/raid1/www/Hosts/bankrupt/CAR_Public/020426.mbx
C L A S S A C T I O N R E P O R T E R
Friday, April 26, 2002, Vol. 4, No. 82
Headlines
ANDRX CORPORATION: Sued for Alleged Monopoly in Cardizem CD Market
ANDRX CORPORATION: Entex Acquisition Results in PPA-Related Drug Suit
AT&T CORPORATION: Faces Suit For Violating WI Laws in Customer Contract
CANADA: School Settles Pension Claim With Retired Female Professors
COAST ENERGY: Recalls 45T Energy Smart Power Planners For Shock Hazard
CONSECO INC.: Court Approves US$34 M Settlement To Long Term Care Suit
CROWLEY MARITIME: Faces Asbestos-Related Damage Suits in Various Courts
EASY MONEY: Sued For Charging Usurious Interest Rates On Loans in KY
FORD MOTOR: Adds Changes To "Discriminatory" Employee Evaluation System
H & R BLOCK: Appeals Court Reverses $25 Million Tax Refund Settlement
HAWAII: Sued For Allegedly Diverting $346.9 Million In Retirement Funds
LEARN2 CORPORATION: Mounting Vigorous Defense V. Consumer Suit in CA
PALLOTA TEAMWORKS: Sued Over Distribution of AIDS Vaccine Rides Funds
SAXON MORTGAGE: Demands Arbitration in Alleged RESPA Violations Suit
TRI-STATE CREMATORY: Suit Filed By Families of Deceased in GA Court
*Changes in Securities Reform Act Sought After Wave of Enron Lawsuits
Securities Fraud
ACCELERATED NETWORKS: Decision On Securities Suit Dismissal Pending
AETHER SYSTEMS: Faces Suit For Securities Act Violations in S.D. NY
ALLIED IRISH: Bernstein Liebhard Commences Securities Suit in S.D. NY
ANDRX CORPORATION: Faces Suits For Securities Violations in S.D. FL
CALPINE CORPORATION: Marc Henzel Commences Securities Suit in N.D. CA
CONCORD CAMERA: Milberg Weiss Commences Securities Suit in S.D. FL
CORNELL COMPANIES: Bernstein Liebhard Lodges Securities Suit in S.D. TX
CROWLEY MARITIME: CA Court Sets Certification Hearing For May 2002
FLAG TELECOM: Scott Scott Commences Securities Fraud Suit in S.D. NY
FLORIDA PROGRESS: Sued Over Proposed Sale of Stock in Florida Court
FOUNDRY NETWORKS: Labels "Without Merit" Securities Suit in S.D. NY
FOUNDRY NETWORKS: To Mount Vigorous Defense V. Securities Suit in CA
GEMSTAR-TV GUIDE: Mark McNair Initiates Securities Suit in C.D. CA
GERBER SCIENTIFIC: Mark McNair Launches Securities Fraud Suit in CT
INTERTRUST TECHNOLOGIES: Mounting Vigorous Defense V. Suit in S.D. NY
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
MONTANA POWER: Plaintiffs Ask Leave To Add Defendant in Securities Suit
OPEN MARKET: MA Court Hears Arguments on Dismissal of Securities Suit
ORCHID BIOSCIENCES: Labels "Without Merit" Securities Suit in S.D. NY
PROASSURANCE CORPORATION: Sued Over Proposed Stock Repurchase in MI
SONICWALL INC.: Securities Fraud Suits Could "Divert Attention" in NY
STILLWATER MINING: Mark McNair Commences Securities Suit in S.D. NY
TORCH OFFSHORE: Faces Suit For Securities Act Violations in E.D. LA
VIROPHARMA INC.: Schiffrin Barroway Lodges Securities Suit in E.D. PA
*********
ANDRX CORPORATION: Sued for Alleged Monopoly in Cardizem CD Market
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Andrx Corporation faces several antitrust lawsuits in the United States
District Court for the Eastern district of Michigan, relating to the
Company's and Aventis Corporation's alleged near monopoly in the United
States market for Cardizem CD and a bioequivalent version of this
pharmaceutical product.
Several suits were commenced in August 1998 in the states of Alabama,
California, Florida, Illinois, Kansas, Michigan, Minnesota, New York,
Tennessee, Wisconsin, North Carolina and the District of Columbia.
These suits were later consolidated for multi-district litigation
purposes in the Eastern District of Michigan.
The suits uniformly allege that the two Companies, by way of the 1997
stipulation, have engaged in alleged state antitrust and other
statutory and common law violations that allegedly have given them a
near monopoly for Cardizem CD and its bioequivalent version.
The suits assert that the monopoly possessed by the defendants enables
Aventis to perpetuate its ability to fix the price of Cardizem CD at an
artificially high price, free from generic competition, with the result
that direct purchasers such as pharmacies, as well as indirect
purchasers such as medical patients who have been issued prescriptions
for Cardizem CD are forced to overpay for the drug.
In June 2000, the district court granted plaintiffs' motion for partial
summary judgment against the Company and Aventis in the pending
putative class actions. The court determined that the 1997 stipulation
the Company had entered into with Aventis relating to their Cardizem CD
patent litigation constitutes a restraint of trade that is illegal per
se under section 1 of the Sherman-Antitrust Act. In August 2000, the
district court granted the defendant's motions to certify two questions
relating to this determination to the United States Court of Appeals
for the Sixth Circuit. In December 2000, the Court of Appeals accepted
the appeal, as certified by the district court. The appeal has been
fully briefed and the Court of Appeals has set April 30, 2002 as the
date for oral argument.
In March 2001, the district court granted the plaintiffs' motion to
certify the case as a class action on behalf of all persons or entities
who directly purchased Cardizem CD from Aventis during a specified
period. Latr, the court also certified as a class the indirect
purchasers of Cardizem CD.
In May 2001, the State Attorney Generals for the States of New York
and Michigan, joined by 13 additional states and the District of
Columbia, filed suit against the two companies in the same federal
court in which the above described consolidated Cardizem CD antitrust
class action litigation is being conducted. The attorney generals'
suit is brought on behalf of their government entities and consumers
resident in their jurisdictions who allegedly were damaged as a result
of the 1997 stipulation. Subsequently, an amended complaint was filed
adding 12 additional States and Puerto Rico to the action.
The lawsuit essentially reiterates the claims asserted against the
Company in the Cardizem CD antitrust class action litigation and seeks
the same relief sought in that litigation.
In July 2001, Blue Cross Blue Shield of Michigan, joined by three other
Blue Cross Blue Shield plans (one in Minnesota and two in New York),
filed suit against the Company and Aventis in the same court on behalf
of themselves and as claim adjustors for their self-funded customers to
recover damages allegedly caused by the 1997 stipulation. The suit
essentially repeats the claims asserted against the Company that are
being litigated in the above described consolidated Cardizem CD
antitrust class action.
The US District Court for the Eastern District of Michigan has divided
the above described class actions, individual actions and actions by
the State Attorney Generals and the Blue Cross Blue Shield Health Plans
directed at the 1997 stipulation entered into by the Company and
Aventis into these categories:
(1) Sherman Act Class Actions;
(2) Sherman Act Individual Actions;
(3) State Law Class Actions;
(4) State Law Individual Actions; and
(5) State Attorney Generals and Health Plan Actions.
Motions by both Companies to dismiss the Sherman Act Class Actions, the
Sherman Act Individual Actions and State Law Class Actions were denied
by the District Court. The Company has answered the complaints in the
Sherman Act Class Actions and the Sherman Act Individual Actions
denying the allegations of the plaintiffs.
Additionally, the Company has filed motions to dismiss the amended
complaints in the State Law Class Actions, the State Law Individual
Actions, the State Attorney Generals Action, and the Blue Cross Blue
Shield Action. Discovery in these suits closed April 1, 2002.
The Company intends to vigorously defend against these suits.
ANDRX CORPORATION: Entex Acquisition Results in PPA-Related Drug Suit
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Andrx Corporation, along with numerous other pharmaceutical companies,
face a series of class actions pending in United States District Court
for the Western District of Washington and in the Judicial District
Court of the State of Louisiana relating to the use of
phenylpropanolamine (PPA) in drug products and damage allegedly
incurred by the consumers of such products.
The Louisiana State Court action is being removed to the Federal
District Court and thereafter consolidation is expected for pre-trial
purposes with the other federal court actions in the Western Court of
Washington.
The Company was named in this action because it acquired Entex, a
product, which at one time contained PPA, from a subsidiary of Elan
Corporation. Upon acquiring the Entex product, the Company
reformulated the Entex product eliminating PPA as an active ingredient.
The Company has never caused the Entex product to be manufactured with
PPA as an active ingredient. The Company intends to defend this action
vigorously.
AT&T CORPORATION: Faces Suit For Violating WI Laws in Customer Contract
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AT&T Corporation faces a class action filed in Dane County Circuit
Court by Wisconsin Attorney General Jim Doyle, alleging the Company's
standard contract with Wisconsin consumers violated several state laws,
the Associated Press reports.
The suit alleges that the Company's contract includes provisions
allowing it to change the rate for intrastate residential long distance
service without providing at least 25 days notice to consumers. The
contract also restricts consumers' rights to seek class action relief.
These are allegedly violations of Wisconsin law.
Mr. Doyle told AP that the Company believes it only has to comply with
the consumer protections laws of New York, where it is based. "We want
to make sure they're following Wisconsin consumer protection laws."
An AT&T spokesman, Mike Pruyn, did not immediately return a phone call
Wednesday morning from The Associated Press seeking comment.
CANADA: School Settles Pension Claim With Retired Female Professors
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The University of Toronto (U of T) has settled a claim brought by four
retired professors fighting for back pay and pension adjustments, the
Toronto Star reports. While terms of the mediated settlement remain
confidential, as many as 60 retired female professors are expected to
receive enhanced benefits as a result of the deal, said lawyer Mary
Eberts, who acted for the women.
In their action, brought last year, the four retired U of T professors
said the university unjustly benefited from decades of paying women
less than men. The women allege systemic sex discrimination was the
reason females were consistently paid an average of 20 percent less
than men. Over 30 years, that difference could amount to a total loss
of about $150,000 each.
Last year, the Court dismissed a class action from the retired female
U of T professors and librarians fighting for back pay and pension
adjustments. However, the Court said they had strong individual cases
against the university. That statement raised the possibility that the
university could have faced dozens of lawsuits, Ms. Eberts said, after
the ruling last November.
Although Ms. Eberts refused to go into the details of the settlement,
she called the deal "a win for both sides." The agreement, she said,
"is confidential, and I cannot let myself be drawn into discussions.
We do have to keep it under wraps." However, she added that the women
involved "definitely feel that it was worth it."
Ursuala Franklin, one of the retired professors, said the settlement
was the best option. "A mediated settlement will befit more people
than would have been possible throughout the court case. It also
ensures that the retired women will immediately benefit, which is
especially important as many of them are in their 80s and 90s."
The University's vice-provost, Vivek Goel, said that the U of T
recognized that in the past many of its female faculty faced obstacles
and barriers in their careers because of their gender. The vice-
provost said that "the results of the two past salary review processes
indicate that the university had failed to achieve fairness in ensuring
that all faculty members of similar accomplishment and seniority within
the same discipline received similar compensation regardless of their
gender."
COAST ENERGY: Recalls 45T Energy Smart Power Planners For Shock Hazard
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Coast Energy Management, Inc. is cooperating with the United States
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 45,000 Energy Smart Power Planners. The Power Planner is a
device connected between motorized appliances and wall outlets that is
intended to save electricity. These Power Planners have reversed
polarity, posing a shock hazard to consumers.
The Company has not received any reports of incidents or injuries
involving these Power Planners. This recall is being conducted to
prevent the possibility of injuries.
The recalled Power Planners are white plastic, about 5-inches in
height, and have the words "Energy Smart" printed across the front in
green writing. They have a 10-amp rating and the model numbers SP010-N
or SP010-NV. The model numbers are printed on a green and silver label
attached to the left side of the device. The device has a three-prong
plug built into the back and a three-prong receptacle on one side. A
green light at the bottom of the unit flashes when the product is first
plugged in and then lights steadily, indicating proper operation. The
recall includes Power Planners with lot numbers 6/2-01, 10/2-01, 25/2-
01, 28/5-01, 20/6-01 and units without a lot number. The lot number is
printed on a label affixed to the back of the device.
Home Depot, Costco and Orchard Supply Hardware stores sold these Power
Planners from September 2000 through April 2002 for between $40 and
$45.
For more information, contact the Company by Phone: 800-808-8897
between 8 am and 5 pm MT Monday through Friday or visit the firm's Web
site: http://www.energysmart.com.
CONSECO INC.: Court Approves US$34 M Settlement To Long Term Care Suit
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The Philadelphia Court of Common Pleas granted approval to a US$34.7
million settlement in a long term care class action against one of
Conseco, Inc.'s subsidiaries, American Travelers Life Insurance
Company, Insurance News Net reports. The suit relates to the large
premium rate increases in long-term care contracts issued by American
Travelers Life
In an order dated April 1, state judge John Herron approved the
settlement, declaring the stipulation binding on all class members as
well as being preclusive in all pending and future lawsuits. The
ruling also overruled objections made to due process,
constitutionality, procedures, substance and compliance with the law,
and releases the Company from any future claims. Additionally, the
order states that the settling parties shall seek to dismiss two
related cases pending in the state courts of Orange County and San
Diego, California within 30 days of the order.
Insurance News Net reports that the court received fewer than 200
objections to the settlement. Less than 5,000 class members opted out
of the settlement, while approximately 85,000 actively participated in
the settlement. Another 120,000 eligible participants are expected to
participate at a later date, according to Conlee Whiteley, the attorney
representing Kanner & Associates.
Under the settlement, eligible policyholders can accept a new Company
policy, accept a non-forfeiture benefit or hold existing Company long
term care contracts. Nearly 250,000 policyholders will be eligible to
participate in the settlement if they experience premium increases in
their contracts in the future, Ms. Whiteley adds.
Company spokesman Mark Lubbers said the Company was pleased with the
approval and looked forward to implementing benefits that people have
opted for. However, the American Association of Retired Persons,
Washington, is still reviewing the court opinion and order and could
not immediately comment, Deborah Zuckerman, an AARP attorney, told
Insurance News Net.
CROWLEY MARITIME: Faces Asbestos-Related Damage Suits in Various Courts
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Crowley Maritime Corporation, together with a number of its present or
former affiliates or subsidiaries, has been named as a defendant in
approximately 15,000 personal injury lawsuits filed in Ohio, Michigan
and New Jersey federal courts, 52 cases filed in the Territorial Court
of the US Virgin Islands and a small number of cases filed in state
courts in Utah, Texas, Pennsylvania and Louisiana.
These cases have been filed on behalf of current, retired or deceased
seamen who allege that they suffered unspecified asbestos-related
injuries or diseases as a result of occupational exposure to fibers
emitted from asbestos-containing products in the course of employment
aboard vessels owned or operated by the Company and other vessel
owners.
The federal suits were later transferred to the United States District
Court for the Eastern District of Pennsylvania for pretrial
administration. All of the federal cases were later administratively
dismissed by order of the District Court, with the District Court
retaining jurisdiction. Cases that have been "administratively
dismissed" may be reinstated only upon a showing to the district court
that:
(1) there is satisfactory evidence of an asbestos-related injury;
and
(2) there is probative evidence that the plaintiff was exposed to
products or equipment supplied by each individual defendant in
the case.
Little, if any, activity has otherwise occurred since 1991 in
connection with the cases filed in federal courts, although additional
cases continue to be filed.
EASY MONEY: Sued For Charging Usurious Interest Rates On Loans in KY
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Easy Money of Kentucky, Inc. faces an amended class action filed in the
United States District Court for the Eastern District of Kentucky,
Lexington Division, alleging violations of several state and federal
laws. The suits name as defendants the Company and:
(1) Easy Money of Virginia, Inc.,
(2) Easy Money Holding Corporation,
(3) David L. Greenberg,
(4) Tami Van Gorder,
(5) Jerome Greenberg,
(6) John Murphy,
(7) Sterling Financial Bank and
(8) unknown individuals and entities
The suit alleges that:
(i) the defendants violated the Kentucky Interest and Usury
Statute;
(ii) the defendants violated the Kentucky Consumer Loans Act;
(iii) the defendants violated the Racketeer Influenced and Corrupt
Organization Act;
(iv) the defendants violated the Kentucky Consumer Protection Act;
and
(v) the defendants engaged in fraud.
The plaintiffs brought this action as a class action claiming the
defendants charged and collected from plaintiffs and other customers
similarly situated usurious interest rates for consumer loans. The
suit further alleges defendants illegally coerced payment of monies
from plaintiffs and other class members by threatening to pursue
collection of the debts. The complaint also charges that defendants
were not properly licensed under Kentucky state law.
The Court has certified this case as a class action. The Company
expressed confidence in a disclosure to the Securities and Exchange
Commission that it will be able to settle these cases for nominal sums,
although it cannot offer any assurance as to the matter.
FORD MOTOR: Adds Changes To "Discriminatory" Employee Evaluation System
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Ford Motor Company instituted changes in its management evaluation
system, called the Performance Management Program (PMP), after it
spurred the filing of two discrimination class actions by its current
and former workers. The changes could be put in place within 30 to 45
days, according to a SignOnSanDiego report.
The Company's current and former employees charged the Company with
"reverse discrimination" after the PMP allegedly discriminated against
older, white managers. The system calls for an A-B-C grading scheme,
and C grades, which meant no bonuses or even firing were given in
higher proportion to older, white male employees as compared to younger
minorities and women.
The Company already changed the system last year, replacing the A-B-C
grades with three new designations - "top achiever," "achiever," and
"improvement required." It also lowered the percentage of employees to
be given C's or low grades from 10% to 5%
Joe Laymon, Company vice president of corporate human resources, told
SignOnSanDiego, that the new round of changes will be looked at by the
Company's policy board later this week. The new program will drop the
PMP moniker and focus more on building bonds between supervisors and
workers, Mr. Laymon said. "We have a system that has objectives built
in it.We have a system that has periodical reviews. We have a system
that has very strong coaching, counseling features built in. We have a
performance system that has a final appraisal," he added. There will
be no grading quotas.
H & R BLOCK: Appeals Court Reverses $25 Million Tax Refund Settlement
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The Seventh US Circuit Court of Appeals in Chicago recently tossed out
a $25 million settlement of a class-action lawsuit relating to H&R
Block's popular tax refund loan program, after the appeals court
concluded that Federal Judge James B. Zagel, who approved the
settlement in September 2000, did not do enough to ensure customers
were not shortchanged by the agreement, the Associated Press reported.
The class action claimed the Company and its banking partner, Household
Finance, illegally gouged customers by providing "refund anticipation
loans" at interest rates exceeding 100 percent.
"The circumstances demanded closer scrutiny than the district judge
gave it," the Appeals Court said. "He painted with too broad a brush,
substituting intuition for the evidence and careful analysis that a
case of this magnitude . required."
The decision by the Appeals Court not only overturns the Federal
Judge's approval of the settlement but also lifts an injunction
blocking a Texas class action from proceeding against the Company's
refund loan program.
After fending off legal attacks against the loan program for years, the
Company agreed to pay $25 million for a far-reaching settlement. The
settlement was to cover 17 million customers who borrowed against their
tax refunds between January 1, 1987, and October 26, 1999. However,
after receiving notices, only one million customers filed claims to
receive refunds ranging from $15 to $30, the appeals court noted.
Under the program, a customer owed a tax refund can receive most of the
money, minus $76.19 in loan fees, in two to three business days. The
refund, minus the loan fees, is deposited into a special account set up
by the Company and Household Finance.
Critics of the program, like Edward M. Carstarphen, who is handling the
Texas suit against the Company, allege that the loans victimize low-
income households, immigrants and financially unsophisticated taxpayers
who are not adequately informed about the high interest rates charged
for the short-term advances or other risks. These critics objected to
the settlement as a sham that did not adequately compensate customers
for their alleged damages, and they appealed Judge Zagel's decision.
The Appeals Court, in fact, said in its decision, that Judge Zagel
should have looked deeper into "suspicious circumstances" that led to
the $25 million settlement. Their concerns dated back to a September
1997 meeting at which Company attorney Burt Rubin discussed a possible
settlement with two lawyers, Howard Prossnitz and Francine Schwartz,
who had previously pursued unsuccessful class actions against the loan
program. The Appeals Court had doubts that the two lawyers still had
clients who had borrowed from the Company's loan program. However,
later, Ms. Schwartz "bought" a Company customer by providing a $100,000
referral fee to another lawyer, the Appeals Court said. As part of the
settlement approved in 2000, the Company agreed to pay $4.25 million in
attorney fees.
The tax refund loan program has become a significant profit center for
the Company, which prepares about one in every seven individual tax
returns nationwide. The Company processed 4.5 million loans last year,
pocketing a pretax profit of $68 million on the $133.7 million in
revenue generated from the program. The Company makes its money on the
program by retaining a 49.9 percent stake in many of the loans and
collecting a $9 referral fee on each loan. Critics describe the fee as
a "kickback" that encourages the preparers to peddle the refund loans
even when they are not in customers' best interests.
The Company issued a statement expressing disappointment with the
appeals court decision. "We believe the settlement was fair, and we
will review our options," the Company said. Prospect, Illinois-based
Household Finance declined to comment.
HAWAII: Sued For Allegedly Diverting $346.9 Million In Retirement Funds
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A police officers' union is suing the state of Hawaii for diverting
$346.9 million from the Employees Retirement System (ERS), the
Associated Press reports. In a class action filed in Circuit Court in
Honolulu, the State of Hawaii Organization of Police Officers (SHOPO)
asked the court to find that the 1999 legislation diverting the funds
to balance the budget is unconstitutional.
The suit, which names retired Maui police Captain George Kahoohanohano
and Honolulu police detective Loren Andrade as plaintiffs, asks for an
injunction preventing the state from taking any more money from the
retirement fund, and seeks monetary damages of $346.9 million, plus
interest. The state has no more right to the beneficial use of any
asset of the ERS than any other non-beneficiary, the lawsuit says.
The lawsuit also alleges that "Over the years, the state has repeatedly
exhibited an utter disregard for the fiscal independence and integrity
of the ERS, the prohibitions of Article 16 (of the state Constitution)
and the state's contractual obligations to ERS members."
The lawsuit says further that "Through a variety of legislative
contrivances the state has raided, skimmed and otherwise diverted funds
from the ERS for its own benefit and that of its political
subdivisions."
"Every month every police officer pays 12.2 percent of his or her
salary to our pension fund, the ERS," said SHOPO president Tenari
Ma'afala. That pension fund is important to our future and our
families' future."
State Senate Vice President Colleen Hanabusa, an attorney, said the
Constitution simply says there is a contractual obligation to make sure
that the benefits are provided. "How we provide these benefits is
within the purview of the Legislature," she said, adding that the ERS
is operating at 91 percent, which means that 91 percent of the
beneficiaries would be paid if the retirement system were to shut down
today. The ERS had net assets of $8.76 billion as of last June 30.
Meanwhile, a state Senate committee has approved a resolution calling
for an audit of the retirement system. The Senate Labor Committee also
approve a resolution, this one calling for an investigation of the
investment decisions of the trustees charged with overseeing the
system, which pays pensions for nearly 30,000 employees.
The ERS has come under increased review after fund trustees in February
of last year went against their investment adviser's recommendation and
retained an under-performing investment firm, 3Bridge Capital, whose
principals include a former ERS administrator.
LEARN2 CORPORATION: Mounting Vigorous Defense V. Consumer Suit in CA
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The Santa Clara County Court in California granted class certification
to a consumer class action filed against Learn2 Corporation by Mr.
Joseph Pavel, one of its prior customers, alleging that the Company
breached its contracts with the plaintiff and other customers, relating
to the sale of Internet postage products.
The Company labeled the suit without merit and is vigorously defending
this action. Pendency of these legal proceedings can be expected to
result in expenses to the Company and the diversion of management time
and other resources.
PALLOTA TEAMWORKS: Sued Over Distribution of AIDS Vaccine Rides Funds
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Pallotta Teamworks faces a class action in the Superior Court of
California in San Francisco relating to the "HIV/AIDS Vaccine Rides,"
long-distance bike rides, that the Company organizes throughout the
United States to raise money for the development of a vaccine to
prevent and treat HIV and AIDS-related illnesses. To date, only $8
million of approximately $28 million raised has been distributed by the
Company to the designated beneficiary organizations that conduct
vaccine research, according to its Website.
"The promise of the AIDS Vaccine Ride was that it would help raise
much-needed funds for research and development of a vaccine for
HIV/AIDS," commented lead Plaintiff Mark Cloutier. "It is incredibly
sad that the Company's fundraising efforts were so poorly managed and
so unsuccessful in financially assisting key agencies working on an
AIDS vaccine. I was greatly disappointed - and so were many other
well-intentioned riders who were misled by the Company."
The suit alleges that the Company, in its marketing materials and
solicitation for the AIDS Vaccine Rides, has consistently
misrepresented the amount of funds raised and distributed to designated
beneficiaries. In addition, it alleges that the Company has engaged in
unfair business practices and breached its fiduciary duties in its
mismanagement of the funds raised.
Mr. Cloutier and the class members are represented pro bono by a
litigation team at Fenwick & West LLP that includes partners Victor
Schachter and Patricia Lucas and associates Gregg Williams and Michael
Weil. "Our central purpose in filing this suit is to recover the
misallocated funds which should have been provided to the beneficiary
organizations designated by PTW," commented Victor Schachter,
Employment and Labor Partner at Fenwick & West.
"Equally important, we want our message to the community to be clear -
we want these events to continue and to be successful - and we want to
ensure that organizers act with fiscal responsibility, keep accurate
records and deal credibly with their donors and beneficiaries. At the
end of the day, this suit will encourage support for HIV and AIDS-
related causes through responsible fundraising activities and
accountable organizations," Mr. Schachter added.
For more details, contact Brian Colucci by Phone: 650-858-7616 or by E-
mail: bcolucci@fenwick.com or Allison Sloan by Phone: 202-973-1330 or
by E-mail: asloan@levick.com or visit the firm's Web site:
http://www.fenwick.com.
SAXON MORTGAGE: Demands Arbitration in Alleged RESPA Violations Suit
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Saxon Mortgage, Inc. faces a class action suit pending in the United
States District Court for the Northern District of Georgia. The suit
also names Meritech Mortgage Services, Inc., and other lending
institutions as defendants.
The suit alleges, among other claims that the payments the Company
makes to mortgage brokers, referred to as yield spread premiums,
violate the federal Real Estate Settlement Procedures Act (RESPA).
The Company has filed a motion to compel arbitration of the plaintiff's
claim pursuant to the arbitration agreement contained in the
plaintiff's loan documents. The Company intends to assert its position
that the payments at issue in the plaintiff's loan were legal, and that
the case is not appropriate for treatment as a class action, for
reasons including but not limited to the fact that the plaintiff's
claim is governed by the arbitration agreement contained in the
Plaintiff's loan documents.
TRI-STATE CREMATORY: Suit Filed By Families of Deceased in GA Court
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Tri-state Crematory, Inc. faces a class action filed in the State Court
of Walker County, Georgia filed by the families of 55 deceased people
whose remains were sent to the Company for cremation, on behalf of
others similarly situated. The suit also names as defendants all the
funeral homes that did business with the Company.
The families bringing the lawsuit are united by the fact that all
entrusted their loved ones' remains to funeral homes that contracted
with Tri-State Crematory, Inc. for cremation services. The crematory,
which is allegedly unlicensed, failed to perform cremation on the
bodies, and instead dumped these bodies in the woods or the crematory
grounds. Their families chose to include class action allegations
while pressing individual claims in an effort to protect the interests
of the hundreds of families similarly affected by the tragedy at the
Tri-State Crematory in Noble, Georgia.
Lorenzo Ervin, the son of Lorenzo Ervin, Sr. and Minnie Lou Ervin,
whose remains were delivered to Tri-State, explained, "We want to make
sure every family who is going through this nightmare is protected and,
through our strength in numbers, we want to make sure that this kind of
injustice never happens again."
"The 55 bereaved individuals bringing this suit have bravely decided
that they want to bring claims not just for their own suffering, but on
behalf of all of the families who have been impacted by this tragedy,"
commented attorney Kathryn Barnett, an attorney with Lieff Cabraser
Heimann & Bernstein, LLP, which serves as counsel for the families.
"If the funeral homes failed to monitor and investigate Tri-State to
assure families' wishes were being followed, they may share liability,
because it appears any of them could have investigated, discovered
these indecencies, and put a stop to this tragedy. Instead, it
continued and was compounded."
Ms. Barnett added, "These families have asked that this case and the
other cases that have been filed be coordinated, so that the entire
community of families can work together to right these grievous
wrongs."
For more information, contact Kathryn Barnett by Phone: 615-313-9000 or
by E-mail: kbarnett@lchb.com
*Changes in Securities Reform Act Sought After Wave of Enron Lawsuits
---------------------------------------------------------------------
The financial community has started asking for revisions in the Private
Securities Litigation Reform Act of 1995 in the wake of class actions
suits filed against Enron Corporation after the energy trader's
collapse and bankruptcy, seeking to help investors recover at least
some of their losses. The Private Securities Litigation Reform Act
could make it harder to compel the alleged wrongdoers to compensate the
investors, The Columbus Dispatch reported recently.
A class-action lawsuit provides a way for many people with relatively
small claims to band together in a single case. This is true because,
if a single investor lost $25,000 based on a Company's false or
misleading statements, there would be no feasible way for the
individual investor to pursue recovery. In a complicated case against
a huge company, legal fees and litigation costs would far outstrip any
possible recovery.
Thus, a class action becomes important. One person, or a small group
of claimants (class representatives), can be designated by the court to
represent the entire class of people (class members) who have suffered
harm. Lawyers are willing to handle such cases, because the legal fees
can be based on a percentage of the total award to all class members.
The 1995 law adopted a number of changes designed to make it harder for
investors to bring class actions. President Clinton, who opposed the
law, warned that it would "have the effect of closing the courthouse
door on investors who have legitimate claims."
One of the most criticized provisions of the law is the stay on
discovery. Discovery is the process of obtaining evidence to support a
party's position and build a case. If a defendant asks the court to
throw out the plaintiff's case, under the 1995 law, discovery will be
frozen. The theory behind this provision is that a defendant should
not be put through a potentially expensive and time-consuming process
of providing information if the plaintiff's case has no merit and will
be dismissed. A court will allow discovery to proceed only in
exceptional circumstances.
In a typical case, it may take months, sometimes a year or more, before
a court rules on a defendant's request to throw out a case. During
that time, the laws says, parties must preserve relevant documents.
The disclosure that auditing firm Arthur Andersen shredded Enron
documents highlights concern over discovery delays. If discovery is
delayed, evidence may be lost.
For example, parties routinely delete e-mail messages and computer
memos, and the risk of losing evidence is even greater when it comes to
people and companies who may have relevant information.
The 1995 law also bars most cases for securities fraud from being
brought under the Racketeer Influenced and Corrupt Organizations Act
(RICO). Under RICO, extreme cases of security fraud could be punished
by awarding the victims an amount equal to triple their actual losses.
The threat of triple damages has constituted a significant deterrent.
A third change raised the level of proof needed to win a case. Now,
intentional actions must be shown. Critics have argued that the
reckless handling of investors' money ought to be enough to result in
liability.
The Enron case, as well as the cases revealed since Enron because of
greater vigilance by investors, has shown not only the need for greater
legal means to ensure corporate transparency, but also the need for
such legal devices as immediate discovery, a reasonable burden of proof
to be carried by plaintiffs, as well as the deterrent effect of RICO.
These sharpened realizations in the financial community have spurred
new calls to revise or repeal the Private Securities Legislation Reform
Act.
Securities Fraud
ACCELERATED NETWORKS: Decision On Securities Suit Dismissal Pending
-------------------------------------------------------------------
The United States District Court for the Central District of California
heard arguments on Accelerated Networks, Inc.'s motion to dismiss the
consolidated securities class action pending against it and certain of
its current and former officers and directors.
The suit arose from seven securities suits commenced following the
Company's April 17, 2001 announcement that it would restate its
financial results. The suit generally alleges that the defendants made
materially false and/or misleading statements regarding the Company's
financial condition and prospects during the period between June 22,
2000 through April 17, 2001 in violation of Sections 10(b) and 20(a)
and Rule 10b-5 of the Securities Exchange Act of 1934.
The suit further states that the registration statement and prospectus
issued by defendants in connection with the Company's June 23, 2000
initial public offering contained untrue statements of material fact
and omitted to state material facts in violation of Sections 11,
12(a)(2) and 15 of the Securities Act of 1933.
The Company filed a motion to dismiss the amended complaint on January
10, 2002, and the court scheduled a hearing on April 22, 2002. The
court has yet to release its ruling. The Company intends to defend the
litigation vigorously.
AETHER SYSTEMS: Faces Suit For Securities Act Violations in S.D. NY
-------------------------------------------------------------------
Aether Systems, Inc. faces nine securities class actions pending in the
United States District Court for the Southern District of New York on
behalf of persons and entities who acquired the Company's common stock
after its initial public offering in October 21, 1999. The suits name
as defendants the Company and:
(1) David S. Oros,
(2) David C. Reymann,
(3) Merrill Lynch, Pierce, Fenner & Smith Incorporated,
(4) BancBoston Robertson Stephens Inc.,
(5) Donaldson, Lufkin & Jenrette Securities Corporation,
(6) US Bancorp Piper Jaffray Inc.,
(7) Deutsche Bank Securities Inc., and
(8) Friedman, Billing Ramsey & Co., Inc.
The suits seek damages on account of alleged violations of securities
laws. Among other things, the suits claim that prospectuses, dated
October 21, 1999 and September 27, 2000 and issued by the Company in
connection with the public offerings of its common stock, contained
untrue statements of material fact or omissions of material fact in
violation of securities laws. The prospectuses allegedly failed
to disclose that the offerings' underwriters had solicited and received
additional and excessive fees, commissions and benefits beyond those
listed in the arrangements with certain of their customers which were
designed to maintain, distort and/or inflate the market price of the
Company's common stock in the aftermarket.
The Company believes the claims are without merit and plans to
vigorously contest these actions.
ALLIED IRISH: Bernstein Liebhard Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class class
action on behalf of all persons who acquired Allied Irish Banks, PLC
(NYSE: AIB) securities between January 1, 2001 and February 6, 2002.
The suit is pending in the United States District Court for the
Southern District of New York.
The suit alleges that the Company's financial reports since 1999
fraudulently failed to reflect at least $691 million of currency
trading losses associated with its AllFirst Financial, Inc. subsidiary.
On February 6, 2002, the Company shocked the investment markets by
disclosing for the first time that its AllFirst subsidiary had
concealed massive losses from foreign exchange trading, and that it had
halted all currency trading at AllFirst.
Following this announcement, the Company's ADR price fell to $19.77,
down 16% from the previous day's close of $23.55. The Company has
since admitted that its 2001 financial reports alone overstated net
income by as much as $449 million.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 or by E-mail: AIB@bernlieb.com or
visit the firm's Web site: http://www.bernlieb.com.
ANDRX CORPORATION: Faces Suits For Securities Violations in S.D. FL
-------------------------------------------------------------------
Andrx Corporation faces several securities class actions, pending in
the United States District Court for the Southern District of Florida
on behalf of purchasers of the Company's common stock from April
30,2001 through February 21,2002. The suit names as defendants the
Company and certain of its officers and directors.
The suits similarly allege violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The suits allege that, during the time period in
question, the Company publicly issued a series of material
misrepresentations to the market regarding the regulatory status of its
bioequivalent version of the drug Tiazac.
These statements allegedly misled the investing public into believing
that, but for the pending patent litigation with Biovail, the Company's
bioequivalent version of Tiazac was ready to be marketed when, in fact,
FDA had raised "certain issues" concerning bioequivalent Tiazac, as the
Company disclosed on February 21, 2002, in connection with its
announcement that it had reached a tentative settlement with Biovail
relating to that patent dispute. According to the suits, the Company's
February 21, 2002 announcement precipitated a decline in its stock
price.
The Company believes the complaints have no merit, noting that the
stock price of its common stock actually increased following the
February 21, 2002 announcement, and believes that the decline, on
February 22, 2002, in the price of its common stock, was substantially
unrelated to the status of Tiazac within FDA.
CALPINE CORPORATION: Marc Henzel Commences Securities 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 Calpine Corporation (NYSE: CPN) publicly traded securities during
the period between January 5, 2001 and December 13, 2001.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The Company
owns, develops, acquires, and operates power-generation facilities and
sells electricity and steam, primarily in the US Calpine's stock, which
went public in 1996, on a split adjusted basis, went from $2 at the IPO
stage to over $33 in January 2001.
The suit alleges that the Company's stock price was very important
because the Company was planning at this time to build or acquire $15
billion of plants over the next four years. The financing for these
plants was based on the performance of its stock because many of its
bond buyers were looking to convert to common stock. If the stock did
not perform, financing would be difficult to fund the Company's
expansion. However, certain of the Company's manipulative
transactions, including those with Enron, such as inflated revenues,
began to emerge on December 9, 2001.
On December 14, 2001, prior to the market opening, Moody's Investors
Service announced that it might cut the credit rating on the Company's
$11.6 billion of debt to junk. In response, Company shares plummeted
to $12.50, a more than 26% drop. Then, after the close of the market
on December 14, 2001, Moody's Investors Service announced that it had
in fact cut its rating of the Company's debt to junk.
As now revealed, at all times during the class period, defendants
issued false and misleading statements and press releases concerning
the Company's sale of and demand for power and the Company's ability to
generate sufficient cash revenue to service its debt. During the class
period, before the disclosure of the true facts, the individual
defendants sold their personally held Company common stock generating
more than $34 million in proceeds and the Company raised billions of
dollars in a series of debt offerings.
For more information, contact 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
CONCORD CAMERA: Milberg Weiss Commences Securities Suit in S.D. FL
------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Concord Camera,
Corporation (Nasdaq: LENS) between January 18, 2001 and June 22, 2001,
inclusive. The suit is pending in the United States District Court,
Southern District of Florida against the Company, Harlan Press and Ira
B. Lampert.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market during the class period, thereby artificially inflating the
price of Company securities.
The suit alleges that, throughout the class period, defendants issued a
series of materially false and misleading statements, which failed to
disclose that:
(1) no less than $15,777,000, more than 45% of the Company's
receivables, represented an unsecured and delinquent balance
due from one single customer - KB Gear;
(2) this delinquent $15,777,000 receivable balance was
uncollectible; and
(3) due to KB Gear's inability to pay for merchandise, the Company
was stuck with a large quantity of customized higher-cost
specialty components which had no alternative use and were
non-salable.
On June 22, 2001, the last day of the class period, the Company issued
a press release revising its fourth quarter guidance and disclosing for
the first time that:
(i) excess inventory positions at many of the Company's customers
and the resulting changes in their purchasing patterns have
adversely affected inventory sales;
(ii) the Company will record the following one-time charges against
income in the quarter: $15.8 million accounts receivable
provision, $4.3 million inventory provision, $1.4 million
restructuring charge; and
(iii) the accounts receivable provision and $2.0 million of the
inventory provision relate to a financially troubled former
customer of the Company with respect to which management has
concluded that workout efforts are not likely to be
successful.
In response to these disclosures, the price of Company stock plummeted
over 20% to close at $6.02.
For more information, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165 by
Phone: 800-320-5081 or contact Kenneth Vianale or Tara Isaacson by
Mail: The Plaza, 5355 Town Center Road, Suite 900, Boca Raton, FL 33486
by Phone: 561-361-5000 by E-mail: concordcameracase@milbergNY.com or
visit the firm's Web site: http://www.milberg.com
CORNELL COMPANIES: Bernstein Liebhard Lodges Securities Suit in S.D. TX
-----------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf of all persons who purchased or acquired Cornell Companies,
Inc. (NYSE: CRN) securities between March 6, 2001 and March 5, 2002.
The suit is pending in the United States District Court for the
Southern District of Texas.
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, Company 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 Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 by E-mail: CRN@bernlieb.com or
visit the firm's Web site: http://www.bernlieb.com.
CROWLEY MARITIME: CA Court Sets Certification Hearing For May 2002
------------------------------------------------------------------
Plaintiffs in the class action against Crowley Maritime Corporation
have asked the Superior Court of the State of California for the County
of Alameda to certify the suit as a class action. Class certification
hearing is set for May 24,2002.
The suit was commenced on behalf of a class of certain holders of the
Company's common stock against the Company and each member of its board
of directors. The suit alleges, among other things, that the
defendants undertook certain actions to avoid subjecting the Company to
public reporting requirements and caused shares of the Company's common
stock to be purchased and sold at artificially low prices in connection
with the Company's tender offer announced on April 16, 2001. The
plaintiff originally asserted causes of action for:
(1) breach of contract,
(2) breach of fiduciary duty and
(3) unjust enrichment
The defendants subsequently moved to dismiss the breach of contract
claim on the grounds that, based on the facts of the case, the
plaintiff could not properly allege such a claim as a matter of law.
In December 2001, the court dismissed the breach of contract claim
without leave to amend. The parties are currently participating in
discovery. Trial in the suit is also set for November 11, 2002.
The Company believes that there are legal and factual defenses to these
claims and intends to defend this action vigorously. In addition, the
Company does not believe that the ultimate resolution of this
proceeding will have a material adverse effect on its financial
position or results of operations.
FLAG TELECOM: Scott Scott Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Scott + Scott LLC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of purchasers of the shares of FLAG Telecom Holdings, Ltd.
(Nasdaq:FTHL) between March 23, 2001 and February 13, 2002, inclusive.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market during the class period, thereby artificially inflating the
price of the Company's shares.
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 so-called 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 Neil Rothstein, David R. Scott, James E.
Miller by Phone: 800-404-7770, by E-mail: nrothstein@scott-scott.com,
drscott@scott-scott.com or jmiller@scott-scott.com or visit the firm's
Web site: http://www.scott-scott.com
FLORIDA PROGRESS: Sued Over Proposed Sale of Stock in Florida Court
-------------------------------------------------------------------
Florida Progress Corporation faces a class action pending in the
Circuit Court of the 6th Judicial Circuit in and for Pinellas County,
Florida on behalf of its shareholders relating to a proposed auction of
the Company's stock. The suit names as defendants the Company and:
(1) Richard Korpan,
(2) Clarence V. McKee,
(3) Richard A. Nunis,
(4) Jean Giles Wittner,
(5) Michael P. Graney,
(6) Joan D. Ruffier,
(7) Robert T. Stuart, Jr.,
(8) WD Frederick, and
(9) Vincent J. Naimoli
The complaint seeks class action status and injunctive relief:
(i) declaring that the agreement and plan of exchange was entered
into in breach of the fiduciary duties of the Florida Progress
Corporation board of directors;
(ii) enjoining Florida Progress Corporation from proceeding with
the share exchange;
(iii) rescinding the agreement and plan of exchange;
(iv) enjoining any other business combination until an auction is
conducted to obtain the highest price possible for Florida
Progress Corporation;
(v) directing the Florida Progress Corporation board of directors
to commence such an auction; and
(vi) awarding the class an unspecified amount of damages.
The parties have reached agreement on terms of a settlement, which are
subject to court approval. If the settlement is not approved, Florida
Progress Corporation and the nine individual defendants intend to
vigorously defend against this action.
FOUNDRY NETWORKS: Labels "Without Merit" Securities Suit in S.D. NY
-------------------------------------------------------------------
Foundry Networks faces a securities class action filed in the United
States District Court for the Southern District of New York on behalf
of purchasers of the Company's common stock from September 27,1999
through December 26,2000, alleging violations of federal securities
laws. The suit names as defendants, the Company, three of its
officers, and investment banking firms that served as underwriters for
the Company's initial public offering in September 1999.
The suit alleges violations of Sections 11 and 15 of the Securities Act
of 1933, and Section 10(b) of the Securities Exchange Act of 1934, on
the grounds that the prospectus incorporated in the registration
statement for the offering failed to disclose, among other things,
That:
(1) the underwriters had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriters allocated to those investors material
portions of the shares of the Company's stock sold in the
initial public offering; and
(2) the underwriters had entered into agreements with customers
whereby the underwriters agreed to allocate shares of the
Company's stock sold in the initial public offering to those
customers in exchange for which the customers agreed to
purchase additional shares of the Company's stock in the
aftermarket at pre-determined prices.
The Company is aware that similar allegations have been made in
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000. Those cases have been consolidated for
pretrial purposes before Federal Judge Shira A. Scheindlin.
Defendants' time to respond to the complaints has been stayed pending
plans for further coordination.
The Company believes that the allegations in the suit are without merit
and intends to contest them vigorously. However, the suit is in the
preliminary stage, and its outcome cannot be predicted.
FOUNDRY NETWORKS: To Mount Vigorous Defense V. Securities Suit in CA
--------------------------------------------------------------------
Foundry Networks, Inc. labeled "without merit" the amended securities
class action pending in the United States District Court for the
Northern District of California against the Company and certain of its
offices relating to its December 2000 announcement of its anticipated
financial results for the fourth quarter ended December 31,
The amended suit arose from ten suits, which were subsequently
consolidated by the Court. The consolidated suit alleged violations of
federal securities laws on behalf of shareholders who purchased the
Company's common stock during the period from September 7, 2000 to
December 19, 2000.
The Company asked the Court to dismiss the first amended complaint, and
the court granted this motion in October 2001. In December 2001,
attorneys for lead plaintiffs filed a second amended complaint.
The Company reviewed the second amended complaint and concluded that it
was also without merit. Therefore, it intends to defend itself
vigorously.
GEMSTAR-TV GUIDE: Mark McNair Initiates Securities Suit in C.D. CA
------------------------------------------------------------------
The Law Offices of Mark McNair initiated a securities class action in
the United States District Court for the Central District of California
on behalf of purchasers of Gemstar-TV Guide Int. Inc.(NASDAQ:GMST)
securities from August 11, 1999 to April 1, 2002.
The suit alleges that the Company improperly recognized $107 million
inlicensing revenue from cable TV equipment maker Scientific Atlantic.
Allegedly, the Company also booked as "sold" program guides to Fantasy
Sports when, in fact, the transactions were barter arrangements.
For more details, contact Mark McNair by Phone: 877-511-4717 or
202-872-4717 by E-mail: mcnair@justice4investors.com or visit the
firm's Web site: http://www.justice4investors.com.
GERBER SCIENTIFIC: Mark McNair Launches Securities Fraud Suit in CT
-------------------------------------------------------------------
The Law Office of Mark McNair initiated a securities class action in
the United States District Court for the District of Connecticut on
behalf of purchasers of the common stock of Gerber Scientific, Inc.
(NYSE:GRB) from May 27, 1999 to April 12, 2002.
The suit alleges violations of federal securities laws relating to an
announcement made by the Company on April 15, 2002, that in response to
a SEC investigation into certain of its accounting practices, it was
conducting an internal review and once this review is completed, it is
likely to restate its earnings.
For more information, contact Mark McNair by Phone: 1-877-511-4717 or
202-872-4717 by E-mail: mcnair@justice4investors.com or visit the
firm's Web site: http://www.justice4investors.com.
INTERTRUST TECHNOLOGIES: Mounting Vigorous Defense V. Suit in S.D. NY
---------------------------------------------------------------------
Intertrust Technologies Corporation labeled without merit the
securities class actions pending in the United States District Court
for the Southern District of New York against it, certain of its
current and former directors and officers, and the underwriters
involved in its initial public offering and/or secondary public
offering. The suit was filed on behalf of all persons who acquired the
Company's shares between October 26, 1999 through May 16, 2001.
The suits allege, among other things, that the Company and the other
defendants named in the complaints violated the federal securities laws
by issuing and selling the Company's common stock in its initial public
offering in October 1999 and its secondary public offering in April
2000 without disclosing to investors that certain of the underwriters
in the offering allegedly solicited and received excessive and
undisclosed commissions from certain investors.
The Company intends to defend the case vigorously. However, there is
no assurance that the Company will be successful in the defense of this
lawsuit, and an unfavorable result could have a significant adverse
affect on its financial position or results of operations.
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Kaplan Fox and Kilsheimer initiated a securities class action against
Merrill Lynch & Co., Inc., and Internet stock analyst and First Vice
President of Merrill Lynch, Henry Bloget, in the United States District
Court for the Southern District of New York on behalf of all persons or
entities who purchased or otherwise acquired the common stock of
Internet Capital Group, Inc. (Nasdaq: ICGE) between August 30, 1999 and
November 8, 2000, inclusive.
The suit alleges that the defendants violated the federal securities
laws by issuing analyst reports regarding ICGE that recommended the
purchase of ICGE common stock and which set price targets for ICGE
common stock, which were materially false and misleading and lacked any
reasonable factual basis.
The suit further alleges that, when issuing their ICGE analyst reports,
the defendants failed to disclose significant, material conflicts of
interest, which resulted from their use of Mr. Blodget's reputation and
his ability to issue favorable analyst reports, to obtain investment
banking business for Merrill Lynch.
Furthermore, in issuing their ICGE analyst reports, in which they
recommended the purchase of ICGE stock, the defendants failed to
disclose material, non-public, adverse information, which they
possessed about ICGE. Throughout the class period, the defendants
maintained an "Accumulate/Buy" recommendation on ICGE in order to
obtain and support lucrative financial deals for Merrill Lynch.
As a result of the defendants' false and misleading analyst reports,
ICGE's common stock traded at artificially inflated levels during the
class period.
For more detailsl, contact Frederic S. Fox, Jonathan K. Levine or
Donald R. Hall 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 by E-
mail address: mail@kaplanfox.com or visit the firm's Web site:
http://www.kaplanfox.com
MONTANA POWER: Plaintiffs Ask Leave To Add Defendant in Securities Suit
-----------------------------------------------------------------------
Plaintiffs in the securities class action have moved to add Touch
America Holdings, Inc. as a defendant in a class action suit against
Montana Power Company in Montana State District Court. The suit
currently names as defendants the Company and:
(1) eleven members of the Company's board of directors,
(2) a current Company officer,
(3) four officers of Touch America Holdings, Inc.,
(4) PPL Montana as defendants, and
(5) Torch America's investment banking consultants
Torch America is the Company's successor.
The suits allege that the Company and its directors and officers had a
legal obligation and a fiduciary duty to obtain shareholder approval
before the sale of our former electric generation assets to PPL
Montana. The suits further allege that because shareholders did not
vote, the sale of the generation assets is void and PPL Montana is
holding these assets in constructive trust for the shareholders.
Alternatively, the plaintiffs allege that shareholders should have been
allowed to vote on the sale of the generation assets and, if an
appropriate majority vote was obtained in favor of the sale, the
shareholders should have been given dissenters' rights.
The plaintiffs also make various claims of breaches of duty and
negligence against the Company's Board of Directors and the individual
officers and the other named defendants.
The plaintiffs have sought court approval to proceed with this suit as
a class action, which is pending in court.
The Company believes that the defendants have fully complied with their
statutory and fiduciary duties. Accordingly, the Company is defending
the suit vigorously. At this early stage, however, the Company cannot
predict the ultimate outcome of this matter or how it may affect its
consolidated financial position, results of operations, or cash flows.
OPEN MARKET: MA Court Hears Arguments on Dismissal of Securities Suit
---------------------------------------------------------------------
The United States District Court for the District of Massachusetts
heard arguments on the motion seeking the dismissal of a consolidated
securities class action pending against Open Market, Inc. on behalf of
purchasers of the Company's common stock between November 18, 1999 and
April 18, 2000.
The consolidated suit alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. In particular, the suit alleges, among other things, that
during the class period, the defendants sought to mislead the investing
public by overstating the Company's prospects and the quality of its
products.
In May 2001, the Company moved for the suit's dismissal, and in
November 2001, the court heard oral argument on the defendants' motion
to dismiss. However, it has not released any ruling on the motion.
The suit is in the early stages of the litigation, but the Company
believes it has meritorious defenses against the suit, and intends to
defend the case vigorously.
ORCHID BIOSCIENCES: Labels "Without Merit" Securities Suit in S.D. NY
---------------------------------------------------------------------
Orchid Biosciences, Inc. 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 stock between May 4,2000 and
December 6,2000. The suit names as defendants the Company and certain
of our officers and underwriters.
The suit alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933, as amended, and Section 10(b) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder.
The suit alleges that, in connection with the Company's May 5, 2000
initial public offering, the defendants failed to disclose additional
and excessive commissions purportedly solicited by and paid to the
underwriter defendants in exchange for allocating shares of Company
stock to preferred customers and alleged agreements among the
underwriter defendants and preferred customers tying the allocation of
IPO shares to agreements to make additional aftermarket purchases at
pre-determined prices.
The suit claims that the failure to disclose these alleged arrangements
made the Company's registration statement on Form S-1 filed with the
SEC in May 2000 and the prospectus, a part of the registration
statement, materially false and misleading.
The Company believes that the allegations are without merit and intends
to vigorously defend against the plaintiffs' claims.
PROASSURANCE CORPORATION: Sued Over Proposed Stock Repurchase in MI
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ProAssurance Corporation and subsidiary MEEMIC Holdings, Inc. faces a
class action pending in the 6th Circuit Court in Oakland County,
Michigan by a purported shareholder of MEEMIC Holdings seeking
to enjoin a stock repurchase transaction where MEEMIC Holdings proposed
to acquire all of its outstanding shares of stock not currently owned
by the Company for $29 per share in cash (a total of 1,294,905 fully
diluted shares), for a total possible purchase price of $37.6 million.
The suit purports to be a class action on behalf of the minority
shareholders, alleges, among other things:
(1) that the transaction has been timed to freeze out the minority
shareholders;
(2) that the proposed transaction is unfair; and
(3) that the Company and its directors have violated their
fiduciary duties.
The suit may delay or prevent progress toward the completion of the
proposed transaction.
The Company and MEEMIC Holdings intend to vigorously defend itself and
the other defendants against these claims. Both companies believe they
have meritorious defenses to the claims made by the plaintiff,
including without limitation, the fact that it has taken several steps
to protect the rights of the minority shareholders in the proposed
transaction and to ensure its fairness.
These steps include permitting a committee of two independent directors
who have no other affiliation with MEEMIC Holdings or the Company to
negotiate and approve the proposed transaction, and making the
completion of the transaction subject to the approval of the holders of
a majority of the shares not owned by the Company or its affiliates and
the receipt of fairness opinions from independent financial advisors.
There can be no assurance, however, as to the outcome of this
litigation and, if the Company is not able to successfully defend
against the claims made by the plaintiff, the outcome of this
litigation could have a material adverse impact on the proposed
transaction and on its financial position, liquidity and results of
operations.
SONICWALL INC.: Securities Fraud Suits Could "Divert Attention" in NY
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SonicWALL, Inc. 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 stock between Noember 10, 1999 and
December 6,2000, relating to the Company's initial public offering in
November 1999 and its follow-on offering in March 2000. The suit names
as defendants the Company and:
(1) Sreekanth Ravi, CEO, President and director,
(2) Sudhakar Ravi, Vice President of Engineering, director,
(3) Michael J. Sheridan, CFO and Secretary,
(4) Bear, Stearns & Co. Inc.,
(5) FleetBoston Robertson Stephens Inc. and
(6) Credit Suisse First Boston Corporation
The suit alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. The suits seeks damages
or rescission for misrepresentations or omissions in the prospectuses
relating to, among other things, the alleged receipt of excessive and
undisclosed commissions by the underwriters in connection with the
allocation of shares of common stock in the Company's public offerings.
The Company believes that the claims in the suit are without merit and
intends to vigorously defend against these allegations. However, it
warned that the litigation could result in substantial costs and divert
its attention and resources, which could have a material adverse effect
on the Company's business and operating results.
STILLWATER MINING: Mark McNair Commences Securities Suit in S.D. NY
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The Law Office of Mark McNair initiated a securities class action in
the United States District Court for the Southern District of New York
on behalf of purchasers of Stillwater Mining Company (NYSE:SWC)
securities from the period starting April 20, 2001 and ending April 1,
2002.
The suit charges the Company with federal securities act violations,
relating to its April 2, 2002 announcement that its accounting
practices had been condemned by the Securities and Exchange Commission
and its stock dropped 24%. Among other things, it is alleged that the
SEC advised the Company by mid-December 2001/early January 2002 that
its methodology for calculating probable ore reserves was improper and
would have to be changed.
For more information, contact Mark McNair by Phone: 877-511-4717 or
202-872-4717 by E-mail: mcnair@justice4investors.com or visit the
firm's Web site: http://www.justice4investors.com.
TORCH OFFSHORE: Faces Suit For Securities Act Violations in E.D. LA
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Torch Offshore, Inc. faces two securities class actions pending in the
Eastern District of Louisiana on behalf of all persons who purchased
the common stock of Torch Offshore, Inc. (Nasdaq: TORC) from June 7,
2001 through August 1, 2001, inclusive. The suit names as defendants
the Company, certain of its officers and/or directors and underwriters:
(1) UBS Warburg LLC,
(2) CIBC World Markets Corp., and
(3) Howard Weil, a division of Legg Mason Wood Walker, Inc.
The suit alleges that the defendants violated Sections 11 and 15 of the
Securities Act of 1933 by making false and misleading representations
in the June 7, 2001 registration statement and prospectus prepared and
disseminated by defendants in connection with the IPO.
The suit alleges, among other things, that the prospectus contained
material misrepresentations concerning the prices of natural gas and
oil in the period preceding the IPO, as well as the effect of those
prices upon the Company's business and the demand for the Company's
services.
The Company believes the allegations in the suits are without merit,
and intends to vigorously defend this lawsuit. Even so, an adverse
outcome in this class action litigation could have an adverse effect on
the Company's financial condition or results of operations.
VIROPHARMA INC.: Schiffrin Barroway Lodges Securities Suit in E.D. PA
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Schiffrin and Barroway LLP initiated a securities class action against
ViroPharma, Inc. (Nasdaq:VPHM) claiming that the company misled
investors about its business and financial condition. The suit was
filed in the United States District Court for the Eastern District of
Pennsylvania on behalf of all investors who bought the Company's
securities between July 13, 1999 and March 19, 2002.
The suit alleges that the Company made highly positive statements
regarding its drug Picovir. The Company represented that its growth
was contingent on US Food and Drug Administration (FDA) approval of
its' Picovir (pleconaril) drug as a cure for the common cold.
The Company informed the investing public of every positive part of the
Picovir studies and insisted that treatment was well tolerated and that
adverse events were comparable to placebo in the trials. The Company
issued numerous press releases, which praised the effectiveness of
Picovir and minimized and concealed the potential obstacles to FDA
approval.
However, on March 19, 2002, trading on the stock was halted as the
Company revealed that a FDA advisory committee voted 15-0 against
approval of Picovir because of safety concerns. On March 20, 2002,
after the resumption of trading, the Company's shares plummeted 60
percent. The 15-member FDA committee had questions about the safety of
the drug in women taking oral contraceptives and in the elderly.
In addition, the committee asked for broader studies on the drug's
benefits with minorities, the elderly, patients with asthma and chronic
bronchitis, children, and more about the drug's interaction with other
medications. They also expressed concern that the drug may develop
drug-resistant cold germs. The FDA pointed out that the drug had
several significant side effects, with headache the most frequently
cited.
For more details, contact Schiffrin & Barroway directly by Phone:
888-299-7706 (toll free) or 610-822-2221 by Fax: 610-822-0002 by E-
mail: info@sbclasslaw.com or visit the firm's Web site:
http://www.sbclasslaw.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
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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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