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/raid1/www/Hosts/bankrupt/CAR_Public/020722.mbx C L A S S A C T I O N R E P O R T E R Monday, July 22, 2002, Vol. 4, No. 143 Headlines AROMA HOUSEWARES: Recalls 117,000 Juice Extractors For Injury Hazard FORD MOTOR CO.: Consumers Group Alleges "Secret Warranty" Violations HALLIBURTON COMPANY: Plan Participant Files Securities Fraud Suit in TX HILTON HOTELS: Recalls 27T Children's Cooler/Chairs For Injury Hazard JAKKS PACIFIC: Recalls 296T "Smatter" Spray Foam Cans For Injury Hazard JOHNSON OUTDOORS: Recalls 1,7T U-Line Pressure Gauges For Injury Hazard MAXIM'S BAKERY: Canada Court Approves Salmonella Outbreak Settlement NORTH CAROLINA: Lawsuit To Be Used As Predatory Lending Law Test PRO-FAC COOPERATIVE: Faces Farmers Suit Over Fraudulent Accounting STATE FARM: AZ Court Grants Consumer Fraud Suit Class Certification TELECOMS COMPANY: Consumer Fraud Suit Going To Trial In Madison County TERRORIST ATTACK: Second Attorney For OK Bombing Victims Withdraws UNITED STATES: Thousands Of Federal Workers To Share Back Pay Accord WORLDCOM INC.: CA Pension Funds Sue Former Executives, Underwriters New Securities Fraud Cases AMERICAN EXPRESS: Lovell & Stewart Commences Securities Suit in S.D. NY AOL TIME: Lovell & Stewart Commences Securities Fraud Suit in S.D. NY AOL TIME: Milberg Weiss Commences Securities Fraud Suit in S.D. NY DUKE ENERGY: Bernstein Liebhard Commences Securities Suit in S.D. NY FLEXTRONICS INTERNATIONAL: Wolf Popper Commences Securities Suit in NY FLEXTRONICS INTERNATIONAL: Spector Roseman Lodges Securities Suit in NY MIRANT CORPORATION: Bernstein Liebhard Launches Securities Suit in GA MIRANT CORPORATION: Schatz & Nobel Commences Securities Suit in N.D. GA MUTUAL RISK: Bernstein Liebhard Commences Securities Suit in S.D. CA TELLABS INC.: Cauley Geller Commences Securities Fraud Suit in N.D. IL UNIROYAL TECHNOLOGIES: Schiffrin & Barroway Lodges FL Securities Suit VIVENDI UNIVERSAL: Wolf Haldenstein Lodges Securities Suit in S.D. NY ********* AROMA HOUSEWARES: Recalls 117,000 Juice Extractors For Injury Hazard -------------------------------------------------------------------- Aroma Housewares Co. is cooperating with the US Consumer Product Safety Commission (CPSC), by voluntarily recalling about 117,000 more juice extractors or juicers. The juicer's filter and lid can break apart, projecting metal and plastic into the air, causing injuries to consumers. The firm previously recalled 40,000 juicers in June 1999. This recall includes redesigned juicers used as replacements for the original recall. The Company has received two additional reports of the redesigned juicer's filter and lid breaking apart, resulting in two consumers suffering minor injuries. There have been 32 reports of the original juicer breaking, and 32 reports of injuries. Seven of these injuries required stitches and one required surgery for lacerated arteries. All model ACJ-250 Aroma Juice Extractors are included in the recall. "ACJ-250" and "MADE IN CHINA" are written on the bottom of the juicer on a silver label. The juice extractor is made of white and clear plastic and has a metal filter. "Aroma" is printed on the front of the unit. Discount specialty and department stores sold the recalled juice extractors from March 1996 through July 2002 for about $25. For more details, contact the Company by Phone: 800-276-6286 between 9 am and 5 pm PT Monday through Friday. FORD MOTOR CO.: Consumers Group Alleges "Secret Warranty" Violations -------------------------------------------------------------------- A consumer group recently accused Ford Motor Co. of violating "secret warranty" laws in California, Connecticut, Virginia and Wisconsin, by failing to tell civilian owners of Crown Victorias and similar cars about a program to reduce the risk of fires from gas tank ruptures, the Los Angeles Times reports. Class actions already have been filed against the Company in Arkansas, Texas, and New Jersey, seeking recall of all Crown Victoria police cruisers, and now the issue of civilian cars has arisen. In letters to California Attorney General William Lockyer and his counterparts in the other three states, Connecticut, Virginia and Wisconsin, the Center for Auto Safety said Ford had broken these states' laws by telling repair shops about a recommended fix but keeping owners of the cars in the dark. Clarence Ditlow, executive director of the Washington-based Center for Auto Safety, said he hopes the latest salvo will increase the pressure on Ford to issue a nationwide recall, not only of the Crown Victoria police cruisers that have been in the news, but civilian models, too. They also have fuel tanks behind their rear axles, which critics say makes them unusually vulnerable to rear-collision fires. Sara Tatchio, a Ford spokeswoman, said the center had misinterpreted the states' "secret warranty" laws. Ford is in compliance, "and there was no intention of hiding anything," she said. The company has maintained that the cars are safe and that the gas tank fires have been extremely rare, the result of high-speed collisions that no fuel system would be likely to withstand. In the last 10 years, there have been reports of at least a dozen police officer deaths in fiery wrecks involving the popular Crown Victoria police cruisers. Using court and medical records and a government database of accidents, the Center for Auto Safety said it had identified about 30 fatal wrecks since 1992, mostly involving civilians, in which occupants of the cars appeared to survive a crash but died in the ensuing fire. The letters written by the Center for Auto Safety to the attorneys general in California, Connecticut, Virginia and Wisconsin, focused on a technical service bulletin that Ford sent to repair shops in October 2001, advising that the risk of tank punctures in 1992-2001 "Panther" platform cars, the Crown Victoria, Lincoln Town Car and Mercury Marquis, could be reduced by grinding down a metal tab and replacing a protruding bolt that could be pushed into the tank in an accident Ford said the work was recommended only for Crown Victoria police cruisers, which are frequently exposed to high-speed rear collisions during traffic stops. However, the service bulletin said all owners of Panther platform cars could have the work done free of charge if their cars were under the warranty. The "secret warranty" laws grew out of a campaign by the Center in the early `90s that helped get the laws on the books in the four states. Mr. Ditlow said they were a response to numerous cases in which vehicles were not recalled, but manufacturers told repair shops "they would fix something for free, but they would not tell the consumers." Ford's view is that the laws do not cover technical service bulletins, which frequently are issued without consumers being notified, the spokeswoman, Ms. Tatchio, said. "We do not believe their interpretation is anywhere near correct. They have twisted the facts to fit their argument." The Crown Victoria issue, which has been simmering for about three years, arose to a boil last month with the fiery death of a police officer in Chandler, Arizona, when Robert Nielsen, 25, became the third Arizona officer to die in less than four years when the fuel tank of his Crown Victoria erupted in flames after a crash. HALLIBURTON COMPANY: Plan Participant Files Securities Fraud Suit in TX ----------------------------------------------------------------------- Halliburton Company faces a class action plan filed in the United States District Court for Dallas, Texas by a participant in the Company's retirement plan, alleging accounting fraud, the Associated Press reports. The suit alleges that the Company altered its accounting policies in late 1998 to report hundreds of millions of dollars worth of revenues from disputed cost overruns on long-term construction projects. Lawyers filing the lawsuit said the company should not have counted on getting the revenue, the Associated Press reports. The suit names as defendants: (1) David J. Lesar, chairman and chief executive, (2) Michele Mastrean, chairwoman of the company benefits committee, (3) Robert L. Crandall, (4) Kenneth T. Derr, (5) Charles J. Dibona, (6) Lawrence S. Eagleburger, (7) W.R. Howell, (8) Ray L. Hunt, (9) Aylwin B. Lewis, (10) J. Landis Martin, (11) Jay A. Precourt, (12) Debra L. Reed and (13) C.J. Silas The Company has denied wrongdoing, according to an Associated Press report. The named plaintiff in the lawsuit is Texas resident Gay R. Pitman, a participant in the retirement plan. Pitman's lawyers, the Hartford, Conn., firm of Schatz & Nobel, are seeking to broaden the lawsuit by allowing any Halliburton plan participant whose account held Halliburton shares August 1999 through May 28 of this year to join as a plaintiff. HILTON HOTELS: Recalls 27T Children's Cooler/Chairs For Injury Hazard --------------------------------------------------------------------- Hilton Hotels Corporation is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 27,000 Vacation StationT children's cooler/chairs. When the chair collapses the folding mechanism can pose a crushing, cutting or severing hazard to consumers' fingers. The Company is aware of one report in which part of a 2-year-old boy's fingertip was severed when the chair collapsed. The recalled product is a multi-use product that can be used as both a child's chair or a food/beverage storage cooler. The cooler/chairs were given to hotel guests as a welcoming gift at participating Hiltonr, Doubletreer, and Hilton Garden Innr hotels and resorts. The chairs have either a purple aluminum frame with a purple fabric seat and green cooler bag, or a green aluminum frame with a green fabric seat and a blue cooler bag. Vacation StationT is printed on the front of the cooler bag. The chairs were made in Hong Kong and imported into the US by Promotional Partners Group Limited of Hong Kong. Participating Hiltonr, Doubletreer, and Hilton Garden Innr hotels and resorts nationwide distributed the cooler chairs between May 2002 and June 2002 for free to hotel guests with children. For more details, contact the Company by Phone: 877-221-2424 between 9 am and 4 pm PT Monday through Friday, or visit one of the participating brand Websites: http://www.hilton.com/families, http://www.doubletree.com/familiesor http://www.hiltongardeninn.com/families. JAKKS PACIFIC: Recalls 296T "Smatter" Spray Foam Cans For Injury Hazard ----------------------------------------------------------------------- Jakks Pacific, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling approximately 296,000 cans of its aerosol "Smatter" spray foam. If the pressurized can is left in a hot automobile, it can forcefully break apart and cause injury to a nearby consumer. The Company has received eight reports of the aerosol container breaking apart. One child reportedly suffered a minor bump on the head when a can of spray foam broke apart after being in a hot car. In two cases, car windshields were cracked. Only early production of spray foam with the date codes "0492PT" to "0952PT" stamped on the bottom of the can are involved in this recall. "Smatter" is an aerosol product that sprays a soft foam material from the can when the nozzle is pushed. The product is generally used at parties, celebrations, or games. The spray foam is sold in three different varieties - "Original Smatter," "Spit Smatter," and "Fatter Smatter." "SMATTER" appears in large print on the can and on the cardboard packaging. "NickelodeonTM" is written on the orange handle. "Made in China" is written the back of the product. Discount department and toy stores sold the recalled "Smatter" products nationwide from February 2002 through June 5, 2002 for about $10. For more details, contact the Company by Phone: 800-554-5516 between 9 am and 5 pm PT Monday through Friday, for information on receiving a free replacement "Smatter" product, or visit the firm's Website: http://www.jakkspacific.com. JOHNSON OUTDOORS: Recalls 1,7T U-Line Pressure Gauges For Injury Hazard ----------------------------------------------------------------------- Johnson Outdoors, Inc. is cooperating with the US Consumer Product Safety Commission by voluntarily recalling about 1,700 SCUBAPRO/UWATECT dive computer consoles. The U-LineT submersible pressure gauge that is part of the dive consoles can malfunction and display inaccurate pressure readings. Divers using the consoles could fail to decompress properly during a dive, causing decompression sickness. The Company has received four reports of the pressure gauge malfunctioning. No injuries have been reported. Only U-LineT submersible pressure gauges contained in UWATECT brand Smart PROT, Pro ULTRAT, and Sport PLUST dive computer consoles are included in the recall. The consoles are mostly gray in color and the brand name "UWATECT" is written on the front of each console. The pressure gauges are made in the US and the computers are made in Switzerland. All of the recalled consoles have a test code that appears on the back of the gauge: (1) Tested - IL, (2) Tested - LL, (3) Tested - DM, (4) Tested - JL, (5) Tested - AM, (6) Tested - EM, (7) Tested - KL, (8) Tested - BM, (9) Tested - LL, (10) Tested - CM Aquatic sports, sporting goods and dive shops nationwide sold these gauges from January 2002 through May 2002 for between $500 and $700. For more details, contact the Company by Phone: 800-382-2211 between 8 am and 4:30 pm PT Monday through Friday, or visit the firm's Website: http://www.scubapro.com. MAXIM'S BAKERY: Canada Court Approves Salmonella Outbreak Settlement -------------------------------------------------------------------- The BC Supreme Court in Canada approved a settlement of the class action filed on behalf of 48 Lower Mainland residents who became ill in one of the worst salmonella outbreaks in Canada in recent memory. The salmonella outbreak began in mid-July 2000, with most reported cases concentrated in Richmond. By early September 2000, regional health authorities had 47 reports of the same strain of salmonella, and finally traced the source to egg-based products from Maxim's Richmond Centre bakery. Investigators determined that Maxim's had been using raw unpasteurized eggs cooked at temperatures inadequate to kill bacteria. The bakery subsequently issued a product recall and switched to pasteurized eggs. Salmonella enteritidis is a virulent, potentially lethal form of food poisoning, made all the more dangerous because it does not affect the appearance, smell, or taste of the food it contaminates. Even healthy young people can be made severely ill by this strain of salmonella. Christopher Dalhuisen, a Richmond teen athlete who served as the representative plaintiff for the case, was hospitalized for five days, could not complete his summer job and had to dropout of a series of cross-country races. The Company initially fought to prevent a class action suit, arguing that the company would settle individually with each person who came forward. However, Justice Burnyeat decided to allow the case to proceed as a class action. "Class action suits help democratize justice in our society, making the courts available to those who might not have the time, resources, and language skills to pursue a case on their own," said lawyer David Klein. "Class actions have great impact in improving corporate standards for safety, ethics and consumer protection. They're also a more economical use of the legal system's overburdened resources." The settlement requires Maxim's to pay victims who were hospitalized $6,500 plus $600 per day of hospitalization, or $10,000, whichever is greater; plus out-of-pocket expenses and lost wages. Those who were not hospitalized receive $3,750 plus expenses. A third settlement option with no dollar limit is available for anyone who experienced permanent injury from the poisoning. For more details, contact David Klein by Phone: 604-874-7171 or visit the firm's Website: http://www.kleinlyons.com NORTH CAROLINA: Lawsuit To Be Used As Predatory Lending Law Test ---------------------------------------------------------------- Three years ago, North Carolina became the first state in the country to pass a law to safeguard consumers from predatory lenders. Now, a former proponent of that law when he was a state senator, state Attorney General Roy Cooper is watching a potential class action become the first test for whether that groundbreaking law has any teeth, The News & Observer (Raleigh, N.C.) reports. The lawsuit will decide whether out-of-state national banks are subject to the state's predatory lending law. Last year, three Wake County, North Carolina residents sued Guaranty National Bank of Tallahassee, claiming the bank charged them unreasonable closing fees and failed to provide loan counseling as the lending law requires. The bank says, however, that it does not have to follow North Carolina law. The consumers' attorney is seeking class action status on behalf of 141 homeowners across the state who obtained loans through Guaranty National. This bank is subject to federal law and law in the state of its charter, Florida. "Florida does not have a law like North Carolina's predatory lending law," said the bank's attorney, John M. Loper of Raleigh. The consumers' attorney, Jerry Hartzell, says federal law does not free the bank from being regulated by North Carolina, where it is soliciting customers. "There is nothing in the banking law that entitles them to sidestep North Carolina's consumer protection law," Mr. Hartzell said. Attorney General Cooper, in support of the consumers' position, said, "I think it is important that the state defend the constitutionality of this important law whenever it is challenged." He said the case could be an important precedent. In 1999, when Mr. Cooper was instrumental in getting the legislation passed, proponents said other states soon would follow North Carolina's lead. This has not yet happened, however, the outcome of this lawsuit could determine whether they will. Susan Lupton, projects director for the Coalition for Responsible Lending in Durham, says the mortgage industry supports the law, which protects consumers from the hidden costs of loans. If the consumers win the lawsuit, they could recover twice the interest they have paid on their loans and will not have to pay any more interest on what remains. If the lawsuit is certified a class action, and the consumers win, the bank faces losing $6.6 million, Mr. Hartzell estimates in court records. In January, while the lawsuit was pending in federal court, the bank sent checks and release forms to the 141 borrowers after Mr. Hartzell rejected a $353,000 settlement offer, court records say. Mr. Hartzell accused the bank of trying to entice borrowers "who may be strapped for cash" with $5,000 checks. He also accused the bank of misleading the borrowers about their rights to recover more money with the lawsuit. Mr. Loper denied wrongdoing, saying the letters were accurate and encouraged borrowers to seek legal advice before accepting the settlement offer. Senior US District Judge James C. Fox ruled that the bank's letter was not "false or misleading," but did not explain the lawsuit well enough. Judge Fox ordered a new letter written by both sides to be sent to all the borrowers. And Judge Fox ruled the banks could not finalize the settlements and banned the banks from contacting the borrowers again without court approval. Six weeks later, before the new letters were sent, Judge Fox sent the case back to state court. The state court judge assigned to the case will have to decide whether Judge Fox's order should be carried out. PRO-FAC COOPERATIVE: Faces Farmers Suit Over Fraudulent Accounting ------------------------------------------------------------------ Farmers helped build Pro-Fac Cooperative Inc. into an agricultural giant, but mow, some of them are going to court about an accounting dispute with the Company, The Wall Street Journal reports. An Oregon Circuit Court judge has certified the lawsuit to be heard as a class action, and the trial is set for January 15. About 170 farmers in Oregon's fertile Willamette Valley have banded together to sue the Rochester, New York company, alleging it inflicted an estimated $50 million in damages on them by shifting profitable assets of a Pro-Fac unit they belonged to, called AgriFrozen Foods Inc., to the parent company. As a result, say the farmers, AgriFrozen was left so unprofitable that Pro-Fac closed it down last year, leaving the farmers belonging to the unit with no place to sell many of their fruit and vegetable goods, while also wiping out their investments in the company. Additionally, the farmers say in their lawsuit that Pro-Fac underpaid them by as much as 50 percent for their crops. The farmers accuse Pro- Fac and its subsidiary, Agrilink Foods Inc., of fraud, breach of contract and other misdeeds. Lead plaintiff Robert Dettwyler added that the farmers feel "Pro-Fac came in here, promised a lot of things and then let us down." His family farm's annual income has been reduced about 20 percent by Pro-Fac's breach of contract, among other things. He said some farmers who sold a greater percentage of their crops to the Pro-Fac unit are in danger of going out of business. In a SEC filing, the company said the case is without merit and that it intended to vigorously defend itself. Pro-Fac was founded in 1960 to process and market crops grown by its members. Its Agrilink subsidiary is the largest frozen-vegetable producer in the nation. STATE FARM: AZ Court Grants Consumer Fraud Suit Class Certification ------------------------------------------------------------------- The Superior Court of Maricopa County certified as a class action the suit against State Farm Mutual Automobile Insurance Co., on behalf of all policyholders who, from or after January 29, 1993, made a claim for vehicle repairs pursuant to their policy and who received payment based on an estimate prepared or approved by the Company which did not include one or more omitted repairs where the vehicle was not a total loss. By "omitted repairs," the plaintiffs allege: (1) seat belt check, (2) rust proofing, (3) weld through primer, (4) undercoating, (5) flex additive, (6) masking inner surfaces, (7) front wheel alignment, (8) four wheel alignment, (9) aim lamps and (10) replace EPA label This suit was filed by Stacey White, who claims that the Company pays less than required to repair its insureds' damaged vehicles by using an estimating software program that systematically omits payment for the omitted repairs. Ms. White claims that the Company's failure to pay the full amount required by its policies to repair its insureds' damaged vehicles violates the Arizona Consumer Fraud Act and constitutes a breach of contract. The Company denies any wrongdoing and raises the following defenses to the allegations: (i) the software does not omit any necessary repairs; (ii) not all procedures performed on a vehicle will appear on the estimate; and (iii) the statute of limitations bars many of the claims. For more details, contact Andrew Friedman and Elaine Ryan of Bonnett, Fairbourn, Friedman & Balint, PC, class counsel by Mail: 2901 N. Central Avenue, Suite 1000, Phoenix, Arizona 85012 or contact Ron Parry and David Futscher of Parry, Deering, Futscher & Sparks, PSC, by Mail: 128 East Second Street, Covington, Kentucky 41012. TELECOMS COMPANY: Consumer Fraud Suit Going To Trial In Madison County ---------------------------------------------------------------------- The Madison County Courthouse has become a favorite place for lawyers to file class actions, but none of those cases has ever had a trial. So far, reports the Belleville News-Democrat (IL), all of the class actions that have been resolved, have been settled out of court. That is expected to change next month, however, when a trial is scheduled to begin in a class action which accuses AT&T and Lucent of deceiving customers by not clearly informing them that some of the charges on their bills represent lease charges for telephones they may have been thrown away years ago. Lawyers and businesses will be watching to see how a class action turns out when it goes to trial in this county, which has a reputation of being a plaintiff's paradise. If the verdict goes in favor of the defendants, more companies might be more willing to take their chances with trials, said William Schroeder, a law professor at Southern Illinois University Carbondale. Belleville attorney Stephen Tillery, the lead lawyer in the AT&T and Lucent case, said it is not really that unusual that none of the Madison County cases have gone to trial, since "only a few class actions are tried around the country per year - no more than a handful," Mr. Tillery said. "I think most companies probably look at their potential exposure and decide they don't want that exposure." Professor Schroeder said, "Litigation is very expensive. Settlement is almost always in everyone's best interest." Mr. Tillery also has a separate suit against AT&T & Lucent. He is asking a judge to block AT&T from spinning off its profitable AT&T Broadband division, because AT&T will not be able to pay the judgment in Mr. Tillery's leased phone class action if it unloads the Broadband division and its $103 billion in assets - which represents two-thirds of AT&T's total worth. "There is a lot of significance to the case, in terms of the numbers of people that have been affected by this fraud," said Mr. Tillery. "There are literally tens of millions of people who have been affected by their (the two defendants) conduct. Mr. Tillery said there have been no negotiations for a settlement, and he fully expects the trial to begin as scheduled on August 5. The trial is expected to last six to eight weeks. The case has its roots in the mid-1980s breakup of AT&T into regional phone companies. Before then, AT&T installed phones in customers' homes and leased them to customers. Lucent, one of AT&T's spin-off companies, now owns the phones but mails the lease bills to customers under the AT&T name. Mr. Tillery said that the bills do not clearly explain that customers are being charged for leasing a phone that they may have thrown away years ago. He said some people have unknowingly spent more than $1,300 leasing a phone. Customers have been leasing phones at an average of $6 a month, when local discount stores sell basic phones for $20. Lucent spokesman John Skalko said Lucent customers, in a survey, showed they liked to lease phones, because they could get them repaired free of charge. He said further that Lucent followed FCC guidelines when it took over the lease program from AT&T and that, therefore, the issue belongs in a federal court, not a state court. TERRORIST ATTACK: Second Attorney For OK Bombing Victims Withdraws ------------------------------------------------------------------ A second attorney who was helping Oklahoma City bombing victims receive federal terrorism compensation has withdrawn from the case, the Associated Press Newswires reports. Charles E. Polk Jr. told bombing victims recently that they have a better chance of receiving federal money if he does not represent them, said Kathleen Treanor, whose four-year-old daughter and in-laws were killed in the 1995 blast. Mr. Polk's co-counsel, Douglas Dowd of St. Louis, withdrew last week. He filed a report with the Missouri Bar that raises questions about how Mr. Polk got involved with the bombing victims. Mr. Dowd and Mr. Polk have been lobbying for legislation to include the Oklahoma City bombing victims in the compensation fund set up after the September 11 attacks. The two attorneys had promised to file a class action if the legislation was not enacted. The attorneys solicited clients with contingency arrangements. The first required those signing to pay 25 percent of anything they got from the fund, even if was the result of congressional approval. After that fee was criticized by Senator Donald Nickles, R-Okla., and Rep. Ernest Istook, R-Okla., the attorneys said they would take 10 percent for negotiation or lobbying for legislation and 25 percent if a class action was filed and successful. Now all agreements are off, as both attorneys withdraw from the case. Mr. Polk did not return a phone call from The Associated Press. Ms. Treanor said that Mr. Polk was trying to distance himself from the case and that he did not want any dispute between him and his co-counsel to harm the bombing victims' chances. About 150 bombing victims had signed up with the attorneys. However, the Senate Judiciary Committee is expected to discuss including in the compensation fund victims from Oklahoma City, the 1993 World Trade Center bombing and the 1998 bombings of US embassies in Africa. UNITED STATES: Thousands Of Federal Workers To Share Back Pay Accord -------------------------------------------------------------------- Thousands of federal workers, numbering about 200,000, or their heirs, will each get as much as $30,000 in back pay owed to the workers for work done between 1982 and 1988, The Washington Times reports. Under the terms of the settlement of the class action, due to receive final approval in November, the government will give back pay with interest to engineers, scientists, medical personnel and clerical workers, who were short-changed during the 1980s. The money is intended to make up for raises denied the so-called special rate employees. Because the case has dragged on for so many years, many of the people due the back pay have died, and their heirs will be eligible to receive the settlement payments instead. Earlier this month, the government sent notices to 212,000 workers who were part of the class action, informing them they had held special rate jobs during the class period and might be entitled to back pay, inclusive of interest, under the terms of the recently signed settlement. Part of the settlement agreement between the government and the National Treasury Employees Union is that the money will be paid to the estates of any of the eligible federal workers who have dies, and will be paid to their beneficiaries. The next step in the long-running back pay cases will occur in November, when the US Court of Appeals in Washington is expected to approve the formula worked out between the government and the Union. WORLDCOM INC.: CA Pension Funds Sue Former Executives, Underwriters -------------------------------------------------------------------- California public pension funds filed a joint lawsuit against WorldCom, Inc.'s former executives and major underwriters of the Company's bonds, and warned they were losing faith in investment bankers who sell bonds, the Financial Times reports. "If we cannot rely on the independence of the underwriters' due diligence, how can we purchase bonds of any type in the future?" said Jack Ehnes, chief executive of the California State Teachers' Retirement System (Calstrs). Calstrs filed a joint lawsuit with Calpers, the California Public Employees' Retirement System and number one US pension fund, and the Los Angeles County Employees Retirement Association (LACERA) seeking recovery of $318.5 million in losses from a May 2001 WorldCom bond issue. The suit, recently filed in the Los Angeles County Superior Court by the San Diego law firm of Milberg Weiss Bershad Hynes & Lerach, names the underwriting banks and 15 former WorldCom executives. Calpers alleges that the banks sold the bonds to avoid having their credit lines drawn down. "These banks underwrote the bonds so that WorldCom could use the monies raised to avoid having to rely on these same banks' outstanding credit line," said James Burton, Calpers' chief executive officer. Mr. Burton said the lawsuit charges that the Company clearly knew that its books falsely portrayed its true financial picture. The banks named include: (1) Citigroup, (2) Salomon Smith Barney, (3) JP Morgan Securities, (4) JP Morgan Chase, (5) Banc of American Securities, (6) ABN/Amro, (7) Deutsche Bank and (8) Deutsche Banc Alex. Brown Bernie Ebbers, former chief executive officer, Scott Sullivan, former chief financial officer and 13 other former executives also were named. The Company raised $11.9 billion in bonds in May last year. At the time, it was the biggest-ever bond issue by a US company. While some of the money raised was used for business purposes, the vast bulk of it was needed to pay off maturing debt, including a bank facility that was due to expire. At the time, the Company already had more than $17 billion in debt. Mr. Ehnes said the lawsuit was an attempt to hold more than the company responsible. "We want the investment banking community to know that will not stand for this breach of ethical conduct." Calpers hopes to recover $268 million in losses from the bond sale, while Calstrs bond losses were $24.5 million, and LACERA's losses were $26 million. The funds are also involved in class-action lawsuits New Securities Fraud Cases AMERICAN EXPRESS: Lovell & Stewart Commences Securities Suit in S.D. NY ----------------------------------------------------------------------- Lovell & Stewart, LLP initiated a securities class action on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of the American Express Company (NYSE: AXP) between July 18, 1999 and July 17, 2001, inclusive. The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The action is pending in the U.S. District Court for the Southern District of New York. The complaint alleges that the Company and certain of its officers and directors made misstatements and omissions of material fact, including: (1) failing to disclose that the Company was investing in a risky portfolio of high-yield or "junk" bonds with ratings as low as "single-B" that carried the potential for substantial losses if default rates in the junk bond market increased; (2) failing to disclose the true extent of the Company's total exposure as a result of the foregoing after the Company wrote down $182 million of its junk bond portfolio in April 2001; and (3) failing to disclose that the Company was taking a substantial and unnecessary risk by investing in high-yield securities involving complex risk factors that American Express management and personnel did not fully comprehend. The complaint further alleges that after the full truth regarding the Company's unnecessarily risky and imprudent investment strategy began to become known to the market on July 18, 2001 when the Company announced a surprise charge against earnings of $826 million, its third consecutive write-down of high-yield or "junk" bonds, Company stock traded as low as $37.17, down from a class period high of over $62.00. For more details, contact Christopher Lovell, Victor E. Stewart or Christopher J. Gray by Mail: 500 Fifth Avenue, New York, New York 10110 by Phone: 212-608-1900 or by E-mail: classaction@lovellstewart.com AOL TIME: Lovell & Stewart Commences Securities Fraud Suit in S.D. NY --------------------------------------------------------------------- Lovell & Stewart, LLP initiated a securities class action on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of America Online, Inc. between July 19, 1999 and January 10, 2001 and all persons who purchased, converted, exchanged or otherwise acquired the common stock of AOL Time Warner, Inc. (NYSE:AOL) between January 11, 2001 and July 17, 2002, inclusive. The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and the common law and seeks to recover damages. The suit is pending in the U.S. District Court for the Southern District of New York. The complaint alleges that during the class period, AOL (and later AOL Time Warner) made misrepresentations and/or omissions of material fact, including affirmatively misstating AOL and AOL Time Warner's revenue from online advertising sales by including in such revenues sums received as one-time payments in connection with the termination of contracts for online advertising. The complaint further alleges that AOL artificially inflated its online advertising revenues for fiscal 1Q 01 by counting in such revenues $16.4 million in online advertising that AOL required an enterprise called 24dogs.com to purchase in order to settle a legal dispute, and that AOL Time Warner artificially inflated its revenues from online advertising sales by including in such revenues sums that AOL Time Warner received in connection with selling online advertising for online auction site eBay. The complaint further alleges that defendant Ernst & Young, LLP violated the federal securities laws by certifying AOL Time Warner's financial statements as incorporated in AOL Time Warner's Annual Report for its fiscal year 2001 filed with the SEC on March 25, 2002 even though it knew (or recklessly failed to discover) that AOL Time Warner had counted in revenue sums received in connection with selling online advertising for online auction site eBay. When The Washington Post revealed the foregoing on July 18, 2002, AOL Time Warner stock dropped to as low as $11.75, down from its class period high of $58.51. For more details, contact Christopher Lovell or Christopher J. Gray by Mail: 500 Fifth Avenue, New York, New York 10110 by Phone: 212-608-1900 or by E-mail: classaction@lovellstewart.com AOL TIME: Milberg Weiss Commences Securities Fraud Suit in S.D. NY ------------------------------------------------------------------ Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of AOL Time Warner, Inc. (NYSE: AOL) between April 18, 2001 and April 24, 2002, inclusive. The action is pending in the United States District Court, Southern District of New York, against the Company and: (1) Stephen Case, (2) Michael Kelly, (3) Richard Parsons and (4) Gerald M. Levin 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 18, 2001 and April 24, 2002, thereby artificially inflating the price of Company securities. As alleged in the complaint, defendants issued numerous materially false and misleading statements concerning the Company, the synergies derived from the merger of America Online Inc. and Time Warner, Inc. and the Company's prospects and earnings projections. The complaint alleges that these statements were materially false and misleading because they failed to disclose: (i) that the Merger was not generating the synergies as represented by defendants; (ii) that the Company was experiencing declining advertising revenues; and (iii) that the Company had failed to properly write down the value of more than $50 billion of goodwill, thereby artificially inflating its reported financial results and rendering its published financial statements materially false and misleading and in violation of Generally Accepted Accounting Principles. On April 24, 2002, the last day of the class period, the Company issued a press release announcing its financial results for the first quarter of 2002, and revealed that it would be taking a "one-time, non-cash charge that reduced the carrying value of the Company's goodwill by approximately $54 billion." Following this announcement, Company stock closed at $19.30 per share, a decline of more than 66% from a Class Period high of $56.60 per share. During the class period, prior to the disclosure of the true facts about the Company, Company insiders sold their personal holdings of AOL Time Warner common stock to the unsuspecting public for proceeds in excess of $250 million. For more details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: 800-320-5081 by E-mail: AOLTimeWarnercase@milbergNY.com or visit the firm's Website: http://www.milberg.com DUKE ENERGY: Bernstein Liebhard Commences Securities Suit in S.D. NY -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action on behalf of all persons who purchased or acquired Duke Energy Corporation (NYSE: DUK) securities between April 2, 2001 and May 17, 2002. The action is pending in the United States District Court for the Southern District of New York. The complaint alleges that the Company: (1) failed to disclose that it was engaging in electricity trades involving simultaneous purchases and sales of power at the same price; (2) overstated the Company's revenues in its public Securities and Exchange Commission (SEC) filings and elsewhere by including in such revenues sums received in connection with such simultaneous purchases and sales of power; and (3) failed to disclose that the Company did not have in place sufficient management controls to prevent Company's traders from engaging in simultaneous purchases and sales of power at the same price. The complaint further alleges that Deloitte & Touche violated the common law by certifying the Company's financial statements and by allowing its unqualified opinion to be incorporated by reference into Company filings with the SEC despite the fact that such financial statements and filings were materially misleading in that they materially overstated the Company's revenues by counting as revenue sums received in connection with simultaneous purchases and sales of power at the same price. After the foregoing became known to the public, the complaint alleges, Company stock tumbled to as low as $32.89 on May 21, 2002, down from a class period high of $47.74. For more details, contact Ms. Linday Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 or by E-mail: DUK@bernlieb.com. FLEXTRONICS INTERNATIONAL: Wolf Popper Commences Securities Suit in NY ---------------------------------------------------------------------- Wolf Popper LLP initiated a securities class action against Flextronics International, Ltd. (Nasdaq:FLEX) and certain of its senior officers, alleging violations of federal securities laws on behalf of all persons who purchased or otherwise acquired Company stock between October 2, 2001 and June 3, 2002, inclusive, in the United States District Court for the Southern District of New York. The suit charges the defendants with violation of Sections 10(b) of the Securities Exchange Act of 1934. The suit alleges that during the class period, the Company consistently represented that its business was thriving, that it was using the difficult market conditions to increase market share and revenues, and that it expected to continue to do so in the foreseeable future. Defendants failed to disclose during the class period that the Company's business was experiencing a number of adverse factors which were negatively impacting its business and which would cause it to report declining financial results, materially less than the market expectations defendants had created. Specifically defendants failed to disclose that: (1) the Company was experiencing declining sales as its business began to be affected by negative trends in its markets; (2) 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; and (3) though the Company had taken restructuring charges of almost $400 million in the second fiscal quarter of 2002, the period ended September 30, 2001, purportedly to finalize the Company's restructuring, defendants knew that as a result of the adverse business conditions the Company was experiencing, further restructuring would be necessary. For more details, contact Michael A. Schwartz by Mail: 845 Third Avenue, New York NY 10022-6689 by Phone: 212-759-4600 or 877-370-7703 by Fax: 877-370-7704 by E-Mail: IRRep@wolfpopper.com or visit the firm's Website: http://www.wolfpopper.com FLEXTRONICS INTERNATIONAL: Spector Roseman Lodges Securities Suit in NY ----------------------------------------------------------------------- Spector, Roseman & Kodroff, PC initiated a securities class action in the United States District Court for the Southern District of New York against defendants Flextronics International, Ltd. (Nasdaq:FLEX) on behalf of purchasers of the Company's stock October 2,2001 and June 4, 2002, inclusive. The suit also names as defendants: (1) Michael E. Marks, Chief Executive Officer and Chairman of the Board of Directors, (2) Michael McNamara, President of American Operations of the Company, and (3) Robert R.B. Dykes, President of Systems Group and Chief Financial Officer of the Company The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 2, 2001 and June 4, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, the Company consistently represented that its business was thriving in the global electronics, telecommunications and handheld device markets. Unbeknownst to investors, however, the Company was suffering from a host of undisclosed adverse factors that were negatively impacting its business and which would cause it to report declining financial results, materially less than market expectations. On June 4, 2002, the final day of the class period, and only months after certain officers and directors unloaded over $500 million of Company shares priced at almost $26.00 per share upon unsuspecting investors, defendants shocked the market when they finally revealed that the restructuring, purportedly paid for in October 2001 and substantially completed thereafter, was still far from complete. Defendants admitted that there were at least an additional $150 million in restructuring charges that had to 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. Defendants admitted that the Company would earn as little as $0.05 per share, as little as one-third the $0.13 per share Defendants forecast at the time of the January public offering and thereafter throughout the class period. Revenue estimates too were suddenly reduced, with only $3 billion in revenue now forecast for the first quarter 2003, compared to prior estimates of $3.3 billion. For more details, contact Robert M. Roseman by Phone: 888-844-5862 or by E-mail: classaction@srk-law.com MIRANT CORPORATION: Bernstein Liebhard Launches Securities Suit in GA --------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action on behalf of all persons who purchased or acquired Mirant Corporation (NYSE: MIR) securities between January 19, 2001 and May 6, 2002. The action is pending in the United States District Court for the Northern District of Georgia. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 19, 2001 and May 6, 2002. According to the complaint, the Company reaped illegal profits in California by artificially manipulating energy prices through a variety of improper tactics. The Company's fraudulent practices have resulted in investigations by both the Attorney General of the State of California, and the Federal Energy Regulatory Commission, as well as a number of lawsuits filed by California, and consumers. As now revealed, during the class period, while the Company announced quarter-after-quarter of outstanding growth, and assured investors that problems in the California market had been properly accounted for, the Company, in fact, failed to: (1) provide for the return of illegally obtained revenue, through a charge to earnings; (2) provide for professional fees associated with the investigations arising from the fraud through a charge to earnings; and (3) disclose the fact that the illegally obtained revenue was subject to forfeiture and that investigations surrounding the illegally obtained revenue would result in the expenditure of material amounts for legal and professional fees. As a result, defendants' class period financial statements were materially overstated, and failed to comply with Generally Accepted Accounting Principles (GAAP). For more details, contact Ms. Linda Flood by Phone: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: MIR@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. MIRANT CORPORATION: Schatz & Nobel Commences Securities Suit in N.D. GA ----------------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action in the United States District Court for the Northern District of Georgia on behalf of all persons who purchased the securities of Mirant Corporation, (NYSE: MIR) from January 19, 2001 through May 6, 2002, inclusive, against the Company and certain individual officers. The suit alleges that defendants artificially manipulated energy prices in California, much like Enron, which led to investigations by the Attorney General of California and the Federal Energy Regulatory Commission. In addition, the complaint alleges that while the Company announced outstanding growth and assured investors that problems in the California market had been properly accounted for, the Company violated Generally Accepted Accounting Principles by failing to take a charge to earnings to account for the return of illegally obtained revenue and the professional fees necessary to deal with the fraud investigations. Defendants are alleged to have sold over $8 million of their stock at artificially inflated prices during the class period, and to have used the inflated stock price to acquire power plants in Jamaica and the Philippines. When the full extent of the Company's wrongdoing was ultimately revealed on May 7, 2002, the price per share fell over 12% to $9.75 per share, well below the class period high of almost $50 per share. For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 or by E-mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net MUTUAL RISK: Bernstein Liebhard Commences Securities Suit in S.D. CA -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action on behalf of all persons who purchased or acquired Mutual Risk Management Ltd. (OTC Pink Sheets: MLRMF); (formerly traded NYSE: MM) securities between February 16, 2000 and April 2, 2002. The case is pending in the United States District Court for the Southern District of California. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the class period, the Company and its most senior officers and directors disseminated materially false financial statements for each of the Company's interim quarters during that period and for the years ended December 31, 2000 and 2001, which materially overstated the Company's cumulative 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. As a result of the materially false and misleading statements and omissions described herein, Company stock was inflated to an all-time high of $23.75 per share. The Company also represented in each of its quarterly and annual filings with the SEC that the financial statements included therein had "been prepared in conformity with generally accepted accounting principles" and "reflected all adjustments necessary for a fair presentation of results for such periods." In reality, each of the Company's financial statements violated the general accepted accounting practices (GAAP) by understating reserves for potential claims. The financial results included in the Company's SEC filings during the class period were thereby rendered materially false and misleading. Then, on April 2, 2002, the Company admitted that even its disastrous Q4 2001 results (announced February 19, 2002) were not accurate, putting the Company's shares into another "free fall," trading at just pennies per share following the April 2, 2002 admission. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 or by E-mail: MLRMF@bernlieb.com. TELLABS INC.: Cauley Geller Commences Securities Fraud Suit in N.D. IL ---------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Northern District of Illinois, Eastern Division on behalf of purchasers of Tellabs, Inc. (Nasdaq: TLAB) publicly traded securities during the period between December 11, 2000 and June 19, 2001, inclusive. The complaint charges the Company and certain of its officers and directors with violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between December 11, 2000 and June 19, 2001. According to the complaint, the Company had represented to the public, in press releases issued throughout the class period, that: (1) its new products were enjoying strong demand; (2) the seeming slowdown in its business was due to "component- parts shortages which have been corrected;" and (3) the Company's business was strong fundamentally and the Company would meet earnings and revenues expectations. The complaint alleges that these, and other, statements were materially false and misleading because, as alleged in the complaint, its new optical networking line of products were inferior to the competition and their products were not well-received or in high demand. The complaint further alleges that, contrary to its statements to the investing public, the Company's highly touted acquisition of SALIX was a failure as sales of the product line it gained in the acquisition were falling. On June 19, 2001, the Company issued a press release revealing that second quarter of 2001 revenues would be 35% less than guidance reiterated only weeks before, and that the Company's earnings would be breakeven instead of the consensus $0.29 per share. In reaction to the announcement, the price of Company stock fell by 31%, from $23 per share on June 19 to $15.87 on June 20, representing a 75% decline from the class period high. During the class period, one of the Company's officers sold a total of 80,000 shares of Company stock at prices between $64.25 to $65.38 per share, grossing proceeds of more than $5.18 million. 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 UNIROYAL TECHNOLOGIES: Schiffrin & Barroway Lodges FL Securities Suit --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Middle District of Florida on behalf of all purchasers of the common stock of Uniroyal Technology Corp. (Nasdaq: UTCI) from February 8, 2000 through May 13, 2002, inclusive. The suit names as defendants the Company and: (1) George J. Zulanas, Jr. and (2) Howard R. Curd The defendants allegedly violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 8, 2000 and May 13, 2002. According to the complaint, defendants issued a series of press releases touting its financial stability and its acquisition of Sterling Semiconductor, while strategically positioning the Company to increase its participation in the explosive compound semiconductor industry via internal growth. However, unbeknownst to the investing public that purchased Company stock during the class period: (i) the Company was not a financially stable company; (ii) its acquisition of Sterling was not lucrative at all; and (iii) it was not strategically positioning the Company to increase its participation in the explosive compound semiconductor industry via acquisition and internal growth. But for the Company's financial support, Sterling would probably have been forced to seek protection under the bankruptcy laws. Sterling was a development stage company and not, as defendants touted, "a leading developer of silicon carbide technology and materials." Moreover, in order to materially inflate the Company's net worth and further foster the illusion of growth, defendants agreed to pay an inflated price for Sterling with materially overvalued stock serving as currency. On December 31, 2001, eighteen months after having acquired Sterling in exchange for stock, with a purported value of more than $40 million, the Company shocked the market by announcing that it recorded a write- down of Sterling goodwill of approximately $9,816,000. On January 2, 2002, Company stock closed at $1.69 down from $3.20 the previous day and substantially down from its class period high of $71.125 reached on February 23, 2000. 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 VIVENDI UNIVERSAL: Wolf Haldenstein Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the securities of Vivendi Universal (NYSE: V; Paris Bourse: EX FP) between February 11, 2002 and July 3, 2002, inclusive, against the Company and Jean-Marie Messier, former Chairman and Chief Executive Officer. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. Specifically, prior to and during the class period, Mr. Messier took the Company on an acquisition binge that, according to published reports, resulted in the Company amassing approximately $18 billion in debt as he turned the Company from a water concern into an entertainment powerhouse. Under Mr. Messier's leadership, Vivendi completed a $30 billion buyout of Canada's Seagram and a $10.3 billion purchase of USA Networks Inc., the cable and entertainment company owned by Hollywood mogul Barry Diller. Concomitantly, Mr. Messier orchestrated a scheme to conceal the severity of the Company's liquidity problems stemming from the massive debt load incurred as a result of these, and other, transactions. In fact, only days before his ouster by the Company's Board, Mr. Messier caused the Company to issue several press releases that falsely stated that the Company did not face an immediate and severe cash shortage that threatened its viability going forward absent an asset fire sale. It was only after the Company's board dislodged Mr. Messier that the Company's new management disclosed the severity of the crisis and that the Company would have to secure immediately both bridge and long-term financing or default on its largest credit obligations. As detailed in the Complaint, Mr. Messier failed to disclose the true contours of the Company's cash crisis and his affirmative misrepresentations to the contrary have given rise to an investigation by French authorities concerning whether Mr. Messier disclosed in a timely fashion that the Company was in dire financial straits. Published reports also indicate that the Company is engaged in urgent discussions with lenders to secure financing and is both considering and negotiating the sale of assets. For more details, contact Gregory Mark Nespole by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Vivendi. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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