/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
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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
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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
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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.
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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