/raid1/www/Hosts/bankrupt/CAR_Public/020716.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, July 16, 2002, Vol. 4, No. 139
Headlines
AMERICAN HOME: Reaches Settlement in Suits Over Fen-Phen Diet Drugs
ARIZONA: Income Tax Refund Case Defies Settlement, Mediation Sought
ARTHUR ANDERSEN: Former Partner Duncan Faces Suit Over Enron Collapse
ARTHUR ANDERSEN: Judge Approves Settlement With Baptist Foundation
CALIFORNIA: Credit Agency's Customers Challenge Arbitration Clause
CATHOLIC CHURCH: Former Youth Center Residents File Suit Alleging Abuse
CATHOLIC CHURCH: Court Denies Sex Abuse Documents' Continued Secrecy
ENRON CORP.: Several Pension Funds Consider Suit Against Bank Advisors
GENERAL MOTORS: Ex-Workers File $4 Million Racial Discrimination Suit
GEORGIA-PACIFIC CORP.: Faces Suit Over CCA-Containing Wood Products
HALLIBURTON CO.: Vice President Cheney Named In Corporate Fraud Suit
ILLINOIS: Judge Grants Class Status To Milk Retailers Antitrust Suit
INDIANA: Strip-Search Suit Settlement Delayed Over Class Participants
JEFFBOAT INC.: IN Residents Sue Due to Paint Property Damage
MAJOR LEAGUE: Disappointed Fans File Lawsuits Over All-Star Game Tie
MURPHY OIL: Reaches Settlement in Lawsuit Over 1995 Meraux Explosion
PENNSYLVANIA: Bucks County Ordered To Impanel Prison Oversight Board
REPUBLIC SERVICES: Nevada Court Grants Certification to Overcharge Suit
SERVICE CORPORATION: Florida Judge Says Plaintiffs Have Strong Case
SHELL OIL: Motorists Reimbursed, Some Sue Over Faulty Gasoline Additive
SUNBEAM CORP.: Suit Settlement Brings Shareholders' Total To $141M
SUPERVALU INC.: Mounting Vigorous Defense V. Securities Suits in MN
TRACKNET: Investors Allege Deceptive Prospectus In $15M Securities Suit
UNITED PARCEL SERVICE: Employees Fired For Hiring Blacks File Suit
WORLDCOM INC.: Louisiana Pension Fund Files Suit Over Plummeting Bonds
WORLDCOM INC.: Two Illinois Pension Systems Sue Over Securities Losses
WORLDCOM INC.: Forcing Workers To Waive Rights To Get Pay, Benefits
WORLDCOM INC.: Energy Chair Claims CEO Ebbers Knew of Securities Fraud
WYETH CORP.: Class Action Status Sought For Suit Over Prempro Injuries
New Securities Fraud Cases
CORPPRO COMPANIES: Leo Desmond Commences Securities Suit in N.D. OH
FLEXTRONICS INTERNATIONAL: Schiffrin & Barroway Lodges Suit in S.D. NY
MERCK & CO.: Shapiro Haber Commences Securities Fraud Suit in NJ Court
MERCK & CO.: Marc Henzel Commences Securities Fraud Suit in New Jersey
MERCK & CO.: LeBlanc & Waddell Commences Securities Fraud Suit in NJ
MERCK & CO.: Kaplan Fox Commences Securities Fraud Suit in New Jersey
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
MONTANA POWER: Wechsler Harwood Commences Securities Suit in Montana
OMNICOM GROUP: Scott + Scott Commences Securities Fraud Suit in S.D. NY
OMNICOM GROUP: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
PERKINELMER INC.: Schatz & Nobel Commences Securities Fraud Suit in MA
SUPERVALU INC.: Schiffrin & Barroway Lodges Securities Fraud Suit in MN
SUPERVALU INC.: Cauley Geller Commences Securities Fraud Suit in MN
SUPERVALU INC.: Beatie and Osborn Commences Securities Fraud Suit in MN
TRITON NETWORKS: Schiffrin & Barroway Launches Securities Suit in FL
TYCO INTERNATIONAL: Johnson & Perkinson Launches Securities Suit in NH
WORLDCOM INC.: Cauley Geller Commences Securities Fraud Suit in MS
*********
AMERICAN HOME: Reaches Settlement in Suits Over Fen-Phen Diet Drugs
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A nationwide class action settlement has been reached with American
Home Products Corp., which will resolve the claims of individuals who
took the diet drugs fen-phen, according to a report by the South
Florida Sun-Sentinel.
Under the terms of the settlement, people who took these drugs may have
the right to receive a refund, compensation and/or a free
echocardiagram. The group of diet drugs collectively referred to as
fen-phen include:
(1) a combination of Ionamin, Adipex, Fastin (brand names for
formulations of ofphentermine),
(2) Pondimin (a brand name for fenfluramine) and
(3) Redux (a brand name for dexfenfluramine)
Combinations of these drugs have been known to cause heart valve
damage, pulmonary cardiovascular damage and neuropsychological damage.
ARIZONA: Income Tax Refund Case Defies Settlement, Mediation Sought
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Attorneys in a major state income tax refund case, brought by the
taxpayers as a class action, said they have not reached a settlement
and are ready to get help from a mediator, the Associated Press
Newswires reports.
Lawyers for the state and taxpayers in the class action are trying to
negotiate a settlement for the state to pay what could be hundreds of
millions of dollars in refunds to hundreds of thousands of taxpayers.
Lawyers told State Tax Court Judge Paul Katz that they had made
substantial progress but believe it was now time to call in a mediator
to help resolve remaining differences.
Resolution is important. Besides the impact for numerous individual
taxpayers, the case is important because the potential overall cost has
been estimated as high as $600 million and could exacerbate the state's
budget problems. The money would cover taxes ruled to have been
illegally collected on some corporate dividends paid in the late 1980s.
Michael Kempner, an assistant attorney general representing the
Department of Revenue, told Judge Katz that the state believes one
particular issue in the case would not be suitable to be resolved as
part of the settlement. Mr. Kempner did not specify the issue during
the court hearing, however, and he later declined to elaborate.
Randall Wilkins and another lawyer for the taxpayers said later that
they do not know what that issue is.
If the two sides cannot reach an agreement on a settlement, remaining
issues would be submitted to Judge Katz to decide.
ARTHUR ANDERSEN: Former Partner Duncan Faces Suit Over Enron Collapse
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Former Arthur Andersen partner, David Duncan, faces a federal class
action for his involvement in energy giant Enron's collapse, but his
attorneys say Mr. Duncan did not conspire with Enron to create the off-
the-book partnerships that led to its collapse, the Associated Press
Newswires reports.
Mr. Duncan, former top auditor for Houston-based Enron, pleaded guilty
in March and testified for the prosecution in Andersen's June
obstruction of justice conviction. This week's response to the class
action denies that Mr. Duncan participated in "any accounting
trickery," such as inflating earnings or hiding debt as the lawsuit
alleges.
However, a lead plaintiff in the lawsuit, seeking $26 billion in
damages, argues that Mr. Duncan did play a part in the scandal that
brought Enron into collapse. There is "substantial evidence that David
Duncan played a substantial role in the Enron scheme," Trey Davis, a
spokesman for the University of California Regents, said in a recent
issue of the Houston Chronicle.
The lawsuit, filed by Enron workers and shareholders, names a number of
companies and individuals that they allege helped defraud them.
ARTHUR ANDERSEN: Judge Approves Settlement With Baptist Foundation
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US Bankruptcy Court Judge George Nielsen gave his approval to the $217
million settlement of claims against Arthur Andersen LLP, brought by
the Baptist Foundation of Arizona Liquidation Trust, according to a
recent report by the Dow Jones Business News.
Judge Nielsen noted in making his ruling that the probability of
success pursuing litigation was not high, and that even if an equal or
larger amount of money were awarded at trial, there would be
impediments to recovery - including Andersen's financial condition.
Judge Nielsen added that conducting the trial would cost the estate
millions of dollars. "There is little question that this is in the
best interest of (BFA) investors," he said in announcing his decision
that the settlement is fair.
The foundation was formed in 1948 as a nonprofit to raise money for
Baptist causes, while at the same time paying returns to investors.
Approximately, 11,000 people, many of them elderly, lost $570 million
in the foundation's 1999 collapse. Its liquidation trust sued
Andersen, claiming auditors turned a blind eye to fraudulent activity
at the foundation, allowing it to continue.
One week into a trial in May, the settlement agreement was reached. It
also settles a class action brought by investors, a case brought by
state authorities and an administrative action at the state accountancy
board. In a separate settlement, the foundation's law firm agreed to
pay $21 million.
In an unusual instance, Judge Nielsen held his hearing concurrently
with a preliminary fairness hearing conducted by Maricopa County
Superior Court Judge Edward Burke, the presiding judge in the trust's
case against Andersen. Judge Burke is now scheduled to decide whether
to grant his final approval of the settlement at a hearing September
13.
Attorneys for some creditors attempted to delay the approval process,
claiming it should first be determined how the money will be allocated.
That is necessary, an attorney for the Verde Baptist Church of
Cottonwood Inc. argued, so that adequate notice can be given to
investors so they can make an informed decision whether to opt in or
out of the settlement.
"The best thing to ensure the finality of this settlement is to make
this as bulletproof as possible," said attorney Harold Watkins.
However, attorney Andy Friedman, representing plaintiffs in the class
action, said any further delay would add to the risk that Andersen
might file for bankruptcy protection and the funds become unavailable.
Although the funds are in an escrow account, they could be reclaimed in
the event of a bankruptcy filing. "If Andersen becomes bankrupt, the
settlement is in jeopardy," he added. "The risk of the delay cannot be
overemphasized. Arthur Andersen is in what appears to be a death
spiral."
Judge Burke ordered attorneys to come up with some language that would
put investors on notice that the amount they eventually receive could
change based on the allocation process yet to occur, and to report back
to his court Monday afternoon, July 15.
CALIFORNIA: Credit Agency's Customers Challenge Arbitration Clause
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A state appellate court has preserved a lawsuit charging fraud, which
was filed by as many as 100,000 low-income Californians, by rejecting a
credit agency's attempt to require them to submit past grievances to
arbitration, The San Francisco Chronicle reports.
The suit was filed by an Oakland woman in 1997, and later approved by a
judge as a class action on behalf of California customers of the
American Fair Credit Association, a Colorado company.
The lawsuit accuses the company of luring impoverished customers with
promises to restore their damaged credit ratings, failing to perform
and issuing a credit card with fees of more than $500 per year in
contracts that were virtually impossible to terminate.
Six months after the lawsuit was filed, the company announced that new
members would have to submit future disputes to arbitration, rather
than going to court, and that current members also would be covered by
arbitration unless they objected in writing within a brief period.
The change included a prohibition on class actions. That was its main
purpose, contended Daniel Girard, the customers' lawyer. "They have no
intention of anybody arbitrating anything," Mr. Girard said. "This was
purely a procedural device to evade pending litigation. This is the
newest game in town, the use of consumer arbitration to stop class
actions."
Douglas Hendricks, a lawyer for the company, said the lawsuit was
unfounded. He said the company never promised to restore its
customers' credit ratings, but merely provided them with material that
could help them, and that most customers were able to leave the program
and return to conventional credit cards within a short time. Mr.
Hendricks also said he disagreed with the appellate ruling that barred
enforcement of the arbitration policy against existing customers.
The court upheld a decision by Alameda County Superior Court Judge
Ronald Sabraw. The court said that the Company's attempt to enforce
arbitration unless customers objected, would violate a state law
requiring credit service contracts to be in writing and signed by the
customer.
The 1984 law, designed to protect the public from "unfair or deceptive
advertising and business practices employed by some credit services
organizations," applies to contract modifications as well as to
original agreements, said Justice Mark Simons in the 3 to 0 ruling last
week that preserved the class action brought by the customers whom the
credit agency was trying to force into arbitration.
CATHOLIC CHURCH: Former Youth Center Residents File Suit Alleging Abuse
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Three men, who lived in a youth treatment center in the mid-1980s,
filed a class action accusing a former center chaplain of sexually
abusing them, the Associated Press Newswires reports.
The men, who filed the lawsuit anonymously, say the Rev. Joseph
Seminatore fondled and molested them at Parmadale Family Services, a
treatment center for about 100 emotionally disturbed children run by
Cleveland Catholic Charities. Rev. Seminatore is one of 15 priests in
the Cleveland diocese under suspension for allegedly sexually abusing
children.
Lawyer Howard Schulman said he filed the lawsuit as a class action
because he suspects Rev. Seminatore's victims are too numerous for the
filing of lawsuits individually. "We hope that the other victims will
contact us and tell us, in confidence, what happened to them," Mr.
Schulman said.
The priest's lead accuser was an altar boy, an athlete and a fairly
good student until he encountered Rev. Seminatore, Mr. Schulman said.
Afterwards, he spent about two years in prison for aggravated assault,
theft, receiving stolen property and domestic abuse.
The suit, filed in Cuyahoga County Common Pleas Court, names the
Catholic Diocese of Cleveland and Parmadale as defendants, but not the
Rev. Seminatore. The lawsuit has asked for unspecified damages.
A chaplain at Parmadale for 20 years, Rev. Seminatore, 60, has been on
administrative leave since May. He was suspended by Bishop Anthony
Pilla after one of the accusers, now 31, and living in Cleveland, came
forward with sexual-abuse allegations. The county Department of
Children and Family Services concluded last month that the allegations
could not be substantiated.
Nonetheless, Rev. Seminatore will remain suspended pending the outcome
of a grand jury investigation and the recommendations of an independent
commission, that is studying the clergy sex abuse problem in the
diocese, diocesan spokesman Robert Tayek said.
CATHOLIC CHURCH: Court Denies Sex Abuse Documents' Continued Secrecy
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The Jefferson County Circuit Court in Kentucky rejected a motion by the
Archdiocese of Louisville to keep secret documents relating to more
than 150 lawsuits alleging sexual abuse by priests, the Associated
Press reports.
The plaintiffs in the suits allege that they were sexually abused by
clergy or church employees when they were children. Church officials
reportedly knew of the abuse but did nothing about it.
The archdiocese moved for the suits to be kept secret, citing a 1998
state law requiring documents in child sex abuse cases to be sealed if
the alleged abuse took place more than five years earlier. Most of the
recent cases involve alleged abuse that occurred more than 30 years
ago, according to an Associated Press report.
The archdiocese further argued that the priests should not be named
publicly until they were found guilty of a crime. Only one of the 20
priests who has been named have been indicted - the Rev. Louis Miller,
named in 63 of the lawsuits, was indicted last month on 42 felony
counts of sexual misconduct. He has pleaded innocent.
Judge James Shake rejected the archdiocese's motion, saying the law
applied only to lawsuits naming he perpetrator as defendant. The
recent suits name the archdiocese and Archbishop Thomas Kelly as
defendants but not the priests.
"From here, we go to the light of day," William McMurry, the attorney
for nearly all 154 plaintiffs, told AP. "Everything the archdiocese
does applying to these cases will be under public scrutiny."
Spokesman Brian Reynolds told AP that the archdiocese still objects to
releasing the priests' names, but will not appeal. "We remain
concerned about the importance of protecting the rights of innocent
people," he said. "However, we are not afraid of facts coming out
concerning these cases."
ENRON CORP.: Several Pension Funds Consider Suit Against Bank Advisors
----------------------------------------------------------------------
Several US pension funds intend to file suit next week against five
major investment banks for their roles as advisors in an $11.6 bond
issue from Enron Corporation eight months before it went bankrupt, a
lawyer handling the case told Dow Jones Newswires recently.
William Lerach, a senior partner at Milberg Weiss Bershad Hynes &
Lerach, said five or six pension funds will file lawsuits against these
investment banks:
(1) JP Morgan Chase & Co.,
(2) Citigroup Inc.,
(3) ABN Amro Holding NV,
(4) Deutsche Bank AG and
(5) Bank of America Corporation
Mr. Lerach said that Section 11 of the 1933 Securities Act makes
issuers and underwriters liable to buyers of bonds for false
information given at the time of sale, unless the issuers or
underwriters can prove they were not negligent. "The burden of proof
is on the bank," Mr. Lerach said.
The Illinois State University Retirement System filed suit recently in
Chicago's Cook County, Mr. Lerach said. "For the first time
institutional investors are coming forward with litigation and that's
good, because it gives the lawsuit credibility with the court," he
said. Mr. Lerach also said that nine or 10 more funds are considering
taking legal action against Enron under the same statute, the 1933
Securities Act.
Mr. Lerach is representing the University of California in a $25
billion class action, filed last December, and seeking damages to
compensate its pension and endowment funds for losing $145 million on
Enron stock, the most in the state and the second largest set-back
reported so far by public investment funds in the United States.
GENERAL MOTORS: Ex-Workers File $4 Million Racial Discrimination Suit
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Two black former employees of General Motors Corporation's Moraine
Assembly Plant in Ohio, have filed a $4 million racial discrimination
lawsuit against the automaker, alleging plant managers ignored racial
slurs and unfairly denied them job advancement opportunities, the
Dayton Daily News reports.
The suit says, among other things that the Company created a hostile
work environment by allowing discriminatory conduct in the Moraine
plant, including the display of hangman's nooses.
Dayton attorneys Mia Wortham Spells and Michael Thompson, who are
representing the two plaintiffs, said they are waiting for the
Company's response. The attorneys have not decided yet whether to seek
class action status or sue separately.
The complaint, filed in US District Court in Dayton, says one of the
former workers, Larry Lovelace, was demoted in August 2000, from his
position as supervisor in the trim shop as retaliation for a racial
discrimination complaint Mr. Lovelace filed with the Ohio Civil Rights
Commission. Mr. Lovelace resigned in January after working at the
plant for more than eight years.
The complaint also says that the other plaintiff, Lamont Appleton, who
was a salaried supervisor, was passed over for promotions on three
separate occasions in 1999, and that less-qualified white workers
received the jobs he was seeking. Mr. Appleton resigned in December
1999, after working at the plant for more than five years.
In addition to the Company, four white management-level employees who
worked at the plant at the time of the incidents are named in the
lawsuit.
Both Mr. Lovelace and Mr. Appleton have since found jobs with other
automotive-related companies. Mr. Lovelace and Mr. Appleton withdrew
complaints they had pending with the Ohio Civil Rights Commission and
Equal Emplyment Opportunity Commission to enter into mediation with the
Company, but the Company broke off those talks in February 2001.
GEORGIA-PACIFIC CORP.: Faces Suit Over CCA-Containing Wood Products
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A lawsuit filed in federal court claims that lumber company Georgia-
Pacific Corp. exposed customers to arsenic in its products, the Orlando
Sentinel reports. The lawsuit seeks class-action status and
unspecified damages.
The suit, filed in federal court in Birmingham, Alabama, claims that
the Company sells treated lumber containing chromate copper arsenate,
or CCA, concealing, however, the danger of the human carcinogen to
customers.
CCA is used to protect lumber from decay and insect damage. The
Environmental Protection Agency reached an agreement with lumber
companies in February to phase out CCA's use in residential products by
the end of next year. The plaintiff in the lawsuit is an Alabama state
trooper who claims he became seriously ill after handling CCA-treated
wood while building a deck.
A Company spokeswoman said that the Company is reviewing the lawsuit,
and could not comment.
In addition to the class action in Louisiana, another suit has been
filed in Florida, The New York Times reports. Both lawsuits are in
their early stages and are aimed primarily at the environmental and
property damage. In addition to the class actions, about 30 individual
lawsuits have been filed nationwide involving claims of acute poisoning
from sawdust, splinters and inhalation, said David S. McCrea, an
Indiana lawyer, who has handled some of the cases.
Litigation experts say the success of all these lawsuits and the
potential for liability, whether the case be class action or
individual, will turn on scientific evidence that neither side yet has.
"Before a toxin becomes a litigation concern, there has to be some
science," said Bill G. Lowe, who edits Emerging Toxic Torts, a
newsletter. Mr. Lowe said that, at the present time, "the science is
so immature that we don't know whether the plaintiffs are going to be
able to overcome that hurdle."
HALLIBURTON CO.: Vice President Cheney Named In Corporate Fraud Suit
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One day after President Bush unveiled his latest efforts to stem
corporate corruption, a legal watchdog group sued Vice President
Richard Cheney and the Texas-based oil services business he once led,
alleging fraudulent accounting practices by the company, according to a
report by the Los Angeles Times.
The lawsuit, filed by Judicial Watch, on behalf of two Halliburton
shareholders, in US District Court, in Dallas, Texas, charges that the
Company overstated its revenue by $445 million from 1999 to 2001, part
of the period the vice president was chairman and chief executive
officer. The lawsuit alleges that the overstatements led to
shareholder losses. Also named as defendants are the Company's board
of directors and the Arthur Andersen accounting firm.
The Company's accounting practices challenged by the suit are also
being investigated by the Securities and Exchange Commission. The SEC
was looking at the company's accounting of cost overruns on
construction jobs. Contracts had allowed the Company to negotiate or
sue for additional payment if such cost overruns ate into its profits.
Larry Klayman, chairman and general counsel of Judicial Watch, said the
lawsuit goes beyond the SEC investigation because it named the vice
president and would involve public disclosures, rather than being
conducted behind closed doors.
Mr. Klayman also said that Mr. Cheney was listed as a defendant
because, as chief executive during the period targeted by the lawsuit,
"the buck stops with him." Mr. Klayman added, "He is a meticulous
manager. For them to make this kind of accounting change, he had to
approve it."
Judicial Watch's suit follows several others filed on behalf of
shareholders allegedly defrauded by the Company's accounting practices,
legal experts said. At least five securities fraud suits seeking class
action status for all Halliburton shareholders have been filed.
ILLINOIS: Judge Grants Class Status To Milk Retailers Antitrust Suit
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A Cook County judge has granted class action status to a civil lawsuit
that claims Jewel and Dominick's food stores conspired to keep milk
prices high in the Chicago area, Associated Press Newswires reports. A
trial is expected to start in January.
"This is huge," said Andy Hale, an attorney with the firm that filed
the lawsuit. "Everybody who bought milk at Jewel or Dominick's in the
last four years is affected by this." Mr. Hale said his firm would
advertise in newspapers to let the public know of the class action
status. The advertisements will give more detail on how people can
join the suit and then share in any proceeds if it succeeds.
The class action designation applies to people who bought milk at
either supermarket chain, between 1996 and 2000, in Cook, DeKalb,
DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties. Jewel
is owned by Albertson's Inc. of Boise, Idaho, while Dominick's is owned
by Safeway Inc. of Pleasanton, California.
INDIANA: Strip-Search Suit Settlement Delayed Over Class Participants
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Disagreement over who should benefit from a $2.5 million settlement of
a class action involving illegal strip searches at the Floyd County
jail, has stalled payment to victims, the Associated Press Newswires
reports.
"There is the critical issue of who is in the class" of people to be
compensated, said Richard Mullineaux, a lawyer representing county
government. He said his concern is that the notice to be mailed to
victims, as written, would allow the participation of an undetermined
number of people who have not previously been involved in the case.
The list of former inmates compiled by the plaintiffs' lawyers should
be definitive because it is what the settlement agreement was based on,
Mr. Mullineaux said.
Bart Betteau, who filed the lawsuit, said the notice was written to
allow people who were inadvertently left off the initial list of
participants in the class action to take part, and receive up to $1,000
for their mistreatment by the jail. Mr Betteau said four people who
were not on the initial list already have been located.
The lawsuit involves inmates who were strip-searched after being
arrested for minor offenses. Mr. Betteau filed the lawsuit, which
claimed that the jail had violated the civil rights of 11 people by
requiring them to strip for a visual search by guards of the opposite
sex. The lawsuit was later granted class action status.
JEFFBOAT INC.: IN Residents Sue Due to Paint Property Damage
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Two residents in Jeffersonville, Indiana, filed a class action, in
Clark Circuit Court, accusing bargemaker Jeffboat Inc. of failing to
control the paint overspray that has wafted from its factory, damaging
their cars and houses, the Associated Press Newswires reports.
If class action status is granted, the number of people involved could
be "easily over 1,000," the lawsuit states. It claims that residents
of the neighborhood, along with Company employees who frequently travel
through the area, have had their vehicles, homes and possessions
damaged by the fine mist of primer and paint that comes from the
shipyard. The lawsuit asks for compensation for damages, as well as
for a judge's order preventing the Company from doing uncontrolled
outdoor painting.
The two lead plaintiffs and nine other residents sent a letter recently
to the Company, claiming the Company was dumping paint into the Ohio
River and onto the ground. "That letter was written because we have a
good-faith basis to believe they are not in compliance," said Jeffrey
Goldenberg of Cincinnati, an attorney for the residents. "Paint in the
river is very serious. I would say they need to re-evaluate their
operations."
Company officials deny the paint dumping allegations. They also say
the Company, acting on complaints in the mid-1990s about overspray from
its painting operation, had done what it could to reduce those
problems. "We believe we are absolutely following the rules," said
Paul Besson, a senior vice president of American Commercial Lines, the
Company's parent company. Mr. Besson said the Company had all the
proper environmental permits to do business and was in compliance with
them.
"We categorically deny that we are dumping anything into the river, and
we do as much of the painting under cover that can be done," said Mr.
Besson. And, Mr. Besson added that he would not say there is no
overspray, but it has been dramatically reduced. Mr. Goldenberg said,
however, that the overspray issue is well-documented.
MAJOR LEAGUE: Disappointed Fans File Lawsuits Over All-Star Game Tie
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Milwaukee Brewers season ticket holder Wayne Zenecke filed a lawsuit
recently against Major League Baseball, Commissioner Bud Selig and the
Brewers in Milwaukee County Circuit Court, Associated Press Newswires
reports.
Mr. Zenecke, 27, has filed a lawsuit, which, in his 22-page complaint,
asks, among other things, that Judge Michael Sullivan grant his lawsuit
class action status so anyone who attended the game with tickets can be
added as plaintiffs.
He contends that Major League Baseball committed breach of contract,
deceptive trade practices, negligent representation and
misrepresentation by advertising the All-Star Game as a game and then
allowing it to end in a tie. The lawsuit seeks unspecified damages.
No court date has been set.
Article "1" of Major League Baseball rules "has as its sole objective a
winning team," the lawsuit said. Fans would not have bought tickets to
the game if they had known it would not have been played according to
the rules, the lawsuit said. However, Commissioner Selig decided to
end the All-Star Game in a 7 to 7 tie after 11 innings last Tuesday at
Miller Park in Milwaukee. Angry fans threw bottles and seat cushions
onto the field and chanted, "Let them play."
Mr. Selig said American League Manager, Joseph Torre, and National
League Manager Robert Brenly told him they had run out of pitchers.
Mr. Selig said that he had no choice but to end the game for the health
of the players. It was the first All-Star Game to end in a tie since
1961.
Dave Barber, a radio talk show host, filed a lawsuit in Genesee County,
Michigan, insisting the game be finished from where it left off. He
says the actions of Major League Baseball caused harm to millions of
sports fans, created a loss of faith in baseball and sent a message to
children that quitting is acceptable.
Mr. Barber, 47, of Grand Blanc, Michigan, hosts "The Dave Barber Show"
on the Michigan Talk Radio Network. His lawsuit seeks damages of more
than $25,000. Mr. Barber says he wants the game to be finished more
than the money, however.
MURPHY OIL: Reaches Settlement in Lawsuit Over 1995 Meraux Explosion
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Nearly seven years after a 75-foot fireball was sparked by an explosion
at a Meraux plant, Murphy Oil USA has agreed to an $8.8 million
settlement in a class action filed by rattled area residences, the
Associated Press Newswires reports.
Two judges met with both sides in the dispute and mediated the
negotiations, which concluded last week in state District Judge Kirk
Vaughn's courtroom in New Orleans, Louisiana. Judge Vaughn said the
settlement saved the time and expense of a three-to four-month trial,
which was scheduled to start this week. He credited fellow-judge
Robert Buckley with helping to resolve the issues.
However, the plaintiffs likely will not see their money anytime soon.
Up to 40 percent of the settlement dollars could go to their attorneys,
if Judge Vaughn approves the move. It could be as much as six months
before the 3,848 plaintiffs, who live outside of New Orleans in the
western part of Chalmette and in Mereaux, will receive any money.
A special master to be appointed by Judge Vaughn will recommend
specific damages for each plaintiff, attorneys said. Individuals will
have the opportunity to dispute the amounts awarded to them, according
to Sidney Torres III, one of the plaintiffs' attorneys.
Awards could range from several hundred dollars each plaintiff to about
$1,500, Mr. Torres said. People living nearest the fire typically will
receive the most money, he said. Mr. Torres also said that most of the
claims "are based on fear and fright" produced by the explosion and the
fireball. The lawsuit charged the Company with negligence.
"This is a good settlement for both sides," said Mr. Torres. "It is
through this type of class action that we can hold large oil companies
accountable for their actions."
The fire, in a unit that separates light oil from heavy oil, happened
when the plant was going back online after a power surge caused units
to shut down as a safety precaution, refinery officials said at the
time.
Several other lawsuits related to the explosion and fire were also
settled during the negotiations with the two judges. One was a
settlement of $95,000 to two workers injured at the Company's plant
during the occurrence of the fire and another was an $80,000 settlement
to 216 residents who sued separately from the 3,848 claimants in the
main suit, officials said.
Attorney George Frilot, who represented El Dorado, Arkansas-based
Murphy Oil in the lawsuits, said he has not been authorized by company
officials to comment.
PENNSYLVANIA: Bucks County Ordered To Impanel Prison Oversight Board
--------------------------------------------------------------------
Establishment of a new prison oversight board was requested in a class
action filed by female inmates of the Bucks County Prison. The request,
acquiesced to by US Magistrate Diane Devlin Welsh, who recently issued
a federal court order creating the Bucks County Prison Oversight Board,
the Allentown Morning Call reports. As a result of this order, Bucks
County commissioners will lose some of their authority over the prison.
Judge Welsh ordered the commissioners to appoint county officials to
the board as well as three members of the public, within 30 days of her
ruling. Commissioner Michael G. Fitzpatrick said it is unlikely the
commissioners will appeal the order. Mr. Fitzpatrick said the
commissioners had agreed earlier to abide by Judge Welsh's rulings in
the case.
"We think this is great," said Anita F. Alberts, a Doylestown attorney
who represents the inmates. "There is going to be fresh air in the
system. That is what it needs."
Since 1993, when the Bucks County population growth enabled it to get
status under state law as a second-class county, the three
commissioners have been responsible for operating the prison. In
previous years, under laws covering third-class counties, the Bucks
County Prison Board held that responsibility, but when the county'
status was upgraded, the prison board assumed a merely advisory
position and met infrequently.
During the past two years, the prison has been at the center of
scandals and criminal probes. Investigating agencies uncovered a drug
ring operating in the prison, a black market cigarette smuggling
business and an inmate operating a credit card scam on prison
telephones.
Also, four prison employees were convicted in the sexual assaults on
women inmates. Finally, women inmates at the prison filed the class
action, demanding separate facilities for mentally ill women inmates,
who, now, are housed with the general population, as well as other
changes in prison policy.
Judge Welsh ordered the commissioners to appoint themselves to the
oversight board as well as President Judge R. Barry McAndrews, District
Attorney Diana E. Gibbons, Chief Public Defender Stephen H. Shantz,
Chief Probation Officer Francis V. Crumley, Controller Raymond H.
McHugh and acting Sheriff William Dalton.
Once the board is formed, its members are required to select three
residents who "shall not be employees of any state, county or municipal
Entity" as the "citizen members" of the board. Each citizen member
will be appointed to a term of three years, said Judge Welsh.
Under Judge Welsh's order, the oversight board will be responsible for
the maintenance of the maximum-security prison and its two minimum-
security centers, as well as the health and safety of inmates. Judge
Welsh ordered the board to conduct meetings at least monthly and is
required to conduct at least two unannounced inspections of the
facility each year.
Judge Welsh said the first meeting of the oversight board must be
before August 8, and the board has 90 days from the date of the ruling
to appoint its three citizen members.
REPUBLIC SERVICES: Nevada Court Grants Certification to Overcharge Suit
-----------------------------------------------------------------------
Nevada Federal Judge Gene Porter granted class certification to a
lawsuit against the Republic Services of Southern Nevada, charging it
with overbilling customers to pay a state tax. The ruling will allow
more than 400,000 of the Company's claimants to take part in the suit.
Attorney for the plaintiffs Frank Cremen told the Las Vegas Review
Journal, "Anyone who has been billed by Silver State (Republic
Services) for trash collection since at least 1994 is a potential
claimant."
The city of Las Vegas, Clark County, North Las Vegas and Henderson are
engaged in an exclusive contract with the company, formerly known as
Silver State, the Las Vegas Review Journal reports. In 2000, Cremen
sued the company regarding its collections from customers to pay the
Nevada Business Tax. The tax, established in 1991, requires that
certain companies pay $25 every quarter for each of its employees. The
Nevada Legislature implemented a provision to the law, saying that
companies whose income or rates are dictated by government can pass the
exact cost on to the consumer.
The suit alleges that the Company didn't have the right to pass the
cost to consumers in Las Vegas, North Las Vegas, Henderson and
unincorporated Clark County. Even if it did, that right should have
ceased in 1994 when local governments raised the rates Republic could
charge customers.
Mr. Cremen told the Review Journal that in the process of discovery, he
has gathered information that proves the Company was overcharging in
the gathering of revenue for payment of the business tax. "They have
admitted that in certain years they collected more than they actually
owed," he said.
He added the company in the past has charged 18 cents a quarter to
customers in order to pay the tax. The charge was uniformly applied to
both residential and commercial outlets. Since the lawsuit was filed,
the company has dropped the charge to 9 cents a quarter, he said,
adding, "it would seem awfully coincidental given this lawsuit."
Company spokeswoman Lee Haney and company attorney Thomas Kummer
declined to comment, according to the Las Vegas Review Journal. Mr.
Cremen said if the suit is successful, individual plaintiffs probably
would not be subject to a large rebate, perhaps as little as $5.
However, Mr. Cremen said that, if he wins in court, the cumulative
effect of the suit could cost Republic a large sum of money, and
perhaps more importantly, such a victory would demonstrate to the
company that its Nevada customers won't tolerate being overcharged.
"This is a monopoly," Mr. Cremen told the Las Vegas Review Journal.
"If they can sneak 18 cents a quarter out of your pocket and no one
cares, they might try to slip a little more out."
SERVICE CORPORATION: Florida Judge Says Plaintiffs Have Strong Case
-------------------------------------------------------------------
Lawyers suing parent company Service Corporation International (SCI),
cemetery industry giant, over alleged wrongdoing at the Company's two
Menorah Gardens cemeteries in South Florida, laid out the heart of
their case last week, the South Florida Sun-Sentinel reports.
The lawyers painted an image of corporate greed run amok at the expense
of the families whose loved ones had been entrusted to the local
cemetery companies. The case is scheduled to resume on August 28, when
lawyers will argue why the lawsuit should be considered a class action,
something that would greatly increase the stakes. So far, about 1,200
families are part of this lawsuit.
In a carefully edited audiovisual presentation shown to Broward County
Circuit Judge J. Leonard Fleet, lawyers for family members of those
buried at the cemeteries displayed excerpted memos and played sworn
statements to show the Company knew of the widespread problems but
chose to do nothing as the situation worsened.
The parade of excerpted depositions and memos from current and former
cemetery workers was "extremely misleading," SCI spokesman Donald
Mathias said after sitting through a two-hour hearing, intended to
determine whether the Company would be subject to financial penalties
(punitive damages) on top of compensation should the plaintiffs win.
Mr. Mathias characterized the audiovisual presentation as "very
selective" and "out of context."
Although Judge Fleet withheld judgment on the lawyers' request to allow
the lawsuit to include punitive damages, he indicated that he found the
40-minute presentation "compelling."
"The plaintiffs have made a very strong case," he said. He added that
in order to reach into the deep corporate pockets of the largest
business in the death industry, the lawyers must demonstrate that those
in Houston were aware of and participated in the situation in the two
Menorah Gardens cemeteries in Florida.
Earlier, Judge Fleet rejected SCI's attempt to get him to throw out key
elements of the lawsuit, which could have killed the case. He did
allow time for the company to present its arguments at a later hearing.
Multiple investigations were launched in December after the attorneys
announced their lawsuit. Florida's attorney general and comptroller
followed with their own lawsuit. Florida's Department of Law
Enforcement (FDLE) is conducting a criminal investigation. In
February, investigators found human remains in a wooded area at the
Menorah Gardens, just outside Palm Beach Gardens, bolstering the
lawyers' contention that the chaos at the cemetery had real
consequences. SCI has acknowledged longtime misalignment of rows, lack
of adequate space between graves and bodies buried in wrong locations.
Both the private and government lawsuits allege that the lack of
spacing between graves led cemetery workers to be ordered to smash the
sides of burial vaults, or in some cases to remove remains and dump
them, in order to make way for new burials.
SHELL OIL: Motorists Reimbursed, Some Sue Over Faulty Gasoline Additive
-----------------------------------------------------------------------
Shell Oil Co. still is receiving complaints from Central Kentucky
customers about a gasoline additive the company pulled from its pumps
in May. A class action also was filed against the Company for the
costs of car repairs, rental cars and other expenses related to the use
of the gasoline additive, The Lexington Herald Leader reports.
The gasoline additive, introduced in the Lexington, Kentucky market in
the fall of 2001, was supposed to give motorists more miles to the
tank. However, Shell began receiving thousands of complaints that a
similar additive was causing problems with fuel pumps and gauges in
cars in Canada. By end of May, the company had pulled the additive
from all its pumps.
Since June 1, Shell has received 168 complaints from Central
Kentuckians, 80 percent of which were made the day after Shell
announced it had discontinued the gasoline additive, said Rick Wirth,
spokesman for Shell. Mr. Wirth said the company considered only 32 of
the complaints valid.
The average reimbursement to each complaining motorist has been $480,
which includes any expense related to the inconvenience suffered, as
well as such items as repairs, car rentals, hotels, and the like. The
class action is still making its way through the court.
The company has no immediate plans to reintroduce the additive in the
United States or Canada. In Canada, low-fuel indicator lights in the
affected cars, mostly DaimlerChrysler vehicles, began to blink even
though the tank was full, and the needles on the gauges swung back and
forth at random. In some cases, fuel pumps clogged after heat caused
the additive to gum up.
Shell Canada has paid motorists thousands of dollars for repairs.
SUNBEAM CORP.: Suit Settlement Brings Shareholders' Total To $141M
------------------------------------------------------------------
A settlement with two Chubb Group insurers brings the total recovered
by Sunbeam Corporation shareholders to $141 million in their fraud
lawsuit against the bankrupt appliance maker, according to a report by
the Associated Press Newswires. None of the settlements contain
admissions of wrongdoing.
A federal judge has set a hearing for August 9 in West Palm Beach, to
hear objections to the final settlement of the class action, filed five
years ago when complaints of corporate accounting irregularities were
unusual.
The lawsuit accused the Company and its officers of inflating stock
prices and misleading investors about the Company's sales and earnings.
The Company was forced to restate financial results for 18 months
before fast-talking chairman and CEO Al "Chain Saw" Dunlap was fired in
June 1998.
Tens of thousands of shareholders already have filed claims with the
settlement administrator for a share of the money, and the last claims
must be postmarked by September 6, said shareholders' attorney Robert
Kornreich. If all possible shareholders file claims, they could expect
to receive about 14 to 15 cents on the dollar for their actual market
losses.
Settlement notices have been sent to those who held common stock or
futures with the Boca Raton-based appliance maker during the class
period of April 23, 1997, to June 30, 1998.
Shareholders' attorneys are guaranteed up to 25 percent of the
settlement, or as much as $35 million. Settlement money has come from
many sources. Sunbeam's accountant, Arthur Andersen, agreed to pay the
lion's share of the settlement monies, $110 million. Mr. Kornreich
believes Sunbeam shareholders may be the last large group to have
recovered from Andersen while it was still known as an accounting
giant.
Settlement money also includes payment from:
(1) former Chairman & CEO of Sunbeam, Al Dunlap of US$15 million,
(2) Chubb's Executive Risk Insurance Co. & Federal Insurance Co of
US$13.5 million,
(3) Great American Insurance Group of US$2.0 million and
(4) Former Executive Vice President Russell Kersh US$250,000.
Both insurance companies wrote policies covering Company officers and
directors. The Company's bankruptcy filing last year shielded it from
any liability.
SUPERVALU INC.: Mounting Vigorous Defense V. Securities Suits in MN
-------------------------------------------------------------------
Supervalu Inc. faces two securities class actions pending in the United
States District Court for the District of Minnesota, on behalf of
purchasers of the Company's stock from April 4,2001 and June 26,2002.
The suits charge the Company and certain of its officers and directors
with issuing false and misleading statements concerning its business
and financial condition. Specifically, the complaint alleges that
defendants issued statements regarding the Company's annual financial
performance and filed reports confirming such performance with the
United States Securities and Exchange Commission (SEC).
The Company believes that it has always acted with integrity and in
compliance with its legal disclosure obligations. The Company said in
a statement that it believes the lawsuits are completely without merit
and intends to vigorously defend the actions.
TRACKNET: Investors Allege Deceptive Prospectus In $15M Securities Suit
-----------------------------------------------------------------------
Tracknet, the failed technology group, whose plan it was to sell
tracking devices for use in vehicles and home security, is the subject
of a $15 million class action, filed in the Federal Court of Australia,
by lawyers Maurice Blackburn Cashman on behalf of 156 investors, the
Sydney Morning Herald reports.
The suit alleges that the investors received a deceptive prospectus
from the company. The investors claim to have lost an average of
$100,000 each. The lawsuit is seeking compensation from the Company's
advisers, managers and directors.
The lawsuit also incorporates Australian Securities and Investments
Commission allegations that Kean Henry Flanagan, a former director,
made statements, which were false or were materially misleading. The
lawsuit also alleges that Mr. Flanagan had advised investors that the
company acquired Mobiletrack when it had not.
UNITED PARCEL SERVICE: Employees Fired For Hiring Blacks File Suit
------------------------------------------------------------------
Two white former employees of the United Parcel Service (UPS) filed a
lawsuit in federal court in Newark, alleging that the Company fired
them for refusing to follow orders that required them to deny African-
Americans jobs as drivers, The Record (Bergen County, NJ) reports.
Kristine Swick, who now lives in Ohio, and Mathew Decembri of Valley
Cottage, New York, both worked in the human resources department for
UPS from 1999 to 2001, and allege they were told on several occasions
not to associate with black people or hire them to drive the
distinctive brown trucks.
When the two former employees failed to follow these orders, they were
fired, the suit says. The suit alleges wrongful termination of
employment and racial discrimination.
Ms. Swick was hired as a human resources employee in August 1999, and
Mr. Dicembri, her assistant, started in September 2001. The two
conducted job interviews in Bergen County, New Jersey and Rockland
County, New York, to hire local workers for the Atlanta-based shipping
company, and they reported to supervisors in Parsippany.
Their lawyer, Lydia Cotz, said that on several occasions, either in
person or through telephone conversations, Ms. Swick's superiors told
her, in no uncertain terms, that African-Americans did not have a good
public reputation and were not to be used as drivers. Ms. Cotz said
that Ms. Swick was told, "We don't think the public perceives them as
trustworthy people to drive our vans. They don't have a good image for
us."
In court papers, Ms. Swick alleges her supervisors told her not to be
friendly toward blacks, and that she was harassed and humiliated when
she maintained those contacts, which included an African -American to
whom she sublet a house. Her assistant was told to "distance himself"
from Ms. Swick when she refused to stop talking with black people, and
he was warned of possible loss of his job when he did not obey, the
suit alleges. Both the former employees complained to management about
their treatment, but the company did nothing to stop the harassment,
the lawsuit further alleges.
The Company's spokesman Daniel McMackin said that "all of the UPS
employment actions involving these individuals have been fair and
consistent with established company policies and procedures. The
record shows these individuals were treated properly and that the
Company took action to address their complaints."
In June, Fortune magazine ranked the company 25th in its list of
minority-friendly companies and noted that the company may have an
African-American CEO in the near future. It was the third time the
Company had made this list. This year, the NAACP recognized UPS with
its national "2002 Corporate Citizen of the Year Award" for commitment
to minority issues.
In 1999, however, UPS settled a $12.4 million class action that claimed
part-time black employees received fewer promotional opportunities and
were channeled to less desirable jobs than whites, who were more likely
to receive higher-paying jobs as supervisors and drivers. As part of
the settlement agreement, UPS said it would monitor promotions of
African-Americans and keep track of preferences made on job
applications for positions, schedules and job locations.
WORLDCOM INC.: Louisiana Pension Fund Files Suit Over Plummeting Bonds
----------------------------------------------------------------------
A Louisiana pension fund that purchased Worldcom, Inc. bonds during a
US$1.25 billion offering, filed a suit against the troubled company and
its underwriters, Dow Jones Business News reports.
The suit was filed in Manhattan federal court and seeks class action
status on behalf of all investors who bought eight percent notes, due
2006, that were issued in May 2000. The plaintiff, Municipal Police
Employees Retirement System of Louisiana, purchases US$2.5 million
worth of the eight percent notes, which have plummeted in value since
the Company disclosed that it had improperly booked nearly $4 billion
in expenses.
The lawsuit names the Company, current and former officers and
directors, the accounting firm Arthur Andersen LLP and 10 investment
banks that underwrote the offering, including co-lead underwriters
Salomon Smith Barney and JP Morgan Chase & Co. (JPM).
A number of shareholder suits already have been filed against the firm.
The New York State Common Retirement Fund, which lost more than $300
million on its investment in the Company's stock, has asked to be lead
plaintiff in the shareholder litigation.
The Company is struggling to avoid a bankruptcy filing that would be
the largest in corporate history.
WORLDCOM INC.: Two Illinois Pension Systems Sue Over Securities Losses
----------------------------------------------------------------------
Two Illinois pension systems are suing after losing millions of dollars
by investing in Worldcom, Inc., the Associated Press Newswires reports.
In the lawsuit, the Teachers' Retirement System and the State
Universities Retirement System claim that the Company, some of its top
executives and several investment firms knew the Company was in
financial trouble but hid that fact when selling $12 billion worth of
bonds last year.
Company executives have admitted disguising expenses to appear more
profitable. "Basically, we are coming to learn the company was aware
of its financial woes and knowingly placed false information in the
registration statement for those bonds," Jon Bauman, executive director
of the Teachers' Retirement System, said.
His pension system lost about $11 million on that bond sale, and the
university system lost roughly $4 million to $5 million. They lost
more money on other Company investments, but those losses are not part
of this lawsuit. The total losses, however, are just a tiny fraction
of the systems' overall worth, and officials say there is no threat to
retirees' benefits.
The value of Company stock has collapsed, so there may be little chance
of the pension systems recovering money from the company. However,
they might be able to collect damages from executives and the
investment firms, Mr. Baumann said
WORLDCOM INC.: Forcing Workers To Waive Rights To Get Pay, Benefits
-------------------------------------------------------------------
Attorneys for WorldCom Inc. employees say the Company is improperly
trying to limit future claims and participation in class action by
forcing workers to sign away their legal rights in return for severance
pay and paid health benefits, the Los Angeles Times reports.
The workers' attorneys, therefore, have asked a judge to order the
Company to stop distributing the so-called general release agreements
and to recall the agreements already in circulation among laid-off
employees. The US District Court for the District of Columbia has
agreed to consider the request at an expedited hearing set for Tuesday.
The Company, teetering on the verge of bankruptcy amid a vast
accounting scandal, is laying off more than 17,000 employees to save
money. The Company is offering dismissed employees severance pay and
paid health insurance, but only if they sign an agreement, within 10
days, that relieves the company, its officers, executives and others
from liability in all potential claims and lawsuits, including suits
already underway.
Such broadly framed liability releases have become common among large
corporations, and have been upheld as legal in many circumstances as
long as the signing employees are adequately informed before waiving
their rights, employment law experts have said. Companies are
restricted, however, from making already earned wages and accrued
vacation pay contingent on waiver agreements.
However, if a company offers anything in addition to what it is legally
required to provide in severance, it can ask for a waiver of rights in
return, said Rene Barge, a West Los Angeles employment lawyer. "There
might even be an unconscionability argument that their use of these
agreements is deceptive or abusive," said Ms. Barge. "But it depends
on what the employees are getting. If they are getting something they
already deserve (are entitled to), then they shouldn't sign it."
In WorldCom's case, a series of fraud investigations at the Company are
in their infancy, making it impossible for employees to have complete
information before signing a waiver, according to attorney A.J. De
Bartolomeo. Her firm sued the company this month on behalf of
employees whose retirement accounts were decimated when Company stock
plummeted below $1 a share.
"What WorldCom is trying to do here is to buy themselves an insurance
policy against illegal acts," Ms. DeBartolomeo said. "It's
particularly egregious, because they are asking people to sign away
rights which are the subject of lawsuits right now, not some lawsuit
the could be filed in the future."
The Company has been sued by at least nine other law firms over alleged
violations of the federal Employees Retirement Income Security Act, or
ERISA. The lawsuits accuse the company of fraudulently hiding the
firm's true financial condition from employees whose retirement money
was invested in Company stock. The release agreement being distributed
by the company could prevent employees who sign it from participating
in these lawsuits involving ERISA claims.
WORLDCOM INC.: Energy Chair Claims CEO Ebbers Knew of Securities Fraud
----------------------------------------------------------------------
Rep. Billy Tauzin, chairman of the US House Energy and Commerce
Committee, said that Worldcom, Inc.'s former chief financial officer
told company lawyers that then-chairman Bernard Ebbers knew certain
expenses were shifted to other accounts in violation of accounting
rules, in his appearance on CNN's "Moneyline," Reuters reports.
Rep. Tauzin also added that former Worldcom CFO Scott Sullivan revealed
to lawyers conducting an internal investigation at the Company that Mr.
Ebbers was aware of accounting improprieties. Mr. Sullivan was fired
for his role in the accounting scandal, which forced the Company to
revise its financial records for 15 months starting in 2001.
"The fired CFO of the company, the guy in charge of financial affairs
of the company, admitted to those lawyers that the chairman of the
company, Bernie Ebbers, did in fact know that millions of dollars,
hundreds of millions of dollars had been moved into capital debt rather
than expensing it as ordinary debt of the corporation," Tauzin said in
the interview.
"So this is the first evidence that we have at least the CFO is saying
to attorneys within the corporation that his boss, the CEO of the
company, actually knew that the books were being cooked," he added.
Investigators for Rep. Tauzin's committee met recently with Company
attorneys who said they had interviewed a number of people about the
scandal, including Mr. Sullivan and Mr. Ebbers, according to Rep.
Tauzin's spokesman Ken Johnson. The lawyers said that Ebbers denied
any wrongdoing, Johnson told Reuters.
Mr. Ebbers's attorney was not immediately available for comment,
Reuters reports.
WYETH CORP.: Class Action Status Sought For Suit Over Prempro Injuries
----------------------------------------------------------------------
Wyeth Corporation denied the allegations in a purported class action
suit filed on behalf of everyone prescribed the hormone-replacement
drug Prempro, a type of progestin, the Dow Jones Business News reports.
The lawsuit, filed in US District Court in Philadelphia seeks to have a
medical-monitoring fund established for everyone who has taken Prempro,
and refunds for all Prempro patients and to get compensation "to all
victims for personal injuries and death."
A recently released study showed that women who are attempting to stay
the effects of menopause by using combination hormone-replacement
therapy, may be putting themselves at risk for cardiovascular disease
and breast cancer. Prempro, an estrogen-progestin supplement, was used
in the 16,608-woman study, run by the National Institutes of Health
regarding a combination-hormone therapy. The study was ended May 31 by
a safety monitoring board. The Food and Drug Administration approved
Prempro in 1995 for hormone-replacement therapy.
A Company spokesman said the company had not seen the lawsuit, but does
not believe there is any legal or factual basis for claims against the
company related to Prempro or the study.
The Company has sent 500,000 letters to doctors and other health-care
providers urging them to consider, when they talk to patients, the
"critical role" Prempro has in relieving the symptoms of menopause.
The letters try to differentiate between women who take Prempro for
more than four years - the point where researchers found a higher risk
of breast cancer - and those who took it for less time. The letters
urge doctors to consider Prempro's benefits of relieving hot flashes
and other problems in healthy women who begin the therapy early in
menopause.
New Securities Fraud Cases
CORPPRO COMPANIES: Leo Desmond Commences Securities Suit in N.D. OH
-------------------------------------------------------------------
The Law Offices of Leo W. Desmond initiated a securities class action
on behalf of shareholders who acquired Corppro Companies, Inc.
(AMEX:CO) securities between April 1, 2000 and March 20, 2002,
inclusive. The case is pending in the United States District Court for
the Northern District of Ohio against the Company and:
(1) Joseph W. Rog,
(2) Michael K. Baach,
(3) David H. Kroon,
(4) Neal R. Restivo,
(5) John L. Brack, Jr.,
(6) Kurt R. Packer and
(7) Marilyn Eisele
It is alleged that defendants violated Section 10(b) 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
FLEXTRONICS INTERNATIONAL: Schiffrin & Barroway Lodges Suit in S.D. NY
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of New York
claims that Flextronics International Ltd. (Nasdaq:FLEX) misled
shareholders about its business and financial condition.
The suit seeks damages for violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 (and/or the Securities Act of 1933)
on behalf of all investors who bought the Company's securities between
October 2, 2001 through June 4, 2002.
The suit alleges that the Company failed to disclose that its business
and operations were being negatively affected by a host of adverse
factors, including, but not limited to, the following:
(1) that the Company was experiencing declining sales as its
business began to be affected by adverse market forces.
Throughout the class period, defendants repeatedly emphasized
that the Company was not being affected by the slowdown in the
US or global economy, when, in fact, that was not true;
(2) throughout the class period, many of the Company's customers
were experiencing severe financial difficulty such that it was
highly foreseeable that they would be unable to complete
anticipated sales, thereby causing the Company to suffer a
decline in its revenues. At all times throughout the class
period, defendants lacked a reasonable basis upon which to
publish and/or affirm the revenue guidance they provided to
analysts and investors; and
(3) defendants had purposely and/or recklessly under-reported the
amount of financing needed to complete the Company's
restructuring and over-stated the status of the completion of
this reorganization, as well as made false statements
concerning the Company's financial and operational condition
because it was critical that defendants raise cash by selling
more equity during the upcoming months.
On June 4, 2002, the last day of the class period, defendants shocked
the market when they finally revealed that the restructuring, which was
purportedly paid for in October 2001 and substantially completed
thereafter, was still far from complete. Defendants now admitted that
there were at least an additional $150 million in restructuring charges
that must be recorded.
In addition, defendants also stated that they could not possibly meet
the Company's previous earnings and revenue forecasts for its first
fiscal quarter 2003.
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com
or visit the firm's Website: http://www.sbclasslaw.com
MERCK & CO.: Shapiro Haber Commences Securities Fraud Suit in NJ Court
----------------------------------------------------------------------
Shapiro Haber & Urmy, LLP initiated a securities class action in the
United States District Court for the District of New Jersey against
Merck & Co., Inc. (NYSE: MRK), and certain of its officers and
directors, on behalf of all persons who purchased Company common stock
during the period July 1, 1999 through July 5, 2002, inclusive.
The complaint alleges that the defendants violated section 10(b) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
and Section 20(a) of the Exchange Act, by issuing a series of press
releases and public filings containing materially false or misleading
statements regarding the Company's soon to be spun off pharmacy-benefit
unit, Merck-Medco Managed Care, LLC.
The complaint charges that the Company overstated revenues of the
Company by billions of dollars by improperly recognizing as revenue
consumer co-payments for prescriptions that it never collected. On
July 5, 2002, in a public filing with the SEC, the Company admitted
that Merck-Medco reported approximately $14 billion in revenue for co-
payments it never collected in fiscal years 1999, 2000, 2001 and the
first quarter of 2002, representing about 10% of Merck's overall
revenues for that period.
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.
MERCK & CO.: Marc Henzel Commences Securities Fraud Suit in New Jersey
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the US District Court for the District of New Jersey on behalf of
shareholders who purchased Company (NYSE:MRK) stock from July 1,1999
through June 21,2002. The suit charges the Company and several top
officers with improperly inflating revenues by billions of dollars.
According to the complaint, Merck overstated revenues by billions of
dollars from its subsidiary Merck-Medco Managed Care, LLC by including
consumer co-payments for prescription drugs in its revenues. During
the class period, Merck-Medco's revenues made up over 50% of Merck's
total revenues.
The lawsuit claims that Merck violated Generally Accepted Accounting
Practices because neither company bills for the co-payments, gets
billed for them, or otherwise comes into contact with co-payment money.
Patients make co-payments directly to pharmacies when they purchase
medicine.
On June 21, 2002, The Wall Street Journal reported on Merck's
accounting practices and estimated that Merck and Merck-Medco may have
pumped up their 2001 revenues by as much as $4.6 billion. Similar
overstatements may have occurred for 1999 and 2000, the complaint says.
That same day, according to the complaint, a Merck spokesman admitted
that the company had been recording prescription drug co-payments as
revenue since it acquired Merck-Medco in 1993.
In the wake of these revelations, Merck's stock immediately dropped
4.25% from its closing price of $52.20 on June 20, 2002 to a closing
price of $49.98 on June 21, 2002, its lowest closing price since late
1997.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave,
Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888-643-6735 or
610-660-8000 by Fax: 610-660-8080 by E-mail: Mhenzel182@aol.com or
visit the firm's Website: http://members.aol.com/mhenzel182.
MERCK & CO.: LeBlanc & Waddell Commences Securities Fraud Suit in NJ
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LeBlanc & Waddell, LLC initiated a securities class action against
Merck & Co., Inc. (NYSE:MRK) and several top officers, claiming the
company improperly inflated revenues by billions of dollars. The suit
is pending in the US District Court for the District of New Jersey, on
behalf of all investors who bought Merck common stock from July 1, 1999
through June 21, 2002.
According to the complaint, Merck overstated revenues by billions of
dollars from its subsidiary Merck-Medco Managed Care, LLC by including
consumer co-payments for prescription drugs in its revenues. During
the class period, Merck-Medco's revenues made up over 50% of Merck's
total revenues.
The lawsuit claims that Merck violated Generally Accepted Accounting
Principles because neither company bills for the co-payments, gets
billed for them, or otherwise comes into contact with co-payment money.
Patients make co-payments directly to pharmacies when they purchase
medicine.
On June 21, 2002, The Wall Street Journal reported on Merck's
accounting practices and estimated that Merck and Merck-Medco may have
pumped up their 2001 revenues by as much as $4.6 billion. Similar
overstatements may have occurred for 1999 and 2000, the complaint says.
That same day, according to the complaint, a Merck spokesman admitted
that the company had been recording prescription drug co-payments as
revenue since it acquired Merck-Medco in 1993.
In the wake of these revelations, Merck's stock immediately dropped
4.25% from its closing price of $52.20 on June 20, 2002 to a closing
price of $49.98 on June 21, 2002, its lowest closing price since late
1997.
For more details, contact Chad A. Dudley by Mail: 5353 Essen Lane,
Suite 420, Baton Rouge LA 70809 by Phone: 800-988-3514 or by E-mail:
cdudley@lw-law.net
MERCK & CO.: Kaplan Fox Commences Securities Fraud Suit in New Jersey
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Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Merck & Co., Inc. (NYSE:MRK) and certain of its officers and directors,
in the United States District Court for the District of New Jersey.
This suit is brought on behalf of all persons or entities who purchased
or otherwise acquired Company common stock between July 1, 1999 and
June 21, 2002, inclusive.
The complaint alleges that the Company and certain of its officers and
directors violated the federal securities laws. The complaint alleges,
among other things, that during the class period defendants overstated
the Company's revenues.
The Company's operations are comprised of two reportable segments:
Merck Pharmaceutical and Merck's wholly owned subsidiary, Merck-Medco
Managed Care, LLC. Since Merck acquired Merck-Medco in 1993 and
throughout the class period, Merck and Merck-Medco have falsely
inflated their reported revenues by billions of dollars, in violation
of Generally Accepted Accounting Principles (GAAP).
During the class period, Merck-Medco's revenues have made up over 50%
of the Company's total revenues. Merck-Medco revenues are purportedly
derived from the filling and managing prescriptions and health
management programs. Consumers who are members of pharmacy benefits
plans and purchase prescriptions must make a co-payment directly to the
pharmacy.
To artificially boost Merck-Medco's apparent sales, defendants included
consumer co-payments for prescription drugs in its revenues, contrary
to the revenue recognition practices of two of Merck-Medco's biggest
competitors and in violation of GAAP. As a result, Merck-Medco and
Merck overstated the companies' total economic activity, making it look
more successful than it was in reality.
According to a June 21, 2002 article in The Wall Street Journal,
neither company bills for the co-payments, gets billed for them, or
otherwise comes into contact with them. The Wall Street Journal
reported that Merck has not disclosed the actual co-payments charged
and estimated that Merck and Merck-Medco may have artificially inflated
their 2001 revenues by as much as $4.6 billion.
As a result of defendants' false and misleading statements, investors
were damaged, by purchasing Merck's common stock at artificially
inflated levels during the class period.
For more details, contact Frederic S. Fox, Joel B. Strauss or Donald R.
Hall by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by
Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-mail:
mail@kaplanfox.com
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Merrill Lynch & Co., Inc., and Internet stock analyst and First Vice
President of Merrill Lynch, Henry Blodget, in the United States
District Court for the Southern District of New York on behalf of all
persons or entities who purchased or otherwise acquired the common
stock of GoTo, Inc. (Nasdaq: OVER) between January 11, 2001 and June 6,
2001, inclusive.
The complaint alleges that defendants violated the federal securities
laws by issuing analyst reports regarding GoTo that recommended the
purchase of GoTo common stock and which set price targets for GoTo
common stock, which were materially false and misleading and lacked any
reasonable factual basis.
The complaint further alleges that, when issuing their GoTo 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 GoTo analyst reports, in which they
recommended the purchase of GoTo stock, the Defendants failed to
disclose material, non-public, adverse information, which they
possessed about GoTo. Throughout the class period, the defendants
maintained positive recommendations on GoTo in order to obtain and
support lucrative financial deals for Merrill Lynch.
As a result of defendants' false and misleading analyst reports, GoTo's
common stock traded at artificially inflated levels during the class
period.
For more details, contact Frederic S. Fox, Jonathan K. Levine or Donald
R. Hall by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by
Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-mail:
mail@kaplanfox.com
MERRILL LYNCH: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Merrill Lynch & Co., Inc., and certain of its 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 or otherwise
acquired Merrill Lynch's Internet Infrastructure HOLDRS/SM Trust
(AMEX:IIH) between February 24, 2000 and April 8, 2002, inclusive.
The complaint alleges that Merrill Lynch and certain of its officers
and directors violated the federal securities laws. The complaint
alleges, among other things that during the class period, defendants
issued a series of false and misleading statements, and omissions of
material fact, within a Registration Statement and Prospectus filed
with the SEC on February 24, 2000, for the issuance and initial public
offering of one billion Internet Infrastructure HOLDRS.
Taking advantage of the profitable Internet wave, Merrill Lynch created
multiple trusts that were composed of underlying securities of
companies in the technology sector. Each Internet Infrastructure
HOLDRS represents an undivided beneficial ownership in 20 specific
companies in the Internet infrastructure sector of the technology
industry. The price of the Internet Infrastructure HOLDRS was directly
related to, and shifted with, the price of the underlying securities.
Merrill Lynch research analysts in the Internet group, issued inflated
rating and biased reports for the companies whose stocks comprised the
trusts and for additional Internet stocks. In so doing, defendants
created a false demand for the securities that comprised the trusts,
which in turn inflated the price of the Internet Infrastructure HOLDRS
Trust as well. Merrill Lynch engaged in such conduct despite knowing
that the valuation of the Internet companies cold not be sustained, and
that eventually fall in value.
As a result, investors were damaged, by purchasing Internet
Infrastructure HOLDRS Trust at artificially inflated levels during the
class period.
For more details, contact Frederic S. Fox or Jonathan K. Levine by
Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone:
800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by E-mail:
mail@kaplanfox.com
MONTANA POWER: Wechsler Harwood Commences Securities Suit in Montana
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Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of shareholders who acquired Montana Power Company,
n/k/a Touch America Holdings, Inc. (NYSE:TAA) securities between
January 30, 2001 and November 14, 2001, inclusive, in the United States
District Court for the District of Montana, against defendants Touch
America and Robert Gannon.
The complaint charges Touch America Holdings, Inc. and certain of its
officers and directors violated the federal securities by issuing false
and misleading statements concerning its business and financial
condition. Specifically, defendants issued positive statements
regarding the Company's successful restructuring from an energy company
into a standalone telecommunications company.
These statements were materially false and misleading because they
failed to disclose material adverse facts which were known to
defendants or recklessly disregarded by them, including:
(1) that the Company was having problems with the assets that it
acquired from Qwest Communications International - which had
become its principal assets in lieu of the power generation
assets which it had sold - and in its relationship with Qwest.
As a result of these problems:
(i) the Company was experiencing declining revenues in its
telecommunications business;
(ii) the Company's broadband division was experiencing declining
demand for its products and services; and
(iii) as a result of the foregoing, the Company's purported
transformation to a standalone telecommunications company was
not meeting with success.
On November 14, 2001, the last day of the class period, the Company
issued a press release announcing its financial results for the third
quarter of 2001, the period ending September 30, 2001, and disclosed
that the Company's quarterly losses, "reflect the continued slowing of
the nation's economy and the difficult transition of the Company from a
diversified energy company to Touch America."
The press release further revealed that, as a result of its poor third
quarter results, the Company was not in compliance with certain
financial covenants under its Senior Secured Credit Facility. Finally,
the press release revealed that the Company was engaged in litigation
with Qwest concerning its purchase of certain assets from Qwest in June
2000, litigation ongoing since August 2001, but not meaningfully
revealed to investors.
Following this announcement, the price of Company common stock closed
at $4.70 per share on heavy trading volume. During the class period,
Company common stock traded as high as $22.78 per share.
For more details, contact Craig Lowther by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 or by E-
mail: clowther@whhf.com.
OMNICOM GROUP: Scott + Scott Commences Securities Fraud Suit in S.D. NY
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Scott + Scott, LLC 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 against 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 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:
(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 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 Neil Rothstein or David R. Scott by Phone:
800-404-7770 by E-mail: nrothstein@scott-scott.com or drscott@scott-
scott.com
OMNICOM GROUP: Kaplan Fox Commences Securities Fraud Suit in S.D. NY
--------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Omnicom Group, Inc. (NYSE:OMC) and certain of its 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 or otherwise acquired Company securities between April 25,
2000 and June 11, 2002, inclusive.
The complaint alleges that the Company and certain of its officers and
directors violated the federal securities laws. The complaint alleges,
among other things, that during the class period defendants reported
that the Company was experiencing growth in its revenues and earnings,
despite the overall economic slowdown and the worst decline in
advertising revenue that the industry had ever experienced. Defendants
attributed the Company's growth to, for the most part, the numerous
acquisitions made by the Company.
During 2000 and 2001, the Company acquired 73 companies. The Company,
however, failed to reveal that it strung out the payments on its
acquisitions for years to come, yet immediately accounted for the
revenue from the acquired companies, thereby pumping up the Company's
organic growth rate.
During the class period, the Company failed to disclose $250 to $350
million in liabilities created by having to make future payments on its
acquisitions. Moreover, the Company accounted for "earn-out payments"
(payments to the acquired companies) as acquisition expenses, rather
than compensation, so that the amounts were not subtracted from the
Company's net income.
The complaint further alleges that during the class period, the Company
failed to disclose that under certain circumstances, it would be
obligated to purchase certain companies in which it had invested.
Thereby, the Company misrepresented its liabilities.
The Company also failed to disclose that it transferred its holdings in
several troubled Internet companies to Seneca, a company it created, so
that it would avoid writing down the losses on the investments. The
Company's consideration for the transfers was $280 million in Seneca
stock, which constituted an overstatement of the value of the
investments.
As a result of defendants' false and misleading statements, investors
were damaged, by purchasing Company securities at artificially inflated
levels during the class period.
For more details, contact Frederic S. Fox or Shelley Thompson by Phone:
805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: 800-290-1952
or 212-687-1980 by Fax: 212-687-7714 or by E-mail: mail@kaplanfox.com
PERKINELMER INC.: Schatz & Nobel Commences Securities Fraud Suit in MA
----------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the District of Massachusetts on behalf of
all persons who purchased PerkinElmer, Inc., (NYSE: PKI) from July 15,
2001 through April 11, 2002, inclusive. Also included are all those
who acquired Company shares through its acquisition of Packard
BioScience (formerly Nasdaq: PBSC).
The suit alleges that the defendants made materially false and
misleading representations concerning the Company's financial condition
throughout the class period. These statements were allegedly false and
misleading because the Company failed to disclose that:
(1) it was experiencing a severe decline in business, specifically
in its Optoelectronics division;
(2) the Company was failing to write-down tens of millions of
dollars of inventory held by that division, and
(3) the company was incurring rising expenses associated with its
numerous divestitures and acquisitions.
On March 1, 2002, the Company announced that earnings would be
materially less than it had represented. In response, shares fell 31%
from $23 to $15.75. On April 11, 2002, defendants disclosed that
reported earnings would be breakeven, not the $0.16 to $0.17 profit per
share that the Company had previously stated and that its revenues
would decline. On this news, shares fell 28% to close at $12.04 per
share.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
SUPERVALU INC.: Schiffrin & Barroway Lodges Securities Fraud Suit in MN
-----------------------------------------------------------------------
Schiffrin & Barroway LLP initiated a securities class action in the
United States District Court for the District of Minnesota on behalf of
all purchasers of the common stock of Supervalu, Inc. (NYSE: SVU) from
April 4, 2001 through June 26, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statements concerning its business
and financial condition. Specifically, the complaint alleges that
defendants issued statements regarding the Company's 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:
(1) the Company was employing improper accounting practices
regarding the cost of goods sold for at least the past four
years in violation of Generally Accepted Accounting
Principles. As a result, the Company announced on June 26,
2002 that it expects $21 million in additional expenses; and
(2) based on the foregoing, defendants' statements concerning the
financial condition of the Company were lacking in a
reasonable basis at all times.
The impact of these announcements was immediately felt in the market.
Shares of the Company fell sharply following the Company's statements
on June 26, 2002. Company stock closed on June 26, 2002, at $21.95
down approximately $6.11, or 22%. Subsequently, on July 1, 2002, a
mere five days after the Company disclosed the existence of its
internal investigation, the Company did, in fact, materially restate
its financial statements for all of Fiscal Years 2000, 2001 and 2002.
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 or by E-mail:
info@sbclasslaw.com
SUPERVALU INC.: Cauley Geller Commences Securities Fraud Suit in MN
-------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the District of Minnesota on
behalf of purchasers of Supervalu, Inc. (NYSE: SVU) common stock during
the period between April 4, 2001 and June 26, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statements concerning its business
and financial condition. Specifically, the complaint alleges that
defendants issued statements regarding the Company's 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 cost of goods sold for at least the past four
years in violation of Generally Accepted Accounting
Principles. As a result, the Company announced on June 26,
2002 that it expects $21 million in additional expenses; and
(ii) based on the foregoing, defendants' statements concerning the
financial condition of the Company were lacking in a
reasonable basis at all times.
The impact of these announcements was immediately felt in the market.
Shares of the Company fell sharply following the Company's statements
on June 26, 2002. Company stock closed on June 26, 2002, at $21.95
down approximately $6.11, or 22%.
Subsequently, on July 1, 2002, a mere five days after the Company
disclosed the existence of its internal investigation, Supervalu did,
in fact, materially restate its financial statements for all of Fiscal
Years 2000, 2001 and 2002.
For more details, contact Jackie Addison, Sue Null or Ellie Baker 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
SUPERVALU INC.: Beatie and Osborn Commences Securities Fraud Suit in MN
-----------------------------------------------------------------------
The Law Firm of Beatie and Osborn LLP initiated a securities class
action in the United States District Court for the District of
Minnesota on behalf of individuals who acquired Supervalu, Inc. (NYSE:
SVU) common stock during the period between July 29, 1999 and June 25,
2002, as well as former shareholders of Richfood Holdings, Inc.
(Richfood) who exchanged their shares for the Company's common stock.
The complaint charges the Company with issuing false and misleading
statements concerning its business and financial condition in violation
of the federal securities laws. Specifically, the complaint alleges
that defendants issued statements regarding its annual financial
performance that were materially false and misleading because, among
other things:
(1) the Company was employing improper accounting practices
regarding the cost of goods sold for at least the past four
years in violation of Generally Accepted Accounting
Principles. As a result, the Company announced on June 26,
2002 that it expects $21 million in additional expenses; and
(2) based on the foregoing, defendant's statements concerning the
financial condition of Supervalu were lacking in a reasonable
basis at all times.
The impact of these announcements was immediately felt in the market.
Shares of the Company fell sharply following the Company's statements
on June 26, 2002. Company stock closed on June 26, 2002, at $21.95
down approximately $6.11, or 22%. Subsequently, on July 1, 2002, five
days after the Company disclosed the existence of its internal
investigation, the Company did in fact restate its financial statements
for previous years.
For more details, contact Eduard Korsinsky or Benjamin D. Coleman by
Phone: 800-891-6305 by Fax: 212-888-9664 by E-mail:
clientrelations@bandolaw.com or visit the firm's Website:
http://www.bandolaw.com
TRITON NETWORKS: Schiffrin & Barroway Launches Securities Suit in FL
--------------------------------------------------------------------
Schiffrin & Barroway LLP initiated a securities class action against
Triton Network Systems, Inc. (OTCBB:TNSIE), claiming that the Company
misled investors about its business and financial condition. The suit
is pending in the US District Court for the Middle District of Florida,
Tampa Division on behalf of all investors who bought Company securities
between July 13, 2000 and August 14, 2001.
The suit alleges that the Company issued a series of materially false
and misleading statements to the market between July 13, 2000 and
August 14, 2001. According to the suit, the Company's July 13, 2000
Prospectus contained false and misleading statements regarding its
sales and revenue.
The prospectus also touted a three-year supply agreement with a
customer called Advanced Radio Telecom (ART) representing that this
agreement would account for a significant amount of revenue. However,
defendants revealed on November 14, 2000, that "a key customer" that
had previously been represented in the offering as having a issued
"firm purchase orders," had requested that the Company "postpone
delivery" of the orders until after it (ART) obtains additional
financing." ART filed for bankruptcy on March 30, 2001.
Additionally, the complaint alleges that defendants disseminated
materially false financial statements for each of the Company's interim
quarters during the class period and for the year ended December 31,
2000, which materially overstated the Company's revenues and its net
income. Defendants also made a series of other materially false and
misleading statements about the Company and its financial condition and
performance.
The complaint further alleges that during the class period, defendants:
(1) failed to include in its financial statements, all
adjustments, necessary for a "fair presentation" of the
financial results in violation of GAAP;
(2) applied a non-GAAP accounting method which resulted in a
material $2.7 million under-provision for bad debts;
(3) failed to write off worthless intangible assets; and
(4) failed to recognize a provision for loss and inventory
purchase commitments.
During the class period Company stock experienced a free fall --
plummeting from a high of over $40 per share in July of 2000 to less
than $0.60 per share on August 14, 2001. On August 21, 2001, it was
reported that the Company decided to close and sell its assets, pending
shareholder approval.
For more details, contact Shareholder Relations Manager by Phone:
888-299-7706 (toll free) or 610-822-2221 by E-mail: info@sbclasslaw.com
or visit the firm's website: http://www.sbclasslaw.com
TYCO INTERNATIONAL: Johnson & Perkinson Launches Securities Suit in NH
----------------------------------------------------------------------
Johnson & Perkinson initiated a securities class action in the US
District Court for New Hampshire against Tyco International Ltd. (NYSE:
TYC-News) on behalf of purchasers of the Company's securities from
April 25, 2002 through June 12, 2002.
The complaint asserts claims against the Company and some of its top
officers for violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Plaintiffs
allege:
(1) the Company's financial results announced on April 25, 2002
overstated the value of CIT Group, a wholly owned Tyco
subsidiary, by $4.5 to $6.5 billion, thereby materially
inflating the Company's reported financial results;
(2) Defendants failed to reveal the material risk that the public
offering of CIT stock by Tyco would not be able to be competed
once the criminal investigation of one of the individual
defendants became public or, if it were, would only occur at a
value far below that represented defendants; and
(3) defendants failed to reveal the ongoing criminal
investigations of Kozlowski.
As a result, Company's securities were artificially inflated throughout
the class period, causing plaintiff and other members of the class to
purchase or sell such securities at prices skewed by defendants'
conduct.
At the end of the class period, the Company announced the need to
restate its financial results to write down $4.5 billion of CIT's
goodwill.
For more details, contact Dennis J. Johnson or Jacob B. Perkinson by
Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone:
888-459-7855 or by E-mail: JPLAW@adelphia.net.
WORLDCOM INC.: Cauley Geller Commences Securities Fraud Suit in MS
------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
has been filed in the United States District Court for the District of
Mississippi on behalf of purchasers of WorldCom, Inc. (Nasdaq: WCOME)
common stock during the period between April 26, 2001 and June 25,
2002, inclusive. The suit names as defendants the Company and:
(1) Bernard J. Ebbers,
(2) Scott D. Sullivan and
(3) Arthur Anderson, LLP
The complaint details how during the class period, the Company, the
nation's second-largest long-distance carrier, overstated its cash flow
by $3.8 billion during the last five quarters in what may be the
largest case of corporate fraud in history. As detailed in the
complaint, instead of the $1.4 billion in profits the Company reported
in 2001 and $130 million so far this year, the Company now admits it
lost money during those periods but does not know how much.
As further detailed in the complaint, the Company, under the guidance
of Mr. Ebbers and Mr. Sullivan, booked basic operating costs like basic
network maintenance as capital investments, a fictitious practice that
hid expenses, inflated cash flow and allowed the Company to falsely
report profits instead of losses. In short, this accounting
machination boosted cash flow because it improperly treated costs as an
asset that could be written down over time, not immediately.
Importantly, this practice of moving certain transfers from line item
expenses to capital accounts is a blatant violation of Generally
Accepted Accounting Principles and Generally Accepted Accounting
Standards. Absent this improper accounting practice, the Company would
have reported a net loss for 2001, as well as the first quarter of
2002. The Company reported a profit of $1.4 billion for 2001 and $130
million for the first quarter of 2002, each patently false.
Arthur Andersen also knew that this type of accounting practice was
improper and, according to published reports, Andersen's audit reports
"could not be relied upon for at least "the five quarters in question."
As an experienced auditor charged with the responsibility of preparing
disclosures to be filed with the SEC, Andersen knew the line cost
transfers did not comport with GAAP and GAAS, but either intentionally
or recklessly disregarded this pervasive fraud to the detriment of the
class.
Anderson, however, issued a March 7, 2002, "Report Of Independent
Public Accountants" that was included in the Company's false 2001 Form
10-K that was filed with the SEC on March 13, 2002. Anderson's opinion
letter falsely stated that it had properly audited the Company's 2001
balance sheet and that in Anderson's opinion "(w)e believe that our
audits provide a reasonable basis for our opinion. In our opinion, the
financial statements referred to above present fairly, in all material
respects, the financial position of WorldCom, Inc. and subsidiaries as
of December 31, 2000 and 2001, and the results of their operations and
their cash flows for each of the years in the three-year period ended
December 31, 2001, in conformity with accounting principles generally
accepted in the United States."
For more details, contact Jackie Addison, Sue Null or Ellie Baker 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
*********
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
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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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