/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020429.mbx C L A S S A C T I O N R E P O R T E R Monday, April 29, 2002, Vol. 4, No. 83 Headlines AT&T CORPORATION: Asks For Dismissal of Suit For PA Law Violations CAPITAL CONSULTANTS: Electrical Workers Settle Pension, Other Benefits HEWLETT-PACKARD: June Fairness Hearing For LaserJet Suit Settlement Set HOME BUILDERS: Bill Drafted To Avert Construction Defect Suits ILLINOIS: Voter Challenges Democratic Primary Due To Defective Ballot INSTEP LLC: Recalls 4,300 Hitchhiker Trailer Bikes For Injury Hazard JOURNAL COMMUNICATIONS: Trial Finally Slated for Newspaper Merger Suit OVERSEAS PARTNERS: Faces Suit Over UPS Courier Insurance in S.D. NY PAPUA NEW GUINEA: Govt. Seeks 60-Day Delay Of Landmark Rio Tinto Suit SOUTH DAKOTA: State High Court Considers Appeal of Tax-Refund Suit SPECIALIZED BICYCLE: Voluntarily Recalls 2T Bicycles Over Injury Hazard THIMEROSAL LITIGATION: WA Federal Judge Sends Lawsuit To State Court VERMONT PRECISION: Recalls 990 Cribs For Accident Hazard Due To Slats Securities Fraud ADELPHIA COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in PA ADELPHIA COMMUNICATIONS: Holzer Holzer Files Securities Suit in E.D. PA ADELPHIA COMMUNICATIONS: Entwistle Cappucci File Securities Suit in PA ALLFIRST FINANCIAL: Faces Suit For Securities Act Violations in S.D. NY ALLIED IRISH: Bernstein Liebhard Commences Securities Suit in S.D. NY AMERICAN CABLE: CO Court Refuses To Dismiss Shareholder Derivative Suit ARTHUR ANDERSEN: Settlement Possible in Suits Over Enron Collapse BRISTOL-MYERS SQUIBB: Sued For Securities Act Violations in S.D. NY CONSECO FINANCE: Discovery Proceeds In Securities Fraud Suit In MN CORNELL COMPANIES: Bernstein Liebhard Lodges Securities Suit in S.D. TX EAGLE BUILDING: Cauley Geller Commences Securities Suit in S.D. FL EAGLE BUILDING: Schiffrin Barroway Lodges Securities Suit in S.D. FL FLAG TELECOM: Schiffrin Barroway Commences Securities Suit in S.D. NY GERBER SCIENTIFIC: Faruqi Faruqi Commences Securities Fraud Suit in CT GILAT SATELLITE: Wolf Haldenstein Commences Securities Suit in E.D. NY IMCLONE SYSTEMS: Mounting Vigorous Defense V. Securities Suits in NY IMCLONE SYSTEMS: Faces Shareholder Derivative Suits in Various Courts MERILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY MERILL LYNCH: Klayman Toskes Initiates Securities Fraud Suit in S.D. NY NEW ERA: Agrees To Settle For $5 Million Securities Suit in S.D. NY NEW ERA: CO Court Grants Final Approval to $5.5M Settlement NEWPOWER HOLDINGS: Pomerantz Haudek Lodges Securities Suit in S.D. NY NTL INC.: Faruqi Faruqi Commences Securities Fraud Suit in S.D. NY PARADYNE NETWORKS: Laddering Allegations Focus of Securities Suit in NY PLUG POWER: Labels "Without Merit" Securities Fraud Suit in E.D. NY TELAXIS COMMUNICATIONS: Sued For Securities Act Violations in E.D. NY UNIVERSAL ACCESS: Patton Haltom Commences Securities Suit in E.D. TX WESTERN RESOURCES: Fourth Amended Securities Fraud Suit Filed in CA ********* AT&T CORPORATION: Asks For Dismissal of Suit For PA Law Violations ------------------------------------------------------------------ AT&T Corporation asked the Supreme Court of the State of New York to dismiss the consolidated class action filed against it, Comcast Corporation and AT&T Comcast Corporation by certain shareholders of Comcast and AT&T in February 2002. The suit alleges that the initial term of office of the directors of AT&T Comcast violates section 1724 of the Pennsylvania Business Corporation Law regarding the term of office of directors of non- classified boards. The defendants have served papers in support of a motion to dismiss the consolidated action for failure to state a cause of action. The plaintiffs' response to the motion to dismiss is due March 28, 2002, and the defendants' reply is due on April 4, 2002. Argument on the motion is scheduled for April 8, 2002. AT&T believes that the consolidated action is without merit and intend to contest the action vigorously. CAPITAL CONSULTANTS: Electrical Workers Settle Pension, Other Benefits ---------------------------------------------------------------------- The trustees for the 8th District Electrical Workers announced they have settled a class action on behalf of the workers, which alleged improper investment of pensions, health and welfare, and vacation/ holiday benefits with Oregon-based Capital Consultants, the Deseret News reported recently. The insurer for the trustees has agreed to pay more than $5.25 million to settle the claims. The trustees say that they invested more than $45 million with Capital. They anticipate, however, that about 40 percent of the loss ultimately can be recovered. Despite the losses, the trustees maintain that there is no danger of defaulting on the fund's obligation to retirees. HEWLETT-PACKARD: June Fairness Hearing For LaserJet Suit Settlement Set ----------------------------------------------------------------------- The Superior Court of New Jersey, Middlesex County scheduled the fairness hearing for the settlement of a class action filed against Hewlett-Packard for June 27, 2002. The suit was filed on behalf of people who purchased or otherwise acquired certain Hewlett-Packard (HP) LaserJet printers that might have been affected by a problem in the paper feed mechanism. The suit alleges that the performance problems result from defectively designed separation pads that oxidize, degrade, and harden during the expected useful life of the unit, and can cause the printer to multi- feed paper. Under the proposed settlement agreement, the Company will provide eligible class members who timely submit an adequate claim form with a Rebate Certificate and/or an HP Repair Kit to perform a self-repair on the unit (depending upon the model of the printer and whether the owner needs the kit). A document entitled, "Notice of Proposed Class Settlement," explains the remedies available for each model and what is required to prove eligibility. The hearing will determine: (1) whether the proposed settlement is fair, reasonable and adequate; (2) whether a final judgment should be entered dismissing the litigation on the merits as to HP and HP resellers with prejudice to plaintiff and all members of the settlement class who do not timely request exclusion; and (3) whether applications to be made by class counsel for payment of fees and reimbursement of expenses should be approved by the court. For more information, contact Class Counsel HP Claims by Mail: c/o Wilentz, Goldman & Spitzer, 90 Woodbridge Center Drive, Suite 900, Box 10, Woodbridge, New Jersey 07095 by Phone: 866-613-9345 or by E-mail: hpmultifeed@wilentz.com or visit the Web site: http://laserjet.classaction.hp.young-america.com HOME BUILDERS: Bill Drafted To Avert Construction Defect Suits -------------------------------------------------------------- In Arizona, lawmakers have drafted legislation that would create a process among homeowners and homebuilders for fixing construction defects without filing a lawsuit, The Associated Press has reported. The proposal attempts to resolve construction defect problems that have generated anger and frustration during Arizona's rapid population growth. It tries to provide home-builders a way to avoid the class actions they fear, by establishing a mandated procedure for making the repairs of defects reported by the homeowners. Under an amended bill (HB2620), which was endorsed on a 7 to 0 vote of the Senate Judiciary Committee, homeowners would have to give builders 90 days to fix reported defects before they could sue. If either side does not follow the process, it could be used against them in court. Additionally, if a case does go to court, the prevailing side will be awarded fees for attorneys, experts and other reasonable expenses. Homeowners with safety or life-threatening problems, however, still could go directly to court. A homeowner has up to eight years to file a complaint. The compromise also would require builders to inform new home buyers in bold print that the state Registrar of Contractors is available to arbitrate complaints. While no one spoke against the proposed legislation, some homeowner advocates remain skeptical about whether it actually will help people who discover problems with their new homes. Eric Sachrison, a Phoenix attorney who specializes in construction defects law, did not find a connection between the proposed legislation, which deals more with the time frame involved, and the fixing of problems. "I will be surprised at the end of the day if we find they (the builders) are making offers that fix the problems. It is economics. They don't get paid for making repairs," Mr. Sachrison said. The bill now moves to the Senate for consideration. ILLINOIS: Voter Challenges Democratic Primary Due To Defective Ballot --------------------------------------------------------------------- The 17th Illinois House District faces a class action suit, challenging the results of the March 19 Democratic primary in that district after a voter noticed that Democratic seat candidates were not listed on the ballot, the Chicago Tribune reported. "My vote wouldn't count," said Dayal Patel of Morton Grove, Illinois. Mr. Patel claims his constitutional right to vote was denied because of the alleged ballot problems, and he seeks class action status for his lawsuit. According to official results, Patrick Hughes won, defeating attorney Michael Bender of Skokie by 116 votes out of more than 13,000. However, Mr. Bender alleges that confused election judges gave voters the wrong ballots or sent them to the wrong voting booths, changing the outcome. The suit was filed in the United States District Court in Chicago and asks the Court to order a new vote, if not for the entire district, then in 18 so-called split precincts in the North Shore townships of Evanston, New Trier, Niles and Northfield. Election authorities had not yet been served with the lawsuit complaint when they were asked for their opinion, and therefore declined to comment, said a spokeswoman for Cook County Clerk David Orr. Officials have acknowledged widespread problems in split precincts, and other losers of close races have said they would have won if the judges hadn't made mistakes in such precincts. INSTEP LLC: Recalls 4,300 Hitchhiker Trailer Bikes For Injury Hazard -------------------------------------------------------------------- InSTEP LLC is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 4,300 Hitchhiker III Trailer Bikes. The bike's universal joint system can fail, causing a rider to lose control of the bike. This poses a risk of injury to either of the two riders. The Company has received 10 reports of universal joint systems failing, including three reports of consumers who suffered contusions and abrasions. The recalled Hitchhiker III trailer bikes are attached to a lead bicycle by a universal joint system with two side bolts and a top- mounted quick-release bolt. The recalled NH300 model trailer bikes have the words "HITCHHIKER III" printed in red on the trailer arm and the "InSTEP" logo printed on the bottom tube and the safety flag. Retail stores nationwide, including Toys "R" Us, The Sports Authority and One Step Ahead, sold the bikes from February 2001 through May 2001 for between $80 and $110. For more information, contact the Company by Phone: 800-242-6110 between 8 am and 5 pm CT Monday through Friday by E-mail: info@instep.net or visit the firm's Web site: http://www.instep.net JOURNAL COMMUNICATIONS: Trial Finally Slated for Newspaper Merger Suit ---------------------------------------------------------------------- Trial in the class action pending against Journal Communications, Inc. in the Milwaukee County Circuit Court is set to commence in June 2002. Five of the Company's former employees filed the suit in May 1999, relating to the 1995 merger of the Milwaukee Journal and Milwaukee Sentinel. The suit alleges that an internal memorandum created a contract permitting members of the class to sell back units at any time over a period of up to ten years, depending on their years of unit ownership. The Company asserts that it was widely communicated and known that unit sell-back was required ratably over a specified time period. This lawsuit has been granted class action status to include all other unit- holders that separated from the Company as part of the merger. In 2000 the judge ruled in favor of the plaintiff's summary judgment motion that the separation agreement permits the sell back of units at any time during the sell-back period. A trial on the remaining issues of breach, causation and amount of damages is not expected to begin any earlier than June 2002. While the Company disagrees with the judge's ruling on the contract interpretation, there is a risk that the outcome of such a trial may not be in the Company's favor. OVERSEAS PARTNERS: Faces Suit Over UPS Courier Insurance in S.D. NY ------------------------------------------------------------------- Overseas Partners Ltd. faces a consolidated class action pending in the United States District Court for the Southern District of New York on behalf of customers of United Parcel Services, Inc. (UPS). The suit, which arose from two class actions commenced in November 1999 in two Ohio State Court, alleges that UPS told its customers that they were purchasing insurance for coverage of loss or damage to goods shipped by UPS. The suits further allege that UPS wrongfully enriched itself with the monies paid by its customers to purchase such insurance. The two suits were later removed to New York Federal Court and consolidated in a multi-district litigation for pretrial discovery purposes with other actions asserting claims against UPS. Plaintiffs subsequently amended those claims against all defendants to join a RICO claim as well. On August 7, 2000, the Company and its wholly owned subsidiary, OPCC, were added as defendants in a third class action, also consolidated in the multi-district litigation, which alleges violations of United States antitrust laws, and state unfair trade practice and consumer protection laws. The allegations in the lawsuits are drawn from an opinion by the United States Tax Court that found that the insurance program, as offered through UPS, by domestic insurance companies, and ultimately reinsured by the Company, should not be recognized for federal income tax purposes. In June 2001, the Tax Court opinion was reversed by the United States Court of Appeals for the Eleventh Circuit and remanded to the Tax Court for further consideration. The parties filed supplemental briefs on remand on March 18, 2002. The Company believes that it has meritorious defenses to all three actions and intends to defend them vigorously. The Company has filed motions to dismiss all of the actions on a number of grounds, including that the antitrust claim fails to state a claim upon which relief can be granted, and that the remaining claims are preempted by federal law. PAPUA NEW GUINEA: Govt. Seeks 60-Day Delay Of Landmark Rio Tinto Suit --------------------------------------------------------------------- The Papua New Guinea (PNG) government has asked the United States to delay proceedings in a landmark class action against Rio Tinto by 11,000 Bougainvilleans, AAP News has reported. Prime Minister Sir Mekere Morauta said the case for compensation relating to the Panguna gold and copper mine could damage the national interest. The requested delay is understood to be for 60 days. The lawsuit, filed on behalf of independence leader Francis Ona, alleges that Rio Tinto, acting in concert with the PNG government, was responsible for despoiling the environment, and committed "various Atrocities" and "war crimes," including a military blockade that kept medical supplies from the island of Bougainville. The District Court of Los Angeles has asked PNG and Rio Tinto for their views on the case, which may not be heard in the United States, however, because of the State Department's concern that America's international relations could be damaged. The Bougainvilleans say, on the other hand, that their best chance for their case to be heard without bias would be in the United States. Sir Mekere said the government needs more time to take legal advice on the case. "But the way in which the claim has been framed includes some very serious allegations against the State," Sir Mekere said in a statement. "These allegations have potentially serious implications for Papua New Guinea's national interests, including our reputation for good governance in the eyes of international financial institutions, foreign aid donors, banks and investors, trading and other partners. It is these implications which concern the Cabinet and demand that we seek, obtain and carefully consider the best available legal and other advice before the Government finalizes the State's position on the case," the Prime Minister said. The war on Bougainville was sparked by years of alleged environmental damage caused by the then-Australian mining company, the CRA gold and copper mine in central Bougainville. CRA became part of Rio Tinto three years ago. The war, which led to independence leader Francis Ona's declaration of independence for Bouganville in 1990, caused between 5,000 and 20,000 deaths through outright war with the mainland army and police, internal civil war, starvation, disease and childbirth fatalities. The legal action comes as the PNG government plans the administrative framework for the island after a landmark vote last month which offered Bougainville state-like autonomy and an eventual referendum on independence. The constitutional changes still have to be signed by United Nations weapons collectors. SOUTH DAKOTA: State High Court Considers Appeal of Tax-Refund Suit ------------------------------------------------------------------ A class action over taxes that must be refunded by Rapid City, South Dakota, should be set aside, the State Supreme Court was told during recent argument before it, according to The Associated Press. The case was tentatively decided Wednesday after the parties' arguments, but the Supreme Court Justices will not announce their final ruling until another tally is taken and the decision put into writing. Nearly $476,000 in occupational sales and service taxes must be offered as refunds, because the State Supreme Court had ruled earlier that the city had improperly annexed the airport area. Adam Altman, assistant city attorney, said Rapid City already has a program to provide refunds of the taxes that were collected at the Rapid City Regional Airport. Therefore, Mr. Altman argued, the already-certified class action filed by Loren Beck should be trumped because such an effort would make it more difficult for people to collect refunds. Courtney Clayborne, a lawyer in the class action, said it is easy to identify most of those who are owed tax refunds. The bulk of the taxes that should not have been collected were paid by people who rented cars at the airport. Rental car records will make it easy to locate those people, Mr. Clayborne told the Justices. He was unsure how large the average refund would be, but tens of thousands of people are owed the refunds, he said. Mr Clayborne argued further that the City likely will get to keep most of the refund money unless class action status is upheld. Many of those who paid the tax, either in rental car services or for such things as airplane repairs, do not live in the Rapid City area and do not know about the existing refund program. He also argued that class action status would allow the judge to serve as trustee of the $476,000 and decide how to pay the claims. Mr. Altman said that $250,000 was put into the refund program, and people need only minor proof of purchases to get their tax money back. He said further that people must have spent at least $35 at the airport before they would ever break even on the cost of postage stamps to get their class action settlements. Class action status would also ensure that a big chunk of the money would go to pay legal fees in the case, he said. The existing program is adequate, he urged. SPECIALIZED BICYCLE: Voluntarily Recalls 2T Bicycles Over Injury Hazard ----------------------------------------------------------------------- Specialized Bicycle Components, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 2,200 bicycles. The rear seatstays, the tube behind the seat that connects the rear axle to the rear shock, can break, possibly causing the rider to lose control and crash. The Company has received 39 reports of the seatstays on these bicycles breaking. No injuries have been reported. The recall involves model year 2002 Enduro-brand bicycles. The Enduro Pro FSR is silver, the Enduro Expert FSR is black, the Enduro Comp FSR is yellow and the Enduro FSR is blue. The model name of the bicycles is located on the top tube and the brand name is located on the down tube. Company dealers nationwide sold these bicycles from September 2001 through February 2002 for between $1,650 and $2,750. For more information, contact the Company by Phone: 800-214-1468 between 8 am and 5 pm PT Monday through Friday, or visit the firm's Web site: http://www.specialized.com. THIMEROSAL LITIGATION: WA Federal Judge Sends Lawsuit To State Court -------------------------------------------------------------------- A second federal judge has ruled a class action against major drug companies that added mercury preservative thimerosal to vaccines should be tried in state court, The Associated Press has reported. US District Judge John Coughenour, in Seattle, ruled recently that the drug companies had failed to show any "substantial question of federal law" was at stake in a lawsuit brought by parents of children suffering from autism or other neurological disorders allegedly due to the presence of thimerosal in vaccines. Last January, US Magistrate Donald Ashmanskas, in Portland, ordered a similar case remanded to state court in Oregon. "This is a first step, but a very important step, to begin our inquiry into what vaccine manufacturers knew about mercury and when they knew about it and what they did, if anything, about it," said Ted Willhite, an attorney for the Washington state families who filed the lawsuit. Lawsuits around the nation have been filed in the past year, organized by a Portland law firm representing George and Tory Mead, who say their autistic three-year-old son William was developing normally until he received a series of vaccines containing the preservative thimerosal, a form of mercury. The Meads helped found a national organization of parents to battle drug companies, based on a growing number of reports about autism and other health problems in children who received vaccines containing the mercury preservative. The manufacturers named in the various lawsuits include: (1) Aventis Pasteur Inc., (2) Pfizer, Inc., a subsidiary of Warner-Lambert, (3) GlaxoSmithKline, (4) Merck & Co., (5) Abbott Laboratories, (6) American Home Products, (7) Baxter International Inc., (8) Eli Lilly & Co., (9) Sigma Chemical Co., and (10) Aldrich Chemical Co. Manufacturers had used the preservative to prevent contamination of large bottles of vaccine since the 1930s. However, in the early 1990s, doctors began giving more shots to children at a younger age to fend off diseases such as hepatitis, thereby increasing their exposure to mercury. In July 1999, the American Academy of Pediatrics joined the US Public Health Service to warn that vaccines containing thimerosal should be discontinued. Manufacturers since have switched to vaccine containers carrying just a single dose, thus eliminating the need for any mercury preservative. Last October, the National Academy of Sciences issued a report supporting the recommendation to remove any remaining vaccines with thimerosal from the nation's medical stockpile. However, the report did remark that researchers had not established a definite link between thimerosal and disorders in children. VERMONT PRECISION: Recalls 990 Cribs For Accident Hazard Due To Slats --------------------------------------------------------------------- Vermont Precision Woodworks is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 990 cribs. The slats on the cribs can loosen and detach from the drop side rail, creating a large opening between the slats where a child's head or neck could become entrapped, resulting in serious injury or death. The Company has received 21 reports of slats detaching. No injuries have been reported. The recalled cribs include models, 7010Alpine, 7020 Caspian, 7030 Coventry, 7040 Dunmore and 7070 Haystack. The full-size cribs are solid maple and are available in five finishes, natural, colonial, white, cherry, and cinnamon. A label on the bottom of the cribs reads, "Vermont Precision Woodworks." The manufacturing date and model name is also printed on the label. The cribs were made in the USA. Juvenile product and furniture stores sold the cribs nationwide from January 2000 through March 2002 for between $500 and $800. For more information, contact the Company by Phone: 866-869-7974 anytime or visit the Company's Web site: http://www.vermontprecisionwoodworks.com Securities Fraud ADELPHIA COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in PA ----------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action against Adelphia Communications Corporation ("Adelphia" or the "Company") (Nasdaq:ADLAC) claiming that the company misled investors about its business and financial condition, in the United States District Court for the Eastern District of Pennsylvania. The suit was filed on behalf of all investors who bought Company securities between March 30 2000 and April 1, 2002. The suit alleges that the Company failed to disclose billions of dollars of off-balance sheet debt. As alleged in the suit, unbeknownst to investors, the Company guaranteed credit facilities for certain closely-held partnerships, which are controlled by the Rigas Family (the Company's controlling shareholder), and which used the money, in substantial part, to purchase securities from the Company. Defendants first disclosed the existence of the off-balance sheet debt during an earnings conference call on March 27, 2002. Then, on April 1, 2002, the Company announced that it was requesting an extension to file its Annual Report on Form 10-K with the SEC. The Company reported that the extension was being sought to allow the Company and its outside auditors additional time to review certain accounting matters relating to co-borrowing credit facilities which the Company is a party. In response to these negative announcements, the price of the Company's common stock dropped from $20.39 per share on March 26, 2002, to $13.12 per share on April 1, 2002. The price of other Company debt securities also materially declined. For more information, contact the Shareholder Relations Manager 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 ADELPHIA COMMUNICATIONS: Holzer Holzer Files Securities Suit in E.D. PA ----------------------------------------------------------------------- Holzer & Holzer initiated a securities class action in the United States District Court for the Eastern District of Pennsylvania on behalf of purchasers of Adelphia Communications Corporation (Nasdaq:ADLAC) publicly traded securities during the period between March 30, 2000 and April 1, 2002, inclusive. The suit alleges that the Company and certain of its officers and directors issued false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that, throughout the class period, the Company failed to disclose billions of dollars of off-balance sheet debt. As alleged in the complaint, unbeknownst to investors, the Company guaranteed credit facilities for certain closely-held partnerships, which are controlled by the Rigas Family (the Company's controlling shareholder), and which used the money, in substantial part, to purchase securities from the Company. The suit further alleges that the defendants first disclosed the existence of the off-balance sheet debt during an earnings conference call on March 27, 2002. Then, the complaint alleges, on April 1, 2002, the Company announced that it was requesting an extension to file its Annual Report on Form 10-K with the SEC. The suit alleges that the Company reported that the extension was being sought to allow the Company and its outside auditors additional time to review certain accounting matters relating to co-borrowing credit facilities which the Company is a party. In response to these negative announcements, the price of the Company's common stock dropped from $20.39 per share on March 26, 2002, to $13.12 on April 1, 2002. The price of other Company debt securities also materially declined. For more details, contact Michael I. Fistel, Jr. by Phone: 404-847-0085 if in Atlanta or 888-508-6832 if outside Atlanta or by E-mail: michaelfisteljr@msn.com ADELPHIA COMMUNICATIONS: Entwistle Cappucci File Securities Suit in PA ---------------------------------------------------------------------- Entwistle and Cappucci LLP initiated a securities class action against on behalf of all persons who purchased Adelphia Communications Corporation (NYSE: ADLAE) common stock between January 19, 2001 and April 1, 2002, inclusive in the United States District Court for the Eastern District of Pennsylvania. The suit names as defendants the Company and: (1) John J. Rigas, (2) James P. Rigas, (3) Michael J. Rigas, (4) Timothy J. Rigas and (5) Peter L. Venetis The suit alleges that defendants violated Sections 10(b) and 20(a) of the Exchange Act. More specifically, the suit alleges that defendants failed to disclose billions of dollars of off-balance sheet debt. Unbeknownst to investors, the Company guaranteed loans for certain entities controlled by the Rigas family (the Company's controlling shareholder), which used the loan proceeds, in substantial part, to purchase Company securities. Defendants first disclosed the existence of the off-balance sheet debt during an earnings conference call on March 27, 2002. On April 1, 2002, the Company announced it was requesting an extension of time to file its Annual Report on Form 10-K with the Securities and Exchange Commission (SEC) in order to allow the Company and its outside auditors additional time to review certain accounting matters relating to co-borrowing credit facilities to which the Company is a party. In response to these negative announcements, the price of the Company's common stock dropped from $20.39 per share on March 26, 2002, to $13.12 per share on April 1, 2002. The price of the Company's common stock continues to decline, along with other Company securities since its recent disclosures. On April 3, 2002, the Company announced that the SEC had initiated an "informal" investigation concerning whether the Company had adequately disclosed its debt. On April 17, 2002, the Company announced that the SEC had upgraded its investigation to "formal," which means that the agency now has the power to subpoena records. For more details, contact Vincent R. Cappucci by Mail: 299 Park Avenue, 14th Floor, New York, New York 10171 or by Phone: Telephone: 212-894-7200. ALLFIRST FINANCIAL: Faces Suit For Securities Act Violations in S.D. NY ----------------------------------------------------------------------- Allfirst Financial, Inc. was named as defendants in several securities class actions filed in the United States District Court for the Southern District of New York on behalf of purchasers of Allied Irish Bank's securities from January 1, 2001 through February 6,2002. Allied Irish Bank is the Company's parent. The suit also names as defendants several current and former officers of the Company and Allfirst Bank. The suit alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The suit alleges that the Allied Irish Bank's financial reports since 1999 fraudulently failed to reflect at least $691 million of currency trading losses associated with the Company. On February 6, 2002, Allied Irish shocked the investment markets by disclosing for the first time that the Company had concealed massive losses from foreign exchange trading, and that Allied Irish had halted all currency trading at the Company. The likely disposition of the lawsuit and the demand and their effect on the Company cannot be determined at this time. ALLIED IRISH: Bernstein Liebhard Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf of all persons who acquired Allied Irish Banks, PLC (NYSE: AIB) securities between January 1, 2001 and February 6, 2002 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 by E-mail: AIB@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com. AMERICAN CABLE: CO Court Refuses To Dismiss Shareholder Derivative Suit ----------------------------------------------------------------------- The United States District Court for the District of Colorado refused to dismiss a shareholder derivative class action pending on behalf of investors in American Cable TV Investors 5, Ltd. The suit names as defendants: (1) IR-TCI Partners V, LP, (2) TCI Ventures Five, Inc., (3) Tele-Communications, Inc., (5) Lehman Brothers, Inc., (6) Jack Langer, and (7) American Cable TV Investors 5, Ltd., (as a nominal defendant) This purported class action and derivative action asserts claims against the Company for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and breach of fiduciary duty in connection with the sale of the Riverside System to Century Exchange LLC. In February 2000, the defendants filed motions to dismiss the suit, which the Court granted for failing to plead the federal Securities Act claim properly. The plaintiffs amended the suit in October 2000, which the defendants again moved to dismiss. The court, however, denied the motion. A trial date has not yet been set. Based upon the limited facts available, the Company believes that, although no assurance can be given as to the outcome of this action, the ultimate disposition should not have a material adverse effect upon the financial condition of the Partnership. ARTHUR ANDERSEN: Settlement Possible in Suits Over Enron Collapse ----------------------------------------------------------------- Two recent signs indicate that beleaguered accounting firm Arthur Andersen may be closer to negotiating a settlement in class actions filed against it and others over Enron's collapse, the Houston Chronicle has reported. US District Judge Melinda Harmon recently granted a request to dismiss a key Andersen partner, Mr. C.E. Andrews, from the lawsuit, and a hearing on an injunction to prevent the breakup of Andersen was postponed for the fourth time in deference to ongoing settlement talks. Trey Davis, a spokesman for the University of California, lead plaintiff in the shareholder class action, said Mr. Andrews, head of Andersen Worldwide's auditing practice was not necessary to the plaintiffs' case. However, sources said Mr. Andrews, also part of the team reorganizing Andersen, could be tapped as Chief Executive Officer in the future, and dropping him from the suit is an olive branch in the negotiations. Also dropped from the shareholder class action, at the request of University of California, was former Enron board member Bruce G. Willison. Spokesman Trey Davis said Mr. Willison was on the Board in 1997 and 1998, and evidence indicates he did not sign the documents that are at issue in the case. Judge Harmon's order would not bar the plaintiffs from adding Mr. Andrews and Mr. Willison back to the case should there be additional evidence. Court-ordered negotiations in the civil suit have been underway for several weeks. One of the sticking points has been the unwillingness of banks also named in the lawsuit to shoulder Andersen's liability in the future if the accounting firm successfully settles with the plaintiffs first. Negotiations between Andersen and the Department of Justice over felony obstruction of Justice charges for destroying Enron-related document last fall, fell apart last week. A May 6 trial date on the criminal charge now looms in the case, but observers say an 11th hour settlement is still possible. BRISTOL-MYERS SQUIBB: Sued For Securities Act Violations in S.D. NY ------------------------------------------------------------------- Bristol-Myers Squibb, Inc. faces several securities class actions pending in the United States District Court for the Southern District of New York on behalf of purchasers of the Company's securities between September 25, 2001 and March 19, 2002, inclusive. The suits, which also name the Company's Chairman and Chief Executive Officer, Peter R. Dolan as a defendant, allege 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 plaintiffs allege that the defendants disseminated materially false and misleading statements and failed to disclose safety data of its product VANLEV during the class period. The Company said in a disclosure to the Securities and Exchange Commission that it is not possible at this time to make a reasonable assessment of the final outcome of these matters or the amount of damages if the Company were not to prevail. CONSECO FINANCE: Discovery Proceeds In Securities Fraud Suit In MN ------------------------------------------------------------------ Discovery in the two consolidated securities class actions pending against Conseco Finance Corporation in the United States District Court for the District of Minnesota commenced this month. The suits name as defendants the Company and certain of its current and former officers and directors. The two suits arose from several securities class action filed in the some court on behalf of persons or entities who purchased common stock or options to purchase common stock of the Company during alleged class periods that generally run from July 1995 to January 1998. The suits wee later consolidated into two actions, one of which pertains to a purported class of common stockholders (In re Green Tree Financial Corp. Stock Litig., Case No. 97-2666) and the other of which pertains to a purported class of stock option traders (In re Green Tree Financial Corp. Options Litig., Case No. 97-2679). The suits assert claims under Sections 10(b) and Rule 10b-5 promulgated thereunder, and 20(a) of the Securities Exchange Act of 1934. In each case, plaintiffs allege that the defendants violated federal securities laws by, among other things, making false and misleading statements about the current state and future prospects of the Company (particularly with respect to its prepayment assumptions and performance of certain loan portfolios) which allegedly rendered the Company's financial statements false and misleading. In August 1999, the court issued an order dismissing with prejudice all claims alleged in the lawsuits. The plaintiffs subsequently appealed the decision to the US Court of Appeals for the 8th Circuit. In October 2001, a three-judge panel issued an opinion reversing the dismissal order and remanding the actions to the federal court. The Company believes that the lawsuits are without merit and intends to continue to defend them vigorously. The ultimate outcome of these lawsuits cannot be predicted with certainty. 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 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 Cornell 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 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 by E-mail: CRN@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com. EAGLE BUILDING: Cauley Geller Commences Securities Suit in S.D. FL ------------------------------------------------------------------ Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of purchasers of Eagle Building Technologies, Inc. (OTC Bulletin Board: EGBT) common stock during the period between August 11, 2000 and February 14, 2002, inclusive. The suit charges the Company, Anthony D'Amato and Donald Pollock with violating Section 10(b) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements about the Company's quarterly financial results for the second and third quarters of 2000, its year-end 2000 financial results, and its quarterly financial results for first, second and third quarters of 2001. In particular, it is alleged that a material amount of the revenues and earnings reported in those financial results included fictitious sales to a purported project in India. The suit alleges that as a result of these false and misleading statements, the price of the Company's common stock was artificially inflated throughout the class period, causing plaintiffs and the other members of the class to suffer damages. For more details, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551- 9944 by E-mail: info@classlawyer.com or visit the firm's Web site: http://www.classlawyer.com EAGLE BUILDING: Schiffrin Barroway Lodges Securities Suit in S.D. FL -------------------------------------------------------------------- Schiffrin & Barroway, LLP 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 Eagle Building Technologies, Inc. (OTC Bulletin Board: EGBT) from August 11, 2000 through February 14, 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. Specifically, the suit alleges that a material amount of the revenues and earnings reported in those financial results included fictitious sales to a purported project in India. The suit alleges that as a result of these false and misleading statements, the price of the Company's common stock was artificially inflated throughout the class period, causing plaintiffs and the other members of the class to suffer damages. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com FLAG TELECOM: Schiffrin Barroway Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York, claiming that FLAG Telecom Holdings, Ltd. (Nasdaq:FTHLQ) misled shareholders about its business and financial condition. The suit was filed on behalf of all investors who bought the Company's securities between March 23, 2001 and February 13, 2002. The suit alleges that 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 details, 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 GERBER SCIENTIFIC: Faruqi Faruqi Commences Securities Fraud Suit in CT ---------------------------------------------------------------------- Faruqi and Faruqi LLP initiated a securities class action in the United States District Court for the District of Connecticut on behalf of all purchasers of the securities of Gerber Scientific, Inc. (NYSE:GRB) between May 27, 1999 and April 12, 2002, inclusive. The suit charges defendants with violations of federal securities laws by, among other things, issuing a series of false and misleading press releases concerning the Company's financial condition and business prospects. The suit alleges, throughout the class period, that the Company was employing improper inventory and reserve accounting practices in violation of generally accepted accounting principles (GAAP). As a result, the price of the Company's common stock was artificially inflated throughout the class period, reaching as high as $24.50 per share. However, on April 15, 2002, the Company announced that it expected to take a $12 million pre-tax charge in its fiscal fourth quarter, the period ending April 30, 2002. Moreover, the Company noted that in response to an investigation by the SEC into its inventory and reserve accounting practices, it was conducting an internal review of its financial reporting for the period January 1, 1998 through April 30, 2002. The Company further stated that its investigation is ongoing and once it has been completed, the Company will likely restate its financial results. In response, the stock price of the Company plummeted to $6.99 per share, a decline of more than 71% from its class period high. For more details, contact Anthony Vozzolo by Mail: 320 East 39th Street, New York, NY 10016 by Phone: 877-247-4292 or 212-983-9330 or by E-mail: Avozz@faruqilaw.com GILAT SATELLITE: Wolf Haldenstein Commences Securities Suit in E.D. NY ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Eastern District of New York on behalf of purchasers of Gilat Satellite Networks, Ltd. (NASDAQ: GILTF) securities between November 13, 2000 and October 2, 2001, inclusive, against the Company and certain of its officers and directors. 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 false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. Specifically, the suit alleges that defendants obscured the true financial health of the Company as it was maintained millions of dollars of impaired assets, which should have been written off. On November 13, 2000, the Company issued a press release announcing its financial results for the third quarter of 2000, the period ending September 30, 2000. The Company represented that revenues for the third quarter of 2000 were $135 million. On March 12, 2001, the Company issued a press release announcing its financial results for the fourth quarter of 2000 and fiscal year 2000, the period ending December 31, 2000, reporting revenues of $504.6 million for fiscal year 2000. However, on October 2, 2001, the Company issued a press release to the investing public, which stated that its financial results for the third quarter of 2001 would be less than the previously announced guidance and that it was taking additional charges. The Company reported that revenues for the third quarter were expected to be $80 million, compared to the May 14, 2001 announcement of $150 million. The Company also anticipated reporting a loss of $267 million. For more details, contact Fred Taylor Isquith, Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Web site: http://www.whafh.com. E-mail should refer to Gilat. IMCLONE SYSTEMS: Mounting Vigorous Defense V. Securities Suits in NY -------------------------------------------------------------------- Imclone Systems, Inc. faces several securities class actions pending in the United States District Court for the Southern District of New York against the Company and certain of its officers and directors, alleging federal securities violations. The suits assert claims under Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder and Section 20(a). The suits allege generally that: (1) various public statements made by the Company or its senior officers during 2001 and early 2002 regarding the prospects for FDA approval of ERBITUXT were false or misleading when made; (2) various Company insiders were aware of material, non-public information regarding the actual prospects for ERBITUX at the time that those insiders engaged in transactions in the Company's common stock; and (3) members of the purported shareholder class suffered damages when the market price of the Company's common stock declined following disclosure of the information that allegedly had not been previously disclosed. In late December 2001, the Company disclosed that it had received a "refusal to file" letter from the FDA relating to its biologics license application for ERBITUX. Thereafter, various news articles purported to describe the contents of the FDA's "refusal to file" letter. During this period, the market price of the Company's common stock declined. The Company intends to vigorously oppose the suits. IMCLONE SYSTEMS: Faces Shareholder Derivative Suits in Various Courts --------------------------------------------------------------------- Imclone Systems, Inc. faces several shareholder derivative suits filed in Delaware and New York courts against the members of its Board of Directors, and naming the Company as nominal defendant. Some of these derivative cases were filed in the Delaware Court of Chancery and have been consolidated in that court, while two other derivative actions are pending in the United States District Court for the Southern District of New York. Another derivative shit is pending in New York State Supreme Court, in Manhattan. All of these actions assert claims, purportedly on the Company's behalf, for breach of fiduciary duty by certain members of the Board of Directors based on the allegation, among others, that certain directors engaged in transactions in the Company's common stock while in possession of material, non-public information concerning the regulatory and marketing prospects for ERBITUX. All of these actions are in their earliest stages. The Company intends to contest vigorously the claims asserted in these actions. MERILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY ------------------------------------------------------------------- Kaplan Fox and Kilsheimer LLP initiated a securities class action against Merrill Lynch & Co., Inc., and Internet stock analyst and First Vice President of Merrill Lynch, Henry Blodget, 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 Excite@Home Corporation (Nasdaq: ATHMQ) between June 7, 1999 and April 26, 2001, inclusive. The suit alleges that the defendants violated the federal securities laws by issuing analyst reports regarding Excite@Home that recommended the purchase of Excite@Home common stock and which set price targets for Excite@Home common stock, which were materially false and misleading and lacked any reasonable factual basis. The suit further alleges that, when issuing their Excite@Home 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 Excite@Home analyst reports, in which they recommended the purchase of Excite@Home stock, the defendants failed to disclose material, non-public, adverse information, which they possessed about Excite@Home. Throughout the class period, the Defendants maintained an "ACCUMULATE/BUY" or "ACCUMULATE/ACCUMULATE" recommendation on Excite@Home in order to obtain and support lucrative financial deals for Merrill Lynch. As a result of the defendants' false and misleading analyst reports, Excite@Home's common stock traded at artificially inflated levels during the class period. For more details, 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 or by E-mail address: mail@kaplanfox.com MERILL LYNCH: Klayman Toskes Initiates Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Klayman & Toskes PA initiated a securities class action against Merrill Lynch, Pierce, Fenner & Smith, Inc. 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). The sole purpose of this release is to investigate, on behalf of our clients, sales practice violations of licensed brokers at Merrill Lynch. The firm is investigating securities violations including the misuse of margin, the misuse of stock option plans, failure to supervise, unsuitability claims, misrepresentation and material omissions of fact, unauthorized transactions, and excessive trading/churning of customers' accounts. For more details, contact Lawrence L. Klayman by Phone: 888-997-9956 or visit the firm's Web site: http://www.nasd-law.com. NEW ERA: Agrees To Settle For $5 Million Securities Suit in S.D. NY ------------------------------------------------------------------- New Era of Networks, Inc. agreed to settle for US$5 million a consolidated securities class action filed in the United States District Court for the Southern District of New York. The suit, filed on behalf of purchasers of the Company's stock from October 18,2000 to November 21,2000, charges the Company and certain of its current and former officers with violations of federal securities laws. Although the Company believes the suit is without merit, it agreed to settle the lawsuit in order to avoid protracted and expensive litigation and the uncertainty of trial. The Stipulation of Settlement was filed with the Court on March 22, 2002 and is awaiting approval from the court. The Company is confident that the settlement of the suit will have no material adverse effect on its consolidated financial condition or results of operations. NEW ERA: CO Court Grants Final Approval to $5.5M Settlement ------------------------------------------------------------ The United States District Court for the District of Colorado granted final approval to a US$5.5 million settlement proposed by New Era of Networks, Inc. to settle a consolidated securities class action pending against it and certain of its current and former officers. The suit, filed on behalf of purchasers of the Company's stock from April 21,1999 to July 6,1999, alleges violations of federal securities laws and other claims. Although the Company viewed the suit to be without merit, it agreed to settle the lawsuit in order to avoid protracted and expensive litigation and the uncertainty of trial. The agreement of settlement was filed with the Court in August 2001 and received final approval from the Court on January 2, 2002. The Company believes the settlement will not have a material adverse affect on its consolidated financial condition or results of operation. NEWPOWER HOLDINGS: Pomerantz Haudek Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Pomerantz Haudek Block Grossman and Gross LLP initiated a securities class action against NewPower Holdings, Inc., its directors and the lead underwriters of its October 5, 2000 initial public offering in the United States District Court for the Southern District of New York. The suit charges the defendants with violations of Sections 11 of the Securities Exchange Act of 1933, on behalf of investors who, during the period from October 5, 2000, through October 19, 2001, inclusive, purchased the Company's common stock, issued in, or traceable to, the Company's 2000 IPO. The suit alleges that when the Company went public in October 2000, it launched its IPO pursuant to an amended registration statement and prospectus dated October 4, 2000, which was materially false and misleading. Specifically, the registration statement: (1) falsely represented that the Company was "uniquely positioned" to succeed in the new business of selling natural gas and electricity to residential and small commercial users nationwide based on its extensive experience when in fact its extensive experience consisted largely of failed efforts; (2) falsely represented that the Company had developed a sophisticated hedging strategy to protect itself from fluctuations in the wholesale price of gas and electricity when in fact the Company did not have a viable hedging strategy and that the only hedging strategy it had was the one that had been tried, and failed, in 1998; and (3) failed to disclose that Enron Corp., its parent company, had entered into a series of "side deals" in connection with this public offering which would shield it against the anticipated drastic drops in the price of the Company's common stock, while enabling it, through a series of paper transactions with various "Special Purpose Entities," to reap an immediate paper profit of $370 million on the sale of Company warrants and shares. For more information, contact Andrew G. Tolan by Phone: 888-476-6529 (888-4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's Web site: http://www.pomlaw.com NTL INC.: Faruqi Faruqi Commences Securities Fraud Suit in S.D. NY ------------------------------------------------------------------ Faruqi and Faruqi LLP 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 securities of NTL, Inc. (NYSE:NLI) between August 9, 2000 and November 29, 2001, inclusive. The suit charges defendants with violations of federal securities laws by, among other things, issuing a series of false and misleading press releases concerning the Company's financial condition and business prospects. The complaint alleges, throughout the class period, that the Company failed to disclose: (1) that the Company was unable to effectively integrate its acquisitions and, as a result was experiencing substantial difficulties in operating its business; (2) that the Company was not fully funded until 2003, and as a result of its massive debt burden would necessarily have to restructure its debt; (3) that the Company was under reporting churn rates by failing to report terminations and by continuing to bill customers for accounts which they had terminated, thereby creating the false impression that the Company was retaining customers longer and that migrations were decreasing; and (4) that the Company was improperly delaying the writedown of billions of dollars of impaired assets, thereby inflating the Company's operating results. For more details, contact Anthony Vozzolo by Mail: 320 East 39th Street, New York, NY 10016 by Phone: 877-247-4292 or 212-983-9330 by E- mail: Avozz@faruqilaw.com or visit the firm's Web site: http://www.faruqilaw.com PARADYNE NETWORKS: Laddering Allegations Focus of Securities Suit in NY ----------------------------------------------------------------------- Paradyne Networks, Inc. intends to vigorously oppose a securities class action pending in the United States District Court for the Southern District of New York against the Company, some of its executive officers and the Chairman of its Board, and the underwriters of its initial public offering. The suit alleges that the defendants, during the period from July 15, 1999 through December 6, 2000, violated federal securities laws by allocating shares of the Company's initial public offering to favored customers in exchange for their promise to purchase shares in the secondary market at escalating prices. The Company labeled the suit "without merit" although they qualified that they could not predict the suit's outcome. PLUG POWER: Labels "Without Merit" Securities Fraud Suit in E.D. NY ------------------------------------------------------------------- Plug Power, Inc. faces a consolidated securities class action pending in the United States District Court for the Eastern District of New York against the Company and several of its officers and directors. The suit, filed on behalf of purchasers of the Company's stock between February 14,2000 and August 2, 2000, alleges the defendants violated certain federal securities laws by failing to disclose certain information concerning the Company's products and future prospects. The suit alleges claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The claims under the Securities Act of 1933, however, were subsequently withdrawn. The suit alleges that the defendants made misleading statements and omissions regarding the state of development of the Company's technology in a registration statement and proxy statement issued in connection with the Company's initial public offering and in subsequent press releases, and are seeking damages. The Company believes that the allegations in the suit are without merit and intends to vigorously defend against the claims. The Company does not believe that the outcome of these actions will have a material adverse effect upon its financial position, results of operations or liquidity. TELAXIS COMMUNICATIONS: Sued For Securities Act Violations in E.D. NY --------------------------------------------------------------------- Telaxis Communications Corporation faces a consolidated securities class action pending in the United States District Court for the Eastern District of New York on behalf of purchasers of the Company's stock from October 29,1999 to August 2,2000. The consolidated suit originally alleged claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Subsequently, however, the plaintiffs withdrew their claims under the Securities Act of 1933. The suit alleges that the defendants made misleading statements and omissions regarding the state of development of the Company's technology in a registration statement and proxy statement issued in connection with the Company's initial public offering and in subsequent press releases, and are seeking damages. The Company believes that the allegations in the consolidated suit are without merit and intends to vigorously defend against the claims. The Company does not believe that the outcome of these actions will have a material adverse effect upon its financial position, results of operations or liquidity. UNIVERSAL ACCESS: Patton Haltom Commences Securities Suit in E.D. TX -------------------------------------------------------------------- Patton Haltom Roberts McWilliams & Greer LLP initiated a securities class action in the United States District Court for the Eastern District of Texas on behalf of all purchasers of the common stock of Universal Access, Inc. or Universal Access Global Holdings, Inc. (Nasdaq:UAXS) between May 10, 2001 and March 22, 2002, against the Company and certain of its officers and directors seeking remedies under the Securities Act of 1934. The suit charges the Company and certain of its officers and directors with issuing a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of the Company's publicly traded securities in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 during the relevant time period. For more details, contact Patton, Haltom, Roberts, McWilliams & Greer, LLP by Mail: Century Bank Plaza - Suite 400, 2900 St. Michael Drive, Texarkana, Texas 75503 by Phone: 866-546-9959 x404 (Toll Free) or by E- mail: radams@pattonhaltom.com WESTERN RESOURCES: Fourth Amended Securities Fraud Suit Filed in CA ------------------------------------------------------------------- Western Resources, Inc. was named as a defendant in an amended consolidated securities class action pending in the United States District Court for the Central District of California on behalf of all purchasers of publicly traded securities of Protection One, Inc. including common stock and bonds, during the period of February 10, 1998 through February 2, 2001. The suit also names as defendants: (1) Westar Industries, Inc. (2) Protection One, Inc., (3) Protection One Alarm Monitoring, Inc. and (4) certain present and former officers and directors of Protection One The suit has been amended four times. The third amended suit asserted claims under Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 against Protection One, Protection One Alarm Monitoring, and certain present and former officers and directors of Protection One based on allegations that various statements concerning Protection One's financial results and operations for 1997, 1998, 1999 and the first three quarters of 2000 were false and misleading and not in compliance with generally accepted accounting principles. The third amended suit alleged, among other things, that former employees of Protection One have reported that Protection One lacked adequate internal accounting controls and that certain accounting information was unsupported or manipulated by management in order to avoid disclosure of accurate information. The suit further asserted claims against the Company and Westar Industries as controlling persons under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. A claim was also asserted under Section 11 of the Securities Act of 1933 against Protection One's auditor, Arthur Andersen LLP. In June 2001, the District Court dismissed the claims under Sections 10(b) and 20(a) of the Securities Exchange Act, but granted plaintiffs leave to re-plead such claims. The Court also dismissed all claims brought on behalf of bondholders with prejudice. The Court also dismissed plaintiffs' claims against Arthur Andersen, which the plaintiffs have appealed. On February 22, 2002, plaintiffs filed a fourth consolidated amended suit, re-alleging claims under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Company cannot predict the impact of this litigation, which could be material. However, it is confident that the ultimate disposition of such matters will not have a material adverse effect upon its overall financial position or results of operations. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *