/raid1/www/Hosts/bankrupt/CAR_Public/020214.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, February 14, 2002, Vol. 4, No. 31
Headlines
ASARCO COMPANY: Omaha Residents Commence Suit Over Lead Pollution
CSK AUTO: Settles California Overtime Wage Suits For $8.8 Million
CSK AUTO: Robinson-Patman Antitrust Suit Drags On in E.D. NY
DISNEY CHILDREN'S: Recalls Zowie's Children's Book For Choking Hazard
FLORIDA: Inmates' Voting Suit Summary Judgment Hearing Set For Friday
HAWAII: Citizens Coalition Opposes Merger Of Aloha, Hawaiian Airlines
MICROSOFT CORPORATION: Dissenting States Ask Judge To Bar New Witnesses
OHIO: Federal Judge Sets Mediation Schedule In Racial Profiling Suit
OSHKOSH B'GOSH: Recalls 21T Newborn Girls' Garment For Choking Hazard
PARTY CITY: Mounts Vigorous Defense Against California Wage Law Suit
PENNSYLVANIA: Appeals Court Reinstates Psychiatric Society's HMO Suit
Securities Fraud
CREDIT SUISSE: Milberg Weiss Commences Securities Suit in S.D. New York
ENTERASYS NETWORKS: Berger Montague Initiates Securities Suit in NH
GLOBAL CROSSING: Cohen Milstein Commences Securities Suit in S.D. NY
GLOBAL CROSSING: Much Shelist Investigates For Securities Violations
GLOBAL CROSSING: Weinstein Kitchenoff Files Securities Suit in C.D. CA
GLOBIX CORPORATION: Schiffrin Barroway Lodges Securities Suit in NY
HANOVER COMPRESSOR: Abbey Gardy Commences Securities Suit in S.D. TX
HANOVER COMPRESSOR: Scott Scott Commences Securities Suit in S.D. TX
IMCLONE SYSTEMS: Schiffrin Barroway Expands Class Period in NY Suit
IMCLONE SYSTEMS: Lowey Dannenberg Lodges Securities Suit in S.D. NY
MCLEOD USA: Schiffrin Barroway Initiates Securities Suit in N.D. Iowa
PARTY CITY: Plaintiffs Appeal Dismissal of Suit in 3rd Circuit Court
PNC FINANCIAL: Much Shelist Investigates Possible Securities Violations
PNC FINANCIAL: Glancy Binkow Commences Securities Suit in W.D. PA
PNC FINANCIAL: Rabin Peckel Lodges Securities Suit in W.D. Pennsylvania
PNC FINANCIAL: Wolf Haldenstein Commences Securities Suit in W.D. PA
PREPAID LEGAL: Motion To Dismiss Securities Suit Still Pending in OK
REGENERATION TECHNOLOGIES: Rabin Peckel Files Securities Suit in FL
REPEATER TECHNOLOGIES: Sued For Securities Act Violations in S.D. NY
TYCO INTERNATIONAL: Much Shelist Probes Possible Securities Violations
TYCO INTERNATIONAL: Cauley Geller Commences Securities Suit in S.D. FL
TYCO INTERNATIONAL: Abbey Gardy Commences Securities Suit in S.D. FL
TYCO INTERNATIONAL: Lovell Stewart Commences Securities Suit in S.D. NY
WILLIAMS COMPANIES: Much Shelist Investigates For Securities Violations
*********
ASARCO COMPANY: Omaha Residents Commence Suit Over Lead Pollution
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Class action suits against the Asarco Company in Colorado and
Washington have resulted in soil cleanups and resident cash
compensation, the Omaha World-Herald recently reported. In the Tacoma,
Washington area, the Company made a $67.5 million settlement with
nearly 7,000 neighbors who live within two miles of its smelter. In
Denver, 570 residents each received $14,000 in cash and yard
replacements in a settlement with Asarco.
Two attorneys for several Omaha residents, Robert Lannin and Richard
DeWitt, are trying to achieve the same result in Omaha, and have filed
a lawsuit in Douglas County, Omaha, asking District Judge Michael
Coffey to certify their case for class action status. The lawsuit
claims that the Company's refinery "rained lead" upon the yards of
thousands of Omaha residents, endangering health and lowering property
values. Those people, the attorneys argue, are entitled to
compensation and clean yards.
If the suit is successful, it is possible that many more Omaha
residents will receive yard replacements than is likely under a cleanup
being considered by the US Environmental Protection Agency. The
lawsuit, which is separate from the EPA action, may face a tough road.
Judge Coffey previously threw out the same attorneys' request for
class-action status. Judge Coffey found a potential conflict of
interest among plaintiffs and said the claims and issues in the case
were unmanageable as a class action. The new filing attempts to
address his concerns.
The Company's general counsel, Douglas McAllister, declined to comment,
as the case is pending in court. Attorneys for the plaintiffs,
Mr. Dewitt and Mr. Lannin, also declined to comment.
The refinery operated for about a century, closing in 1997. The EPA is
investigating the Company for its possible role in the lead
contamination that the EPA says exists in east Omaha yards. Company
officials have said their tests indicate that Asarco is not the cause
of the contamination. Nonetheless, the EPA contends that so many east
Omaha yards are contaminated that a 20-square-mile area should be
considered for Superfund status, the list of the nation's
environmentally most hazardous sites. Governor Mike Johanns last month
concurred with that assessment, and the EPA will now review Omaha for a
final decision.
The Omaha suit originally was filed in 1997 in Federal Court, but then
moved to State Court, where it encountered several setbacks. Judge
Coffey denied class action status after the Company successfully argued
that there were conflicts of interest among the plaintiffs, who have
different levels of contamination on their property. Judge Coffey also
threw out four of the original suit's six causes of action, those based
on trespassing, strict liability, unjust enrichment and medical
monitoring. The Judge let stand complaints that the Company was a
nuisance through its actions and damaged residents through negligence.
When the plaintiffs' attorneys recently filed their amended request for
class action status, they made an effort to remedy the problems
concerning the class that Judge Coffey had with the case. The
attorneys also revived the complaints that the Judge originally threw
out.
In their amended lawsuit, Mr. DeWitt and Mr. Lannin more narrowly
define the class of people eligible to participate in the case as those
whose yards contain soil contamination of at least 400 parts per
million. Previously, the lawsuit had used the figure of 100 parts per
million (ppm). The suit requests soil replacement in yards
contaminated at the 400 ppm level, which is lower than the level
the EPA is likely to use in its cleanup, which means that more yards
could receive a cleanup if the plaintiffs in the lawsuit prevail.
According to the lawsuit, within two miles north of the Company's
refinery, 70 percent of the yards tested showed contamination of 400
ppm or greater. Within one and two miles south of the Company, 60 to
68 percent of the yards tested had similar readings.
CSK AUTO: Settles California Overtime Wage Suits For $8.8 Million
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CSK Auto, Inc. settled for $8.8 million the class actions pending
against them in several California state courts alleging violations of
state wage laws.
The first of these suits were commenced in May 4, 1998 in the Superior
Court in San Diego, California. Two former store managers and a former
assistant manager filed the suit seeking overtime pay for a period
beginning in May 1995 as well as injunctive relief requiring overtime
pay in the future. The suit was filed on behalf of all present and
former California store managers and senior assistant managers.
The Company was also served with two other lawsuits purporting to be
class actions filed in California state courts in Orange and Fresno
Counties by thirteen other former and current employees.
The Company finalized a settlement of all these lawsuits, and included
the cost in the fourth quarter of fiscal year 2000, with payments of
the settlement made during the first quarter of fiscal 2001.
CSK AUTO: Robinson-Patman Antitrust Suit Drags On in E.D. NY
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CSK Auto, Inc. has yet to resolve a class action commenced in March
2000 in the US District Court for the Eastern District of New York by
the Coalition for a Level Playing Field, O.K. and 250 individual auto
parts dealers. The suit alleges that the Company and seven other auto
parts dealers violated the Robinson-Patman Act.
The suit also names as defendants:
(1) AutoZone, Inc.,
(2) Wal-Mart Stores, Inc.,
(3) Advance Stores Company, Inc.,
(4) Discount Auto, Inc.,
(5) The Pep Boys 151,
(6) Manny, Moe and Jack, Inc.,
(7) Reilly Automotive, Inc., and
(8) Keystone Automotive Operations, Inc.
The suit, filed on behalf of several individual auto parts dealers,
alleges that the Company and other defendants knowingly either
induced or received discriminatory prices from large suppliers,
allegedly in violation of Section 2(a) and 2(f) of the Robinson-Patman
Act, as well as received compensation from large suppliers for services
not performed for those suppliers, allegedly in violation of Section
2(c) of the Robinson-Patman Act.
The Company, with other defendants, filed a motion to dismiss and
certain other procedural motions. All motions were denied, except the
motion to dismiss one of the Robinson-Patman claims that was
based upon the allegation that defendants were acting as
brokers, which was granted.
The Company believes the suit is without merit and continues to
vigorously defend against it. The Company does not believe that this
complaint will result in liabilities material to its consolidated
financial position, results of operations or cash flows.
DISNEY CHILDREN'S: Recalls Zowie's Children's Book For Choking Hazard
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Disney Children's Book Group LLC is cooperating with the US Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 5,180
Zowie's 123 children's books. The books have a plastic abacus-like toy
attached to the back cover that contains five plastic beads. The beads
can separate from the book cover, posing a choking hazard to young
children.
The Company has received one report of a 15-month-old boy who broke a
bead from the book cover and placed it in his mouth. An adult was able
to remove the bead from the child's mouth without injury.
The Zowie's 123 book is a twelve page white board book that measures
6.5-inches by 6.5-inches with a yellow plastic abacus-like toy attached
to the back book cover. The abacus toy has five small, blue, green,
red, yellow and orange beads. The beads slide along a plastic track.
The book is based on the Rolie, Polie, Olie television series and
depicts the Zowie character on its cover. The book can be identified
with the ISBN code number 078683307-6, found on the back cover in the
bottom corner. Bookstores nationwide sold the recalled books from
January 2002 through February 2002 for about $7.
Mail the books to Disney Press, Attn: Zowie 123, 114 Fifth Avenue, New
York, NY 10011 and use six first-class stamps per book. For additional
information, contact the Company by Phone: (866) 203-8070.
FLORIDA: Inmates' Voting Suit Summary Judgment Hearing Set For Friday
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Miami Federal Court is set to decide on summary judgment for the class
action which seeks to overturn a lifetime voting ban affecting more
than 600,000 Floridians has a critical court hearing this week.
Governor Jeb Bush and the Clemency Board are being sued for violating
the Constitution and the Voting Rights Act of 1965.
The suit seeks to restore voting rights to more than 600,000 ex-felons
in the state of Florida who have served their time and are now
productive, tax-paying citizens.
The Judge will hear argument on motions for summary judgment and
motions to exclude evidence. If the Judge grants the request from
either side, he will decide the case in a written brief and there will
be no trial.
"This case is about democracy, not crime," says Nancy Northup, Director
of the Brennan Center's Democracy Program and a former federal
prosecutor. "A lot of people violate criminal laws, but who gets
convicted of a felony is based on the prosecutors discretion and
numerous other factors. Voting rights should not turn on these
factors."
"This litigation is critical to restoring the civil rights of those who
have paid their debt to society," said Lori Outzs Borgen, Voting Rights
Attorney at the Lawyers' Committee. "Nothing is more fundamental to
full participation in our society than the right to vote," she added.
The hearing is set for this Friday, February 15, 2002.
For more information, contact Amanda Cooper by Phone: 212-998-6736 or
visit the Web site: http://www.brennancenter.org.
HAWAII: Citizens Coalition Opposes Merger Of Aloha, Hawaiian Airlines
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A citizen's coalition has opposed the proposed merger between Hawaii's
two major airlines, saying the move would ultimately lead to
significant job losses and higher ticket prices. Earlier, several
class action lawsuits on behalf of groups including employees and
shareholders, have been filed in State Court in an attempt to block the
Merger.
The Citizens for Competitive Air Travel recently presented to Governor
Ben Cayetano a petition with more than 20,000 signatures stating its
case, the Associated Press recently reported. The coalition plans to
submit more signatures as they come in by mail.
The coalition believes that the merger would have a ripple effect
throughout the State's economy. The two airlines announced the
proposed merger in December 2001, citing financial difficulties
stemming from the state's economic downturn after September 11. The
coalition has said that it believes the airlines should seek other ways
to stay afloat.
"They (the airlines) have not taken advantage of some of the other
alternatives that they have available to them, including going to the
federal government for additional revenues related to September 11th,"
said Richard Port, former chairman of the Democratic Party of Hawaii
and spokesman for the coalition. "They also have not taken advantage
of the State's offer of loan guarantees so, there are these various
alternatives that we would like to see them explore first," he added.
"We are concerned about the anticompetitive nature of this merger,
which will hurt all the citizens of Hawaii," Mr. Port continued. "The
dollars that will be spent on additional ticket prices when the prices
go up will be fewer dollars that can be spent for Hawaii's businesses,"
Mr. Port said.
The Governor's Chief of Staff, Sam Callejo, in accepting the petition,
said "We will evaluate everything that you guys have prepared plus talk
with the attorney general before a decision is made." The Governor has
said he supports the merger based on meetings with the airlines' chief
executives who have said the merger is a financial necessity. A
spokeswoman for the Governor did not immediately respond to a telephone
message.
However, the State's three Republican senators have asked the US
Justice Department to block the merger. US Representative Neil
Abercrombie, D-Hawaii, released a letter sent to US Attorney General
John Ashcroft and US Transportation Secretary Norman Mineta expressing
his concerns about the merger. Mr. Abercrombie said he was concerned
about maintaining a minimum level of service and affordable fares due
to the fact that inter-island travel is heavily dependent on the
airlines.
"As you analyze details of the proposed merger," Mr. Ambercrombie
wrote, "I respectfully request that you consider the potential impact
on the level of service and the price of fares in light of Hawaii's
unique geographical composition."
Stu Glauberman, a spokesman for Aloha Airlines, said executives had no
immediate comment on the petition. Hawaiian Airlines spokeswoman Keoni
Wagner also declined comment. Greg Brenneman, the former Continental
Airlines president, who is overseeing the merger of Aloha and Hawaiian,
has been canvassing the state speaking to employees, shareholders, town
hall meetings and community groups to drum up support for the merger.
A spokeswoman for Mr. Brenneman said he was traveling and would have no
comment on the petition.
MICROSOFT CORPORATION: Dissenting States Ask Judge To Bar New Witnesses
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The nine states who opted out of the settlement entered into by
Microsoft Corporation and the US Justice Department have opposed the
inclusion of the 23 "last-minute" witnesses in the fairness hearings
for the pact, according to a Reuters report.
The nine Attorney Generals for the State asked US District Judge
Colleen Kollar-Kotelly to bar the witnesses, saying the Company was
using a "hide-the-ball" tactic and was trying to delay the proceedings.
The States also argued that the Company should not be allowed to
present 16 of the witnesses, for showing a "blatant disregard for this
Court's schedule and for the reasonable and appropriate conduct of
litigation."
In their motion, the States said, "By adding 23 previously undisclosed
witnesses to its final witness list (at the last minute), Microsoft is
obviously trying yet again to derail this remedy proceeding to the
detriment of consumers and competitors who continue to be harmed by
Microsoft's monopolistic conduct."
The Company countered that it needed many witnesses because the States
have proposed drastic sanctions, including forcing the Company to sell
a stripped-down version of its Windows operating system, Reuters
reports. In a statement, the Company asserts "It is important that the
Court hear from consumer and industry witnesses on the harms they would
suffer under the state proposals. The non-settling states are seeking
remedies that go far beyond the Appeals Court rulings and they don't
want the Court to hear about the negative impact their proposals will
have on consumers, on the industry and on the economy."
The Company forged the agreement with the Justice Department and nine
states last year, but nine other states dissented, saying the
settlement was not harsh enough to punish the Company's "anti-
competitive" behavior. Judge Kollar-Kotelly has set fairness hearings
for March.
OHIO: Federal Judge Sets Mediation Schedule In Racial Profiling Suit
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US District Judge Susan Diott has outlined a schedule that both parties
in the racial profiling lawsuit against the city of Cincinnati must
meet in their mediation, the Associated Press recently reported. The
Federal Court order recently issued by the Judge says that final
negotiations on the lawsuit filed by black activists and the American
Civil Liberties Union must be concluded by April 5. The lawsuit
accuses the City of decades of discrimination against blacks.
The racial profiling lawsuit filed on behalf of businessman Bomani
Tyehimba and the motion to certify the case as a class-action lawsuit
are on hold pending the outcome of the mediation. The settlement, if
one is reached, is expected to include specific plans, policies and
procedures that would be monitored by the Federal Court.
Under Judge Diott's order, both sides must conclude initial
negotiations by February 19 and agree by February 27 on a monitoring
process to be used if a settlement is reached. By March 18, attorneys
will present a draft settlement to their clients and both parties will
either accept or reject the proposed settlement by April 5.
"The setting of the schedule is going to be very helpful in assuring
our focus and success," said Al Gerhardstein, one of the three lawyers
who filed the federal lawsuit. "We are moving with a real tight time
line now," said Jay Rothman, President of Aria Group, a Yellow Springs-
based conflict resolution firm leading the mediation.
OSHKOSH B'GOSH: Recalls 21T Newborn Girls' Garment For Choking Hazard
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OshKosh B'Gosh, Inc. is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 21,800 newborn girls'
garments. The fabric, heat-sealed flowers on the front of the garments
can detach after washing, posing a choking hazard to young children.
The Company has received one report of a 6-month-old child who began to
choke on one of the detached flowers that had separated from the
garment. It was removed from the child's throat without injury.
The recall includes two separate garments sold as sets. One garment is
a lavender-colored velour jumpsuit with a floral printed rib knit top.
The other garment is a lavender-colored French terry and velour top
with printed rib knit bottom. Only jumpsuits with style numbers 516-
8240 and 516-8340 and top and bottom sets with style numbers 516-8241
and 516-8341 are included in the recall.
Both garments have felt fabric flowers on the front bodice. The
jumpsuit has one large purple flower and two teal colored leaves on the
front. The top has one large purple flower and two small blue flowers
on each side. A label sewn on the inside neck of the garments reads in
part "Baby OshKosh B'Goshr" and "Made in Malaysia." Both garments were
sold in sizes 0-3, 3-6, and 6-9 months. The Company and department
stores nationwide sold these garments from August 2001 through December
2001 for about $38.
For more information, contact the Company by Phone: (800) 282-4674
between 8 am and 4:30 pm CT Monday through Friday or visit the firm's
Web site: http://www.oshkoshbgosh.com
PARTY CITY: Mounts Vigorous Defense Against California Wage Law Suit
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Party City Corporation faces a class action commenced in September 2001
in the Los Angeles Superior Court by an Assistant Manager in one of the
Company's California stores on behalf of other Company store managers,
claiming the Company misclassified them as exempt from California
overtime wage and hour laws.
The suit seeks relief in the form of payment of overtime wages
allegedly owed by the Company to the Class but not paid. The plaintiffs
also seek punitive damages and statutory penalties.
The Company denies the allegations and is vigorously defending
against the claim.
PENNSYLVANIA: Appeals Court Reinstates Psychiatric Society's HMO Suit
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The United States Court of Appeals for the Third Circuit endorsed the
Pennsylvania Psychiatric Society's right to pursue changes in the
managed care industry's treatment of both the Society's member
physicians and their patients, as essayed in its class action suit
against these Health Management Organizations:
(1) Green Spring Health Services,
(2) Magellan Health Services,
(3) Highmark, Inc., and
(4) three Keystone Health Plans.
The suit aims to correct what the Society claims are multiple and
systemic breaches of good faith and fair dealing, resulting in harm to
physicians and mental health patients alike. The Society alleges:
(1) overly restrictive medical necessity decisions;
(2) interference with the doctor-patient relationship;
(3) creation of improper obstacles to physician credentialing,
resulting in restricted access to care by patients;
(4) overly burdensome administrative requirements; and
(5) other practices that interfered with physicians' ability to
render the care that they are legally and ethically obliged to
provide.
According to Philip H. Lebowitz, legal counsel for the Pennsylvania
Psychiatric Society, the Third Circuit decision "is significant because
it permits challenges to managed care practices and procedures by
organized associations of providers," rather than individual lawsuits
by injured patients and proposed class action lawsuits by providers,
both of which face significant legal obstacles.
"The Pennsylvania Psychiatric Society approach potentially provides an
efficient mechanism for leveling the playing field between provider and
payer for discussions of future changes in procedures to improve the
quality of health care provided under managed care plans," he said.
The Court of Appeals vacated a lower court order that had dismissed the
psychiatric society's claims against the defendants. The Court of
Appeals' decision reinstates the lawsuit and remands it to the Western
District of Pennsylvania for discovery and other proceedings.
In vacating the lower court's rulings, the Court of Appeals found that
because the Pennsylvania Psychiatric Society is seeking only an order
preventing future conduct of the type alleged to be improper, it may be
able to prove its claims without the need for excessive individual
involvement of its member psychiatrists. The Court ruled that the suit
should not be dismissed without giving the Society an "opportunity to
establish the alleged violations without significant individual
participation."
In addition to its unanimous ruling that the Society should be allowed
to proceed on behalf of its members based on associational standing,
the Court of Appeals panel decided 2-1 that the Society also has third-
party standing to sue on behalf of its members' patients.
Writing for the majority, Third Circuit Judge Anthony J. Scirica
pointed out that the Courts have generally recognized physicians'
authority to pursue the claims of their patients in certain situations,
particularly when the patient's ability to protect his or her own
interests is limited or hindered in some way.
While the District Court found that the nature of mental illness and
public perceptions of it were not sufficient to allow PPS third-party
standing, Judge Scirica disagreed. "The stigma associated with
receiving mental health services presents a considerable deterrent to
litigation. Besides the stigmatization that may blunt mental health
patients' incentive to pursue litigation, their impaired condition may
prevent them from being able to assert their claims. Therefore, we
believe the patients' fear of stigmatization, coupled with their
potential incapacity to pursue legal remedies, operates as a powerful
deterrent to bringing suit."
Based on the finding that individual psychiatrists have third-party
standing to sue on behalf of their patients, the majority then
concluded that the Pennsylvania Psychiatric Society has standing to
pursue its members' claims on behalf of their patients.
Society President, Lawrence A. Real, MD, of Philadelphia, was pleased
by the new ruling. "This decision makes sense, because it recognizes
the principle that associational suits such as ours are a legitimate
vehicle for pursuing systemic relief in areas where the cost and burden
of individual lawsuits has made it nearly impossible for our individual
members to achieve meaningful change. If we meet the next challenge, we
may be able to correct serious and pervasive problems that make it so
difficult for patients to actually receive the care they need."
For more information, contact Gwen Lehman by Phone: 1-717-558-7750.
Securities Fraud
CREDIT SUISSE: Milberg Weiss Commences Securities Suit in S.D. New York
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Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Symyx Technologies,
Inc. (NASDAQ: SMMX) between November 18, 1999 and December 6, 2000,
inclusive, in the United States District Court, Southern District of
New York. The suit names as defendants Credit Suisse First Boston
Corporation, Steven D. Golby and Jeryl L. Hilleman.
The suit alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. In November 1999, the
Company commenced an initial public offering of 5,538,000 of its shares
of common stock at an offering price of $14 per share.
In connection therewith, the Company filed a registration statement,
which incorporated a prospectus with the SEC. The complaint further
alleges that the Prospectus was materially false and misleading because
it failed to disclose, among other things, that:
(i) Credit Suisse had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which Credit Suisse allocated to those investors material
portions of the restricted number of Symyx shares issued in
connection with the Symyx IPO; and
(ii) Credit Suisse had entered into agreements with customers
whereby Credit Suisse agreed to allocate Symyx shares to those
customers in the Symyx IPO in exchange for which the customers
agreed to purchase additional Symyx shares in the aftermarket
at pre-determined prices.
For more information, contact Steven G. Schulman or Samuel H. Rudman by
Phone: 800/320-5081 or visit the firm's Web site:
http://www.milberg.com
ENTERASYS NETWORKS: Berger Montague Initiates Securities Suit in NH
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Berger & Montague, PC commenced a securities class action against
Enterasys Networks, Inc. (NYSE: ETS) and certain of the officers and
directors in the United States District Court for the District of New
Hampshire, on behalf of all persons or entities who purchased the
Company's common stock during the period from September 26, 2001
through February 1, 2002.
The suit charges the Company and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and SEC Rule 10b-5. The complaint alleges that the
defendants issued public statements and releases and filed documents
with the SEC reporting financial results and revenues for the Company
without disclosing that revenues were materially overstated as a result
of the improper recognition of revenue in its Asia-Pacific region in
violation of generally accepted accounting principles and the Company's
own revenue recognition policies.
It was not until the close of trading on February 1, 2002 that the
Company disclosed that the release of its fourth quarter and fiscal
year ended December 29, 2001 financial results would be delayed in
order to complete a review of a $4 million sales contract recorded by
its Asia-Pacific operations which did not comply with the Company
policies or GAAP.
The Company's auditor KPMG, LLP (KPMG) had reviewed the same contract,
but the one KPMG reviewed had different terms and conditions which
purportedly complied with the Company's policies and GAAP.
As a result, the Company hired the Boston firm of Ropes & Gray and the
accounting firm of Deloitte & Touche, LLP to review revenue recognition
and sales practices in the Asia Pacific region. Three out of 120
employees in the Asia-Pacific region have been put on leave as a
result. In addition, the Company has received an order of investigation
from the SEC, purportedly relating to the Company and certain
affiliated companies. Moreover, preliminary unaudited results in Latin
America were $7 million below internal expectations.
Following the February 1, 2002 announcement, Company shares fell $6.59
to $4.21 in trading of 35.1 million shares or 22 times the 3 month
daily average, sinking to the lowest closing price since May 1991.
Company stock suffered the second largest percentage decline in US
markets, reducing its market value to $855.4 million from $2.9 billion.
For more information, contact Sherrie S. Savett, Barbara A. Podell or
Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103
by Phone: (888) 891-2289 or (215) 875-3000 by Fax: (215) 875-5715 by E-
mail: InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
GLOBAL CROSSING: Cohen Milstein Commences Securities Suit in S.D. NY
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Cohen Milstein Hausfeld & Toll, PLLC initiated a securities class
action against certain Global Crossing, Ltd. (NYSE:GX) officers and
directors in the United States District Court for the Southern District
of New York, on behalf of all persons or entities who purchased the
Company's common stock between January 2, 2001 and October 4, 2001,
inclusive.
The suit charges certain of the Company's officers and directors with
violations of the Securities Exchange Act of 1934. The complaint
alleges, among other things, that during the class period defendants
improperly recorded revenue on the Company's bandwidth trading
contracts, in violation of generally accepted accounting principles,
thereby substantially overstating earnings.
The suit also alleges that while the Company's shares were artificially
inflated, certain defendants engaged in heavy insider trading, selling
a total of more than $135 million of their personal shares.
For more information, contact Mark S. Willis or Lisa Polk by Mail: 1100
New York Avenue, N.W. West Tower, Suite 500 Washington, D.C. 20005-3964
by Phone: 888-240-0775 or (202) 408-4600 by E-mail: mwillis@cmht.com or
lpolk@cmht.com or visit the firm's Web site: http://www.cmht.com
GLOBAL CROSSING: Much Shelist Investigates For Securities Violations
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Much Shelist Freed Denenberg Ament & Rubenstein, PC is investigating
certain directors and officers of Global Crossing Ltd. (OTCBB:GBLXQ)
(formerly NYSE:GX) for possible securities act violations during the
period starting February 14,2001 to January 28,2002.
The Company's officers and directors allegedly violated federal
securities laws by issuing false and misleading statements, press
releases, and SEC filings concerning the Company's financial condition,
as well as its ability to generate sufficient cash revenue from new
revenue sources, considering the failing market for broadband access.
The Company filed for protection under Chapter 11 in the United States
Bankruptcy Court for the Southern District of New York on January 28,
2002 and, therefore, cannot be considered as a defendant.
Before the disclosure of the Company's true financial condition,
certain of its officers and directors and other Company insiders sold
their stock for proceeds of more than $149 million and the Company
raised $1 billion in an offering of senior notes.
The full extent of the Company's cash flow crisis, and its failure to
compete in the market for customized communications services, began to
emerge on Oct. 4, 2001. On that date, the Company issued a string of
stunning announcements:
(1) Cash revenues in the third quarter would be approximately $1.2
billion, $400 million less than the $1.6 billion expected by a
consensus of analysts surveyed by Thomson Financial/First
Call. The cash revenue shortfall was purportedly the result
of a "sharp falloff" in wholesale IRU sales to carrier
customers;
(2) the Company also announced that it expected recurring adjusted
EBITDA to be "significantly less than $100 million" compared
to forecasts of $400 million.
Following these announcements, the Company's share price plunged by 49%
to $1.07 per share.
For more information, contact Carol V. Gilden, Jean K. Janes or Michael
E. Moskovitz by Phone: 1-800-470-6824, or by E-mail:
cgilden@muchlaw.com, jjanes@muchlaw.com or mmoskovitz@muchlaw.com. E-
mail should refer to Global Crossing.
GLOBAL CROSSING: Weinstein Kitchenoff Files Securities Suit in C.D. CA
----------------------------------------------------------------------
Weinstein Kitchenoff Scarlato & Goldman Ltd. lodged a securities class
action on behalf of persons who purchased the convertible preferred
stock of Global Crossing Ltd. (NYSE: GX) (OTC Bulletin Board: GBLXQ)
between January 2, 2001 and October 4, 2001.
The suit, filed in the United States District Court for the Central
District of California, charges certain of the Company's officers and
directors with violating the Securities Exchange Act of 1934 by issuing
false and misleading public statements during the class period
concerning the Company's financial condition, and its ability to
generate cash sufficient to service its debt.
The true picture of the Company's financial condition began to emerge
on October 4, 2001, when defendants issued a string of stunning
announcements contradicting their earlier public statements. On January
28, 2002, the Company announced that it had commenced bankruptcy
proceedings. A proposed plan of reorganization will extinguish the
interests of its preferred and common stockholders.
Prior to the disclosure of the Company's true financial condition, the
individual defendants and certain other insiders sold their personally
held stock for more than $149 million.
For more information, contact Andrea Adlam or Paul Scarlato by Phone:
1-877-805-7200 by E-mail: scarlato@wksg.com or visit the firm's Web
site: http://www.wksg.com
GLOBIX CORPORATION: Schiffrin Barroway Lodges Securities Suit in NY
-------------------------------------------------------------------
Schiffrin & Barroway, LLP commenced a securities class action in the
U.S. District Court for the Southern District of New York claiming that
Globix Corporation (OTCBB:GBIX) misled shareholders about its business
and financial condition. The suit alleges violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 on behalf of all
investors who bought the Company's securities between January 6, 2000
and April 2, 2001.
The suit alleges that the New York-based Company, on November 16, 2000,
set-forth its business plan which stated in no uncertain terms that the
Company would be fully funded to fiscal 2003 and thereafter cash flow
positive. This sentiment was repeated in its annual report filed on
Form 10-K with the SEC and thereafter in Company press releases and
conference calls.
Despite such assurances, on December 27, 2001, defendants announced
that management had been secretly negotiating with its bondholders and
preferred stockholders to effectuate a pre-packaged bankruptcy that
would result in a near total dilution of the existing common
stockholders' interest in the Company.
For more information, contact Marc A. Topaz or Stuart L. Berman by
Phone: (888) 299-7706 (toll free) or (610) 822-2221 or by E-mail:
info@sbclasslaw.com
HANOVER COMPRESSOR: Abbey Gardy Commences Securities Suit in S.D. TX
--------------------------------------------------------------------
Abbey Gardy LLP initiated a securities class action on behalf of all
person who acquired common stock of Hanover Compressor Company
(NYSE:HC) during the period between November 8, 2000 and January 28,
2002, inclusive, in the US District Court for the Southern District of
Texas.
The complaint alleges that certain of the Company's officers and
directors violated the Securities Exchange Act of 1934. The suit
charges that during the class period, defendants issued false and
misleading statements, press releases, and SEC filings concerning
Hanover's financial condition. These statements had the effect of
artificially inflating the price per share of the Company's common
stock and other securities.
The Company's true state of fiscal affairs was in fact substantially
different than reported to the markets. On January 28, 2002, the
Company would reveal various investments and joint ventures for which
it never recorded the investment amount or purchase price, but for
which it recorded revenue from in order to bolster its claims of
growth.
Specifically, the true facts, which were known by the defendants during
the Class Period but concealed from the public, were:
(1) the $16 million in revenue and $2.6 million in net income
recognized in the 3rd and 4th quarter associated with the
Hampton Roads fabrication project should not have been
recognized;
(2) the Registration Statement omits the Hampton Roads project and
incorporates the Company's false and misleading 3rd and 4th
quarter 2000 financial results; and
(3) the Company's financial statements for 1st and 3rd quarter
2001 were false in that the revenue and EPS were overstated
and they failed to disclose the impact of the questionable
Hampton Roads joint venture.
For more information, contact Nancy Kaboolian or Jennifer Haas by
Phone: (800) 889-3701 or by E-mail: JHaas@abbeygardy.com or
nkaboolian@abbeygardy.com
HANOVER COMPRESSOR: Scott Scott Commences Securities Suit in S.D. TX
--------------------------------------------------------------------
Scott + Scott LLP initiated a securities class action in the United
States District Court for the Southern District of Texas on behalf of
purchasers of Hanover Compressor Company (NYSE:HC ) publicly traded
securities during the period between Nov. 8, 2000 and Jan. 28, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934, alleging
violations of the federal securities laws arising out of defendants'
issuance of false financial statements and other false and misleading
statements about the Company's operating performance.
The true facts, which were known by the defendants during the class
period but concealed from the public, were:
(1) the $16 million in revenue and $2.6 million in net income
recognized in Q3 and Q4 associated with the Hampton Roads
fabrication project should not have been recognized as it did
not reflect the percentage of the project's completion;
(2) the Company's "former majority partner" in the Hampton Roads
project was actually replaced on March 19, 2001, not July
2001;
(3) defendants "paid off" the investor in Hampton Roads the sum of
$1 million in exchange for the investor's signature on the
sham transaction documents on or before Sept. 30, 2000, in
order for the Company to use the same to inflate the Company's
revenue and earnings as early as Q3 00;
(4) defendants issued a "side letter" to the Hampton Roads
investor offering to loan up to $40 million to the joint
venture in order to induce the investor to enter into the
agreement by Sept. 30, 2000;
(5) in Winter 2000, defendants actually knew that the Hampton
Roads project completion date had been pushed out to 2003 or
2004, not 2001;
(6) the Registration Statement omits the Hampton Roads project and
incorporates the Company's false and misleading Q3 and Q4 2000
financial results;
(7) the Company's financial statements for Q1-Q3 2001 were false
in that the revenue and EPS were overstated and they failed to
disclose the impact of the dubious Hampton Roads project.
Moreover, these statements (in addition to the Registration
Statement/Prospectus) concealed the fact that the investor in
the transaction advised defendants in February 2001 that it
sought to back out of the venture; and
(8) on Feb. 6, 2001, the investor in Hampton Roads demanded a
refund of his $4 million.
Further, in a secret "behind-the-scenes" type transaction, the Company
refused to refund the money directly to the investor. Instead,
defendants forwarded the money to a company related to the investor so
that the transaction would go uncovered.
Finally, defendants arranged for the "related company" to issue a
Promissory Note to the Company in the amount of $4 million (the same
amount as the refund) which it agreed in an oral "side agreement" not
to insist upon payment.
For more information, contact Neil Rothstein, David R. Scott or James
E. Miller by Phone: 800-404-7770 or by E-mail:
nrothstein@scott-scott.com, drscott@scott-scott.com or
jmiller@scott-scott.com or visit the firm's Web site:
http://www.scott-scott.com
IMCLONE SYSTEMS: Schiffrin Barroway Expands Class Period in NY Suit
-------------------------------------------------------------------
Schiffrin & Barroway, LLP expanded the class period in the securities
class action pending in the US District Court for the Southern District
of New York against ImClone Systems, Inc. (Nasdaq:IMCL) for violations
of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder. The class now includes all
investors who bought Company securities between expanded period May 12,
2001 and January 18, 2002.
The suit alleges that the Company issued multiple press releases
highlighting the successful progress of its "Fast-Track" application to
the US Food and Drug Administration for approval of IMC-C225, its
blockbuster drug used for the treatment of colorectal cancer and also
known as Erbitux, and the positive impact that the drug's approval
would have on the Company's revenues. As alleged in the suit, these
statements were materially false and misleading because, among other
things:
(1) defendants failed to comply with the FDA's requirements for
filing the "Fast Track" application for approval of Erbitux;
and
(2) as such, defendants knew, or should have known, that their
deficient application would be rejected and would thus
negatively impact the Company's future earnings.
For more information, contact Marc A. Topaz or Stuart L. Berman by
Phone: (888) 299-7706 (toll free), (610) 822-2221 by E-mail:
info@sbclasslaw.com or visit the firm's Web site:
http://www.sbclasslaw.com
IMCLONE SYSTEMS: Lowey Dannenberg Lodges Securities Suit in S.D. NY
-------------------------------------------------------------------
Lowey Dannenberg Bemporad & Selinger, PC commenced a securities class
action against ImClone Systems, Inc. (NASDAQ: IMCL) and certain of the
Company's officers and directors in the United States District Court
for the Southern District of New York, on behalf of all persons or
entities who purchased the Company's common stock from April 26, 2001
through January 7, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with federal securities violations arising from allegedly false and
misleading statements about its application to the US Food and Drug
Administration (FDA) for approval of its new colorectal cancer-fighting
drug, Erbitux, and the likely revenues expected to be produced in the
near term by sales of Erbitux.
As a result of defendants' false and misleading statements during the
class period, the price of Company stock traded at artificially
inflated prices. While class members lost millions of dollars from
their purchases of Company stock, certain senior executives reaped
about $150 million from sales at inflated prices.
The Company shocked the market when, on December 28, 2001, it announced
that the FDA had rejected its fast-track application to market Erbitux.
Thereafter, on January 7, 2002, a Washington-D.C.-based newsletter,
"The Cancer Letter," reported far more serious and numerous problems
with the Company's application after obtaining a copy of the FDA's
letter reflecting its decision to "refuse to file" (RTF).
The RTF revealed that the Company had been forewarned more than a year
earlier about FDA concerns regarding the combined use of Erbitux with
another approved, but toxic, chemotherapy drug product, CPT-11, and
that the FDA had demanded that the Company demonstrate that CPT-11 was
"necessary to achieve the clinical" effectiveness of Erbitux, a
material fact that defendants had concealed from investors.
The price of Company stock fell sharply again on January 9, 2002, when
executives admitted that the Company had submitted a faulty application
for Erbitux.
For more information, contact David Harrison or Stacey Blaustein by
Mail: The Gateway, 11th Floor One North Lexington Avenue White Plains,
NY 10601-1714 by Phone: 877-777-3581 (toll-free) by E-mail:
ldbs@westnet.com or visit the firm's Web site: http://www/ldbs.com
MCLEOD USA: Schiffrin Barroway Initiates Securities Suit in N.D. Iowa
---------------------------------------------------------------------
Schiffrin and Barroway LLP commenced a securities class action against
McLeodUSA, Inc. (Nasdaq:MCLDQ) claiming that the Company misled
investors about its business and financial condition. The suit was
filed in the U.S. District Court for the Northern District of Iowa on
behalf of all investors who bought the Company's securities between
January 30, 2001 and December 3, 2001.
The suit alleges that the New York-based Company issued a series of
materially false and misleading statements regarding its business,
operations and financial statements that failed to disclose:
(1) 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.;
(2) 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
(3) 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, it purchased Intelispan for $40 million in Company
stock.
For more information, contact the Shareholder Relations Manager by
Phone: (888) 299-7706 (toll free), (610) 822-2221 or by E-mail:
info@sbclasslaw.com
PARTY CITY: Plaintiffs Appeal Dismissal of Suit in 3rd Circuit Court
--------------------------------------------------------------------
Plaintiffs in the securities class action against Party City
Corporation have appealed a New Jersey Federal Court's dismissal of the
suit in the US Third Circuit Court of Appeals.
The suit was initially commenced as twelve class actions against the
Company, its former Chief Executive Officer, its former Chief Financial
Officer and Executive Vice President of Operations, in the United
States District Court for the District of New Jersey. The suits were
filed on behalf of persons who purchased or acquired the Company's
common stock during various time periods between February 1998 and
March 19, 1999.
In October 1999, plaintiffs filed an amended class action complaint and
in February 2000, plaintiffs filed a second amended complaint. The
second amended complaint alleged, among other things, violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended, and Rule 10b-5 promulgated thereunder.
The suit alleged that defendants issued a series of false and
misleading statements and failed to disclose material facts concerning,
among other things, the Company's financial condition, adequacy of
internal controls and compliance with certain loan covenants during the
class period. The plaintiffs further alleged that because of the
issuance of a series of false and misleading statements and/or the
failure to disclose material facts, the price of the Company's common
stock was artificially inflated.
In early 2000, defendants moved to dismiss the second amended complaint
on the ground that it failed to state a cause of action. In May 2001,
the Federal Court dismissed the suit with prejudice.
Hearing of arguments for the appeal is scheduled on March 19, 2002. It
is not possible to predict the likely outcome of the appeal at this
time, the Company qualified in a filing with the Securities and
Exchange Commission.
PNC FINANCIAL: Much Shelist Investigates Possible Securities Violations
-----------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC is investigating
PNC Financial Services Group, Inc. (NYSE: PNC), certain of its officers
and directors and accounting firm Ernst and Young for possible
securities violations for the period starting July 19,2001 to January
29,2002.
The Company, certain of its officers and directors and Ernst & Young
allegedly violated the federal securities laws by issuing materially
false and misleading statements to the market concerning the Company's
earnings prospects, results and reductions in loans, which misled
investors and concealed its true financial condition.
Specifically, the defendants failed to recognize the impairment of
certain loans or charges related to the Company, and instead shifted
these problem loans off the Company's books and into three separate
investment entities created by the American International Group (AIG)
for the sole purpose of receiving such loans during each of the
quarters during the class period.
As a result, the Company's earnings, as well as its ability to reduce
its liabilities related to non-performing assets, were overstated. In
fact, the failure to conform with generally accepted accounting
principles (GAAP) produced inflated earnings and misled investors as to
the Company's true financial condition.
While acting as an auditor and consultant for the Company, Ernst &
Young was also acting as a consultant for AIG. In fact, as the
Company's auditor, Ernst & Young approved its transactions with AIG and
issued a written statement approving the accounting for them.
On January 29, 2002, the Company announced that the Federal Reserve
Board (FRB) had demanded that the Company consolidate its financial
results with the investment entities created by AIG, effectively
requiring it to reflect the true nature of these loans. In addition,
the Company announced that the FRB and the SEC were making inquiries
about its transactions.
As a result of the FRB's actions, the Company was compelled to reduce
its 2001 net income by approximately $155 million. The Company further
announced that it will revise fourth quarter 2001 results and restate
earnings for the second and third quarters of 2001. Following the news
of these disclosures, Company stock fell dramatically to close on
January 29, 2002 at $56.08, down $5.79 or nearly 10%, from its close on
January 28, 2002 at $61.87.
For more information, contact Carol V. Gilden, Jean K. Janes or Michael
E. Moskovitz by Phone: 1-800-470-6824, or by E-mail:
cgilden@muchlaw.com, jjanes@muchlaw.com or mmoskovitz@muchlaw.com. E-
mail should refer to PNC.
PNC FINANCIAL: Glancy Binkow Commences Securities Suit in W.D. PA
-----------------------------------------------------------------
Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the Western District of Pennsylvania on
behalf of of all persons who purchased securities of PNC Financial
Services Group, Inc. (NYSE:PNC) between July 19, 2001 and January 29,
2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of federal securities laws. Among other things,
plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the nature of the Company's revenues and earnings caused its stock
price to become artificially inflated, inflicting enormous damages on
investors.
For more information, contact Michael Goldberg or Lionel Z. Glancy by
Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California
90067 by Phone: (310) 201-9150 or (888) 773-9224 or by E-mail:
info@glancylaw.com.
PNC FINANCIAL: Rabin Peckel Lodges Securities Suit in W.D. Pennsylvania
-----------------------------------------------------------------------
Rabin and Peckel LLP initiated a securities class action in the United
States District Court for the Western District of Pennsylvania on
behalf of all persons or entities who purchased PNC Financial Services
Group, Inc. common stock (NYSE: PNC) between July 19, 2001 and January
28, 2002, both dates inclusive. The suit names as defendants the
Company and:
(1) James E. Rohr,
(2) Robert L. Haunschild, and
(3) Ernst and Young LLP, the Company's auditor
The suit alleges that defendants violated Section 10(b) and 20(a) of
the Securities and Exchange Act of 1934 by issuing a series of false
and misleading statements, and omissions of material fact during the
class period concerning the Company's financial statements as a result
of improper accounting.
In particular, it is alleged that the Company failed to consolidate
into its financial statements three financial firms in which it held
interests in violation of generally accepted accounting principles and
that must be restated by order of the federal reserve board.
The suit alleges that the restatements reduce the Company's net income
and earnings by $155 million or 27% for the year ended December 31,
2001. The suit also alleges that as a result of these false and
misleading statements the price of the Company's common stock was
artificially inflated throughout the class period causing plaintiff and
the other members of the class to suffer damages.
For more information, contact Eric Belfi or Maurice Pesso by Mail: 275
Madison Avenue, New York, NY 10016 by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892, by E-mail: email@rabinlaw.com or
visit the firm's Website: http://www.rabinlaw.com
PNC FINANCIAL: Wolf Haldenstein Commences Securities Suit in W.D. PA
--------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit
in the United States District Court for the Western District of
Pennsylvania on behalf of purchasers of the securities of PNC Financial
Services Group, Inc. (NYSE: PNC) between July 19, 2001 and January 29,
2002, inclusive, against the Company, Ernst & Young LLP ("E&Y"), James
E. Rohr and Robert L. Haunschild.
The complaint alleges that defendants violated the Securities Act of
1934. Specifically, the complaint alleges that during the class period,
defendants misrepresented the Company's financial results and issued
false and misleading statements with regard to its financial condition.
It is alleged that the defendants failed to properly consolidate
liabilities associated with three subsidiaries the Company had
established with American Insurance Group (AIG).
Throughout the class period, defendants misrepresented the Company's
earnings as well as its ability to reduce its liabilities related to
non-performing assets. In fact, defendants' alleged failure to conform
with proper accounting standards produced inflated earnings and misled
investors as to the Company's true financial condition.
The suit further alleges that while acting as auditor and a consultant
for the Company, Ernst & Young was also acting as a consultant for AIG.
In fact, as the Company's auditor, Ernst & Young approved its
transactions with AIG while at the same time acting as an "accounting
adviser" to AIG.
It is further alleged that Ernst & Young drew up the financial
structure for the subsidiaries in question and approved them for
implementation by AIG and that it also issued a letter that helped AIG
pitch its product to banks.
For more information, contact Fred Taylor Isquith, Gregory Nespole,
Katherine B. DuBose, 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, whafh@aol.com or visit the firm's Web site:
http://www.whafh.com. All e-mail correspondence should make reference
to PNC.
PREPAID LEGAL: Motion To Dismiss Securities Suit Still Pending in OK
--------------------------------------------------------------------
The United States District Courts for the Western District of Oklahoma
has yet to decide on Prepaid Legal Services, Inc.'s motion to dismiss
the consolidated securities class action against the Company and
various of its executive officers.
The suit arose from multiple securities suits commenced in December
2000, seeking unspecified damages on the basis of allegations that the
Company issued false and misleading financial information, primarily
related to the method the Company used to account for commission
advance receivables from sales associates.
The suits were later consolidated and an amended and consolidated
complaint was filed in June 2001. The Company filed a motion to
dismiss the complaint in July of the same year. Under the Private
Securities Litigation Reform Act of 1995, discovery is stayed during
the pendency of a motion to dismiss.
While the outcome of these cases is uncertain, the Company believes
these actions are without merit and will vigorously defend these
actions. However, an unfavorable decision in this litigation could
have a material adverse effect on the Company's financial position,
results of operations and cash flows.
REGENERATION TECHNOLOGIES: Rabin Peckel Files Securities Suit in FL
-------------------------------------------------------------------
Berger & Montague, PC commenced a securities class action against
Regeneration Technologies, Inc. (NASDAQ:RTIX) and certain of its
officers in the United States District Court for the Northern District
of Florida, on behalf of all persons or entities who purchased the
Company's common stock during the period from July 25, 2001 through
January 31, 2002.
The suit charges the Company and certain of its officers with issuing
false and misleading statements concerning its business and financial
condition. Specifically, the suit alleges that defendants made highly
positive statements regarding the Company's financial results.
The Company reported quarter after quarter of "record" financial
results and strong revenue growth, which caused the price of Company
securities to trade as high as $12.82 per share during the class
period. These statements were allegedly false and misleading because
the Company failed to take a charge against earnings to recognize
worthless inventory.
On February 2, 2002, the Company shocked the market by announcing that
it was delaying its fourth quarter and year-end results for fiscal year
2001 while "management completes its evaluation of certain inventory
issues." The Company also announced that its Chief Financial Officer,
Richard Allen, and Vice President of Marketing and Sales, James
Abraham, are leaving the Company effective immediately. The Company
further announced that it is "evaluating whether these issues may
affect RTI's previously reported financial results" and although "RTI's
annual results have not been finalized, company officials expect to
report a loss for both the quarter and the year."
In response to the news the price of Company stock plunged more than
50% from $10.15 on January 31, 2002 to $5.19 on February 1, 2002.
For more information, contact Todd S. Collins, Douglas M. Risen or
Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103
by Phone: (888) 891-2289 or (215) 875-3000 by Fax: (215) 875-5715 by E-
mail: InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
REPEATER TECHNOLOGIES: Sued For Securities Act Violations in S.D. NY
--------------------------------------------------------------------
Repeater Technologies, Inc. faces a securities class action pending in
the United States District Court for the Southern District of New York
against the Company, its underwriters and executives:
(1) Chris Branscum,
(2) Kenneth Kenitzer, and
(3) Timothy Marcotte
The suit, filed on behalf of all purchasers of Company stock between
August 8, 2000, the effective date of its initial public offering, and
December 6, 2000, alleges, among other things, that the Company's
prospectus, incorporated in our registration statement on Form S-1
filed with the Securities and Exchange Commission, was materially false
and misleading because it failed to disclose, among other things, that
certain underwriters allegedly:
(i) solicited and received excessive and undisclosed commissions
from certain investors in exchange for which such underwriters
allocated to those investors substantial portions of the
shares issued in our initial public offering, and
(ii) entered into agreements with customers whereby the
underwriters agreed to allocate shares of the Company's common
stock to those customers in its initial public offering in
exchange for which the customers agreed to purchase additional
shares of common stock in the aftermarket at pre-determined
prices.
As a result of the alleged omissions in our prospectus and the
defendants' alleged subsequent misrepresentations and omissions in
connection therewith, the plaintiff claims violations of Sections 11,
12 and 15 of the Securities Act of 1933, as amended, and Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended, and Rules
10b-3 and 10b-5 promulgated thereunder.
The Company believes that it has meritorious defenses and intends to
vigorously defend against these allegations.
TYCO INTERNATIONAL: Much Shelist Probes Possible Securities Violations
----------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC is investigating
Tyco International Ltd. (NYSE:TYC) and certain of its officers and
directors for possible securities violations during the period starting
February 1,2000 to February 1, 2002.
The Company and certain of its officers and directors allegedly
violated the federal securities laws by issuing a series of material
misrepresentations to the market during the class period. During the
class period, Company shares traded as high as $63.21 per share. On
February 4, 2002, Company shares reached an intra-day low of $28.50 per
share.
The Company's representations during the class period were allegedly
rendered false and misleading by its failure to disclose:
(1) that the Company would achieve its earnings targets only
through undisclosed acquisitions;
(2) that certain officers and directors sold in excess of $100
million of their individual stock holdings to the Company; and
(3) that the Company's management procedures were to make large
payments to insiders, including a $20 million payment to one
director and his charity for furthering the Company's
interests.
External rule changes allegedly required the Company to cease its
aggressive revenue recognition practices and recognize the revenues
from its security contracts only as the monies thereunder were
received. Throughout the class period, the Company and certain of its
officers and directors were allegedly aware that the adverse financial
effect of the rule change by the Securities and Exchange Commission
would be approximately $1 billion. The Company, however, allegedly
failed to disclose this adverse financial effect until partial
disclosure was made in October 2001.
For more information, contact Carol V. Gilden, Jean K. Janes or Michael
E. Moskovitz by Phone: 1-800-470-6824 or by E-mail:
cgilden@muchlaw.com, jjanes@muchlaw.com or mmoskovitz@muchlaw.com. E-
mail should refer to Tyco.
TYCO INTERNATIONAL: Cauley Geller Commences Securities Suit in S.D. FL
----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Southern District of
Florida on behalf of purchasers of Tyco International, LTD. (NYSE: TYC)
common stock during the period between December 13, 1999 through
February 1, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that during the class period, defendants issued false and
misleading statements, press releases, and SEC filings concerning
Tyco's financial condition. These statements had the effect of
artificially inflating the price per share of the Company's common
stock and other securities.
The complaint alleges that the Company's representations were false and
misleading due to defendants' failure to disclose:
(1) hundreds of cash acquisitions during the class period totaling
expenditures of several billion dollars;
(2) that the individual defendants sold in excess of $155,000,000
of their individual stock holdings in the Company;
(3) that the Company's management procedures were to make large
payments to insiders, including a $20,000,000 payment to one
director and his charity for furthering the Company's
interests; and
(4) the Company fostered a corporate atmosphere which encouraged
the individual defendants to work for their personal interests
rather than those of the Company or its shareholders by
offering bonuses to those who acquired companies with high,
but short term, profitability.
As the truth regarding the foregoing false and misleading statements
began to be revealed on January 27, 2002, the Company's stock price
began a rapid decline. Company shares, which closed at $45 on January
27, 2002, had plummeted to $35.63 by the end of the class period and
are currently trading for under $30 per share.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 or by E-mail: info@classlawyer.com
TYCO INTERNATIONAL: Abbey Gardy Commences Securities Suit in S.D. FL
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Abbey Gardy LLP initiated a securities class action in the US District
Court for the Southern District of Florida, on behalf of all persons
who acquired common stock of Tyco International, Ltd. (NYSE:TYC) during
the period between December 13, 1999 and February 1, 2002, inclusive.
The suit alleges that certain of the Company's officers and directors
violated the Securities Exchange Act of 1934. The suit charges that
during the class period, defendants issued false and misleading
statements, press releases and SEC filings concerning Tyco's financial
condition. These statements had the effect of artificially inflating
the price per share of the Company's common stock and other securities.
The complaint alleges that the Company's representations were false and
misleading due to defendant's failure to disclose:
(1) hundreds of cash acquisitions during the class period totaling
expenditures of several billion dollars;
(2) that the individual defendants sold in excess of $155,000,000
of their individual stock holdings in the Company;
(3) that the Company's management procedures were to make large
payments to insiders, including a $20,000,000 payment to one
director and his charity for furthering the interests of the
Company; and
(4) the Company fostered a corporate atmosphere which encouraged
the individual defendants to work for their personal interests
rather than those of the Company or its shareholders by
offering bonuses to those who acquired companies with high,
but short term, profitability.
As the truth regarding the foregoing false and misleading statements
began to be revealed on January 28, 2002 the Company's stock price
began a rapid decline. Company shares, which closed at $45 on January
27, 2002, had plummeted to $35.63 by the end of the class period and
are currently trading for under $30 per share.
For more information, contact Nancy Kaboolian or Jennifer Haas by
Phone: (800) 889-3701 or by E-mail: JHaas@abbeygardy.com or
nkaboolian@abbeygardy.com
TYCO INTERNATIONAL: Lovell Stewart Commences Securities Suit in S.D. NY
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Lovell & Stewart, LLP initiated a securities class action on behalf of
all persons who purchased or otherwise acquired the common stock of
Tyco International Ltd. (NYSE: TYC), between February 1, 2000 through
February 1, 2002, inclusive. The suit is pending in the United States
District Court for the Southern District of New York.
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 during the class period, thereby artificially inflating the
price of the Company's common stock.
The complaint alleges that the Company's representations were rendered
false and misleading by defendants' failure to disclose:
(1) that the Company would achieve its earnings targets only
through undisclosed acquisitions;
(2) that the individual defendants sold in excess of $100,000,000
of their individual stock holdings to the company; and
(3) that the Company's management procedures were to make large
payments to insiders, including a $20,000,000 payment to one
director and his charity for furthering the interests of the
Company.
The suit further alleges that external rule changes required the
Company to cease its allegedly aggressive revenue recognition practices
and recognize the revenues from its security contracts only as the
monies thereunder were received. Throughout the class period,
defendants were allegedly aware that the adverse financial effect of
the rule change by the Securities and Exchange Commission would be
approximately $1,000,000,000. However, defendants allegedly failed to
disclose this adverse financial effect until partial disclosure was
made in October 2001.
As defendants belatedly announced portions of the foregoing material
facts between October 2001 and January 2002, Company stock fell
allegedly by more than 40 plus percent.
For more information, contact Christopher Lovell or Ian T. Stoll by
Mail: 500 Fifth Avenue New York, New York 10110 by Phone: 212-608-1900
by E-mail: msklovell@aol.com or visit the firm's Website:
http://www.lovellstewart.com
WILLIAMS COMPANIES: Much Shelist Investigates For Securities Violations
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Much Shelist Freed Denenberg Ament & Rubenstein, PC is investigating
Williams Companies, Inc. (NYSE:WMB) and Williams Communications Group,
Inc.(NYSE:WCG) for possible securities violations for the period
starting July 24, 2000 to January 29, 2002.
The two companies and certain of their officers and directors may have
violated the federal securities laws by issuing materially false and
misleading statements and failing to disclose material information
regarding:
(1) the spin-off of Williams Companies from Williams
Communications;
(2) the accounting and financial impact of the contingent
liabilities retained by Williams Companies; and
(3) the nature of the assets and liabilities of Williams
Communications.
Specifically, the firm is investigating the series of statements
Williams Companies and Williams Communications issued concerning their
businesses, financial results and operations, and believes that the
statements failed to disclose:
(i) that the spin-off of Williams Communications from Williams
Companies was not in the best interests of both Williams
Companies' and Williams Communications' shareholders but the
primary motivation for the Williams Communications spin-off
was to allow Williams Companies to shore up its balance sheet
so that it could then issue more stock and/or debt to acquire
companies and protect its debt rating;
(ii) that Williams Communications was operating well below company-
sponsored expectations, such that revenue projections were
overstated, and costs and expenses were understated, and that,
in an effort to control costs, defendants would soon have
to take actions that would have a further adverse impact on
Williams Companies' profitability;
(iii) that approximately $2 billion of Williams Communications debt
that was guaranteed for payment by Williams Companies around
the time of the spin-off was improperly footnoted by Williams
Companies as a mere contingent obligation of Williams
Companies, which was materially false and misleading because
the declining financial condition of Williams Communications
made it increasingly certain that Williams Companies would be
forced to pay on such guaranties, for which it did not
adequately reserve;
(iv) that Williams Communications' assets were permanently impaired
and had to be written-off and that Williams Communications
avoided taking such write-offs on its own books through a
series of financial machinations;
(v) that Williams Companies was carrying on its financial
statements receivables from Williams Communications 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, Williams Companies agreed to extend up to $100
million of Williams Communications' receivables with an
outstanding balance due on March 31, 2001 to March 15, 2002;
and
(vi) that the sale and leaseback of Williams Communications' office
properties in or about September 2001 was a non-arm's length
transaction at an inflated value for the properties whose
motive and intent was to funnel monies to Williams
Communications and avoid forcing Williams Companies to perform
its guaranties and thereby adversely affect its results and
debt ratings.
For more information, contact Carol V. Gilden, Jean K. Janes or Michael
E. Moskovitz by Phone: 1-800-470-6824, or by E-mail:
cgilden@muchlaw.com, jjanes@muchlaw.com or mmoskovitz@muchlaw.com. E-
mail should refer to Williams Companies.
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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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