/raid1/www/Hosts/bankrupt/CAR_Public/020321.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, March 21, 2002, Vol. 4, No. 57
Headlines
BERMUDA: Group Calls For Better Rights For Fathers in Custody Cases
CURATIVE HEALTH: Agrees To Settle For $10.5 Mil Securities Fraud Suit
FLORIDA: Broward County To Join Fight v. Canker Eradication Program
FLORIDA: Orlando Officials Ask Firefighters To Reimburse Legal Fees
FLORIDA POWER: Supreme Court To Hear Arguments On Claims Under ADEA
GLOBALSANTAFE CORP.: Settles For $9.3M Wage Antitrust Suit in S.D. TX
HECLA MINING: To Mount Vigorous Defense To Idaho Environmental Suit
IBP INC.: Faces Suit For Hiring Illegal Immigrants in Illinois Plants
KANEB PIPELINE: Settles Pipeline Rupture Suit For $2.25M
PATRICK CORPORATION: $8M Settlement Reached in "Union-Busting" Suit
PELE-PHONE INC.: Settles Suit Over Telephone Rates For $1.19 Million
PREPAID LEGAL: Sales Associates Sue For "Unregistered" Marketing Plan
SMART & FINAL: Labels "Without Merit" Employees Suit in CA State Court
UNOCAL CORPORATION: Sued For Mistreatment, Forced Labor in Myanmar
UNOCAL CORPORATION: Sued For Conspiring To Fix CARB Diesel Fuel Prices
VIDEOGAME COMPANIES: CO Federal Court Dismisses Columbine High Case
WARREN GENERAL: Certification Allows 500 Patients To Join Privacy Suit
Securities Fraud
ARTHUR ANDERSEN: Singapore Partners Say Suits Will Not Affect Them
CORNING INC.: Wolf Haldenstein Commences Securities Suit in W.D. NY
FLEMING FOOD: Oklahoma Court's Ruling Dismissing Securities Suit Stands
FUNDTECH LP: NJ Court Dismisses Without Prejudice Securities Fraud Suit
MEDI-HUT CO.: Denies Securities Suits Allegations in New Jersey
METAWAVE COMMUNICATIONS: Kirby McInerney Files Securities Suit in WA
METAWAVE COMMUNICATIONS: Milberg Weiss Lodges Securities Suit in WA
NOVELL INC.: Asks Utah Federal Court To Dismiss Amended Securities Suit
PREPAID LEGAL: Securities Suit Dismissed, Appeal Deadline Set For April
PREPAID LEGAL: Expects Dismissal of Suits For Failure To State Claim
PRG SCHULTZ: Faces Suit For Securities Act Violations in N.D. Georgia
TYCO INTERNATIONAL: Weiss Yourman Commences Securities Suit in S.D. NY
WELLS FUND: Limited Partners File Securities Fraud Suit In N.D. GA
WILLIAMS COMPANIES: Schoengold Sporn Lodges Securities Suit in N.D. OK
*********
BERMUDA: Group Calls For Better Rights For Fathers in Custody Cases
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The Bermuda government faces a possible class action filed by a group
called Fathers In Action, over the way it handles child custody cases,
the Royal Gazette reports.
The group was allegedly a broad-based group whose objectives are to
improve decision making in custody cases for divorcees. An
advertisement in the Royal Gazette described the group as representing
"individuals who believe that the Government Department of Child and
Family Services has been discriminatory in both the approach to and the
content of Social Inquiry reports prepared for cases which appear
before the courts." The group is now undertaking legal research and
compiling case histories and is inviting people who believe they have
been wronged by a Social Inquiry report compiled by the Child and
Family Services Department to join the action.
Childwatch President, Eddie Fisher, said a survey conducted by his
group showed that in child custody cases, most social service reports
were done by women and that fathers' concerns tended to be ignored, and
that good fathers often ended up as bit players in their children's
lives once they lost custody in divorce cases. He is not connected
with Fathers In Action but supported their campaign asking the
government to improve fathers' rights.
CURATIVE HEALTH: Agrees To Settle For $10.5 Mil Securities Fraud Suit
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Curative Health Services reached a tentative agreement to settle for
US$10.5 million a securities class action filed against it after the US
Justice department charged it with engaging in illegal Medicare
reimbursements, Newsday reports.
In April 1999, the Justice Department charged the Company with Medicare
fraud. Government documents said that the Company engaged in improper
patient referrals and also that it had charged excessive fees to
Columbia/HCA, a hospital company, which were reimbursed by Medicare,
according to a Newsday report. The development caused the Company's
stock to fall from $11 to about $4, a 60% in one day. The suits
alleged that the Company's improper practices, "caused the company's
publicly-reported revenues and earnings to be materially overstated."
Under the settlement, the Company will pay $6.5 million in common stock
or cash to settle the class action suits against it. The remaining $4
million, it said, will be paid from insurance. The Court has yet to
approve the settlement.
Joe Feshbach, the Company's Chairman and interim Chief Executive
Officer, said in a statement that he believed the class-action claims
were "without merit," but that settlement was in the best interests of
shareholders, according to Newsday.
FLORIDA: Broward County To Join Fight v. Canker Eradication Program
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Broward County is joining a class action suit against the State of
Florida over its controversial citrus canker law, after county
commissioners voted 8-0, agreeing to let the County Attorney's Office
represent homeowners in the challenge, the South Florida Sun-Sentinel
reports.
Florida has instituted a program which authorizes it to cut healthy
citrus trees to stop the spread of "canker," a bacteria that causes
brown blemishes on fruit and can cause it to drop prematurely from
trees. Governor Jeb Bush signed a law last week, which allows the
State to destroy healthy trees located within 1,900 feet of a tree
infected with citrus canker.
The program has spurred enormous criticism from homeowners, who say the
State is trespassing on their land to protect the citrus industry.
Broward County Commission Chairwoman, Lori Parrish, told the Sun-
Sentinel the County must take on the legal challenge. She explains,
"No homeowner could take on the State government, (this is for) the
people of Broward County who couldn't afford to do it by themselves .
You go to work and you wind up with four guys in your backyard with a
McCulloch chain saw."
State officials say stopping the disease is a priority in Central
Florida, where citrus is a key industry.
FLORIDA: Orlando Officials Ask Firefighters To Reimburse Legal Fees
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Officials of Orlando, Florida want the firefighters who filed a class
action against the City for its alleged failure to inform them of
serious medical problems to reimburse the City for its legal expenses
after the 5th District Court of Appeals refused to hear their lawsuit
for the second time, the Orlando Sentinel reports.
Thirteen firefighters sued the City in July, alleging that doctors at
an employee medical clinic neglected to tell them about their serious
medical problems like hepatitis and heart and lung ailments. The suit
was later rejected, and the firefighters filed an appeal with the 5th
District.
Now that the Appeals Court has rejected the suit, the City is demanding
that the firefighters reimburse more than $220,000 in legal fees. City
Attorney Scott Gabrielson told the Sentinel, "The claim against these
individuals was frivolous.The idea that there was a 20-year conspiracy
to cover up these firefighters' health problems - there was no evidence
to support that."
The firefighters described the City's push for attorneys' fees as
"vindictive." Firefighter Alba Hall told the Sentinel, "It just holds
with what they've done all along. They didn't tell us about our
illnesses because of money, and now they're trying to go after our
money because we tried to protect our health.They're just trying to rub
our noses in it."
FLORIDA POWER: Supreme Court To Hear Arguments On Claims Under ADEA
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The US Supreme Court scheduled for today a hearing on oral arguments
regarding whether disparate claims can be brought under the Age
Discrimination in Employment Act (ADEA) in the class action against
Florida Power Corporation.
The suit charges the company with age discrimination and seeks back
pay, reinstatement or front pay through their projected dates of normal
retirement, costs and attorneys' fees. The number of plaintiffs
remains at 116, but four of those plaintiffs have had their federal
claims dismissed and 74 others have had their state age claims
dismissed.
In October 1996, the Atlanta Federal Court approved an agreement
between the parties to provisionally certify this case as a class
action suit under the ADEA. The Company then filed a motion to
decertify the class, which the Court granted.
In October 1999, the judge certified the question of whether the case
should be tried as a class action to the Eleventh Circuit Court of
Appeals for immediate appellate review. In December 1999, the Court of
Appeals agreed to review the judge's order decertifying the class. In
anticipation of a potential ruling decertifying the case as a class
action, plaintiffs filed a virtually identical lawsuit, which
identified all opt-in plaintiffs as named plaintiffs. In July 2001,
the Appellate Court ruled that as a matter of law, disparate claims
cannot be brought under the ADEA, thus decertifying the suit as a class
action.
The plaintiffs filed a petition in the United States Supreme Court,
requesting a hearing of the case, on the issue of whether disparate
claims can be brought under the ADEA. On December 3, 2001, the United
States Supreme Court agreed to hear the case. As of this date, the
trial court has not stayed the litigation pending the decision of the
Supreme Court.
GLOBALSANTAFE CORP.: Settles For $9.3M Wage Antitrust Suit in S.D. TX
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GlobalSantaFe Corporation agreed to settle for US$9.3 million a class
action suit filed in the US District Court for the Southern District of
Texas against their predecessors, alleging a conspiracy to fix wages of
employees of their offshore contract drilling business.
The suit names as defendants the Company's predecessors Global Marine,
Inc., Santa Fe International and a number of other participants in the
offshore contract drilling business in the Gulf of Mexico. Global
Marine and Santa Fe later merged to form the Company.
The suit alleges a conspiracy among the defendants to fix or restrain
wages and benefits paid to their offshore employees, and seeks an
unspecified amount of damages, treble damages and other relief.
Although both Global Marine and Santa Fe International vigorously
denied the allegations, each agreed to settle the suit, prior to the
date of their merger. Global Marine agreed to pay a total of $8.7
million and Santa Fe International agreed to pay $0.6 million.
The settlements are subject to court approval, which has already
rendered its preliminary approval. The Company expects the settlements
to receive the required approval. However, should the settlement be
disapproved, the Company vowed to vigorously defend the lawsuit. The
Company does not expect that the matter will have an adverse effect on
its business or financial position.
HECLA MINING: To Mount Vigorous Defense To Idaho Environmental Suit
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The Hecla Mining Company faces a class action pending in the Idaho
District Court, County of Kootenai, against it and several other
corporate defendants, demanding that the Companies finance medical
monitoring to identify and treat health problems allegedly caused by
their mining and smelting activities, which poisoned the region's water
and soil with lead and other heavy metals.
The suit was filed on behalf of residents within a 21-square mile
Superfund site surrounding the Bunker Hill mining complex, known as the
Box, and those living within the greater Coeur d'Alene river basin,
which includes an estimated half-million people residing in Post Falls,
Idaho and Spokane, Wash. The class area includes all those living in
the Coeur d'Alene river basin. The suit pursues three types of relief:
(1) various medical monitoring programs,
(2) a real property remediation and restoration program, and
(3) damages for diminution in property value, plus other damages
and costs.
The Company believes the suit is subject to challenge on a number of
bases and intends to vigorously defend itself in this litigation.
IBP INC.: Faces Suit For Hiring Illegal Immigrants in Illinois Plants
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IBP Inc. faces a class action in Rock Island, Illinois, accusing it of
using an underground network of recruiters to bring illegal immigrants
into the United States to work in its beef packing plant in Joslin,
Illinois, the Independent.com reports.
The Company allegedly violated racketeering laws by bringing in illegal
immigrants to work in their packing plants, to save on wages by keeping
them at unnaturally low levels. The Company allegedly used recruiters
who smuggled the immigrants into the country, and set them up with
phony documents. These workers are paid as little as US$7 an hour, and
are induced to continue working due to their fear of apprehension.
The suit states, "Owing to their constant fear of apprehension by law
enforcement authorities, IBP's illegal immigrant workers tolerate
deplorable workplace conditions and do not file workers' compensation
claims when they are injured on the job."
The Company also allegedly hired recruiters, who are paid $200 to $500
for each worker, who are told to look for people who are "vulnerable,
submissive, have little knowledge of the US legal system and a pressing
need for immediate employment," the Independent.com reports.
The Company has denied the charges, saying in a statement, "We are
extremely offended by the accusations made in this lawsuit.The
plaintiffs are trying to paint a picture of our Company that is unfair
and grossly inaccurate." Company spokesman Gary Mickelson told the
Independent.com, "The references in the lawsuit are flat out
inaccurate. We don't want to employ anybody in this country without
proper authorization."
KANEB PIPELINE: Settles Pipeline Rupture Suit For $2.25M
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Kaneb Pipe Line Partners LLP's Support Terminal Services (ST Services)
agreed to settle for US$2.25 million a class action commenced due to
damages brought about by an April 2000 fuel oil pipeline rupture in
Maryland. The pipeline was owned by Potomac Electric Power Company
(PEPCO) and operated by a partnership in which ST Services is general
partner.
The suits were commenced in Maryland Trial Court by property and/or
business owners, alleging damages in unspecified amounts under various
theories, including under the Oil Pollution Act (OPA). The suits were
later consolidated.
The Maryland Court recently granted preliminary approval of the
settlement, with ST Services and PEPCO each contributing half of the
settlement fund. Notice of the proposed settlement will be sent to
putative class members and putative class members have until March 26,
2002 to opt out. A hearing on final settlement will be held on April
15, 2002.
The Company expects that most class members will elect to participate
in the class settlement, but does not discount the possibility that
even if the settlement becomes final, the Company may still face
litigation from opt-out plaintiffs. However, the Company is confident
that these actions will not have a material adverse effect on its
financial condition.
PATRICK CORPORATION: $8M Settlement Reached in "Union-Busting" Suit
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Australian stevedoring company Patrick Corporation has agreed to settle
for US$8 million two federal class actions filed by 200 of its former
employees, after it attempted to break a union stronghold on the docks
in a 1998 waterfront dispute, the Sunday Mail reports.
The suit alleges that the Company engaged in misleading and deceptive
conduct under the Trade Practices Act in employing the workers, mainly
current or ex-servicemen to join the Producers and Consumers Stevedores
(PCS) as "union busters". The Company and the National Farmers
Federation had allegedly conspired to secretly train PCS workers in
Dubai to replace union labor on the docks.
In a statement, the Company said the action had been ongoing for four
years and had consumed hundreds of hours of management time and legal
costs. "The proceedings were settled for a total of $8 million dollars
of which approximately half comprised the claimants' legal and other
costs," the statement said.
PELE-PHONE INC.: Settles Suit Over Telephone Rates For $1.19 Million
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Israeli communications company Pele-phone, Inc. has agreed to settle a
class action filed by Mordechai Levy, owner of SR Sophisticated
Industries, alleging the Company overcharged on reciprocal compensation
rates and phone-to-phone rates.
According to Israel's Business Arena, the Company asserted it acted
properly and in good faith, and the sums collected from its subscribers
were justified under Ministry of Communications regulations. The
disputed sum totaled ILS10 million (US$2.1 million), and the parties
compromised on ILS5.5 million (US$1.19 million). Under the compromise
agreement, the Company will provide 1.8 million subscribers a monetary
credit worth five minutes of airtime. The Company also admitted no
wrongdoing in entering the settlement.
PREPAID LEGAL: Sales Associates Sue For "Unregistered" Marketing Plan
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Prepaid Legal Services, Inc. faces a class action pending in the United
States District Court for the Western District of Oklahoma against the
Company and certain of its executive officers, on behalf of all of the
Company's sales associates.
The suit alleges that the marketing plan offered by the Company
constitutes a security under the Securities Act of 1933 and seeks
remedies for failure to register the marketing plan as a security and
for violations of the anti-fraud provisions of the Securities Act of
1933 and the Securities Exchange Act of 1934 in connection with
representations alleged to have been made in connection with the
marketing plan. The suit also alleges violations of:
(1) the Oklahoma Securities Act,
(2) the Oklahoma Business Opportunities Sales Act,
(3) breach of contract,
(4) breach of duty of good faith and fair dealing
(5) unjust enrichment,
(6) violation of the Oklahoma Consumer Protection Act, and
(7) negligent supervision.
The Company intends to vigorously defend this case. The case is in the
preliminary stages and the ultimate outcome is not yet determinable.
SMART & FINAL: Labels "Without Merit" Employees Suit in CA State Court
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Smart & Final, Inc. faces a class action filed in the Superior Court
for the State of California for the County of Los Angeles, on behalf of
the Company's store managers and assistant managers in California. The
suit alleges that the Company misclassified the status of store
managers and assistant managers in California as "exempt" employees.
The Company is actively investigating the merits of this action and
believes:
(1) the merits of this action do not warrant class action status;
(2) that it has certain defenses to the claim; and
(3) that the ultimate determination of this action will not have a
material adverse effect on its results of operations or
financial position.
UNOCAL CORPORATION: Sued For Mistreatment, Forced Labor in Myanmar
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Unocal Corporation faces several class actions in California federal
and state courts, holding the Company liable for alleged mistreatment
and forced labor in Myanmar in connection with the construction of the
Yadana natural gas pipeline.
Several suits are pending in the US District Court for the Central
District of California, on behalf of residents and former residents of
the Tenasserim region of Myanmar. The suits contained numerous counts
and alleged violations of several US and California laws and US
treaties during the construction of the pipeline, which transports
natural gas from fields in the Andaman Sea across Myanmar to Thailand.
In its answers to amended complaints in both actions, the Company
denied that it was either properly named as a party or subject to joint
venture, partnership or other liability with respect to the Yadana
pipeline. In 2000, the Court granted the Company's motions for summary
judgment in the suits. The Court also ordered the federal law claims
dismissed with prejudice and, after declining to exercise jurisdiction
over the pendant state law claims, ordered them dismissed without
prejudice.
Subsequently, the plaintiffs in both actions appealed the final
judgments to the US Court of Appeals for the Ninth Circuit, where oral
argument was conducted in December 2001. The court's ruling on the
appeals remains pending.
In 2000, following the dismissal of their claims by the Federal Court,
the plaintiffs filed actions against the Company in the Superior Court
of the State of California for the County of Los Angeles, Central
District. The suits allege that, by virtue of the Company's
participation in the Yadana project, it is liable under California law
for alleged acts of mistreatment and forced labor by the government of
Myanmar. The suits contain numerous counts alleging various violations
by the defendants of the constitution, statutes and common law of
California.
With respect to liability for alleged unfair business practices, the
federal suit is also styled as a purported class action on behalf of
two classes of plaintiffs:
(1) all affected residents and former residents of the Tenasserim
region of Myanmar; and
(2) all California residents and the general public within the
State of California
The Company's demurrers, which sought to have the actions dismissed
from the State Court, were denied in September 2001. Subsequently, the
Company moved for summary judgment in both actions on all claims, which
motions remain pending.
UNOCAL CORPORATION: Sued For Conspiring To Fix CARB Diesel Fuel Prices
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Unocal Corporation faces a purported class action pending in the
California Superior Court for Sacramento County against the Company and
eight major California oil refiners by direct and indirect purchasers
of diesel fuel in the state of California from March 1996 through 1997.
The suit alleges that the defendants conspired to restrict the
production and fix the price of "CARB" diesel fuel in violation of the
California Cartwright and Unfair Competition Acts.
The Company and its co-defendants believe that there is no merit to the
plaintiffs' claim that there was a conspiracy to fix prices or restrict
the supply of CARB diesel fuel. Moreover, even if such an agreement
did exist among some of the defendants, the Company believes that there
is no evidence linking it to such an agreement. Further, the Company
believes that the sale of its marketing and refining assets to Tosco in
1997 would be deemed to constitute an effective withdrawal from any
alleged conspiracy.
In 2000, the Court entered a stay in this case pending the decision of
the California Supreme Court in the case of Aguilar v. Atlantic
Richfield Company. In light of the decision favorable to the defendants
in the Aguilar case by the California Supreme Court in June 2001, the
Company no longer considers this case to be material.
VIDEOGAME COMPANIES: CO Federal Court Dismisses Columbine High Case
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The US District Court for the District of Colorado dismissed a class
action filed against several video and computer game publishers on
behalf of all persons killed or injured by the shootings which occurred
at Columbine High School on April 20, 1999.
The suit alleged that the video game defendants negligently caused
injury to the plaintiffs as a result of their distribution of
unidentified "violent" video games, which induced two minors to kill a
teacher and to kill or harm their high school classmates. The suit
sought:
(1) compensatory damages in an amount not less than $15,000 for
each plaintiff in the class, but up to $20 million for some of
the members of the class;
(2) punitive damages in the amount of $5 billion;
(3) statutory damages against certain other defendants in the
action; and
(4) equitable relief to address the marketing and distribution of
"violent" video games to children.
WARREN GENERAL: Certification Allows 500 Patients To Join Privacy Suit
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Ohio Judge Mary Cacioppo granted class certification to a class action
suit against the former Warren General hospital, charging it with
providing confidential medical records to a private law firm. The
ruling allowed 555 patients to join the suit, the Tribune Chronicle
reports.
The hospital, presently being managed by HM Health Services, allegedly
provided the records to law firm Elliot, Heller, Maaz, Moro and Magill,
who used the records for a program to assist disabled persons collect
Social Security benefits that would help in the payment of their
medical bills. The firm collected admissions records each week and
reviewed them to identify patients suffering from disability and was
paid for its services by Social Security Administration, the Tribune
reports.
The class certification covers inpatients, outpatients, emergency room
patients or walk-in medical clinic patients between April 29, 1993, and
June 6, 1995. The suit was originally assigned to Judge W. Wyatt McKay
and later to Cacioppo, who in October 1996 granted a summary judgment
to the hospital and the law firm, dismissing the case. The 11th
District Court of Appeals overturned the ruling in March 1998.
Securities Fraud
ARTHUR ANDERSEN: Singapore Partners Say Suits Will Not Affect Them
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Arthur Andersen's Singapore partners remain confident that legal
actions taken against the Company and its global parent, Andersen
Worldwide, will not have a material effect on its operations, the
Straits Times reports.
The local partnership allegedly is a separate entity from Andersen
Worldwide, because it is owned by Singapore partners, and that the
Swiss-based Andersen Worldwide does not hold a stake in any of the
partnerships around the world.
However, lawyer Steve Berman of Hagens Berman disagreed, saying all
Andersen affiliates were liable for the actions of the parent company,
Bloomberg News reported. "[If] Andersen partners think they are going
to walk away from liability, they are mistaken," Mr. Berman said. He
added that the "profit-sharing, exchange of advertising and sharing of
costs" between Andersen's worldwide partners make them liable.
The controversial accounting firm faces numerous class actions for its
role in the collapse of Enron Corporation. The suits accuse Enron and
the firm of accounting inaccuracies and destruction of documents
related to its financial position. Mr. Berman told Bloomberg News, he
may broaden the focus of the current United States lawsuit to include
the global partnership.
The firm's Spanish and Chilean partners are planning to separate from
the firm, as are its Italian, French and Portuguese partners.
CORNING INC.: Wolf Haldenstein Commences Securities Suit in W.D. NY
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Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Western District of
New York on behalf of purchasers of Corning, Inc. (NYSE: GLW)
securities between September 27, 2000 and July 10, 2001, inclusive,
against the Company and certain of its officers and directors.
The suit alleges that defendants violated the federal securities laws
by issuing false and misleading statements throughout the class period
that had the effect of artificially inflating the market price of the
Company's securities.
On November 6, 2000, the Company raised approximately $4.4 billion
through the previously announced dual tranche offering of common stock
and convertible debt. As announced earlier, the proceeds were used to
provide for an aggressive expansion of the Company's optical production
capacity and to pay for the previously announced $3.6 billion cash
acquisition of Pirelli S.P.A.'s interest in Pirelli's optical
components and devices business.
The complaint alleges that the prospectus of the offering was false and
misleading. The prospectus expressed that the Company's growth would
remain potent, while the demand for its optical cable network
technologies was slowing as its primary customers were undergoing
severe and relentless business slowdowns. The alleged "exceptionally
robust demand" the Company had reported in the prospectus was the
result of a substantial inventory buildup at the Company's customers'
businesses. The Company was amassing hundreds of millions of dollars
of obsolete inventory.
Finally, an acquisition from Pirelli, was marked with problems as the
business that the Company had acquired had only one customer, Cisco,
which in turn was struggling with a considerable downswing in its
business. The projection of 25% earnings growth, reflected in the
prospectus, in 2001 was lacking in probability.
Following the offering, the Company continued to tell analysts that
demand for its photonics products was strong, that it would continue to
be healthy throughout 2001, and that it had taken the steps to isolate
itself from the current troubles in the telecommunications industry.
However, on January 24, 2001, in a release announcing its fourth-
quarter earnings, the Company gave the primary indication that the
market for its photonics products was not as robust as it had earlier
indicated. On July 10, 2001, the Company announced that it was taking a
$5.1 billion charge chiefly related to the acquisitions of Pirelli and
NetOptix, that it would also write off $300 million in excess and
obsolete inventory, and that it would cut 1000 jobs and close three
plants.
For more details, contact Fred Taylor Isquith, Gregory 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 Corning.
FLEMING FOOD: Oklahoma Court's Ruling Dismissing Securities Suit Stands
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An Oklahoma federal court's dismissal of a securities class action
against Fleming Food Management Company LLC and certain of its present
and former officers and directors stands unchanged, after plaintiffs
failed to object to an appellate court's refusal to grant a rehearing.
The suit was commenced in United States District Court for the Western
District of Oklahoma and in 1997, alleging the Company engaged in
"deceptive business practices." The Company also allegedly failed to
properly account for and disclose the contingent liability created by
the David's Supermarkets case, a suit the Company settled in April 1997
in which David's charged it with overcharging for products.
The suit further alleged that the Company's deceptive business
practices led to the David's case and to other material contingent
liabilities, caused the Company to change its manner of doing business
at great cost and loss of profit, and materially inflated the trading
price of its common stock.
In 1999, the Court dismissed the suit but gave the plaintiffs the
opportunity to restate their claims, and they did so in amended
complaints. The Company asked the Court to dismiss the suits, and in
February 2000, the Court dismissed the suits with prejudice.
The plaintiffs appealed the decision to the Tenth Circuit Court of
Appeals, but in September 2001, the Appeals Court affirmed the lower
Court's decision. The plaintiffs then asked for a full bench rehearing
with the Appeals Court, but the request was denied in October. Since
the plaintiffs did not request a review of the judgment of the lower
courts to the United States Supreme Court, all appeals by plaintiffs
are exhausted and the Court's judgment will stand unchanged.
FUNDTECH LP: NJ Court Dismisses Without Prejudice Securities Fraud Suit
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The United States District Court for the District of New Jersey
dismissed without prejudice the securities class action filed against
Fundtech LP in October 1999, on behalf of purchasers of the Company's
stock on October 6,1999.
The suit alleged violation of section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder, by making statements
at an analysts conference before the opening of the market on October
6, 1999 that did not reveal that later that day the Company would
announce an earnings decrease.
MEDI-HUT CO.: Denies Securities Suits Allegations in New Jersey
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Medi-Hut Co., Inc. labeled "without merit" the securities class actions
pending in the United States District Court for the District of New
Jersey on behalf of all purchasers of its common stock from April 4,
2000 through February 4, 2002, inclusive. The suit names as defendants
the Company and:
(1) Joseph A. Sanpietro, President and CEO,
(2) Laurence M. Simon, CFO,
(3) Robert Russo, Treasurer,
(4) Vincent Sanpietro, Secretary,
(5) James G. Aaron, director, and
(6) James S. Vacarro, director
The suit alleges violations of of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
The defendants allegedly disseminated materially false and misleading
statements and omissions that misrepresented the Company's business,
operations and financial performance.
These statements specifically refer to the relationship of Company Vice
President Lawrence Marasco to Larval Corporation, one of the Company's
biggest customers. Mr. Marasco had a controlling interest in Larval,
and based on generally accepted accounting principles, the Company
should have revealed this information, and filed income from Larval as
"related party transactions." The Company failed to do this.
The Company denies these allegations and said it will vigorously oppose
the suit in a disclosure to the Securities and Exchange Commission.
METAWAVE COMMUNICATIONS: Kirby McInerney Files Securities Suit in WA
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Kirby McInerney & Squire, LLP commenced a securities class action in
the United States District Court for the Western District of Washington
on behalf of all purchasers of Metawave Communications Corporation
(Nasdaq:MTWV) common stock during the period from April 24, 2001 and
March 14, 2002, inclusive.
The suit charges the Company as well as its Chief Executive Officer and
Chief Financial Officer, with violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934. The violations, as the complaint
alleges, stem from the issuance of allegedly false and misleading
financial statements and financial projections during the class period,
which had the effect, during the class period, of artificially-
inflating the price of Company shares.
On March 14, 2002, after the close of the markets, the Company issued a
press release disclosing a number of surprises concerning the Company,
including:
(1) that it would restate its 2001 earnings, reducing revenue by
$5 million to $7 million out of the $43.6 million of total
revenue previously reported, a change of 11% to 15%, because
of "unauthorized commitments" made to customers in Asia;
(2) that it would terminate its SpotLight GSM product line due to
"insufficient customer demand;"
(3) that it would close its Taiwan facilities, cut its Chinese
operation and reduce its United States workforce by 42% in an
effort to lower operating expenses;
(4) that the restructuring would result in a first quarter (2002)
charge of $23 million to cover inventory and accounts
receivable write-offs, employee severance, facilities
closures, and other shutdown costs;
(5) that it had fired its Chief Financial Officer, Stuart
Fuhlendorf; and
(6) that it had revised its first-quarter 2002 revenue guidance to
about $6 million, well below the $8.5 million to $9 million
range Wall Street had been led to expect for the Company's
first quarter (2002) revenue.
After disclosure that the Company's current financial results would not
be as expected, and that previously-reported financial results would be
even lower than reported, its shares swiftly lost more than 70% of
their value.
For more information, contact Pamela E. Kulsrud or Diem Tran by Mail:
830 Third Avenue, 10th Floor, New York, New York 10022 by Phone:
212-317-2300 or 888-529-4787 by E-Mail: dtran@kmslaw.com or visit the
firm's Web site: http://www.kmslaw.com
METAWAVE COMMUNICATIONS: Milberg Weiss Lodges Securities Suit in WA
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Milberg Weiss Bershad Hynes and Lerach initiated a securities class
action in the United States District Court for the Western District of
Washington on behalf of purchasers of Metawave Communications
Corporation (NASDAQ:MTWV) publicly traded securities during the period
between April 25, 2001 and March 14, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The suit
alleges that during the class period, defendants caused the Company's
shares to trade at artificially inflated levels through the issuance of
false and misleading financial statements.
As a result of this inflation, the Company was able to complete private
placement offerings, raising net proceeds of $30 million during the
class period. On March 14, 2002, just months after the last offering
was completed, the Company revealed that its FY 2001 results were false
when issued. The stock dropped below $1 per share on this news.
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
NOVELL INC.: Asks Utah Federal Court To Dismiss Amended Securities Suit
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Software company Novell, Inc. asked the United States District Court
for the District of Utah to dismiss an amended securities class action
accusing the Company and certain of its directors of federal securities
violations.
The suit was initially filed in February 1998, alleging the defendants
violated federal securities laws by concealing the true nature of the
Company's financial condition. The suit was filed on behalf of
purchasers of the Company's common stock from November 1, 1996 through
April 22, 1997.
The Court dismissed the original complaint in November 2000. However,
the plaintiffs filed an amended complaint in an effort to remedy
inadequacies in the original complaint. The Company then moved the
Court to dismiss the amended complaint on the same grounds relied on in
its dismissal of the original complaint.
If the case continues, the Company intends to vigorously defend against
the allegations. While there can be no assurance as to the ultimate
disposition of the lawsuit, the Company does not believe that the
resolution of this litigation will have a material adverse effect on
its financial position, results of operations, or cash flows.
PREPAID LEGAL: Securities Suit Dismissed, Appeal Deadline Set For April
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Plaintiffs in the securities class action against Prepaid Legal
Services, LLC have until the first week of April to appeal the US
District Court for the Western District of Oklahoma's dismissal of the
suit with prejudice.
The suit charged the Company and various of its executive officers with
issuing false and misleading financial information, primarily related
to the method the Company used to account for commission advance
receivables from sales associates.
On March 5, 2002, the Court granted the Company's motion to dismiss
the complaint, with prejudice, and entered judgment in its favor. The
deadline for plaintiffs to file notice of their intent to appeal, if
any, is thirty days from the date on which the judgment is entered.
PREPAID LEGAL: Expects Dismissal of Suits For Failure To State Claim
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Prepaid Legal Services, LLC expects that the shareholder derivative
suits pending against its directors will be dismissed, because the
plaintiffs failed to make the requisite demand that the Company pursue
the claims of alleged misconduct and failed to state a claim.
The suits were commenced in June 2001 seeking unspecified actual and
punitive damages on behalf of the Company based on allegations of
breach of fiduciary duty, corporate waste and mismanagement by the
defendant directors. In August 2001, the suits were amended to add
Deloitte & Touche, the Company's previous outside auditors, as
defendants.
The suits allege that the defendants caused the Company to:
(1) violate generally accepted accounting principles and federal
securities laws by improperly capitalizing commission
expenses;
(2) allegedly pay increased salaries and bonuses based upon
financial performance which was allegedly improperly
inflated; and
(3) expend significant dollars in connection with the defense of
its accounting policy, including cost incurred in connection
with the defense of the securities suits in Oklahoma, and in
connection with the repurchase of its own shares on the open
market at artificially inflated prices.
The derivative actions have been consolidated and are in the
preliminary pleading stage. The Company believes that these derivative
actions are related to the Oklahoma securities class actions and may be
intended to circumvent the restrictions on those actions imposed by the
Private Securities Litigation Reform Act of 1995.
In February 2002, the defendants moved to stay the derivative action
pending a decision on the motion to dismiss the related securities
class actions. In March 8, 2002, the defendants withdrew that motion
as moot in light of the Oklahoma federal court's order dismissing the
putative securities class actions. On March 1, 2002, the plaintiffs
filed a consolidated amended derivative complaint making claims and
allegations similar to those contained in the original derivative
complaints.
The Company vowed to mount a vigorous defense against these suits, and
is confident that the litigation will not have a material effect on its
business operations and financial position.
PRG SCHULTZ: Faces Suit For Securities Act Violations in N.D. Georgia
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PRG Schultz International, Inc. and its President John M. Cook face a
consolidated securities class action in the United States District
Court for the Northern District of Georgia, Atlanta Division.
The suit alleges that the defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by allegedly disseminating materially false and misleading
information about a change in the Company's method of recognizing
revenue and in connection with revenue reported for a division. The
suit further alleges that these misstatements and omissions led to an
artificially inflated price for the Company's common stock during the
putative class period, which runs from July 19, 1999 to July 26, 2000.
The Company believes the alleged claims in this lawsuit are without
merit and intends to defend the lawsuit vigorously. However, due to
the inherent uncertainties of the litigation process and the judicial
system, it is unable to predict the outcome of the suit.
TYCO INTERNATIONAL: Weiss Yourman Commences Securities Suit in S.D. NY
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Weiss and Yourman initiated a securities class action against Tyco
International, Ltd. (NYSE:TYC) in the United States District Court for
the Southern District of New York on behalf of purchasers of Tyco
securities, between December 13, 1999 and February 5, 2002.
The suit charges defendants with violations of the Securities Exchange
Act of 1934. The complaint alleges that defendants issued false and
misleading statements, which artificially inflated the stock.
For more details, contact Mark D. Smilow, James E. Tullman or David C.
Katz by Mail: The French Building, 551 Fifth Avenue, Suit 1600, New
York, New York 10176 by Phone: 888-593-4771 or 212-682-3025 or by E-
mail: info@wynyc.com
WELLS FUND: Limited Partners File Securities Fraud Suit In N.D. GA
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Wells Fund I and its general partners face an amended securities class
action pending in the United States District Court for the Northern
District of Georgia, Atlanta Division, accusing them of violations of
federal securities laws, and breaches of the partnership agreement.
The suit was initially filed on December 2001 on behalf of all Class A
Wells Fund I limited partners. The suit alleges, among other things,
that:
(1) the 2000 Consent Solicitation contained material
misrepresentations or omissions of fact in violation of Rule
14a-3 promulgated under Section 14(a) of the Securities
Exchange Act of 1934, and
(2) the acts and omissions of Wells Fund I and the general
partners constituted a breach of the Partnership Agreement.
In addition to seeking any compensatory damages that might be suffered,
the plaintiffs in this action sought an injunction against Wells Fund I
and the general partners from:
(i) continuing to solicit proxies pursuant to the 2000 Consent
Solicitation;
(ii) using the proxies obtained pursuant to the 2000 Consent
Solicitation;
(iii) modifying the Partnership Agreement of Wells Fund I without
the approval of 100% of the Class A limited partners;
(iv) distributing the proceeds from the sale of assets of Wells
Fund I to Class B limited partners that rightfully should be
distributed to Class A limited partners; and
(v) requiring that the net sale proceeds currently held by Wells
Fund I be promptly disbursed pursuant to the terms of the
Partnership Agreement, in addition to requesting the court for
an award of attorneys' fees be made to plaintiffs' counsel.
In January 2002, Wells Fund I filed an amendment to the 2000 Consent
Solicitation with the Securities and Exchange Commission withdrawing
and terminating the 2000 Consent Solicitation. Shortly thereafter, the
termination notice was mailed to the Wells Fund I limited partners.
While the general partners received an 87% favorable response rate from
the limited partners holding Class A Units who responded to the 2000
Consent Solicitation, the general partners became convinced that 100%
approval by the Class A limited partners was not attainable.
On January 31, 2002, Wells Fund I and the general partners filed a
motion to dismiss the suit on the basis that the withdrawal and
termination of the 2000 Consent Solicitation by Wells Fund I rendered
the issues raised in the suit as moot.
After the filing of their motion to dismiss, Wells Fund I and the
general partners were served with an amended complaint in the first
suit alleging, among other things, that the defendants breached their
fiduciary duties to the plaintiffs by reallocating capital accounts to
artificially create positive capital accounts for the Class B limited
partners, by holding funds that should be distributed to the Class A
limited partners, and by engaging in acts and omissions calculated to
benefit the Class B limited partners at the expense of the Class A
limited partners.
The plaintiffs in the amended complaint allege that they have been
damaged in that they have not received distributions to which they are
entitled pursuant to the Partnership Agreement, have incurred costs,
fees and expenses in the prosecution of the lawsuit to recover their
damages, and have suffered damages from the loss of the use of the
funds.
In addition, the plaintiffs in the amended complaint requested that an
equitable accounting be made of the nature and amount of proceeds
received by Wells Fund I and the appropriate distribution, and time for
distribution, of such funds.
Wells Fund I and the general partners have until March 20, 2002, to
file their answer to the amended complaint.
WILLIAMS COMPANIES: Schoengold Sporn Lodges Securities Suit in N.D. OK
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Schoengold & Sporn, PC initiated a securities class action against
against Williams Companies, Inc. (NYSE: WMB) and Williams
Communications Group, Inc. (NYSE: WCG) and certain of its key officers
and directors in the United States District Court for the Northern
District of Oklahoma on behalf of all purchasers of WMB and WCG
securities during the period between July 24, 2000 and January 29,
2002.
The suit charges defendants with violations of Sections 10(b) and 20(a)
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, and alleges that during the class period, defendants issued
to the investing public false and misleading financial statements and
press releases concerning the Company's publicly reported earnings, net
income and liabilities. The suit further states that the Company
failed to disclose material information necessary to make its prior
statements not misleading.
On January 29, 2002, the Company shocked the market by announcing that
it would be delaying the release of its 2001 earnings "pending an
internal assessment of Williams' contingent obligations to Williams
Communications." According to the press release, WMB "expects to be
able to estimate the financial effect, if any, regarding its ultimate
obligation related to WCG's $1.4 billion debt and network lease
agreement covering assets that cost $750 million."
In response to WMB's shocking announcement, the price of WMB common
stock, which was already substantially eroded from its prior year's
high, declined sharply, falling from approximately $24 per share to as
low as $18.70 per share, and the already depressed WCG common stock
declined to as low as $1.30 per share.
For more information, contact 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
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S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
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