/raid1/www/Hosts/bankrupt/CAR_Public/020528.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, May 28, 2002, Vol. 4, No. 104
Headlines
AOL TIME: Ex-Employees File Suit For Violations of ERISA in C.D. CA
AMERITRADE INC.: Plaintiffs Appeal Summary Judgment in Consumer Suit
BELLSOUTH COMMUNICATIONS: Plaintiffs Allege Strategy To Remove Judge
BOEING COMPANY: WA Judge Grants Certification To Racial Bias Lawsuit
CATHOLIC CHURCH: New Victim Added To Worcester Diocese Sex Abuse Suit
COCA-COLA COMPANY: Settles For $8.1M Underpaid Women Employees' Suit
EXPRESS SCRIPTS: Sued For Alleged Fraudulent Business Practices in AZ
EXPRESS SCRIPTS: Faces Suit Over Tamoxifen Co-Payments in CA Court
FLORIDA: Prominent Attorney Joins Fight Over Wingate, Florida Landfill
HOST REIT: Court Declines Appeal, Discovery Proceeds in Illinois Suit
KANSAS: Group Files Motion To Decertify Class In Desegregation Suit
LIGAND PHARMACEUTICALS: Agrees To Settle Privacy Suit in CA State Court
LOCKFORMER COMPANY: Parties Satisfied With US$10 Million Settlement
LOUISIANA: Lawyer Calls Judge Defendants' Advocate In Mobile-Home Suit
MARK NUTRITIONALS: Seeks Delay Of Weight Loss Suit Due To Similar Suits
SPIN MASTER: Voluntarily Recalls 137,000 Toy Plans For Injury Hazard
SULZER MEDICA: Opt-Out Deadline For Faulty Implants Settlement Extended
UNIVERSAL CORPORATION: Appeals Class Certification of Antitrust Suit
Securities Fraud
ADELPHIA BUSINESS: Schatz & Nobel Commences Securities Suit in E.D. PA
ADELPHIA COMMUNICATIONS: Johnson & Perkinson Lodges PA Securities Suit
ADELPHIA COMMUNICATIONS: Kaplan Fox Lodges Securities Suit in E.D. PA
ADELPHIA COMMUNICATIONS: Finkelstein & Krinsk Lodges Suit in E.D. PA
ALLIED CAPITAL: Stull Stull Commences Securities Fraud Suit in S.D. NY
ALLIED CAPITAL: Milberg Weiss Launches Securities Fraud Suit in S.D. NY
ARTHUR ANDERSEN: Kaplan Fox Commences Securities Fraud Suit in N.D. TX
BRISTOL-MYERS SQUIBB: Abbey Gardy Commences Securities Suit in S.D. NY
CIRCUIT CITY: The Emerson Firm Commences Securities Fraud Suit in VA
CMS ENERGY: Rabin & Peckel Commences Securities Fraud Suit in E.D. MI
CMS ENERGY: Glancy & Binkow Initiates Securities Fraud Suit in E.D. MI
CMS ENERGY: Wolf Haldenstein Commences Securities Fraud Suit in E.D. MI
DOV PHARMACEUTICALS: Weiss & Yourman Launches Securities Suit in NY
GATEWAY INC.: $10.25M Settlement Reached in Securities Suit in S.D. CA
GEMSTAR-TV GUIDE: Hoffman & Edelson Commences Securities Suit in CA
MAXIM PHARMACEUTICALS: CA Court Dismisses Consolidated Securities Suit
MERRILL LYNCH: Spector Roseman Files Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY
MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY
MERRILL LYNCH: Klayman & Toskes Probes Possible Securities Violations
MERRILL LYNCH: Rabin & Peckel Commences Securities Fraud Suit in NY
NTL INC.: Bernstein Liebhard Commences Securities Fraud Suit in S.D. NY
PEREGRINE SYSTEMS: Glancy & Binkow Commences Securities Suit in S.D. CA
PEREGRINE SYSTEMS: Kirby McInerney Files Securities Suit in S.D. NY
SALOMON SMITH: Cohen Milstein Initiates Securities Suit in S.D. NY
SONIC INNOVATIONS: Asks Utah Court To Dismiss Amended Securities Suit
STILLWATER MINING: Bernstein Liebhard Launches Securities Suit in NY
*********
AOL TIME: Ex-Employees File Suit For Violations of ERISA in C.D. CA
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Multimedia giant AOL Time Warner, Inc. faces a class action filed in
the United States District Court for the Central District of California
filed by three former employees of the Company's subsidiaries, namely:
(1) Time Warner Entertainment Company, LP,
(2) Warner-Elektra-Atlantic Corporation,
(3) WEA Manufacturing Inc.,
(4) Warner Bros. Records, and
(5) Atlantic Recording Corporation
The suit also names as defendants the various pension plans sponsored
by the companies and the administrative committees of those plans.
The plaintiffs allege that defendants miscalculated the proper amount
of pension benefits owed to them and other class members as required
under the plans in violation of the Employee Retirement Income Security
Act (ERISA).
Due to its preliminary status, the Company is unable to predict the
outcome of the case or reasonably estimate a range of possible loss.
However, the Company is confident that the litigation will not have a
material effect on the company's financial position and results of
operations.
AMERITRADE INC.: Plaintiffs Appeal Summary Judgment in Consumer Suit
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Plaintiffs in the class action against Internet broker Ameritrade Inc.
have filed a notice of appeal of a Nebraska federal court's decision
granting summary judgment in favor of the Company.
The suit was commenced in September 1998 in the United States District
Court of Douglas County, Nebraska, alleging that the Company was not
able to handle the volume of subscribers to its Internet brokerage
services. The complaint, as amended, seeks injunctive relief
enjoining alleged deceptive, fraudulent and misleading practices,
equitable relief compelling the Company to increase capacity, and
unspecified compensatory damages.
In May 2001, the Company filed a motion for summary judgment in the
matter, which the plaintiffs opposed. The Court granted summary
judgment for the Company on January 2, 2002.
The Company believes it has adequate legal defenses for the suit, and
is confident that the litigation would not materially affect its
results of operations or its financial position.
BELLSOUTH COMMUNICATIONS: Plaintiffs Allege Strategy To Remove Judge
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In the first round of legal wrangling in the racial discrimination
lawsuit against BellSouth Communications, Inc., employees bringing the
suit allege the Company is maneuvering to force the African-American
judge assigned to the case to step aside, the Atlanta Journal-
Constitution reports.
The employee-plaintiffs claim the Atlanta company hired attorney Terry
Price, nephew of Chief US District Judge U.W. Clemon, as a way to
remove the African-American Judge. Under law, the family tie means
Judge Clemon must recuse himself from the case.
The case, centered on the workers' allegations that the Company used
"invalidated" tests to deny promotions to black employees, is being
heard in the United States District Court in Birmingham. Class action
status is being sought for the lawsuit. If the request is granted by
the Judge, class action status would extend the lawsuit to cover an
estimated 15,000 African-Americans who are employed by the Company
across its in-state region.
Mr. Price, partner in a Birmingham firm, is the Company's counsel and
lawyers in four law firms in Atlanta and Washington are also working on
the case. The plaintiffs, five African-American workers who brought
the lawsuit in late April, have filed papers asking the Court to force
the Company to replace Mr. Price rather than make Judge Clemon step
aside.
Company spokeswoman, Necole Merritt, says the Company hired Mr. Price
for his expertise. He has worked on a number of labor and employment
cases for the Company since 1996. However, Joseph Sellers, a
Washington lawyer representing the employees suing the Company, said
"the pattern here suggests it was done for reasons of invoking (the
judge's recusal. They could retain anyone else they want as local
counsel."
The Company has about a week to respond to the plaintiffs' contention
that it should hire another Birmingham lawyer.
BOEING COMPANY: WA Judge Grants Certification To Racial Bias Lawsuit
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A lawsuit alleging discrimination by The Boeing Company against Middle
Eastern and Asian-American engineers has been certified as a class
action by US District Court Judge Robert Lasnik, in Seattle, the
Associated Press Newswires reports. The class covers 1,000 to 2,000
engineers in Washington whose ethnicity originates in:
(1) Cambodia,
(2) Vietnam,
(3) the Philippines,
(4) India,
(5) Pakistan,
(6) Afghanistan or
(7) Iran
The class is limited to those who worked for the Company anytime after
October 12, 1996.
The decision by Judge Lasnik to certify the class does not address the
legal claims of the lawsuit, which contends that the Company
discriminated in salary and retention of engineers from the named
countries. However, Harish Bharti, the Seattle attorney representing
the plaintiffs, hailed the ruling as a major victory. "Judge Lasnik's
ruling is a big blow to the defense and is a very significant victory
for the minority work force," said Mr. Bharti. "These poor people have
been very hardworking, very good employees . Culturally, they are very
reluctant to use the legal process."
The Company said it was disappointed by Judge Lasnik's decision and may
appeal it. Company spokesman Ken Mercer said, "We disagree with
this procedural ruling, and we are currently evaluating our options."
The Company has faced discrimination complaints before. Since January
1999, it has agreed to pay out at least $19.5 million to black
employees, women and other minority workers who contend they were
discriminated against in pay and raises.
CATHOLIC CHURCH: New Victim Added To Worcester Diocese Sex Abuse Suit
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A civil class action filed last week against the Roman Catholic Diocese
of Worcester and the Rev. Robert E. Kelley has been amended to include
a new alleged victim and the addition of three lawyers to represent the
plaintiffs, the Telegram & Gazette (Worcester, MA) reports.
Claire Baillargeon Groccia, who lives in the Sturbridge area, said she
was sexually molested by Rev. Kelley at the time he was assigned to
Notre Dame parish in Southbridge, according to lawyer Daniel J. Shea.
Her name has been added to the lawsuit, which, originally, named only
Karen A. Pedersen of Fitchburg, who said she was molested when Rev.
Kelley was at St. Boniface Parish in Lunenburg.
Mr. Shea said the lawsuit alleges Rev. Kelley sexually abused many
girls. For that reason, Abigail R. Williams, Melissa J. Shufro and
Kathy K. Chekani, all of whom are lawyers and registered nurses
practicing in Worcester, have agreed to help Mr. Shea with the lawsuit.
Bishop Daniel P. Reilly has been subpoenaed to give a deposition in the
lawsuit on June 19.
Rev. Kelley, who has not functioned as a priest since 1986, was
arraigned last week in Leominster District Court on charges of child
rape, which allegedly occurred when the priest was assigned to
Leominster, according to the allegation made by a Tewksbury woman. The
case was continued to next month and Rev. Kelley was released on
personal recognizance.
COCA-COLA COMPANY: Settles For $8.1M Underpaid Women Employees' Suit
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Softdrink giant Coca-Cola Company will pay US$8.1 million to more than
2,000 female employees who were underpaid by the Company, the
Associated Press Newswire reports.
More than half the total, $4.2 million, will be paid under an agreement
the Company struck with the United States Department of Labor's Office
of Federal Contract Compliance Programs, officials told AP. The money
will go to 980 current and former employees in the Company's Atlanta-
based corporate operations, mostly in professional-level jobs. The
payment of $4.2 million for salary discrimination is one of the largest
in the agency's history.
Another $3.9 million will be paid to 1,100 current and former female
employees in the Company's North America operations. The Company is
making those payments voluntarily.
This deal brings the Company's recent discrimination payouts to more
than $200 million. Last year, a federal judge approved a $192.5
million settlement in a action racial discrimination suit involving
current and former black employees.
The Contract Compliance Program audit, which was unrelated to the race-
discrimination lawsuit, looked at pay practices from December 31, 1998
to December 15, 2000.
The Company told its employees about the payments that will be made in
a recent memo. Those who are owed money will get notices within the
next 60 days, the Company said. A few men will receive payments, but
the majority are women, both whites and minorities.
EXPRESS SCRIPTS: Sued For Alleged Fraudulent Business Practices in AZ
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Express Scripts, Inc. faces a class action pending in the United States
District Court for the District of Arizona, asserting that certain of
the Company's business practices, including those relating to its
contracts with pharmaceutical manufacturers for retrospective discounts
on pharmaceuticals and those related to its retail pharmacy network
contracts, violate certain fiduciary duties that the Company allegedly
owes to a class consisting of clients of health benefit plans that are
self-funded by an employer client.
The Company believes the complaint is without merit, and will
vigorously defend the matter. Although the ultimate outcome is
uncertain, a determination adverse to the Company could result in
changes in our business practices with respect to its formulary and
rebate programs and its retail pharmacy network contracting, and/or an
award of money damages, either of which could have a material adverse
effect on the Company's results of operations, financial position
and/or cash flow from operations.
EXPRESS SCRIPTS: Faces Suit Over Tamoxifen Co-Payments in CA Court
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Express Scripts, Inc. faces a class action pending in the Superior
Court of the State of California, County of Contra Costa by California
resident, Beverly Dubrin. Ms. Dubrin alleges that she was improperly
charged brand drug co-payments for the cancer drug Tamoxifen.
The suit alleges that this practice violated certain statutes in
California regulating trade practices and consumer protection, as well
as a common law claim for unjust enrichment. The suit asserts that
Tamoxifen is a generic drug for which a lower co-payment should have
been charged.
The Company believes that the complaint is without merit, and will
vigorously defend this matter.
FLORIDA: Prominent Attorney Joins Fight Over Wingate, Florida Landfill
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Jan Schlichtmann, a Beverly, Massachusetts attorney portrayed by John
Travolta in the film, "A Civil Action," has joined the fight over Fort
Lauderdale's Wingate landfill. Mr. Schlichtmann won $8 million, in
1986, for families who alleged that their children died of leukemia due
to pollutants dumped in the Boston suburb of Woburn, Massachusetts.
Now, Mr. Schlichtmann and at least eight other attorneys have filed
papers to form a new local law firm that will try to prove a link
between toxic chemicals buried at the Wingate landfill and high rates
of disease around it, primarily in the 33311 and 33313 ZIP codes. The
firm, the Environmental Justice Project, will seek damages from the
city of Fort Lauderdale and at least 38 companies that allegedly dumped
toxic waste there.
"We are going to approach them and ask them a lot of questions," Mr.
Schlichtmann said. "We want to do it in an atmosphere in which we are
sharing information."
Mr. Schlichtmann's involvement undoubtedly will bring greater attention
to a battle that has raged for years. The landfill in Fort Lauderdale
operated from 1954 to 1978. Some residents believe its contaminants
are to blame for illnesses they have had.
"We are always willing to sit down and talk," said Gregory Kisela, a
Fort Lauderdale city manager. "But at this point, we have not seen any
link between Wingate and any particular illness."
The city has capped the landfill and intends to create a golf course on
the site, a plan which is controversial. Legal Aid Service of Broward
County plans next month to appeal the capping plan, which was approved
by the US Environmental Protection Agency.
Mr. Schlichtmann said it is critical that the community come together
to reach a solution, a lesson he said he learned in the Massachusetts
case. "If anything will be done, it will be because the community
comes together," he said. "You cannot do it on your own."
The lawyers who have contributed about $500,000 of their own money to
get started, hope to reach a settlement without having to sue, and
would take a percentage of the settlement. They have not ruled out,
however, the possibility of a class action.
To quantify the landfill problems, including a link between the
landfill and disease, the attorneys have hired a private investigator,
who will look at the site and the people living around it. The lawyers
of the Project also plan to consult doctors, scientists,
epidemiologists, sociologists and psychologists to determine whether
Wingate residents have suffered any damage.
Some of the 38 companies that allegedly dumped toxic waste into the
landfill, said that they are doing their part to solve the Wingate
problem by participating in the EPA-ordered, plastic-capping plan.
"The cleanup has been successfully completed. We were very
cooperative," said Peggy Palter, spokeswoman for Sears, Roebuck and
Co., who added that more than a thousand other companies and the
general public dumped in the landfill. "We did what we were asked to
do by the EPA."
Mike Haggerty, a spokesman for Florida Power & Light, said FPL also has
agreed to cooperate with approved solutions to the Wingate problem.
"The group formed to manage and clean up the Wingate site has always
supported a study of the health effects," said Mr. Haggerty, adding
that his firm had minimal participation.
Mr. Schlichtman, 51, who also works with a Pensacola law firm, said he
is trying to gauge whether the community will stand behind the new law
firm's plan. If so, he and other attorneys will form a nonprofit
community coalition made up of Wingate area residents named TOXIC,
which stands for Team of Exposed Individuals to Contaminants.
Civic activist Leola McCoy, who has long fought to have the Wingate
toxins cleaned up properly, showed her support recently by inviting the
lawyers to her home for lunch. "I think the community needs to
understand that it needs to play its part," said Ms. McCoy.
HOST REIT: Court Declines Appeal, Discovery Proceeds in Illinois Suit
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The United States Court of Appeals declined to hear Host Real Estate
Investment Trust's (REIT) appeal of an Illinois state court's decision
denying their motion to dismiss a class action against it and certain
of its subsidiaries.
The suit was commenced in October 2000 in the Circuit Court of Cook
County, Illinois, Chancery Division, against the Company and:
(1) Host LP,
(2) Marriott International, and
(3) MOHS Corporation, a subsidiary of Host LP and a former general
partner of O'Hare Suites.
The plaintiffs allege that an improper calculation of the hotel
manager's incentive management fees resulted in inappropriate payments
in 1997 and 1998, and, consequently, in an inadequate appraised value
for their limited partner units in connection with the acquisition of
O'Hare Suites during the 1998 REIT conversion. The plaintiffs are
seeking damages of approximately $13 million.
On August 28, 2001, the plaintiffs filed a third amended complaint,
which did not include Marriott International as a defendant. The
Company responded by filing a motion to dismiss based on the
plaintiffs' lack of standing to bring a derivative action under Rhode
Island law.
At a hearing held on December 10, 2001, the Court denied this motion
and the Company sought leave to file an appeal. Although the Court
granted leave to appeal on March 15, 2002, the Appellate Court declined
to entertain the appeal. Discovery is proceeding in this action.
KANSAS: Group Files Motion To Decertify Class In Desegregation Suit
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A group of students and parents has filed a motion to decertify the
class in the decades old desegregation class action against the Kansas
City School District, the Associated Press Newswires reports.
The motion was filed recently in US District Court, in Kansas City by a
group called Plaintiffs for African-Centered Education (PACE). The
motion seeks decertification of the plaintiff class because it does not
serve the interests of children receiving African-centered education.
The motion also asks that the Court, if it does not decertify the
entire class, create, instead, a subclass consisting of students at
three Kansas City schools engaged in African-centered education.
African-centered education is the incorporation of African and
African-American cultural orientation in public schools.
If the Court does not decertify the class or create the subclass, then
the group asks that Arthur A. Benson II be removed from his post as
attorney for the plaintiff schoolchildren in the desegregation case,
which dates back to 1977.
Mr. Benson is "too biased and too prejudiced against African-centered
Education to adequately represent the interest" of the children in
African-centered programs of the Kansas City School District, the
motion reads. Mr. Benson said he did not expect the motion to succeed
in court.
Mr. Benson cites as reasons, that "neither PACE nor the parents named
in the motion are parties to the Kansas City School Desegregation case"
and no parties may just walk off the street and ask the court to do
things. "Non-parties, including PACE and the parents, have no standing
to file the motion, and I suspect the court will disregard it," Mr.
Benson said.
Mr. Benson said he was investigating the effectiveness of the African-
centered programs. "We are open-minded. And apparently these parents
and this organization do not want its effectiveness to be investigated,
and they are trying to stop that investigation," he said.
However, PACE lawyer Larry Coleman said that his clients do not believe
that Mr. Benson intends to give African-centered education a fair
chance. "My clients disbelieve him. They don't have confidence in
this guy to protect their interests."
The Kansas City district has been under court supervision for more than
20 years because of the desegregation effort that has now cost more
than $2 billion.
LIGAND PHARMACEUTICALS: Agrees To Settle Privacy Suit in CA State Court
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Ligand Pharmaceuticals, Inc. agreed to settle, for an undisclosed
amount, a class action pending in the Superior Court of the State of
California against the Company and a specified former Company employee.
The suit, as amended, alleges claims of:
(1) invasion of privacy,
(2) negligence,
(3) fraud and deceit, and
(4) negligent infliction of emotional distress
based on, among other things, an allegation that the Company, as
successor-in-interest to its Glycomed subsidiary and by reason of its
position as employer, negligently and fraudulently allowed a former
employee to access and publish private information of the plaintiffs.
The parties have signed a settlement pursuant to which plaintiffs will
dismiss this litigation with prejudice.
LOCKFORMER COMPANY: Parties Satisfied With US$10 Million Settlement
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Lisle, Illinois families who sued Lockformer Company for polluting
their wells, lowering their property values and reckless conduct say
they are satisfied with the $10 million settlement announced in their
class action, according to a report by the Chicago Daily Herald.
While Federal Judge Harold Leinenweber tentatively approved the
settlement just days before the case was expected to go to the jury,
the agreement will not be official until June 28, when Judge
Leinenweber is expected to issue a final ruling. Residents who
disagree with the settlement may state their objections at the June 28
hearing.
The Company, which manufactures machinery, and its parent company,
Mestek Inc., do not admit any wrongdoing in the settlement. However,
Daniel Biederman, the Company's attorney, said that the Company
considers the agreement a positive step. Attorney Shawn Collins, who
represents the 186 families who claimed their wells had become polluted
by the spilling for years of trichloroethylene (TCE) on the Company's
property, called the settlement his best moment as a lawyer.
The residents did not claim personal injury, but the settlement will
not prevent them from suing the Company in the future for health
reasons. TCE has been associated with causing illnesses, including
cancer or kidney damage, if swallowed or inhaled in concentration.
The $10 million will be divided several ways:
(1) Mr. Collins' firm and another group of lawyers who worked on
the case will receive $3.3 million. The firms also will be
reimbursed for such expenses as soil testing;
(2) the Company will place $1.26 million in an escrow account to
be used for connecting affected families to Lisle's public
water supply. The Company and the Illinois attorney general's
office - which also is suing the Company for contamination -
recently reached a deal on payment for such connections;
(3) the remaining money will be divided among the 186 homeowners.
The funds will be used to seal basements against TCE vapors
and to compensate residents for estimated five percent
declines in home values;
The $10 matches what economic experts hired by the plaintiffs
anticipated would be a fair settlement. The litigation is not over for
the Company, though, as it still faces four other lawsuits, including a
case filed by Attorney General James Ryan, and another filed by Shawn
Collins, involving families with tainted wells south of Lisle.
LOUISIANA: Lawyer Calls Judge Defendants' Advocate In Mobile-Home Suit
----------------------------------------------------------------------
The Fifth US Circuit Court of Appeals recently agreed to halt all
proceedings in a class action against mobile-home manufacturers, in
order to review a complaint by the plaintiffs' attorney against the
federal judge assigned to the case, The Baton Rouge Advocate reports.
Lafayette attorney Barry Domingue filed an emergency writ application
in the Fifth Circuit, asking the Appeals Court to void United States
District Judge Tucker Melancon's order that plaintiffs produce all case
information to show why each of 282 manufacturers was named as a
defendant.
The suit alleges that plaintiffs unknowingly bought poorly made
manufactured homes, defective in design, composition and construction,
and that the defective design allowed condensation to create formation
of a toxic mold in the walls, making occupants sick. The companies
have denied that they produce an inferior product, and they are seeking
dismissal of the case.
During a hearing last month, Judge Melancon ordered Mr. Domingue to
disclose to the Court all investigative files and any other materials
used to develop the lawsuit. The Judge said Mr. Domingue would have to
explain why he included the 282 companies as defendants, even though
many of them have not done business in Louisiana and many others have
gone bankrupt. The Judge said Mr. Domingue would be required to pay
the legal fees of any companies included in the lawsuit without proper
justification.
The Judge also doubted that he would allow the material to be filed
under seal, although Mr. Domingue said that failing to do so would
place him at a disadvantage by revealing his hand to the defendants.
The Fifth Circuit agreed to have all proceedings stopped in the case
until it decides all the issues raised in Mr. Domingue's appeal,
according to the clerk's office for the Appeals Court.
Mr. Domingue argued in the appeal that "the inescapable conclusion is
that the District Court has become an advocate for the defendants" by
forcing disclosure of the plaintiffs' files. Mr. Domingue said in his
papers that the plaintiffs expected that routine motions would be
considered at the April 18 hearing. Instead, plaintiffs were
"essentially ambushed and required to walk into a [hearing on
sanctions] without any prior notice as required."
At the hearing, Judge Melancon was uncertain Mr. Domingue could
substantiate allegations of a conspiracy among the mobile home makers.
However, Mr. Domingue defended that possibility in the appeal. "From
the confidential information available to plaintiffs' counsel,
reasonable inferences can certainly be drawn that the defendants have
acted in a concerted effort at concealment of the inherent defects with
mobile home," he argued. One would have to be extremely naive not to
perceive or even consider the possibility of collusion, he added.
The plaintiffs' attorney contends in the appeal that the plaintiffs
should be allowed to obtain information from the defendants "to further
corroborate that the defendants have conspired with the intent to
circumvent [the US Department of Housing and Urban Development]
regulations and to injure the class plaintiffs."
The case was originally filed in Opelousas state District Court, but
was moved to federal court after challenges by the defendants'
attorneys. Mr. Domingue indicated in the writ application that the
plaintiffs will try to get the case returned to state District Court.
MARK NUTRITIONALS: Seeks Delay Of Weight Loss Suit Due To Similar Suits
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Mark Nutritionals, the Texas company that markets a nighttime weight
loss plan through radio ads, has a judge to delay a Dade City
woman's lawsuit against it. The Company's attorney explained that the
Company is being sued in so many other places that all the depositions
and court procedures could hurt its productivity, the Pasco Times
reported recently.
Janet Makinen, 51, sued Mark Nutritionals, claiming that she bought the
liquid nighttime weight loss formula and gained weight. Her lawsuit
seeks class action status for all Floridians who bought the product.
However, in a motion filed before Circuit Judge Maynard Swanson, Thomas
Roehn, attorney for the Company, argued that the defendant is already
busy with three similar lawsuits seeking federal class action status in
Michigan, Ohio and Texas, as well as lawsuits seeking statewide class
action status in Texas and California.
Having to deliver company officials to sit through deposition and court
hearings across the country would mean "incredible disruption of its
business," Mr. Roehn argued. He argued further that the Court should
give other courts, with older cases, time to decide if any of the cases
should be granted class action national status. If that were to
happen, Ms. Makinen and all other Floridians who were unhappy with the
product could be included under the federal lawsuit.
A hearing on the matter is set before Judge Swanson on June 13.
SPIN MASTER: Voluntarily Recalls 137,000 Toy Plans For Injury Hazard
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Spin Master Toys, of Toronto Ontario, in cooperation with the United
States Consumer Product Safety Commission (CPSC), is voluntarily
recalling about 137,000 Firestormer and Skyblazer toy planes. The
plastic air intake chamber of the air-powered toy planes can burst,
throwing plastic pieces, posing a laceration, bruise and abrasion
hazard to consumers.
The Company has received seven reports of Firestormer planes bursting,
including four reports of injuries to children. Injuries included one
chest abrasion, a cut leg, a bruised shoulder and ringing in the ears.
There have been no reports involving the Skyblazer planes.
The recalled Firestormer plane is either red or blue in color with a
flame graphic across the body and "Firestormer" printed on the wings
of the plane. The Skyblazer plane is purple, green and white in color
and has "Skyblazer" printed on the wings of the plane. These toys use a
hand pump mechanism to compress air to make the plane fly. Both planes
are recommended for children 8 years old and over. The planes have an
8-digit date code on the bottom of the pump. The date code reads
MM/DD/YY-KS. Only planes with date codes 12/29/01-KS through 03/24/02-
KS are included in the recall. "Made In China" is written on the
bottom of the pump below the date code. Planes manufactured before
December 29, 2001 and after March 24, 2002 are not included in this
recall.
Hobby shops and department stores nationwide, including Wal-Mart, Toys
R Us, Target and K-mart sold these planes between January 2002 and
May 20, 2002 for about $20.
For more information, contact the Company by Phone: 800-622-8339 9 am
to 5 pm ET Monday through Friday or visit the firm's Web site:
http://www.spinmaster.com
SULZER MEDICA: Opt-Out Deadline For Faulty Implants Settlement Extended
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Sulzer Medica, faced with possible bankruptcy of its US business due to
prior patients refusing to be part of a $1 billion faulty joint
implants settlement, said on Wednesday it has persuaded 17 of the 132
opt-outs to agree to be part of the settlement, the Reuter English News
Service reports.
Sulzer Medica, Europe's largest maker of orthopedic devices, said it
would try to get more patients to accept the deal by the May 31
deadline, extended from Wednesday, May 22. The Company said that out
of the 132 patients who rejected the US court-approved $1 billion
settlement, it had won over 17. The affected implant patients in the
high-profile and intensely complex class action, totaling some 30,000
individuals, are mainly elderly people in the United States the
Company's largest market.
The Company said it was imperative that it reduce the number of opt-
outs even further, so that it would not have to move to a scenario in
which it would have to seek Chapter 11 bankruptcy protection for its US
business. The firm has said repeatedly that it would have to act to
protect its assets against creditors, in this case the plaintiffs, if
it believed that the cost of their individual litigation could bring
the US business, or the whole group, down.
The Company added that it was imperative that it analyze the situations
and claims of the op-outs as accurately as possible to be able to
assess the cost to the firm and determine whether it could afford to
compensate them separately.
The Company says that an expected number of opt-outs had been factored
into the settlement, but the Company has not revealed exactly how much
of the settlement is available for opt-outs, since that could
compromise its position in talks with them. The firm has not been
specific about the likelihood of additional costs, but financial
analysts have estimated they could reach $650 million.
The Company's battered stock has more than tripled this year as
optimism about the settlement has grown. A collapse of the settlement
would probably herald a fall in stock prices again.
UNIVERSAL CORPORATION: Appeals Class Certification of Antitrust Suit
--------------------------------------------------------------------
Universal Corporation's subsidiaries have petitioned the United States
Fourth Circuit Court of Appeals to appeal class certification of the
suit pending against them and other leaf tobacco merchants in the
United States District Court for the Middle District of North Carolina,
Greensboro Division. The subsidiaries named in the suit are:
(1) Universal Leaf Tobacco Company, Incorporated,
(2) JP Taylor Company, Incorporated and
(3) Southwestern Tobacco Company, Incorporated
The suit, filed on behalf of United States tobacco growers and quota
holders, alleges that the defendants violated antitrust laws by bid-
rigging at tobacco auctions and by conspiring to undermine the tobacco
quota and price support program administered by the federal government.
In April 2002, the federal court issued an opinion and order certifying
the class. The subsidiaries have petitioned the appellate court for
appeal of the class certification pursuant to Rule 23(f) of the Federal
Rules of Civil Procedure, and are awaiting the court's response to that
petition.
Regardless of the outcome of the petition and any consequent appeal,
the Company Subsidiaries intend to vigorously defend the suit. The
suit is still in its initial stages, and at this time no estimate of
the impact on the Company that could result from an unfavorable outcome
at trial can be made.
Securities Fraud
ADELPHIA BUSINESS: Schatz & Nobel Commences Securities Suit in E.D. PA
----------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Eastern District of Pennsylvania on
behalf of all persons who purchased the common stock of Adelphia
Business Solutions, Inc. (formerly Nasdaq: ABIZ; now OTC: ABIZQ)
between January 6, 2000 and March 27, 2002, inclusive.
The Complaint alleges that the Company's senior officers misled the
investing public during the class period by misrepresenting the
Company's growth prospects and financial condition. Specifically, the
defendants allegedly inflated the number of the Company's new
customers, improperly and arbitrarily allocated overhead expenses to
the Company which were actually incurred by its former parent company,
Adelphia Communications, and failed to disclose $2.3 billion in off-
balance-sheet debt for which Adelphia Communications was the guarantor.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
ADELPHIA COMMUNICATIONS: Johnson & Perkinson Lodges PA Securities Suit
----------------------------------------------------------------------
Johnson & Perkinson initiated a securities class action in the U.S.
District Court for the Eastern District of Pennsylvania on behalf of
all acquirers of any debt instrument, including Notes, of Adelphia
Communications Corp. (NASDAQ: ADLAE-news) during the period from May
28, 1999 through April 1, 2002.
The complaint asserts claims against Company officers and directors and
its auditor Deloitte & Touche, LLP for violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by the Securities and Exchange Commission due to defendants'
failure to disclose material adverse information.
By artificially inflating the Company's reported financial condition on
its financial statements published during the class period, defendants
caused plaintiff and other members of the class to purchase or acquire
ADLAE debt instruments at artificially inflated prices.
For more details, contact Dennis J. Johnson or Jacob B. Perkinson by
Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone:
888-459-7855 or by E-mail: JPLAW@adelphia.net.
ADELPHIA COMMUNICATIONS: Kaplan Fox Lodges Securities Suit in E.D. PA
---------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Adelphia Communications Corp. (Nasdaq:ADLAE) and certain of its
officers and directors in the United States District Court for the
Eastern District of Pennsylvania. The suit is brought on behalf of all
persons or entities who purchased or otherwise acquired Adelphia 6%
Convertible Subordinated Notes Due 2006, between January 19, 2001 and
May 2, 2002, inclusive.
The complaint accuses the Company and certain of its officers and
directors of violating federal securities laws. The complaint alleges,
among other things, that during the class period, defendants failed to
disclose certain material liabilities relating to entities controlled
by the Company's managers, the Rigas family.
As a result of defendants' misrepresentations, the Company's 6% Notes
traded at artificially inflated prices during the class period.
For more details, contact Frederic S. Fox or Shelley Thompson by Mail:
805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: 800-290-1952
or 212-687-1980 by Fax: 212-687-7714 or by E-mail: mail@kaplanfox.com
ADELPHIA COMMUNICATIONS: Finkelstein & Krinsk Lodges Suit in E.D. PA
---------------------------------------------------------------------
Finkelstein & Krinsk initiated a securities class action on behalf of
those persons or entities who purchased the common stock of Adelphia
Communications Corporation (NASDAQ: ADLAC), between (at least) April 2,
2001through April 1, 2002, in the United States District Court for the
Eastern District of Pennsylvania.
The complaint charges that the Company manipulated its financial
statements by misrepresenting its earnings and financial results,
thereby inflating its stock price by improper accounting practices. On
March 27, 2002, the Company disclosed it was liable for at least $2.3
billion in debt related to the co-borrowing guarantees entered into
with Highland Holdings, a third party controlled by the defendants.
Following the announcement, the price of the Company's common stock
fell to $16.70 per share and additional adverse news continues to flow
from the Company.
For more details, contact Jeffrey R. Krinsk by Mail: 501 West Broadway,
Suite 1250, San Diego, CA 92101 by Phone: 877-493-5366 by Fax:
619-238-5425 or by E-mail: fk@class-action-law.com
ALLIED CAPITAL: Stull Stull Commences Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of New York, on behalf
of all persons who acquired the common stock of Allied Capital Corp.
(NYSE:ALD) between November 14, 2001 and May 16, 2002, inclusive
against the Company and:
(1) William L. Walton, President, Chairman and Chief Executive
Officer,
(2) Penni F. Roll, its Chief Financial Officer, and
(3) Arthur Andersen, LLP, the Company's auditors.
The complaint alleges that defendants violated the federal securities
laws by making misstatements and/or omissions of material facts in the
Company's public filings with the Securities and Exchange Commission
(SEC) and otherwise.
Specifically, the complaint alleges that throughout the class period,
defendants misstated the value of the Company's investments in
companies including, inter alia, Velocita Corp. and Loewen Group, Inc.
in its public filings with the SEC and otherwise as a result of failing
to "mark to market" or record write-downs of investments that had
substantially declined in value long after it had become apparent that
such investments were being carried on the Company's books at values
vastly higher than their true values.
The complaint further alleges that the Company misstated its total
assets in its financial statements by carrying the Company's
investments including Velocita Corp. and Loewen Group, Inc. on its
balance sheet at unrealistically and misleadingly high values.
The complaint further alleges that Arthur Andersen, LLP violated the
federal securities laws by certifying the Company's financial
statements and by allowing its unqualified opinion to be incorporated
by reference into its filings with the SEC after it was readily
apparent that investments on its balance sheet, including its
investments in Velocita Corp. and Loewen Group, Inc., were being
carried at unrealistically and misleadingly high values.
When the foregoing was revealed to the market on May 16, 2002, the
complaint alleges, the Company's share price plummeted from its opening
price of $26.44 to as low as $20.00 before closing at $23.20.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York, NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 or by E-
mail: SSBNY@aol.com
ALLIED CAPITAL: Milberg Weiss Launches Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Allied Capital
Corporation (NYSE: ALD) between November 14, 2001 and May 16, 2002,
inclusive, in the United States District Court, Southern District of
New York against the Company, William L. Walton and Penni F. Roll.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between November 14, 2001 and May 16, 2002, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the suit, defendants issued
numerous statements and filed quarterly and annual reports with the
SEC, which described the Company's investments and their valuations.
The suit alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that the Company was overstating the value of its investments
in companies such as Velocita, Inc. and The Loewen Group,
Inc.;
(2) that the Company was improperly delaying the write-down of its
impaired investments; and
(3) that as a result, the value of the Company's private finance
portfolio and total assets was materially overstated at all
relevant times.
On May 16, 2002, the last day of the class period, when concerns were
raised by a money manager about the Company's long-term prospects and
its accounting practices and management, shares of the Company fell
$2.79 per share, or approximately 10%, to close at $23.20 per share,
after reaching an intra-day low of $20 per share, on volume of more
than 14 million shares traded.
For more information, contact Steven G. Schulman or Samuel H. Rudman by
Phone: 800-320-5081 by E-mail: AlliedCapitalcase@milbergNY.com or visit
the firm's Website: http://www.milberg.com
ARTHUR ANDERSEN: Kaplan Fox Commences Securities Fraud Suit in N.D. TX
----------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Arthur Andersen LLP in the United States District Court for the
Northern District of Texas, Dallas Division, on behalf of all persons
who purchased the common stock of Intelect Communications, Inc. n/k/a
Teraforce Technology Corp. (OTCBB:TERA) between March 31, 1998 and
November 17, 1998.
This case arises out of the same set of facts as another case the firm
is prosecuting for lead plaintiffs, entitled Umsted v. Intelect
Communications, Inc. et al., which is also pending in the US District
Court, Northern District of Texas, Dallas Division. That case, which
was filed in November 1999 and names Intelect and three of its current
and former executives as defendants, is currently in the discovery
phase.
The recently filed case is brought only against Arthur Andersen,
Intelect's auditor during the class period. The lawsuit charges
Andersen with violations of the securities laws and regulations of the
United States.
The suit alleges, among other things, that Andersen's audit of Intelect
for the year ended December 31, 1997 was conducted in violation of
generally accepted auditing standards (GAAS), in that Andersen falsely
represented that Intelect's financial statements for that year were
presented in conformity with generally accepted accounting principles
and that they had been audited in accordance with GAAS.
For more details, contact Jonathan K. Levine or Christine M. Fox by
Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone:
800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-mail:
mail@kaplanfox.com
BRISTOL-MYERS SQUIBB: Abbey Gardy Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action on behalf of all
persons who acquired Bristol-Myers Squibb Company (NYSE:BMY) common
stock between May 16, 2001 and April 1, 2002, in the United States
District Court for the Southern District of New York.
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5. The suit
alleges, among other things, that throughout the class period
defendants engaged in a systematic program of moving sales from future
periods in a process of what is sometimes called "channel stuffing."
On April 1, 2002, defendants admitted that the Company had overloaded
US wholesalers with products by offering them incentives. Defendants
further admitted that US wholesalers were holding approximately $1
billion in excess inventory and that the de-stocking of this inventory
would materially adversely affect sales and earnings in 2002.
In response to the April 1, 2002 announcement, the price of the
Company's stock dropped over 5%.
For more details, contact Jennifer Haas by Phone: 800-889-3701 by E-
mail: JHaas@abbeygardy.com or visit the firm's Web site:
http://www.abbeygardy.com
CIRCUIT CITY: The Emerson Firm Commences Securities Fraud Suit in VA
--------------------------------------------------------------------
The Emerson Firm initiated a securities class action in the United
States District Court for the Eastern District of Virginia on behalf of
purchasers of Circuit City Stores, Inc. (NYSE:CC) common stock during
the period between December 6, 2001 and February 22, 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 complaint alleges that
defendants issued materially false statements during the class period,
which failed to disclose, among other things, that the Company was
facing significant inventory shortages and was experiencing problems
with its internal controls, which would result in the Company having to
incur additional expenses associated with the termination of leases and
with the remodeling of nearly half of its retail stores.
When defendants did finally disclose the Company's problems on February
22, 2002, the last day of the class period, the price of Company stock
plummeted over 33% to close at $16.08 per share.
For more details, contact Ms. Tanya Autry by Mail: P.O. Box 25336,
Little Rock, AR 72221-5336 by Phone: 800-663-9817 or by E-mail:
tanya.autry@worldnet.att.net
CMS ENERGY: Rabin & Peckel Commences Securities Fraud Suit in E.D. MI
---------------------------------------------------------------------
Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Eastern District of Michigan on behalf of
all persons or entities who purchased CMS Energy Corporation common
stock (NYSE:CMS) between August 3, 2000 and May 10, 2002, both dates
inclusive, against the Company and:
(1) William T. McCormick, Jr.,
(2) David W. Joos, and
(3) Alan M. Wright
The suit alleges that defendants violated section 10(b) of the
Securities and Exchange Act of 1934, and SEC Rule 10b-5 by issuing a
series of materially false and misleading statements concerning its
business and financial condition.
Particularly, it is alleged that defendants improperly recognized
approximately $4.4 billion in revenue from engaging in "round trip"
transactions where, in fact, no actual profit or loss was generated
from the transactions. The improperly recognized revenue was reported
in the Company's quarterly and annual press releases, and in filings
with the SEC during the class period.
On May 10, 2002, the Company announced that the SEC was investigating
the round trip transactions. In response to this news, the price of
Company common stock dropped from a high of $20.06 to $15.72.
For more details, contact Eric Belfi or Sharon Lee by Phone:
800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail:
email@rabinlaw.com or visit the firm's Web site:
http://www.rabinlaw.com
CMS ENERGY: Glancy & Binkow Initiates Securities Fraud Suit in E.D. MI
----------------------------------------------------------------------
Glancy & Binkow LLP commenced a securities class action in the United
States District Court for the Eastern District of Michigan on behalf of
a class consisting of all persons who purchased securities of CMS
Energy Corporation (NYSE:CMS) between August 3, 2000 and May 10, 2002,
inclusive.
The suit charges the Company and certain of its officers and directors
with violations of federal securities laws. Among other things,
plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the nature of the Company's business, operations, and financial
performance caused Company stock price to become artificially inflated,
inflicting enormous damages on investors.
For further details, contact Michael Goldberg by Mail: 1801 Avenue of
the Stars, Suite 311, Los Angeles, California 90067 by Phone:
310-201-9150 or 888-773-9224 or by E-mail: info@glancylaw.com.
CMS ENERGY: Wolf Haldenstein Commences Securities Fraud Suit in E.D. MI
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Eastern District of
Michigan, on behalf of purchasers of the securities of CMS Energy
Corporation (NYSE: CMS) between August 3, 2000 and May 10, 2002,
inclusive, against the Company and certain of its officers and
directors.
The suit charges 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 materially false and misleading
statements to the market between August 3, 2000 and May 10, 2002.
According to the complaint, the Company had, throughout the class
period, improperly recognized approximately $4.4 billion in revenues by
engaging in transactions lacking any economic substance using what are
known as "round-trip" trading transactions. The improperly recognized
revenues were, according to the complaint, reported in the Company's
quarterly and annual press releases and in financial filings with the
Securities and Exchange Commission (SEC), throughout the class period.
On May 10, 2002, the Company announced that the SEC was investigating
the propriety of its "round-trip" trading practices. In response to
the announcement, the Company's common stock price collapsed, falling
from a high of $20.06 on May 10, 2002 to a low of $15.72 on May 13,
2002 -- a drop of more than 21% on extremely heavy trading volume.
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 Website:
http://www.whafh.com. All e-mail correspondence should make reference
to CMS.
DOV PHARMACEUTICALS: Weiss & Yourman Launches Securities Suit in NY
-------------------------------------------------------------------
Weiss & Yourman initiated a securities class action against DOV
Pharmaceutical, Inc. (NASDAQ:DOVP), certain of its officers and
directors, and its underwriters, in the United States District Court
for the Southern District of New York, on behalf of purchasers of the
Company's common stock in or traceable to its initial public offering
on or about April 25, 2002.
The complaint charges the defendants with violations of the Securities
Act of 1933. The complaint alleges that defendants issued false and
misleading statements which artificially inflated the stock.
For more details, contact David C. Katz, Mark D. Smilow, and/or James
E. Tullman by Mail: The French Building 551 Fifth Avenue, Suite 1600,
New York, New York 10176 by Phone: 888-593-4771 or 212-682-3025 or by
E-mail: info@wynyc.com
GATEWAY INC.: $10.25M Settlement Reached in Securities Suit in S.D. CA
----------------------------------------------------------------------
Gateway, Inc. (NYSE: GTW) agreed to settle for US$10.25 million a
consolidated securities class action pending in the United States
District Court for the Southern District of California, originally
filed in in fiscal year 2000, as well as related state court litigation
against the company.
The suit was filed against the Company, one of its former officers, and
one director. The suit alleges that the defendants misrepresented the
Company's financial performance in securities filings and in statements
to the public, and purport to be class actions on behalf of purchasers
of Company stock between April 14, 2000 and February 28, 2001.
The $10.25 million settlement, which still requires court approval,
would be funded by the Company's insurance coverage and will have no
impact on its financial position.
"Although we feel these claims are without merit as evidenced by the
recent dismissal of the original case by the Federal Court, settling
this matter at this time and avoiding further prolonged litigation is
in the best interests of our shareholders," said Gateway's chief
financial officer, Joseph Burke, in a press statement. "We can now put
the distraction and expense of this litigation behind us and focus on
what's important -- bringing our customers the best technology products
and services in the industry."
GEMSTAR-TV GUIDE: Hoffman & Edelson Commences Securities Suit in CA
-------------------------------------------------------------------
Hoffman & Edelson, LLC initiated a securities class action in the
United States District Court for the Central District of California on
behalf of purchasers of Gemstar-TV Guide International, Inc.
(NASDAQ:GMST) publicly traded securities during the period between
August 11, 1999 and April 1, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
suit alleges that during the class period, defendants caused the
Company's shares to trade at artificially inflated levels through the
issuance of false and misleading financial statements.
On April 1, 2002, the Company filed its 10-K, which stated in part,
"During 1997 through 1999, Scientific-Atlanta was under a license
agreement with the Company for the incorporation of interactive program
guides into Scientific-Atlanta set-top boxes. The license expired on
July 23, 1999, however, Scientific-Atlanta continued to ship set-top
boxes incorporating IPGs the same, or similar to, the products shipped
during the agreement term. The Company instituted legal proceedings in
federal district court to recover damages to include revenues
commensurate with the licensing fees under the expired agreement. The
Company has accrued an aggregate of $107.6 million; $58.9 million,
$36.5 million and $12.2 million for the year ended December 31, 2001,
the nine months ended December 31, 2000 and for the period from July
23, 1999 through March 31, 2000, respectively, in license fees from
Scientific-Atlanta."
The 10-K also provides in relevant part, "In April 2001, the Company
entered into a non-monetary transaction with an unrelated company in
which $20.8 million of intellectual property was acquired in exchange
for $750,000 in cash and advertising having a fair value of $20
million. In addition, the Company received an option to acquire the
company in the event that certain performance criteria were met in each
of the following two years. The Company determined the fair value of
the advertising consideration, all of which was recognized during 2001
as the advertising was aired, based on cash transactions for similar
advertising sold to other parties." The stock dropped below $9 per
share on this news.
For more details, contact Jerold B. Hoffman by Mail: 45 W. Court
Street, Doylestown, PA 18901 by Phone: 877-537-6532 (toll free) by Fax:
215-230-8735 or by E-mail: jhoffman@hofedlaw.com.
MAXIM PHARMACEUTICALS: CA Court Dismisses Consolidated Securities Suit
----------------------------------------------------------------------
The United States District Court for the Southern District of
California dismissed the consolidated securities class action against
Maxim Pharmaceuticals, Inc., but granted the plaintiffs 30 days to file
an amended complaint.
The consolidated suit arose from fourteen substantially similar suits,
filed on behalf of a class of Company stockholders against the Company
and certain of its officers. The consolidated suit alleges violations
of federal securities laws related to declines in the Company's stock
price. The suit alleges claims in connection with various alleged
statements and omissions to the public and to the securities markets
relating to the Company's drug candidate, Ceplene.
In December 2001, the Company filed a motion to dismiss the suit, which
was heard in February 2002. On April 22, 2002, the Court granted the
Company's motion to dismiss.
The Company stated in a disclosure to the Securities and Exchange
Commission that it couldn't give any assurance that it will be
successful in its defense of these claims. If it is not successful in
its defense of such claims, the Company could be forced to make
significant payments to its stockholders and their lawyers, and such
payments could have a material adverse effect on its business,
financial condition and results of operations if not covered by its
insurance carrier.
MERRILL LYNCH: Spector Roseman Files Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Spector, Roseman & Kodroff, PC initiated a securities class action on
behalf of purchasers of the securities of the common stock of
Excite@Home (OTCBB:ATHQE) between August 18, 1999 through September 28,
2001, inclusive. The action is pending in the United States District
Court, Southern District of New York against defendants Merrill Lynch
and Henry Blodget, and certain of its officers and directors.
The suit alleges that to maintain and enhance Merrill Lynch's
investment banking relationships with Excite, defendants issued analyst
reports with positive ratings on Excite which were materially
misleading as they were inconsistent with their own contemporaneous,
private adverse assessments of Excite.
For example, defendants were repeatedly issuing a short-term
accumulate, long-term buy rating on Excite despite their internal e-
mails that Excite stock had a "flat" outlook, was without any "real
catalysts" for improvement and described the company using profane
language.
For more details, contact Robert M. Roseman by Phone: 888-844-5862 by
E-mail: classaction@srk-law.com or visit the firm's Web site:
http://www.srk-law.com
MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY
-------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons who purchased the common stock of Excite@Home
Corporation (formerly Nasdaq: ATHM; currently OTC: ATHMQ) from June 7,
1999 through April 26, 2001, inclusive.
The suit alleges that Merrill Lynch and its well-known Internet stock
analyst Henry Blodget violated the federal securities laws by knowingly
issuing false and misleading analyst reports regarding Excite@Home
during the class period.
Based on e-mails and other internal Merrill Lynch communications, which
were made public as a result of the investigation conducted by the New
York State Attorney General, Eliot L. Spitzer, the suit alleges that
defendants failed to disclose a significant conflict of interest
between their investment banking and research departments.
Specifically, Henry Blodget and other Merrill Lynch analysts issued
very favorable analyst reports regarding Excite@Home to the public when
they allegedly knew that the positive recommendations were unwarranted.
Unbeknownst to the investing public, Merrill Lynch's buy
recommendations and price targets for Excite@Home were influenced by
its efforts to attract lucrative investment banking business from
Excite@Home and other internet companies.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
MERRILL LYNCH: Schatz & Nobel Commences Securities Fraud Suit in NY
-------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York against
Merrill Lynch & Co., Inc. on behalf of all persons who purchased the
common stock of Internet Capital Group, Inc. (Nasdaq: ICGE) from August
30, 1999 through November 8, 2000, inclusive.
The suit alleges that Merrill Lynch and its well-known Internet stock
analyst Henry Blodget violated the federal securities laws by knowingly
issuing false and misleading analyst reports regarding Internet Capital
during the class period.
Based on e-mails and other internal Merrill Lynch communications, which
were made public as a result of the investigation conducted by the New
York State Attorney General, Eliot L. Spitzer, the Complaint alleges
that defendants failed to disclose a significant conflict of interest
between their investment banking and research departments.
Specifically, Henry Blodget and other Merrill Lynch analysts issued
very favorable analyst reports regarding Internet Capital to the public
when they allegedly knew that the positive recommendations were
unwarranted.
Unbeknownst to the investing public, Merrill Lynch's buy
recommendations and price targets for Internet Capital were influenced
by its efforts to attract lucrative investment banking business from
Internet Capital and other internet companies.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
MERRILL LYNCH: Klayman & Toskes Probes Possible Securities Violations
---------------------------------------------------------------------
The Law Firm of Klayman & Toskes, PA, representing numerous Merrill
Lynch, Pierce, Fenner, & Smith, Inc. customers in securities
arbitration suits, continues to investigate and pursue claims on its
clients' behalf against the brokerage house, a unit of Merrill Lynch &
Co., Inc.
Recently, a suit was filed against Merrill before the National
Association of Securities Dealers, Inc. (NASD) seeking compensatory and
punitive damages for violations of the Securities and Exchange Act of
1934, state securities laws, common law fraud, breach of contractual
and fiduciaries duties, and gross negligence. The claims allege that
Merrill acted fraudulently in regard to investments in Excite@home
(OTCBB:ATHQE)
The firm wants to investigate, on behalf of its clients, sales practice
violations at Merrill. 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, and excessive trading/churning of
customers' accounts.
For more information, contact Lawrence L. Klayman by Phone:
888-997-9956 by E-mail: dhuff@nasd-law.com or visit the firm's Web
site: http://www.nasd-law.com
MERRILL LYNCH: Rabin & Peckel Commences Securities Fraud Suit in NY
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Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons or entities who purchased Aether Systems, Inc. common
stock (Nasdaq:AETH) between November 15, 1999 and February 20, 2002,
both dates inclusive, against Merrill Lynch & Co., Inc. and Henry
Blodget, a former Aether analyst at Merrill Lynch.
The suit alleges that defendants violated section 10(b) of the
Securities and Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder by issuing a series of materially false and misleading
statements in analyst reports concerning Aether Systems, Inc. during
the class period.
In particular, it is alleged that defendants recommended the purchase
of and set price targets for Aether common stock without any reasonable
factual basis therefore and failed to disclose significant material
conflicts of interest to obtain investment banking business for Merrill
Lynch; and failed to disclose material, non-public, adverse information
which they possessed about Aether, as well as their true opinion about
the Company.
The suit alleges that as a result of these false and misleading
statements the price of Aether common stock was artificially inflated
throughout the class period, causing plaintiff and the other members of
the class to suffer damages.
For further details, contact Eric Belfi or Sharon Lee by Mail: 275
Madison Avenue, New York, NY 10016 by Phone: 800-497-8076 or
212-682-1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or
visit the firm's Web site: http://www.rabinlaw.com.
NTL INC.: Bernstein Liebhard Commences Securities Fraud Suit in S.D. NY
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Bernstein Liebhard & Lifshitz LLP initiated a securities class action
on behalf of all persons who purchased or acquired NTL, Inc. (OTCBB:
NTLD) securities between August 9, 2000 and November 29, 2001, in the
United States District Court for the Southern District of New York.
The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition. Specifically, the complaint alleges
that, throughout the class period, defendants issued a series of
materially false and misleading statements, which failed to disclose,
among other things:
(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 write down of
billions of dollars of impaired assets, thereby artificially
inflating the Company's operating results.
Indeed, after the end of the class period, the Company announced that
it would write off over $11 billion of goodwill and other asset
impairments prior to reporting fourth quarter results, which would
result in an astounding loss per share for the fourth quarter 2001 of
$46.46 per share.
For more information, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 or by E-mail: NTLD@bernlieb.com.
PEREGRINE SYSTEMS: Glancy & Binkow Commences Securities Suit in S.D. CA
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Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the Southern District of California on behalf
of a class consisting of all persons who purchased securities of
Peregrine Systems, Inc. (NASDAQ:PRGN) between July 20, 2000 and May 3,
2002, inclusive. The action includes claims on behalf of those
investors who, during the class period, acquired Company stock as a
result of the Company's acquisitions of Extricity Inc., Remedy Corp.,
and Loran Technologies.
The suit charges the Company and certain of its officers and directors
with violations of federal securities laws. Among other things,
plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the nature of the Company's revenues and earnings caused its stock
price to become artificially inflated, inflicting enormous damages on
investors.
For more details, contact Michael Goldberg by Mail: 1801 Avenue of the
Stars, Suite 311, Los Angeles, California 90067 by Phone: 310-201-9150
or 888-773-9224 or by E-mail: info@glancylaw.com.
PEREGRINE SYSTEMS: Kirby McInerney Files Securities Suit in S.D. NY
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Kirby McInerney & Squire, LLP initiated a securities class action in
the United States District Court for the Southern District of
California on behalf of all investors who purchased or otherwise
acquired the common stock of Peregrine Systems Inc. (Nasdaq:PRGN)
during the period from July 20, 2000 through May 3, 2002. The action
includes claims on behalf of those investors who, during the class
period, acquired Company stock as a result of the Company's
acquisitions of Extricity Inc., Remedy Corp. and Loran Technologies.
The suit charges the Company as well as its chief executive officer and
chief financial officer, with violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934. The violations, as the complaint
alleges, stem from the issuance of allegedly false financial statements
during the class period, which had the effect, during the class period,
of artificially inflating the price of Company shares.
On April 30, 2002, the Company announced that it would delay issuing
its financial results for fiscal 2002, and on May 6, 2002, disclosed
that its Board had formed a committee to investigate "certain
transactions involving revenue recognition irregularities, totaling as
much as $100 million" during fiscal 2001 and 2002.
In reaction to such news, the Company's shares fell from $6.80 on April
30, 2002 to less than $1.00 per share on May 6, 2002.
For more details, contact Randall K. Berger or Orie Braun by Mail: 830
Third Avenue, 10th Floor, New York, New York 10022 by Phone:
212-317-2300 or 888-529-4787 (toll-free) by E-Mail: obraun@kmslaw.com
SALOMON SMITH: Cohen Milstein Initiates Securities Suit in S.D. NY
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Cohen, Milstein, Hausfeld & Toll, PLLC commenced a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of Global Crossing, Ltd.
(OTCBB:GBLXE.OB) common stock between May 24, 1999, and Oct. 4, 2001,
inclusive, against Salomon Smith Barney, Inc. and its well known
telecommunications analyst Jack Grubman for violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934.
The firm is involved in five similar suits against Merrill Lynch and
its internet analyst Henry Blodget, as well as a case against Salomon
Smith Barney and Jack Grubman on behalf of purchasers of WorldCom.
The suit alleges that defendants violated sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, by the issuance of analyst reports regarding Global
Crossing. The reports recommended the purchase of Global Crossing
common stock and which set price targets for Global Crossing common
stock without any reasonable factual basis.
When issuing their Global Crossing reports, defendants failed to
disclose significant, material conflicts of interest which they had, in
light of their use of Mr. Grubman's reputation and his Global Crossing
analyst reports, to obtain investment banking business for Salomon.
For more details, contact Steven J. Toll or Robert Smits by Mail: 1100
New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005 by
Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
rsmits@cmht.com or visit the firm's Website: http://www.cmht.com
SONIC INNOVATIONS: Asks Utah Court To Dismiss Amended Securities Suit
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Sonic Innovations, Inc. asked the United States District Court for the
District of Utah to dismiss the second amended consolidated securities
class action pending against it and certain of its officers and
directors, alleging violations of federal securities laws.
The suit, filed on behalf of purchasers of the Company's common stock
from May 2,2000 to October 24,2000, alleges the defendants violated
federal securities laws by providing materially false and misleading
information, or concealing information, about the Company's
relationship with Starkey Laboratories, Inc.
The complaint alleges that as a result of false statements or
omissions, the Company was able to complete its IPO, artificially
inflate its projections and results and have its stock trade at
inflated levels.
The Federal Court dismissed the first amended and consolidated suit,
but granted the plaintiffs leave to re-file the suit. There has been
no discovery to date, no class has been certified and no trial date has
been scheduled.
The Company strongly denies these allegations and will defend itself
vigorously; however, litigation is inherently uncertain and there
can be no assurance that the Company will not be materially affected.
STILLWATER MINING: Bernstein Liebhard Launches Securities Suit in NY
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Bernstein Liebhard & Lifshitz LLP initiated a securities class action
on behalf of all persons who purchased or acquired Stillwater Mining
Company (NYSE: SWC) securities between April 20, 2001 and April 1,
2002, in the United States District Court for the Southern District of
New York.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between April 20, 2001 and April 1, 2002, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the complaint, the Company
issued a series of materially false and misleading statements regarding
its financial performance and filed reports confirming such performance
with the United States Securities and Exchange Commission (SEC).
The complaint alleges that these statements were materially false and
misleading because, among other things:
(1) the Company improperly classified "mineralized material" as
"probable reserves;"
(2) defendants' improper manipulation of probable reserves
overstated the Company's class period net income because
defendants depreciated its plant and equipment costs according
of the life of these reserves. If defendants had properly
accounted for these reserves, depreciation would have occurred
much faster; and
(3) the reduction in probable reserves will likely result in an
impairment charge, or a restatement of at least fiscal year
2001 results.
Furthermore, defendants failed to disclose that the SEC had advised the
Company by mid-December 2001/early January 2002 that its methodology
for the calculation of probable ore reserves was improper and would
have to be changed.
On April 2, 2002, when defendants belatedly disclosed that the
Company's accounting practices had been condemned by the SEC, the stock
dropped by 24% in one day on extraordinarily high volumes of 4,743,600
shares traded, vastly greater than the Company's average trading volume
of approximately 400,000 shares per day. The full extent of the
Company's losses is still unknown to the market, since the revision to
reserves could adversely impact 2001 net income, and result in a
downward financial restatement of prior quarters.
For more information, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 by E-mail: SWC@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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