the
company disclosed all relevant lobbying contacts with the government,
the Associated Press reported.
The institute charges that the Company didn't comply with a federal
statute called the Tunney Act, which covers how federal settlements
should be determined to be in the public interest. Former Sen. John
Tunney, author of the act, says that he intended the law to cover all
employees of the US government including congressional members and
aides, according to the Associated Press.
The Company has lobbied extensively with Congress, spending
considerable time and money on the antitrust suit. The institute
claims the Company listed only contacts with the executive branch,
which was a possible violation of the Tunney Act.
The Company said it has not violated the act, saying the disclosure
portion applies only to the executive branch. It cited communications
giant AT&T who took the same position in its settlement that resulted
in its breakup. Company spokesman Jim Desler said "We feel the process
should move forward, and we look forward to the judge's review of this
settlement."
Albert Foer, President of the Institute, expressed his confidence in an
interview with Associated Press, saying "I think we've made a very
strong argument that the law has not been complied with." The request
for an injunction and hearing within 20 days will serve as a
preliminary indication of whether Judge Kollar-Kotelly is willing to
consider the institute's position, he added.
Judge Kollar-Kotelly will decide in March whether to approve the
Company's settlement of antitrust charges with nine states and the
Department of Justice. Nine other states and the District of Columbia
have opposed the settlement and are fighting for stronger penalties
against the Company.
NEW YORK: Irondequoit Retirees Ask Federal Court To Rule In Their Favor
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Retirees from Irondequoit, New York have asked the US District Court
for the Western District of New York, to issue an immediate ruling in
their favor in the suit filed against the town. The suit alleges the
City breached an agreement with its non-union retirees when its Board
voted last March to change retirees' health coverage from Blue
Cross/Blue Shield Blue Million Preferred to Blue Choice Senior plan,
according to the Democrat and Chronicle.
The suit, which also alleges age discrimination, currently names
retirees Hubert Lawrence, Amelia Fontana, Roger Fox and John Magin as
lead plaintiffs. However, another motion requests that the suit be
reclassified as a class action to cover all 33 affected retirees.
The Democrat and Chronicle further reports that under the terms of the
town's new health benefits package, retirees 80 or older were allowed
to keep their existing coverage, Preferred Blue Million. Retirees 65 to
80 were switched to Blue Choice Senior, and retirees 64 and under were
given Blue Choice Select.
The suit alleges that the biggest change for the retirees would be the
new out-of-pocket costs for prescription drugs. With Preferred Blue
Million, the retirees had been paying a $5 co-pay per 34-day supply for
drugs. Blue Choice Senior pays only 50 percent of drug costs up to
$1,000 per calendar year, with a $200 deductible. Retirees can keep
the Blue Million coverage if they pick up the $90-per-month premium
difference.
Attorney for the plaintiffs, J. Nelson Thomas, told the Democrat and
Chronicle the suit was troubling because, "these retirees are all older
people and are not in a position to get jobs to make up for the benefit
they lost." Town Attorney Stacey Romeo said she cannot comment.
OKLAHOMA: Woman Sues Tulsa Police Department For Racial Discrimination
----------------------------------------------------------------------
A woman and her son are suing the police department and two officers,
claiming they use excessive force against blacks, according to a recent
Associated Press report.
Louis Bullock represents Clara Jackson and her son DaMon Jackson, who
claim they were pulled over because they are black. The mother and son
were stopped in their blue Jeep by Officers Paul Downe and Harold Goad,
who were searching for the driver of a stolen green Jeep. Officer
Downe allegedly hurt Mrs. Jackson's arm, pushed her against the vehicle
and applied handcuffs too tightly. Court documents also say the
officer then pepper-sprayed Mrs. Jackson and pushed her onto a curb.
Officer Goad handcuffed DaMon Jackson, a high school student, and
searched him for weapons. The Jacksons were allowed to go home after
the officers realized they had no basis to arrest them.
The complaint says, "This incident and the city's treatment of it is
part of a pattern of incidents of excessive force by Tulsa police
officers involving African-American citizens."
Tulsa Police Chief Ron Palmer said the timing of the lawsuit is odd,
because the attorney who filed it also represents a group of black
officers who are trying to settle a class action with the City. Mrs.
Jackson's husband is Officer Dwight Jackson, one of the black
officers suing the city. In Mr. Bullock's other suit, the City's black
officers allege that the police department has created a racially
segregated and hostile environment for blacks and has discriminated
against them in promotions and "other professional opportunities."
Mr. Bullock said the officers' suit and the Jackson case are "separate
matters." "They're just different," he said. "They're apples and
oranges. One doesn't relate to the other."
Chief Palmer said, "It's a little bit disconcerting" that Mr. Bullock
is trying to settle one lawsuit against the city at the same time he
has filed another one. "You have to question Mr. Bullock's motives in
bringing the new lawsuit during a `critical stage' of negotiations in
the class-action case." The parties are in negotiations and have a
February 12 court date.
PRUDENTIAL LIFE: Escapes Damages, Ordered To Pay $66T To Settle Suit
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A federal jury ordered Prudential Life Insurance Company to pay $66,105
to two families who charged the Company with deceptive sales practices.
However, the Court refused to award punitive damages to the two
families who sought billions of dollars.
The decision was a setback for the plaintiffs who filed the suit to
highlight the "deceptive" sales practices the Company said were flawed
but had been eliminated long ago, according to an Associated Press
report. The suit claims policyholders were misled in a variety of ways.
Many complained they were offered pension plans requiring payments for
only a few years when they actually were exchanging existing life
insurance policies for costlier ones. One plaintiff who lost claimed
she was promised nursing home coverage, but her policy didn't cover it.
The plaintiffs have asked for stiff punitive damages to punish the
Company, seeking at least $101,000 in damages and an unspecified amount
in punitive damages. The plaintiffs had claimed $15 billion in
customer losses nationally.
Company spokesman Robert DeFillippo hailed the verdict, saying "We're
very pleased with the verdict, especially given the excessive demands
of the plaintiffs.We're particularly pleased that the jury rejected the
allegations of fraud."
The plaintiffs plan to appeal the suit. Plaintiff Edward Cohen calls
the ruling "a miscarriage of justice." He was awarded $64,288 after
rejecting $500,000 in mediation, Associated Press reports. "I waited 15
years to get back my own money," he adds.
SIX FLAGS: Denies Allegations in Racial Bias Suit in California
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Theme park operator Six Flags Theme Parks, Inc. faces a class action in
the California Superior Court for Los Angeles County, commenced in
November 2001. The suit alleges that security and other practices at
the Company's theme park in Valencia, California, discriminates against
visitors on the basis of race, color, ethnicity, national origin and/or
physical appearance, and assert claims under California statutes and
common law.
The named plaintiffs purport to represent seven "subclasses" of
visitors to the Valencia park. One of the plaintiffs, 1984 Olympic
boxing bronze medalist Israel Cole, claims he was allegedly assaulted,
battered, falsely imprisoned, falsely arrested and threatened by a park
security workers in October last year. He also claims he was subjected
to racial slurs during the incident, which included "disparaging
remarks about his African tribal heritage."
The Company has denied the allegations, arguing that the lawsuit cannot
appropriately be maintained as a class action, and intends to
vigorously defend this case.
SULZER MEDICA: Texas City Sues Subsidiary Over Aborted Move To Suburb
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Sulzer Medica, Ltd. faces another legal battle as residents of Cedar
Park, Texas sued subsidiary Sulzer Biologics, alleging that the Company
has defaulted on a deal to move its headquarters from Denver to the
Austin suburb, the Austin American-Statesman recently reported.
Cedar Park is asking a Williamson County District Court to declare the
Company in default on its $3 million incentive agreement, City Attorney
Leonard Smith said. The city spent about $3 on 26 acres at La Jaita
Business Park, in 2000, with the understanding that Sulzer Biologics
would invest $25 million to build on the site by December 31, 2003, or
repay the City. However, the company scrapped plans to expand to Cedar
Park in October because of corporate restructuring. The City has been
waiting for a resolution to the incentive agreement ever since, Mr.
Smith said.
"We don't think this (lawsuit) should be a big surprise," the City
Attorney said. "They have had more than 90 days to come up with a
plan. Their proposal thus far has just been `Give us more time.' They
should be building a plant right now. If the Company doesn't propose
an acceptable resolution.Cedar Park may ask for $3 million plus
interest and lawyers' fees," he said.
The Company has suggested that a sister company, Sulzer Carbomedics
might want the land, but city officials said they need a concrete
agreement and that the agreement may not be good enough. The Company's
lawyers said they had not seen the suit and had no comment.
The Company has indicated it is not yet in default because of the 2003
deadline, Mr. Smith said. However, the City's lawsuit says that the
Company already is in default because Sulzer Biologics Vice President,
T.C. Selman, told the American-Statesman the Company was not coming to
Cedar Park.
Meanwhile, in a Cleveland courtroom, Sulzer and lawyers representing
thousands of patients who received faulty hip and knee implants
recently spent the day attempting to agree on a settlement of the class
action against Sulzer, without which the hundreds of individual
lawsuits for faulty implants will be allowed to proceed. The Company
has offered $783 million in cash and stock in settlement over the
defective hip and knee implants made by the company's Austin-based
Sulzer Orthopedics division.
SULZER MEDICA: Expects Positive Settlement Development in Implants Suit
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A breakthrough is expected in the settlement negotiations between
Sulzer Medica and plaintiffs in the class action over defective hip and
knee implants, according to Company spokesman, Andy Bateln.
The suits commenced after the Company recalled 40,000 hip implants and
withdrew some knee implants last year. The implants allegedly were not
bonding properly to their bones. Later, the Company determined that
oil residue on the hip and knee implants caused the problem.
Later, Sulzer proposed a $783 million agreement to settle the class
actions. Under the settlement, the Company will pay patients who
needed surgery after receiving the faulty hip or knee implants between
$57,500 and $97,500 in cash and stock.
Attorneys for the plaintiffs, however, criticized the proposed
settlement, saying it was not enough. Attorney for the plaintiffs Luke
Ellis explains that under the proposed settlement, patients who had
serious medical complications after they underwent "revision" surgery
to fix the problem got the same amount of money, $60,000, as patients
who had no medical problems after the procedure. The proposal also
included compensation in the form of one-third of the Company's stock,
which experts criticized, saying the Company's assets would be
protected by a series of liens that would keep the money out of the
reach of plaintiffs who opt out of the settlement.
"A break through is expected in a very short time," Mr. Bateln said,
ahead of a new meeting in the US this week. According to an AFX
report, discussions now focus on a term sheet, with the final fairness
hearing still scheduled for May 14 in California State Court. The
injunction against individual claims meanwhile remains in place, until
a settlement is reached, Mr. Bateln added.
TELECOMMUNICATIONS COMPANIES: Firms Join Forces In "Right-Of-Way" Suit
----------------------------------------------------------------------
A newly formed coalition of law firms have joined forces to consolidate
35 class actions valued at more than a billion dollars against
telecommunications companies MCI WorldCom, Sprint, Qwest, Level 3 and
Williams. The firms released papers that were filed here earlier this
week asking the Judicial Panel for Multidistrict Litigation to transfer
and consolidate all of the class actions in a single federal court.
More than 50 class actions have been filed nationally on behalf of
landowners on pre-existing railroad, pipeline and utility rights of
way, which often are preferred by telecom companies. In many cases
courts have held that adjacent landowners own the land under railroads
and other utilities, and only they can grant rights to fiber optic
cable companies.
Washington attorney Nels Ackerson said the development creates a big
advantage for landowners who filed the suit against the Companies.
"Fourteen law firms will now be acting as one.Plaintiffs' lawyers are
rarely this well organized on a national scale. The hardball tactics of
these defendants brought us together. They have told different stories
in different courts and have tried to make a sweetheart settlement
without our involvement and to shop it around secretly to different
federal courts for approval."
The attorneys said that the defendants worked for five months on a
settlement before a judge in Chicago. After he expressed skepticism
about the fairness of the defendants' proposal, the defendants now have
decided to start over with a new judge in Oregon who is not as familiar
with their history, they said.
"Consolidation will eliminate the defendants' ability to use procedures
in one court to delay and frustrate the landowners while misleading
other courts," Chicago attorney William Gotfryd, another plaintiffs'
lawyer, said. "We are now pooling information and sharing
responsibilities, and if our motion is granted we can focus on a single
court."
The defendants' recently proposed settlement with a "compliant"
plaintiffs' lawyer in Federal Court in Eugene, Oregon, is an example of
the conduct which the coalition hopes to stop, according to Minneapolis
attorney Daniel Millea. "One defendant's lawyer told me a year ago that
he would rather settle with `a greedy plaintiffs' lawyer' than an
`ideologue' such as Nels Ackerson," he said. "That can only mean the
defendants would rather pay large attorneys fees to lawyers who would
accept lower payments to the landowners they are supposed to
represent."
The amount at issue is large for all parties. The landowners believe
the exposure of these defendants is at least a billion dollars, even if
the liability is only $10,000 per mile. That figure per mile is lower
than other similar class action settlements with AT&T and some other
telecom companies, according to the landowners. Yet several of the
companies appear not to have disclosed the liability to stockholders or
to the public.
For more information, contact Nels Ackerson or Kathleen Kauffman of the
Ackerson Group, Chartered by Mail: 1666 K Street, NW, Ste 1010,
Washington, D.C. 20006-1217 by Phone: 202-833-8833 by E-mail:
nackerson@ackersonlaw.com or visit the firm's Website:
http://www.ackersonlaw.com
TUBE TURNS: Faces Suit Relating To LA Exxon Mobil Coker Plant Explosion
-----------------------------------------------------------------------
Tube Turns Technologies, Inc., a subsidiary of Sypris Technologies, is
named as co-defendant in two lawsuits, one of which is a class action,
arising out of an explosion at a coker plant owned by Exxon Mobil
Corporation located in Baton Rouge, Louisiana.
These suits allege that a carbon steel pipe elbow that the Company
manufactured was improperly installed and, the failure of which caused
the explosion. The class action suit was filed in 1994 in the United
States District Court in Louisiana on behalf of the residents living
around the plant. The suit names as defendants the Company and Exxon
Mobil, the fabricator and general contractor of the plant.
The Company maintains that the carbon steel pipe elbow at issue was
appropriately marked as carbon steel and was improperly installed,
without its knowledge, by the fabricator and general contractor in
circumstances that required the use of a chromium steel elbow.
The Company believes the above defense is meritorious but cannot give
any assurance that it will not be found liable for some or all of the
alleged damages. It also stated that a negative outcome in the suit
could materially affect their business and financial position.
Securities Fraud
COMPUTER ASSOCIATES: Settling Shareholder Derivative Suits in DE, NY
---------------------------------------------------------------------
Computer Associates International, Inc. settled three shareholder
derivative class actions pending in Delaware and New York alleging
securities laws violations.
The suits arose from a pending consolidated class action in the United
States District Court for the Eastern District of New York. The suit,
filed on behalf of purchasers of the Company's stock from January
20,1998 to July 22,1998, names as defendants the Company and:
(1) Charles B. Wang,
(2) Sanjay Kumar and
(3) Russell M. Artzt
The suit alleges that the defendants' misleading statements,
representations and omissions regarding the Company's future financial
performance harmed the members of the class. The court refused to
dismiss the suit, as requested by the defendants and the parties
currently are engaged in discovery.
Although the ultimate outcome and liability, if any, cannot be
determined, management, after consultation and review with counsel,
believes that the facts in this suit do not support the plaintiffs'
claims and that the Company and its officers and directors have
meritorious defenses.
The first derivative suit was filed in July 1998, alleging misleading
statements and omissions similar to those alleged in the shareholder
action. An additional derivative action on behalf of the Company,
alleging that the Company issued 14.25 million more shares than were
authorized under the 1995 Key Employee Stock Ownership Plan was also
filed in the New York federal court. The court later ordered these two
suits consolidated.
Another derivative action was filed in the Chancery Court in Delaware
in September 1998 alleging that 9.5 million more shares were issued to
the three 1995 Plan participants than were authorized under the 1995
Plan.
The defendants later announced that they have agreed to settle the
three derivative suits. Under the terms of the proposed settlement,
which is subject to dismissal of related claims by the New York Federal
Court, the 1995 Plan participants returned 4.5 million shares of
Computer Associates stock to the Company.
The Delaware Chancery Court has approved the settlement and both the
Delaware Court and the New York Federal Court have dismissed the
Derivative Action.
One plaintiff has filed a notice of an appeal from the order of the New
York Federal Court dismissing the action, while the other parties to
the litigation have filed a motion to dismiss the appeal.
The Company believes that it has meritorious defenses in connection
with the above claims and lawsuits and intends to vigorously contest
each of them. In the opinion of the Company's management, the results
of these other claims and lawsuits, either individually or in the
aggregate, are not expected to have a material effect on the Company's
results of operations, financial position or cash flows.
CRITICAL PATH: Milberg Weiss Commences Securities Suit in N.D. CA
-----------------------------------------------------------------
Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of Critical Path, Inc. (NASDAQ:CPTH)
common stock during the period between April 21, 2000 and October 19,
2000.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company
provides e-mail hosting services to a variety of organizations,
including Internet service providers, Web hosting companies, Web
portals, and corporations. Many of these types of companies were new
and were suffering from a downturn in Internet-related funding which
began in the spring of 2000.
The suit alleges that the problems many of these companies were having
raising money had reached crisis levels and were impacting the
Company's ability to collect receivables. Defendants had also known for
months that new accounting regulations would negate its ability to
continue to recognize up-front license fees in the 4th Quarter 2000.
Defendants knew this would severely impair the Company's future revenue
growth and impair their ability to make future stock sales and extract
future bonuses that were tied to the Company's performance. Thus,
defendants continued to make positive but false statements about the
Company's business and projections for the 3rd and 4th Quarters of 2000
and beyond. As a result, Company stock traded as high as $77-3/4.
For more information, contact William Lerach by Phone: 800-449-4900 by
E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
DECODE GENETICS: Sued For Securities Laws Violations in S.D. New York
---------------------------------------------------------------------
Decode Genetics faces a securities class action in the United States
District Court for the Southern District of New York on behalf of
purchasers of the Company's stock from July 7, 2000 to December 6,
2000. The suit names the Company, two of its current executive
officers and the two lead underwriters for its initial public
offering in July 2000 as defendants.
The suit alleges:
(1) violations of Section 11 of the Securities Act of 1933 against
the Company and the two current executive officers;
(2) violations of Section 15 of the Securities Act of 1933 against
the two current executive officers; and
(3) violations of Sections 11 and 12(a)(2) of the Securities Act
of 1933 and Section 10(b) of the Securities Exchange Act of
1934 (and Rule 10b-5 promulgated thereunder) against the two
lead underwriters
Generally, the suit alleges that the two lead underwriters:
(i) solicited and received excessive and undisclosed commissions
from certain investors in exchange for which the two lead
underwriters allocated to those investors material portions of
the shares of stock sold in the IPO; and
(ii) entered into agreements with customers whereby the two lead
underwriters agreed to allocate shares of the Company's stock
sold in the IPO 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.
The suit further alleges that the prospectus incorporated into the
registration statement for the IPO was materially false and misleading
in that it failed to disclose these arrangements.
The Company labels the allegations against it and its officers "without
merit" and stated its intention to contest them vigorously. The Company
also believes it is possible that further lawsuits alleging
substantially similar claims will be filed against it and its officers.
DYNACQ INTERNATIONAL: Charles Piven Lodges Securities Suit in S.D. TX
---------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA commenced a securities class
action on behalf of shareholders who acquired Dynacq International,
Inc. (Nasdaq:DYII) securities November 29, 1999 and January 16, 2002,
inclusive, in the United States District Court for the Southern
District of Texas, against the Company and certain of its officers
and/or directors, namely, Chiu Moon Chan and Philip S. Chan.
The suit charges that defendants violated the Securities Exchange Act
of 1934 by issuing a series of materially false and misleading
statements to the market throughout the class period.
For more information, contact Charles J. Piven by Mail: 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or
by E-mail: hoffman@pivenlaw.com
ENRON CORPORATION: Two Employees Sue Andersen, Former Enron Executives
----------------------------------------------------------------------
Two former Enron Corporation employees recently filed a class-action
lawsuit in a Texas court against three former company executives,
Arthur Andersen and the former head of the accounting firm's Houston
branch, the Associated Press recently reported.
Michael McCown and Daniel Shultz claim in the lawsuit that former chief
executive officers of the Company, Kenneth Lay and Jeff Skilling along
with former chief financial officer Andrew Fastow, participated in a
civil conspiracy with Arthur Andersen and the head of its Houston
office, David Duncan, to misrepresent the worth of company stock to
employees.
Attorney Steve Berman, who is representing the two former employees,
said Company employees who earned bonuses often accepted stock options
instead of a cash payment because of their belief in the company. "It
was called `Phantom Stock,'" he said. "It turned out to be a good name
for it."
The lawsuit also claims negligent misrepresentation and a violation of
the Texas Deceptive Trade Practices Act through false financial
representations and omissions in press releases, annual reports, SEC
filings and other documents.
ENRON CORPORATION: Collapse Costs Hawaii's Pension System $11.3 Million
-----------------------------------------------------------------------
Hawaii may join other states in a class-action lawsuit against Enron
Corporation and its auditor Arthur Andersen LP, the Associated Press
recently reported. Hawaii's Employment Retirement System lost $11.3
million in pension funds due to the energy trader's collapse, a state
official said.
The losses in Enron stocks and bonds represent 0.13 percent of the
fund, which is valued at about $8.4 billion, system Administrator David
Shimabukuro said. He added that the State's retirees need not worry,
saying "The pension fund is sound. We really are long-term investors,
and even though our investment managers, like others, were caught by
surprise, they still have a good track record."
Hawaii, like the other states already joined in a class action, would
be bringing its lawsuit under the federal Private Securities Litigation
Reform Act, which allows litigation in cases where financial losses
result from fraud or criminal conduct. "We are talking to the Attorney
General's office to determine what legal course of action can be
taken," said Mr. Shimabukuro.
Representative Marcus Oshiro, D-Wahiawa, said he was relieved to hear
the retirement system did not suffer greater losses. "It's terrible
that it strikes so close to home, $11.3 million is a lot of money, and
it shows you how close some of these national catastrophes can strike,"
he said. "But we are just fortunate that we didn't put the entire pot
into one investment. There are a lot of people out there with larger
holes in their pockets."
The fund has diminished in the past year and a half, largely because it
paid out more in benefits than it traditionally has, and because it
lost money in the volatile stock market. The fund, at $9.9 billion in
June 2000, fell to $8.8 billion in June 2001.
GLOBAL CROSSING: Green Fauth Files Securities Suit in LA Court
--------------------------------------------------------------
Green Fauth & Jigarjian LLP initiated a securities class action on
behalf of investors in the publicly traded common stock of Global
Crossing, Ltd. (NYSE: GX) in Los Angeles County Superior Court,
relating to a preliminary agreement entered into by the Company's
directors with Hutchison Whampoa Ltd. and Singapore Technologies
Telemedia Pte. Ltd.
Under the agreement, Hutchison and Singapore Technologies, will invest
$750 million in the Company, subject to a restructuring through
bankruptcy which will wipe out the equity of current shareholders,
essentially transferring billions of dollars of valuable assets,
including a state-of-the-art intercontinental fiber optic network, to
those entities at bargain-basement prices. Current shareholders have
been told that their entire equity stake in the Company will be wiped
out by this transaction.
The suit names as defendants the Company's directors, including founder
and Chairman Gary Winnick, and Chief Executive Officer John Legere. The
suit alleges that the defendants' actions, including the attempted
transaction, breached fiduciary duties Company directors owed its
shareholders. The suit further alleges that the defendants breached
fiduciary duties of loyalty and good faith by:
(1) acting to deprive shareholders of equity in the Company;
(2) failing to allow shareholders to vote on the contemplated
transfer of assets; and
(3) failing to pursue alternatives to the transaction which would
have maximized value for shareholders.
According to the suit's allegations, there was no need for a
restructuring destroying shareholder equity, and the defendants failed
adequately to explore alternatives, including the divestiture of "non-
core" assets such as Global Marine, estimated to be worth some $500
million alone. The suit quotes a company spokesperson as saying in
August 2001, that "Our cash position remains solid. Based on our
reconfirmed guidance we expect to end 2001 with approximately $1.7 to
2.1 billion in cash and liquidity. In addition, our capital
expenditures will continue to decrease significantly in 2002,
reflecting the completion of our core network."
The suit also quotes CEO Legere as saying, in a November 7, 2001
interview that, "We exceeded every bit of guidance.It's all on
track.the Global Crossing team could not have done better.Shareholders
should feel confident that we do what we say." The complaint says that,
when asked about bankruptcy, Mr. Legere stated that, "Global Crossing
has no situation pending where that's something we have to worry
about."
The action is brought on behalf of all persons who owned Company
securities as of January 28, 2002. Excluded from the class are the
Company, Hutchison Whampoa and Singapore Technologies Telemedia, the
defendants and members of the immediate families of the Defendants.
For more information, contact Robert A. Jigarjian, Gordon M. Fauth, Jr.
or Warren A. Jackson by Phone: (415) 477-6700 by E-mail:
gfj@classcounsel.com or visit the firm's Website:
http://www.classcounsel.com.
IMMUNEX CORPORATION: Shareholders Sue Over American Homes Merger in WA
----------------------------------------------------------------------
Immunex Corporation and its Board of Directors faces several securities
class action in the King County Superior Court of Washington, alleging
breach of fiduciary duty relating to the Company's merger with American
Home Products.
Company shareholder David Osher filed the first suit in December 2001
against the Company, American Home Products and the Company's Board of
Directors:
(1) Edward V. Fritzky,
(2) Kirby L. Cramer,
(3) Robert J. Herbold,
(4) John E. Lyons,
(5) Joseph M. Mahady,
(6) Edith W. Martin,
(7) Peggy V. Phillips,
(8) Lawrence V. Stein and
(9) Douglas E. Williams
The suit alleges that American Home Products and the Company's
Board of Directors breached their fiduciary duties owed to Company
shareholders by stalling the merger discussions as a result of
positions taken by American Home Products in the negotiations relating
to its control of the Company and its marketing rights in future
products.
The suit further alleges that American Home Products and the Company's
board of directors are favoring their own interests and not acting in
good faith toward the plaintiff and other members of the purported
class.
Another shareholder, Adele Brody filed a suit in December 2001 against
the Company and:
(i) Edward V. Fritzky,
(ii) Douglas E. Williams,
(iii) Peggy V. Phillips,
(iv) Mann and Pea, and
(v) the marital community of the named defendants in the first
suit
The suit, filed on behalf of several Company shareholders, alleges,
among other things, that the defendants breached their fiduciary duty
to the purported class by failing to take all reasonable steps to
assure the maximization of shareholder value, including the
implementation of a bidding mechanism to foster a fair auction of the
Company to the highest bidder, or the exploration of strategic
alternatives which would return a greater value to plaintiff and the
other members of the class.
The suit further alleges that defendants are continuing to breach their
fiduciary duties in order to entrench themselves in office and to
receive the benefits of negotiating only with American Home Products.
Another suit was filed in the same Court against the same defendants by
stockholder Edwin Weiner. The allegations and the relief requested in
this complaint are substantially identical to those in the second
complaint described above.
While these cases are in their early stages, the Company believes that
the cases are without merit and intends to contest them vigorously.
PNC FINANCIAL: Shareholder Files Suit After 2001 Earnings Restatement
---------------------------------------------------------------------
PNC Financial Services Group and its auditor, Big Five accounting firm
Ernst & Young, recently were named in an investors' lawsuit, alleging
that the Company, Pennsylvania's largest bank, misrepresented its 2001
earnings, the Associated Press reported. The class action was filed
recently in US District Court in Pittsburgh.
Company earnings changed because regulators required the bank to change
how it accounted for the sale of $550 million in corporate loans.
American Insurance Group issued preferred shares to the Company in
exchange for the loans, which the insurance company then assigned to
three subsidiaries in 2001.
Federal Reserve Board staff told the Company that, under generally
accepted accounting principles, the subsidiaries should be consolidated
in preparing bank holding company reports. The Company said its
independent Auditors, Ernst & Young, had advised them differently.
When federal regulators required the Company to return the loans to its
balance sheet, the Company also had to book their depreciation, how
much the loans' value decreased, causing it to lower its income by $155
million.
"Defendant's (PNC's) failure to conform with proper accounting
standards produced inflated earnings and misled investors as to PNC's
true financial condition," according to a statement issued by Schiffrin
& Barroway, the Philadelphia firm that filed the lawsuit.
Ernst & Young spokesman Larry Parnell told the Associated Press that he
is aware of the lawsuit, but declined comment because company officials
have not yet seen it. Company spokesman Jeep Bryant said that the
Company reported its earnings the way it did on the advice of Ernst &
Young. He said, however, that the bank does not comment on litigation.
SAGENT TECHNOLOGY: Asks CA State Court To Dismiss Derivative Suits
------------------------------------------------------------------
Sagent Technology, Inc. asked two California state courts to dismiss
two derivative shareholder suits filed against several of its officers
and directors, alleging that the defendants breached their fiduciary
duty to the Company.
The derivative suits arose from several securities class actions
commenced in October 2000 in the United States District Court in
California on behalf of purchasers of the Company's common stock
between October 21, 1999 and April 18, 2000. The suits alleged that the
Company misrepresented its prospects for 1999 and the first quarter of
2000.
The Court later ordered the suits consolidated and the plaintiffs filed
a consolidated amended suit in April 2001. The Court dismissed the
suits in September 2001, but gave the plaintiffs leave to amend the
complaint.
The first derivative suit was filed in November 2000 in the Superior
Court of California for the County of San Mateo, and the second was
commenced in February 2001 in the Superior Court of California for the
County of Santa Clara. The suits named the Company's present and
former officers and directors and tagged the Company as a nominal
defendant. The suits primarily alleged that the defendants breached
their fiduciary duties to the Company.
In July 2001, the two cases were coordinated for pretrial purposes in
the Superior Court of California for the County of Santa Clara. The
Company asked the Court to dismiss both suits, on the grounds that,
among other things, the plaintiff had failed to make a pre-suit demand
on the board of directors as required by Delaware law. The officer and
director defendants joined in that motion, and also moved to dismiss on
the grounds that the complaint fails to allege the asserted causes of
action against the individual defendants. These motions are now
pending.
SAGENT TECHNOLOGY: CA Suits Could Adversely Affect Business Operations
----------------------------------------------------------------------
Sagent Technology, Inc. denies the allegations in the securities class
actions pending against it in the United States District Court for the
Northern District of California on behalf of purchasers of the
Company's common stock between May 11, 2001 and November 28, 2001.
The suit accuses the Company and certain of its officers and directors
with violating the Securities Exchange Act of 1934. During the class
period, defendants caused Company 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
results had been materially misstated and would have to be restated
The Company intends to defend itself against the suit, which it says
could adversely affect its business operations and financial position.
TALARIAN CORPORATION: To Vigorously Oppose CA Suit Over Tibco Merger
--------------------------------------------------------------------
Talarian Corporation labeled "without merit" the class action pending
in the Superior Court of the State of California for the County of
Santa Clara, relating to its merger with Tibco Software, Inc. The suit
was filed on behalf of all of the Company's public stockholders.
The suit alleges, among other things, that:
(1) the Company and the members of its board of directors breached
their fiduciary duties to its stockholders in approving the
merger with Tibco;
(2) the directors engaged in self-dealing in connection with their
approval of the merger; and
(3) the directors failed to take steps to maximize the value of
the Company to its stockholders.
The Company intends to vigorously contest the action, but cannot give
assurance that it will be successful in the defense of the action.
TALX CORPORATION: Vigorously Opposing Securities Suit in E.D. Missouri
----------------------------------------------------------------------
Talx Corporation vowed to mount a vigorous defense against three
securities class actions commenced in December 2001 in the United
States District Court for the Eastern District of Missouri by Matt L.
Brody, an alleged Company shareholder. The suit names as defendants
the Company and:
(1) William W. Canfield,
(2) Craig N. Cohen,
(3) Richard F. Ford,
(4) Stifel, Nicolaus & Company, Incorporated and
(5) AG Edwards & Sons, Inc.
The suit, brought on behalf purchasers of the Company's shares between
July 18, 2001 and October 1, 2001, alleges, among other things, that
the registration statement and prospectus for the Company's 2001 common
stock offering, as well as other statements made by the defendants,
were materially false and misleading because they allegedly did not
properly account for certain software and inventory, did not reflect
certain write-offs, and did not accurately disclose certain business
prospects.
The suit alleges violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder by the
Company and the individual defendants, Section 11 of the Securities Act
of 1933, and, in the case of Mr. Canfield, Section 15 of the Securities
Act of 1933.
Two additional securities class actions were filed in the same Court,
against the same defendants and making substantially the same
allegations.
The Company believes it has meritorious defenses to the claims.
However, due to the inherent uncertainties of litigation, the Company
cannot accurately predict the ultimate outcome of the litigation. An
unfavorable outcome could have a material adverse impact on the
Company's business, financial condition and results of operations.
WILLIAMS COMPANIES: Federman Sherwood Lodges Securities Suit in N.D. OK
-----------------------------------------------------------------------
Federman & Sherwood initiated a securities class action on behalf of
purchasers of the common stock of Williams Companies, Inc. (NYSE: WMB)
(WMB) and/or Williams Communications Group, Inc. (NYSE: WCG) (WCG)
between July 24, 2000 and January 29, 2002, inclusive in the United
States District Court for the Northern District of Oklahoma.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between July 24, 2000 and January 29, 2002, thereby artificially
inflating the price of WMB common stock and WCG common stock.
Specifically, the complaint alleges that WMB and WCG issued a series of
statements concerning their businesses, financial results and
operations which failed to disclose:
(1) that the spin-off of WCG from WMB was not in the best
interests of both WMB and WCG shareholders as the primary
motivation for the spin-off of WCG was to allow WMB to shore
up its balance sheet so that it could then issue more stock
and/or debt to acquire companies using its common stock as
currency and protect its debt rating;
(2) that WCG was operating at levels well below company-sponsored
expectations, such that revenue projections were overstated,
and costs and expenses were understated, and also such that,
in an effort to control costs, defendants would soon have to
take actions which would have a further adverse impact on
WCG's profitability;
(3) that approximately $2 billion of WCG debt that was guaranteed
for payment by WMB around the time of the spin-off was
improperly footnoted by WMB as a mere contingent obligation of
WMB, which was materially false and misleading because the
declining financial condition of WCG made it increasingly
certain that WMB would be forced to pay on such guaranties,
for which it did not adequately reserve;
(4) that WCG's assets were permanently impaired and had to be
written-off and that WCG avoided taking such write-offs on its
own books through the series of financial machinations
described in the complaint;
(5) that WMB was carrying on its financial statements receivables
from WCG that were impaired, uncollectible and should have
been written-off in whole or in substantial part. Rather than
writing off these impaired assets, which amounted to tens of
millions of dollars, WMB agreed to extend up to $100 million
of WCG's receivables with an outstanding balance due on March
31, 2001, to March 15, 2002; and
(6) that the sale and leaseback of WCG's office properties in or
about September of 2001 was a non-arm's length transaction at
an inflated value for the properties whose motive and intent
was to funnel monies to WCG and avoid forcing WMB to perform
its guaranties and thereby adversely affect its results and
debt ratings.
For more information, contact William B. Federman by Mail: 120 N.
Robinson, Suite 2720 Oklahoma City, OK 73102 by Phone: (405) 235-1560
by Fax: (405) 239-2112 or by E-mail: wfederman@aol.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.
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