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/raid1/www/Hosts/bankrupt/CAR_Public/020923.mbx C L A S S A C T I O N R E P O R T E R Monday, September 23, 2002, Vol. 4, No. 188 Headlines ANNTAYLOR STORES: NY Court Issues Final Decree on $3.3MM Settlement ARIZONA: Tax Case Settlement on Out-Of-State Dividends Put At $350M BARNEYS NEW: Confident Class Action in California Won't Prosper BIKO INC.: Concludes Class Suit With Final Payment of Settlement Offer BLACK & DECKER: Recalls 140,000 Cordless Electric Lawn Mowers BOMBAY COMPANY: California Managers File Suit Seeking Overtime Pay CANADA SAFEWAY: Recalls Products Containing Undeclared Sulphites CISCO SYSTEMS: Building Defense Against California Shareholders' Suit COLE NATIONAL: Faces Wage Claims Seeking Class Action Status in CA DAVE & BUSTER'S: Directors Sued for Breach of Fiduciary Duties DEUTSCHE BAHN: German Court Nixes Higher Pay Claims for Crash Victims FEDERATED DEPARTMENT: Discovery, Motion to Dismiss Remain Pending FEDERATED DEPARTMENT: Dismissal of Derivative Shareholder Suit Appealed GART SPORTS: Now Facing Four Wage Claims in California LABONTE HONEY: Canadian Food Regulator Clarifies September 12 Recall LITTLE QUALICUM: Recalls Cheese Contaminated With "Listeria" Bacteria MASSACHUSETTS: Students Who Failed State Test Claim Bias, To File Suit MEDI-HUT CO.: Faces Several Securities-Related Suits in New Jersey MEN'S WEARHOUSE: Court Suspends Summary Judgment, to Rule Next Week MENORAH GARDENS: Hearing on Suit's Status Continues; DNA Samples Taken MERRICK PET: Salmonella Contamination Forces Firm to Recall Product METAWAVE COMMUNICATIONS: Vows to Clear Name in Securities Fraud Suits MICHAELS STORES: CA Settlement Final, As Appeal Deadline Expires MOTORCAR PARTS: Former CFO Pleads Guilty to Lying to Investors NCI BUILDING: Says Pending Securities Suits Won't Have Material Effects NIKON INC.: Recalls 9,100 Coolpix 2000-Model Digital Cameras OHIO: Families Sue State for Defective Child Support System QUALITY NATURAL: Recalls Product Containing Undeclared Peanut Protein ROCK HILL: More Stockholders File Lawsuit Against Troubled Bank TRANS WORLD: Settles Antitrust Lawsuits Without Admitting Wrongdoing VISA/MASTERCARD: Retailers' Debit Card Lawsuit Set for Trial Next Year New Securities Fraud Cases CHARTER COMMUNICATIONS: Wechsler Harwood Files Suit in C.D. California EXODUS COMMUNICATIONS: Emerson Firm Brings Securities Suit in S.D. NY GLAXOSMITHKLINE: Goodkind Labaton Begins Antitrust Lawsuit in S.D. NY HEALTSOUTH CORPORATION: Emerson Firm Lodges Lawsuit in N.D. Alabama INKTOMI CORPORATION: Cauley Geller Commences Lawsuit in S.D. New York INTERPUBLIC GROUP: Rabin & Peckel Commences Securities Suit in S.D. NY INTERPUBLIC GROUP: Marc S. Henzel Commences Securities Suit in S.D. NY MORGAN STANLEY: Emerson Firm Commences Securities Suit in S.D. New York WALT DISNEY: Shapiro Haber Commences Securities Suit in C.D. California XCEL ENERGY: Kaplan Fox Commences Securities Fraud Suit in Minnesota ********* ANNTAYLOR STORES: NY Court Issues Final Decree on $3.3MM Settlement ------------------------------------------------------------------- Ann Taylor Stores Corporation disclosed in its latest Securities and Exchange Commission filing that the U.S. District Court for the Southern District of New York entered on June 19, 2002 a final judgment approving the previously disclosed settlement of the stockholder class action Novak v. Kasaks, et al., 96 Civ. 3073 (AGS) filed in that Court. Early this year, the Company agreed to settle for $3.3 million the securities class action against it, its wholly owned subsidiary AnnTaylor, Inc., and certain former officers and directors, alleging federal securities violations. The complaint had alleged causes of action under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended, asserting that the defendants made false and misleading statements about the Company and AnnTaylor, Inc. during the period commencing February 3, 1994 through May 4, 1995. It admitted no wrongdoing but pursued the settlement to avoid the significant legal fees, other expenses and management time that would have to be devoted to continue to vigorously defend the suit in the courts. The Company is a national retailer of upscale women's clothing designed exclusively for its own stores. Its Ann Taylor and Ann Taylor Loft shops offer apparel, shoes, and accessories. Targeting fashion- conscious professional women, AnnTaylor operates about 540 stores across the U.S. Most are located in malls and upscale retail centers. Ann Taylor Loft stores offer their own label of mid-priced apparel, while Ann Taylor Factory Stores offer clearance merchandise from both Ann Taylor stores. ARIZONA: Tax Case Settlement on Out-Of-State Dividends Put At $350 MM --------------------------------------------------------------------- A settlement said to have a $350 million price tag for the state is emerging in a tax refund class-action lawsuit with significant budget ramifications, according to the Associated Press Newswires. Tax Court Judge Paul Katz said that lawyers in the case told him they have agreed on terms of a $350 million settlement, payable by the state over four years, and will present him with a written proposal for a hearing next Monday. The case stems from income taxes ruled to have been collected illegally from thousands of taxpayers for some corporate dividends in the late 1980s. The state has agreed that it should not have taxed non-Arizona companies' dividends at one rate while giving more favorable treatment to dividends paid by in-state companies. The case is important for the state and its taxpayers for two reasons: First, it produced a state Supreme Court's 2001 ruling, fought by the state, that said taxpayers can band together to file class-action lawsuits to challenge tax laws and decisions. Second, the case's potential overall cost to the state has been estimated as high as $600 million at a time when the state faces a budget crisis. While the specific terms have not yet been revealed to Judge Katz, two people with knowledge of the terms, and who spoke on the condition of anonymity to the Associated Press, said it would require the state to pay $350 million over a period of four years -- the two terms critical to the state's continued fiscal stability. The state faces a projected shortfall of up to $400 million in the current $6.2 billion budget and a $1 billion projected shortfall in the budget that will be written next spring for the 2003-04 fiscal year. "It won't all be paid out in a lump sum because we are all sensitive to the state's budget situation," Judge Katz said. Judge Katz said he will consider the fairness of the proposed settlement during Monday's court hearing. Individual taxpayers will be given a chance to drop out of the class- action case and pursue refunds on their own. If the proposed settlement remains on track during that process, final approval could come by late December or early January, the judge said. BARNEYS NEW: Confident Class Action in California Won't Prosper --------------------------------------------------------------- In a latest Securities and Exchange Commission disclosure, Barneys New York, Inc. admitted that it is facing a class action in the Superior Court for the State of California, County of San Diego. The suit was filed on July 31, 2002 by an individual alleging two causes of action for purported violations of California's Civil Code and Business and Professions Code relating to the alleged requesting by the Company of certain information. "The Company is reviewing the lawsuit and believes that the Complaint is without merit. The Company believes that it has substantial defenses to the claims and plans to vigorously defend the lawsuit," said the SEC document. "In management's judgment, based in part on consultation with legal counsel, this case is not expected to have a material adverse effect on the Company's financial position." The slimmed-down yet still debt-laden company emerged from Chapter 11 bankruptcy protection in 1999. The tony retailer features upscale apparel for men, women, and children; shoes; accessories; and home furnishings. It operates eight full-price stores (including flagship stores in New York City; Beverly Hills, California; and Chicago) and 12 outlets. Barney Pressman founded the company in 1923 with money he raised by pawning his wife's engagement ring; the Pressman family now owns less than 2% of the company. Two investment firms, Bay Harbour Management and Whippoorwill Associates, each own about 38% of Barneys. BIKO INC.: Concludes Class Suit With Final Payment of Settlement Offer ---------------------------------------------------------------------- On September 19, 2002, the Company announced that it made the final payment in connection with its class action lawsuit, thus finally ending the Walsingham v. BICO class action litigation that began in 1996. The final class action settlement was approved by the U.S. District Court for the Western District of Pennsylvania on September 9, 2002, subject to the final payment made September 18, 2002. This concludes the Company's only class action litigation. The settlement is part of the Company's continued efforts to re- organize and restructure its operations and financial position. Although the Company continues to suffer cash flow problems and deal with its payables, the Company's new chief executive officer Stan Cottrell stated that he believes the company is taking steps in the right direction. The Company continues to reduce its overhead and streamline its operations and administrative expenses; so far, the Company has reduced its compensation costs from approximately $1 million per month in September 2001 to approximately $350,000 per month for September 2002. On an annualized basis, this reduction in compensation costs would result in savings of approximately $7.8 million per year. BLACK & DECKER: Recalls 140,000 Cordless Electric Lawn Mowers ------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Black & Decker (U.S.) Inc., of Towson, Md., is voluntarily recalling to repair about 140,000 cordless electric lawn mowers. An electrical component in the lawn mower can overheat, posing a possible fire hazard. Black & Decker has received 11 reports of electrical components overheating. One of these resulted in a minor hand burn and nine resulted in reports of minor property damage extending beyond the mower. The mowers were sold under both the Black & Decker and Craftsman brand names. The recalled Black & Decker cordless electric lawn mowers have the model number CMM1000 or CMM1000R and date codes from 9534 through 200230, both of which are located on the silver and black label affixed to the rear door of the mower. The lawn mowers have either an orange or green deck cover with a black motor cover. The lawn mowers have the words "Black & Decker" and "Cordless" on top of the motor cover. The Craftsman-brand mowers, which were sold at Sears, have model number 900.370520 and include all date codes. The model number is located on the silver and black label affixed to the rear door of the mower. The Sears lawn mowers have a dark green deck with a black motor cover. The lawn mowers have the words "Craftsman" and "24 Volt Cordless" on top of the motor cover. Home centers, hardware and discount stores nationwide sold the Black & Decker lawn mowers from February 1996 through August 2002 for between $360 and $400. Craftsman-brand mowers were sold at Sears stores nationwide from January 1998 through December 2000 for between $360 and $400. Consumers with either brand recalled lawn mower should stop using it immediately. Black & Decker mower owners should call Black & Decker toll-free at 866-229-5570 between 8 a.m. and 4:30 p.m. ET Monday through Friday, or log onto the company's web site at http://www.blackanddecker.comto receive information on the free repair. Craftsman mower owners should take their mower to the nearest Sears store or Sears product repair center for a free repair. Black & Decker recalled 1,300 cordless electric mowers with model number CMM1000R on January 23, 2002. For more information about that recall, contact Black & Decker at the toll-free number listed above. To see a picture of the recalled product(s), click on this link: http://www.cpsc.gov/cpscpub/prerel/prhtml02/02254.html BOMBAY COMPANY: California Managers File Suit Seeking Overtime Pay ------------------------------------------------------------------ The Bombay Company, Inc. recently disclosed in a Securities and Exchange Commission filing that it had been served a with a summons and complaint of a lawsuit, seeking class action status, asserting claims for overtime pay under California law for its store managers. "Based upon [our] review of the complaint and [our] initial investigation of this matter, [we] believe the plaintiffs' claims are without merit and [we] intend to vigorously defend against them," the company said in its latest SEC disclosure. "While it is not possible to predict the outcome of this legal action or provide a reasonable estimate of potential liability, if any, that may arise, the Company believes that costs resulting from the action will not have a material adverse impact on its consolidated financial position, cash flows or liquidity, but could possibly be material to the consolidated results of operations in a particular quarter or fiscal year," the company said. According to a www.hoovers.com dossier, the company operates about 420 stores, mostly in malls throughout the US and Canada, offering classic and traditional furniture, wall decor, and accessories for the bedroom, dining room, home office, and living room. CANADA SAFEWAY: Recalls Products Containing Undeclared Sulphites ---------------------------------------------------------------- Canada Safeway is warning people with sensitivities to sulphites not to consume Safeway Select Firecrackers Beef, Cheese & Jalapeno Appetizers (227g package of 8, UPC 58200 10457) because the product label does not list sulphites as an ingredient. All packages with best before dates prior to Aug 29, 2003 are affected by this Alert. The code date displayed on the package reads "Best Before/Meilleur Avant 1 03 AU 29." Canada Safeway is voluntarily recalling this product because the undeclared sulphites may cause a serious or life threatening reaction in persons with sensitivities to sulphites. There have been no reported allergic reactions to date. This product is sold at all Canada Safeway stores in Western Canada (BC, Alberta, Saskatchewan, Manitoba and N.W. Ontario). Customers who have purchased the product may return it for a full refund. For more information, contact Linda Toby Oswald-Felker, Vice President, Public Relations & Government Affairs, Canada Safeway Limited, by Phone: 403-730-3511 CISCO SYSTEMS: Building Defense Against California Shareholders' Suit --------------------------------------------------------------------- Cisco Systems, Inc. vows to mount a vigorous defense against the consolidated shareholder class action in the U.S. District Court for the Northern District of California. These suits, filed beginning April 20, 2001, allege that the Company and certain of its officers and directors made false and misleading statements, purport to assert claims for violations of the federal securities laws, and seek unspecified compensatory damages and other relief. Purported class includes those who purchased the Company's publicly traded securities between August 10, 1999 and February 6, 2001. "Cisco believes the claims are without merit and intends to defend the actions vigorously," a latest Securities and Exchange Commission filing said. In addition to this class action, Cisco Systems, Inc. also faces a number of purported shareholder derivative lawsuits filed in the Superior Court of California, County of Santa Clara and in the Superior Court of California, County of San Mateo. In its SEC disclosure, the Company said the complaints in the various derivative actions include claims for breach of fiduciary duty, waste of corporate assets, mismanagement, unjust enrichment, and violations of the California Corporations Code. They also seek compensatory and other damages, disgorgement and other relief. Cisco Systems is the leader in the market for equipment used to link networks and power the Internet. The company's bread and butter are the routers and switches that account for 70% of its sales; Cisco's switch line includes equipment based on Ethernet, Gigabit Ethernet, Token Ring, and ATM technologies. Other products include remote access servers, IP telephony equipment, optical networking components, and network service and security systems. It sells its products primarily to large enterprises and telecommunications service providers, but it also has products designed for small businesses and consumers. Cisco generates about 40% of its revenues outside the US. COLE NATIONAL: Faces Wage Claims Seeking Class Action Status in CA ------------------------------------------------------------------ Vision care products provider Cole National Group, Inc. told the Securities and Exchange Commission recently that a subsidiary is facing a class action complaint in California over violation of wage and hour laws. "The case is in its early stages and the Company intends to vigorously defend the suit. We may be required to modify our activities and pay damages and/or restitution in currently undeterminable amounts if the plaintiffs prevail, the cost of which, as well as continuing defense costs, might have a material adverse impact on our operating results in one or more periods," the company said in its latest SEC filing. According to a Yahoo.com dossier, Cole National Group, Inc. provides eyewear products, optometric services and personalized gifts through two units: Cole Vision and Things Remembered. It operates 2,917 retail outlets in 50 states, Canada and the Caribbean. It also holds an approximately 21% interest in Pearle Europe B.V., which operates 943 retail optical locations in the Netherlands, Belgium, Germany, Austria, Italy, Poland and Portugal. The Company's retail vision locations do business primarily under the names Pearle Vision, Sears Optical, Target Optical and BJ's Optical, and its managed vision care programs are offered primarily through Cole Managed Vision (collectively, Cole Vision). Personalized gifts are offered through retail locations, e-commerce and catalogs by Things Remembered. For the 26 weeks ended August 3, 2002, the company's revenues rose 6% to $579 million. Net income before extraordinary item totaled $6.2 million, up from $2.1 million. Revenues reflect increased comparable store sales in the Company's vision segment. Earnings also reflect improved gross margins, the dossier says. DAVE & BUSTER'S: Directors Sued for Breach of Fiduciary Duties -------------------------------------------------------------- Dave & Buster's, Inc., a restaurant and entertainment center operator, told the Securities and Exchange Commission recently that it had received several complaints alleging breaches of fiduciary duties by company directors. The complaints, filed purportedly on behalf of stockholders, claim that the approval of the transactions contemplated in a merger agreement in May constituted the breach. The purported class action, filed in state district court in Dallas County, Texas on May 31, 2002, purports to seek an injunction preventing consummation of the originally proposed tender offer and merger transaction and unspecified damages. "We have received four similar complaints filed in the State of Missouri, one in the circuit court of Greene County and three in the circuit court of Cole County, each filed in June 2002. We and each member of our Board of Directors have been named as defendants in each of the complaints," the Company said in its latest SEC disclosure. "We have answered the complaint filed in Dallas County, denying all of the allegations of the plaintiffs, which we believe to be without merit. We have filed a motion to dismiss for the complaint filed in Greene County for improper venue, which motion is currently pending before the court. In July 2002, the plaintiffs in the Dallas County and one of the Cole County complaints filed amended class action complaints alleging that the cash consideration in the amended merger transaction of $13.50 per share is inadequate and renewing the initial allegations of their complaints. We have not yet filed an answer in any of the Cole County cases," the Company said. On May 30, 2002 the Company announced that it had entered into a definitive merger agreement under which a group led by the company's founders and certain members of the senior executive management, together with Investcorp S.A., a global investment group, and co- investors organized by Investcorp, will acquire the company through a newly formed holding company, D&B Holdings I, Inc. The transaction was originally structured as a cash tender offer by D&B Acquisition Sub, Inc., a wholly owned subsidiary of D&B Holdings, for all outstanding shares of the company's common stock at a price of $12.00 per share, to be followed by a merger, which would result in Dave & Buster's becoming a wholly owned subsidiary of D&B Holdings. On July 10, 2002, the Company announced that the tender offer by D&B Acquisition Sub. had expired without sufficient shares being tendered to complete the transaction. On July 12, 2002, the company entered into an amendment to the merger agreement providing that the consideration proposed to be paid for the company's common stock was increased to $13.50 in cash per share and that the company would proceed with a single-step, all-cash merger that would be submitted for a vote at a special meeting of shareholders. Shareholders representing at least 66 2/3 of outstanding common stock must vote in favor of the merger for it to be completed. The Company further announced that D&B Acquisition Sub had secured the written agreement of three of the company's largest shareholders to vote in favor of the merger. The total transaction value is approximately $275 million, including the refinancing of Dave & Buster's debt. A special committee of three independent, non-employee directors, with the advice of Houlihan Lokey Howard & Zukin, recommended approval of the merger transaction as so amended, which was also unanimously approved by the Board of Directors. Part restaurant, part saloon, and part carnival midway, Dave & Buster's (D&B) is all fun for more than 16 million patrons, according to a www.hoovers.com dossier. D&B's offers casual dining, full bar services, and adult game centers through 31 restaurant and entertainment complexes in 14 US states. D&B's also has two locations operating under license in Canada and Taiwan. Its cavernous game rooms feature the latest in video games and motion simulators, as well as games of skill in which players can win coupons redeemable for merchandise. Its menu features traditional American fare such as burgers, seafood, and steak. D&B games generate nearly half the company's revenue; alcoholic beverages account for nearly 20% of sales. An investment group led by D&B management wanted to buy the company in 2002 for about $255 million but failed to acquire enough shares before the deal expired. DEUTSCHE BAHN: German Court Nixes Higher Pay Claims for Crash Victims --------------------------------------------------------------------- Relatives of those killed in Germany's worst rail crash are not entitled to higher compensation payments than those already made by national railroad Deutsche Bahn, a Berlin court ruled recently, according to an Associated Press Newswires report. The Berlin state court gave no explanation for its rejection of the complaint by six people who lost relatives in the 1998 derailment near the western city of Eschede. Deutsche Bahn paid relatives of the 101 people killed about 15,000 euros each after the crash. The six plaintiffs in the recent lawsuit were seeking about 125,000 euros for each of the surviving relatives. Reiner Geulen, a lawyer for the plaintiffs, said a decision whether to appeal depends on whether a United States court admits a class-action lawsuit brought by an American woman injured in the crash. The lawsuit is against companies including Deutsche Bahn and Thyssen-Krupp. Thyssen-Krupp made the wheel, which investigators believe broke, causing the high-speed train bound for Hamburg to derail and slam into a bridge pillar. The Berlin court rejected a motion by the plaintiffs to suspend hearings until after the verdict in the ongoing trial of three railroad engineers charged with negligent homicide for the deaths, because of their responsibility for the safety of the wheels. FEDERATED DEPARTMENT: Discovery, Motion to Dismiss Remain Pending ----------------------------------------------------------------- The discovery on the securities suits filed against the Federated Department Stores, Inc. two years ago has yet to commence, while the company's motion to dismiss the complaint remains pending, a Securities and Exchange Commission document says. The five substantially identical purported class actions were originally filed in August, September and October 2000 on behalf of persons who purchased shares of the Company between February 23, 2000 and July 20, 2000. The cases, now pending in the United States District Court for the Southern District of New York, have been consolidated into a single case (In Re Federated Department Stores, Inc. Securities Litigation, Case No. 00-CV-6362 (RCC)) and a consolidated amended complaint has been filed. The Company and certain members of its senior management were named defendants. The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, on the basis that the Company, among other things, made false and misleading statements regarding its financial condition and results of operations and failed to disclose material information relating to the credit delinquency problem at the Company's former Fingerhut subsidiary. The plaintiffs seek unspecified amounts of compensatory damages and costs, including legal fees. Management intends to defend vigorously against those allegations. The Company is the largest upscale department store retailer in the US. It operates almost 460 stores in 34 states, Puerto Rico, and Guam. Federated also owns Bloomingdale's and five regional chains: The Bon March,, Burdines, Rich's Department Stores, Lazarus, and Goldsmith's. Its stores sell men's, women's, and children's apparel and accessories, cosmetics, and home furnishings, among other things. To cut losses, it recently restructured its direct retailing business by shutting down some catalog operations and revamping its various Web sites. The company had just sold off its Fingerhut unit. FEDERATED DEPARTMENT: Dismissal of Derivative Shareholder Suit Appealed ----------------------------------------------------------------------- Plaintiffs who sued the Federated Department Stores, Inc. in February have appealed the dismissal of their shareholder derivative suit, the company said in its latest Securities and Exchange Commission filing. On February 14 and February 26, 2002, two essentially identical shareholder derivative lawsuits were filed in a Minnesota state court, purportedly on behalf of the Company, naming as defendants the Company's directors, its Fingerhut subsidiary and certain officers of Fingerhut. The complaints alleged that the defendants breached their fiduciary duties to the Company in connection with the disposition of Fingerhut and sought an injunction to prevent the liquidation of Fingerhut or a sale of Fingerhut's assets other than as a going concern. The defendants removed these lawsuits to the United States District Court for the District of Minnesota (Wesenberg vs. Zimmerman, et al, Case No. 02-CV-527; Alaska Ironworkers Pension Trust vs. Zimmerman, et al; Case No. 02-CV-528). One of these lawsuits (Case No. 02-CV-528) was voluntarily dismissed without prejudice in May 2002. In the second lawsuit (Case No. 02-CV-527), the defendants filed a motion to dismiss, which was granted by the court on June 24, 2002. The dismissal of this second lawsuit is now the subject of appeal. GART SPORTS: Now Facing Four Wage Claims in California ------------------------------------------------------ In June 2000, a former employee of Sportmart brought two class action complaints in California against the Company, alleging certain wage and hour claims in violation of the California Labor Code, California Business and Professional Code section 17200 and other related matters. One complaint alleges that the Company classified certain managers in its California stores as exempt from overtime pay when they would have been classified as non-exempt and paid overtime. The second complaint alleges that the Company failed to pay hourly employees in its California stores for all hours worked. In March 2001, a third class action complaint was filed in the same court in California alleging the same wage and hour violations regarding classification of certain managers as exempt from overtime pay. In July 2001, a fourth complaint was filed alleging that store managers should also not be classified as employees exempt from overtime pay. All the complaints seek compensatory damages, punitive damages and penalties. The amount of damages sought is unspecified. "Although the court denied motions to dismiss the first two complaints, the Company intends to vigorously defend these matters and at this time, the Company has not ascertained the future liability, if any, as a result of these complaints. The Company has not accrued any reserves related to these claims," a latest SEC disclosure says The Company, according to Hoovers, is the second-largest full-line sporting goods chain in the US, behind The Sports Authority. The company has about 180 stores in 25 states in the western US. Its Gart Sports, Sportmart, and Oshman's Sporting Goods stores sell sporting goods, footwear, and apparel and offer equipment repairs. Gart Sports' large-market, freestanding stores average 40,000 sq. ft.; other stores are as small as 10,000 sq. ft. The company bought the Oshman's Sporting Goods chain in June 2001, adding about 60 superstores to its roster. Leonard Green & Partners owns 64% of Gart Sports, a www.hoovers.com dossier says. LABONTE HONEY: Canadian Food Regulator Clarifies September 12 Recall -------------------------------------------------------------------- The Canadian Food Inspection Agency (CFIA) is issuing a clarification to the recall notice issued September 12, 2002 regarding Paradise Brand Natural Honey. The product affected by the recall bears the brand and designation, "a taste of paradise Natural Honey." The product is manufactured by Labonte Honey Inc., Victoriaville, Quebec. This product is sold in a 500g glass container with UPC 0 64597 00113 0 bearing codes 012035, 022035 and 032035. This code is found on the bottle shoulder. The CFIA is monitoring the effectiveness of the recall. For more information on the Health Hazard Alert issued on September 12, 2002, please click on this link: http://www.inspection.gc.ca/english/corpaffr/recarapp/2002/20020912e.sh tml Consumers and industry can call one of the following numbers for more information on the previous alert: Labont, Honey Inc., Jos,e Michaud, Quality Control at 819-758-3877. For information on receiving recalls by electronic mail, or for other food safety facts, visit http://www.inspection.gc.ca For media enquiries, contact Jos,e Michaud, Labont, Honey Inc, Quality Control by Phone: 819-758-3877. LITTLE QUALICUM: Recalls Cheese Contaminated With "Listeria" Bacteria --------------------------------------------------------------------- The Canadian Food Inspection Agency (CFIA) and Little Qualicum Cheeseworks Ltd. are expanding their warning to consumers not to eat Tiny Tomme cheese as it may contain the bacteria responsible for listeriosis in humans. The initial warning was for British Columbia only but now includes all of Canada. This expanded advisory is to alert people who may have purchased the affected product at various community events and festivals in British Columbia and may still have it at home. Little Qualicum Cheeseworks Ltd. Tiny Tomme cheese is sold in small sized packages (150g to 200g) bearing the Best Before Date NOV. 16 02. Some packages may not have the weights declared. The manufacturer, Little Qualicum Cheeseworks Ltd., Vancouver Island, British Columbia is voluntarily recalling the affected product from the marketplace. This product is sold in British Columbia only. The CFIA is monitoring the effectiveness of the recall. Food contaminated with Listeria monocytogenes may not look or smell spoiled. Consumption of food contaminated with this bacteria can cause listeriosis. Listeriosis can cause high fever, severe headache, neck stiffness, and nausea. Pregnant women, young children, the elderly and people with weakened immune systems are particularly at risk. Infected pregnant woman may experience only a mild, flu like illness, however, infections during pregnancy can lead to premature delivery, infection of the newborn, or even stillbirth. For information on receiving recalls by electronic mail, or for other food safety facts, visit http://www.inspection.gc.ca For media inquiries, contact: Garfield Balsom (English), Canadian Food Inspection Agency Office of Food Safety and Recall, Telephone: 613-760-4232 MASSACHUSETTS: Students Who Failed State Test Claim Bias, To File Suit ---------------------------------------------------------------------- Lawyers representing Holyoke and Springfield Students who failed the MCAS exam plan to sue the state of Massachusetts, claiming the test discriminates against the poor and minorities, reports the Associated Press Newswires recently. The lawsuit seeks class-action status, citing a Class composed of black and Hispanic students, students with limited English, students with disabilities, vocational students and students from the Holyoke school district. The class-action lawsuit, which would be the first contesting the Massachusetts Comprehensive Assessment System (MCAS), challenges the test as well as a graduation requirement for the classes of 2003 and thereafter. The lawsuit also claims that the exam is invalid under the equal protection clauses of the state and federal constitutions, and that it is unreliable and unfair. Plaintiffs' attorneys from three public interest groups and a private law firm are planning to file the suit this week in U.S. District Court in Springfield, Massachusetts, on behalf of six members of the Class of 2003, who have failed the exam. Defendants include the state Board of Education, the state Department of Education, and the Holyoke school district. DOE spokeswoman Heidi Perlman said, "Every state that has ever instituted a high-stakes test as a graduation requirement has been challenged in court," she said. Ms. Perlman added: "We are very well prepared to defend the state law." The test violates the equal protection provisions of state and federal constitutions, as well as other laws, plaintiffs' attorneys contend. "Instead of fixing struggling schools, the state, instead, opted to enact a high-stakes exam that effectively has punished, sacrificed and abandoned the students that were really the ones that needed the education the most," said attorney Thomas Frongillo. The lawsuit is being filed by representatives of the Center for Law and Education, the Multicultural Education, Training and Advocacy group and the Boston Bar Association's committee for civil rights. MEDI-HUT CO.: Faces Several Securities-Related Suits in New Jersey ------------------------------------------------------------------ In its latest SEC report, Medi-Hut Co., Inc. said it received a total of eleven class action lawsuits between March and April of 2002. These lawsuits were filed in the United States District Court, District of New Jersey. The complaints allege that Medi-Hut and its officers and directors failed to disclose in its periodic reports a related party transaction between Medi-Hut and an employee of Medi-Hut. The plaintiffs seek unspecified monetary damages along with fees and expenses for the action. "Our management believes the lawsuits are without merit and intends to vigorously defend against and/or attempt to dismiss these class actions lawsuits," the SEC document said. Prior to these lawsuits, the company said the SEC, on February 21, 2002, had issued a formal order directing private investigation entitled In the Matter of Medi-Hut Co., Inc. According to the formal order, the SEC is investigating, among other things, the accuracy of the Company's SEC filings and financial disclosures, as well as the sufficiency of the Company's system of internal accounting controls. MEN'S WEARHOUSE: Court Suspends Summary Judgment, to Rule Next Week ------------------------------------------------------------------- The Superior Court of California has rescheduled its tentative ruling on the motion for summary judgment filed by The Men's Wearhouse, Inc. in connection to a class action. The suit alleges several causes of action, each based on the factual allegation that the company had advertised and sold men's slacks at a marked price that was exclusive of a hemming fee for the pants. In its recent disclosure with the Securities and Exchange Commission, the company said the court was supposed to hand its decision on September 13, but moved it to September 27. Once announced, either party may request oral argument before the court on its tentative ruling. The suit was filed on May 11, 2001 in the Superior Court of California for the County of San Diego, Cause No. GIC 767223. The suit seeks: (i) permanent and preliminary injunctions against advertising slacks at prices, which do not include hemming; (ii) restitution of all funds allegedly acquired by means of any act or practice declared by the Court to be unlawful or fraudulent or to constitute unfair competition under certain California statutes, (iii) prejudgment interest; (iv) compensatory and punitive damages; (v) attorney's fees; and (vi) costs of suit. "We believe that the suit is without merit and the allegations are contrary to customary and well recognized and accepted practices in the sale of men's tailored clothing. The complaint in the suit was subsequently amended to add similar causes of action and requests for relief based upon allegations that our alleged "claims that [it] sell[s] the same garments as department stores at 20% to 30% less" are false and misleading," the Men's Wearhouse said in its disclosure. "We believe that such added causes of action are also without merit. The court ruled against the plaintiff's motion for class certification, declining to certify a class." The Company intends to vigorously defend the suit, the SEC document said. The Company is one of the largest retailers of men's business attire in the US, with about 680 stores, including about 110 Moores outlets in Canada. Its primary operation is Men's Wearhouse, which has about 500 stores, mostly in strip malls, in more than 40 states and Washington, DC. The chain sells tailored suits priced 20% to 30% less than competitors, as well as shoes, formal wear, and casual clothes. The Company's K&G Men's Center subsidiary has about 60 superstores, and its Suit Warehouse chain, which includes five stores, sell clothes for even less. The founding Zimmer family owns about 15% of The Men's Wearhouse. MENORAH GARDENS: Hearing on Suit's Status Continues; DNA Samples Taken ---------------------------------------------------------------------- DNA samples recently were taken from a grave at Menorah Gardens Cemetery, as law enforcement officials attempt to match them with samples from remains found in a nearby wooded area, the Associated Press Newswires has reported. The cemetery has been accused of unearthing and moving bodies, dumping them in the woods or stacking them atop one another to make room for more. "What we are trying to do," said Florida Department of Law Enforcement spokesman James Born, is "determine if there was criminal wrongdoing; if there was, we'll take appropriate action." The Houston, Texas-based Service Corporation International owns and manages Menorah Gardens. It has denied any knowledge of grave desecration. 1,400 families have filed a class-action lawsuit charging desecrations of various kinds. The DNA samplings, along with the comparison of remains in nearby woods, was being conducted in conjunction with hearings being held during this period, so that the judge could determine whether enough graves had been desecrated to have affected enough of the petitioning families, so that they constituted a class. Employees fired by the Company confirmed the allegations of the lawyers for the families, in courtroom testimony, by testifying that they were told by cemetery managers to make room for more bodies. Officials from SCI attended the investigation at the cemetery, as did cemetery officials, and a rabbi accompanied the technicians to ensure that the work was done respectfully and properly, the South Florida Sun-Sentinel reported. MERRICK PET: Salmonella Contamination Forces Firm to Recall Product ------------------------------------------------------------------- The Canadian Food Inspection Agency (CFIA) is warning consumers not to purchase or use Merrick brand Pet Treats Delicatessen Style Beef Steak Patties. This product may be contaminated with the bacteria responsible for salmonellosis in humans. The affected product, Merrick brand Pet Treats Delicatessen Style Beef Steak Patties may be sold through bulk sales or from its original cardboard carton containing 75 patties and bearing the UPC 0 22808 68007 9. All lot codes of the Merrick brand Pet Treats Delicatessen Style Beef Steak Patties are affected by this recall. The various importers of the affected product are voluntarily recalling it from the marketplace. This pet treat is manufactured by Merrick Pet Treats, Hereford, Texas. This product may have been distributed nationally through retail stores. Consumers are advised to verify with their retailers if they may have purchased the affected product. No other pet treat patties are affected by this recall. Common symptoms of Salmonella infection are nausea, vomiting, abdominal pain and diarrhea, although more serious consequences are possible, especially in young children, in the elderly, and in people with weakened immune systems. There have been reported human illnesses associated with this product. People may risk bacterial infection by handling the treats directly or by contact with pets that have used the treats. Anyone who may have handled the treats should wash their hands with warm water and soap. Consumers should dispose of these treats in the trash. The CFIA is monitoring the effectiveness of the recall. For more information, consumers and industry can call the CFIA at one of the following numbers: In the province of Quebec 1-800-561-3350; or in other provinces and territories 1-800-442-2342. - 8:00 am to 4:00 pm local time - Monday to Friday. For information on receiving recalls by electronic mail, or for other food safety facts, visit http://www.inspection.gc.ca For media inquiries, contact Fred Jamieson (English), Canadian Food Inspection Agency, Office of Food Safety and Recall by Phone: 613-760-4376 METAWAVE COMMUNICATIONS: Vows to Clear Name in Securities Fraud Suits --------------------------------------------------------------------- Metawave Communications Corporation declares it will prove its innocence in the pending securities fraud lawsuits in Washington and New York, but warned shareholders that the outcome of these suits are unpredictable. It cannot assure them that the Company won't incur liabilities. In its latest SEC report, Metawave said a number of these class actions name the company and its current and former officers as defendants. The suits pending in the U.S. District Court for the Western District of Washington purport to represent those who purchased the company's common stock between April 2001 and March 2002. The complaints allege that the Company made false and misleading statements or omissions in violation of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, and seek unspecified compensatory damages and other relief. On November 6, 2001, a class action lawsuit was filed in the United States District Court for the Southern District of New York against the company and certain of our officers and directors as well as against the underwriters who handled its April 26, 2000 initial public offering of common stock. The complaint was filed on behalf of persons who purchased the company's common stock during the time period beginning on April 26, 2000 and ending on December 6, 2000. The complaint alleges violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 primarily based on the assertion that there was undisclosed compensation received by underwriters in connection with the initial public offering. "We intend to vigorously defend against these complaints. The results of litigation proceedings are inherently unpredictable, however, and we are unable to provide assurance regarding the outcome of these complaints or possible damages that may be incurred," the SEC document said. "The uncertainty associated with these substantial unresolved lawsuits could harm our business and financial condition," the Company warned. "In addition, negative developments with respect to the lawsuits or the investigation could cause our stock price to decline." Meanwhile, it said it is cooperating with an investigation being conducted by the Securities and Exchange Commission into the events that led to the restatement of the company's financial results for 2001. "We have provided documents requested by the SEC and former and current employees have met with SEC personnel. No formal action has been taken by the SEC against the Company, its employees or its directors as of the filing of this report on Form 10-Q," Metawave said. Metawave Communications makes software-controlled antenna systems that enable wireless operators to increase analog and digital network capacity without having to invest in additional cell sites. Its SpotLight antennas reduce signal interference caused by the constant movement of wireless subscribers between service areas. Metawave's SmartShare antenna sharing system enables multiple operators to share one set of antenna panels. It also offers engineering and training services. Customers include Alltel (37% of sales), Grupo Iusacell (31%), and Verizon Wireless (27%). Metawave is closing operations in Asia and cutting staff to lower costs. MICHAELS STORES: CA Settlement Final, As Appeal Deadline Expires ---------------------------------------------------------------- Michaels Stores, Inc. says none of the plaintiffs appealed the decision by the Los Angeles County Superior Court, California, which approved on June 12, 2002 the settlement of a class action suit against subsidiary, Aaron Brothers, Inc. In its latest SEC filing, the Company said the appeal period expired on August 12, 2002. "No appeals were filed with the Court. The settlement payments were delivered to the settlement administrator on August 16, 2002 for distribution," its disclosure said. On April 16, 1999, Suzanne Collins, a former assistant manager of our subsidiary, Aaron Brothers, Inc., filed the class action on behalf of Aaron Brothers' former store managers, assistant store managers, and managers-in-training. The Complaint alleged that Aaron Brothers violated various California laws by erroneously treating its store managers, assistant store managers, and managers-in-training as "exempt" employees who were not entitled to overtime compensation. Based on these allegations, the Collins Complaint asserted that Aaron Brothers: (i) violated various California Labor Codes; (ii) violated Section 17200 of the California Business and Professions Code; and (iii) engaged in conversion. The complaint sought back wages, interest, penalties, punitive damages, and attorneys' fees. On March 15, 2002, Aaron Brothers negotiated a definitive settlement of the purported class action with Collins, subject to final court approval. The Court granted preliminary approval of the settlement on March 29, 2002. As a result, Aaron Brothers recorded a litigation settlement charge of $5 million in the fourth quarter of fiscal 2001, covering all claims, attorneys' fees, and estimated payroll taxes. The company is the nation's No.1 arts and crafts retailer. It operates about 710 Michaels Stores canvassing the US and Canada. Michaels sells silk and dried flowers, art and hobby supplies, frames, needlecraft kits, virtually everything an artist, decorator, or hobbyist needs. Michaels also operates a frame-making division; more than 135 Aaron Brothers stores, mostly on the West Coast, that provide framing and art supplies; a wholesale business; and a Web site that offers arts, crafts, and decorating tips, as well as selling arts and crafts supplies, prints, and posters online. MOTORCAR PARTS: Former CFO Pleads Guilty to Lying to Investors -------------------------------------------------------------- Prosecutors said recently that the former chief financial officer of Motorcar Parts & Accessories Inc. will plead guilty to charges that he lied to investors, forcing the Company to restate earnings for 1997 and 1998, Associated Press Newswires reported. The Company settled a class-action lawsuit brought by it's investors for $7.5 million. Peter Bromberg, 38, of Wellington, Florida, has admitted committing financial fraud by falsifying Motorcar's books and records. Mr. Bromberg, who was Motorcar Parts CFO from 1994, until he resigned in May 1999, faces a maximum sentence of 20 years in prison and a potential $1 million fine. His arraignment on two felony counts of making false statements to investors is scheduled for September 30. Motorcar Parts, a rebuilder of starters and alternators, inflated its earnings by nearly $3.4 million, or 60 percent, in 1997; and by almost $3.6 million, or 50 percent, in 1998. The falsified statements were included in a registration statement filed with the Securities and Exchange Commission (SEC) for a public offering that raised $19.8 million. The SEC has filed criminal and civil charges against Mr. Bromberg and Motorcar Parts for deceiving investors and lying to auditors. The SEC is focusing on how Motorcar Parts accounted for and credited customers for returned parts. The complaint alleges that Mr. Bromberg shipped returns to an offsite storage facility to deceive auditors and delayed processing customer credits for returned goods in an effort to inflate the company's earnings. The SEC's civil complaint alleges that in April 1999, Mr. Bromberg improperly reversed $544,000 of accounts payable that Motorcar Parts had properly recorded in the fourth quarter of fiscal 1998, in order to enhance the company's earnings. The company did not issue any financial statements that included these improperly reversed amounts. The SEC is seeking an order that would bar Mr. Bromberg from serving as a corporate officer or director and also is requiring that Mr. Bromberg return any ill-gotten gains with interest and pay a fine. NCI BUILDING: Says Pending Securities Suits Won't Have Material Effects ----------------------------------------------------------------------- As a result of the Company's restatement of its financial results for the last half of fiscal 1999, all of fiscal 2000 and the first quarter of fiscal 2001, several class action lawsuits were filed against NCI Building Systems, Inc. and certain of its current officers in the U.S. District Court for the Southern District of Texas, commencing in April 2001. The plaintiffs in the actions purport to represent purchasers of NCI common stock during various periods ranging from August 25, 1999 through April 12, 2001. The lawsuits were consolidated into one class action lawsuit on August 16, 2001. On January 10, 2002, the court appointed lead plaintiffs for the consolidated lawsuit. The lead plaintiffs filed a consolidated amended complaint on February 1, 2002. In the consolidated complaint the plaintiffs allege, among other things, that during the financial periods that were restated the Company made materially false and misleading statements about the status and effectiveness of a management information and accounting system used by its components division and costs associated with that system, failed to assure that the system maintained books and records accurately reflecting inventory levels and costs of goods sold, failed to maintain internal controls on manual accounting entries made to certain inventory-related accounts in an effort to correct the data in the system, otherwise engaged in improper accounting practices that overstated earnings, and issued materially false and misleading financial statements. The plaintiffs further allege that the individual defendants traded in NCI's common stock while in possession of material, non-public information regarding the foregoing. The plaintiffs in the consolidated complaint assert various claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and seek unspecified amounts of compensatory damages, interest and costs, including legal fees. On March 15, 2002, the Company filed its Motion to Dismiss Plaintiffs' Amended Consolidated Class Action Complaint and Memorandum in Support. The Motion to Dismiss is currently pending before the court. NCI and the individual defendants deny the allegations in the complaint and intend to defend against them vigorously. The consolidated lawsuit is at a very early stage. Consequently, at this time the Company is not able to predict whether it will incur any liability in excess of insurance coverage or to estimate the damages, or the range of damages, if any, that the Company might incur in connection with the lawsuit, or whether an adverse outcome could have a material adverse impact on its business, consolidated financial condition or results of operations. "The Company believes that these legal proceedings will not have a material adverse effect on its business, consolidated financial condition or results of operations," a recent SEC disclosure said. NCI makes engineered metal building systems and metal building components such as overhead doors, roofs, and trim, which it designs for commercial, industrial, agricultural, civic, and residential uses. The company's engineered building systems products include brands A&S Building Systems and Mid-West Steel Buildings; its brands of metal- building components include DOUBLECOTE and Metal Prep. NCI also provides metal-coating and paint products. It operates about 34 manufacturing and distribution facilities in 15 states in the US and in Mexico. NIKON INC.: Recalls 9,100 Coolpix 2000-Model Digital Cameras ------------------------------------------------------------ In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Nikon Inc., of Melville, N.Y., is voluntarily recalling about 9,100 Coolpix 2000-model digital cameras imported into the United States. A short circuit can occur in the battery compartment, creating a possible thermal burn hazard to consumers if the battery compartment lid is touched. Nikon has received 14 reports of these cameras shorting, but none occurred in the United States. No injuries have been reported. Minor heat damage to the battery compartment has been reported. The recall includes the Nikon Coolpix 2000-model digital cameras with serial numbers 3010001 to 3060980 and 3510001 to 3561916. The brand name and model number are located on the front of the camera, and the serial number is on the bottom of the camera. The camera is mostly silver-colored with lavender around the lens. Department, electronic, computer and camera stores, as well as mail- order and Web retailers sold these cameras nationwide from July 30, 2002 through August 2002 for about $250. Consumers with a recalled Nikon Coolpix 2000 camera should immediately remove the batteries and contact Nikon to receive a free replacement Coolpix 2000 digital camera. For more information, contact Nikon at 800-645-6687 between 9 a.m. and 7 p.m. ET Monday through Friday, or go to Nikon's web site at www.nikonusa.com No other Nikon products are involved in this recall. To see a picture of the recalled product(s), click on this link: http://www.cpsc.gov/cpscpub/prerel/prhtml02/02253.html OHIO: Families Sue State for Defective Child Support System ----------------------------------------------------------- A group of families collecting child support recently brought a class- action lawsuit against the state of Ohio, saying it has failed to provide Ohio residents with an adequate child support enforcement system, according to a report by the Associated Press Newswires. The Equal Justice Foundation, a nonprofit organization that files lawsuits on behalf of disadvantaged Ohio residents, sued the Ohio Department of Job and Family services in the Ohio Court of Claims. The Department has denied wrongdoing and said it would fight the lawsuit. Six families, listed as plaintiffs, say that they and tens of thousands of other in Ohio have suffered "substantial financial injuries" because they have not received child support services that the state by law is mandated to provide. The families do not ask for specific damages. "The system is broken and the children are owed this money," said Judy Goldstein, an attorney with the Equal Justice Foundation. "As much as we would like to see our clients get money for what they have lost, ultimately, what we do hope for is that there will be a system overhaul. Ms. Goldstein says she receives complaints daily about the state's child support system, the main problem usually being that the Department is not ensuring that county child support enforcement agencies enforce orders that parents must pay child support. Other problems abound as well. For example, last year, Governor Robert Taft ordered counties to return overdue child support payments and income tax refunds that the state had admitted it improperly kept from former welfare recipients as reimbursements for aid they received. The amount owed is considerable: the state so far has sent out 28,113 refund checks worth about $6.4 million. "The frustration is," said Thomas Hayes, director of the Job and Family Services Department, "that they [the family member of each child in the system] can paper the courthouse walls with lawsuits, and we have to deal with them." "We will vigorously defend ourselves, but what they are representing is dramatically different from reality," he said. Mr. Hayes said that 99.7 percent of all checks the state receives are being sent to families within 48 hours of the state obtaining the money. The remaining payments are held up because they are missing information, such as Social Security numbers or names, and the Department must match the payment to the recipient. QUALITY NATURAL: Recalls Product Containing Undeclared Peanut Protein --------------------------------------------------------------------- The public warning issued on September 13, 2002 has been expanded to include additional information on product distribution. The Canadian Food Inspection Agency (CFIA) and Quality Natural Foods Ltd. are warning consumers with allergies to peanut protein not to consume Quality Brand Rajgira Laddu and Rajgira Chikki. These products may contain peanut protein that is not declared on the label. This alert is of concern to those individuals with allergies to peanut protein. The affected products, Quality brand Rajgira Laddu and Rajgira Chikki are sold in 100 g packages. These products are imported from India. The importer, Quality Natural Foods Ltd., Scarborough, Ontario is voluntarily recalling the affected products from the marketplace. These products have been distributed in Alberta, Ontario and Quebec. Consumption of these products may cause a serious or life-threatening reaction in persons with allergies to peanut protein. There have been no reported illnesses associated with the consumption of these products. The previous Allergy Alert can be viewed at: http://www.inspection.gc.ca/english/corpaffr/recarapp/2002/20020913e.sh tml The CFIA is monitoring the effectiveness of the recall. For more information, please contact consumers and industry can call the CFIA at one of the following numbers: In the province of Quebec 1-800-561-3350; or in other provinces and territories 1-800-442-2342. - 8:00 am to 4:00 pm local time - Monday to Friday. For information on receiving recalls by electronic mail, or for other food safety facts, visit http://www.inspection.gc.ca For media enquiries, contact: Michael Hiscock (English), Canadian Food Inspection Agency Office of Food Safety and Recall, by Phone: 613-760-4044 ROCK HILL: More Stockholders File Lawsuit Against Troubled Bank --------------------------------------------------------------- Additional stockholders have sued a Rock Hill bank facing problems over bank fraud, the Associated Press Newswires reported recently. Six shareholders who own a combined 35,428 shares filed their lawsuit recently in York County, South Carolina. The shareholders want the lawsuit to be certified as a class action for any shareholder who will lose more than $100 following the firing of bank President Robert Heeron, who was fired July 3, 2002. A Lesslie man filed a similar suit last week for stockholders who own at least 100 shares. Mr. Herron and two other men have been charged by a federal grand jury with 12 counts of bank fraud on loans totaling $1.02 million. The lawsuit has been filed against Rock Hill Bank & Trust, eight board members and the bank's accounting firm, Tourville Simpson & Caskey of Columbia. The plaintiffs in the lawsuit are: (i) Oliver G. Wood Jr., of Richland County; (ii) W&B Inc., in Orangeburg; (iii) Woodward W. Watford Sr., of Orangeburg; (iv) Woodward W. Watford Jr., of Orangeburg; (v) Claude T. Sullivan, of Atlanta; and (vi) Haberman Value Fund TRANS WORLD: Settles Antitrust Lawsuits Without Admitting Wrongdoing -------------------------------------------------------------------- On August 8, 2000, 30 Attorneys General served a complaint against Trans World Entertainment Corporation, five major music distributors and two other specialty retailers in the United States District Court for the Southern District of New York (AG's suit). The complaint was subsequently amended to add additional states as plaintiffs and to reflect the transfer of the case to the United States District Court in Maine pursuant to the Multidistrict Litigation Rules. The AG's suit alleged that the distributors and retailers conspired to violate certain anti-trust laws and to fix prices by requiring retailers to adhere to minimum advertised prices in order to receive cooperative advertising funds from the distributors. The complaint alleged that consumers were damaged in an unspecified amount and sought treble damages and civil penalties. Following the service of the AG's suit, these same defendants were named as defendants in private class action suits (Class Actions), each with similar allegations as in the AG's suit. The Class Actions were consolidated along with the AG's suit in the United States District Court in Maine. The Company believes the lawsuits are without merit and presented its case at a settlement hearing held on April 30, 2002. In order to avoid lengthy and costly litigation, the Company tentatively settled with the plaintiffs without admission of wrongdoing, and accordingly, recorded a reserve in the quarter ended August 3, 2002. Trans World Entertainment sells CDs, DVDs, cassettes, videos, and related items through nearly 1,000 stores (about 75% of them in malls) in 46 states. Its music chains include Camelot Music, Record Town, Coconuts, Strawberries, and Spec's Music. Its video stores include Saturday Matinee and Movies Plus. In its effort to create a unified brand, Trans World has combined the majority of its mall-based stores under the F.Y.E. brand and offers merchandise online through fye.com Founder Bob Higgins and his family own 30% of Trans World Entertainment. VISA/MASTERCARD: Retailers' Debit Card Lawsuit Set for Trial Next Year ---------------------------------------------------------------------- After fighting legal obstacles for years, major retailers, including Wal-Mart Stores Inc., are moving forward with their class-action lawsuit, accusing Visa U.S.A. Inc. and MasterCard International Inc. of illegally monopolizing the debit-card business, the St. Louis Post-Dispatch has reported recently. Trial is scheduled to begin April 28, 2003. The retailers said last week that they have begun notifying more than 7.6 million other businesses about the lawsuit filed in the U.S. District Court for the Eastern District of New York in 1996. The retailers charge Visa and MasterCard with illegally blocking other financial companies from gaining entry into the debit-card business. The merchants also have challenged the defendants' "honor all cards policy" which requires that if a merchant accepts any Visa or MasterCard, the merchant has to accept all cards, including debit cards. Such a tie-in, say the merchants is a violation of the federal antitrust laws. The merchants further allege that they have been forced to pay unlawfully high prices for debit and credit transactions as a result of the alleged tying and monopolization practices. More than 8,000 financial institutions in the United States issue debit cards with the Visa or MasterCard brand. Visa and MasterCard have denied the retailers' allegations. Other plaintiff retailers in the lawsuit include The Limited, Inc.; Sears, Roebuck and Co.; Circuit City and the National Retail Federation. New Securities Fraud Cases CHARTER COMMUNICATIONS: Wechsler Harwood Files Suit in C.D. California ---------------------------------------------------------------------- The law firm of Wechsler Harwood Halebian & Feffer LLP announced late last week that a class action has been commenced in the United States District Court for the Central District of California on behalf all persons who purchased or acquired Charter Communications, Inc. (Nasdaq:CHTR) securities between November 9, 1999 through July 17, 2002, inclusive against defendants Charter and certain of its officers. The complaint asserts claims for violation of Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 against Charter Communications, as well as its Chief Executive and Chief Financial Officers. The alleged violations, according to the complaint, stem from materially false and misleading statements made by the defendants during the Class Period that, as detailed below: (i) materially misrepresented Charter Communications' financial performance; thereby (ii) causing Charter Communications securities to trade at artificially-inflated prices. The complaint alleges that defendants: (i) overstated Charter's revenue; (ii) failed to account appropriately for installation costs; and (iii) artificially inflated the reported number of subscribers for the Company's basic cable services. On July 18, 2002, when a Merrill Lynch analyst expressed concerns about potentially misleading accounting practices, Charter's stock fell more than 13%. A subsequent article in Forbes discusses a Credit Suisse First Boston report that further amplifies these concerns and describes how Charter handles the impact of "churn" -- labor and advertising costs -- on the Company's balance sheet, by improperly capitalizing approximately 30% of its installation labor costs over an extended time period. For more details, contact Wechsler Harwood Halebian & Feffer LLP by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 (toll free) or e-mail Craig Lowther, Wechsler Harwood Shareholder Relations Department: clowther@whhf.com EXODUS COMMUNICATIONS: Emerson Firm Brings Securities Suit in S.D. NY --------------------------------------------------------------------- The Emerson Firm, a securities class action trial law firm, announced late last week that a class action has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Exodus Communications, Inc. (Nasdaq:EXDS) common stock during the period between December 8, 1999 and June 19, 2001, inclusive. The complaint alleges that Merrill Lynch & Co., Inc. and Henry Blodget urged investors to purchase Exodus stock when defendants knew or recklessly disregarded that such purchases were not a good investment. The complaint alleges that defendants: issued "Buy" recommendations about Exodus without any rational economic basis; failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and concealed significant, material conflicts of interest that prevented them from providing independent objective analysis. Between March 24, 2000 and September 26, 2001, Exodus stock dropped from approximately $173.32 per share to less than $1 dollar per share. During this time period, Merrill Lynch repeatedly reiterated its Near-Term Buy/Long-Term Buy recommendation. After the Nasdaq suspended trading in Exodus common stock on April 26, 2001, Exodus voluntarily de-listed from Nasdaq and filed for Chapter 11 bankruptcy shortly thereafter. Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Exodus common stock during the Class Period. For more details, contact THE EMERSON FIRM through its Investor Relations Department: Ms. Tanya Autry by Mail: 830 Apollo Lane, Houston, Texas 77058 by Phone: 800-663-9817 (toll free) or by e-mail: tanya.autry@worldnet.att.net GLAXOSMITHKLINE: Goodkind Labaton Begins Antitrust Lawsuit in S.D. NY --------------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP (GLRS) filed Thursday last week a class action lawsuit against GlaxoSmithKline, (NYSE: GSK) charging the drug manufacturer is illegally maintaining a monopoly over the antibiotic Augmentin. GLRS is representing New York State's largest union, New York State United Teachers which represents some 480,000 classroom teachers, other school employees and retirees; academic and professional faculty at the state's community colleges, State University of New York; and other education and health officials, and its largest local union, the 130,000-member United Federation of Teachers Welfare Fund in New York City, in the class action suit. NYSUT is affiliated with the American Federation of Teachers, AFL-CIO. Barbara Hart, a partner at GLRS, in describing some of GlaxoSmithKline's conduct pointed out that, "GlaxoSmithKline has gone so far as to try to assert patent protection over their version of the drug touting the fact that they put it in a bottle with a cap and a desiccant. That's been the state of the art since 1974, certainly not a patentable new utility. Even shoe manufacturers know a lid and a desiccant keep shoes fresh." New York State United Teachers Executive Vice President Alan B. Lubin, chairman of the New York State AFL-CIO Prescription Drug Task Force, said, "The suit is part of NYSUT's three-pronged approach to attacking the high cost of prescription drugs in New York State." "In addition to legal action, NYSUT is lobbying lawmakers to pass legislation to put a cap on prescription drug costs," Lubin said. "We're also pushing the state for new regulations to limit drug advertising, which encourages some people to seek out prescription drugs that they don't really need." The suit, filed in the Southern District, U.S. District Court in New York, alleges that GlaxoSmithKline has engaged in unjust practices to suppress competition from generic alternatives to Augmentin, which could be offered to consumers at lower cost. The suit seeks monetary damages and injunctive relief under federal and state antitrust and related laws. "Parents of children who need this medication should have it at the lowest cost possible," Lubin said. He went on to add that "the shamefully high cost of prescription drugs in our state is forcing New Yorkers into an intolerable position. Some parents are being forced to decide between buying clothes to keep their children warm and buying prescription drugs to keep their children healthy. There are senior citizens who are choosing between paying for heat or paying for their medication. This is a tragedy. Working families are paying the price for the pharmaceutical companies' greed." The AFL-CIO Prescription Drug Task Force is sponsoring a series of meetings across the state to help bring attention to the prescription drug crisis. The first public meeting, co-sponsored by NYSUT, was held in Albany in late June, where Ms. Hart was an invited speaker. Future meetings are planned for Rochester, Buffalo and New York City. GLRS and various AFL-CIO affiliates are also pursuing claims where brand-name manufacturers are allegedly colluding. Ms. Hart and the GLRS Antitrust Litigation team recently won settlements in the In Re Warfarin Sodium Antitrust Litigation against DuPont Pharmaceuticals. The class was awarded a $44.5 million settlement. In the In re: Lorazepam and Clorazepate Antitrust Litigation, against Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc. (together Mylan), Cambrex Corporation, Profarmaco S.r.l. and Gyma Laboratories of America, Inc. In these cases two settlement funds totaling $10.1 and $25.3 million were created. In addition, GLRS was co-lead counsel in related antitrust litigation on behalf of consumers brought in conjunction with the Federal Trade Commission and the attorneys general of thirty-two states. This litigation was also settled at the same time, with Mylan paying $100 million which will be used to reimburse consumers and state agencies in all fifty states and the District of Columbia for a portion of any overcharge they may have incurred when purchasing either or both drugs. The total amount of the settlements including lawyers' fees totaled $147 million. In approving the Mylan settlements, Judge Hogan complimented the efforts of GLRS recognizing them as " ... experienced antitrust litigators" and commenting positively about their efforts in a " ... lengthy and complex antitrust case, involving multiple jurisdictions, extensive investigation and discovery, coordination, and negotiations." For more details, contact Goodkind Labaton Rudoff & Sucharow LLP through Barbara Hart by Phone: 212-907-0862 by e-mail: bhart@glrslaw.com or visit the firm's Web site: http://www.glrslaw.com HEALTSOUTH CORPORATION: Emerson Firm Lodges Lawsuit in N.D. Alabama ------------------------------------------------------------------- The Emerson Firm, a securities class action trial law firm, late last week that a class action has been filed in the United States District Court for the Northern District of Alabama, Southern Division, on behalf of purchasers of HealthSouth Corporation (NYSE:HRC) publicly traded securities during the period between January 14, 2002 and August 26, 2002, inclusive. The complaint alleges that HealthSouth's Chief Executive Officer admitted that HealthSouth knew of problems with its Medicare billing practices as early as June 6, 2002, two full months before the date the Company previously disclosed. A copy of the complaint filed in this action is available from the Court or can be obtained from the Firm's Investor Relations Department by making a toll free call. The complaint alleges widespread securities fraud and charges that defendants HealthSouth, Richard M. Scrushy (CEO, Chairman), Weston L. Smith (CFO, Executive VP), William Owens (Chief Operating Officer) and George Strong (director) 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 14, 2002 and August 27, 2002. According to the complaint, throughout the Class Period, HealthSouth issued press releases and filed reports with the SEC announcing impressive revenue and earnings growth and repeatedly assuring the market that the Company was well on its way to meeting its financial targets for the year 2002 and that its fundamentals were strong. According to the complaint, on August 27, 2002, HealthSouth shocked the market by issuing a press release announcing that CMS directives issued on July 1, 2002 concerning reimbursements may result in a $175 million shortfall in EBITDA from previously issued financial guidance for 2002 and that it could not provide further guidance for 2002 and 2003 because of uncertainties posed by the directives. In addition, the Company announced that it would spin-off its surgery- center division as part of a massive restructuring undertaken to deal with the developments and that defendant Scrushy would be replaced as CEO by defendant Owens. In response to this disclosure, HealthSouth stock plummeted by over 43% to close at $6.71 per share in a single day on extremely high trading volume. The Complaint further alleges that defendants failed to disclose the facts concerning the CMS directives and EBITDA shortfalls, which had been known to them for many months, in order to allow defendants Scrushy and Strong to sell (collectively) millions of shares of the Company's stock at artificially inflated prices and so that the Company could commence a $998 million note exchange/offer on more favorable terms than if the truth regarding the CMS directives and their impact on the Company was known publicly. On August 27, 2002, when HealthSouth announced that certain Medicare "billing changes" would cause HealthSouth's earnings to fall well below guidance, defendant Scrushy claimed that the full impact of this "new" information was only learned by HealthSouth on August 15, 2002, which explained why HealthSouth did not disclose the information to HealthSouth investors earlier. These statements were false as William Owens, HealthSouth's Chief Executive Officer, has now admitted that HealthSouth knew of a potential problem by at least June 6, 2002, and defendant George Strong sold nearly $2 million worth of HealthSouth stock between June 7- 11, 2002. HealthSouth and Scrushy's assertion that they disclosed this adverse information timely is further undermined by the fact that the Centers for Medicare and Medicaid (CMS) have stated that the "new" information "identified" by HealthSouth and Scrushy was not "new" information at all, but a mere clarification of existing policy. Moreover, CMS had never permitted healthcare providers to seek payment for individual services when such services were, in fact, provided not to an individual but to a group of individuals, and HealthSouth was seeking such improper reimbursement nonetheless. Investors lost millions while defendant Scrushy sold over $50 million worth of HealthSouth stock at artificially inflated prices before the collapse. For more information, contact THE EMERSON FIRM through its Investor Relations Department: Ms. Tanya R. Autry by Mail: 830 Apollo Lane, Houston, Texas 77058 by Phone: 800-663-9817 (toll free) or by e-mail: tanya.autry@worldnet.att.net INKTOMI CORPORATION: Cauley Geller Commences Lawsuit in S.D. New York --------------------------------------------------------------------- The Law Firm of Cauley Geller Bowman & Coates, LLP filed late last week a class action in the United States District Court for the Southern District of New York on behalf of purchasers of Inktomi Corporation (Nasdaq: INKT) publicly traded securities during the period between June 10, 1998 and April 3, 2001, inclusive. The complaint charges Merrill Lynch & Co., Inc., Morgan Stanley Dean Witter & Co., Inc., Henry Blodget and Mary Meeker with issuing misleading analyst reports about Inktomi. Specifically, the complaint alleges that Defendants urged investors to purchase Inktomi stock when defendants knew or should have known that such purchases were not a good investment. The complaint alleges that defendants issued "Buy" recommendations about Inktomi without any rational economic basis; failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and concealed significant, material conflicts of interests that prevented them from providing independent objective analysis. For additional information, contact CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Ellie Baker by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 (toll free) or by e-mail: info@cauleygeller.com INTERPUBLIC GROUP: Rabin & Peckel Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- A class action complaint has been filed 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 securities of The Interpublic Group of Companies (NYSE:IPG) between October 28, 1997 and August 13, 2002, both dates inclusive. The Interpublic Group of Companies, Inc., John J. Dooner, Jr., Philip H. Greier, Sean F. Orr, Frederick Molz, Eugene P. Beard, Richard P. Sneeder, Jr., David I.C. Weatherseed, and Joseph M. Studley are named as defendants in the complaint. The complaint alleges that defendants violated section 10(b) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements and omitting to disclose material adverse information about the Company's operations and prospects during the Class Period. Specifically, the complaint alleges that defendants issued numerous statements and filed quarterly and annual reports with the SEC, which described the Company's increasing net income and financial performance. These statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that, throughout the Class Period, the Company was overstating its net income by failing to expense certain charges which should have been expensed; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 13, 2002, the Company announced, among other things, that it had "identified $68.5 million of charges, principally in Europe, which had not been properly expensed," which will cause the company to restate its previously issued financial statements going back to 1997 and prior. During the Class Period, defendants and other insider sold almost $100 million of Interpublic stock. For more information, contact Rabin & Peckel LLP through Eric J. Belfi or Sharon Lee by Phone: (800) 497-8076, (212) 682-1818 by Fax: (212) 682-1892 or by e-mail@rabinlaw.com INTERPUBLIC GROUP: Marc S. Henzel Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- A class action lawsuit was filed in the United States District Court, Southern District of New York on behalf of purchasers of the securities of The Interpublic Group of Companies, Inc. (NYSE:IPG) between October 28, 1997 and August 13, 2002, inclusive. 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 28, 1997 and August 13, 2002, thereby artificially inflating the price of Interpublic securities. Throughout the Class Period, as alleged in the complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC, which described the Company's increasing net income and financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that, throughout the Class Period, the Company was overstating its net income by failing to expense certain charges which should have been expensed; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 5, 2002, Interpublic announced that it would be rescheduling the release of its second quarter 2002 earnings "to accommodate the Audit Committee of its Board of Directors," which was interpreted by the market to potentially involve the Company's accounting. In response to the uncertainty surrounding defendants' announcement, investors sold off shares of Interpublic, which dropped $4.69 per share, or 23.8%, to close at $14.99 per share. On August 13, 2002, the last day of the Class Period, the nature of the Company's delay of its second quarter 2002 earnings release became evident when the Company announced, among other things, that it had "identified $68.5 million of charges, principally in Europe, which had not been properly expensed," which will cause the company to restate its previously issued financial statements going back to 1997 and prior. For additional information, contact The Law Offices of Marc S. Henzel through Bala Cynwyd by Phone: 888-643-6735 or 610-660-8000 MORGAN STANLEY: Emerson Firm Commences Securities Suit in S.D. New York ----------------------------------------------------------------------- The Emerson Firm, a securities class action trial law firm, announced late last week that a class action has been filed in the United States District Court for the Southern District of New York on behalf of all purchasers of Morgan Stanley Dean Witter Technology Fund shares, of all four share classes (Nasdaq:TEKAX) (Nasdaq:TEKBX) (Nasdaq:TEKCX) (Nasdaq:TEKDX) from the public offering for the Fund on September 25, 2000 through July 31, 2002, inclusive (the Class Period) against Morgan Stanley Dean Witter & Co. (MSDW), Morgan Stanley Dean Witter Technology Fund (the Fund) and others for violations of Sections 11, 12 and 15 of the Securities Act of 1933 and of other federal statutory law. The Morgan Stanley Dean Witter Technology Fund recently changed its name to the Morgan Stanley Technology Fund. The defendants are: (1) the underwriters for the common stock of certain of the companies in the Technology Fund's portfolio; (2) the investment bankers and corporate finance specialists for certain of the companies whose securities in the Fund's portfolio; (3) seeking to obtain additional investment banking business from these present and former clients and from other companies whose shares also were/are in the Fund's portfolio; (4) the issuers of the shares in the Fund; (5) preparing and publicly disseminating research reports and recommendations on many of the companies whose shares were in the Fund's portfolio; and (6) the broker for certain members of the Class. This action arises as a result of the issuance by the defendants of shares in the Fund, and concerns material misstatements and omissions by defendants in the Prospectus, relating to defendants' conflicts of interest, which include but are not limited to the following: (i) defendants failed to disclose and omitted material information that MSDW had had investment banking relationships with, including having brought public, certain of the companies whose securities were part of the Fund's portfolio. Defendants disclosed neither this general fact nor the identities of the particular companies with which it had investment banking relationships; (ii) defendants failed to disclose and omitted material information concerning that MSDW was continuing to seek investment banking relationships with many of the companies whose securities were part of the Fund's portfolio; and (iii) defendants failed to disclose and omitted material information concerning that a material part of the total compensation paid to MSDW research analysts was based upon obtaining investment banking business for MSDW and not upon the accuracy of their research about a given company. Hence, MSDW and its affiliated companies including the Fund recommended investments in and/or invested in companies in order to enhance MSDW's opportunity to obtain investment banking business from those companies (without regard to whether they were good investments for the investors including plaintiffs and the Class). For more information, contact Investor Relations Department: Ms. Tanya R. Autry by Mail: 830 Apollo Lane, Houston, Texas 77058 by Phone: 800-663-9817 (toll free) or by e-mail: tanya.autry@worldnet.att.net WALT DISNEY: Shapiro Haber Commences Securities Suit in C.D. California ----------------------------------------------------------------------- The Boston law firm of Shapiro Haber & Urmy LLP has filed a class action suit alleging securities fraud against the Walt Disney Company (NYSE:DIS) and certain of its officers and directors in the United States District Court for the Central District of California, Western Division. The case was filed on behalf of all persons who purchased Disney common stock during the period August 15, 1997 through May 15, 2002, inclusive. The Complaint charges defendants with violations of federal securities laws. Among other things, plaintiff claims that during the Class Period, defendants failed to disclose the material facts concerning the existence, details, and potential effects of a pending lawsuit over merchandising rights concerning "Winnie the Pooh." Those effects include Disney's potential payout of hundreds of millions of dollars in royalties as well as the much more serious threat of possible termination of the Company's merchandising agreement for Pooh products which represents several billion dollars a year in revenue. On May 15, 2002, defendants belatedly disclosed the amount of the claims involved and the potential fallout from the litigation. As various media sources gradually reported this news, Disney's stock price fell, declining 28% in the two months after the disclosure. For additional information, contact Ted Hess-Mahan, Esq. or Liz Hutton, paralegal 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 XCEL ENERGY: Kaplan Fox Commences Securities Fraud Suit in Minnesota -------------------------------------------------------------------- Kaplan Fox has filed a class action suit against Xcel Energy, Inc. (NYSE:XEL) and certain of its officers and directors, in the United States District Court for the District of Minnesota. This suit is brought on behalf of all persons and entities who purchased or otherwise acquired Xcel securities between January 31, 2001 and July 26, 2002, inclusive. The complaint alleges that Xcel and certain of its officers and directors violated the federal securities laws by issuing a series of materially false and misleading statements regarding Xcel's financial performance and the financial performance of NRG, the Company's majority-owned subsidiary. The complaint further alleges that during the Class Period defendants failed to disclose that Xcel Participated in so called "round-trip" transactions which lacked economic substance, had the effect of artificially inflating Xcel's reported financial results, and also exposed Xcel to massive legal liability. As a result of defendants' failure to disclose Xcel's improper "round- trip" transactions, Xcel's stock price was artificially inflated during the Class Period, trading as high as $31.00. On July 29, 2002, Xcel stock fell to $5.66 on trading of more than 17 million shares. For more information, contact Frederic S. Fox, Esq., Joel B Strauss, Esq. or Donald R. Hall, Esq. 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 ********* 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. 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