/raid1/www/Hosts/bankrupt/CAR_Public/020620.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, June 20, 2002, Vol. 4, No. 121
Headlines
ALLIED IRISH: Plaintiffs Move for Consolidation of NY Securities Suits
APARTHEID LITIGATION: Reparations Suit to Name Citibank as Defendant
BARNARDO'S: Sued Over Child Employment & Migration Program to Canada
BICO INC.: Makes Another Payment in Settlement of Fraud Suit in PA
CASINO MAGIC: Limited Discovery Proceeds in RICO, Fraud Suit in Nevada
COEUR D'ALENE: Faces Suit Over Bunker Hill Superfund Site in Idaho
COMPUTER ASSOCIATES: Discovery Proceeds in Securities Suit in E.D. NY
COMPUTER ASSOCIATES: Faces Suits For Securities Violations in E.D. NY
DUKE ENERGY: Faces Suit For Antitrust Violations in CA Power Market
EMULEX CORPORATION: Court to Hear Reconsideration Motion in June 2002
ENRON CORP.: Details in Bankruptcy Spark Anger, Plans for Legal Action
FIRST UNION: Shareholders File Suit Over Gotham Golf Transaction in NY
FLORIDA PROGRESS: Trial in Age Discrimination Suit Set for July 2002
FRANKLIN RESOURCES: FL Court Grants Final Approval to $6.5M Settlement
HOLOCAUST REPARATIONS: Lawyers Doubt If Claims Process Will Speed Up
INDIAN FUNDS: Interior Department Asks for Removal of Court Monitor
JACK IN THE BOX: Settles Sex Harassment, Retaliation Suit With EEOC
MARCOS WEALTH: Lawyers Seek Financier's Testimony About Hidden Funds
RADIO FLYER: Recalls 15,000 Little Wooden Push Cars for Choking Hazard
REAL ESTATE: Trial in Suits Over Limited Partnerships Set for July 2002
RR DONNELLY: IL Court Yet to Decide Statute of Limitations in Race Suit
RR DONNELLEY: Seeks to Enforce Ruling Dismissing Claims in Race Suit
TERRORIST ATTACK: Lawyers Urge 9/11 Survivors to Share in $4 BB Fund
WESTMINSTER CAPITAL: DE Court Denies Motion for Expedited Proceedings
***********
DUKE ENERGY: Stull, Stull & Brody Commences Securities Fraud Suit
GREAT ATLANTIC: Stull, Stull & Brody Files Securities Fraud Suit in NJ
HALLIBURTON COMPANY: Pomerantz Haudek Lodges Securities Suit in N.D. TX
MERRILL LYNCH: Cauley Geller Commences Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
OMNICOM GROUP: Milberg Weiss Launches Securities Fraud Suit in S.D. NY
OMNICOM GROUP: Schiffrin Barroway Lodges Securities Suit in S.D. NY
OMNICOM GROUP: Stull Stull & Brody Commences Securities Fraud Suit
OMNICOM GROUP: Cauley Geller Commences Securities Fraud Suit in S.D. NY
PEREGRINE SYSTEMS: Shapiro Haber Commences Securities Suit in S.D. CA
PEREGRINE SYSTEMS: Neiman Garland Commences Securities Suit in S.D. NY
PEROT SYSTEMS: Schiffrin Barroway Launches Securities Suit in N.D. TX
PEROT SYSTEMS: Cauley Geller Commences Securities Fraud Suit in W.D. WA
***********
ALLIED IRISH: Plaintiffs Move for Consolidation of NY Securities Suits
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Plaintiffs in the securities class actions against Allied Irish Bank in
the United States District Court for the Southern District of New York
filed a motion to consolidate the suits and appoint lead plaintiffs.
The suits were commence in March 2002 against the Company and:
(1) Allfirst Financial Corporation,
(2) several current and former officers of Allfirst and
(3) Allfirst Bank
The suit purports to represent all purchasers of the Company's
securities from February 6, 1999 through February 6, 2002 and alleges
violations of Section 10(b) of the Securities Exchange Act of 1934 and
Rule 10b-5 thereunder arising out of the $691 million of foreign
exchange currency trading losses at Allfirst Bank.
Another suit was filed in the United States District Court for the
Southern District of New York, purporting to represent all purchasers
of the Company's securities from January 1, 2001 through February 6,
2002. The suit alleges violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder arising out of the FX
Trading Losses, against the same defendants.
The Company intends to vigorously oppose the suit, but cannot predict
the outcome of the litigation at this stage.
APARTHEID LITIGATION: Reparations Suit to Name Citibank as Defendant
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United States attorney Ed Fagan will initiate a class action not only
against Switzerland's two biggest banks - UBS and Credit Suisse - but
also against a US bank, Citibank, on behalf of victims of South
Africa's former apartheid regime, the Agence France-Presse reports.
At a second news conference in Zurich, Switzerland, Mr. Fagan told the
reporters that "The day of reckoning has arrived. This is only the
beginning," adding that lawsuits were planned against other Swiss and
US firms and companies in France, Britain and Germany.
Other participating lawyers said that the three targeted companies
helped prop up the white government, which was struggling as foreign
capital fled the country, with loans and other business deals worth
billions of dollars. The help continued even after the United Nations
asked all member states to break off diplomatic, trade and transport
relations with South Africa in 1962. Switzerland was not, is not, a
member of the United Nations, and did not take part in the UN sanctions
regime, except for the embargo on arms sales. Switzerland is due to
join the United Nations in the coming months.
The lawyers declined to say how much they were seeking in damages, but
said they expected billions of dollars. That money would not be
distributed to individuals, but used collectively to help alleviate the
impact of apartheid by building schools or houses, for examples, said
Diane Sammons, a US lawyer working on the case. "When everybody else
was divesting, the Swiss banks took up the cause and added much more
money," she said. "They continued to profit from these crimes against
humanity, torture, murder."
Mr. Fagan said that the current lawsuit against the three banks
involves six lead plaintiffs, and he added, "There are more coming."
Apartheid was an oppressive web of racist laws, starting in 1948, that
classified all South Africans by race and stripped even the most basic
rights from those who were not white. As efforts to overthrow the
white regime grew, authorities began jailing some opponents, killing
others without trial and chasing still others from their homes.
The regime ended in 1994 with the election of Nelson Mandela as
president in the nation's first all-race elections. Power was handed
over peacefully, preceded, however, by much struggle, vehement world
disapproval and sanctions, and the strong, just leadership of Mr.
Mandela.
BARNARDO'S: Sued Over Child Employment & Migration Program to Canada
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Barnardo's, the largest children's charity in the United Kingdom, faces
a CD$600 million class action, as a result of its child migration
program which emigrated approximately 30,000 minors to Canada, where
many were subjected to abuse and mistreatment. The plaintiff, Harold
Warneford Vennell, launched the class action on behalf of all persons
who the Company emigrated to Canada and placed in Ontario, who are
alive or who died on or after June 13, 2000.
In the mid to late 19th century, Dr. Thomas Barnardo established homes
for destitute or homeless children in or near London, England. While
some of these children were orphans, some had parents who were alive,
but too impoverished to care for them. From 1870 to 1939, the Company
shipped 30,000 children to Canada.
Under the Company's child migration program, Canadian farmers who
wished to secure the services of a child applied to Barnardo's. An
employer was expected to school, clothe, feed and pay the child, and in
return, the child was expected to work on the farm or in the home.
"Most Canadians do not know that more than 100,000 children, many of
them with parents still alive in Britain, were shipped to Canada to
work on farms as indentured servants," said Harvey Strosberg, class
counsel. "Barnardo's was the largest of the British agencies to do so,
having brought some 30,000 children to Canada, with most settling in
Ontario."
"While Barnardo's intentions may have seemed laudable to some, it is
now indisputable that many of the migrant children were neglected,
abused or otherwise mistreated - and such mistreatment must have been
known to Barnardo's representatives," added Mr. Strosberg. "This class
action will expose this little-known disgraceful chapter in Canadian
history. We hope to obtain damages for the child migrants who have
suffered so long in silence."
The suit alleges that Barnardo's owed a fiduciary duty to Mr. Vennell
and the other members of the class, and that it breached its duty by
failing to establish or maintain an adequate system of inspection to
ensure that Mr. Vennell and the members of the class were given
adequate board, lodging, clothing and education.
The class action further alleges that Barnardo's breached its fiduciary
duty by failing to screen employers to determine if they were suitable,
by failing to monitor employers, and by failing to maintain an adequate
program of inspection to ensure that Mr. Vennell and the other members
of the class were not abused or otherwise mistreated by the Employers.
For more information, contact Harvey T. Strosberg by Phone: (416) 362-
7272 (Toronto office) or (519) 561-6228 (Windsor office) by Fax: (519)
561-6203 by E-mail: hts@strosbergco.com or visit the firm's Website:
http://www.barnardosclassaction.com
BICO INC.: Makes Another Payment in Settlement of Fraud Suit in PA
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Bico, Inc. made another payment for the remainder of the US$3.45
million settlement in the class action filed against the Company,
Diasense, Inc., and certain of its officers and directors, in the
United States District Court for the Western District of Pennsylvania.
The suit was commenced in April 1996, alleging the defendants issued
misleading disclosures in connection with the Noninvasive Glucose
Sensor and other related activities, which the Company denied.
Without agreeing to the alleged charges or acknowledging any liability
or wrongdoing, the Company agreed to settle the lawsuit for US$3.45
million. As of March 31, 2002, US$3.25 million has been paid toward
the settlement. In 2001, the parties agreed to extend the payments on
the remaining balance. The remaining US$425T is included in the
Company's accrued liabilities, including US$225T for extending the due
dates, and was due in the fourth quarter of 2001.
Due to cashflow problems, the final payment was not made in 2001 or the
first quarter of 2002. A payment of $50,000 was made in April 2002 and
the Company still owes $375,000. Payment is necessary in order to
satisfy the terms of the settlement. Although it is not known whether
the plaintiffs have been formally notified of the settlement, or if
they have accepted its terms, the Company believes that the existing
settlement will end this matter.
CASINO MAGIC: Limited Discovery Proceeds in RICO, Fraud Suit in Nevada
----------------------------------------------------------------------
The United States District Court for the District of Nevada, in Las
Vegas lifted the stay on discovery in the consolidated class action
against Casino Magic Corporation and other manufacturers, distributors
and casino operators of video poker and electronic slot machines,
allowing plaintiffs to conduct limited discovery.
The first suit, called the Poulos lawsuit, was commenced in April 1994,
in the United States District Court, Middle District of Florida
alleging that the defendants have engaged in a course of fraudulent and
misleading conduct intended to induce people to play such games based
on false beliefs concerning the operation of the gaming machines and
the extent to which there is an opportunity to win. The suit alleges
violations of the Racketeer Influenced and Corrupt Organization Act
(RICO), as well as claims of common law fraud, unjust enrichment and
negligent misrepresentation. The suit seeks damages in excess of US$6
billion.
In May 1994, a second class action, called the Ahern suit, was filed in
the United States District Court, Middle District of Florida, naming
as defendants the same defendants who were named in the first suit and
adding as defendants the owners of certain casino operations in Puerto
Rico and the Bahamas, who were not named as defendants in the Poulos
lawsuit.
The claims in the Ahern suit are identical to the claims in the Poulos
suit. Because of the similarity of parties and claims, the two suits
were consolidated into one case file in the United States District
Court, Middle District of Florida. In December 1994, a motion by the
defendants for change of venue was granted, transferring the case to
the United States District Court for the District of Nevada, in Las
Vegas.
In an order dated April 17, 1996, the court granted motions to dismiss
filed by the Company and other defendants and dismissed the suit
without prejudice. The plaintiffs then filed an amended suit in May
1996 seeking damages against the Company and other defendants in excess
of US$1 billion and punitive damages for violations of RICO and for
state common law claims for fraud, unjust enrichment and negligent
misrepresentation.
The two suits were later with two other class actions (one on behalf of
a smaller, more defined class of plaintiffs and one against additional
defendants) involving allegations substantially identical to those in
the Poulos/Ahern suit. All pending motions in the consolidated suits
were deemed withdrawn without prejudice.
The plaintiffs then filed another consolidated amended complaint in
February 1997, which the defendants moved to dismiss. The court later
granted the motion to dismiss certain allegations in the RICO claim,
but denied the motion as to the remainder of such claim. The court
also granted the defendants' motion to strike certain parts of the
consolidated amended suit but denied the defendants' remaining motions
to dismiss and to stay or abstain. The court also permitted the
plaintiffs to substitute one of the class representatives.
In January 1998, the plaintiffs filed a second consolidated amended
suit containing claims nearly identical to those in the previously
dismissed complaints. The defendants answered, denying the substantive
allegations of the second consolidated amended complaint. On March 19,
1998, the magistrate judge granted the defendants' motion to bifurcate
discovery into "class" and "merits" phases.
"Class" discovery was completed on July 17, 1998. The magistrate judge
recommended denial of the plaintiffs' motion to compel further
discovery from the defendants, and the court affirmed in part.
"Merits" discovery is stayed until the court decides the motion for
class certification filed by the plaintiffs on March 18, 1998, which
motion the defendants opposed.
In January 2001, the plaintiffs filed a supplement to their motion for
class certification, and hearing for class certification was held
November 15, 2001. The court has not issued a ruling on this motion.
At a March 27, 2002 status conference, the court lifted the stay on
discovery allowing the parties to conduct limited discovery on the
manufacturers and casinos where the named plaintiffs played. During
the status conference, the presiding judge also indicated that he was
withdrawing from the case and that the case will be reassigned to one
of the three new judges in the District of Nevada. Such reassignment
has not yet occurred.
COEUR D'ALENE: Faces Suit Over Bunker Hill Superfund Site in Idaho
------------------------------------------------------------------
Coeur D'Alene Mines Corporation was named as a defendant in a private
class action filed in January 2002, in the Idaho District Court for the
First District, in Kootenai County, Idaho. The suit was filed against
against the companies that have been defendants in the prior Bunker
Hill Superfund site and natural resources litigation in the Coeur
d'Alene Basin.
The suit demands that the Companies finance medical monitoring to
identify and treat health problems allegedly caused by their mining and
smelting activities, which poisoned the region's water and soil with
lead and other heavy metals.
At this early stage of the litigation, the Company cannot predict the
outcome of this suit.
COMPUTER ASSOCIATES: Discovery Proceeds in Securities Suit in E.D. NY
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The consolidated securities class action filed against Computer
Associates in the United States District Court for the Eastern District
of New York is presently in discovery, after the court denied the
defendant's motion to dismiss the suit.
Several suits were commenced in July 1998 on behalf of purchasers of
the Company's stock from January 20,1998 to July 22,1998, naming as
defendants the Company and:
(1) Charles B. Wang,
(2) Sanjay Kumar and
(3) Russell M. Artzt
The plaintiffs were allegedly harmed by misleading statements,
representations and omissions regarding the Company's future financial
performance. These cases, which seek monetary damages in an
unspecified amount, were later consolidated into a single action
Although the ultimate outcome and liability, if any, cannot be
determined, management, after consultation and rev iew with counsel,
believes that the facts do not support the plaintiffs' claims in the
suit and that the Company and its officers and directors have
meritorious defenses. In the opinion of management, resolution of this
litigation is not expected to have a material adverse effect on the
financial position of the Company.
In addition, three derivative suits, the first of which was filed in
July 1998, alleging misleading statements and omissions similar to
those alleged in the federal suits on behalf of the Company against a
majority of the directors who were serving on the Company's board at
that time. Another derivative action on behalf of the Company,
alleging that the Company issued 14.25 million more shares than were
authorized under the 1995 Key Employee Stock Ownership Plan was filed
in the United States District Court in New York. These derivative
actions were consolidated into a single action in New York. Lastly, a
derivative action on behalf of the Company was filed in the Chancery
Court in Delaware on September 15, 1998 alleging that 9.5 million more
shares were issued to the three 1995 stock plan participants than were
authorized under the 1995 Stock Plan.
The derivative action and the Delaware action have been settled and
both actions have been dismissed. Under the terms of the settlement the
1995 stock plan participants returned 4.5 million shares of Copmpany
stock to the Company.
COMPUTER ASSOCIATES: Faces Suits For Securities Violations in E.D. NY
---------------------------------------------------------------------
Computer Associates, Inc. faces several securities class actions
pending in the United States District Court for the Eastern District of
New York since February and March 2002. The suits allege violations of
federal securities laws against the Company and:
(1) Charles Wang,
(2) Sanjay Kumar, and
(3) Ira H. Zar
The lawsuits allege, among other things, that the Company made
misleading statements of material fact or omitted to state material
facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading. Each of the
named individual plaintiffs seeks to represent a class consisting of
purchasers of the Company's common stock and call options and sellers
of put options for the period May 28, 1999 through February 25, 2002.
In April 2002, a derivative suit against all the directors of the
Company except Mr. Jay W. Lorsch and Mr. Walter P. Schuetze was filed
in the Chancery Court in Delaware alleging breach of their fiduciary
duties resulting in damages to the Company of an unspecified amount.
This derivative suit is based on essentially the same allegations as
those contained in the February and March 2002 shareholder lawsuits.
The Company believes that the facts do not support the claims in these
lawsuits and the Company and its officers and directors have
meritorious defenses and intend to contest the lawsuits vigorously. In
the opinion of management, resolution of this litigation is not
expected to have a material adverse effect on the financial position of
the Company.
DUKE ENERGY: Faces Suit For Antitrust Violations in CA Power Market
-------------------------------------------------------------------
Trial in the consolidated amended suit against Duke Energy Corporation,
and other generators and traders of electricity in California markets
has been set for March 2004 in San Diego, California state court.
The Company, some of its subsidiaries and three current or former
executives have been named as defendants, among other corporate and
individual defendants, in one or more of a total of six lawsuits
brought by or on behalf of electricity consumers in the State of
California. The plaintiffs seek damages as a result of the defendants'
alleged unlawful manipulation of the California wholesale electricity
markets.
Company subsidiaries Duke Energy North America, LLC and Duke Energy
Trading and Marketing (DETM) are among 16 defendants in a class action
lawsuit, named the Gordon lawsuit filed against generators and traders
of electricity in California markets.
DETM was also named as one of numerous defendants in four additional
lawsuits filed in the San Diego State Court, including two class
actions (the Hendricks and Pier 23 Restaurant lawsuits), filed against
generators, marketers, traders and other unnamed providers of
electricity in California markets.
Another suit, named the Bustamante lawsuit, was brought by the
Lieutenant Governor of the State of California and a State
Assemblywoman, on their own behalf as citizens and on behalf of the
general public, and includes the Company, some of its subsidiaries and
three current or former executives of the Company among other corporate
and individual defendants. The Bustamante lawsuit was filed in May
2001 in Superior Court, Los Angeles County.
These lawsuits generally allege that the defendants manipulated the
wholesale electricity markets in violation of state laws against unfair
and unlawful business practices and state antitrust laws. The
plaintiffs seek aggregate damages of billions of dollars. These suits
were later consolidated before in San Diego State Court.
The plaintiffs in the six lawsuits filed a joint Master Amended
Complaint on March 8, 2002, which adds additional defendants. The
claims against the defendants are similar to those in the original
complaints.
The court has approved a schedule, which calls for class certification
motions to be filed by October 1, 2002 in the class actions. Trial has
been scheduled for March 1, 2004. While these matters are in their
earliest stages, management believes, based on its analysis of the
facts and the asserted claims, that their resolution will have no
material adverse effect on the Company's consolidated results of
operations, cash flows or financial position.
EMULEX CORPORATION: Court to Hear Reconsideration Motion in June 2002
---------------------------------------------------------------------
The United States District Court for the Southern District of
California is set to hear Emulex Corporation's motion for
reconsideration of the court's decision refusing to dismiss the
securities class action against the Company.
Several suits were commenced in February 2001 against the Company and
certain of its officers on behalf of purchasers of the Company's common
stock during various periods ranging from January 18, 2001, through
February 9, 2001. The suits allege that the Company and certain of its
officers and directors made misrepresentations and omissions in
violation of sections 10(b) and 20(a) of the Securities Exchange Act of
1934, as amended. The suits were later consolidated and an amended
suit was filed in August 2001.
The Company then asked the court to dismiss the suit, but the court
denied this motion in March 2002. The Company asked the court to
reconsider their decision, but the court denied its motion for
reconsideration in May 2002. Plaintiffs have commenced discovery.
As a result of these class action lawsuits, a number of derivative
cases were filed in state courts in California and Delaware, and in
federal court in California, alleging that certain officers and
directors breached their fiduciary duties to the Company in connection
with the events alleged in the class actions.
The derivative cases filed in California state courts have been
consolidated in Orange County and plaintiffs filed a consolidated and
amended complaint on January 31, 2002. On May 10, 2002, the court
ordered that the consolidated actions be stayed pending resolution
of the federal class action described above. The derivative suit in
Delaware was dismissed on August 28, 2001.
The defendants filed a motion to dismiss or stay the California federal
derivative action and, on March 15, 2002, the court ordered that
further proceedings should be stayed pending resolution of the class
action lawsuit described above.
The plaintiffs in that action have filed a motion for reconsideration
which is scheduled to be heard on June 3, 2002. The Company believes
that the lawsuits are without legal merit and intends to defend them
vigorously. However, because the lawsuits are at an early stage, it is
not possible to predict whether the Company will incur any liability or
the amount of any liability in connection with such lawsuits.
ENRON CORP.: Details in Bankruptcy Spark Anger, Plans for Legal Action
----------------------------------------------------------------------
Top Enron Corporation employees reaped US$744 million of payments and
stock in the year leading up to its bankruptcy filing, according to a
Company report, the Associated Press reports. Representatives of
former workers and shareholders responded angrily to the bankruptcy
court filing, accusing the 144 senior managers, essentially, of raiding
Enron's coffers, while leaving their clients - the workers who
participated in retirement plans and the shareholders - looking at
great and even complete losses.
Enron disclosed in a 1,436-page filing with the federal bankruptcy
court in New York that the executives received US$309.5 million in
salary, bonuses, long-term incentives, loan advances and other
payments. The executives also exercised stock options and received
stock valued at US$434.5 million. These funds were taken out of Enron
Corp. during the period of the year leading up to the bankruptcy
filing.
Eli Gottesdiener, a Washington attorney representing 24,000
participants in Enron retirement plans who lost as much as US$1 billion
on collapse of Enron's stock, said, "It is outrageous. My clients find
it outrageous, and it's just more evidence that people at the top knew
that they better get, while the getting was good . And they did, and my
clients are left holding the bag. They drained the company of hundreds
of millions of dollars."
The more than 4,500 who lost their jobs when Enron filed for bankruptcy
have received a combined $43 million in severance, and a tentative
agreement has been reached whereby they would receive an additional $30
million or so. Mr. Gottesdiener and other lawyers representing current
and former Enron employees who lost hundreds of millions of dollars in
the company's 401(k) plans, could try to recover some of the money.
They would need to prove that preferential payments were made,
obstructing creditors from getting their share. Federal law prohibits
"preferential payments" in the 90 days leading up to a bankruptcy
filing.
Figuring out when the payments were made will be critical. Enron
retirees and former executives who were denied the ability to withdraw
compensation and bonuses they had deferred say they were discriminated
against because they already had left the company.
About a dozen lawsuits have been consolidated into a single class
action asserting the Enron violated federal pension rules. The case,
to be heard in a Houston court, will be used to determine how much the
class would be entitled to as an unsecured creditor, while any
distribution of funds would be decided by the New York bankruptcy
court. The use of the information, revealed in detail in the recent
bankruptcy filing, relating to the large payments made in the 12-month
period before Enron filed for bankruptcy protection, would provide an
additional "hook" on which to hang a cause of action for compensation
for workers and shareholders (the preferential payments), according to
Mr. Gottesdiener.
Such preferential payments, in addition to executives' pay and awards,
abounded. For example, as late as the fall of 2001 (Enron filed for
Chapter 11 protection on December 2), Enron funded one retention bonus
plan with US$50 million to keep 76 employees "deemed critical" to its
wholesale trading operations. The company paid, in the same 12-month
interval, another US$54.6 million in bonuses to employees in various
subsidiaries, payments the company said were crucial to the "future" of
these businesses.
On November 28, 2001, the Company's proposed merger with rival Dynegy
Inc. fell apart, and four days later Enron filed for bankruptcy.
FIRST UNION: Shareholders File Suit Over Gotham Golf Transaction in NY
----------------------------------------------------------------------
The First Union Real Estate Equity and Mortgage Investments faces a
class action commenced in April 2002 in the Supreme Court of New York
in New York County on behalf of a purported holder of the Trust's
convertible preferred shares.
Among the allegations made by the plaintiff is that the proposed
transaction with Gotham Golf Corporation was approved by the Trust's
board of trustees in violation of duties owed to the holders of its
convertible preferred shares. The suit seeks, among other things,
unspecified damages, an injunction of the proposed transaction and the
court's certification of the lawsuit as a class action. Named as
defendants in the lawsuit were the Trust, its five trustees and Gotham
Partners, LP.
The Trust regards the lawsuit as being without merit and will
vigorously defend against the asserted claims. The Trust does not
believe that the suit will preclude or materially delay the completion
of the proposed transaction.
FLORIDA PROGRESS: Trial in Age Discrimination Suit Set for July 2002
--------------------------------------------------------------------
Trial for the first set of plaintiffs in the age discrimination suit
against Florida Progress Corporation and Florida Power Corporation is
set for July 2002 in Florida federal court.
The suit was initially filed with 116 plaintiffs, but four of those
plaintiffs have had their federal claims dismissed and 74 others have
had their state age claims dismissed. While no dollar amount was
requested, each plaintiff seeks back pay, reinstatement or front pay
through their projected dates of normal retirement, costs and
attorneys' fees.
In October 1996, the court approved an agreement between the parties to
provisionally certify this case as a class action suit under the Age
Discrimination in Employment Act. The Company filed a motion to
decertify the class and in August 1999, the court granted the Company's
motion.
In October 1999, the judge certified the question of whether the case
should be tried as a class action to the Eleventh Circuit Court of
Appeals for immediate appellate review. In December 1999, the Court of
Appeals agreed to review the judge's order decertifying the class. In
anticipation of a potential ruling decertifying the case as a class
action, plaintiffs filed a virtually identical lawsuit, which
identified all opt-in plaintiffs as named plaintiffs.
On July 5, 2001, the Eleventh Circuit Court of Appeals ruled that as a
matter of law, disparate claims cannot be brought under the Americans
with Disabilities Act (ADEA). This ruling has the effect of
decertifying the case as a class action. The plaintiffs then filed a
petition in the United States Supreme Court, requesting a hearing of
the case, on the issue of whether disparate claims can be brought under
the ADEA.
In December 2001, the United States Supreme Court agreed to hear the
case. Oral arguments on the issue were held on March 20, 2002, and in
April 2002, the US Supreme Court issued a per curiam affirmed order in
the case stating they had improvidently granted the oral argument and
they would uphold the ruling of the Eleventh Circuit Court of Appeals.
Therefore, the case will remain decertified.
As a result of the decertification, the trial court has grouped the
plaintiffs cases to be tried. The first set of plaintiffs, 12 former
information technology plaintiffs, is set for trial in July, 2002. The
Company cannot predict the outcome of this matter.
FRANKLIN RESOURCES: FL Court Grants Final Approval to $6.5M Settlement
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The United States District Court for the Southern District of Florida
granted final approval to a US$6.5M settlement of the consolidated
class action against Franklin Resources, Inc. and several of its
subsidiaries:
(1) Templeton Vietnam Opportunities Fund, Inc. (now known as
Templeton Vietnam and Southeast Asia Fund, Inc.),
(2) Templeton Asset Management, Ltd., an indirect wholly-owned
subsidiary of the Company and the investment manager of the
closed-end investment company,
(3) certain of the fund's officers and directors, and
(4) Templeton Worldwide, Inc., a Company subsidiary.
The defendants allegedly mismanaged the Templeton Vietnam Opportunities
Fund, causing it to fail to meet its goal of 65% Vietnam investments in
1997. The suit further alleged that embarrassed managers didn't
liquidate as planned and went on to invest in long-term Thai
investments just before Asian markets collapsed and lost more than $40
million in three months, according to investors. The lawsuit also
claimed the fund was improperly controlled by a board of insiders.
On April 3, 2002, the court provided final approval of the settlement
agreement entered into among the parties, which had been preliminarily
approved by the court on November 15, 2001. Under the terms of the
settlement agreement, the plaintiffs and defendants agreed to resolve
all claims for $6.5 million, including plaintiffs' attorneys fees and
the costs of administering the settlement.
The defendants have agreed to the settlement to avoid the expense and
inconvenience of further proceedings. The settlement does not contain,
and specifically denies, any admission of wrongdoing or violation of
law by any of the defendants.
HOLOCAUST REPARATIONS: Lawyers Doubt If Claims Process Will Speed Up
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Melbourne lawyers, helping local Holocaust survivors or heirs of
Holocaust victims in their fight for their monies or monies held in
their parents' and grandparents' wartime Swiss bank accounts, have
reacted with cynicism to the announcement of moves to speed up the
claims process stemming from settlement of a US-led class action, the
Sunday Age reports.
The pledge was made by former US Federal Reserve chairman Paul Volcker,
who is head of the US tribunal that distributes money obtained from the
accounts. Mr. Volcker said the changes made in the claims processing
would enable the tribunal to complete its work by the end of the year.
Since the tribunal was set up last year, only $16.9 million (AU$30.2
million) has been paid of an available $800 million - part of a AU$1.25
billion settlement by the banks, announced in 1998.
More than 300 Australians have lodged claims against accounts.
Barrister Norman Rosenbaum, who has helped those taking part in the
US-led class action for a share of settlement money, said the tribunal
was "an infrastructure set up to delay and deny," and no Australian
claimant had received any money through it.
"We have heard all this before - and for the last five years - . it has
all ground to a halt. There should have been sanctions against the
Swiss until they did the right thing by Holocaust survivors," he said.
Mr. Rosenbaum said claimants have had only negative experiences with
the tribunal. "There are delays in responding to correspondence;
deadlines are not kept. It is bogged down in bureaucracy." He said he
did not know anyone who had gained any money through the US class
action, "The only people who have got any money out of it are American
lawyers."
St. Kilda solicitor Henry Burstyner, who is representing 17 clients,
said the process was frustrating. He was cynical about the promises
made by Mr. Volcker. "I don't think it will change anything in the
foreseeable future."
INDIAN FUNDS: Interior Department Asks for Removal of Court Monitor
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Government attorneys want a judge to call off the court's watchdog, who
has harshly criticized the Interior Department's management of hundreds
of millions of dollars of American Indian money, according to a recent
report by Associated Press Newswires.
Interior Secretary Gale Norton's attorneys said that court monitor
Joseph S. Kieffer III is biased and has overstepped his legal bounds.
"He has failed to respect the constitutional and statutory limits of
this court's jurisdiction . and has demonstrated a lack of impartiality
that requires his disqualification from further participation in this
case," Assistant Attorney General Robert D. McCallum Jr. wrote in a
filing submitted late Friday.
Mr. Kieffer was appointed in April 2001, by US District Judge Royce
Lamberth - with the consent of the Interior Department - to monitor
the department's progress in fixing mismanagement of royalties from
Indian lands. Mr. Kieffer's scathing reports were the basis for a 29-
day contempt trial against Secretary Norton earlier this year. Judge
Lamberth is still considering holding Ms. Norton in contempt for
failing to comply with the court-ordered overhaul of the trust fund and
accounting of what the Indians are owed.
The Interior department is responsible for collecting royalties from
oil and gas mining, timber harvesting, grazing and other uses of Indian
land, and distributing the money to the landowners. However, for more
than a century, the money was sloppily - even negligently - managed,
with unknown amounts of money misappropriated, stolen or never
collected. A class action, filed on behalf of 300,000 Indian account
holders, says the department squandered tens of billions of dollars.
The attorney for the Indians, Dennis Gingold, said the attack on Mr.
Kieffer is an act of desparation. "They have declared war on the
court, which is extraordinary," said Mr. Gingold. "They know they are
going to lose on the merits so they attack the individuals involved."
Mr. Kieffer did not return phone messages, Associated Press reports.
JACK IN THE BOX: Settles Sex Harassment, Retaliation Suit With EEOC
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Fast food restaurant chain Jack in the Box recently settled a sex
harassment and retaliation class action filed by the Equal Employment
Opportunity Commission (EEOC), the Associated Press Newswires reports.
In the suit, the EEOC alleged that the Company management and employees
sexually harassed several women at its Cottonwood restaurant. The
lawsuit included evidence that a shift leader exposed himself to female
employees who were under the age of 18. Additionally, EEOC officials
alleged, local Company management was aware of the conduct of their
employees and took no action.
Under the terms of the settlement, the fast-food restaurant has to pay
US$92,500. The consent decree calls for Jack in the Box to make the
cash settlement to the victims.
MARCOS WEALTH: Lawyers Seek Financier's Testimony About Hidden Funds
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Attorneys in a class action brought by 9,539 Filipinos against the
estate of the late President Ferdinand Marcos, are trying to enforce a
judgment that has grown to more than US$3 billion against the estate,
the Associated Press Newswires reports.
To this end, the lawyers have asked Visiting US District Judge Manuel
L. Real, sitting in Honolulu, to impose sanctions against wiss
financier Jean-Paul Sunier of Suntrust, a Swiss financial corporation,
for failing to cooperate in the case.
Judge Real delayed ruling on the motion after the attorneys agreed to
make one final attempt to arrange a deposition from Mr. Sunier. "We
have been struggling for many years to try to recover money that was
owned by Ferdinand Marcos," said plaintiffs' attorney Robert Swift.
"It now appears that we are finally going to take the deposition of the
Swiss financier who parked that money for Mr. Marcos for these many
years, so, I am hopeful that the information will be helpful."
Jack Cullen, an attorney for Suntrust, has suggested that both sides
make an offer to depose Mr. Sunier under certain restrictions that
would allow the financier to avoid incriminating himself. Mr. Cullen
said that sanctions would be counterproductive and would result in Mr.
Sunier refusing to testify. During the hearing, Mr. Cullen suggested
"multiple alternative methodologies" for obtaining Mr. Sunier's
testimony, a move that prompted a scolding from Judge Real. "This is
not Burger King," the judge said. "We do not do it Mr. Sunier's way."
Judge Real agreed to withhold deciding on the motion for sanctions and
allow Mr. Cullen two days to convey the latest deposition request to
Mr. Sunier in Switzerland. Mr. Cullen told the judge he would
recommend to Mr. Sunier that he accept the latest offer, which calls
for the deposition to take place July 3 in Munich, Germany.
The class action was filed against the Marcos estate in 1986, the year
Mr. Marcos was deposed and fled to Hawaii. He died in 1989.
In 1995, a Honolulu jury awarded plaintiffs US$1.9 billion after
finding the former president responsible for summary executions,
disappearances and torture. The judgment was upheld by the Ninth US
Circuit Court of Appeals in December 1996, but the plaintiffs had
trouble collecting money from foreign accounts with contested
ownership.
In US District Court, in Los Angeles, in 1999, Judge Real approved a
US$150 million settlement that was to be taken from US$570 million of
Mr. Marcos' frozen Swiss bank accounts, held in an escrow account in a
Philippine bank. However, the payout was tied up in Philippine courts.
Judge Real subsequently terminated the settlement and reinstated the
original judgment in November 2000, after the plaintiffs complained the
Philippine government blocked the possibility of any transfer of funds
from the Swiss bank accounts to pay the plaintiffs' claims.
All now wait upon Mr. Sunier's response to the latest deposition
request.
RADIO FLYER: Recalls 15,000 Little Wooden Push Cars for Choking Hazard
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Radio Flyer, Inc. is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 15,000
Little Wooden Push Cars for repair. A child can pull the horn off the
car's steering wheel, and a small part inside poses a choking hazard.
The Company has received three reports of the horns being
pulled off, but no injuries have been reported.
The Little Wooden Push Car is about 24-inches long, 14-inches wide, and
18-inches high. The car has a natural wood body, a red steering wheel
column, a red metal bar on the back, and a red plastic horn on the
steering wheel. "Radio Flyer" is written on both sides of the car. A
child sits in the push car and moves the car with his or her feet. The
car is for use by children 1- to 3-years-old.
Toy stores, catalogues and web retailers sold these cars nationwide
from February 1999 through June 2002 for about $60.
For more details, contact the Company by Phone: (800) 621-7613 between
8:30 am and 5 pm CT Monday through Friday by E-mail:
218Repair@RadioFlyer.com or visit the firm's Website:
http://www.radioflyer.com
REAL ESTATE: Trial in Suits Over Limited Partnerships Set for July 2002
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Trial in the class action against Real Estate Associates, Ltd. is set
for July 16,2002 in the United States District Court for the Central
District of California.
The litigation was started in August 1998, when two investors holding
an aggregate of eight units of limited partnership interests in Real
Estate Associates Limited III and two investors holding an aggregate of
five units of limited partnership interest in Real Estate Associates
Limited VI. The suit also mentioned as defendants National Partnership
Investments Corporation (NAPICO), the partnership's managing general
partner, and certain other affiliated entities.
The suit alleges that the defendants breached their fiduciary duty to
the limited partners of certain NAPICO managed partnerships and made
materially false and misleading statements in the consent solicitation
statements sent to the limited partners of such partnerships relating
to approval of the transfer of partnership interests in limited
partnerships, owning certain of the properties, to affiliates of Casden
Properties Inc., organized by an affiliate of NAPICO.
In August 1999, one investor holding one unit of limited partnership
interest in Housing Programs Limited (an affiliated partnership in
which NAPICO is the managing general partner) commenced a virtually
identical action in the same court against the same defendants.
The second action has been subsumed in the first action, which has been
certified as a class action. In August 2001, plaintiffs filed a
supplemental complaint, which added new claims, including for a
recision of the transfer of partnership interests and an accounting.
The defendants believe that the plaintiffs' claims are without merit
and intend to contest the actions vigorously.
RR DONNELLY: IL Court Yet to Decide Statute of Limitations in Race Suit
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An Illinois appeals court has heard R.R. Donnelley & Sons Co.'s appeal
on the appropriate statute of limitations to apply in two racial
discrimination class actions filed on behalf of its current and former
African-American employees.
The first suit was initiated in November 1996 in the United States
District Court in in Chicago, Illinois, alleging that the Company
racially discriminated against the Africa-American employees in
violation of the Civil Rights Act of 1871, as amended, and the US
Constitution. Although plaintiffs sought nationwide class
certification, most of the specific factual assertions of the complaint
relate to the closing by the Company of its Chicago catalog operations
in 1993. Other general claims relate to other company locations.
The other suit was filed in June 1998 in the same court, alleging that
the Company racially discriminated against them in violation of Title
VII of the Civil Rights Act of 1964. While making many of the same
general discrimination claims contained in the first suit, the
plaintiffs are also claiming retaliation by the Company for the filing
of discrimination charges or otherwise complaining of race
discrimination.
In April 2001, in an amended opinion, the district court judge in the
two cases certified three plaintiff classes in the actions:
(1) a class consisting of African-American employees discharged in
connection with the shutdown of the Chicago catalog
operations;
(2) a class consisting of African-American employees of the
Chicago catalog operations after November 1992 who were other
than permanent employees; and
(3) a class consisting of African-Americans subjected to an
allegedly hostile working environment at the Chicago catalog
operations, the Chicago Financial, Pontiac or Dwight,
Illinois, manufacturing operations.
The judge also consolidated the cases for pretrial purposes. In an
order dated June 8, 2001, the district court ruled that a four-year,
rather than a two-year, statute of limitations applied to classes one
and three, a ruling that the defendants appealed. On April 4, 2002,
the court of appeals heard the company's appeal on the issue of the
appropriate statute of limitations to apply but has not yet ruled. The
district court has also set for trial beginning in November, 2002, the
claims of four of the plaintiffs with individual claims unaffected by
the pendancy of the appeal on the statute of limitations question.
RR DONNELLEY: Seeks to Enforce Ruling Dismissing Claims in Race Suit
--------------------------------------------------------------------
R.R. Donnelley & Sons, Co., Inc. filed a motion for summary judgment,
seeking to enforce a United States District Court in Chicago's ruling
denying all the claims in a class action charging the Company with
violations of the Employee Retirement Income Securities Act (ERISA).
The suit was commenced in December 2000, against the Company and
certain of its benefit plans on behalf of certain former employees of
the Chicago catalog operations. The suit alleges that enhanced pension
benefits were not paid to plaintiffs and that plaintiffs are being
required to contribute to the costs of retiree medical coverage, both
in violation of plan documents and ERISA.
In January 2002, the district court granted summary judgment in the
Company's favor on one claim, finding that retirees from the Chicago
catalog operations were not entitled to non-contributory medical
benefits for life. The court ruled separately that under procedures
outlined in the Company's Retirement Benefit Plan, appeals of any
determination of pension amounts due to putative class members were to
be made through a prescribed administrative process. The court also
ruled that those claims made on behalf of plaintiffs already members of
the classes certified in another suit in Chicago federal court (persons
over the age of 54 at the date of termination of their employment)
should be made through the same administrative process.
The court completed in March 2002 an administrative review of the
claims of all the plaintiffs, and the court denied the claims. On
February 28, 2002, the plaintiffs filed with the court a motion for
summary judgment seeking to overturn the administrative ruling, and on
March 28, 2002, the company filed its motion for summary judgment
seeking to enforce the ruling.
TERRORIST ATTACK: Lawyers Urge 9/11 Survivors to Share in $4 BB Fund
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The Association of Trial Lawyers of America believes the survivors of
more than 3,200 people who died in the World Trade Center and Pentagon
attacks, and a fatal crash into a Pennsylvania field, should settle for
their portion of the government's $4 billion victim-compensation fund,
the Orlando Sentinel reports.
One day after the terrorist attacks, the association's president Leo
Boyle urged "a moratorium on civil lawsuits that might arise out of
these awful events." The association's position is remarkable - it is
the first time the group has encouraged victims of disasters not to
sue. Leo Boyle was able to rally its members to agree to a moratorium
on lawsuits. "There are more urgent needs that must be served at this
time," Mr. Boyle told the 56,000 members last fall.
However, there are survivors, like Ellen Mariani, for example, who want
answers and who think a lawsuit is the only way to get them. Ms.
Mariani lost her husband that fateful day - he was aboard the United
Airlines Flight 175, which was hijacked and crashed into the south
tower of the Trade Center. While the compensation fund is receiving
high marks from many sectors of the public, some survivors of victims
regard it as a "shut-up" fund. The fund does not offer what some
survivors like Ms. Mariani are seeking - it does not offer answers.
She wants to know how the five terrorists got aboard the United flight.
She wants to know why the airline did not do more to protect its
passengers. "I want to know everything," said Ms. Mariani, who
recently participated in a protest by widows of the attack demanding an
independent investigation. Ms. Mariani, a resident of Derry, New
Hampshire, filed suit against United in December. Hers is one of 10
lawsuits filed so far as a result of the attacks.
One of the lawsuits, on behalf of seven families, is a class action
against Osama bin Laden, al Queda and the Taliban. That suit also
names Iran and Iraq as defendants.
Many families will never accept the government's money, said Mary
Schiavo, former inspector general for the US Department of
Transportation and a partner in the law firm of Baum, Heldand, Aristei,
Guilford & Schiavo. "They won't agree to a no-fault decision or to no
investigation," she said.
On the other hand, many of the survivors have been telling the American
Trial Lawyers Association (ATLA) that they are hoping the fund will
provide them with closure, according to Carlton Carl, spokesman for
Trial Lawyers Care, a non-profit group established by the trial lawyers
to coordinate the referral of free legal service to victims' families.
Mr. Carl says that the leadership and members of ATLA would recommend
for almost every victim a claim under the fund.
The government compensation fund is offering an average payment of as
much as US$1.8 million. More than 500 relatives of victims have filed
claims with the fund since it issued its final rules in March.
WESTMINSTER CAPITAL: DE Court Denies Motion for Expedited Proceedings
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The Delaware Court of Chancery for New Castle County denied plaintiffs'
motion for expedited proceedings in the class action filed against
Westminster Capital Corporation and each member of its board of
directors.
The suit, filed in April 2002, relates to the Company's tender offer to
purchase any and all outstanding shares of its common stock at a price
of $2.80 per share. The plaintiff brought this action individually and
as a purported class action on behalf of all stockholders of the
Company.
The suit alleges that the Company and the members of its board of
directors have breached their fiduciary duties to the Company's
stockholders. The complaint seeks, among other things, preliminary and
permanent injunctive relief prohibiting the Company from proceeding and
implementing the tender offer, and if the tender offer is completed, an
order rescinding the tender offer and awarding damages to the purported
class.
On May 8, 2002, the court denied the motion for expedited proceedings
and also refused to schedule a hearing on the plaintiff's motion for a
preliminary injunction, which sought to enjoin the Company's tender
offer.
The Corporation and the other defendants believe that the allegations
raised in the complaint are without merit and intend to vigorously
defend against them.
*********
DUKE ENERGY: Stull, Stull & Brody Commences Securities Fraud Suit
-----------------------------------------------------------------
Stull, Stull & Brody initiated a securities class action in the United
States District Court for the Western District of North Carolina,
Charlotte Division, on behalf of persons or entities who purchased the
common stock of Duke Energy Corporation (NYSE:DUK) between July 22,
1999 and May 17, 2002, inclusive against the Company and:
(1) Richard Priory,
(2) Robert Brace,
(3) David L. Hauser,
(4) Keith G. Butler,
(5) Sandra P. Meyer,
(6) Jeffrey L. Boyer and
(7) Richard J. Osborne
The complaint charges defendants with issuing false and misleading
statements concerning its business and financial condition.
Specifically, 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 increasing revenues
and financial performance. These statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(i) that the Company had engaged in approximately $1 billion of
"round-trip" energy trades that provided no economic benefit
for the Company;
(ii) that the Company lacked the necessary internal controls to
adequately monitor the trading of its power; and
(iii) that as a result, the value of the Company's revenues and
financial results were materially overstated at all relevant
times.
On May 17, 2002, the last day of the class period, the Company issued a
press release announcing that it had "analyzed its trades for the
three-year period from 1999 through 2001 to identify those trades which
may have some of the characteristics of sell/buy-back trades." These
trades, known as "round-trip" or "wash" transactions, involve the
simultaneous buying and trading of power in the same price and same
amount and provide no economic benefit to the Company.
Following this announcement, and the disclosure of inquiries by both
the Federal Regulatory Commission and the Securities and Exchange
Commission, the market price of Company stock fell to $30.05 per share,
after reaching a split-adjusted class period high of $44.97 on November
30, 2000.
For more details, contact Howard T. Longman and/or Tzivia Brody by
Phone: 6 East 45th Street, New York NY 10017 by Phone: 1-800-337-4983
by Fax: 212-490-2022 or by E-mail: SSBNY@aol.com
GREAT ATLANTIC: Stull, Stull & Brody Files Securities Fraud Suit in NJ
----------------------------------------------------------------------
Stull Stull & Brody LLP initiated a securities class action in the
United States District Court for the District of New Jersey, on behalf
of purchasers of the securities of Great Atlantic & Pacific Tea
Company, Inc. (NYSE:GAP) between November 15, 2001 and May 28, 2002,
inclusive against the Company and:
(1) Christian W.E. Haub,
(2) Elizabeth Culligan,
(3) Fred Corrado,
(4) Mitchell Goldstein and
(5) Kenneth A. Uhl
The complaint 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 15, 2001 and May 28, 2002, thereby artificially
inflating the price of Company securities.
Throughout the class period, as alleged in the complaint, defendants
issued statements regarding the Company's quarterly and annual
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:
(i) the Company was employing improper accounting practices
regarding the Company was employing improper accounting
practices regarding the recognition of vendor allowances and
the accounting of inventory in certain of its regions for
fiscal year 2001 in violation of Generally Accepted Accounting
Principles. As a result, the Company's operating results were
materially misrepresented and overstated; and
(ii) based on the foregoing, defendants' statements concerning the
prospects of the Company were lacking in a reasonable basis at
all times.
On May 28, 2002, the last day of the Class Period, the Company
announced that it would delay the filing of its annual report with the
SEC while it conducted an accounting review which will most likely
result in a charge to earnings. The accounting review will focus on the
appropriate timing for the recognition of vendor allowances and the
accounting of inventory in certain of the Company's regions for fiscal
year 2001.
The Company further noted that a substantial portion of any charge the
Company will take will reverse credits which were recognized
prematurely as reductions of cost of merchandise sold, and that portion
will therefore be recognized in periods subsequent to fiscal 2001 as
reduction of cost of merchandise sold.
Following this disclosure, Company stock fell $4.03 per share, or
approximately 16%, to close on May 28, 2002 at $21.070 per share.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York NY 10017 by Phone: 1-800-337-4983 by Fax; 212-490-2022 or by E-
mail: SSBNY@aol.com
HALLIBURTON COMPANY: Pomerantz Haudek Lodges Securities Suit in N.D. TX
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Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action against Halliburton Company (NYSE:HAL) and four of its
senior officers on behalf of investors who purchased the Company's
common stock during the period between July 22, 1999 and May 28, 2002,
inclusive, in the United States District Court for the Northern
District of Texas (Dallas Division).
The suit charges the defendants with violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934. The suit alleges that
during the class period, defendants improperly recognized revenues in
connection with the Company's long-term construction projects in
violation of Generally Accepted Accounting Principles (GAAP).
Beginning at least as early as the fourth quarter of fiscal 1998, the
Company amended its accounting policies to report approximately $89
million of revenues to cover disputed cost overruns on long-term
construction projects. The Company assumed that its customers would
pay the disputed amounts, but never disclosed the change in accounting
or the assumption of payment to the market.
As alleged in the suit, for fiscal years 1999, 2000, and 2001, the
Company reported unbilled receivables of $98 million, $113 million, and
$234 million, respectively. These unbilled receivables were based on
the same undisclosed assumption of payment, in violation of GAAP
because payment of the receivables was not probable and the amounts
could not be estimated with the requisite reliability.
Thereafter, on May 28, 2002, the Company disclosed that the Securities
and Exchange Commission (SEC) had begun "a preliminary investigation of
the Company's accounting treatment of cost of cost overruns on
construction jobs." Over the next two weeks, the stock lost 15% of its
value as it fell from a closing price of $19.35 on May 28, 2002, to a
closing price of $16.49 on June 11, 2002, a loss of $2.86 per share.
For more details, contact Andrew G. Tolan by Phone: (888) 476-6529
((888) 4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomerantzlaw.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 Pets.com, Inc. (formerly traded OTC
Bulletin Board: IPET) common stock during the period between March 7,
2000 and November 7, 2000, inclusive, against Merrill Lynch & Co. Inc.
and its former star Internet analyst and First Vice President of
Merrill Lynch, Henry Blodget for violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934.
The complaint alleges that defendants violated the federal securities
laws by issuing analyst reports regarding Pets.com that recommended the
purchase of Pets.com common stock and which set price targets for
Pets.com common stock, which were materially false and misleading and
lacked any reasonable factual basis.
The complaint further alleges that, when issuing their Pets.com analyst
reports, the Defendants failed to disclose significant, material
conflicts of interest, which resulted from their use of Mr. Blodget's
reputation and his ability to issue favorable analyst reports, to
obtain investment banking business for Merrill Lynch.
Furthermore, in issuing their Pets.com analyst reports, in which they
recommended the purchase of Pets.com stock, the Defendants failed to
disclose material, non-public, adverse information which they possessed
about Pets.com.
Throughout the class period, the defendants maintained
"ACCUMULATE/ACCUMULATE" or "BUY/BUY" recommendations on Pets.com in
order to obtain and support lucrative financial deal for Merrill Lynch.
As a result of defendants' false and misleading analyst reports,
Pets.com's common stock traded at artificially inflated levels during
the class period.
For more details, contact Jackie Addison, Sue Null or Shelly Nicholson
by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-
551-9944 by E-mail: info@classlawyer.com or visit the firm's Website:
http://www.classlawyer.com
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
------------------------------------------------------------------
Cohen Milstein Hausfeld and Toll, PLLC initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of any class of trust shares of the
Merrill Lynch Internet Strategies Fund, Inc., during the period of
March 14, 2000, through Oct. 15, 2001.
On Oct. 15, 2001, the Internet Strategies Fund merged with The Merrill
Lynch Global Technology Fund (Nasdaq:MAGTX). The suit names as
defendants the following: Merrill Lynch & Co., Inc. (NYSE: MER),
Merrill Lynch Funds Distributor, Henry Blodget, Paul G. Meeks and
several directors of the Internet Strategies Fund.
Cohen, Milstein, is also involved in several other similar cases
against Merrill Lynch and others on behalf of purchasers of the stocks
of the following companies: InfoSpace, Inc., Internet Capital Group,
Aether Systems, Excite@Home, 24/7 Real Media, Inc., GoTo.com and
Interliant, Inc. The companies themselves are not named as defendants
in these suits.
For more details, contact Steven J. Toll or Diana Steele by Mail: 1100
New York Avenue, NW, West Tower, Suite 500, Washington DC by Phone:
888=240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
dsteele@cmht.com or visit the firm's Website: http://www.cmht.com
OMNICOM GROUP: 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 Omnicom Group, Inc.
(NYSE: OMC) between April 25, 2000 and June 11, 2002, inclusive, in the
United States District Court, Southern District of New York. The suit
names as defendants the Company and:
(1) John D. Wren,
(2) Randall J. Weisenburger,
(3) Bruce Crawford and
(4) Philip J. Angelastro
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 25, 2000 and June 11, 2002, thereby artificially
inflating the price of Company securities.
The complaint alleges that prior to and throughout the class period,
defendants reported that the Company was continuing to experience
growth in its revenues and earnings, despite the overall economic
slowdown and the worst decline in advertising revenue that the industry
had ever experienced.
As alleged in the suit, the Company's growth was attributed, for the
most part, to the numerous acquisitions made by the Company, which were
accretive to its earnings. However, on June 12, 2002, an article in
The Wall Street Journal highlighted the Company's acquisition
accounting and raised questions concerning its creation of an off-
balance sheet entity in which it transferred certain Internet
investments.
In particular, with respect to the Company's accounting for
acquisitions, the article noted that:
(i) the Company immediately included revenue and earnings from
recent acquisitions in its reported financial results, in
contrast to its competitors who excluded the results for the
first year after the company was acquired, thereby creating a
materially misleading impression of the Company's performance;
(ii) that the Company continued to owe hundreds of millions of
dollars in additional payments for companies that it had
previously acquired; and
(iii) the Company faced a potential future liability whereby, under
certain circumstances, it might be required to acquire
companies in which it had invested.
With respect to the off-balance sheet entity, the article described the
Company's transfer of its internet investments to Seneca, which had
been jointly created with Pegasus Capital LLP in May 2001. According
to the article, Seneca had been created as a vehicle for the Company to
avoid reporting a loss on its investments in internet companies that
had become devalued.
In response to the revelations contained in The Wall Street Journal
article, the price of the Company's common stock dropped precipitously,
falling almost 20% to close at $62.28, on volume of more than 31
million shares traded.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY 10119-0165 by
Phone: (800) 320-5081 by E-mail: OmnicomCase@milbergNY.com or visit the
firm's Website: http://www.milberg.com
OMNICOM GROUP: Schiffrin Barroway Lodges Securities Suit in S.D. NY
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of New York on
behalf of all purchasers of the common stock of Omnicom Group, Inc.
(NYSE: OMC) from April 25, 2000 through June 11, 2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with violating 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 25,
2000 and June 11, 2002, thereby artificially inflating the price of
Omnicom securities.
The complaint alleges that prior to and throughout the class period,
defendants reported that the Company was continuing to experience
growth in its revenues and earnings, despite the overall economic
slowdown and the worst decline in advertising revenue that the industry
had ever experienced.
As alleged in the complaint, the Company's growth was attributed, for
the most part, to the numerous acquisitions made by the Company, which
were accretive to the Company's earnings. However, on June 12, 2002, an
article in The Wall Street Journal highlighted the Company's
acquisition accounting and raised questions concerning the Company's
creation of an off-balance sheet entity in which it transferred certain
Internet investments.
In particular, with respect to the Company's accounting for
acquisitions, the article noted that:
(1) the Company immediately included revenue and earnings from
recent acquisitions in its reported financial results, in
contrast to its competitors who excluded the results for the
first year after the company was acquired, thereby creating a
materially misleading impression of the Company's performance;
(2) that the Company continued to owe hundreds of millions of
dollars in additional payments for companies that it had
previously acquired; and
(3) the Company faced a potential future liability whereby, under
certain circumstances, it might be required to acquire
companies in which it had invested.
With respect to the off-balance sheet entity, the article described the
Company's transfer of its Internet investments to Seneca, which had
been jointly created with Pegasus Capital LLP in May 2001. According to
the article, Seneca had been created as a vehicle for the Company to
avoid reporting a loss on its investments in Internet companies that
had become devalued.
In response to the revelations contained in The Wall Street Journal
article, the price of Omnicom common stock dropped precipitously,
falling almost 20% to close at $62.28, on volume of more than 31
million shares traded.
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: 1-
888-299-7706 (toll free) or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
OMNICOM GROUP: Stull Stull & Brody Commences Securities Fraud Suit
------------------------------------------------------------------
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 purchased the common stock of Omnicom Group Inc.
(NYSE:OMC) on the open market between April 25, 2000 and June 11, 2002,
inclusive against the Company and certain of its senior officers.
The suit alleges that defendants materially misrepresented the
Company's financial results through improper accounting methods in
connection with certain acquisitions. More specifically, plaintiff
alleges that the Company fraudulently and misleadingly:
(1) reported growth in "organic" revenue that included revenue
generated by newly acquired companies; and
(2) failed to disclose the Company's future obligations relating
to its prior acquisitions.
The complaint further alleges that the Company transferred its minority
investments in various internet companies to a newly formed entity
(Seneca), enabling it to avoid writing down the value of its
investments in those companies, and that the Company failed to disclose
its contingent obligations to make additional investments in certain
partially acquired companies.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York NY 10017 by Phone: 1-800-337-4983 by Fax: 212-490-2022 or by E-
mail: SSBNY@aol.com
OMNICOM GROUP: 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 Omnicom Group, Inc. (NYSE: OMC)
publicly traded securities during the period between April 25, 2000 and
June 11, 2002, inclusive. The suit names as defendants the Company
and:
(1) John D. Wren,
(2) Randall J. Weisenburger,
(3) Bruce Crawford and
(4) Philip J. Angelastro
The defendants allegedly 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 25, 2000 and June 11, 2002, thereby artificially
inflating the price of Company securities.
The complaint alleges that prior to and throughout the class period,
defendants reported that the Company was continuing to experience
growth in its revenues and earnings, despite the overall economic
slowdown and the worst decline in advertising revenue that the industry
had ever experienced.
As alleged in the complaint, the Company's growth was attributed, for
the most part, to the numerous acquisitions made by the Company, which
were accretive to the Company's earnings. However, on June 12, 2002,
an article in The Wall Street Journal highlighted the Company's
acquisition accounting and raised questions concerning its creation of
an off-balance sheet entity in which it transferred certain Internet
investments.
In particular, with respect to the Company's accounting for
acquisitions, the article noted that:
(i) the Company immediately included revenue and earnings from
recent acquisitions in its reported financial results, in
contrast to its competitors who excluded the results for the
first year after the company was acquired, thereby creating a
materially misleading impression of the Company's performance;
(ii) that the Company continued to owe hundreds of millions of
dollars in additional payments for companies that it had
previously acquired; and
(iii) the Company faced a potential future liability whereby, under
certain circumstances, it might be required to acquire
companies in which it had invested. With respect to the off-
balance sheet entity, the article described the Company's
transfer of its Internet investments to Seneca, which had been
jointly created with Pegasus Capital LLP in May 2001.
According to the article, Seneca had been created as a vehicle for the
Company to avoid reporting a loss on its investments in Internet
companies that had become devalued.
In response to the revelations contained in The Wall Street Journal
article, the price of Company stock dropped precipitously, falling
almost 20% to close at $62.28, on volume of more than 31 million shares
traded.
For more details, contact Jackie Addison, Sue Null or Shelly Nicholson
by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-
551-9944 by E-mail: info@classlawyer.com or visit the firm's Website:
http://www.classlawyer.com
PEREGRINE SYSTEMS: Shapiro Haber Commences Securities Suit in S.D. CA
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Shapiro Haber & Urmy LLP initiated a securities class action on behalf
of persons or entities who received common stock of Peregrine Systems,
Inc. (Nasdaq: PRGN), in exchange for their stock in Harbinger
Corporation (Nasdaq: HRBC), in connection with its acquisition by the
Company on June 19, 2000. The suit was filed in the United States
District Court for the Southern District of California against th e
Company , certain of its officers and directors, and its former
independent auditor, Arthur Anderson LLP.
The complaint alleges that the defendants violated Sections 11 and 15
of the Securities Act of 1933 by making materially false and misleading
statements regarding the Company's revenues and income for fiscal year
2000 in the registration statement and prospectus issued in connection
with the Company's acquisition of Harbinger.
On May 23, 2002, the Company shocked the market by announcing that it
was restating up to $100 million of previously recognized revenues for
its fiscal years 2000, 2001 and the first three fiscal quarters of
2002, based on information that resulted from its ongoing internal
investigation into accounting "errors and irregularities." The Company
also reported that the SEC has begun an investigation into its
accounting practices.
For more details, contact Ted Hess-Mahan or Liz Hutton by Mail: 75
State Street, Boston, MA 02109 by Phone: (800) 287-8119 by Fax: (617)
439-0134 or by E-mail: cases@shulaw.com.
PEREGRINE SYSTEMS: Neiman Garland Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
Neiman, Garland & Urbach initiated a securities class action against
Peregrine Systems, Inc. (NASDAQ:PRGN) and certain of its officers and
directors in the United States District Court for the Southern District
of California for securities fraud under section 10(b) of the
Securities Exchange Act of 1934, on behalf of a class comprised of all
persons who purchased or otherwise acquired the Company's common stock
during the period from July 20, 2000 - the first day of trading after
the Company announced its financial results for its first fiscal
quarter (ended June 30, 2000) of its 2001 fiscal year - through May 3,
2002 - shortly after the Company announced a delay in its reporting of
its fourth quarter 2002 financial results, purportedly due to its
switch of auditors from Arthur Andersen LLP to KPMG LLP earlier in
April 2002.
On May 23, 2002, the Company announced that it would "restate its
financial statements for fiscal years 2000 and 2001 and the first three
quarters of fiscal year 2002" (including the correction of "previously
reported revenue recognition irregularities amounting to as much as
$100 million") and that the SEC was investigating the Company. It
later announced that it was terminating KPMG as its auditor, on the
basis of a purported conflict.
The complaint alleges that the Company and certain of its officers and
directors violated federal securities laws by, among other things,
issuing materially false and misleading statements regarding the
Company and its reported results.
For more details, contact Jeffrey Neiman by Phone: 866/539-3788 or
718/677-3788 or by E-mail: JeffreyNeiman@Aol.Com
PEROT SYSTEMS: Schiffrin Barroway Launches Securities Suit in N.D. TX
---------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Texas-Dallas
Division on behalf of all purchasers of the common stock of Perot
Systems Corp. (NYSE: PER) from February 2, 1999 through June 7, 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 omitted to disclose crucial facts regarding risky business
practices in which the Company was engaged in order to try to obtain
new consulting business and generate additional revenues.
Specifically, the complaint alleges that:
(1) the Company had disclosed crucial proprietary information
regarding the architecture of California's power grid that
could be used to cause artificial congestion on the system to
power trader Reliant;
(2) the Company faces substantial potential legal liability due to
the possibility that its improper disclosures of proprietary
information enabled power traders to exploit such weaknesses
in California's power grid for their own profit; and
(3) the Company did not have in place sufficient management
controls to prevent its personnel from using confidential
information obtained in the course of its consulting work as a
selling point in trying to obtain lucrative consulting
business.
The complaint further alleges that when Wall Street learned of these
practices after California State Sen. Joseph Dunn unearthed a Company
sales presentation mapping out strategies to exploit weaknesses and
loopholes in the California power grid, Company stock tumbled 19% on
June 5, 2002 and an additional 11.3% to close at $12.90 on June 6,
2002, down from its class period high of $85.75.
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: 1-
888-299-7706 (toll free) or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
PEROT SYSTEMS: Cauley Geller Commences Securities Fraud Suit in W.D. WA
-----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Western District of
Washington on behalf of purchasers of Perot Systems Corp. (NYSE: PER)
publicly traded securities during the period between February 2, 1999
and June 7, 2002, inclusive.
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 defendants omitted to disclose crucial facts regarding risky
business practices in which the Company was engaged in order to try to
obtain new consulting business and generate additional revenues.
Specifically, the complaint alleges that:
(1) the Company had disclosed crucial proprietary information
regarding the architecture of California's power grid that
could be used to cause artificial congestion on the system to
power trader Reliant;
(2) the Company faces substantial potential legal liability due to
the possibility that its improper disclosures of proprietary
information enabled power traders to exploit such weaknesses
in California's power grid for their own profit; and
(3) the Company did not have in place sufficient management
controls to prevent its personnel from using confidential
information obtained in the course of its consulting work as a
selling point in trying to obtain lucrative consulting
business.
The complaint further alleges that when Wall Street learned of these
practices after California State Sen. Joseph Dunn unearthed a Perot
Systems sales presentation mapping out strategies to exploit weaknesses
and loopholes in the California power grid, Company stock tumbled 19%
on June 5, 2002 and an additional 11.3% to close at $12.90 on June 6,
2002, down from its class period high of $85.75.
For more details, contact Jackie Addison, Sue Null or Shelly Nicholson
by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-
551-9944 by E-mail: info@classlawyer.com or visit the firm's Website:
http://www.classlawyer.com
***********
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.
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