/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020320.mbx C L A S S A C T I O N R E P O R T E R Wednesday, March 20, 2002, Vol. 4, No. 56 Headlines ARGOSY GAMING: Faces Suit For Violations of RICO Act in Las Vegas BIOVAIL CORPORATION: Sued For Monopolizing Market on Hypertension Drug CONNECTICUT: Town Sues Law Firms For Advising CRRA To Invest in Enron DYNEGY INC.: Faces Six Antitrust Suits Over California Power Prices ENTERGY CORPORATION: Property Owners File Suit Over Easements in TX, LA METRO-NORTH COMMUTER: High Court Refuses To Dismiss Race Bias Suit ONEOK INC.: Residents Sue Over Damages Brought By 2001 Gas Explosions PFIZER INC.: Labor Union Files Antitrust Suit Over Epilepsy Drug in NY RELIANT ENERGY: Alleged Polluter Tells Residents Not To Attend Hearing SOUTHERN COMPANY: GA Court Refuses Racial Bias Suit Certification SULZER MEDICA: OH Court Extends Ban On Individual Lawsuits Until June TRI-STATE CREMATORY: Cobb State Court Judge Takes Over Desecration Suit UNITED STATES: INS Faces Suit Over "Unfair" Haitian Refugee Policy Securities Fraud AT&T CORPORATION: Bernstein Liebhard Commences Securities Suit in NY BAKER HUGHES: Sued For Violations of Federal Securities Laws in S.D. TX BIOPURE CORPORATION: Cauley Geller Commences Securities Suit in MA CALPINE CORPORATION: Milberg Weiss Commences Securities Suit in N.D. CA COMPUCOM SYSTEMS: Denies Allegations in Securities Suit in S.D. NY DYNEGY INC.: Faces Two Securities Suits Over Failed Merger With Enron GILAT SATELLITE: Cauley Geller Commences Securities Suit in E.D. NY GILAT SATELLITE: Schoengold Sporn Commences Securities suit in E.D. NY HANOVER COMPRESSOR: Schoengold Sporn Launches Securities Suit in NY IRVINE SENSORS: Wolf Haldenstein Commences Securities Suit in S.D. NY JD EDWARDS: Dismissal Decision, Settlement Agreement Approval Pending LEGATO SYSTEMS: Securities Suit in N.D. CA Still in Early Stages LEGATO SYSTEMS: To Vigorously Defend Against Derivative Suits in CA LUMENIS LTD.: Bernstein Liebhard Commences Securities Suit in S.D. NY NEWPOWER HOLDINGS: Cauley Geller Commences Securities Suit in S.D. NY NVIDIA CORPORATION: Kaplan Fox Commences Securities Suit in N.D. CA PERFORMANCE FOOD: Could Face Securities Suit After Income Restatement PLAINS ALL: Settles Securities Suits For $30 Million S.D. Texas PLAINS ALL: Settles Derivative Shareholder Suits For $1.1M in DE, TX QUICKLOGIC CORPORATION: To Mount Vigorous Defense v. Securities Suits SYMBOL TECHNOLOGIES: LeBlanc Waddell Lodges Securities Suit in E.D. NY WACHOVIA CORPORATION: Asks NC Court To Dismiss Securities Fraud Suit ********* ARGOSY GAMING: Faces Suit For Violations of RICO Act in Las Vegas ----------------------------------------------------------------- Argosy Gaming Systems, Inc. was named as a defendant in a consolidated class action pending in Las Vegas, Nevada Federal Court, charging several gaming companies with violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). The suit alleges that the companies engaged in a course of fraudulent and misleading conduct intended to induce people to play their gaming machines based upon a false belief concerning how those gaming machines actually operate, as well as to the extent to which there is actually an opportunity to win on any given play. The plaintiffs have filed a motion for class certification, which was fully briefed before the Court in November 2001. The parties are awaiting the Court's decision, and discovery has been stayed pending the Court's ruling. The Company is unable to determine what effect, if any, the suit would have on its business or operations. BIOVAIL CORPORATION: Sued For Monopolizing Market on Hypertension Drug ---------------------------------------------------------------------- Biovail Corporation faces a class action pending in the United States District Court for the Eastern District of Pennsylvania filed on behalf of users and consumers of Tiazac, a hypertension and angina drug from April 22, 2000 to the present. The suit alleges that the Company's efforts to prevent generic competition to the hypertension and angina drug impermissibly monopolized the market. Specifically, the suit alleges that the unavailability of a generic equivalent caused the class to pay higher prices for Tiazac than they would have if a generic version had been available. For more information, contact Krishna Narine, of Schiffrin & Barroway, LLP by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com CONNECTICUT: Town Sues Law Firms For Advising CRRA To Invest in Enron ---------------------------------------------------------------------- West Hartford officials have commenced a class action against two law firms that advised Connecticut's Resources Recovery Authority (CRRA) to invest $220 million in fallen energy trader Enron Corporation in the Hartford Superior Court, Associated Press reports. The suit, filed on behalf of 70 cities and towns that send their garbage to the trash authority's plant in Hartford, alleges that the CRRA's plan to increase its trash disposal fees by 31% was a way to recoup its losses due to its relationship with Enron. The suit names as defendants law firms Murtha Cullina, LLP of Connecticut and Hawkins Delafield and Wood of New York. Both firms were allegedly "negligent and careless" in providing the CRRA with financial advice, which led it to the huge financial loss, which spurred the rate increase. State Attorney General has called the deal an illegal loan, but CRRA officials say it was an energy transaction. West Hartford Mayor Jonathan Harris told the Hartford Courant, "The goal of this is to get back money that was lost in the deal, to make up for the huge bill that's been foisted on the towns." The law firms denied the allegations, according to an Associated Press report. "We understand the frustration which the towns feel, but we believe the case has no merit, and beyond that we have no comment," said Howard I. Berkman, a New York-based partner of Hawkins Delafield & Wood. Murtha Cullina's managing partner, Paul R. McCary, said, "the whole transaction is a complicated legal matter, a complicated financial matter and, regrettably, it's a complicated political matter." The suit does not name the CRRA as a defendant, despite criticisms from town officials that the authority should have consulted with them before risking a big investment. The money essentially belonged to the municipalities, they contend. Mr. Harris said the lawsuit does not include the CRRA because he and other West Hartford officials were advised that suing the authority would be like suing themselves, since towns are responsible for the net operating cost of CRRA, AP reports. DYNEGY INC.: Faces Six Antitrust Suits Over California Power Prices ------------------------------------------------------------------- Dynegy, Inc. and several of its entities faces six securities suits, accusing them of manipulating California power prices in the summer of 2000. The suits are: (1) Gordon v. Reliant Energy Inc., et al., in San Diego Superior Court; (2) Hendricks v. Dynegy Power Marketing Inc., et al., in San Diego Superior Court; (3) People of the State of California v. Dynegy Power Marketing Inc., et al., San Francisco Superior Court; (4) Pier 23 Restaurant v. PG&E Energy Trading, et al., in San Francisco Superior Court; (5) Sweetwater Authority et al. v. Dynegy Inc., et al., in San Diego Superior Court; (6) Bustamante v. Dynegy Inc., et al., in Los Angeles Superior Court, filed on behalf of California taxpayers by Lieutenant Governor Cruz Bustamante and Assembly Woman Barbara Matthews, both acting in their capacity as taxpayers and not in their capacity as elected officials The suits are based on the events occurring in the California power market during the summer of 2000, and allege violations of California's Business and Professions Code, Unfair Trade Practices Act and various other statutes. Specifically, the plaintiffs allege that the defendants, including the owners of in-state generation and various power marketers, conspired to manipulate the California wholesale power market to the detriment of California consumers. Included among the acts forming the basis of the plaintiffs' claims are the alleged improper sharing of generation outage data, improper withholding of generation capacity and the manipulation of power market bid practices. The Bustamante suit includes claims against various Dynegy entities, including Dynegy Inc. and Dynegy Marketing and Trade, as well as against three corporate officers individually. The allegations in this suit are similar to those in the other five suits, with the exception that the Bustamante suit includes a claim of unfair business practices based on "price gouging" during an emergency declared by Governor Gray Davis. The suits are at preliminary stages. Defendants in the six lawsuits have yet to file answers. The plaintiffs filed motions to remand five of the cases to state court. In respect to the sixth case, the Bustamante suit, the parties agreed that, based on a judge's decision to remand the other five lawsuits, the case should go back to state court. All six lawsuits will be consolidated before a single California State Court judge. After the actions were remanded, the parties agreed that they should be coordinated. On December 12, 2001, the California Judicial Council resolved a dispute among the parties as to the county in which the actions should be coordinated and assigned the Coordination Proceedings (Nos. 4204 & 4205) to the Superior Court of California, County of San Diego. On December 20, 2001, the presiding Judge of the San Diego Superior Court designated Judge Sammartino as the Coordination Trial Judge for the Coordination Proceedings. On January 17, 2002, Judge Sammartino set a preliminary trial conference for March 4, 2002 to, among other things, set schedules for: (i) determining legal issues that might expedite disposition of the Coordination Proceedings; (ii) establishing a discovery schedule; and (iii) resolving matters pertinent to the class action issue. The defendants in the six lawsuits have formed various joint defense groups in an effort to coordinate the defense of the claims and to share certain costs of defense. The Company believes the allegations are without merit and will vigorously defend these claims. In the opinion of management, the amount of ultimate liability with respect to these actions will not have a material adverse effect on the financial position or results of operations of the Company. ENTERGY CORPORATION: Property Owners File Suit Over Easements in TX, LA ----------------------------------------------------------------------- Entergy Corporation and its subsidiaries faces several class actions in Texas and Louisiana filed on behalf of all property owners in each of the states throughout the Company's service areas who have conveyed easements to the Company and other defendants, namely: (1) Entergy Gulf States, (2) Entergy Services and (3) Entergy Technology Holding Company (ETHC) The first suit, originally commenced in 1998 by a group of property owners in the Jefferson County State Court in Texas, alleges that the Company installed fiber optic cable across their property without obtaining appropriate easements. The plaintiffs sought actual damages for the use of the land and a share of the profits made through use of the fiber optic cables and punitive damages. The State Court petition was voluntarily dismissed, and the plaintiffs commenced a class action suit with the same claims in the Federal Court in Beaumont, Texas. Both sides filed motions for summary judgment, which were heard by the court in late 2001. The Magistrate's recommendation to the District Judge found that two of the four types of easements did not allow the Company to place its fiber on the property and the other two were ambiguous and required a jury determination. Subsequently, the District Judge held oral arguments and has taken the motions under advisement. The Company believes the easements did provide it the right to place the fiber optic cable. If the Court or jury disagrees, the Company believes that any damages suffered by the plaintiff landowners are negligible and that there is no basis for the claim seeking a share of profits. At this time, management cannot determine the specific amount of damages being sought. In January 2002, a class action lawsuit asserting similar allegations to those alleged in the Texas lawsuit was commenced in State Court in Ascension Parish, Louisiana, against Entergy Louisiana, Entergy Services, ETHC, and Entergy Technology Company, on behalf of all similarly situated property owners in Louisiana. The Company intends to vigorously defend the lawsuit. At this time, management cannot determine the specific amount of damages being sought. METRO-NORTH COMMUTER: High Court Refuses To Dismiss Race Bias Suit ------------------------------------------------------------------ The US Supreme Court refused to block a discrimination class action filed by former black employees of the Metro-North Commuter Railroad Co., which provides rail transportation between New York City and the suburbs, Syracuse.com reports. The suit was filed on behalf of 1,200 black workers employed between 1985 and 1996 who said they were discriminated against because of their race. Initially, a federal court rejected the class action, but the 2nd US Circuit Court of Appeals in Manhattan reinstated the suit. The plaintiffs then asked the Supreme Court to review the case. The Supreme Court has not commented on the merits of the suit, but allowed it to proceed as a class action. A July 15 trial date has been set in the case. A lawyer for the plaintiffs, Alan Fuchsberg, told Syracuse.com he was pleased that the Supreme Court appreciated "the 2nd Circuit's common- sense approach" to the case. He said it was important that the case be heard as a class action because the plaintiffs seek to change the policies and practices of the railroad to prevent future discrimination. A lawyer for Metro-North, Myron Rumeld, declined to comment, Syracuse.com reports. ONEOK INC.: Residents Sue Over Damages Brought By 2001 Gas Explosions --------------------------------------------------------------------- Natural gas company OneOK, Inc. faces two class actions pending in the US District Court of Reno County, Kansas, charging it and several of its affiliates relating to certain gas explosions in 2001 in or near Hutchinson, Kansas. The suits name two separate classes of claimants: (1) all owners of real estate in Reno County, Kansas whose property had allegedly declined in value; and (2) owners of businesses in Reno County whose income had allegedly suffered. The suits also name as defendants: (i) Kansas Gas Service Company, Inc. (ii) Western Resources, Inc., (iii) Mid-Continent Market Center, Inc., (iv) ONEOK Gas Storage, LLC, (v) ONEOK Gas Storage Holdings, Inc., and (vi) ONEOK Gas Transportation, LLC At this point in discovery, the Company is unable to evaluate the merits of these cases or likelihood of success by the plaintiffs. PFIZER INC.: Labor Union Files Antitrust Suit Over Epilepsy Drug in NY ---------------------------------------------------------------------- Pfizer, Inc. faces an antitrust class action filed by the Health and Benefit Trust Fund of the International Union of Operating Engineers Local 94/94A/94B, AFL-CIO in the US District Court for the Southern District of New York, claiming illegal overcharges made for the prescription drug Neurontinr. The suit names the Company and the Warner-Lambert Company, which was acquired by Pfizer in June 2000, as defendant. Warner-Lambert is presently a wholly owned subsidiary of Pfizer. In 1993, prior to being acquired by Pfizer, Warner-Lambert received FDA approval to market Neurontinr and had marketed Neurontinr in the United States through its Parke-Davis division. Neurontinr is an anti- convulsant that is approved by the FDA for the treatment of seizures in adults with epilepsy. The suit alleges that the two companies have maintained sham patent infringement lawsuits against potential generic competitors for Neurontinr for the purpose of delaying and preventing generic competition. Michael A. Carney, President of the Operating Engineers Local 94, said in a statement, "The victims of the phony patent lawsuits that keep generics off the market are not only health funds like ours, but also the elderly, the working poor, the uninsured and everyone that is forced to pay more for a brand name drug when a generic drug is illegally kept off the market. Our Health Fund is filing this case, not only because we have a fiduciary duty to our members and our Fund to do so, but because our members and their families are tired of being ripped off by big companies charging us these illegally inflated prices and making obscene profits. We bring this lawsuit to fight back and recover these overpayments for our Fund, for our members and for all consumers hurt by these sharp practices." Since the filing of the lawsuit "counsel for two consumers contacted us and have filed lawsuits with allegations similar to that of our client," Robert Schachter, lawyer for the plaintiffs, said. He also reported that counsel for a number of other union health and welfare funds and private insurers have indicated that they may join Local 94's lawsuit. For more information, contact Robert S. Schachter or Joseph Lipofsky by Phone: 212-223-3900 or 800-721-3900 by E-mail: rschachter@zsz.com or jlipofsky@zsz.com or visit the firm's Web site: http://www.zsz.com. RELIANT ENERGY: Alleged Polluter Tells Residents Not To Attend Hearing ---------------------------------------------------------------------- A hearing about groundwater contamination has been canceled because people who have sued the alleged polluter have been told not to come, says Louisiana State Senator James David Cain, D-Dry Creek, the Associated Press recently reported. Senator Cain had scheduled a State Senate Environmental Quality Committee hearing in Haughton about the extent of an alleged benzene leak from a former Arkla Gas Company plant in Haughton. "We have had to cancel the meeting because area residents who are involved in the class action against Reliant Energy and its predecessor, Arkla Gas, have been advised not to attend the meeting," said the Senator, who is Committee Chairman, in a recently released statement. State Representative Billy Montgomery, D-Bossier City, who worked with Senator Cain to set up the meeting, said, "I am available and willing to hold a public hearing on this issue if the people of Haughton feel there is a need for one." SOUTHERN COMPANY: GA Court Refuses Racial Bias Suit Certification ----------------------------------------------------------------- The Eleventh Circuit Court of Appeals in Atlanta upheld a lower court ruling denying class certification to a racial discrimination class action against electric firm Southern Company (NYSE: SO), saying the evidence presented was insufficient in quality and quantity, iWon.com reports. The suit, filed by seven black Company workers, alleges that the Company and three of its units discriminated against black workers in pay and promotions and subjected them to a hostile working environment. The suit names as defendants the Company and: (1) Georgia Power Company, (2) Southern Company Services, and (3) Southern Company Energy Solutions The Companies have denied the charges against them. The Appellate Court also denied the plaintiffs permission to appeal. Steven Rosenwasser, a lawyer for the plaintiffs, told iWon the individual lawsuits would proceed. "This decision is not a reflection of the merits of our appeal. We just received the opinion and are contemplating our options." Lolita Browning, a spokeswoman for the Company, said the ruling affirmed the Company's view that the discrimination claims should be handled on an individual basis. SULZER MEDICA: OH Court Extends Ban On Individual Lawsuits Until June --------------------------------------------------------------------- The US District Court in Cleveland, Ohio has extended until June the ban on individual lawsuits against medical equipment maker Sulzer Medica and former parent Sulzer, Inc. over defective hip and knee implants that the Company recalled last year, Reuters reports. The Company is currently finalizing a $1 billion settlement to the class action brought against it by thousands of American patients, whose hip or knee implants loosened painfully after surgery and who had to have follow-up operations to get replacements. Final hearing on the settlement is set for May 6, 2002. Federal Judge Kathleen O'Malley has granted preliminary approval to the settlement, whose value was increased from $783 million to $1 billion amidst complaints that the compensation was not enough. The approval brought the Company closer to resolving the debacle, which has dented its reputation and hurt its stock. TRI-STATE CREMATORY: Cobb State Court Judge Takes Over Desecration Suit ----------------------------------------------------------------------- Superior Court Judge James G. Bodiford of the Cobb Judicial Circuit has agreed to preside over the trial of Tri-State Crematory operator Brent Marsh, charged with 204 counts of theft by deception after four judges from the Lookout Mountain Judicial Circuit recused themselves due to conflict of interest, the Walker County Messenger reports. Mr. Marsh and the Tri-State Crematory faces a slew of private lawsuits and class actions, after Georgia authorities discovered hundreds of corpses dumped in the crematory premises, instead of being cremated. Outraged relatives of the deceased filed class actions against the crematory, Mr. Marsh and the funeral homes that sent the bodies to the crematory. Judge Ralph Hill, the original judge overseeing the case, recused himself because his son was one of the attorneys handling a class- action lawsuit against the crematory. Judge Kristina Cook Connelly was the next to recuse herself last Thursday. Her father, Summerville attorney Bobby Lee Cook, is involved in litigation in the Tri-State case. Judge Ralph Van Pelt was next to recuse himself Saturday, followed by Judge Bo Wood on Monday morning. Both Van Pelt and Wood reportedly had relatives whose bodies were sent to Tri-State Crematory, the Walker County Messenger reports. UNITED STATES: INS Faces Suit Over "Unfair" Haitian Refugee Policy ------------------------------------------------------------------ The United States Immigration and Naturalization Services (INS) faces a class action filed by Haitians, alleging that they were treated differently from those of other nationalities who make it to US shores, WPLG Click10.com reports. Last year, the INS decided that any Haitian who made it to the US would be detained. The suit alleges that the practice has led to Haitians being held at Krome Detention Center and other facilities around the county even when some of those inmates have received political asylum. The suit further says that the policy is unfair, as it applies only to Haitian refugees, and that parole proceedings involving Haitian refugees are often rushed affairs where lawyers are given little time to try the case, there are difficulties getting interpreters and some hearings last only 30 minutes, Click10.com reports. "Up until December, once they had convinced the asylum officer they had a legitimate case, they were being released within days after that interview," immigration lawyer Cheryl Little told WPLG Click10.com. "Since December, virtually none of these Haitians have been released. While detainees of all other nationalities are being quickly released after they pass their.interviews." The INS has not released any comment on the matter. Securities Fraud AT&T CORPORATION: Bernstein Liebhard Commences Securities Suit in NY -------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of persons who acquired At Home Corporation, d/b/a Excite@Home (NASDAQ: ATHM) common stock between April 17, 2001 and August 28, 2001, inclusive. The suit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and alleges that AT&T Corporation and certain current and former officers and directors of At Home violated the federal securities laws by making misstatements regarding, and by failing to disclose adverse material facts regarding, At Home's business and financial condition during the class Period and also by virtue of their status as control persons of At Home. Specifically, the complaint alleges that defendants failed to disclose that At Home was burning through its cash at a substantially higher rate than indicated in its filings with the SEC and in other public statements and that At Home had obtained $100 million worth of convertible note financing in June 2001 based on alleged misrepresentations that subjected the Company to the threat of immediate claims that could put it into bankruptcy. The suit further alleges that defendants affirmatively misrepresented the amount of cash that At Home would need to finance its ongoing operations for the calendar year 2001 by falsely stating in April 2001 that an additional $85 million in financing would be sufficient to meet At Home's needs for cash during 2001. Despite obtaining a total of $185 million in new financing, the complaint alleges, on September 29, 2001, At Home announced that it would seek bankruptcy protection, and on October 23, 2001, At Home Corp.'s share price hit a 52-week low of four cents per share. The suit further alleges that defendant AT&T Corporation, which at all relevant times held a 74% voting interest in At Home, is liable for the foregoing under Section 20(a) of the Securities Exchange Act of 1934 based on its status as a control person of At Home. According to the complaint, due to defendants' deceptive and illegal conduct, the Company's stock price was artificially high throughout the class period, causing plaintiff and the other class members to purchase their securities at inflated prices. For further information, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 or by E-mail: ATHM@bernlieb.com. BAKER HUGHES: Sued For Violations of Federal Securities Laws in S.D. TX ----------------------------------------------------------------------- Baker Hughes, Inc. faces a consolidated securities class action in the US District Court for the Southern District of Texas, filed by shareholders shortly after the Company's December 8, 1999 announcement regarding the accounting issues it discovered at its INTEQ division. The suit makes claims under the Private Securities Litigation Reform Act of 1995. The Company filed motions to dismiss both the shareholder derivative suit and the class action. The Court granted the Company's motions on both actions. No appeal was filed in the shareholder derivative suit, but the class action is currently on appeal at the US Fifth Circuit Court of Appeals. The Company believes the allegations in these suits are without merit, and intends to vigorously defend these lawsuits. Even so, an adverse outcome in this class action litigation could have an adverse effect on the Company's results of operations or financial condition. BIOPURE CORPORATION: Cauley Geller Commences Securities Suit in MA ------------------------------------------------------------------ Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of Massachusetts on behalf of purchasers of Biopure Corporation (Nasdaq:BPUR) common stock during the period between May 8, 2001 and December 6, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. The suit alleges that the Company, a leading developer, manufacturer and marketer of a new class of pharmaceuticals it calls oxygen therapeutics, and its Chairman and Chief Executive Officer, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements concerning the likely timing of the Company's filing with the U.S. Food and Drug Administration (FDA) of its Biologic License Application (BLA) to market Hemopure, its experimental blood substitute for patients undergoing elective surgery. In particular, defendants led investors to believe that the BLA was on track to be filed by year-end 2001. As alleged in the suit, these statements were materially false and misleading because, by commencement of the class period, defendants knew or recklessly ignored the fact that the data collected from the Hemopure trial (which had been completed in August 2000) was significantly deficient and failed to demonstrate that the trial had been conducted in an adequate and well-controlled manner. As such, plaintiff asserts that the data lacked reliability, thereby making any application unlikely to be accepted for filing, much less approved, by the FDA. It is further alleged that defendants also knew that the FDA would not allow a BLA to be filed where the data lacked prima facie reliability. On December 6, 2001, the Company announced that it would not file the Hemopure application until mid-2002, contrary to repeated prior assertions that the BLA would be filed in 2001. The Company blamed the delay on additional facility and process validation requirements for its Cambridge, Massachusetts manufacturing plant. The suit asserts that this was merely a pretext for the delay, which in fact was occasioned by the data deficiencies that had arisen during the clinical trial. As a result of the postponement, the price of Company stock fell to less than $15 per share, well below the $40 plateau above which the stock traded throughout most of the class period. For more information, contact Jackie Addison, Shelly Nicholson, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438 Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com CALPINE CORPORATION: Milberg Weiss Commences Securities Suit in N.D. CA ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach, LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Calpine Corporation (NYSE:CPN) publicly traded securities during the period between January 5, 2001 and December 13, 2001. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company owns, develops, acquires, and operates power-generation facilities and sells electricity and steam, primarily in the US. The Company's stock, which went public in 1996, on a split adjusted basis, went from $2 at the IPO stage to over $33 in January 2001. The suit alleges that the Company's stock price was very important because it was planning at this time to build or acquire $15 billion of plants over the next four years. The financing for these plants was based on the performance of its stock because many of its bond buyers were looking to convert to common stock. If the stock did not perform, financing would be difficult to fund the Company's expansion. However, certain of the Company's manipulative transactions, including those with Enron, such as inflated revenues, began to emerge on December 9, 2001. On December 14, 2001, prior to the market opening, Moody's Investors Service announced that it might cut the credit rating on the Company's $11.6 billion of debt to junk. In response, Company shares plummeted to $12.50, a more than 26% drop. Then, after the close of the market on December 14, 2001, Moody's Investors Service announced that it had in fact cut its rating of the Company's debt to junk. As now revealed, at all times during the class period, defendants issued false and misleading statements and press releases concerning its sale of and demand for power and its ability to generate sufficient cash revenue to service its debt. During the class period, before the disclosure of the true facts, the individual defendants sold their personally held common stock generating more than $34 million in proceeds and the Company raised billions of dollars in a series of debt offerings. For more information, contact William Lerach by Phone: 800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Web site: http://www.milberg.com COMPUCOM SYSTEMS: Denies Allegations in Securities Suit in S.D. NY ------------------------------------------------------------------ CompuCom Systems, Inc. believes it has valid defenses to a class action filed in the US District Court in New York, on behalf of purchasers of the common stock of Opus360 Corporation, where the Company was named as defendant. The suit also names Opus, its officers and directors and its underwriters as co-defendants. The suits allege, among other things, that the prospectus and registration statement for OPUS's initial public offering contained misrepresentations and/or omissions regarding: (1) OPUS's products, including Opus Xchange; (2) OPUS's cash flow and liquidity, including its "cash burn" rate; and (3) OPUS's relationships with its customers. The suits assert claims under Sections 11, 12 and 15 of the Securities Act of 1933, and seek damages in an amount in excess of $70 million. The Company and the other defendants have moved to dismiss this complaint for failure to state a claim upon which relief may be granted. While the outcome of this litigation is uncertain, the Company intends to defend the lawsuits vigorously. DYNEGY INC.: Faces Two Securities Suits Over Failed Merger With Enron --------------------------------------------------------------------- Dynegy, Inc. faces a securities class action in the United States District Court for the Southern District of New York on behalf of all persons or entities who owned common stock of Enron Corporation as of November 28, 2001, relating to the failed merger between the two companies. The suits allege that they are intended third party beneficiaries of the merger agreement dated November 9, 2001 between Enron, the Company and related entities. The suit claims that the Company materially breached the merger agreement by wrongfully terminating it, and that the Company breached the implied covenant of good faith and fair dealing. On February 4, 2002, the Company filed a notice of motion to dismiss or transfer venue to the United States District Court for the Southern District of Texas (Houston Division). Discovery has not yet commenced. The Company faces a similar class action in the 129th Judicial District Court for Harris County, Texas, on behalf of all persons or entities who owned common stock of Enron Corporation as of November 28, 2001. The suit makes substantially similar allegations as to the first lawsuit. The Company has filed an answer on February 4, 2002, denying all allegations. Discovery has not yet commenced. The Company believes the allegations in Enron's adversary proceeding and the other cases arising out of the terminated merger are without merit and will vigorously defend against these claims. An adverse result in these proceedings, however, could have a material adverse effect on the Company's financial position and results of operations. GILAT SATELLITE: Cauley Geller Commences Securities Suit in E.D. NY ------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Eastern District of New York on behalf of purchasers of Gilat Satellite Networks, Ltd. (Nasdaq: GILTF) common stock during the period between November 13, 2000 and October 2, 2001, inclusive. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the suit alleges 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 Company claims that defendants' material omissions and the dissemination of materially false and misleading statements caused its stock price to become artificially inflated, inflicting enormous damages on investors. For more information, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com GILAT SATELLITE: Schoengold Sporn Commences Securities suit in E.D. NY ---------------------------------------------------------------------- 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 in the US District Court for the Eastern District of New York. The suit charges that the Company's stock was artificially inflated due to the defendants' materially false and misleading statements concerning its net income and inventories. The action alleges violations of the United States securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and officers Yoel Gat, Chairman of the Board of Directors and Chief Executive Officer, and Yoav Leibovich, Chief Financial Officer. Among other things, the suit 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. For more information, contact Joel P. Laitman by Phone: 866-348-7700 by Fax: 212-267-8137 by E-mail: Shareholderrelations@spornlaw.com or visit the firm's Web site: http://www.spornlaw.com HANOVER COMPRESSOR: Schoengold Sporn Launches Securities Suit in NY ------------------------------------------------------------------- Schoengold & Sporn, PC initiated a securities class action against Hanover Compressor Company (NYSE: HC) and certain of its key officers and directors in the United States District Court for the Southern District of Texas on behalf of all purchasers of Company stock during the period between November 8, 2000 and January 28, 2002. The suit alleges 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 facts, which were known by the defendants during the class period but concealed from the public, were that certain revenue and net income recognized in the 3rd and 4th quarter should not have been recognized. Thus, the Company's financial statements for the 1st to the 3rd Quarter 2001 were false and misleading in that the revenue and EPS were overstated and the impact of a particular project was not disclosed. Further, in a secret "behind-the-scenes" type transaction, defendants refused to refund money to an investor and instead forwarded the money to a company related to the investor so that the transaction would go uncovered. For more information, contact Ashley Kim by Mail: 19 Fulton Street, Suite 406 New York, New York 10038 by Phone: 212-964-0046 by Fax: 212-267-8137 or by E-mail: shareholderrelations@spornlaw.com IRVINE SENSORS: Wolf Haldenstein Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of California on behalf of purchasers of Irvine Sensors Corporation (NASDAQ: IRSN) securities between January 6, 2000 and September 15, 2001, inclusive, against the Company and certain of its officers and directors. The suit alleges that defendants violated the federal securities laws by issuing a series of material misrepresentations throughout the class period that had the effect of artificially inflating the market price of the Company's securities. The defendants reportedly reiterated their commitment during the class period to the investing public that the Electronic Film System or "EFS-1" device being made by its majority owned subsidiary, Silicon Film Technologies, Inc. (SFI), was virtually commercially viable. However, the EFS-1 suffered from serious and insurmountable technical design flaws, among other grave problems. Put on hold originally, the EFS-1 was to be ready by early summer of 2000. Yet even by September 2000, a pre-production model was still not available for public consumption. Then, in May 2001, defendants announced that certification had been completed on the initial components of EFS-1 and that orders were now being accepted for the product. In truth, however, EFS-1 had not passed the required national or international certification testing and because of serious technical design problems associated with constructing EFS-1, it could not be publicly released. During the summer of 2001, in an effort to rebuild the market's faith in the credibility of the Company's management, the Company announced that William Patton, a veteran businessman, had accepted the position of Chairman and Chief Executive Officer of SFI. However, he never accepted the position. The Company announced on September 15, 2001, that SFI had halted their operations, and was contemplating bankruptcy. The EFS-1 was essentially finished. For further details, contact Fred Taylor Isquith, Michael Miske, George Peters, Gustavo Bruckner 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 Irvine Sensors. JD EDWARDS: Dismissal Decision, Settlement Agreement Approval Pending --------------------------------------------------------------------- The US District Court for the District of Colorado has yet to decide on JD Edward and Company's motion to dismiss the securities class action against the Company and certain of its officers and directors, filed on behalf of purchasers of the Company's common stock during the period between January 22, 1998, and December 3, 1998. The suit charges the defendants with violating the Securities Exchange Act of 1934 through a series of false and misleading statements, and seeks to recover unspecified compensatory damages on behalf of the class members. The Company has reached a settlement in principle of the shareholder class action, the terms of which are still being resolved. The Company believes the final terms will not have a material adverse effect on our financial position, results of operations, or cash flows. The final settlement agreement is subject to court approval and class notice provisions. LEGATO SYSTEMS: Securities Suit in N.D. CA Still in Early Stages ----------------------------------------------------------------- Legato Systems, Inc. vehemently denies the allegations in a second consolidated securities class action pending since January 2000 in the US District Court, Northern District of California, against the Company and certain of its directors and officers. The suit generally alleges that, between April 22, 1999 and May 17, 2000, the defendants made false or misleading statements of material fact about the Company's prospects and failed to follow generally accepted accounting principles in violation of the federal securities laws. The Company vows to mount a vigorous defense against the suits, but cannot give any assurance of a verdict in its favor. LEGATO SYSTEMS: To Vigorously Defend Against Derivative Suits in CA ------------------------------------------------------------------- Legato Systems, Inc. faces three shareholder derivative suits in California State and Federal Courts, charging it and certain of its officers and directors with breaching its fiduciary duty to shareholders between April 22, 1999 and May 17, 2000. The first suit is pending in the US District Court, Northern District of California, alleging that the defendants breached their fiduciary duties by issuing false and misleading statements about the Company's business prospects and engaged in improper insider trading. The defendants moved to dismiss the derivative complaint, which the court granted with leave to amend. The plaintiffs then filed an amended complaint, but later moved to voluntarily dismiss the amended suit with the right to re-file the complaint at a later date if they choose to do so. The Court granted the motion in November 2001. Another shareholder derivative action was filed in the Superior Court of California, County of Santa Clara, while another was lodged in the Superior Court of California, County of San Mateo. Both state derivative complaints generally allege the same conduct as the derivative action filed in federal court, claiming that the Company's officers and directors breached their fiduciary duties for the same period. The state derivative cases were later consolidated in San Mateo County. The Company intends to defend all of these actions vigorously. However, there can be no assurance that any of the complaints discussed above will be resolved without costly litigation, or in a manner that is not materially adverse to its financial position, results of operations or cash flows. LUMENIS LTD.: Bernstein Liebhard Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf all persons who acquired Lumenis Ltd. (NASDAQ: LUME) securities between January 7, 2002 and February 28, 2002, in the United States District Court for the Southern District of New York. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. The complaint alleges that throughout the class period, defendants discounted and disputed marketplace rumors about its operations even as it knew it was being investigated by the Securities and Exchange Commission (SEC) and that its distributors had been contacted by the SEC. Additionally, even after announcing in a press release that it was subject to an SEC investigation, the Company continued to hide the fact that it had been aware of the SEC investigation and had been providing information to the SEC for several weeks. On February 28, 2002, the Company revealed the facts concerning the SEC investigation in a conference call. These shocking revelations caused the stock to plummet 30% in one day and more than 69% from its class period high, resulting in damages to plaintiff and members of the class. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 or by E-mail: LUME@bernlieb.com. NEWPOWER HOLDINGS: Cauley Geller Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action on behalf of all individuals and institutional investors that purchased the common stock of NewPower Holdings, Inc. (NYSE:NPW) between October 5, 2000 and December 5, 2001, inclusive. The suit is pending in the United States District Court for the Southern District of New York. The suit charges the Company and its officers and directors with violations of the Securities Exchange Act of 1934. In addition, the Company, its officers and directors, as well as underwriters of its October 5, 2000 initial public offering, are also charged with violations of the Securities Act of 1933. The complaint alleges that the Company, a nationwide provider of electrical power and natural gas formed by Enron in 1999, engaged in a pattern of misleadingly described policies and transactions throughout the class period that served to mask the true nature of its business, and its financial condition. Specifically, the complaint alleges that the defendants made numerous false and misleading statements concerning its ability to succeed in a volatile energy market through sophisticated risk management strategies conceived and largely managed by its affiliate, Enron Energy Services, Inc. (EES), an Enron subsidiary. The suit asserts that neither EES nor the Company had identified any hedging strategies that could enable the Company to operate profitably under market conditions prevailing at the time of the IPO or, indeed, at any time thereafter. Moreover, as the complaint details, despite representations in the IPO prospectus designed to portray Enron and its affiliates as long-term investors in the Company and believers in its prospects for success, Enron, through its CFO, Andrew Fastow, had set up a partnership known as "Raptor III," whose purpose was to hedge Enron's position against such an anticipated decline in the Company's stock. Although the prospectus purported to describe fully the relationship between Enron, its affiliates, and the Company, and all of their related party transactions, it failed to fully disclose the extremely troubling and material Raptor transactions. As a result of these various misrepresentations and omissions, the IPO garnered net proceeds to the Company of $543 million. In addition, certain defendants made numerous statements concerning the Company's financial performance throughout the class period that falsely attributed disappointing results to factors beyond its control. As the complaint charges, they schemed to omit mention of the true reasons the Company was drastically cutting costs, i.e., that it did not have its claimed hedging system against high prices in place (either independently or with the aid of Enron), and that collateral obligations carried a material risk of loss, thereby sapping its ability to tap enough resources to successfully carry out its business plan. Thereafter, in connection with the collapse of Enron amid scandal in the fall of 2001, the Company and other defendants belatedly began to disclose that they had no substantial hedges in place, and that, contrary to their repeated representations, a substantial portion (and perhaps all) of the enormous collateral they had posted was at risk of loss. The suit alleges that defendants have now admitted in filings made by them with Securities and Exchange Commission that the registration statements were false and misleading in that they failed to disclose that, contrary to defendants' prior representations, the collateral postings were not guaranteed to return to the Company completely or even substantially (as had been previously represented), but were at risk of being seized by the creditor, Enron. The Company misrepresented the true risk the Enron forward contracts presented because the revelation of the truth would have led to investor suspicions about the very viability of its business plan, its ability to hedge against higher prices, the adequacy of its liquid resources, and the fairness of its dealings with Enron. For more details, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com NVIDIA CORPORATION: Kaplan Fox Commences Securities Suit in N.D. CA ------------------------------------------------------------------- Kaplan Fox and Kilsheimer LLP initiated a securities class action against NVIDIA Corporation (NASDAQ: NVDA) and certain of the Company's officers and directors in the United States District Court for the Northern District of California, on behalf of all persons or entities who purchased or otherwise acquired the company's common stock of NVIDIA between February 15, 2000 and February 14, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934, and alleges, among other things, that during the class period defendants issued a series of false and misleading statements concerning the Company's financial condition. In order to overstate revenues in its financial statements, the Company violated generally accepted accounting principles and SEC rules by engaging in an improper scheme. As a result of defendants' misleading statements and accounting improprieties during the class period, the price of the Company's common stock traded at artificially inflated prices. For more details, contact Frederic S. Fox or Hae Sung Nam by Mail: 805 Third Avenue, 22nd Floor New York, NY 10022 by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-mail: mail@kaplanfox.com PERFORMANCE FOOD: Could Face Securities Suit After Income Restatement --------------------------------------------------------------------- The Law Firm of Adkins, Kelston & Zavez, PC is investigating potential shareholder claims against Performance Food Group Companies (Nasdaq:PFGC), a Richmond, Virginia-based food wholesaler. The Company may have committed violations of federal securities laws. According to a March 11, 2002 press release, the Company has identified "accounting errors" at an operating subsidiary that will reduce net income by an estimated $4 million to $5 million. For more information, contact John Peter Zavez by Mail: 90 Canal Street, Boston, MA 02114 by Phone: 617-367-1040 by Fax: 617-742-8280 or by E-mail: Jzavez@AKZLaw.com. PLAINS ALL: Settles Securities Suits For $30 Million S.D. Texas --------------------------------------------------------------- Plains All American Pipeline, LP settled two consolidated securities class actions charging it and certain of its former general partner Plains Resources' officers and directors, for violations of federal securities laws. Twenty suits were originally filed in the US District Court for the Southern District of Texas, primarily in connection with unauthorized trading by a former employee, and were later consolidated into two actions. The first suit was filed by purchasers of Plains Resources' common stock and options, while the second suit was filed by purchasers of the Company's common units. The suits alleged that the defendants were liable for securities fraud violations under Rule l0b-5 and Section 20(a) of the Securities Exchange Act of 1934 and for making false registration statements under Sections 11 and 15 of the Securities Act of 1933. The Company reached an agreement with representatives for the plaintiffs for the settlement of both of the consolidated suits, and in January 2001, the Company deposited approximately $30.0 million under the terms of the settlement agreement. The Court granted final settlement approval in January 2002. PLAINS ALL: Settles Derivative Shareholder Suits For $1.1M in DE, TX -------------------------------------------------------------------- Plains All American Resources, LP settled two derivative shareholder suits pending in the Delaware Chancery Court, New Castle County and in the US District Court for the Southern District of Texas, relating to unauthorized trading by a former Company employee. Both derivative suits named Plains Resources, the Company's former general partner, its directors and certain of its officers as defendants, and allege that they breached the fiduciary duties that they owed to the Company and its unit-holders by failing to monitor properly the activities of its employees. The suits also seek, among other things, to: (1) cause the defendants to account for all losses and damages allegedly sustained by the Company from the unauthorized trading losses; (2) establish and maintain effective internal controls ensuring that the Company's affiliates and persons responsible for our affairs do not engage in wrongful practices detrimental to the Company; and (3) to pay for the plaintiffs' costs and expenses in the litigation, including reasonable attorneys' fees, accountants' fees and experts' fees. The Company has agreed with the plaintiffs to settle the Delaware suit for approximately $1.1 million. On March 6, 2002, the Delaware court approved the settlement. The Company has also reached an agreement in principle with the plaintiffs in the Texas litigation, subject to approval by the Texas federal court, to settle the suit for approximately $112,500. In a disclosure to the SEC, the Company expressed confidence that the litigation will not have a materially adverse effect on its financial condition, results of operations or cash flows. QUICKLOGIC CORPORATION: To Mount Vigorous Defense v. Securities Suits --------------------------------------------------------------------- Quicklogic Corporation labeled "without merit" the securities class action pending in the US District Court for the Southern District of New York against the Company, its officers and directors, and some investment banks that underwrote its initial public offerings. The suit generally alleges that the underwriters obtained excessive and undisclosed commissions in connection with the allocation of shares of common stock in the Company's initial public offering and maintained artificially high prices through "tie-in" arrangements which required customers to buy shares in the aftermarket at pre-determined prices. The suit alleges that the Company and its current officers and directors violated sections of the Securities Act of 1933, and the Securities Exchange Act of 1934 because its registration statements did not disclose the purported misconduct of the underwriters. The Company intends to defend the case vigorously, and believes that it is part of the trend of securities suits pending against more than 300 companies who attempted their initial public offerings during the last two years. SYMBOL TECHNOLOGIES: LeBlanc Waddell Lodges Securities Suit in E.D. NY ---------------------------------------------------------------------- LeBlanc & Waddell LLC initiated a securities class action, on behalf of investors, against Symbol Technologies, Inc. (NYSE:SBL) for securities fraud, claiming that the company artificially inflated its stock price. The suit was filed in the US District Court for the Eastern District of New York on behalf of all investors who bought the Company's stock from October 20, 2000 through February 12, 2002. The suit charges the Company and three top officers with engaging in improper accounting practices to keep the Company's financial results in line with analysts' expectations. Specifically, the defendants are accused of improperly booking a $10 million royalty payment in the third quarter of 2000 and of improperly recording more than $40 million in revenue in the first quarter of 2001. When news of the suspicious accounting practices first emerged in a February 13, 2002 newspaper article, the price of Company stock quickly dropped 17%, or $2.50 a share, to $11.70 a share. The following day, February 14, 2002, the Company announced the abrupt retirement of its Chief Executive Officer and revealed poor quarterly and annual results. The Company's stock price again fell sharply on the new reports, closing at $8.40 per share on February 15, 2002. For more information, contact Roger LeBlanc or Chad A. Dudley by Mail: 5353 Essen Lane, Suite 420, Baton Rouge LA 70809 by Phone: 800-988-3514 or by E-mail: rogerleblanc@lw-law.net WACHOVIA CORPORATION: Asks NC Court To Dismiss Securities Fraud Suit -------------------------------------------------------------------- Wachovia Corporation asked the US District Court for the Western District of North Carolina to dismiss the consolidated securities suits filed against it and certain of its executive officers on behalf of purchasers of the Company's common stock from August 14, 1998 to May 24,1999. The suit alleges various violations of federal securities law including violations of Section 10(b) of the Exchange Act. The defendants allegedly made materially misleading statements and/or material omissions which artificially inflated prices for the Company's common stock. The suit further alleges that management failed to disclose integration problems in the CoreStates Financial Corporation merger and misstated the value of our interest in certain mortgage-backed securities of The Money Store, Inc. (TMSI) acquired by Legacy First Union on June 30, 1998. In January 2001, the US District Court for the Western District of North Carolina granted the Company's motion to dismiss the litigation for failure to state a claim upon which relief could be granted. Although the plaintiffs did not appeal this ruling, they sought, and received permission to file an amended complaint. In August 2001, plaintiffs filed an amended complaint that abandoned their previous allegations concerning the CoreStates Financial Corp merger and primarily raised new allegations of irregularities at TMSI prior to its acquisition by Legacy First Union. In October 2001, the Company filed a motion to dismiss this new complaint on several grounds, including that the statute of limitations bars this complaint. The court has yet to rule on this motion. The Company believes the allegations contained in these actions are without merit and will vigorously defend against them. The Company is also confident that the ultimate outcome of this litigation will not have a material adverse effect on its consolidated financial position. ********* 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 * * *