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/raid1/www/Hosts/bankrupt/CAR_Public/020314.mbx C L A S S A C T I O N R E P O R T E R Thursday, March 14, 2002, Vol. 4, No. 52 Headlines ARMSTRONG WORLD: 350 Former Employees Commence ERISA Suit in E.D. PA AXA FINANCIAL: Georgia Court Approves Settlement of Discrimination Suit CHEVRONTEXACO CORP.: Ecuadorians Testify in $1 Billion Pollution Suit DEPORTED MINORS: Suit For Free Legal Services Awaits Certification ENRON CORPORATION: Gov. Bush Urges Discussion of State Pension Suit EQUITABLE LIFE: Former Agents File Suit For ERISA Violations in N.D. CA EQUITABLE LIFE: Policyholders Sue For Alabama State Law Violations EQUITABLE LIFE: Appeals Certification of Florida Life Insurance Suit EQUITABLE LIFE: Plaintiffs Appeal Dismissal of CA, NY Sales Fraud Suits EQUITABLE RETIREMENT: Sued For Changes In Cash Balance Formula in NY ICON HEALTH: Recalls 7,500 Platform Treadmills Due to Fire, Burn Hazard INDEPENDENT INSURANCE: Creditors To File Suit Over Million-Dollar Debt IOWA SCHOOLS: Paying People Who Sued Over Petition For More Funds LEINER HEALTH: Recalls 14 Thousand Vitamin Bottles For Packaging Defect LOUISIANA: School Board Avoids Suit, Passes Motion on Drivers' Back Pay NEW YORK: Judge Rejects Race Bias Suits For Women in Workfare Program NICOR GAS: IL Court Approves $1.85M Suit Alleging Mercury Exposure PAYPAL INC.: Sued For Electronic Fund Act, CA State Law Violations SONY PICTURES: Settles Fake Critic Suit For $325T With Connecticut SUPERMAX PRISON: Judge Approves Settlement, Orders Improved Conditions UNITED AIRLINES: Base Commission Rate Suit Trial Set for September 2002 UNITED AIRLINES: Weight Program Suit To Proceed In CA Federal Court Securities Fraud ALLIANCE CAPITAL: Settling Suit Over Alliance Holding Reorganization ALLIANCE CAPITAL: Faces Multiple Suits For Involvement With Enron Corp. ARTHUR ANDERSEN: Might Face AU$700M Claim Over HIH Insurance Collapse AXA: To Settle Suits Over AXA Financial Stock Acquisition Proposal AXA FINANCIAL: Donaldson Lufkin Sale Sparks Multiple Securities Suits BIOPURE CORPORATION: Wolf Haldenstein Initiates Securities Suit in MA GILAT SATELLITE: To Mount Vigorous Defense Against Securities Suits GILAT SATELLITE: Schoengold Sporn Commences Securities Fraud Suit IRVINE SENSORS: Labels "Without Merit" Securities Suits in C.D. CA KNIGHT TRADING: Settles One Investors' Suit, Court Dismisses Another OTG SOFTWARE: Has Yet to Respond to Securities Suits in S.D. New York OVERTURE SERVICES: Consolidated Securities Suits in S.D. NY On Hold REGENERATION TECHNOLOGIES: Schiffrin Barroway Files Suit in N.D. FL SPECTRALINK CORPORATION: Schiffrin Barroway Lodges Suit in Colorado THQ INC.: Third Amended Securities Suit Pending in C.D. California VAN WAGONER: Labels Multiple Securities Fraud Suits "Without Merit" WESTERN MULTIPLEX: Shareholders File Suit To Block Walnut-Pine Merger WILLIAMS COMPANIES: Shapiro Haber Commences Securities Suit in N.D. OK ********* ARMSTRONG WORLD: 350 Former Employees Commence ERISA Suit in E.D. PA -------------------------------------------------------------------- About 350 former Armstrong World Industries, Inc. employees, separated into two divestitures in 2000, have brought a purported class action against the Company's retirement committee in the United States District Court for the Eastern District of Pennsylvania. The suit, which also names several named and unnamed committee members and the Retirement Savings and Stock Ownership Plan (RSSOP) as defendants, Plaintiffs allege breach of Employee Retirement Income Security Act (ERISA) fiduciary duties and other violations of ERISA pertaining to losses in their RSSOP accounts, which were invested in Company's common stock. Losses are alleged to be in the range of several million dollars. The Company believes there are strong substantive defenses to the allegations. AXA FINANCIAL: Georgia Court Approves Settlement of Discrimination Suit ----------------------------------------------------------------------- The US District Court for the Northern District of Georgia approved the proposed settlement to a class action filed against the Southern Region of AXA Financial, now known as the Equitable Life Assurance Society of the US, for alleged discriminatory practices. The suit was commenced in September 1997 in the US District Court for the Northern District of Alabama, Southern Division, on behalf of "all African-Americans who applied but were not hired for, were discouraged from applying for, or would have applied for the position of sales agent in the absence of the discriminatory practices, and/or procedures in the (former) Southern Region of AXA Financial from May 16, 1987 to the present." The suit alleges, among other things, that the Company discriminated on the basis of race against African-American applicants and potential applicants in hiring individuals as sales agents, and seeks declaratory judgment and affirmative and negative injunctive relief, including the payment of back-pay, pension and other compensation. The Court referred the case to mediation, pursuant to which the parties reached a proposed settlement agreement. In connection therewith, the case was dismissed in the Alabama Federal Court and re-filed in the Northern District of Georgia, Atlanta Division. The final settlement required notice to be given to class members and was subject to court approval. A January 2002 hearing was held and thereafter, an order was entered approving the settlement. CHEVRONTEXACO CORP.: Ecuadorians Testify in $1 Billion Pollution Suit --------------------------------------------------------------------- Sitting among the lawyers in their pinstriped suits recently, at the United States Court of Appeals in Manhattan, were two barefoot men in palm skirts with blow-dart guns around their necks, and a third wearing a blue-and-yellow crown and a necklace made of feathers, The New York Times reported recently. They were Ecuadorian Indians from a remote region near the Amazon River, and they had come roughly 3,000 miles to lend their support to a class action. The lawsuit, filed on behalf of some 30,000 Ecuadorians, seeks $1 billion in damages from ChevronTexaco Corporation for the Company's role in oil-drilling operations that polluted the water and land in Ecuador's remote Oriente region for over two decades. First filed in 1993, the lawsuit has been dismissed twice by a federal judge here, and it will be several months before the Appeals Court decides once and for all whether the case should be heard in this country or in Ecuador. The men's attorneys brought them to New York City, held a news conference yesterday at a downtown law office, and were clearly not blind to the publicity value of their colorfully dressed clients. The three short, wiry, bare-footed men appeared genuinely overcome by the strangeness of their journey as they walked down Broadway and gazed up at the skyscrapers. None speak English, relating the tales of their odyssey, in Spanish, through interpreters. Two of those men served as further interpreters for the third, Tementa Nenquihui, who speaks only a few words of Spanish and spoke in his tribe's language, Huaotiriro, a unique tongue unrelated to any other language. His tribe, the Huaorani, numbers about 1,000 people and had virtually no contact with anyone outside the rain forest until the 1960s. The three men were glad to appear silently in court as their lawyers presented their case. The problems on the Indians' land began in 1972, when a Texaco subsidiary started drilling oil in an arrangement with Petroecuador, the State-owned oil company. According to the lawsuit, the oil companies dumped toxic byproducts into hundreds of unlined pits instead of injecting them safely into the ground as oil companies do in the United States. From there, the lawsuit says, the toxic waste spread into the soil and the rivers, and continues to do so. A team of Harvard University researchers found high concentrations of petroleum-related toxins in the water in 1993. "There are no more fish in the rivers, and you can't even bathe yourself there," said one of the Ecuadorians, Mr. Ptyaguage. "It is a very big wound to us." Lawyers filed the class action a year after the Company's involvement in the Ecuador venture ended. The lawyers say that because there are no class actions in Ecuador, and because the country's legal system is too corrupt and threadbare to handle such a large case, there was no way to use the courts in Ecuador to compel the Companies to perform a thorough cleanup. "The court that would handle this case has one courtroom and no computer," said Cristobal Bonifaz, the lead lawyer for the lawsuit. Also unfortunate is the fact that Ecuador has a law stating that plaintiffs who have sought to bring an action in one jurisdiction and failed cannot bring it in another, said Mr. Bonifaz. "If we can't do this case here, we're done," he added. ChevronTexaco lawyers say the Company obeyed all laws during its time in Ecuador and that the plaintiffs' environmental claims have not been proven. The Company signed a $40 million agreement with the Ecuadorian government to clean the toxic sites in 1995, and has also argued that the case should be filed in Ecuador. "Our position is that this has everything to do with Ecuador and nothing to do with the United States," said Chris Gidez, a Company spokesman. Mr. Ptyaguage said that if the case cannot be tried here, "we would feel ridiculed," but he said he would not regret his trip to New York, even if the lawsuit fails. During his 1999 visit, he ate at Windows on the World, in the World Trade Center. This time he hoped to see the World Trade Center site. "For me, the towers were like two huge trees in the jungle," he said. "Because I had been there, I had a terrible feeling when I heard that they fell." DEPORTED MINORS: Suit For Free Legal Services Awaits Certification ------------------------------------------------------------------ Federal Judge Fred Van Sickle will decide on March 25 whether he will grant class certification to a lawsuit filed on behalf of minors facing deportation against the US Immigration and Naturalization Service (INS), Spokane-Review.com reports. The suit was filed on behalf of 14-year-old Marcos Gonzales Machado, who is currently being held at Martin Hall, a juvenile lock-up, while awaiting a hearing to determine whether to deport him to Mexico. The suit asks the Court to require the INS to provide free legal representation for minors detained in deportation cases. A class certification would allow around 5,000 immigrant children unaccompanied by parents or other adults the INS takes into custody each year to free representation. Most of these children are 14 to 16 years old. ENRON CORPORATION: Gov. Bush Urges Discussion of State Pension Suit -------------------------------------------------------------------- Governor Jeb Bush of Florida wants the state pension fund trustees to extensively discuss suing a money management company that invested the fund in Enron and lost more than $300 million, the Associated Press recently reported. In a recent letter to Tom Herndon, Executive Director of the State Board of Administration, which invests the pension fund, Governor Bush requested that a possible lawsuit against Alliance Capital Management be discussed at the next trustee meeting. Governor Bush, Comptroller Robert Milligan and state Treasurer Thomas Gallagher are trustees of the $94 billion fund. The Board fired Alliance and its money manager, Alfred Harrison, in December after Enron went bankrupt. Alliance continued to invest state money in the failing energy company almost right up to the bankruptcy filing. A spokesman for New York-based Alliance declined comment. Governor Bush has suggested in the past that suing Alliance for return of the approximately $300 million the pension fund lost because of the ill-timed investing in Enron by Alliance, was a good idea. The pension fund is already a plaintiff in a class action pending in a Texas Federal Court against Enron and its auditor Arthur Andersen. EQUITABLE LIFE: Former Agents File Suit For ERISA Violations in N.D. CA ----------------------------------------------------------------------- The Equitable Life Assurance Society of the United States faces a class action pending in the US District Court for the Northern District of California, alleging that the Company violated the Employee Retirement Income Security Act (ERISA) by eliminating certain alternatives pursuant to which agents of the Company could qualify for health care coverage. In March 1999, the Court certified a class consisting of "all current, former and retired Equitable agents, who while associated with Equitable satisfied (certain alternatives) to qualify for health coverage or contributions thereto under applicable plans." The suit alleged various causes of action under ERISA, including claims for enforcement of alleged promises contained in plan documents and for enforcement of agent bulletins, breach of a unilateral contract, breach of fiduciary duty and promissory estoppel. In June 2000, plaintiffs appealed to the Court of Appeals for the Ninth Circuit contesting the district court's award of legal fees to the plaintiffs' counsel in connection with a previously settled count of the complaint unrelated to the health benefit claims. In that appeal, plaintiffs have challenged the federal court's subject matter jurisdiction over the health benefit claims. Oral argument on this appeal was heard in November 2001. In May 2001, plaintiffs filed a second amended complaint which, among other things, alleges that the Company failed to comply with plan amendment procedures and deletes the promissory estoppel claim. The Company later filed a motion for summary judgment on all of plaintiffs' claims, and plaintiffs filed a motion for partial summary judgment on all claims except their claim for breach of fiduciary duty. The Court has yet to issue judgment on the motions. EQUITABLE LIFE: Policyholders Sue For Alabama State Law Violations ----------------------------------=------------------------------- Discovery has proceeded in the class action presently pending in the US District Court in the Southern District of Alabama, against The Equitable Life Assurance Society of the United States and one of its agents for violations of state law. The suit, originally filed in March 2000 in Circuit Court, Mobile County, Alabama, names a class consisting of all persons who from January 1, 1989: (i) purchased a variable annuity from Equitable Life to fund a qualified retirement plan; (ii) were charged allegedly unnecessary fees for tax deferral for variable annuities held in qualified retirement accounts; or (iii) were sold a variable annuity while owning a qualified retirement plan from the Company. The suit alleges various improper sales practices, including misrepresentations in connection with the use of variable annuities in a qualified retirement plan or similar arrangement, charging inflated or hidden fees, and failure to disclose unnecessary tax deferral fees. In May 2000, the Company removed the case to the Alabama Federal Court and filed a motion to dismiss the complaint, while the plaintiffs filed a motion to remand the case to state court. The Court has permitted limited discovery on the issue of whether the Securities Litigation Uniform Standards Act applies. The plaintiffs have additionally filed a motion for leave to join additional plaintiffs. EQUITABLE LIFE: Appeals Certification of Florida Life Insurance Suit -------------------------------------------------------------------- The Equitable Life Assurance Society appealed a Florida federal court's decision granting class certification to a lawsuit filed on behalf of a nationwide class of persons who purchased variable life insurance policy from the Company and Equitable Variable Life Insurance Company (EVLICO) from September 30,1991 to January 3, 1996. The suit was commenced in January 1996 in the US District Court for the Southern District of Florida, alleging that Company and EVLICO agents were trained not to disclose fully that the product being sold was life insurance. The suit alleges violations of the federal securities laws and seeks rescission of the contracts or compensatory damages and attorneys' fees and expenses. Both Companies answered the amended complaint, denying the material allegations and asserting certain affirmative defenses. In May 1999, the Magistrate Judge issued a report and recommendation recommending that the District Judge deny the defendant's motion for summary judgment and grant plaintiffs' motion for class certification. The Companies promptly filed their objections to the recommendation. In October 2000, the District Judge affirmed the Magistrate's report and recommendation and, accordingly, denied the defendant's motion for summary judgment and granted plaintiffs' motion for class certification. In May 2001, with permission of the United States Court of Appeals for the Eleventh Circuit, both Companies appealed the Federal Court's order. Oral argument is scheduled for March 2002. EQUITABLE LIFE: Plaintiffs Appeal Dismissal of CA, NY Sales Fraud Suits ----------------------------------------------------------------------- Plaintiffs opposed the dismissal of two similar suits against The Equitable Life Assurance Society of the United States and two of its business partners, charging them with engaging in fraudulent and deceptive practices in connection with the marketing and sale of deferred annuity products to fund tax-qualified contributory retirement plans. The suits, which also name AXA Advisors, LLC and Equitable Distributors, Inc. as defendants, are currently pending in the US District Court for the Southern District of California and the US District Court for the Eastern District of New York. The California suit was initially commenced in the Superior Court of California, County of San Diego, on behalf of the general public of the State of California under California consumer protection statutes and also asserts individual common-law claims. On behalf of the named plaintiff and the general public, the suit asserts claims for unlawful, unfair or fraudulent business acts and practices and for false or misleading advertising. On behalf of the named plaintiff alone, the suit alleges claims for fraud, fraudulent concealment and deceit, negligent misrepresentation and negligence. In July 2000, the defendants removed the case to the United States District Court for the Southern District of California and filed a motion to dismiss the complaint. The Court later granted the defendants' motion to dismiss the action, a decision the plaintiffs appealed. The appeal has been fully briefed, but the Court has yet to release its decision. The New York suit was commenced in October 2000 originally in the Supreme Court of the State of New York, County of Nassau, on behalf of a class consisting of all persons who purchased an individual deferred annuity contract or who received a certificate to a group deferred annuity contract, sold by one of the defendants, which was used to fund a contributory retirement plan or arrangement qualified for favorable income tax treatment. The suit makes similar allegations to the California suit and asserts claims for: (1) deceptive business acts and practices in violation of the New York General Business Law (GBL), (2) use of misrepresentations and misleading statements in violation of the New York Insurance Law, (3) false or misleading advertising in violation of the GBL, (4) fraud, fraudulent concealment and deceit, (5) negligent misrepresentation, (6) negligence, (7) unjust enrichment and imposition of a constructive trust, (8) declaratory and injunctive relief; and (9) reformation of the annuity contracts In October 2000, the defendants removed the action to the New York Federal Court, and thereafter filed a motion to dismiss. Plaintiffs filed a motion to remand the case to state court. In September 2001, the Court issued a decision, granting defendants' motion to dismiss and denying the plaintiffs' motion to remand. In October 2001, plaintiffs filed a motion seeking leave to reopen the case for the purpose of filing an amended complaint. In addition, plaintiffs filed a new complaint in the District Court, alleging a similar class and similar facts. The new complaint asserts causes of action for violations of federal securities laws in addition to the state law causes of action asserted in the previous complaint. In January 2002, the defendants filed a motion to dismiss the new action. EQUITABLE RETIREMENT: Sued For Changes In Cash Balance Formula in NY -------------------------------------------------------------------- The Equitable Retirement Plan for Employees, Managers and Agents will vigorously defend against a putative class action commenced in the US District Court for the Southern District of New York in August 2001 on behalf of "all of the Plan's participants, whether active or retired, their beneficiaries and estates, whose accrued benefits or pension benefits are based on the Plan's Cash Balance Formula." The suit, which also names as a defendant, the Officers Committee on Benefit Plans of Equitable Life, due to its role as Plan Administrator, challenges the change, effective January 1, 1989, in the pension benefit formula from a final average pay formula to a cash balance formula. The suit alleges that the change to the cash balance formula violates the Employee Retirement Income Securities Act (ERISA) by reducing the rate of accruals based on age, failing to comply with ERISA's notice requirements and improperly applying the formula to retroactively reduce accrued benefits. The Company answered the complaint, and expressed confidence that an adverse result will not have a material effect on its financial position or operations. ICON HEALTH: Recalls 7,500 Platform Treadmills Due to Fire, Burn Hazard ----------------------------------------------------------------------- Icon Health and Fitness is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 7,500 hikers - shortened-platform treadmills that operate at a speed of up to 6 mph. They can be set at an incline of up to 25 or 50 percent, depending on model, to simulate hiking up steep grades. An electrical component in the control system at the base of the unit can fail and cause overheating. This poses a risk of fire and burns to consumers. The Company has received 14 reports of the machines smoking and plastic pieces melting. There have been no reports of injuries. The recall includes: (1) the NordicTrack Adventurer, model number NTHK9990, (2) the NordicTrack Adventurer, model number 831.29897, (3) NordicTrack Teton, model number NTHK2249, and (4) ProForm TrailRunner, model number PFHK9990 The brand name is written on the console on the front of the machines. The brand name, model name and number are written on the front page of the equipment's user manual. The model number also is written on the hiker's serial number decal found on the left-front corner of the NordicTrack Adventurer and Teton units, and on the right side of the support base of the ProForm TrailRunner. Sporting good and department stores sold these hikers nationwide from April 2000 through December 2001 for up to $2,300, depending on model. For more information, contact the Company by Phone: 800-999-3756 between 6 am and 6 pm MT Monday through Friday. INDEPENDENT INSURANCE: Creditors To File Suit Over Million-Dollar Debt ---------------------------------------------------------------------- Creditors of beleaguered Independent Insurance are launching a class action against the insurer that went into provisional liquidation in June at the request of its directors who had concluded that it could not continue to run on a solvent basis, Ananova.com reports. The potential plaintiffs have formed the Creditors of Independent Insurance Group (CIIG) that will organize the effort to recover millions of investments owed to them. The group met yesterday to discuss a possible class action against the Company, its actuaries Watson Wyat and its auditors, KPMG LLP and the Financial Services Authority. The group may also commence an action against the Company's former chief executive Michael Bright, who resigned last year before the Company collapsed. The group allegedly realized something was wrong at the Company before it collapsed. They told Ananova.com that its members lost "hundreds of millions of pounds" in outstanding claims from the Company, and the cost of having to take out new insurance policies. The group has appointed prominent law firm, Class Law Solicitors, to coordinate the action, and the firm has spent the past nine months gathering evidence. CIIG is made up of corporate policyholders, insurance brokers and trade creditors. A week earlier the group had suspended its shares and closed its doors to new business after failing to raise around o200 million to shore up its balance sheet, according to Ananova.com. IOWA SCHOOLS: Paying People Who Sued Over Petition For More Funds ----------------------------------------------------------------- Davenport, Iowa Community Schools will make payments to 2,610 people who signed a petition eight years ago asking for a public referendum on additional funds for the school district, the Associated Press reported recently. Each of these signers will receive $1 from a class action which was brought against the school district by a group of the petitioners who contended their civil rights were violated when the school Board declared the petition, signed by the plaintiffs and 3,300 others, to be invalid in April 1994. Today, only one person named as defendant in the lawsuit remains with the school district. "I am glad this is behind us," said Superintendent Jim Blanche, who was the principal at West High School when the lawsuit was filed in 1994. The suit alleged that voters' rights were violated when the Board rejected a petition signed by plaintiffs and about 3,300 others. The petitioners had contested the school Board's approval of the Instructional Support Levy. Petitioners argued that the district did not deserve the extra money because of irresponsible management. The petition requested the Board hold a special election so voters could decide whether to implement the levy. The school Board threw out the petition after finding some 300 signatures that members believed were questionable. The petition needed 3,058 signatures to call for a referendum. A Scott County judge agreed with the school district in July 1998, saying the wording of the petition was incorrect and the signatures were not valid. However, the Iowa Supreme Court said that while the wording of the petition was not correct, the plaintiffs were not allowed due process when the Board decided to throw out the petition. The case was sent back to Scott County in March 2001, where a judge ordered the $1-per- person settlement. Those who did not ask to be removed from the litigation can claim one dollar at the Scott County Clerk's office within 90 days from the day the notice was published. Officials say 700 people asked to be removed from the litigation. Money not claimed will be returned to the schools. LEINER HEALTH: Recalls 14 Thousand Vitamin Bottles For Packaging Defect ----------------------------------------------------------------------- Leiner Health Products is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 14,000 bottles of dietary supplements containing iron. The supplements being recalled are not packaged in child-resistant packaging as required under the Poison Prevention Packaging Act. If ingested by children, these iron- containing supplements can cause serious injury or death. The Company has not received any reports of injuries involving these products. This recall is being conducted to prevent the possibility of injuries. The product included in the recall is "Nature's Valley, Women's Formula Multivitamin." The supplement was sold in a brown plastic bottle with a light yellow label. The bottles have UPC code "41163 27006" located on the back of the bottle The recalled product is packaged in containers of 60-tablets and have green screw-on caps. Only bottles with lot numbers IFA2750 and IFA2751 are included in the recall. The lot numbers are written vertically down the back of the bottle. Albertson's, Jewel, Osco, Sav-on and Acme sold these recalled supplement bottles nationwide from July 2001 through February 2002 for between $8 and $9. For more information, contact the Company by Phone: 800-421-1168 between 9 am and 5 pm PT Monday through Friday. LOUISIANA: School Board Avoids Suit, Passes Motion on Drivers' Back Pay ----------------------------------------------------------------------- The Concordia Parish School Board avoided a class action from bus drivers demanding back pay allegedly owed to them since 1986, by passing a motion to compensate the drives what they are "legally due" when computations of mileage and payments have been made, the Natchez Democrat reports. An audit report early this year revealed that bus drivers had been undercompensated for their base operational expenses, starting in 1986, due to a change in state law that increased the compensation for drivers in this area. As a result, the bus drivers are demanding compensation. James Cockerham, representative of the School Bus Drivers Association, welcomed the school Board motion, saying it was "an encouraging step in the right direction." He added, "We understand this process is going to take some time. They are dealing with 45 bus drivers over 15 years. So we weren't looking for any sort of payment tonight.What we were looking for was a commitment on the Board's part that they were dedicated to fixing this problem." He told the Natchez Democrat that papers for a possible class action had been drawn up and were ready to be filed in court. "That would have been our next step had they not adopted this resolution.But that's not how we wanted to do it. We wanted them to do what they did." Initially, the school Board was reluctant to pass the motion, concerned that they were unsure on what they could and could not pay. However, Herbert Dixon, a field representative with the Louisiana Federation of Teachers (LFT), stepped in to negotiate the motion made by Board member the Rev. Johnnie Brown, the Democrat reports. Board members then agreed to pass the motion after including language that said the school district would compensate the bus drivers only what they were "legally due." Mr. Cockerham said the School Bus Drivers Association is hiring an independent auditor to go over the records once the parish has compiled them all. School Board officials said they have three years' records left to review. They expect the review to be complete in one week. NEW YORK: Judge Rejects Race Bias Suits For Women in Workfare Program --------------------------------------------------------------------- In a legal victory for New York City, a federal judge has thrown out a lawsuit brought by the Federal Justice Department on behalf of women in the City's Workfare Program, in an effort to give them more rigorous protection against sexual and racial harassment, The New York Times reported recently. The ruling, by Judge Richard Conway Casey of Federal District Court for the Southern District in Manhattan, found that federal lawyers had failed to show that women in the City's Work Experience Program are entitled to the same workplace protections as most City employees, because they are not, in the eyes of the law, City employees. Those persons participating in workfare are welfare recipients who are assigned work at City agencies or with nonprofit organizations in exchange for their welfare benefits, the City argued. Judge Casey agreed, saying that Workfare participants are not legally employed by the City because they do not conform to several definitions of employment. Among those cited in the judge's 14-page ruling were the low level of financial compensation, and the absence of pensions or other benefits provided to workfare participants. The ruling, signed by Judge Casey on Friday of last week and distributed among lawyers yesterday, came 10 months after Mary Jo White, then United States attorney in Manhattan, sued the Giuliani administration on behalf of four women who had complained of harassment. The lawsuit was filed with the approval of Attorney General John Ashcroft. That lawsuit was combined with another filed by the NOW Legal Defense and Education Fund on behalf of a woman who also complained of being harassed while on a Workfare assignment. Judge Casey's decision also threw out that suit. Reaction to the ruling was muted. Marvin Smilon, a spokesman for the United States Attorney's Office in Manhattan, declined to say whether the ruling would be appealed. "We are studying the opinion," he said. Jerry Russo, a spokesman for Mayor Michael R. Bloomberg, said City lawyers had not yet read the opinion, and declined comment. However, Martha Davis, Legal Director for the NOW group, said it planned to appeal on behalf of its client, who complained of sexual harassment by her supervisor and left the workfare program in 1997. "We are really shocked by the City's position in this," Ms. Davis said, adding that the ruling left workfare participants with little legal recourse if they are harassed. The four women represented by the Justice Department included one who was assigned clerical duties at the Sanitation Department on Staten Island, where she complained of sexual harassment. Another in the group, an African-American woman who was assigned to work as a painter for the Parks Department on Staten Island, complained that someone had put a noose and racist cartoons on her desk. NICOR GAS: IL Court Approves $1.85M Suit Alleging Mercury Exposure ------------------------------------------------------------------ The Circuit Court of Cook County, Illinois granted final approval to a $1.85 million proposal by Nicor Gas to settle a consolidated class action claiming a variety of unquantified damages, including bodily injury, property and punitive damages, allegedly caused by its mercury- containing regulators. On October 2001, the Company entered into an agreement to settle the class action litigation. Under the terms of that agreement, the Company: (1) will pay a total of approximately $1.85 million; (2) will continue for a period of five years to provide medical screening to persons exposed to mercury from its equipment; and (3) will use its best efforts to replace any remaining inside residential mercury regulators within four years. The class action settlement permits class members to "opt out" of the settlement and pursue their claims individually. On February 7, 2002, the Court entered a final order approving the settlement. PAYPAL INC.: Sued For Electronic Fund Act, CA State Law Violations ------------------------------------------------------------------ Paypal, Inc. faces a class action filed on behalf of a nationwide class comprised of all persons who opened an account with the Company or its predecessors, or had money electronically transferred from or to an account with another financial institution in connection with a PayPal transaction. The suit charges the Company with violations of the Electronic Fund Transfer Act and California statutory and common law. The complaint alleges that: (1) the Company fails to provide customers with necessary information, such as an address and telephone number, so that customers can easily report erroneous financial transactions; (2) the Company unlawfully freezes its customers' accounts; and (3) the Company fails to fully compensate customers damaged by erroneous financial transactions. For more information, contact Eric H. Gibbs, Ann Saponara, James AN Smith or Rosemary M. Rivas of Girard Gibbs & De Bartolomeo LLP by Phone: 415-981-4800 by Fax: 415-981-4846 by E-mail: girardgibbs@girardgibbs.com, rmr@girardgibbs.com or csd@girargibbs.com or visit the firm's Web site: http://www.girardgibbs.com SONY PICTURES: Settles Fake Critic Suit For $325T With Connecticut ------------------------------------------------------------------ Sony Pictures Entertainment agreed to settle for $325,000 the class action brought by the State of Connecticut due to its promotion of its films using ecstatic reviews from a fake movie critic called David Manning, Reuters reports. The suit was commenced after a Newsweek report exposed that "David Manning" didn't exist. The Company used his reviews to promote several movies like Heath Ledger's "A Knight's Tale." The movie's advertisement showed blurbs by Mr. Manning, calling Mr. Ledger "this year's hottest new star." Another ad for the movie "Hollow Man," showed Mr. Manning calling it "stupendous." After the expose, Columbia Pictures formally rebuked and suspended ad executives without pay for their roles in inventing Manning. A week later, the studio admitted that two other of its employees had posed as fans in a television testimonial for one of its movies, according to Reuters. A Company spokeswoman told Reuters, "We are pleased to have this matter resolved.acted voluntarily to tighten its advertising policies last June, shortly after management learned of the David Manning incident." The Company still has to contend with another related class action in Los Angeles filed by two moviegoers who claimed they were duped into seeing "A Knight's Tale" by glowing appraisals attributed to Mr. Manning. SUPERMAX PRISON: Judge Approves Settlement, Orders Improved Conditions ---------------------------------------------------------------------- Federal Judge Barbara Crabb recently approved a settlement that changes the name of the prison, bars prison officials from describing inmates as "the worst of the worst" and limits the prison's use of extreme isolation and deprivation to influence inmates' behavior, The Capital Times of Madison, Wisconsin recently reported. "This agreement has achieved a great deal," Judge Crabb said. "Life in Supermax will continue to be difficult, tedious and unpleasant, but the conditions will be ameliorated somewhat and the effects of sensory deprivation lessened." The settlement ends a class action by inmates who alleged the prison violated their constitutional protection against cruel and unusual punishment. Judge Crabb will continue to supervise conditions at the prison indefinitely through a court-appointed special monitor, Madison attorney Stephen Hurley said. The $47 million, 500-bed prison opened in 1999 to house what then- Governor Tommy Thompson described as the "worst of the worst" of State inmates. Admission to the prison wass supposed to be limited to those who have assaulted guards or inmates at other prisons, posed special security or escape risks, or who had a history of discipline problems at other institutions. Inmates entering the prison were confined to windowless cells for at least 23 hours a day, given a limited chance to exercise, read or even see guards or other inmates, and prohibited from having face-to-face visits with friends or family members. Prison officials expected inmates to earn their way out of isolation through good behavior, but critics charged the prison became a dumping ground for inmates who challenged prison authority. Other critics claim many mentally ill inmates wound up at Supermax for violating the rules at other prisons, and then were punished even more harshly for breaking the rules at Supermax. The conditions of isolation, they claimed, worsened their illnesses, which in turn led to more bad behavior. One mental health expert described Supermax as an "incubator of psychosis." Judge Crabb ordered the transfer of five seriously mentally ill inmates from Supermax last year. The settlement declares the prison off-limits to all "seriously mentally ill" inmates. The inmates' attorney Ed Garvey said prison officials have not yet agreed how to define that term. Another hearing before Judge Crabb is scheduled for later this month. Judge Crabb said many inmates told her in written comments on the proposed settlement that they are still unsure how to progress out of the highest-security levels. The lack of understanding of those criteria creates "an enormous amount of frustration" among prisoners, she said. The Wisconsin Legislature's Joint Finance Committee recently voted overwhelmingly to study converting Supermax into a regular maximum- security prison. Committee members said the prison has never been more than half full and could be better used for other purposes. David Fathi, an attorney for the National Prisons Project of the American Civil Liberties Union, said the settlement in Wisconsin, as well as similar court decisions in Ohio and Arizona, indicates that "we are starting to turn the corner" away from ultra-high-security institutions. "The courts are starting to recognize that Supermax prisons are fundamentally different and can sink into unconstitutionality," Mr. Fathi said. UNITED AIRLINES: Base Commission Rate Suit Trial Set for September 2002 ----------------------------------------------------------------------- Trial in the antitrust class action filed against United Airlines and other carriers following the reduction of base commission rates in November 1999 will commence in September 2002, in the US District Court in North Carolina. A North Carolina travel agent commenced the suit after the airlines reduced base commission rates payable to travel agents from 8% to 5%. The suit alleges that the Company and the other carrier-defendants conspired to fix travel agent commissions in violation of the Sherman Act. The defendants filed a motion to dismiss this suit, which the Court denied. On July 12, 2001, plaintiff moved to amend its complaint by joining five new travel agency defendants, the Association of Retail Travel Agents (ARTA), and eight new carrier defendants. The plaintiff also sought to add claims relating to the carriers' reduction of travel agent base commissions from 10% to 8% in 1997 and the 1998 imposition of caps on commissions payable on international air travel. In November 2001, the Court granted the motion allowing the addition of the new parties and claims. A second amended complaint was filed on January 30, 2002 adding a claim related to the 2001 reduction of domestic air travel commission caps. Discovery is currently proceeding. UNITED AIRLINES: Weight Program Suit To Proceed In CA Federal Court ------------------------------------------------------------------- The class action against United Airlines, Inc., filed in February 1992 filed by its travel attendants relating to its former flight attendant weight program has been remanded to the California District Court. The suit alleges that the Company's weight program, in effect from 1989 to 1994, unlawfully discriminated against flight attendants on the grounds of sex, age and other factors. In April 1994, the class was certified as to the sex and age claims. Following extensive motion practice, on March 10, 1998, the District Court dismissed all the claims against the Company, a decision the plaintiffs appealed to the US Court of Appeals for the Ninth Circuit. A three-judge Ninth Circuit panel overturned the ruling, in June 2000 saying that the plaintiffs were entitled to judgment as a matter of law on their claims for discrimination based on sex and that a trial was required for determination on their claims for age discrimination. In addition, the Appeals Court reversed the dismissal of all individual class representative claims of discrimination and the case was remanded to the District Court for further proceedings. The Company petitioned for en banc review by an 11-judge panel, but the Court denied the motion. The Company again petitioned for a review of the Ninth Circuit decision by the US Supreme Court, but that petition was denied on March 5, 2001. In accordance with the Appellate Court ruling, the case will go back to the District Court for further proceedings with respect to the age discrimination claims and for a determination of damages with respect to the sex discrimination claims. Recently the District Court ruled out punitive damages as a matter of law. Securities Fraud ALLIANCE CAPITAL: Settling Suit Over Alliance Holding Reorganization --------------------------------------------------------------------- Alliance Capital Management LP agreed to settle a class action filed in the Chancery Court of the State of Delaware, on behalf of owners of limited partnership units of Alliance Capital Management Holding LP (Alliance Holding) challenging the then-proposed reorganization of Alliance Holding. The suit named as defendants the Company and: (1) Alliance Capital Management Holdings, LP, (2) four Alliance Holding executives, and (3) Alliance Holding's general partner The suit alleges inadequate and misleading disclosures, breaches of fiduciary duties, and the improper adoption of an amended partnership agreement by Alliance Holding, and seeks payment of unspecified money damages and an accounting of all benefits alleged to have been improperly obtained by the defendants. In August 2000, plaintiffs filed a first amended and supplemental class action complaint. The amended complaint alleges in connection with the reorganization that: (i) the partnership agreement of Alliance Holding was not validly amended; (ii) the reorganization of Alliance Holding was not validly effected; (iii) the information disseminated to holders of units of limited partnership interests in Alliance Holding was materially false and misleading; and (iv) the defendants breached their fiduciary duties by structuring the reorganization in a manner that was grossly unfair to plaintiffs. In September 2000, all except one of the defendants filed an answer to the amended complaint denying the material allegations contained therein. In lieu of joining in the answer to the amended complaint, defendant Robert H. Joseph filed a motion to dismiss the suit. In November 2000, defendants, other than Mr. Joseph, filed a motion to dismiss the amended complaint. In December 2000, plaintiffs filed a motion for partial summary judgment on the claim that the Alliance Holding partnership agreement was not validly amended. The court later issued a decision granting in part and denying in part defendants' motion to dismiss. The claim alleging that the partnership agreement of Alliance Holding was not validly amended was one of the claims dismissed. In October 2001, a memorandum of understanding was executed, setting forth the terms of a settlement in principle, and in December 2001, a stipulation of settlement was filed with the Delaware Court. The settlement is subject to a number of conditions, including preparation of definitive documentation and approval, after a hearing, by the Delaware Court of Chancery. ALLIANCE CAPITAL: Faces Multiple Suits For Involvement With Enron Corp. ----------------------------------------------------------------------- Alliance Capital Management LP labeled "without merit" the numerous securities class actions pending in various courts, because one of the directors of general partner, Alliance Premier Growth Fund, served as a director of fallen energy trader Enron Corporation. The first suit was commenced in December 2001 in the US District Court in the District of New Jersey against the Company and the Alliance Premier Growth alleging violations of the Insurance Contracts Act. The suit alleges that the Company breached its duty of loyalty to Premier Growth Fund because one of the fund's directors served as a director of Enron Corporation when the Premier Growth Fund purchased shares of Enron and as a consequence thereof, the investment advisory fees paid to the Company by Premier Growth Fund should be returned as a means of recovering for Premier Growth Fund the losses plaintiff alleges were caused by the alleged breach of the duty of loyalty. Later that month, another substantially similar suit was initiated in the US District Court in the Middle District of Florida, Tampa Divisions, against the Company and the Premier Growth Fund. Two other similar suits were commenced in the US District Court in the District of New Jersey. The Company intends to vigorously defend against these allegations. At the present time, the Company's management is unable to estimate the impact, if any, that the outcome of these actions may have on the Company's results of operations or financial condition. The Company is confident that the ultimate resolution of the suits should not have a material adverse effect on the consolidated financial position of the Company. ARTHUR ANDERSEN: Might Face AU$700M Claim Over HIH Insurance Collapse --------------------------------------------------------------------- Controversial accounting firm Arthur Andersen LLP might find a new claim against them over the collapse HIH Insurance, Ltd., one of Australia's biggest insurers and possibly the nation's biggest collapse. The Company folded up one year ago, with a $2.5 billion shortfall in claims reserves, prompting the highest level of government inquiry, a Royal Commission, the Financial Express reports. Australian law firm Dennis & Co. told the Express that the legal claim against Andersen might amount up to AU$ 700 million, on behalf of more than 1,000 of the insurers' shareholders. The firm added that more than 2,000 are expected to join the suit. "It's in the vicinity of a A$500 million to A$700 million case," principal solicitor Bruce Dennis said. He further said the claim would tap into indemnity insurance written for Andersen by a Lloyd's of London syndicate, but declined to identify the syndicate beyond saying it served the "big five" accounting firms. Arthur Andersen is still reeling from numerous lawsuits over its role in the Enron collapse. The firm declined to comment on insurance arrangements and said it was not facing legal action in any jurisdiction over HIH. "If and when we get any actions, we'll evaluate them," a spokesman for firm added. The world's "Big Five" insure themselves to a certain extent through mini insurance companies of their own, called captives, and also buy liability insurance on the commercial market for settling and defending lawsuits, the Financial Express reports. AXA: To Settle Suits Over AXA Financial Stock Acquisition Proposal ------------------------------------------------------------------ Insurance company AXA agreed to settle a consolidated class action pending in the Delaware Court of Chancery relating to the August 30, 2000 announcement of the Company's proposal to purchase the outstanding shares of AXA Financial, Inc. common stock that it did not already own. The suits name the Company, AXA Financial and directors and/or officers of AXA Financial as defendants, and purport to represent a class consisting of owners of AXA Financial common stock and their successors in interest, excluding the defendants and any person or entity related to or affiliated with any of the defendants. The suits challenge the adequacy of the offer announced by AXA and allege that the defendants have engaged or will engage in unfair dealing, overreaching and/or have breached or will breach fiduciary duties owed to the minority shareholders of AXA Financial. A similar lawsuit was filed in the Supreme Court of the State of New York, County of New York, after the filing of the first Delaware action. In December 2000, the parties to the Delaware suits reached a proposed agreement for settlement and executed a memorandum of understanding. Shortly thereafter, agreement was reached with the plaintiff in the New York suit to stay proceedings in New York and to participate in and be bound by the terms of the settlement of the Delaware suits. In November 2001, the parties filed a stipulation of settlement with the Delaware Court of Chancery. The settlement, which does not involve any payment by AXA Financial, is subject to conditions, including approval, after a hearing, by the Delaware Court of Chancery. The hearing on the settlement is scheduled for March 2002. AXA FINANCIAL: Donaldson Lufkin Sale Sparks Multiple Securities Suits --------------------------------------------------------------------- AXA Financial, Inc. faces several class actions relating to the proposed sale of sister investment company, Donaldson Lufkin and Jenrette, Inc. (DLJ) announced August 30,2000. Four suits were commenced in the Delaware Court of Chancery, naming the Company, DLJ and DLJ's directors, and challenging the sale of DLJ because the transaction did not include the sale of DLJdirect tracking stock. The Delaware suits were filed on behalf of the holders of DLJdirect tracking stock and their successors in interest, and assert claims for breaches of fiduciary duties, for violation of class members' voting rights under 8 Del. C. ss.242, and for breach of implied contractual promise. Another class action was filed in the United States District Court, Southern, making similar allegations as the Delaware suits, and also alleging federal securities law claims relating to the initial public offering of the DLJdirect tracking stock. The New York suit alleges claims for: (1) violations of the securities laws, (2) breaches of the fiduciary duties of loyalty, (3) good faith and due care, (4) aiding and abetting such breaches, and (5) breach of contract. The suit purports to represent a class consisting of all purchasers of DLJdirect tracking stock in the initial public offering and thereafter, with respect to the securities law claims, and all owners of DLJdirect tracking stock who allegedly have been or will be injured by the sale of DLJ, with respect to all other claims. The suit names as defendants are the Company and: (i) Equitable Life, (ii) AXA, (iii) Donaldson Lufkin and Jenrette, (iv) Donaldson, Lufkin & Jenrette Securities Corporation, (v) Credit Suisse Group, (vi) Diamond Acquisition Corporation, and (vii) DLJ's directors. In February 2001, defendants moved to dismiss the New York suit and in October 2001, the New York Court granted defendants' motion, dismissing all claims based on federal law with prejudice and dismissing all claims based on state law on jurisdictional grounds, and entered judgment for the defendants. The plaintiffs did not file a notice of appeal, and their time to appeal has expired. Another class action was commenced in April 2001 in the Delaware Court of Chancery on behalf of the holders of CSFBdirect tracking stock (formerly known as DLJdirect tracking stock), against the Company, Credit Suisse First Boston (USA), Inc., the former directors of DLJ and the directors of Credit Suisse First Boston (USA), Inc. The suit challenges the sale of DLJ common stock as well as the March 2001 offer by Credit Suisse to purchase the publicly owned CSFBdirect tracking stock for $4 per share and asserts claims for breaches of fiduciary duties and breach of contract. The suits were later consolidated under the caption In re CSFBdirect Tracking Stock Shareholders Litigation, and in May 2001, the Delaware Court decided that the last mentioned suit should be the operative complaint in the consolidated actions. A memorandum of understanding outlining the terms of a proposed settlement was executed in July 2001. It is anticipated that a stipulation of settlement will be filed with the Delaware Court of Chancery in or before March 2002. The proposed settlement, which does not involve any payment by AXA Financial, is subject to a number of conditions, including confirmatory discovery and approval, after a hearing, by the Delaware Court of Chancery. BIOPURE CORPORATION: Wolf Haldenstein Initiates Securities Suit in MA --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class action in the United States District Court for the District of Massachusetts on behalf of purchasers of Biopure Corporation (NASDAQ:BPUR) between May 8, 2001 and December 6, 2001, inclusive, against the Company and Carl W. Rausch, Chairman and Chief Executive Officer. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. During the class period, defendants issued to the investing public false and misleading statements concerning the collection and analysis of data from the Company's pivotal Phase III clinical trial of its experimental blood substitute Hemopure, and the likely timing of the Company's submission to the US Food and Drug Administration (FDA) of its Biological License Application (BLA) for Hemopure. In particular, defendants led investors to believe that the BLA was on track to be filed by year-end 2001. The complaint alleges these statements lacked any reasonable basis. The Company had completed the clinical trial for Hemopure in August 2000. At least by the commencement of the class period, defendants knew or recklessly ignored the fact that the data collected from the trial was significantly deficient and failed to demonstrate that the trial had been conducted in an "adequate and well-controlled" manner. Defendants also knew that the FDA would not even allow a BLA to be filed where the data lacked prima facie reliability. The complaint further alleges on December 6, 2001, contrary to repeated prior assertions that the BLA would be filed in 2001, the Company announced that it would not file the Hemopure application until mid- 2002. The Company blamed the delay on "additional facility and process validation requirements" for its Cambridge, Massachusetts manufacturing plant. This was merely a pretext for the delay, which was in fact occasioned by the numerous violations of protocols that had occurred throughout the clinical trial, which had undermined the reliability of the data, thereby making any application unlikely to be accepted for filing, much less approved, the FDA. Following these revelations, the price of Company stock slid to less than $15 a share, well below the $20 plateau above which the stock traded throughout most of the class period. For more information, contact Fred T. Isquith, Gustavo Bruckner, Gregory M. Nespole, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Web site: http://www.whafh.com. E-mail should refer to Biopure. GILAT SATELLITE: To Mount Vigorous Defense Against Securities Suits ------------------------------------------------------------------- Gilat Satellite Networks Ltd. (Nasdaq: GILTF) labels "without merit" several securities class actions pending against it in the United States District Court for the Eastern District of New York and the United States District Court for the Eastern District of Virginia. These suits, brought on behalf of purchasers of securities of the Company between August 14, 2000 and October 2, 2001 inclusive, name the Company and officers Yoel Gat and Yoav Libovitch as defendants. The suits 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 Company securities. The Company intends to vigorously defend its position in this litigation, it said in a press statement. GILAT SATELLITE: Schoengold Sporn Commences Securities Fraud Suit ----------------------------------------------------------------- Schoengold & Sporn, PC initiated a securities fraud class action on behalf of all persons or institutions who acquired common shares of Gilat Satellite Networks, Ltd. (NASDAQ: GILTF) between November 13, 2000 and October 2, 2001 at artificially inflated prices due to the defendants' materially false and misleading statements concerning its net income and inventories. The action alleges violations of the securities laws of the United States (Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder) by the Company, Yoel Gat, Chairman of the Board of Directors and Chief Executive Officer, and Yoav Leibovich, Chief Financial Officer. The suit asserts claims against the Company and its controlling officers and directors and seeks damages as well as an accounting. Among other things, plaintiff claims that defendants knew or recklessly disregarded, yet covered up the fact, that: (1) the demand for and acceptance of the Company's products and the products of its subsidiary, StarBand Communications, Inc., were greatly overstated; (2) the Company was having difficulty manufacturing and selling its chief product, Very Small Aperture Terminal (VSAT) profitably; (3) the Company's purported gross profit margins were false; (4) the Company was materially understating its costs and expenses; and (5) the Company, accordingly, would have to take massive charge- offs, numbering in the hundreds of millions of dollars in the future. The suit claims that defendants' material omissions and the dissemination of materially false and misleading statements caused the Company's stock price to become artificially inflated, inflicting enormous damages on investors. For more information, contact Jay P. Saltzman or Ashley Kim by Mail: 19 Fulton Street, Suite 406, New York, New York 10038 by Phone: 212-964-0046 or 866-348-7700 by Fax: 212-=267-8137 or by E-mail: Shareholderrelations@spornlaw.com IRVINE SENSORS: Labels "Without Merit" Securities Suits in C.D. CA ------------------------------------------------------------------ Irvine Sensors Corporation (Nasdaq: IRSN, Boston Stock Exchange: IRSN) labeled "without merit" the securities class actions pending against it and five of its present or former directors and officers in the United States District Court for the Central District of California. The suit alleges that the defendants made false optimistic statements about the Company's investment in Silicon Film Technologies, Inc. (SFI) and the prospects for SFI's EFS-1 product, which was designed to interface with a conventional camera to allow it to take digital pictures. The suit charges the defendants with violations of Securities Act of 1934, on behalf of a class of stockholders who purchased shares of Company stock during the period January 6, 2000 through September 15, 2001. The Company vows to vigorously defend against the suits. KNIGHT TRADING: Settles One Investors' Suit, Court Dismisses Another -------------------------------------------------------------------- Knight Trading Group Inc. settled a securities class action pending in the US District Court in New Jersey, charging the stock market dealer and its employers of manipulating stock prices, by buying shares in advance of customer orders, Bloomberg.com reports. The suit was commenced in November 2000 and was later dismissed in July 2001, a decision the plaintiffs appealed. The Company settled the lawsuit by investor Yakov Prager "to avoid the time and expense involved with the appeal," the Company said in a disclosure to the Securities and Exchange Commission. The Company also maintained that the amount of the settlement was not "material" to the firm. Bloomberg.com reports that another securities suit against it over alleged earnings forecasts made by a Company executive in the third quarter of 2000 has been dismissed. OTG SOFTWARE: Has Yet to Respond to Securities Suits in S.D. New York --------------------------------------------------------------------- OTG Software, Inc. faces several securities class actions pending since July 2001 in the US District Court for the Southern District of New York against the Company, its officers who signed the registration statement in connection with its initial public offering and the managing underwriters of the initial public. The suits uniformly allege that the Company's initial public offering registration statement and final prospectus contained material misrepresentations and/or omissions, related in part to additional, excessive and undisclosed commissions allegedly received by the Company's underwriters from investors to whom the underwriters allegedly improperly allocated shares of the public offering. The Company has not formally responded to these suits, which are at an early stage. However, the Company intends to defend itself vigorously against them. Management believes that it is not possible at the current time to estimate the amount of a probable loss, if any, that might result from these matters. OVERTURE SERVICES: Consolidated Securities Suits in S.D. NY On Hold ------------------------------------------------------------------- Overture Services, Inc. denies the allegations in several securities class actions pending in the United States District Court, Southern District of New York against the Company, certain underwriters involved in the Company's initial public offering and certain of the Company's current and former officers and directors. The suits allege, among other things, violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 involving undisclosed compensation to the underwriters, and improper practices by the underwriters and seek unspecified damages. The suits have been consolidated for pre-trial purposes before Judge Shira Scheindlin in New York, along with other complaints filed against numerous public companies that conducted initial public offerings of their common stock since the mid-1990s. Judge Scheindlin has ordered that the time for all defendants to respond to any complaint be postponed until further order of the Court. Thus, the Company has not been required to answer the complaint, and no discovery has been served. The Company believes that it has meritorious defenses to the complaint and intends to contest the allegations vigorously. REGENERATION TECHNOLOGIES: Schiffrin Barroway Files Suit in N.D. FL ------------------------------------------------------------------- Schiffrin & Barroway, LLP commenced a securities class action in the US District Court for the Northern District of Florida, Gainesville Division charging Regeneration Technologies, Inc. (Nasdaq:RTIX) with misleading shareholders about its business and financial condition. The suit, filed on behalf of purchasers of the Company's stock between July 25,2001 and January 31,2002, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit alleges that the Company and certain of its officers and directors issued false and misleading statements concerning its business and financial condition. Specifically, the complaint 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 to 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 the Company'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 Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 or 610-822-2221 or by E-mail: info@sbclasslaw.com SPECTRALINK CORPORATION: Schiffrin Barroway Lodges Suit in Colorado ------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the US District Court for the District of Colorado against Spectralink Corporation (Nasdaq:SLNK) on behalf of purchasers of the Company's stock between July 19,2001 and January 11,2002. The suit alleges the Company misled shareholders about its business and financial condition, therefore violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that the Company issued statements which represented that the Company was experiencing continued growth and increasing its market share and would continue to do so in the future. Unbeknownst to investors, however, the Company was suffering from a host of undisclosed adverse factors which were negatively impacting its business and which would cause it to report declining financial results, materially less than the market expectations defendants had caused and cultivated. Specifically, defendants misrepresented or failed to disclose that: (1) the Company was experiencing declining sales as its business began to be affected by general market forces. Throughout the class period, defendants repeatedly emphasized that the Company was not being affected by the slowdown in the US economy, when, in fact, that was not true; (2) the Company was becoming increasingly reliant on end-of-the- quarter sales to meet its sales forecasts. This sales pattern necessarily subjected the Company to the increased risk that it would not meet its sales expectations should it not successfully complete certain anticipated sales; and (3) certain of the Company's customers were experiencing financial difficulty such that it was highly unlikely that they would be able to complete anticipated sales, thereby causing the Company to suffer a decline in its revenues. On January 14, 2002, before the open of the Nasdaq stock market, the Company issued a press release announcing preliminary financial results for its fourth quarter of 2001, and disclosed, for the first time, that its revenue and earnings would in fact be affected by the slowdown in the overall economy. In response to this announcement, the price of Company common stock dropped precipitously, falling from $16.02 per share to $10.16 per share, a decline of more than 36%. While the Company was being adversely affected by the aforementioned factors, but prior to any disclosure to the market, the individual defendants and other senior executives sold more than $13.7 million worth of their personally-held common stock to the unsuspecting public. For more information, contact Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 or 610-822-2221 or by E-mail: info@sbclasslaw.com THQ INC.: Third Amended Securities Suit Pending in C.D. California ------------------------------------------------------------------ THQ, Inc. faces an amended class action in the US District Court for the Central District of California charging the Company and certain of its officers and directors of violations of federal securities laws, on behalf of purchasers of the Company's stock from October 26, 1999 through May 24, 2000. The Court dismissed the suit with prejudice in December 2000 but later modified its order in April 2001, permitting the plaintiffs to file a third amended complaint on that date. The third amended complaint alleges that defendants violated Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934, including allegations that the defendants: (1) manipulated the company's stock price, (2) distributed false and misleading information concerning revenue recognition, forecasts and earnings estimates, (3) selectively disclosed material information, and (4) engaged in insider trading The defendants have filed an answer denying all of the material allegations of the third amended complaint and asserting legal and factual defenses. The lawsuit is in the discovery phase and a trial date of November 12, 2002 has been set. VAN WAGONER: Labels Multiple Securities Fraud Suits "Without Merit" ------------------------------------------------------------------- The Van Wagoner Emerging Growth Fund (NASDAQ:VWEGX) labeled "without merit" the securities class actions pending on behalf of all purchasers of the common stock of Van Wagoner Emerging Growth Fund (Nasdaq: VWEGX) from April 28, 2000 through June 30, 2001, inclusive. The suit names as defendants: (1) Van Wagoner Funds, Inc., (2) Van Wagoner Capital Management, Inc., (3) Sunstone Financial Group, Inc., (4) Van Wagoner Emerging Growth Fund, (5) Garrett R. Van Wagoner, (6) Larry P. Arnold, (7) Robert S. Colman and (8) Ernst and Young, LLP The suit alleges the defendants issued false and misleading statements concerning the Fund's net asset value (NAV) and performance. Specifically, the complaint alleges that Ernst & Young, LLP failed to follow generally accepted accounting practices and generally accepted auditing standards by specifically approving the changes in net assets utilized by the Fund between the end of 1999 and the end of 2000. The Company intends to defend the actions vigorously, and believes that the outcome of such legal actions will not have a material adverse effect on the results of the Funds' operations or its net asset values. WESTERN MULTIPLEX: Shareholders File Suit To Block Walnut-Pine Merger --------------------------------------------------------------------- Communications equipment company, Western Multiplex Corporation, faces three class actions, challenging its planned merger with wholly owned subsidiary, Walnut-Pine Merger Corporation, in Delaware and California courts. Two of suits were commenced in February 2002 in the Delaware Court of Chancery against the Company, its Board of Directors and Walnut-Pine, alleging, among other things, that the Company Board breached its fiduciary duties to its stockholders. The suits seek to enjoin the merger or, alternatively, to recover damages in the event the merger is consummated. On March 4, 2002, another suit was commenced in the Superior Court of the State of California, County of Santa Clara, against the members of the Company's Board of Directors, challenging the termination fee contained in the merger agreement and alleging that the Company's Board breached its fiduciary duties to its stockholders. The Company believes that these actions are without merit and intends to defend against them vigorously. WILLIAMS COMPANIES: Shapiro Haber Commences Securities Suit in N.D. OK ---------------------------------------------------------------------- Shapiro Haber and Urmy LLP initiated a securities class action in the United States District Court for the Northern District of Oklahoma against Williams Companies, Inc. (NYSE: WMB), certain of its officers and directors, and the underwriters of its January 7, 2002 offering of FELINE PACS. The case was filed on behalf of all persons who purchased FELINE PACS in or traceable to the Offering. The suit alleges that the defendants violated Sections 11, 12(2), and 15 of the Securities Act of 1934 by issuing false and misleading statements and omitting material facts concerning WMB's $2.15 billion in obligations related to the spin-off of its subsidiary Williams Communication Group (WCG) in its registration statement, prospectus, and prospectus supplement in connection with the offering. The prospectus supplement classified these obligations as a "risk" when, at the time of the Offering, these liabilities were all but certain, given WCG's dire financial condition. The registration statement, prospectus, and prospectus supplement also failed to disclose that the Company was obligated for an additional $250 million in WCG costs. For more information, contact Ted Hess-Mahan or Liz Hutton by Mail: 75 State Street, Boston, MA 02109 by Phone: 800-287-8119 by Fax: 617-439-0134 or by E-mail: cases@shulaw.com. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *