/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020530.mbx C L A S S A C T I O N R E P O R T E R Thursday, May 30, 2002, Vol. 4, No. 106 Headlines BAYCOL LITIGATION: Kenneth Moll Sues On Behalf of Canadian Consumers CHIRON INC.: Named as Defendant in Medicare Antitrust Suit in MA Court EBAY INC.: CA Court Hears Appeal On Suit Over "Fake" Sports Memorabilia EL PASO: CA Gas Market Manipulation, Shareholder Suits Underway GENDER BIAS: EEOC Ordered To Pay Law Firm Due to Conduct During Suit SARA LEE: Agrees To Settle Racial Discrimination Suits In E.D. PA SHAW'S STORES: Food and Commercial Workers Sue Over "Time-Off Rip-off" SHELL CANADA: Canadian Consumers Sue Over Car-Damaging Gas Cover-up UTI WORLDWIDE: Asserts Defenses in Suit Over Chemicals Used in Gulf War VERISIGN INC.: Faces Suit Over Deceptive "Expiration" Notices in CA WASHINGTON: Supreme Court to Review State's Social Security Policy *Senate Throws Out Bill Requiring Payment of Illegal Immigrant Workers Securities Fraud ADELPHIA COMMUNICATIONS: Goodkind Labaton Lodges Securities Suit in PA BRISTOL-MYERS SQUIBB: Marc Henzel Commences Securities Suit in S.D. NY COMPUTERIZED THERMAL: Cauley Geller Lodges Securities Suit in Oregon COMPUTERIZED THERMAL: Schiffrin & Barroway Lodges Securities Suit in OR DT INDUSTRIES: Asks MO Court To Dismiss Consolidated Securities Suit EAGLE BUILDING: Marc Henzel Commences Securities Fraud Suit in Nevada EDISON SCHOOLS: Leo Desmond Commences Securities Fraud Suit in S.D. NY FLAG TELECOM: Marc Henzel Commences Securities Fraud Suit in S.D. NY ITXC CORPORATION: Suits May Present "Management, Financial Drain" in NY LIGHT MANAGEMENT: Leo Desmond Initiates Securities Suit in S.D. NY MERRILL LYNCH: Cauley Geller Commences Securities Fraud Suit in S.D. NY NUCENTRIX BROADBAND: Agrees To Settle Two Securities Fraud Suits in TX PATHOGENESIS CORPORATION: Appeals Court Upholds Dismissal of Suit in WA PEREGRINE SYSTEMS: Cohen Milstein Expands Securities Suit in S.D. CA PEREGRINE SYSTEMS: Berman DeValerio Lodges Securities Suit in S.D. CA PROTON ENERGY: Will Vigorously Defend V. Securities Suits in S.D. NY RARE MEDIUM: Presenting Settlement Papers in Suit Over Motient Merger RELIANT RESOURCES: Goodkind Labaton Lodges Securities Suit in S.D. TX RESONATE INC.: Securities Suit Alleges Underwriters' Impropriety in NY SCIENTIFIC GAMES: Termination of MDI Acquisition Renders Suit Moot SEITEL INC.: Berman DeValerio Launches Securities Fraud Suit in S.D. TX SPECIALTY LABORATORIES: Leo Desmond Commences Securities Suit in CA STILLWATER MINING: Marc Henzel Commences Securities Suit in S.D. NY TRANSMETA CORPORATION: Asks CA Court To Dismiss Second Amended Suit TRANSMETA CORPORATION: Plaintiffs File Amended Derivative Suit in CA TRANSMETA CORPORATION: Plaintiffs File Consolidated Suit in S.D. NY TURNSTONE SYSTEMS: Files Demurrer To Derivative Securities Suit in CA TURNSTONE SYSTEMS: Plaintiffs Amend Securities Fraud Suit in S.D. NY ********* BAYCOL LITIGATION: Kenneth Moll Sues On Behalf of Canadian Consumers -------------------------------------------------------------------- Kenneth B. Moll & Associates, Ltd., filed a class action on behalf of all Canadians who have used the potentially deadly anti-cholesterol drug Baycol, which was recalled on August 8, 2001, in the United States District Court in Minnesota. The lawsuit, known as the "Canadian Class Action Complaint," was filed on behalf of all persons in Canada who took or purchased the drug Baycol after March 2, 1998. It seeks recoveries for all persons who took Baycol and have not yet manifested physical injury, all persons who were physically injured as a result of taking Baycol and all persons who purchased Baycol for personal or family use. The firm also filed a lawsuit on behalf of individual Canadians who used Baycol and were injured, in the United States District Court for the Northern District of Illinois. The Illinois lawsuit names 20 Canadians who have suffered death or other personal injuries related to their usage of Baycol. On January 18, 2002, Bayer AG announced that it is aware of over 100 deaths related to the use of Baycol, which is double an earlier estimate of 52. An estimated 6,000,000 people worldwide were prescribed Baycol to reduce cholesterol. For more information, contact Kenneth B. Moll by Phone: 312-558-6444 by Fax: 312-558-1112 or visit the firm's Website: http://www.kbmoll.com CHIRON INC.: Named as Defendant in Medicare Antitrust Suit in MA Court ---------------------------------------------------------------------- Pharmaceutical company Chiron, Inc. was named as one of the 29 defendants in a class action filed in the United States District Court for the District of Massachusetts by advocacy group Citizens for Consumer Justice and 13 other named plaintiffs. The suit names biotechnology and pharmaceutical companies as defendants in connection with setting average wholesale prices for various products, including the Company's DepoCytr, which are reimbursed by Medicare. Plaintiffs alleged that defendants violated federal antitrust and racketeering laws by devising and implementing a fraudulent pricing scheme against Medicare and Medicare beneficiaries. In March 2002, the plaintiffs filed an amended complaint that eliminated the antitrust allegations and changed the subject drug from DepoCytr to Mitomycinr, a generic oncology drug sold by the Cetus-Ben Venue Therapeutics partnership. The Company states in a disclosure to the Securities and Exchange Commission that it does not know when or on what basis the suit will be resolved. EBAY INC.: CA Court Hears Appeal On Suit Over "Fake" Sports Memorabilia ----------------------------------------------------------------------- The Superior Court in San Diego California heard the plaintiffs' appeal of the dismissal of the class action against Internet auctioneer eBay, Inc. last April 10,2002. The suit was commenced in April 2000 on behalf of a purported class of eBay users who purchased allegedly forged autographed sports memorabilia on eBay. The suit claims the Company was negligent in permitting certain named (and other unnamed) defendants to sell allegedly forged autographed sports memorabilia on eBay. In addition, the lawsuit charges the Company with violations of California unfair competition law, and a section of the California Civil Code which prohibits "dealers" from selling sports memorabilia without a "Certificate of Authenticity." In January 2001, the Court issued a ruling dismissing all claims against the Company in the lawsuit. The Court ruled that its business falls within the safe harbor provisions of 47 USC 230, which grants Internet service providers such as eBay immunity from state claims based on the conduct of third parties. The court also noted that the Company was not a "dealer" under California law and thus not required to provide certificates of authenticity with autographs sold over our site by third parties. The plaintiffs then appealed this ruling. The Company believes it has meritorious defenses and intends to defend itself vigorously. EL PASO: CA Gas Market Manipulation, Shareholder Suits Underway --------------------------------------------------------------- The class actions filed against El Paso Corporation and several of its subsidiaries in California state courts are at their preliminary pleading stages. The suits contend that the Company's entities acted improperly to limit the construction of new pipeline capacity to California and/or to manipulate the price of natural gas sold into the California marketplace. Trial in these suits is not anticipated until late 2003 at the earliest. The Company and its directors also face a shareholder derivative suit, originally filed in California, contending that its directors failed to prevent the conduct alleged in several of these underlying lawsuits. The suit was dismissed and re-filed in Texas in March 2002. The Company intends to mount a vigorous defense against these suits and is confident that they will not have a material effect on its financial position or operations. GENDER BIAS: EEOC Ordered To Pay Law Firm Due to Conduct During Suit -------------------------------------------------------------------- Accusing the United States Equal Employment Opportunity Commission (EEOC) of "unreasonable and just plain mean-spirited" conduct, a judge, ordered the agency to pay $386,000 to a law firm that it sued unsuccessfully for sexual harassment and discrimination, the Los Angeles Times reported recently. Federal Judge Dickran Tevrizian issued the order after dismissing the EEOC's class action against Robert L. Reeves & Associates, an immigration law firm in Pasadena with about 40 employees. In awarding attorney fees and court costs to the firm, the largest ever assessed against the EEOC, Judge Tevrizian invoked a rarely used sanction in civil rights law that allows judges to compensate defendants who are targeted by lawsuits that are "frivolous, unreasonable or without foundation." Anna Y. Park, EEOC regional attorney in Los Angeles, disputed Judge Tevrizian's characterization of the case, saying numerous witnesses corroborated the allegations against Mr. Reeves. She said an appeal is being considered. The EEOC is charged with enforcing federal law prohibiting employers from discrimination on the basis of race, color, religion, sex or national origin. The files 300 to 400 workplace discrimination suits a year and has been assessed attorney fees and court costs only four times since 1999, according to the agency's public affairs office in Washington, DC. This case involved allegations that 12 female employees, including attorneys and secretaries, were sexually harassed by Mr. Reeves, or were fired because they were pregnant. Several women complained that they were subjected to inappropriate touching, leering and sexual remarks. Mr. Reeves denied the allegations. Judge Tevrizian wrote in his order that the EEOC could have pursued three of those claims as potentially valid. Instead, he said, the agency brought a class action on behalf of a dozen women, "four of whose claims it knew had absolutely no foundation, and five others which it knew or should have known were groundless." Ultimately, Judge Tevrizian dismissed all the claims, saying they did not rise to the level of misconduct under the law, that is, the plaintiff has not shown, as the plaintiff must in sexual harassment suits, that the wrongdoing was so severe or pervasive that it gave rise to a hostile work environment. Judge Tevrizian wrote that he did not condone any of the acts of sexual harassment alleged in the lawsuit, even though he had to dismiss the case on legal grounds. The Judge also criticized the agency for employing "heavy-handed and out of bounds" tactics in the case. Although the commission is required by law to make a good-faith effort to resolve cases through conciliation, Judge Tevrizian said the EEOC laid down conditions that doomed the conciliation process from the start. For example, the agency demanded $1 million in compensatory and punitive damages to settle the case, but at the same time refused to disclose the names of the alleged victims or details of their complaints. When the law firm balked, the agency pronounced the conciliation a failure and took the case to court. In an interview, Ms. Park maintained that the allegations against Mr. Reeves were thoroughly investigated. She said the Judge failed to look at the case in its entirety. "In sexual harassment cases, you have to look at the totality of the circumstances," she said. "Instead, the judge piecemealed them out. That goes against US Supreme Court precedent." Ms. Park also said that Judge Tevrizian failed to take into account that all of the complaints were directed against Mr. Reeves, the owner and most powerful person in the law firm. "That was the theory of our case, and it was completely disregarded by the court," she said. The EEOC began the investigation in 1997 when a receptionist filed a complaint with the agency saying she was fired because she became pregnant. The law firm says she was fired because of poor performance. The case was dormant until 1999, when two other female employees filed harassment charges. Both these women were close friends of two lawyers who had left the firm in a dispute with Mr. Reeves. In court paper, Mr. Reeves accused his former associates, Daniel P. Hanlon and Colin T. Greene, of getting the women to make the sexual harassment claims in an effort to ruin his reputation. Mr. Hanlon called Mr. Reeves' charge ludicrous, but the Judge gave credence to Mr. Reeves' account. "See, I look at this case as one where the EEOC was used by the departing partners of the law firm," the Judge said, according to a court transcript. "Duped? That is absurd," said Ms. Park. She pointed out that the EEOC had received complaints about Mr. Reeves' conduct from women who had nothing to do with his former partners. SARA LEE: Agrees To Settle Racial Discrimination Suits In E.D. PA ----------------------------------------------------------------- Sara Lee Foods and a group of its former employees entered a comprehensive settlement of litigation pending in the United States District Court for the Eastern District of Pennsylvania. Civil actions filed on behalf of 139 individual African-American former employees all concerned employment disputes related to a food processing plant in Philadelphia, including the closure of that facility in August 2001. An initial lawsuit filed by nine employees sought class action status alleging past acts of racial discrimination and hostile work environment conditions. However, Judge Lowell Reed denied class certification to suit. The Third Circuit Court of Appeals also upheld this decision. Plaintiffs then individually filed separate lawsuits. While these cases were pending, the plant was closed. This prompted further litigation including a new class action alleging retaliation in the decision to close the plant. The settlement resulted from negotiations supervised by United States Magistrate Judge Linda K. Caracappa, and covers all pending cases. Specific terms of the settlement were not disclosed, but it was acknowledged that individual settlements did vary depending on employment tenure, filing as an original lead plaintiff and other factors. The settlement of all 140 claims included a payment of $3.5 million together with a complete dismissal of the retaliation class action complaint. On behalf of plaintiffs, attorneys Robert Vance and Stephen Whinston of the law firm of Berger & Montague PC, noted their satisfaction with the final settlement. "We are pleased that we have reached a fair and amicable settlement. The plaintiffs are now able to move forward with their lives and focus on their futures," said Mr. Vance. William A. Geoppinger, chief executive officer of Sara Lee Foods, said, "Sara Lee Foods is committed to a workplace free from any form of harassment or discrimination." Geoppinger emphasized that the decision to close the Philadelphia plant was based purely on business factors, and that the Company would not tolerate harassment of any kind. For more information, contact Julie Ketay of Sara Lee Foods by Phone: 312-558-8727 or Stephen Whinston of Berger & Montague, PC by Phone: 215-875-3097. SHAW'S STORES: Food and Commercial Workers Sue Over "Time-Off Rip-off" ---------------------------------------------------------------------- The Local 1445 of the United Food and Commercial Workers Union (UFCW) filed a class action in behalf of Worcester, Massachusetts employees of Shaw's food stores for alleged labor violations. The union filed the suit after long term Shaw's employees in Worcester got a holiday surprise a few months late when they found out that the foreign-owned supermarket operator had charged them retroactively for their previously paid 2001 Christmas and 2002 New Year holidays. As part of Shaw's alleged campaign to bust the workers' union, the Company unilaterally announced on February 28 that it would no longer recognize the union contract that provided the paid holidays. The Company then decided on April 1 to back track on the paid time off and charge employees for previous holiday time. The suit covers all employees who may have been charged for their holiday time. The Company is already under federal investigation for alleged labor law violations, including making illegal unilateral changes in working conditions. The contract terms' dismissal cost some employees more than the holiday pay. A veteran employee with 18 years of service had scheduled a long- awaited family vacation to Disney World. Under his UFCW contract, he had three weeks of vacation. When Shaw's reneged on the promises made in the union contract, he lost his Disney vacation time, and his family didn't have Dad along for their trip of a lifetime. The suit would get back the contracted time off for any of the 1,700 Shaw's employees who lost time. The grievance demands that the Company restore all paid holiday, vacation, sick and personal time due employees under the contract. All affected employees would be made whole for any and all loss of pay and benefits that they suffered as the result of Shaw's action. For more details, contact Greg Denier of the United Food and Commercial Workers Union by Phone: 202-466-1591 or visit the Web site: http://www.ufcw.org SHELL CANADA: Canadian Consumers Sue Over Car-Damaging Gas Cover-up ------------------------------------------------------------------- A British Columbia woman filed a class action against Shell Canada for not doing enough to notify consumers about a problem with its gasoline that may have damaged fuel gauges in thousands of vehicles across Canada, The Associated Press has reported. Dorothy Young of Port Alberni filed the statement of claim in British Columbia Supreme Court, accusing the Company not only of selling gasoline that damaged her vehicle, but also of continuing to sell the fuel when the Company knew there was a problem with it, and then trying to keep the issue quiet. For months, the Company has been quietly compensating customers after acknowledging that one of its additives seemed to be gumming up fuel pumps and fuel sensors. Fuel lights in affected cars began to blink `empty' even though the tank was full. The needles on gas gauges were swinging back and forth seemingly randomly. The gas was distributed nationwide. The Company stopped using the additive in March. UTI WORLDWIDE: Asserts Defenses in Suit Over Chemicals Used in Gulf War ----------------------------------------------------------------------- Freight and cargo Company UTI Worldwide, Inc. was named as a defendant in a consolidated class action pending in the 23rd Judicial District Court of Brazaria County, Texas. The suit charges 83 companies with selling chemicals that were utilized in the Gulf War by the Iraqi army which caused personal injuries to US armed services personnel and their families, including birth defects. The suits were brought on behalf of the military personnel who served in the Gulf War and their families and the plaintiffs are seeking in excess of $1 billion in damages. To date, the plaintiffs have not obtained class certification. The Company believes it was named as a defendant in the suit solely because an entity that sold it assets in 1993 is a defendant. The Company believes it will prevail in this matter because the alleged actions giving rise to the claims occurred prior to its purchase of the assets. The Company further believes that it will ultimately prevail in this matter since it has never manufactured chemicals. The plaintiffs have been unable to thus far produce evidence that the Company acted as a freight forwarder for cargo that included chemicals used by the Iraqi army. VERISIGN INC.: Faces Suit Over Deceptive "Expiration" Notices in CA ------------------------------------------------------------------- Verisign, Inc. faces a class action filed in the California Superior Court in connection with its alleged mailing of thousands of deceptive "expiration" notices. The suit alleges that the Company engaged in deceptive or unfair acts and practices in violation of California's consumer protection statutes by sending out official-looking Domain Name Expiration Notices that falsely implied that the recipient's domain name was due to expire and further implying that the only way to prevent this from occurring was to pay a $29 "renewal" fee. It is further alleged that, in actuality, payment of the fee transferred the domain name in question from its current domain name registrar to the Company. The complaint was filed pursuant to the "Private Attorney General" provisions of the Unfair Competition Laws and seeks to represent all persons who received such a letter and, based on this false and misleading advertising, have paid the $29 fee. For more details, contact Zev B. Zysman or Weiss & Yourman -Los Angeles by Phone: 800-437-7918 or visit the firm's Website: http://www.wyca.com WASHINGTON: Supreme Court to Review State's Social Security Policy ------------------------------------------------------------------ The United States Supreme Court will review Washington's practice of applying for benefits on behalf of foster children, then using the money to reimburse foster parents for things like food and clothing, the Associated Press reports. The ruling, expected sometime next year, will have far-reaching implications because every state has a system of collecting Social Security payments on behalf of children in state custody, the Court was told. Justices will look at a technical question involving Washington State's mechanism for inserting themselves as the money collectors for children, then deciding how to use it. However, the basic issue is this: Are poor children in state care being short-changed or helped by the intervention? The case was brought over benefits of a foster child whose mother was killed in a car crash. As the guardian of his estate, his grandmother, Wanda Pierce, received the benefits and put them in a college fund. The state sought to get the money, and she filed a class action lawsuit. One of Pierce's lawyers, Teresa Wynn Roseborough, told the Court that the money belongs to the children, not the government, and that the states do not always use the cash in its children's best interest. Ms. Roseborough urged the Court not to use the Washington system to address the issue, calling it a "muddled mess." On the other side were two dozen states and a group of children's advocates who want the Court to make clear that states can continue the practice. The case turns on whether the state youth department acts as a creditor, billing children for their care then using the Social Security benefits to pay the bills. Federal law protects Social Security from creditors. There are more than a half million children in foster care in America, and about 25 percent of those are disabled and may be eligible for Social Security, the court was told. Groups including the Children's Defense Fund and Catholic Charities told the court that states are "the last line of defense for children in foster care." If states aren't allowed to seek benefits for children "it is likely that no one will," the groups said in a filing. If the Washington state foster children win, states could be required to pay back the money. In Florida alone, that could be hundreds of millions of dollars, Attorney General Robert A. Butterworth told the Court. Nationwide, it could cost billions, he said in court papers. In addition to Florida, urging the Court to take the case were Alaska, Colorado, Delaware, Kansas, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wyoming. Washington State has about 10,000 children in foster care, and about 1,500 of them receive benefits under Social Security either because they are disabled or they are entitled to benefits of their deceased parents. The state social services agency handles the paperwork for benefits. The state Supreme Court ruled last year that the system was illegal. "However worthy cost recovery might be, DSHS cannot violate federal law at the expense of foster children to accomplish it," Washington Supreme Court Justice Richard Sanders wrote for the majority in the 5-3 ruling. Pierce's dispute with the state dates back to 1990. The state never took over the benefits for her grandson, Danny Keffeler, and he went on to attend college with the money she saved. *Senate Throws Out Bill Requiring Payment of Illegal Immigrant Workers ---------------------------------------------------------------------- The United States Senate recently rejected a bill that would have required employers to pay employees for performed work regardless of the workers' national origin or immigration status, Associated Press Newswires reported. Similar legislation had passed the House. Critics of the bill said its passage would encourage illegal immigration. Supporters argued, on the other hand, that the issue was fairness, not immigration status, since everyone has a right to be paid for work they perform. The Congress had taken on this issue after the Supreme Court's recent decision to deny back pay to an undocumented worker. The result of this decision was a rash of employers across the nation testing the limits of this decision, some seeking to use the ruling to avoid minimum wage guidelines and workers' compensation awards, according to an April report in the Los Angeles Times. Employers even began asking for the documents of a worker who complained of sexual harassment, according to advocates for low-wage workers. The High Court's decision has engendered a great deal of confusion and fear, even though during oral arguments and in the written decision, the court expressed that they did not intend to abolish all workplace rights for illegal immigrants. Yet that has happened, which dissenters on the Court, along with labor unions, immigrant-rights groups and a coalition of business groups, who filed briefs on behalf of the undocumented worker, feared would happen, the increased, indiscriminate exploitation of immigrant workers by unscrupulous employers, according to the Los Angeles Times. "It is amazing, the quickness of employer response to this," said Ana Avendano Denier, an attorney with the United Food and Commercial Workers Union, which represents thousand of immigrant workers in meat and poultry plants. "Some are intentionally reading it (the decision) too broadly, but there also is a lot of misunderstanding about what the Court said." It will probably be years before the ruling is fully interpreted by lower courts, attorneys are saying, although judges in state and federal courts in California already have taken a narrow view of the decision, the Los Angeles Times has reported. In Los Angeles, a US District Court judge decided the immigrant status of supermarket janitors was not relevant in a class action that sought to collect minimum wages for years of work. A San Diego Superior Court judge decided a taco stand worker who was paid $2 an hour for seven years was entitled to $32,000 for the missing minimum wage. In both cases, employers unsuccessfully cited the recent Supreme Court decision. Securities Fraud ADELPHIA COMMUNICATIONS: Goodkind Labaton Lodges Securities Suit in PA ---------------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class action in the United States District Court for the United States District Court, Eastern District of Pennsylvania, on behalf of all open market purchasers of the common stock of Adelphia Communications Corporation (NYSE:ADLAC) during the period of March 30, 2000 and April 1, 2002, inclusive. The suit names as defendant the Company and its controlling persons John J. Rigas and Timothy J. Rigas. The suit charges defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10(b)-5 promulgated thereunder and Section 20(a) of the Exchange Act of 1934. The Company provides telecommunications services primarily over networks that are commonly referred to as broadband networks. Like other telecommunications companies in the United States, the Company is enormously leveraged and depends heavily on debt offerings to help finance the huge cost of maintaining a communications network. The complaint alleges that in response to its need to secure additional financing, the Company concocted a scheme to keep existing debt off its balance sheets. The individual defendants controlled partnerships to which the Company provided management and consulting services. The partnerships borrowed billions of dollars, guaranteed by the Company, but not recorded on the Company's balance sheet. By keeping the guaranteed debt off its record books, the Company was able to report favorable financial results throughout the class period, which artificially inflated the price of Company stock. The Company used these same financial results to facilitate the issuance of shares and debt during the class period. When, on March 27, 2002, news of the undisclosed debt reached the market the price of Company shares plunged $3.69, or 18%, to $16.70 on very heavy trading. The amount of undisclosed debt guaranteed by the Company was initially reported by the Company to be $2.3 billion. On April 3, 2002, the Company announced the Securities and Exchange Commission (SEC) had launched an investigation into its financial reporting. News of the SEC investigation sent the price of Company shares plunging a further 6.7%, on heavy trading. On April 3, 2002, The Wall Street Journal reported that the Company had at least $2.7 billion in off-balance-sheet debt associated with the partnerships. The Company has indicated it may restate three years of financial reporting. On or about May 23, 2002, the Company announced that members of the Rigas family had relinquished all Board seats and executive positions. The stock currently trades at under $3 per share. For more details, contact Emily C. Komlossy or Henry J. Young by Mail: 100 Park Avenue, 12th Floor New York, New York 10017-5563 by Phone: 212-907-0700 by E-mail: ekomlossy@glrslaw.com or hyoung@glrslaw.com or visit the firm's Website: http://www.glrslaw.com BRISTOL-MYERS SQUIBB: Marc Henzel Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of Bristol-Myers Squibb Company (NYSE: BMY) between September 19, 2001 and January 4, 2002, inclusive, against the Company and certain of its officers. The complaint alleges that defendants violated the federal securities laws by making itself, and allowing its drug development partner to make, without correction, materially false and misleading statements about the progress of its Erbitux cancer treatment drug's application for FDA approval even as the Company knew that the application and data were false. Specifically, the complaint alleges that on December 28, 2001, a press release disclosed that the FDA had rejected the filing of a Biologics License Application for Erbitux. On January 4, 2002, The Cancer Letter reported that the FDA repeatedly informed defendants about problems with the Erbitux clinical trials during the Class Period. These shocking revelations caused the stock to plummet from a class period high of $56 to below $50, and now to $40. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 COMPUTERIZED THERMAL: Cauley Geller Lodges Securities Suit in Oregon -------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of Oregon on behalf of purchasers of Computerized Thermal Imaging (Amex: CIO) common stock during the period between October 11, 1999 and December 21, 2001, 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 the Company has admitted that during the class period, the Company's then- President and Chief Operating Officer, David Packer, consistently made material public misrepresentations regarding FDA approval of the Company's Breast Cancer Detection System. These statements had the effect of artificially raising the price of Company stock so that investors who purchased its shares during the class period did so at inflated prices and were damaged thereby. 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 Website: http://www.classlawyer.com COMPUTERIZED THERMAL: Schiffrin & Barroway Lodges Securities Suit in OR ----------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of Oregon on behalf of all purchasers of the common stock of Computerized Thermal Imaging, Inc. (Amex: CIO) common stock between October 11, 1999 and December 21, 2001, 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 the Company has admitted that during the class period, its then-President and Chief Operating Officer, David Packer, consistently made material public misrepresentations regarding FDA approval of the Company's Breast Cancer Detection System. These statements had the effect of artificially raising the price of Company stock so that investors who purchased Company shares during the class period did so at inflated prices and were damaged thereby. 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 Website: http://www.sbclasslaw.com DT INDUSTRIES: Asks MO Court To Dismiss Consolidated Securities Suit -------------------------------------------------------------------- DT Industries, Inc. asked the United States District Court for the Western District of Missouri to dismiss the second consolidated securities class action pending against DT Industries and its subsidiaries, Kalish Inc. and Sencorp Systems Inc. The suits alleged violations of Section 10(b), and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Securities Exchange Act of 1934, on behalf of purchasers of the Company's common stock during various periods, all of which fall between September 29, 1997 and August 23, 2000. The suit specifically alleges, among other things, that accounting irregularities caused the Company's previously issued financial statements to be materially false and misleading. The Company intends to defend against the suit vigorously. While it is not feasible to predict or determine the final outcome of the suit, management believes the Company and its officers and directors have adequate liability insurance to cover the liabilities, costs and expenses arising out of the suit. However, the Company cannot give any assurance that the suit will not have a material adverse impact on its financial condition, results of operations or cash flow. EAGLE BUILDING: Marc Henzel Commences Securities Fraud Suit in Nevada --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Nevada against Eagle Building Technologies, Inc., previously known as Eagle Capital International, Ltd. (OTC: EGBT.PK) and certain of its officers and directors, on behalf of purchasers of Company securities from December 31,2000 to September 30, 2001. The complaint asserts claims against the defendants for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that as a result of materially false and misleading statements concerning the Company's products, operations and financial results, its securities traded at artificially inflated prices during the class period. The complaint further alleges that the artificial inflation continued until the time Company acknowledged that its prior financial results, from December 31, 2000 to September 30, 2001, were overstated and that certain press releases issued by the Company concerning post-September 11th security measures marketed by the Company may have been false and misleading. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 EDISON SCHOOLS: Leo Desmond Commences Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- The Law Offices of Leo W. Desmond lodged a securities class action on behalf of shareholders who acquired Edison Schools, Inc. (Nasdaq:EDSN) securities between November 10, 1999 and May 14, 2002, inclusive, in the United States District Court for the Southern District of New York against the Company, PricewaterhouseCoopers LLP, Adam Field and Christopher Whittle. It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Leo W. Desmond by Phone: 888/337-6663, 561/712-8000 by E-Mail: Info@SecuritiesAttorney.com or visit the firm's Website: http://www.SecuritiesAttorney.com FLAG TELECOM: Marc Henzel Commences Securities Fraud Suit in S.D. NY -------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of FLAG Telecom Holdings, Ltd. (Nasdaq: FTHL) from March 23, 2001 through February 13, 2002, inclusive. The suit names as defendants the Company and: (1) Andres Bande (CEO and Chairman), (2) Edward McCormack (Chief Operating Officer), (3) Andrew Evans (Chief Technology Officer) and (4) Larry Bautista (Chief Financial Officer until August 2001) The suit alleges the defendants issued false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that throughout the class period, the Company reported strong year-over-year revenue growth. Unbeknownst to investors, however, as alleged in the complaint, the Company was experiencing diminishing revenue growth. The complaint 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 complaint 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 S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 ITXC CORPORATION: Suits May Present "Management, Financial Drain" in NY ----------------------------------------------------------------------- ITX Corporation 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 27, 1999 and December 6, 2000, inclusive. The suit names as defendants the Company and: (1) Lehman Brothers Inc., (2) FleetBoston Robertson Stephens Inc., (3) Merrill Lynch Pierce Fenner & Smith Incorporated, (4) Tom I. Evslin, and (5) Edward B. Jordan The suit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company intends to vigorously defend against the suit. In a disclosure to the Securities and Exchange Commission, the Company stated that "Litigation of such matters may present a drain on the management and financial resources of the Company and adverse outcomes in such lawsuits could materially adversely affect our financial condition or operating results." LIGHT MANAGEMENT: Leo Desmond Initiates Securities Suit in S.D. NY ------------------------------------------------------------------ The Law Offices of Leo W. Desmond launched a securities class action on behalf of shareholders who acquired Light Management Group, Inc. (OTCBB:LMGR) securities between June 9, 1999 and November 20, 2001, inclusive, in the United States District Court for the Southern District of New York. The suit names as defendants the Company and: (1) Barrington L. Simon, (2) Donald J. Iwacha, (3) Eve Sigfrid, (4) Greg Amur, (5) James E. Slayton, CPA, and (6) Feldman, Sherb & Co., PC It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Leo W. Desmond by Phone: 888-337-6663 or 561-712-8000 by E-Mail: Info@SecuritiesAttorney.com or visit the firm's Website: http://www.SecuritiesAttorney.com MERRILL LYNCH: Cauley Geller Commences Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Merrill Lynch Internet Strategies Fund (Fund: MANTX) common stock during the period between March 14, 2000 and October 15, 2001, inclusive. The suit charges Merrill Lynch & Co. and others with issuing false and misleading statements concerning its recommendations of shares of Internet companies in the Fund. Furthermore, when issuing shares of the Fund and their Internet Company reports, the defendants failed to disclose significant, material conflicts of interest, which they had, in light of their use of defendant Henry Blodget's reputation and his Internet companies' analyst reports, to obtain investment banking business for Merrill Lynch. Furthermore, in issuing shares of the Fund and their Internet company reports, in which they were recommending the purchase of stock in Internet companies, the defendants failed to disclose material, non- public, adverse information which they possessed about Internet companies in the Fund as well as their true opinion about Internet companies in the Fund. 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 Website: http://www.classlawyer.com NUCENTRIX BROADBAND: Agrees To Settle Two Securities Fraud Suits in TX ---------------------------------------------------------------------- Nucentrix Broadband Networks, Inc. agreed to settle two securities class actions pending in Texas state and federal courts alleging violations of federal securities laws. The first suit was filed in the United States District Court for the Northern District of Texas against the Company and certain of its former officers and directors. The suit involved federal securities laws claims brought by two former stockholders of Heartland Wireless Communications, Inc. In June 2000, the Court dismissed the plaintiffs' complaint with prejudice. The plaintiffs appealed the dismissal to the US Court of Appeals for the Fifth Circuit. In addition, three of the Company's former officers and directors were co-defendants in a class action originally filed in State District Court in Kleburg County, Texas, alleging state securities laws violations, misrepresentation and civil conspiracy claims. In 2001, the parties in both suits executed settlement agreements for the respective lawsuits. In January 2002, the Court in the state suit approved the settlement and entered a final judgment and order of dismissal with prejudice in this matter. In March 2002, the Appellate Court dismissed the appeal in the federal suit pursuant to the settlement agreement entered into in that lawsuit. All amounts payable by the defendants in the settlement of both suits will be covered by the proceeds from the Company's primary directors and officers liability insurance policy. Accordingly, this settlement will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company. PATHOGENESIS CORPORATION: Appeals Court Upholds Dismissal of Suit in WA ----------------------------------------------------------------------- The United States Ninth Circuit Court of Appeals upheld the dismissal of a consolidated securities class action against Pathogenesis Corporation, on behalf of purchasers of the Company's common stock during the period started January 15, 1999 to March 22, 1999. The suit was commenced in the United States District Court for the Western District of Washington against the Company, its chief executive officer, and its chief financial officer, alleging that the Company and its officers violated certain provisions of the federal securities laws by making statements in early 1999 regarding the Company's 1998 financial results. The Court later dismissed the consolidated cases and bars plaintiffs from filing another lawsuit on the matter. The plaintiffs then filed an appeal with the Ninth Circuit Court. PEREGRINE SYSTEMS: Cohen Milstein Expands Securities Suit in S.D. CA -------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC expanded the securities class action pending against Peregrine Systems, Inc. (Nasdaq:PRGN) in the United States District Court for the Southern District of California, to include persons who purchased the Company's stock during the period July 19,2000 to May 3,2002. The suit charges Peregrine and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that the defendants violated section 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by making materially false and misleading statements regarding the Company's revenues and income. Before the market opened on Monday, May 6, 2002, the Company shocked the market by announcing that its board of directors had authorized an internal investigation into accounting inaccuracies, totaling as much as $100 million. The Company disclosed that these transactions and other accounting matters to be investigated may impact financial results for periods in fiscal 2002 and prior. Simultaneously the board of directors announced that the Company's Chairman of the Board and Chief Executive Officer and its Chief Financial Officer had both resigned all of their positions with the Company. For more details, contact Matthew J. Ide or Clarence Williams by Mail: 999 Third Avenue, Suite 3600, Seattle, WA 98104 by Phone: 206-521-0080 by Fax: 206-521-0166 by E-mail: mide@cmht.com or cwilliams@cmht.com or visit the firm's Website: http://www.cmht.com PEREGRINE SYSTEMS: Berman DeValerio Lodges Securities Suit in S.D. CA --------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities class action against Peregrine Systems, Inc. (Nasdaq:PRGN) in the United States District Court for the Southern District of California, on behalf of all investors who bought the Company's common stock from July 19, 2000 through May 3, 2002. The suit accuses the Company, a San Diego-based software company, of misleading investors about its business and finances by improperly recording revenue it later wrote off. The complaint states that news of the problems came to light May 6, 2002, when the Company disclosed an internal investigation into potential accounting inaccuracies in fiscal 2001 and 2002 - revenue recognition irregularities that could total up to $100 million. In the same statement, the Company announced the resignations of Stephen Gardner, the company's chief executive officer, and Matthew Gless, its executive vice president of finance. The suit names Gardner and Gless as individual defendants. Following the May 6 announcement, Company stock plummeted 65% to a 52- week low of $0.89. For more details, contact Julie Richmond or Michael G. Lange by Mail: One Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E-mail: law@bermanesq.com or visit the firm's Website: http://www.bermanesq.com PROTON ENERGY: Will Vigorously Defend V. Securities Suits in S.D. NY -------------------------------------------------------------------- Proton Energy Systems, Inc. faces several securities class actions pending in the United States District Court for the Southern District of New York on behalf of persons who purchased the Company's common stock from September 28, 2000 through and including December 6, 2000. The suits name the Company, several of its officers and directors, and the underwriters of its September 28, 2000 initial public offering (IPO) as defendants. The suits are substantially similar and allege that the Company's IPO registration statement and final prospectus contained material misrepresentations and/or omissions related, in part, to excessive and undisclosed commissions allegedly received by the underwriters from investors to whom the underwriters allegedly allocated shares of the IPO. The Company believes it has meritorious defenses to the claims made in the complaints and intends to contest the lawsuits vigorously. However, there can be no assurance that it will be successful, and an adverse resolution of the lawsuits could have a material adverse effect on its financial position and results of operation. RARE MEDIUM: Presenting Settlement Papers in Suit Over Motient Merger --------------------------------------------------------------------- Rare Medium Group, Inc. expects to present settlement papers for the securities class action pending against them in the Delaware Chancery Court by May 2002. This will pave the way for the dismissal of the suit, which challenged the merger between the Company and Motient Corporation. The suit names the Company, its board of directors, the holders of the Company's preferred stock and certain of their affiliated entities, and Motient as defendants. The complaint alleges that the defendants breached duties allegedly owed to the holders of the Company's common stock in connection with the merger agreement, and include allegations that: (1) the holders of the Company's preferred stock engaged in self- dealing in the proposed merger; (2) the Company's Board of Directors allegedly breached its fiduciary duties by agreeing to distribute the merger consideration differently among the Company's common and preferred shares; and (3) Motient allegedly aided and abetted the supposed breaches of fiduciary duties. On April 15, 2002, the plaintiffs' counsel informed the Court that the parties in the suit had agreed upon a settlement. RELIANT RESOURCES: Goodkind Labaton Lodges Securities Suit in S.D. TX --------------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class action in the United States District Court for the Southern District of Texas, Houston Division, on behalf of all open market purchasers of the common stock of Reliant Resources, Inc. during the period of May 1, 2001 and May 13, 2002, inclusive. The suit names the Company and R. Steven Letbetter as defendants. The suit charges defendants with violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10(b)-5 promulgated thereunder and Section 20(a) of the Exchange Act of 1934. The Company is a provider of electricity and energy services with a focus on the electric power industry in the United States and Europe. In April 2002, rumors circulated among investors that energy companies had been engaging in "Wash Trading" to artificially inflate their revenue figures. Wash trading, also known as "Round Trip Trading," is a misleading practice whereby two energy companies buy and sell electricity to each other at the same price and simultaneously, creating the appearance that the companies are doing more business than is really the case. Wash trades do not generally generate a profit or a loss, but pump up trading volume and revenue, misleading market analysts and investors as to the market share of the companies involved. On May 13, 2002, the Company admitted that wash trades had made up 10 percent of its revenues over the past three years, and accounted for one-fifth of its electricity trading in 2001. On May 16, 2002, the Company issued a press release announcing a massive reorganization of its top management including the resignation of its Executive Vice President and Group President of Wholesale Businesses and its President of Trading (Wholesale Group). On Tuesday May 21, 2002, the Company restated its revenues for the first quarter of 2001 to adjust for the wash trades. The revised financial statements showed the Company's first quarter 2001 revenues were $8.64 billion instead of the $9.87 billion originally reported. The amount of power purchased during the quarter was revised to $2.40 billion, down from $3.63 billion. The Company also indicated it was to submit restated financial statements for 1999, 2000 and other quarters of 2001 to correct revenues, fuel and cost of gas sold and purchased power expenses to reflect the round trip trades during the three-year period. News of the Company's wash trades and subsequent restatement dramatically impacted its share price, causing harm to thousands of investors. A week following the news of the Company's wash trading the price of its stock had fallen 46%, to $7.73. For more details, contact Emily C. Komlossy or Henry J. Young by Mail: 100 Park Avenue, 12th Floor, New York, New York 10017-5563 by Phone: 212-907-0700 by E-mail: ekomlossy@glrs.com or hyoung@glrs.com or visit the firm's Website: http://www.glrslaw.com. RESONATE INC.: Securities Suit Alleges Underwriters' Impropriety in NY ---------------------------------------------------------------------- Resonate, Inc. faces an amended consolidated securities class action pending in the United States District Court for the Southern District of New York charging the Company, certain of its officers and directors, and certain investment bank underwriters for its initial public offering (IPO), with federal securities violations. The suit alleges undisclosed and improper practices by the underwriters concerning the allocation of the Company's IPO shares, in violation of federal securities laws, and seeks unspecified damages on behalf of persons who purchased the Company's stock during the period from August 2, 2000 to December 6, 2000. The Company stated in a disclosure to the Securities and Exchange Commission that the suit is substantially similar to other suits filed in the Southern District of New York regarding the IPOs of more than 300 other companies. All of these have been coordinated for pretrial purposes. The Company believes it has meritorious defenses to the claims and intends to vigorously defend against the suit. SCIENTIFIC GAMES: Termination of MDI Acquisition Renders Suit Moot ------------------------------------------------------------------ Scientific Games, Inc. amicably terminated negotiations for its takeover of MDI Entertainment, Inc., making the securities class action pending against the two companies in the Delaware Chancery Court subject for dismissal. Shareholders of MDI Entertainment filed the suit, after the Company announced its intent to acquire MDI in a stock-for-stock transaction valued at approximately $26 million. The suit alleges that the consideration offered to MDI's stockholders is unfair and inadequate because the plaintiffs believe that the intrinsic value of MDI's common stock is materially in excess of the amount offered giving consideration to its growth and anticipated operating results, net asset value, and future profitability. The suit further alleges that independent valuations performed by MDI's board of directors before they approved the proposed transaction valued MDI in excess of the value of the proposed transaction. The suit further states that the defendants have approved a proposal that favors their own interests over those of MDI's public stockholders. On May 8, 2002, the Company and MDI mutually terminated the negotiations, following MDI's announcement that it had received a proposal from a third party to acquire a majority interest in MDI for $3.30 per share in cash. SEITEL INC.: Berman DeValerio Launches Securities Fraud Suit in S.D. TX ----------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities class action against Seitel, Inc. (NYSE:SEI), charging the Company and several top officers with artificially inflating the Company's stock price by improperly recording revenue. The suit is pending in the United States District Court for the Southern District of Texas, on behalf of all investors who bought Seitel common stock from May 5, 2000 through May 3, 2002. According to the complaint, the Company and the individual defendants materially misrepresented the Company's financial results for 2000 and 2001 by improperly recognizing revenues. Most of the improper revenue, the complaint says, was attributable to the Company's undisclosed practice of recording revenue for the licensing of its seismic data and other geophysical information before delivering data to customers. The practice ran afoul of generally accepted accounting principles and artificially inflated Company stock price during the class period, the complaint says. The complaint alleges that the defendants were motivated to commit the accounting fraud in order to earn commissions and bonuses, which were tied to the company's revenues and earnings. The complaint claims the defendants had nearly $10 million of insider stock sales during the class period. On April 1, the Company announced that it was restating its financial results for the year 2000 and the first three quarters of 2001. The restatement reduced reported revenue by 15% in 2000 and 30% during the first three quarters of 2001. It also turned what had purportedly been profits during those periods into losses, the lawsuit states. By the time the Company further detailed the restatements on May 3, 2002, its stock price had plunged to $5.65 per share, more than 75% below the class period high of $22.72 per share, the complaint says. For more information, contact Julie Richmond or Michael G. Lange by Mail: One Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E- mail: law@bermanesq.com or visit the firm's Website: http://www.bermanesq.com. SPECIALTY LABORATORIES: Leo Desmond Commences Securities Suit in CA ------------------------------------------------------------------- The Law Offices of Leo W. Desmond initiated a securities class action on behalf of shareholders who acquired Specialty Laboratories, Inc. (NYSE:SP) securities between December 8, 2000 and April 10, 2002, inclusive, in the United States District Court for the Central District of California. The suit names as defendants the Company and: (1) Paul F. Beyer, (2) James B. Peter, (3) Frank J. Spina, (4) Richard E. Belluzzo, (5) Deborah A. Estes, (6) Douglas S. Harrington, (7) William J. Nydam, (8) Thomas R. Testman, (9) Thomas E. England, (10) Bart E. Thielen, and (11) John W. Littleton. It is alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated thereunder, by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Leo W. Desmond by Phone: 888-337-6663 or 561- 712-8000 by E-Mail: Info@SecuritiesAttorney.com or visit the firm's Website: http://www.SecuritiesAttorney.com STILLWATER MINING: Marc Henzel Commences Securities Suit in S.D. NY ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action against Stillwater Mining Company (NYSE: SWC) and certain principal officers and directors in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased the Company's common stock between April 20, 2001 and April 1, 2002. 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 the Company's common stock. 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 details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 TRANSMETA CORPORATION: Asks CA Court To Dismiss Second Amended Suit ------------------------------------------------------------------- Transmeta Corporation asked the United States District Court for the Northern District of California to dismiss the second amended securities class action against the Company, its directors, and certain of its officers. The second amended suit was filed in March 2002, on behalf of persons who purchased the Company's common stock during the period from November 7, 2000 to July 19, 2001. The suit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933. On April 5, 2002, the defendants filed a motion to dismiss the suit. The Company believes that the allegations in the suit are without merit and intends to defend the consolidated action vigorously. TRANSMETA CORPORATION: Plaintiffs File Amended Derivative Suit in CA -------------------------------------------------------------------- Plaintiffs in the shareholder derivative suit pending against Transmeta Corporation's directors and officers filed an amended consolidated suit in the Superior Court for Santa Clara County in California on April 29,2002. Like its antecedents, the consolidated suit alleges that certain individual defendants sold shares of the Company's common stock, purportedly in breach of their fiduciary duties to the Company. The suit further alleges that the selling defendants were aided and abetted by the other individual defendants. The complaint also alleges: (1) gross mismanagement, (2) waste of corporate assets, and (3) abuse of control The Company and the individual defendants have moved to stay discovery and intend to file demurrers in June 2002. The Company believes that the allegations in the consolidated complaint and it antecedents are without merit and intend to challenge the complaint and defend the consolidated action vigorously. TRANSMETA CORPORATION: Plaintiffs File Consolidated Suit in S.D. NY ------------------------------------------------------------------- Plaintiffs in the securities class actions pending against Transmeta Corporation in the United States District Court for the Southern District of New York filed an amended consolidated class action in April 2002. The consolidated suit arose from several class actions filed in June 2001 against the Company, certain of its directors and officers, and certain of the underwriters for its initial public offering. In October 2001, the court dismissed all claims against the defendants without prejudice to plaintiff's right to pursue such claims. In January 2002, the court ordered the suits consolidated. The consolidated suit alleges that the prospectus from the Company's November 7, 2000 initial public offering failed to disclose certain alleged actions by the underwriters for the offering. The suit alleges claims against the Company and several of its officers and directors under Sections 11 and 15 of the Securities Act of 1933, as amended, and under Sections 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended. The Company stated in a disclosure to the Securities and Exchange Commissions that the suit is similar to other actions filed regarding the initial public offerings of more than 300 other companies. All of these cases, including the one against the Company, have been coordinated for pretrial purposes in the Southern District of New York. The Company believes that the allegations in the suit and its antecedents are without merit and intends to defend the action vigorously. The Company and the individual defendants have not yet responded to the consolidated amended complaint, because the time for defendants to move as to that type of complaint is presently adjourned, pending further instruction from the Honorable Shira A. Scheindlin, US District Court Judge, Southern District of New York. TURNSTONE SYSTEMS: Files Demurrer To Derivative Securities Suit in CA --------------------------------------------------------------------- Turnstone Systems, Inc. filed a demurrer to second amended shareholder derivative suit pending against the Company's officers and directors in the state court in California, County of Santa Clara. The original derivative suit alleges that the individual defendants caused the Company harm by either making or permitting the Company to make false and misleading statements between June 5, 2000 and January 2, 2001 and by permitting certain officers to profit from stock sales during that period. The complaint asserts claims against the individual defendants for: (1) breach of fiduciary duty, (2) waste of corporate assets, (3) abuse of control and (4) gross mismanagement of the Company The Company demurred to the suit in July 2001 and in September 2001, a court order was issued sustaining the demurrer and granting plaintiff limited discovery. On December 19, 2001, subsequent to the completion of the court-ordered discovery, plaintiff filed a first amended derivative complaint alleging the same causes of action asserted in the initial complaint. The Company again filed a demurrer to the first amended derivative complaint on January 10, 2002. On February 22, 2002, Judge Jack Komar issued an order sustaining the demurrer and granting plaintiff leave to amend its complaint. The plaintiffs then filed an amended complaint on March 19, 2002. A hearing on the Company's demurrer is set for May 28, 2002. The Company intends to vigorously oppose the suit. TURNSTONE SYSTEMS: Plaintiffs Amend Securities Fraud Suit in S.D. NY -------------------------------------------------------------------- Plaintiffs in the securities class action pending in the United States District Court for the Southern District of New York against Turnstone Systems, Inc. filed an amended suit on April 22,2002. The suit was initially filed in November 2001, alleging claims against the Company, certain of its current and former officers and directors, and the underwriters of the Company's initial public offering of stock. The complaint is purportedly brought on behalf of a class of individuals who purchased common stock in the initial public offering between January 31 and December 6, 2000. The complaint alleges generally that the prospectus under which such securities were sold contained false and misleading statements with respect to discounts and commissions received by the underwriters. The case has been coordinated for pre-trial purposes with over 300 cases raising the same or similar issues and also currently pending in the Southern District of New York. On April 18, 2002, Michael Szymanowski was appointed lead plaintiff in the action. The Company denies the suit's allegations, and intends to mount a vigorous defense against it. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *