/raid1/www/Hosts/bankrupt/CAR_Public/020417.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, April 17, 2002, Vol. 4, No. 75
Headlines
BLOCKBUSTER INC.: Attempts to Reach Settlement of "Late Fees" Suits
CATHOLIC CHURCH: Sexual Abuse Suits Spur Calls For Bishop's Resignation
CRACKER BARREL: NAACP Not Seeking Money in Racial Discrimination Suit
FLORIDA: Judge Dismisses Suit Alleging Race Bias in Hallandale Voting
FLORIDA: City Mulls Suit After Findings of High Arsenic Levels in Soil
FORD MOTOR: Ends Recall of Wilderness AT Tires Connected to Rollovers
FORD MOTOR: Appealing Certification of False Advertising Suit in TX
GENTEK INC.: Sued Over Pollution Caused By Delaware Valley Facility
GENTIVA HEALTH: TN Court Dismisses Fraud Suit Over Patient Referrals
GUIDE CORPORATION: Claims Appeals Delay Homeowners' Fish Kill Payments
INCO LTD.: Appeals Ontario Court Order To Clean Up Nickel Pollution
IPALCO ENTERPRISES: Retirees Sue After Losing Investments in 401(k)
PENNZOIL QUAKER: Faces Suit For Deceptive Trade Practices in Texas
PARK PLACE: Vigorously Opposes "Slot Machine" Suit in Nevada Court
ROBERT'S AMERICAN: Sued For "Mislabeling" Snack Foods' Fat Content
RESOURCE BANCSHARES: Sued For Unsolicited Fax Advertisements in IN
SYNTHROID LITIGATION: Plaintiffs Question $2.25 Million Settlement
Securities Fraud
ADELPHIA COMMUNICATIONS: Marc Henzel Commences Securities Suit in PA
ANDRX CORPORATION: Marc Henzel Commences Securities Suit in S.D. FL
BIOPURE CORPORATION: Marc Henzel Commences Securities Fraud Suit in MA
CORNELL COMPANIES: Mark S. Henzel Files Securities Suit in S.D. TX
DICE INC.: Mounting Vigorous Defense V. Securities Suits in S.D. NY
EAGLE BUILDING: LeBlanc Waddell Launches Securities Suit in S.D. FL
EAGLE BUILDING: Marc Henzel Commences Securities Fraud Suit in Nevada
ENRON CORPORATION: John Hancock Subsidiaries Commence Suit in Texas
ENRON CORPORATION: Kirby McInerney Files Securities Suit in S.D. TX
FLAG TELECOM: Marc Henzel Commences Securities Fraud Suit in S.D. NY
HOST REIT: FL Court Approves Settlement, Pending DE Suit Dismissed
HOST REIT: IL Court Allows Appeal of Ruling Refusing Suit Dismissal
JDS UNIPHASE: Marc Henzel Commences Securities Fraud Suit in N.D. CA
JDS UNIPHASE: LeBlanc Waddell Commences Securities Suit in N.D. CA
JDS UNIPHASE: Kaplan Fox Commences Securities Fraud Suit in N.D. CA
MEASUREMENT SPECIALTIES: LeBlanc Waddell Lodges Securities Suit in NJ
NEWPOWER HOLDINGS: Wolf Haldenstein Commences Securities Suit in NY
PRICELINE.COM: Mounting Vigorous Defense V. Consolidated Suit in NY
PRICELINE.COM: Asks CT Court To Dismiss Suit For Securities Violations
PRICELINE.COM: Asks DE Court To Dismiss Shareholder Derivative Suit
RADIO UNICA: Labels "Without Merit" Securities Fraud Suit in S.D. NY
SWITCHBOARD INC.: Securities Suit "Without Merit" in S.D. NY
SYMBOL TECHNOLOGIES: Schiffrin Barroway Files Securities Suit in NY
WINK COMMUNICATIONS: "Laddering Case" Like Hundreds of Others, Says Co
*********
BLOCKBUSTER INC.: Attempts to Reach Settlement of "Late Fees" Suits
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Video rental chain, Blockbuster, Inc., is in the process of settling
over 23 class actions filed by its customers in twelve states between
February 1999 and December 2001, relating to its policies over late
fees. The suits are pending in state courts in:
(1) Illinois,
(2) California,
(3) Ohio,
(4) Maryland,
(5) Texas,
(6) New York,
(7) New Jersey,
(8) Delaware,
(9) Massachusetts,
(10) Washington, DC,
(11) Florida and
(12) Pennsylvania
The suits allege common law and statutory claims for fraud and/or
deceptive practices and/or unlawful business practices regarding the
Company's policies for customers who choose to keep rental product
beyond the initial rental term. Some of the cases also allege that
these policies impose unlawful penalties and/or result in unjust
enrichment.
In April 2001, the Company reached a preliminary settlement in two of
the Texas cases, which provides for a national settlement class and
does not admit liability. The Texas court signed an order approving an
addendum to the settlement agreement on May 30, 2001, and on January
22, 2002, entered a final judgment approving the settlement.
Under the approved settlement, the Company will make certificates
available to class members for rentals and discounts and would pay up
to $9.25 million in attorneys' fees in connection with the settlement.
Two separate parties objecting to the settlement filed Notices of
Appeal.
While the settlement negotiations are ongoing in Texas, an Illinois
state court denied the Company's motion to stay the case based on the
settlement in Texas. The same Illinois court later entered a
provisional order, subject to further review and final determination,
certifying plaintiff and defendant classes in order that putative class
counsel in Illinois would have an opportunity to be heard regarding the
national class settlement.
In September 2001, the Illinois Supreme Court denied the Company's
petition for leave to appeal the Illinois trial court's denial of the
motion to stay. On January 22, 2002, the plaintiffs in the Illinois
action filed an amended complaint. The Company has filed a motion to
dismiss the complaint.
The Company believes the plaintiffs' positions in these cases are
without merit and, if the settlement reached in Texas is not approved,
intends to vigorously defend itself in any litigation.
CATHOLIC CHURCH: Sexual Abuse Suits Spur Calls For Bishop's Resignation
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Clamor is mounting for the resignation of Cardinal Bernard Law,
Archbishop of Boston, after a slew of class actions have been filed
accusing several Catholic priests of sexual abuse.
Thomas Fulchino, 53, claimed a Boston priest molested him in a class
action settled by the church in 1992. The priest is now in prison.
His son Christopher also claims that defrocked Boston area priest, John
Geoghan, also in jail on child molestation charges, molested him in
1998, CNN.com reports. Mr. Fulchino asserts the Cardinal should step
down, saying "The cardinal, he's harming the archdiocese, he has to
move out and they have to bring in someone else to change the way he
does things."
Critics have accused Cardinal Law of failing to keep pedophile priests
away from children even though he knew of the problem. However, the
Cardinal refused to step down, saying in a letter sent to priests in
eastern Massachusetts, "My desire is to serve this archdiocese with
every fiber of my being.This I will continue to do as long as God gives
me the opportunity." According to CNN.com, court documents released at
Fr. Geoghan's trial in January revealed that Cardinal Law and other
archdiocese officials knew of the sexual abuse allegations against the
priests but failed to do anything about it. They reportedly just moved
him from parish to parish.
Mr. Fulchino expressed disappointment at Cardinal Law's statement,
telling CNN, "There was that hope that he would realize that he has to
step aside. He's not doing any good sitting in there now."
Archdiocese spokeswoman Donna Morrissey told CNN that Cardinal Law was
still deciding what to do, taking the next few days to consult with
advisers and pray "to determine the best way he is able to serve the
church."
CRACKER BARREL: NAACP Not Seeking Money in Racial Discrimination Suit
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The National Association for the Advancement of Colored People (NAACP)
joined the racial discrimination class action against Cracker Barrel
Old Country Store, Inc. primarily to eradicate a pattern of
discrimination against African American customers at many of its
restaurants, Kweisi Mfume, NAACP president & CEO, said in a press
statement.
The suit was filed last week in the United States District Court in
Georgia on behalf of 42 plaintiffs, charging the restaurant chain with
discrimination against African American customers.
Mr. Mfume said, "The NAACP is not seeking any money as an organization
from this case. Cracker Barrel cannot buy our pain. The NAACP's
interest in this lawsuit lies in securing injunctive relief against
Cracker Barrel's practices. This injunctive relief consists of, among
other things, diversity training and education of Cracker Barrel
employees, and monitoring of Cracker Barrel service to African-
Americans so that we may remedy and prevent their mistreatment.
Nationwide injunctive relief on behalf of African Americans is the
primary means of affecting that objective."
The plaintiffs and witnesses have accused Cracker Barrel of engaging in
a pattern of discrimination against African American patrons, reporting
discriminatory violations in more than 200 cities. Cracker Barrel is
one of the nation's largest restaurant chains, with approximately 450
restaurants in 41 states. It employs more than 40,000 people.
The suit alleges that the restaurant's discriminatory conduct includes:
(1) denying service to African American customers and their
associates;
(2) allowing white servers to refuse service to African Americans;
(3) seating African American customers and their associates in a
segregated area (often in the smoking section of the
restaurant); and
(4) requiring African American customers and their associates to
wait longer to be seated or served than white customers.
The Company has denied the allegations, saying the NAACP was
"misinformed."
FLORIDA: Judge Dismisses Suit Alleging Race Bias in Hallandale Voting
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US District Court Judge Federico A. Moreno has dismissed a class action
that claimed discrimination in Hallandale Beach's voting system, saying
that the plaintiffs did not justify filing the suit anonymously, The
Miami Herald reported recently.
The lawsuit, filed by Fort Lauderdale attorney Mikel Jones, claimed
that Hallandale Beach's at-large voting system dilutes the chance for
minorities to be elected at the City Commission. Only one black person
has served on the dais.
Mr. Jones said he plans to file an affidavit appealing the dismissal,
and he explained why the suit was filed under anonymous plaintiffs.
"We'll use that opportunity to explain that (to the judge)," said Mr.
Jones, legislative aide to US Representative Alcee Hastings, D-Miramar,
who has championed the cause. "If that doesn't work, then we'll refile
and identify the plaintiffs."
In a five-page statement, Judge Moreno dismissed the case because the
plaintiffs, John Doe and Mary Doe, "failed to petition the court before
proceeding anonymously. The mere fact that a plaintiff may
suffer some personal embarrassment if not allowed to sue anonymously
does not, standing alone, require the granting of a plaintiff's request
to proceed under a fictitious name."
Mr. Jones said the lawsuit was filed anonymously because of fears that
black residents will be harassed or "have their lives disrupted." City
Attorney Mark Goldstein, on the other hand, sought to dismiss the suit,
citing a 1992 case in which a federal appeals court put tight
restrictions on anonymous filings.
Mr. Jones has said that dividing the city into voter districts would
level the playing field and introduce more minorities to the
commission. Officials have resisted such a move, saying the city is
too small. Commissioner Joy Cooper says that a charter review would
open dialogue among all city residents, including those disenchanted
with the current voting system.
FLORIDA: City Mulls Suit After Findings of High Arsenic Levels in Soil
----------------------------------------------------------------------
The City of Davie, Florida is considering filing a class action against
chemical manufacturers, treated wood producers and retailers, after
testing on the town's soil revealed arsenic levels above the state's
standard for clean soil, the Miami Herald reports.
Harry Venis, mayor of Davies, was approached by a law firm earlier
about taking the lead on a class action over arsenic contamination in
the town's soil. The Town Council then authorized tests of 10 soil
samples to determine their arsenic levels. The tests revealed that
seven of the 10 sites exceeded the Florida Department of Environmental
Protection's residential threshold. Six of the 10 sites also exceeded
the permissible level for an industrial site.
Davie, known for its western image and rural character, has many public
buildings that could be made of pressure-treated wood, a wood treated
with chromated copper arsenate (CCA), which protects it from rotting
and insects. Environmentalists say arsenic, a carcinogen and toxin,
can rub off on hands or leach into the soil.
Mayor Venis said it was very important that "we brought this out in the
open." He added that in order to protect the residents of Davie, "we
have to determine to what extent the arsenic is in the soil." Concerns
about pressure-treated lumber have spawned several lawsuits, but Davie
could be the first municipality to sue for replacing the wood.
Councilman Tom Truex has questioned whether the town should get
involved in a class action. "I don't see anything in the report that is
a huge concern, but I have an open mind."
FORD MOTOR: Ends Recall of Wilderness AT Tires Connected to Rollovers
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Ford Motor Co. has ended its recall of Wilderness AT tires, closing the
book on a public relations nightmare that cost the automaker $2.1
billion and destroyed its 100-year relationship with tire giant
Bridgestone Corp, the National Post reported recently. There are a
handful of class actions in Canada and many more in the United States
over injuries and deaths caused by the rollovers. Linking the
rollovers to the SUV tires is an issue in these cases.
Neither Bridgestone nor Ford has assumed responsibility for the
accidents. "We are on record saying it is a tire issue, not a vehicle
issue, and we stand by that," said John Arnone, a spokesman for the
automaker's Canadian unit.
The voluntary recall of the Wilderness tires came after more than 170
deaths in the United States were blamed on rollovers involving Ford's
Explorer SUV equipped with the tires made by Bridgestone-Firestone Inc.
The recall ended on March 31.
In Canada, 362,000 Firestone tires were replaced on 91,000 vehicles
south of the border, about 2.4 million vehicles were outfitted with
10-million new tires. While Ford did not break out exact cost figures,
the automaker took a $2.1 billion charge in the fourth quarter to pay
for the recall.
FORD MOTOR: Appealing Certification of False Advertising Suit in TX
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Automobile giant Ford Motor Company will appeal a Texas State Court
judge's decision granting statewide class action status to a lawsuit
filed over customer complaints about the radiators on some models of
its F-150 trucks.
The suit was commenced on behalf of owners of hundreds of 2000 and 2001
F-150s equipped with optional heavy duty towing and engine cooling
gear, iWon.com reports. The Company's sales pamphlets and vehicle
ordering guides described the F-150s, with the Company's so-called
class-three trailer or heavy-duty electrical cooling group options, as
having an "upgraded" radiator. Later the Company, which equipped those
same vehicles with standard radiators, corrected the statements, saying
that no upgrade was necessary and that the promise of a super-cooling
radiator was due to a "publication error" that has since been
corrected.
The suit, filed in the 28th Judicial Court District in Nueces County,
Texas, was granted class action in December.
Company spokeswoman Kathleen Vokes told Reuters, "This litigation is
unnecessary, without merit and will be appealed." She added, "In the
past, to get the vehicle with the capacity for towing, you had to order
a special radiator. Over time, as radiators improved, it no longer
became necessary to have a separate option.In the beginning, the
literature was not updated to reflect that."
The Company has been offering affected F-150 owners a choice of either
$100 cash, a new radiator, or $500 toward the purchase of a new Ford
vehicle since November to settle what critics of the automaker describe
as a clear-cut case of false advertising, iWon reports.
GENTEK INC.: Sued Over Pollution Caused By Delaware Valley Facility
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Gentek, Inc. faces a class action pending in the Court of Common
Please, Delaware County, Pennsylvania, on behalf of 550 current and
former employees of the Sunoco Marcus Hook, Pennsylvania refinery
located immediately adjacent to the Company's Delaware Valley facility.
The suit alleges that unspecified releases of sulfur dioxide and sulfur
trioxide over unspecified timeframes caused injuries to the plaintiffs,
and seeks, among other things, to establish a "trust fund" for medical
monitoring for the plaintiffs.
The Company believes this claim is without merit and will vigorously
defend itself in this matter. The Company further believes that the
suit will not have a material adverse effect on its results of
operations or financial condition.
GENTIVA HEALTH: TN Court Dismisses Fraud Suit Over Patient Referrals
--------------------------------------------------------------------
The United States District Court for the Middle District of Tennessee
dismissed a class action against Gentiva Health Services alleging
violations of federal antitrust laws and the Racketeer Influenced
Corrupt Organizations Act (RICO). The suit named as defendants the
Company and:
(1) Columbia/HCA Healthcare Corporation,
(2) Columbia Homecare Group,
(3) Olsten Health Management a/k/a Hospital Contract Management
Services and
(4) Olsten Corporation
The suit alleged, among other things, that the defendants' business
practices in connection with home health care patient referrals between
1994 and 1996 violated provisions of federal antitrust laws, the RICO
Act, the Tennessee Consumer Protection Act and state common law and
sought unspecified compensatory damages, punitive damages, treble
damages and attorneys' fees on behalf of a proposed class of home
healthcare companies and/or agencies which conducted business in
Tennessee, Texas, Florida and/or Georgia.
The Company moved for the suit's dismissal. The Court dismissed the
plaintiffs' RICO and state common law tort claims, but allowed
plaintiff's other claims to proceed to discovery. After conducting
some discovery on the issues, on October 10, 2001, plaintiff filed a
notice of withdrawal of certain allegations and subsequently filed a
second amended complaint that dropped all class action allegations and
all antitrust claims. The parties later stipulated to the dismissal of
the action with each party to bear its own costs. Consequently, the
Court entered an order dismissing the suit in its entirety.
GUIDE CORPORATION: Claims Appeals Delay Homeowners' Fish Kill Payments
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Several hundred homeowners who were expecting their share of a $2
million settlement over the White River fish kill may have to wait
until Memorial Day for their money, the Associated Press reported.
About 1,100 people have filed claims, but William C. Potter, the
Indianapolis lawyer administering the settlement, told the Indianapolis
Star that several hundred of those claims will probably be denied. At
least two people whose claims were denied have appealed already,
thereby slowing the process. Between 700 and 800 homeowners expected
to receive checks of about $1,500 in February. However, checks will be
sent within 30 days after appeals are resolved.
A federal judge approved the $2 million settlement of a class action
filed by homeowners along the White River, who said their property
values were adversely affected when a toxic substance from Guide
Corporation entered the river. Guide, which manufactures lighting
components for automobiles, claimed responsibility for the pollution,
which killed more than five million fish along a 50-mile stretch of the
White River. Crown Environmental Group was contracted by Guide to
oversee operations of its wastewater pretreatment facility, which
discharged a chemical into Anderson's sanitary sewer system that
eventually flowed into the river.
The $2 million settlement of the class action was between Guide,
Crown Environmental and the property owners. Guide had previously
reached a $13.9 million settlement with state and federal agencies and
a $14.3 million settlement with Anderson.
INCO LTD.: Appeals Ontario Court Order To Clean Up Nickel Pollution
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Inco Ltd. appealed an Ontario environment ministry order to clean up
25 nickel-contaminated properties in Port Colborne, The Toronto Star
recently reported. The order compels the mining company to clean up
those 25 properties and any others in the city that show soil-nickel
levels above 8,000 parts per million.
A $750 million class action has been launched against the Company, the
provincial environment ministry and others over the nickel
contamination. "The appeal indicates zero commitment to a cleanup,"
said lawyer Eric Gillespie, who represents the residents of the
contaminated Rodney Street neighborhood in Port Colborne.
The Company, in its appeal, disputes that 8,000 parts per million of
nickel poses a health risk to residents. Nickel oxide, the main
contaminant in Port Colborne, is a known carcinogen for which Ontario
regulations have set a maximum safe exposure level of 319 parts per
million.
The Company already has cleaned up five of the 25 properties covered
under the clean-up order, but residents of the other properties fear
the appeal will delay work at their homes for months or years. Between
1918 and 1984, the Company processed more than 2.5 million tons of
nickel oxide at the Port Colborne refinery.
IPALCO ENTERPRISES: Retirees Sue After Losing Investments in 401(k)
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Three retirees of Indianapolis Power and Light Company (IPALCO)
Enterprises Inc. are bringing a federal class action against the
Company's former top officers, claiming they ignored fiduciary duties
by encouraging employees to invest their 401(k) money in company stock,
the Indianapolis Business Journal reports. The lawsuit seeks up to
$150 million in compensation.
When company officials "strongly advised" employees to invest their
retirement funds in company stock, the officers encouraged imprudent
investments in violation of a federal law governing such plans, said
the retirees' attorney, John Price. "Tying three-fourths of IPALCO
funds in the stock was not a good investment," Mr. Price said. "Under
ERISA, there is a very strong standard that the fiduciaries have an
obligation to make the best investment. That is clearly where the
liability is."
The suit names as defendants:
(1) John Hodowal, former IPALCO Chairman and President,
(2) Ramon Humke, former IPALCO President and Chief Operating
Officer,
(3) Bryan Tabler, former general counsel,
AES Corporation bought the Company a year ago. Since then, its stock
price has slid from $52 a share to roughly $9, taking much of the
former employees' retirement nest eggs with it. One plaintiff has lost
as much as $200,000, Mr. Price said.
In total, 2,000 participants are enrolled in the Company's 401(k) plan.
The retirees contend the defendants "strongly advised" employees to buy
Company stock and provided a match in company stock for a portion of
those contributions.
As of July 200, when the AES acquisition was announced, 77 percent of
the plan's assets were invested in company stock. Officers unloaded
shares worth at least $9 million before the sale while employee money
remained invested in the company. The employees could put their money
in other investment options, though most did not because of the
officers' encouragement to stay with company stock. These actions
violated the federal Employee Retirement Income Security Act (ERISA),
which mandates that the fiduciaries have the obligation to make the
best investment.
PENNZOIL QUAKER: Faces Suit For Deceptive Trade Practices in Texas
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Petroleum producer Pennzoil Quaker State Company faces a class action
pending in the 381st Judicial District Court of Starr County, Texas
charging the Company with:
(1) breaching alleged warranties with respect to advertised
product;
(2) breaching alleged contractual obligations with purchasers of
advertised product; and
(3) breaching the Texas Deceptive Trade Practices Act due to
certain of our advertisements during calendar year 2000.
No class has been certified in the suit. The Company intends to mount
a vigorous opposition to the allegations in the suit.
PARK PLACE: Vigorously Opposes "Slot Machine" Suit in Nevada Court
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Park Place Entertainment Corporation was named as a defendant in a
consolidated class action pending in the US District Court for the
District of Nevada against 41 manufacturers, distributors and casino
operators of video poker and electronic slot machines.
The consolidated suit arose from three lawsuits originally filed in
1994 in the United States District Court for the Middle District of
Florida. The suits were later ordered consolidated in the Nevada
federal court.
The consolidated suit alleges that the defendants are involved in a
scheme to induce people to play electronic video poker and slot
machines based on false beliefs regarding how such machines operate and
the extent to which a player is likely to win on any given play. The
suit includes claims under:
(1) the federal Racketeering Influenced and Corrupt Organizations
Act (RICO),
(2) fraud,
(3) unjust enrichment and
(4) negligent misrepresentation
The case has not been certified as a class action. The Company intends
to vigorously oppose this suit.
ROBERT'S AMERICAN: Sued For "Mislabeling" Snack Foods' Fat Content
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Robert's American Gourmet Foods, Inc. faces a US$50 million class
action, after a Manhattan woman discovered that its snack foods called
Veggie Booty and Pirate's Booty contained six more grams of fat than
was advertised, the New York Post reports.
Freelance journalist and former Post columnist, Meredith Berkman filed
the suit in Manhattan State Supreme Court, alleging she suffered
"emotional distress, mental anguish, outrage and indignation" over the
mislabeling on the corn and rice puffs snacks. The suit alleges that
the snacks caused her to "suffer damages, including exposure to high-
fat, high-calorie food and weight gain." The suit further states that
the snacks, which reportedly had 8 grams of fat per serving as opposed
to the 2.5 grams it claimed on the label, forced her "to perform extra
exercise and to spend extra time at the gym to maintain healthy body
weight."
The Company recalled the snacks in January after a test by the Good
Housekeeping Institute found the cheese-coated corn and rice puffs
contained 147 calories per serving and 8 grams of fat, as opposed to
the stated 120 calories and 2.5 grams of fat, the New York Post
reports. At the time, the Company blamed the discrepancy on new
machinery, and the labels now claim 5 grams of fat, a figure Good
Housekeeping verified.
Ms. Berkman told the Post that some of the suit's language is "tongue
in cheek" and should be taken with "a grain of salt," but it deals with
a serious issue. "It's a question of truth in labeling . I think what
they're doing is wrong," she said. "I know there are many more serious
issues in the world today than this, but these people were essentially
lying to people who eat these snacks."
Ms. Berkman added that she was "shocked" when she noticed the change on
the label while standing in line in the supermarket. "I was eating a
lot of this stuff.A lot," she said.
RESOURCE BANCSHARES: Sued For Unsolicited Fax Advertisements in IN
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Resource Bancshares Corporation faces a class action filed by Indiana
law firm Cohen & Malad, LLP in the the Circuit/Superior Court of Marion
County, Indiana against the Company and Resource Bank. The suit
alleges that the mortgage division of the bank violated the Telephone
Consumer Protection Act by sending unsolicited advertisements by
facsimile without obtaining prior express invitation or permission to
send the facsimiles.
The Company believes that the facsimile allegedly received by the
plaintiff was transmitted by a third party fax service retained by the
bank. As the lawsuit was just received, the Company is still in the
process of factually investigating the claims, and intends to defend
the suit vigorously. In particular, the Company intends to vigorously
contest class certification on the grounds that individual issues
surrounding each facsimile preclude class certification.
SYNTHROID LITIGATION: Plaintiffs Question $2.25 Million Settlement
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A multi-million dollar class action against the makers of Canada's most
widely prescribed drug, Synthroid, has dissolved into a squabble among
the patients and their own lawyers, The Toronto Star reported recently.
The controversy devolves around the fact that under a $2.25 million
settlement, no patients actually receive any cash. Instead, two-thirds
of the settlement will go to thyroid research approved by the drug
firm, Germany's BASF Inc. and the remaining one-third will go to the
patients' lawyers for their fees.
One of the patients involved in the lawsuit accused the three lawyers
representing the plaintiffs of deliberately using the drug company and
user of the drug to make money. Harvin Pitch, a civil litigator with
the Toronto firm Teplitsky Colson and the lawyers' team leader, denied
this accusation. In fact, he said, they managed to negotiate one of
the most innovative class action settlements the country has seen.
In a written decision, in Ontario Superior Court, Justice Warren
Winkler approved the settlement and the lawyers' fees of $719,000. The
fees are twice what the lawyers would normally charge, a premium to
reflect the risk involved in taking a case with no guarantee of
payment. Judge Winkler agreed that a payout to research with the
remainder of the settlement award was the most economical way to
benefit the entire class. With more than 500,000 Canadians suffering
from hypothyroidism, the amount given each individual, in whatever
form, rebate or drug costs reduction, would amount to only a few
dollars, he wrote. Consequently, the Court granted an award to thyroid
research.
Plaintiffs had brought the class action, in Ontario, seeking $250
million damages from Boots Pharmaceutical, original makers of
synthroid, Germany's BASF Inc. and its American subsidiary Knoll. The
case was not about a bad drug or harmed patients. It was a marketing
issue involving the seven-year suppression, from 1990 to 1997, of a
study carried out by California researcher Betty Dong, that concluded
Synthroid was no more effective than generic versions. The lawsuit
represented all Canadians, except those in Quebec and British Columbia
where separate class actions were being filed.
Toronto lawyer Clayton Ruby said that while he finds it hard to believe
the lawyers were not consulting the clients over the course of
negotiations, in his view that was nothing unethical or illegal in the
lawyers' handling of the case.
Securities Fraud
ADELPHIA COMMUNICATIONS: Marc Henzel Commences Securities Suit in PA
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Eastern District of
Pennsylvania on behalf of purchasers of Adelphia Communications Corp.
(NASDAQ: ADLAC) securities between March 30, 2000 and April 1, 2002,
inclusive, against the Company and certain of its officers and
directors, including members of the Rigas family, the Company's
founders.
The suit alleges that during the class period, the Company's founding
family, the Rigases, borrowed $2.7 billion through various entities,
including a limited partnership named Highland Holdings, from credit
facilities that were co-guaranteed by the Company. This practice
allowed for these debt obligations to remain off the Company's balance
sheet and, instead, appear as if they were only the obligation of
Highland and the other entities.
The Rigas family used the borrowed money to purchase the Company stock
and convertible bonds during the past four years. According to
published reports, the securities purchased by the Rigases cost
approximately $1.8 billion, but their market value has since shrunk by
approximately $1 billion.
In addition, the Company's results and reported earnings were false
because, at all relevant times, defendants, including members of the
Rigas family:
(1) failed to disclose approximately $2.7 billion in off-balance
sheet debt that the Company had incurred during co-borrowing
ventures with various entities managed by the Company that
were under the control of the Rigas family;
(2) failed to disclose that this $2.7 billion in off-balance sheet
debt was not fully guaranteed by sufficient, underlying
assets;
(3) failed to disclose that Highland and other entities controlled
by the Rigas family had borrowed $2.7 billion and that the
loans were guaranteed by Adelphia. The Rigas family then used
these funds to purchase Adelphia securities; and
(4) failed to disclose that the Rigases' purchase of Adelphia
securities was effectuated through borrowed funds, guaranteed
by the Company.
The truth concerning the Company's true financial affairs began to
emerge on March 27, 2002, when the Company announced its Fourth Quarter
and Full-Year results. The press release and conference call that
followed revealed that the Company had at least $2.3 billion in off-
balance sheet debt stemming from its guaranty of credit facilities for
Highland.
On April 1, 2002, the full-scope of the fraud was revealed when the
Company announced that it had requested an extension of time from the
SEC in which to file its Form 10-K.
The entirety and scope of the Company's malfeasance remains under
investigation. On April 3, 2002, the Wall Street Journal reported that
the Company's off-balance-sheet debt was at least $2.7 billion,
approximately $400 million more than the Company previously disclosed.
The Journal stated that "The additional $400 million debt obligation
stems from investments the Rigas family, which controls Adelphia,
agreed to make in the cable company earlier this year. People close to
the company say the Rigases paid for the shares with loans guaranteed
by Adelphia and made to Highland Holdings, the main off-balance-sheet
entity." The Company, based in Coudersport, Pa., which ranks sixth
amongst the nation's cable television companies, didn't return calls
seeking comment. The SEC declined to comment.
On April 3, 2002, the Company disclosed that the SEC had commenced an
informal inquiry into its "co-borrowing agreements" and had petitioned
the Company for certain "clarification" related documents. The
Company's stock has continued to slide, falling an additional 14% by
mid-day trading on April 3, 2002.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
ANDRX CORPORATION: Marc Henzel Commences Securities Suit in S.D. FL
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of
Florida on behalf of all purchasers of the common stock of Andrx
Corporation (Nasdaq: ADRX) from April 30, 2001 through February 21,
2002, 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. The suit charges that the Company and certain
of its officers and directors violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market during
the class period, thereby artificially inflating the price of the
Company's common stock.
Specifically, the suit alleges that the Company issued a series of
statements concerning its generic version of the drug Tiazacr that the
only thing holding up the drug from reaching the market was continuing
patent litigation with Biovail Corp. in connection with Tiazacr. The
defendants failed to disclose that in fact, the Company had difficulty
making a stable version of generic Tiazacr, including that it had
amended its original application to the FDA thirteen times.
When the Company announced on February 21, 2002 that the FDA had raised
"certain issues" concerning the generic Tiazacr, Andrx's stock price
dropped from $42.61 per share on February 21, 2002 to $34.96 per share
on February 22, 2002, on volume of 15,767,100, over seven times the
prior day's volume.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
BIOPURE CORPORATION: Marc Henzel Commences Securities Fraud Suit in MA
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Massachusetts
against Biopure Corporation (Nasdaq: BPUR) on behalf of all those
persons or entities who purchased the Company's common stock during the
period between May 8, 2001 and December 6, 2001, inclusive.
The suit alleges that the Company, a leading developer, manufacturer
and marketer of a new class of pharmaceuticals it calls "oxygen
therapeutics," and the Company's 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 US 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. Plaintiff 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 $20 plateau above which the
stock traded throughout most of the class period.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
CORNELL COMPANIES: Mark S. Henzel Files Securities Suit in S.D. TX
------------------------------------------------------------------
The Law Offices of Marc S. Henzel lodged a securities class action in
the United States District Court for the Southern District of Texas on
behalf of purchasers of Cornell Companies, Inc. (NYSE: CRN) common
stock during the period between March 6, 2001 and March 5, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company is
a provider of privatized correctional, detention and pre-release
services to governmental agencies.
The suit alleges that during the class period, defendants issued
favorable but false financial statements and made false and misleading
statements about the Company's business. As a result of these false
statements, the Company's stock traded as high as $18.40. Defendants
took advantage of this artificial inflation, selling 3.4 million shares
of Company stock for proceeds of over $48 million in a November 2001
secondary offering.
On February 6, 2002, Bloomberg ran an article on the Company which
stated in part, "Cornell Cos., which operates 69 prisons in 13 states
and the District of Columbia, said it will review the accounting of an
August real estate transaction involving 11 properties. Its shares fell
as much as 63 percent. The company received a letter Thursday from
auditor Arthur Andersen LLP that raised concern about the transaction,
said Larry Stein of FRB Weber Shandwick, a firm that handles public
relations for Cornell. The Andersen review was part of a year-end
audit."
Upon these disclosures, the Company's stock dropped to as low as $6.50
before closing at $9.96 on February 6, 2002, some 45% below the class
period high of $18.40.
On March 6, 2002, the Company issued a press release entitled, "Cornell
Companies Inc. to Restate Its Financials for Year Ended December 31,
2000 and Subsequent Quarters." On this news, the Company's shares
plummeted once again by more than 10%.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
DICE INC.: Mounting Vigorous Defense V. Securities Suits in S.D. NY
-------------------------------------------------------------------
Dice, Inc. vehemently denies the allegations in a securities class
action pending in the United States District Court for the Southern
District of New York against the Company, certain of its present and
former directors and former officers, and the underwriters of its
initial public offering and secondary offering:
(1) JP Morgan Securities, Inc.,
(2) Bear Stearns & Co., Inc.,
(3) Volpe Brown Whelan & Co., LLC and
(4) Wit Capital Corporation
The suit alleges, among other things, that the underwriters of the
Company's initial public offering and secondary offering violated the
securities laws by failing to disclose certain alleged compensation
arrangements (such as undisclosed commissions or stock stabilization
practices) in the registration statements for the offerings. The
Company and certain of its present and former directors and former
officers are named in the complaints pursuant to Section 11 of the
Securities Act of 1933.
The Company pointed out in a disclosure to the Securities and Exchange
Commission that similar actions have been filed against more than 300
other issuers and their underwriters relating to offerings since 1998.
The Company intends to defend the case vigorously. However, due to the
inherent uncertainties of litigation, the Company cannot predict the
outcome of this litigation with any certainty.
EAGLE BUILDING: LeBlanc Waddell Launches Securities Suit in S.D. FL
-------------------------------------------------------------------
LeBlanc and Waddell, LLC initiated a securities class action against
Eagle Building Technologies, Inc. (OTCBB:EGBT), accusing the Company
and its former chairman of misleading investors. The suit was
commenced in the United States District Court for the Southern District
of Florida, West Palm Beach Division, on behalf of all investors who
bought the Company's common stock from April 18, 2001 through February
14, 2002.
According to the complaint, the Company reported fabricated revenue
from the company's construction business in India and deceived the
public about the nature of its Indian operations. The suit also says
that the defendants issued false statements about purportedly
"revolutionary" airport security technology in a news release issued
two weeks after the September 11, 2001 attacks on New York and
Washington.
On February 14, 2002, the Company announced that it would be forced to
issue earnings restatements for fiscal years 2000 and 2001. That same
day, the complaint said, the U.S. Securities and Exchange Commission
began an investigation into the company's foreign operations and its
post-September 11 statements about an airport security system, mail
sterilization technology and money laundering detection software.
News of the alleged fraud triggered a sharp drop in its stock price,
which had traded as high as $12.30 a share during the class period, the
complaint said. On February 14, the Company's share price fell 68% to
$1.44.
For more details, 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
EAGLE BUILDING: Marc Henzel Commences Securities Fraud Suit in Nevada
---------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Nevada against
Eagle Building Technologies, Inc., previously known as Eagle Capital
International, Ltd. (OTC: EGBT.PK) and certain of its officers and
directors, on behalf of purchasers of the Company's securities.
The complaint asserts claims against the Company, Anthony D'Amato,
Paul-Emile Desrosiers and Tanner & Co. for violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.
The complaint alleges that as a result of materially false and
misleading statements concerning the Company's products, operations and
financial results, its securities traded at artificially inflated
prices during the class period.
The suit further alleges that the artificial inflation continued until
the time the Company acknowledged that its prior financial results,
from December 31, 2000 to September 30, 2001, were overstated and that
certain press releases issued by the Company concerning post-September
11th security measures marketed by the Company may have been false and
misleading.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
ENRON CORPORATION: John Hancock Subsidiaries Commence Suit in Texas
-------------------------------------------------------------------
Three subsidiaries of John Hancock Financial Services commenced a class
action lawsuit against 27 officers and directors of Enron Corporation,
and the Company's auditor, Arthur Andersen, LLP in the United States
District Court in Houston, Texas, seeking restitution for losses
suffered by the subsidiaries on investments in non- publicly traded
securities issued by Enron and its affiliates.
The subsidiaries, Investors Partner Life Insurance Company, John
Hancock Life Insurance Company and John Hancock Variable Life Insurance
Company, had made investments of approximately $215 million during the
period covered by the suit. The suit alleges that these investments
were made based on false, misleading and incomplete information
provided by the company and endorsed by Arthur Andersen.
"We are alleging that Enron's officers and directors were directly
complicit in the fraud perpetrated against us," said David F.
D'Alessandro, chairman and chief executive officer of John Hancock
Financial Services. "It is our belief that they personally profited
from this fraud and, as a result, it is entirely appropriate to file
the action directly against them."
The suit alleges that officers and directors of Enron made
approximately $1 billion in profit on insider trading of Enron stock
during the period covered by the suit. "We have a fiduciary
responsibility to our shareholders and intend to pursue this action
very aggressively," Mr. D'Alessandro said. The purported class
includes numerous major US and foreign financial institutions.
For more details, contact Brian Carmichael by Phone: 617-572-6409 or
617-966-2721 (mobile phone) by E-mail: bcarmichael@jhancock.com or
visit the firm's Web site: http://www.jhancock.com
ENRON CORPORATION: Kirby McInerney Files Securities Suit in S.D. TX
-------------------------------------------------------------------
Kirby McInerney & Squire, LLP initiated a securities class action in
the United States District Court for the Southern District of Texas on
behalf of all purchasers of certain non-publicly traded securities
issued by Enron Corp. and its affiliates (NYSE:ENE) (Pink Sheets:ENRPQ)
during the period between October 19, 1998 and November 27, 2001. The
suit asserts claims on behalf of non-publicly traded securities that
were:
(1) issued by Enron or by Enron affiliates or by trusts or other
issuers (collectively with Enron, "Enron Entities") and
(2) that either were secured or guaranteed, in whole or in part,
directly or indirectly, by Enron or by Enron's issuance of
other Enron debt or preferred or equity securities, or which
benefited from any such guarantee, including, without
limitation, Enron performance guarantees or Enron payment
guarantees that were issued in connection with securities or
that were structured to be repaid, in whole or in part
(including without limitation payments of dividends, yield or
interest with respect to such Class Securities) from a stream
of income generated by notes or by other securities or other
payment obligations of Enron. The Class Securities do not
include any securities which are included within the class
definition in the consolidated action captioned Amalgamated
Bank, et al. v. Kenneth L. Lay, et al., Civil Action No. H-01-
4198, filed in the same court.
Excluded from the class are defendants, the officers and directors of
Enron, members of their immediate families and their legal
representatives, heirs, successors or assigns.
The action asserts claims against Arthur Anderson, LLP and other member
firms of Anderson Worldwide, S.C. (Arthur Anderson) and against 27
Enron executives who, during the class period, collectively received in
excess of $1 billion from selling Enron stock. The Company itself is
not named as a defendant in this action as it is protected by the
automatic stay pursuant to Chapter 11 of the U.S. Bankruptcy Code.
The claims asserted arise under and pursuant to Section 10(b) and 20(a)
of the Securities Exchange Act and Rule 10b-5 promulgated thereunder by
the Securities and Exchange Commission (SEC), and also arise under
Texas state law. The suit alleges that, during the class period,
defendants materially misrepresented, through public statements,
audited financial statements, and disclosure documentation provided to
purchasers of the class securities, the Company's ability to perform
pursuant to guarantees and other forms of credit enhancement issued as
part of the class securities. Defendants' material misrepresentations
concerning the Company's true operational and financial condition had
the effect of artificially inflating the value of the class securities
purchased by class members during the class period.
The suit alleges that, had defendants' statements been accurate and the
truth concerning Enron been known, plaintiff and other members of the
Class would not have purchased or otherwise acquired the class
securities, or, if they had acquired such securities during the class
period, they would not have done so at the artificially inflated prices
which they paid.
In order to overstate its net income and earnings per share during the
class period, the defendants caused the Company to violate generally
accepted accounting principles (GAAP) and SEC rules by failing to
consolidate entities which, pursuant to GAAP, were required to be
consolidated into Enron's financial statements and which entities were
incurring hundreds of millions of dollars in losses and should have
reduced Enron's earnings.
The Company also improperly accounted for common stock issued to a
related-party entity, which should have been treated as a reduction to
shareholders' equity but was accounted for as a note receivable. The
Company has also admitted to not recording, from 1997 to 2000, material
proposed audit adjustments and reclassifications to shareholders'
equity, which Enron chose not to make until the end of the class
period. The Company also failed to record, on a timely basis, required
write-downs for impairment in the value of its content services
business, and for the impairment in the value of its interest in The
New Power Company, and its broadband and technology investments. Enron
has now admitted that these results were false and improperly reported
and has restated its financial results.
For more information, contact Jeffrey H. Squire, Richard L. Stone or
Mark Strauss by Mail: 830 Third Avenue, 10th Floor, New York, New York
10022 by Phone: 212-317-2300 or 888-529-4787 or by E-Mail:
mstrauss@kmslaw.com
FLAG TELECOM: Marc Henzel Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York on behalf of all purchasers of the common stock of FLAG Telecom
Holdings, Ltd. (Nasdaq: FTHL) from March 23, 2001 through February 13,
2002, inclusive. The suit names as defendants the Company and:
(1) Andres Bande, CEO and Chairman,
(2) Edward McCormack, Chief Operating Officer,
(3) Andrew Evans, Chief Technology Officer and
(4) Larry Bautista, Chief Financial Officer until August 2001
The suit charges the defendants with issuing false and misleading
statements concerning its business and financial condition.
Specifically, the suit alleges that throughout the class period, the
Company reported strong year-over-year revenue growth.
Unbeknownst to investors, however, as alleged in the complaint, the
Company was experiencing diminishing revenue growth. The suit alleges
that in order to create the impression that the Company was continuing
to experience growth, the Company engaged in a series of reciprocal
transactions with certain competitors for the purchase and sale of dark
fiber optic cable, the "dark fiber swap".
The suit alleges that as a result of these transactions, the Company
artificially inflated its operating results and materially
misrepresented its financial results at all relevant times.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
HOST REIT: FL Court Approves Settlement, Pending DE Suit Dismissed
------------------------------------------------------------------
The Palm Beach County Circuit Court granted final approval to the
settlement proposed by Host Real Estate Investment Trust (Host REIT),
formerly Host Marriott Corporation, to settle two class actions
relating to the 1996 tender offer for Marriott Hotel Properties II
Limited Partnership (MHP II) units and the Trust's acquisition of MHP
II in connection with the 1998 REIT conversion.
Limited partners of MHP II filed two class actions in 1996, one in Palm
Beach County Circuit Court, and another in the Delaware Court of
Chancery. The suits charge the Trust and certain of its affiliates
with violating their fiduciary duties and engaging in fraud and
coercion in connection with the tender offer and the MHP II
acquisition.
In the Florida case, the defendants removed the case to the United
States District Court for the Southern District of Florida and, after
hearings on various procedural motions, the federal court remanded the
case to state court on July 25, 1998.
In the Delaware case, the Delaware Court of Chancery initially granted
the plaintiffs' motion to voluntarily dismiss the case with the proviso
that the plaintiffs could re-file in the aforementioned action in
Florida federal court. After the federal court's remand of the Florida
action back to Florida state court, two of the three original Delaware
plaintiffs asked the Court of Chancery to reconsider its order granting
their voluntary dismissal.
The Court of Chancery refused to allow the plaintiffs to join the
Florida action and, instead, reinstated the Delaware case. In January
1999, Cary W. Salter, one of the original plaintiffs, alone filed an
amended consolidated class action in the Delaware suit. In January
2000, the Delaware court issued a memorandum opinion in which it
dismissed all but one of the plaintiff's claims, which concerns the
adequacy of disclosure during the initial tender offer.
In October 2001, the Trust entered into a settlement agreement with
respect to the two cases. At a fairness hearing held on February 22,
2002, the Florida court gave final approval to the settlement. The
Court of Chancery subsequently dismissed the Delaware case.
HOST REIT: IL Court Allows Appeal of Ruling Refusing Suit Dismissal
-------------------------------------------------------------------
The Circuit Court of Cook County, Illinois granted Host Real Estate
Investment Trust (Host REIT) leave to appeal the Court's refusal to
dismiss a class action filed by limited partners of the Mutual Benefit
Chicago Marriott Suite Hotel Partners, LP, known as "O'Hare Suites"
against the Company and:
(1) Host LP,
(2) Marriott International, and
(3) MOHS Corporation, a subsidiary of Host LP and a former general
partner of O'Hare Suites.
The suit alleges that an improper calculation of the hotel manager's
incentive management fees resulted in inappropriate payments in 1997
and 1998, and, consequently, in an inadequate appraised value for their
limited partner units in connection with the acquisition of O'Hare
Suites during the 1998 REIT conversion. The plaintiffs are seeking
damages of approximately $13 million.
In August 2001, the plaintiffs filed a third amended complaint, which
did not include Marriott International as a defendant. The Trust
responded by filing a motion to dismiss based on the plaintiffs' lack
of standing to bring a derivative action under Rhode Island law. At a
hearing held on December 10, 2001, the court denied this motion and we
sought leave to file an appeal.
The Company believes the suit has no merit and intends to vigorously
defend against the suit.
JDS UNIPHASE: Marc Henzel Commences Securities Fraud Suit in N.D. CA
--------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
on behalf of an institutional investor in the United States District
Court for the Northern District of California on behalf of purchasers
of JDS Uniphase Corp. (NASDAQ: JDSU) publicly traded securities during
the period between July 27, 1999 and July 26, 2001.
The suit charges the Company, certain of its officers and directors and
its controlling shareholder with violations of the Securities Exchange
Act of 1934. The Company is a provider of fiber optic components and
modules, which form the building blocks for fiber optic networks.
The suit alleges that during the class period, defendants were
motivated to inflate the value of Company stock so that the Company
could make acquisitions using stock and so the individual defendants,
who are the top officers and directors of JDS Uniphase, could sell
their shares.
During the class period, defendants represented that demand was
accelerating and the Company's only problem was its ability to
manufacture enough product to meet demand. Defendants represented that
they had outstanding visibility, including demand for the Company's
products through the end of fiscal 2001 and that the Company had 80
engineers whose job it was to monitor customers and their inventory
levels and as a result, the Company would learn about any slowdown in
demand early.
The Company also misrepresented the success of its largest
acquisitions, including Optical Coating Labs, Cronos Integrated
Microsystems, E-Tek Dynamics and SDL Inc. As a result of these positive
statements, Company stock traded as high as $146.32.
The individual defendants (all of whom were top officers and directors
of the Company) and its controlling shareholder took advantage of the
inflation, selling or disposing of 25.2 million shares of their stock
for proceeds of $2.1 billion.
Then, on July 2001, the Company announced the restatement of its 3rdQ
F01 results, the write-off of $44 billion in goodwill associated with
its acquisitions, inventory write-downs and that F01 EPS would be only
$0.16 and that it would incur a loss of $0.15 in F02. On this news,
Company shares dropped to as low as $7.90, or more than 94% lower than
the class period high of $146.32.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
JDS UNIPHASE: LeBlanc Waddell Commences Securities Suit in N.D. CA
------------------------------------------------------------------
LeBlanc and Waddell, LLC initiated a securities class action against
JDS Uniphase Corporation (Nasdaq:JDSU) claiming the Company used false
and misleading statements to artificially inflate its stock price. The
suit was filed in the United States S. District Court for the Northern
District of California on behalf of all investors who bought the
Company's common stock from July 27, 1999 through July 26, 2001.
The suit claims that the San Jose-based fiber-optics Company issued
false and misleading financial statements to the public. According to
the complaint, the Company and 10 of its top officers stated throughout
the class period that demand for the Company's products was
accelerating, and that the Company's only problem was its ability to
manufacture enough to meet demand.
The suit also maintains that the Company misrepresented the success of
several major acquisitions and downplayed its dependence on its two
largest customers. The company also falsely informed investors that
demand was as strong as claimed, the complaint alleges.
On July 26, 2001, the Company restated its third quarter 2001 financial
results and took massive fourth-quarter charges to account for a total
of $44 billion in write-offs associated with its acquisitions and
excess inventory. Those revisions and write-offs increased the
Company's losses for fiscal year 2001 to $56.1 billion.
According to the complaint, Company executives knew of a slowdown in
demand because the company employed 80 engineers to monitor customers
and inventory levels. After the revised numbers were announced,
Company stock fell to as low as $7.90 per share after trading at a
class period high of $146.32, a 94% decline.
The lawsuit also alleges that the artificially inflated stock price
enabled certain company officers to sell $2.1 billion of their own JDS
holdings before the company's true financial state became public.
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
JDS UNIPHASE: Kaplan Fox Commences Securities Fraud Suit in N.D. CA
-------------------------------------------------------------------
Kaplan Fox and Kilsheimer LLP initiated a securities class action
against JDS Uniphase Corporation (Nasdaq:JDSU) and certain of its
officers and directors in the United States District Court for the
Northern District of California, on behalf of all persons or entities
who purchased the Company's publicly traded securities of JDS Uniphase
between July 27, 1999 and July 26, 2001, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the federal securities laws. The suit alleges,
among other things, that during the class period, defendants were
motivated to inflate the value of Company stock so that the Company
could make acquisitions using stock and so the individual defendants,
who are the top officers and directors of the Company, could sell their
shares.
The Company also misrepresented the success of its largest
acquisitions, including Optical Coating Labs, Cronos Integrated
Microsystems, E-Tek Dynamics, and SDL, Inc. As a result of these
positive statements, Company stock traded as high as $146.32.
The individual defendants, all top officers and directors of the
Company, and its controlling shareholder took advantage of the
inflation, selling or disposing of 25.2 million shares of their Company
stock for proceeds of $2.1 billion. Then, on July 26, 2001, the
Company announced a restatement of March 31, 2001 results, the write-
off of $44 billion in goodwill associated with its acquisitions,
inventory write-downs and that EPS for the 2001 fiscal year would be
only $0.16 and that it would incur a loss of $0.15 in its 2002 fiscal
year.
On this news, Company shares dropped to as low as $7.90 - or more than
94% lower than the class period high of $146.32.
For more information, contact Frederic S. Fox, Jonathan K. Levine 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
MEASUREMENT SPECIALTIES: LeBlanc Waddell Lodges Securities Suit in NJ
---------------------------------------------------------------------
LeBlanc & Waddell LLC initiated a securities class action against
Measurement Specialties, Inc. (AMEX:MSS) claiming that the Company's
publicly reported financial results were misleading. The suit was
filed in the United States District Court for the District of New
Jersey, on behalf of all investors who bought the Company's common
stock from August 1, 2001 through February 14, 2002 or acquired shares
in or traceable to the company's August 1, 2001 public stock offering.
According to the complaint, the Company's financial results were
falsely enhanced by, among other things, improperly recognized revenues
and overstated inventories.
The truth about the state of the electronics company's finances began
to emerge on February 15, 2002, when the Company issued a press release
before the market opened stating that the Company:
(1) would delay filing its financial report for the third fiscal
quarter ended December 31, 2001 because it was in the process
of verifying its earnings and inventory valuation;
(2) expected a significant third quarter 2001 loss;
(3) was in default under its loan agreements;
(4) expected to restate its financial statements for the second
fiscal quarter ended September 30, 2001 and possibly for other
periods; and
(5) had terminated its chief financial officer.
After the announcement, trading of Company stock was abruptly halted.
It has not yet resumed. The shares had traded as high as $16 during the
class period.
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
NEWPOWER HOLDINGS: Wolf Haldenstein Commences Securities Suit in NY
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Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of NewPower Holdings, Inc. (NYSE: NPW)
securities between October 5, 2000 and December 5, 2001, inclusive,
against the Company, certain of its officers and directors, and
underwriters:
(1) Credit Suisse First Boston,
(2) CIBC World Markets Corporation,
(3) Paine Webber, Inc.,
(4) Salomon Smith Barney, Inc. and
(5) DLJ Direct, Inc.
The suit alleges that defendants issued false and misleading statements
in the Company's prospectus and throughout the class period that had
the effect of artificially inflating the market price of the Company's
securities.
Specifically, the complaint alleges that the Company's prospectus for
their October 5, 2000 IPO was false and misleading because it failed to
disclose the true nature of its relationship to Enron Corporation.
Enron created NewPower in 1999, and Enron continues as its controlling
shareholder.
The prospectus led the investing public to believe that the Company's
chances of success in a volatile energy market were increased with the
aid of complex risk management strategies created by its affiliate,
Enron Energy Services, Inc. (EES), an Enron subsidiary. However, there
were no such hedging strategies possessing the ability to allow
NewPower to operate profitably considering market conditions present at
the time of the IPO or, at any time thereafter.
Enron's CFO, Andrew Fastow, had engineered a partnership labeled
"Raptor III," in order to hedge Enron's position against a decline in
the Company's stock. In this case, Enron would not need to record the
decline on its own books, contrasting with the IPO prospectus which had
represented that Enron and its affiliates were long-term investors in
the Company, and believers in the future success of NewPower. The
Raptor transactions were not addressed fully in the Prospectus.
For more information, contact Fred Taylor Isquith, Michael Miske,
Gustavo Bruckner, 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 NewPower.
PRICELINE.COM: Mounting Vigorous Defense V. Consolidated Suit in NY
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priceline.com, Inc. faces a consolidated amended complaint pending in
the United States District Court for the Southern District of New York,
alleging violations of federal securities laws relating to the
Company's March 1999 initial public offering and its August 1999 second
public offering.
The consolidated suit was initially filed as four complaints in the
Southern District New York against the Company and:
(1) Richard S. Braddock,
(2) Jay Walker,
(3) Paul Francis,
(4) Morgan Stanley Dean Witter & Co.,
(5) Merrill Lynch, Pierce, Fenner & Smith, Inc.,
(6) BancBoston Robertson Stephens, Inc. and
(7) Salomon Smith Barney, Inc.
The suits alleged, among other things, that company and the individual
defendants named in the suits violated the federal securities laws by
issuing and selling Company's common stock in its March 1999 initial
public offering without disclosing to investors that some of the
underwriters in the offering, including the lead underwriters, had
allegedly solicited and received excessive and undisclosed commissions
from certain investors.
The cases were later consolidated for pre-trial purposes with hundreds
of other cases, which contain allegations concerning the allocation of
shares in the initial public offerings of more than 300 companies. In
December 2001, the suits were consolidated and amended, making similar
allegations to those described above but with respect to both the
Company's March 1999 initial public offering and its August 1999 second
public offering of common stock. This amended suit also added as
defendants:
(i) Timothy G. Brier,
(ii) Nancy Peretsman,
(iii) Allen & Co., Inc.,
(iv) Donaldson Lufkin & Jenrette Securities Corp. and
(v) Goldman Sachs & Co.
The Company's time to respond to these complaints has been postponed
and not yet rescheduled by the court. The Company intends to defend
vigorously against these actions.
PRICELINE.COM: Asks CT Court To Dismiss Suit For Securities Violations
----------------------------------------------------------------------
priceline.com, Inc. asked the United States District Court for the
District of Connecticut to dismiss the consolidated securities class
action, charging the Company with federal securities violations
relating to its September 27, 2000 earnings restatement.
Twenty-three class actions were initially filed against the Company.
Connecticut Judge Dominick J. Squatrito later ordered these cases
consolidated. In October 2001, the plaintiffs filed the consolidated
amended complaint.
On February 5, 2002, Amerindo Investment Advisors, Inc., who is one of
the lead plaintiffs in the consolidated action, made a motion for leave
to withdraw as lead plaintiff in this action. The court has yet to
rule on that motion.
On February 28, 2002, the Company filed a motion to dismiss the
consolidated suit. Plaintiffs have sixty days to file papers in
opposition to that motion, and thereafter the Company will have
thirty days to file our reply brief. The Company intends to defend
vigorously against this action.
PRICELINE.COM: Asks DE Court To Dismiss Shareholder Derivative Suit
-------------------------------------------------------------------
priceline.com, Inc. has moved for the dismissal of a shareholder
derivative suit pending against it, its Board of Directors and certain
of its current executive officers, in the Delaware Chancery Court for
New Castle County, alleging breach of fiduciary duty and waste of
corporate assets.
In February 2001, all defendants moved to dismiss the complaint for
failure to make a demand upon the Board of Directors and failure to
state a cause of action upon which relief can be granted. Pursuant to
a stipulation by the parties, an amended complaint was filed in June
2001. Defendants renewed their motion to dismiss in August 2001, and
the court has scheduled oral argument on that motion for April 23,
2002.
The Company intends to defend vigorously against this action.
RADIO UNICA: Labels "Without Merit" Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Radio Unica Communications Corporation faces a securities class action
pending in the United States District Court for the Southern District
of New York, on behalf of purchasers of the Company's common stock
between October 19, 1999 and December 6, 2000. The suit names as
defendants:
(1) Joaquin F. Blaya,
(2) Steven E. Dawson,
(3) Manuel A. Borges,
(4) Salomon Smith Barney Holdings,
(5) The Bear Stearns Companies Inc.,
(6) Credit Suisse First Boston Corporation,
(7) CIBC World Markets,
(8) FleetBoston Robertson Stephens, Inc,
(9) Deutsche Banc Alex Brown Incorporated,
(10) Merrill Lynch, Pierce, Fenner & Smith Inc.,
(11) Morgan Stanley Dean Witter & Co., and
(12) Prudential Securities Incorporated
The suit charges the defendants with violations of Sections 11, 12 and
15 of the Securities Act of 1933 and Section 10(b) and 20(a) of the
Securities Exchange Act of 1934 (and Rules 10b-3 and 10b-5 promulgated
thereunder), for issuing a registration statement and prospectus that
contained material misrepresentations and/or omissions.
The suit alleges that the prospectus was false and misleading because
it failed to disclose:
(i) the agreements between the underwriters and certain investors
to provide them with significant amounts of restricted Company
shares in the IPO in exchange for excessive and undisclosed
commissions; and
(ii) the agreements between the underwriters and certain customers
under which the underwriters would allocate shares in the IPO
to those customers in exchange for the customers' agreement to
purchase Company shares in the aftermarket at pre-determined
prices.
The Company considers this claim, as it relates to the Company to be
wholly without merit and intends to vigorously defend against such
claim.
SWITCHBOARD INC.: Securities Suit "Without Merit" in S.D. NY
-------------------------------------------------------------
Switchboard, Inc. vows to mount a vigorous defense against the
securities class action pending against it in the United States
District Court for the Southern District of New York naming as
defendants the Company and the managing underwriters of its initial
public offering:
(1) Douglas J. Greenlaw, officer,
(2) John P. Jewett, former officer, and
(3) Dean Polnerow, officer
The suit alleges that the registration statement and final prospectus
relating to the Company's initial public offering contained material
misrepresentations and/or omissions related, in part, to excessive and
undisclosed commissions allegedly received by the underwriters from
investors to whom the underwriters allegedly allocated shares of the
initial public offering.
The Company asserts that this suit is similar to over 300 others filed
recently against companies that went public between 1998 to 2000. The
Company believes the claims against it are without merit.
SYMBOL TECHNOLOGIES: Schiffrin Barroway Files Securities Suit in NY
-------------------------------------------------------------------
Schiffrin and Barroway, LLP initiated a securities class action in the
United States District Court for the Eastern District of New York on
behalf of all purchasers of the common stock of Symbol Technologies,
Inc. (NYSE:SBL) from October 19, 2000 through February 13, 2002,
inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statement concerning their business
and financial condition. Specifically, the suit alleges that
defendants engaged in conduct, which had the effect of increasing the
Company's reported revenue and profits:
(1) the Company booked as profit in the third quarter 2000 a one-
time royalty payment in excess of $10 million, enabling the
Company to make its third quarter projections;
(2) the Company used expenses associated with its acquisition of
Telxon to mask the fact that its sales were declining; and
(3) the Company booked as having shipped in the first quarter of
2001 more than $40 million in inventory that included side
provisions allowing customers to delay payments or return
merchandise, or included products that "never left the
warehouse."
The Company subsequently had a second-quarter 2001 inventory write-down
of $67.1 million after tax.
On February 13, 2002, Newsday, Inc. reported that the Company had
engaged in the above-described accounting practices, received an
inquiry letter from the Securities and Exchange Commission, and had
hired accounting and consulting firm KPMG to review its sales process.
The next day, the Company announced it was lowering its outlook for
2002 earnings and that its Chief Executive Officer would retire in May
2002.
In response to the Newsday article and the Company's announcements, the
price of Company stock plunged more than 53% from an opening price of
$14.15 on February 14, 2002 to a low of $6.60 on February 15, 2002 on
unusually heavy trading volume.
For more information, contact Marc A. Topaz or Stuart L. Berman by
Phone: 888-299-7706 (toll free) or 610-822-2221 by E-mail:
info@sbclasslaw.com or visit the firm's Web site:
http://www.sbclasslaw.com
WINK COMMUNICATIONS: "Laddering Case" Like Hundreds of Others, Says Co
----------------------------------------------------------------------
Wink Communications, Inc. vowed to vigorously oppose the securities
class action filed in the United States District Court for the Southern
District of New York on behalf of all persons and entities who
purchased, converted, exchanged or otherwise acquired the Company's
common stock between August 18, 1999 and December 6, 2000, inclusive.
The suit asserts claims under Section 11, 12 and 15 of the Securities
Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated by the SEC thereunder against the
Company, certain of its officers and directors, and its underwriters.
The Company described the suit as a "laddering" case, similar to
hundreds of other laddering cases filed against other newly public
companies by other class action defendants in the same Court. The
Company believes it has meritorious defenses against the suit and
expressed confidence that the resolution of each matter will not have a
material adverse effect on its consolidated financial position, results
of operations or cash flows.
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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
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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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