/raid1/www/Hosts/bankrupt/CAR_Public/021118.mbx
C L A S S A C T I O N R E P O R T E R
Monday, November 18, 2002, Vol. 4, No. 228
Headlines
AUTOBYTEL.COM: Court Dismisses Officers, Directors From Securities Suit
AUTOWEB.COM: Court Dismisses Officers, Directors From Securities Suit
AVISTA CORPORATION: Undisclosed Links to Enron, PGE Alleged in WA Suits
BAXTER INTERNATIONAL: Faces Consolidated Securities Lawsuit in N.D. IL
BAXTER INTERNATIONAL: Faces Several Suits Over Althane Series Dialyzers
BAXTER INTERNATIONAL: JPMDL Refuses To Vacate Transfer of Medicaid Suit
BAXTER INTERNATIONAL: Texas Federal Court Dismisses Thimerosal Lawsuit
CABLETRON: Appeals Court Restores Suit V. Gov. Benson, Computer Firm
COOPER CAMERON: Faces Suit For Groundwater Pollution in TX State Court
CREDIT CARDS: Visa, Mastercard Campaigned To Undercut Rival Debit Cards
CYBERGUARD CORP.: Trial in FL Securities Fraud Suit Set For March 2004
ELOQUENT INC.: Officers, Directors Dismissed From Securities Fraud Suit
GENESIS ENERGY: Asks DE Court To Dismiss Suit Opposing Restructuring
HENRY SCHEIN: High Court Reverses Certification For Consumer Fraud Suit
HENRY SCHEIN: Medical Lawsuit Alleges Fraud in NJ Court
HOLLAND AMERICA: Eight Passengers Fall Ill Aboard Company Cruise Ship
POLO RALPH: Enters into Settlement of Saipan Factory Workers' Lawsuit
POLO RALPH: Employee Commences Suit Over Store Worker Policy in N.D. CA
RACING CHAMPIONS: Appeals Court Upholds Dismissal of Consumer Lawsuit
RICA FOODS: FL Court Dismisses Securities Fraud Lawsuit With Prejudice
SALOMON SMITH: Employee Stock Analyst Jack Grubman Says E-Mails A Boast
SWITZERLAND: Lawyers For Russian Families Plan US Suit Over Plane Crash
TOBACCO LITIGATION: Judge Returns Light Cigarette Suit To State Court
TRANSMETA CORPORATION: CA Court To Rule On Certification December 2002
VITAMIN ANTITRUST: MA Court Preliminarily Approves Suit Settlements
WJ COMMUNICATIONS: Fiduciary Breaches Alleged in Securities Suit in DE
New Securities Fraud Cases
ALLEGHENY ENERGY: Cohen, Milstein Commences Securities Suit in MD Court
ANSWERTHINK INC.: Stull Stull Launches Securities Fraud Suit in S.D. FL
ANSWERTHINK INC.: Milberg Weiss Commences Securities Lawsuit in S.D. FL
ELECTRONIC DATA: Berger & Montague Commences Securities Suit in E.D. TX
GREENVIEW COVE: Hackney & Plowman Lodges Suit Over Golf Club in FL
OM GROUP: Three Law Firms Commence Securities Fraud Lawsuit in N.D. OH
SEACHANGE INTERNATIONAL: Milberg Weiss Commences Securities Suit in MA
SYNCOR CORPORATION: Wolf Popper Launches Securities Fraud Lawsuit in NY
TENET HEALTHCARE: Spector, Roseman Commences Securities Suit in C.D. CA
*********
AUTOBYTEL.COM: Court Dismisses Officers, Directors From Securities Suit
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The United States District Court for the Southern District of New York
dismissed without prejudice Autobytel.com's current and former officers
and directors from the securities class action pending against them,
the Company and the underwriters involved in the Company's initial
public offering.
The suit alleges violations of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Plaintiffs allege that the
underwriter defendants agreed to allocate stock in the Company's
initial public offering to certain investors in exchange for excessive
and undisclosed commissions and agreements by those investors to make
additional purchases of stock in the aftermarket at pre-determined
prices.
Plaintiffs allege that the prospectus for the Company's s initial
public offering was false and misleading in violation of the securities
laws because it did not disclose these arrangements. The action seeks
damages in an unspecified amount.
The suit is being coordinated with over 300 other nearly identical
actions filed against other companies. A motion to dismiss addressing
issues common to the companies and individuals who have been sued in
these actions was filed on July 15, 2002.
The Company believes that it has meritorious claims against the
underwriters.
AUTOWEB.COM: Court Dismisses Officers, Directors From Securities Suit
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The United States District Court for the Southern District of New York
dismissed without prejudice Autoweb.com's former officers and directors
form the securities class action pending against them, the Company and
the underwriters involved in the Company's initial public offering.
The suit alleges violations of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Plaintiffs allege that the
underwriter defendants agreed to allocate stock in the Company's
initial public offering to certain investors in exchange for excessive
and undisclosed commissions and agreements by those investors to make
additional purchases of stock in the aftermarket at pre-determined
prices.
Plaintiffs allege that the prospectus for the Company's initial public
offering was false and misleading in violation of the securities laws
because it did not disclose these arrangements. The actions seek
damages in an unspecified amount.
The action is being coordinated with over 300 other nearly identical
actions filed against other companies. A motion to dismiss addressing
issues common to the companies and individuals who have been sued in
these actions was filed on July 15, 2002.
On October 9, 2002, the Autoweb individual defendants were dismissed
from the case without prejudice. The Company believes that it has
meritorious claims against the underwriters.
AVISTA CORPORATION: Undisclosed Links to Enron, PGE Alleged in WA Suits
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Avista Corporation faces several securities class actions filed in the
United States District Court for the Eastern District of Washington,
alleging federal securities violations. The suit also names as
defendants:
(1) Thomas M. Matthews, the former Chairman of the Board,
President and Chief Executive Officer of the Company,
(2) Gary G. Ely, the current Chairman of the Board, President and
Chief Executive Officer of the Company, and
(3) Jon E. Eliassen, Senior Vice President and Chief Financial
Officer of the Company
The suits assert violations of the federal securities laws in
connection with alleged misstatements and omissions of material fact
pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of
1934.
In particular, the plaintiffs allege that the Company failed to
disclose certain business practices that Avista Corp. was engaging in
with Enron Power Marketing, Inc. (EPMI) and Portland General Electric
Corporation (PGE).
The plaintiffs assert that such alleged misstatements and omissions
have occurred in the Company's filings with the Securities and Exchange
Commission and other information made publicly available by the
Company, including press releases.
The class action lawsuits assert claims on behalf of all persons who
purchased, converted, exchanged or otherwise acquired the Company's
common stock during the period between November 23, 1999 and August 13,
2002.
The Company intends to file a motion to dismiss these complaints.
BAXTER INTERNATIONAL: Faces Consolidated Securities Lawsuit in N.D. IL
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Baxter International, Inc., its Chief Executive Officer and Chief
Financial Officer face a consolidated securities class action filed in
the United States District Court for the Northern District of Illinois,
alleging violations of federal securities laws.
The suit seeks recovery of unspecified damages, alleging that the
defendants made misleading statements that allegedly caused the
Company's common stock to trade at inflated levels. The suit was filed
on behalf of purchasers of Baxter International Inc. (NYSE: BAX)
publicly traded securities during the period between January 24, 2002
and July 18, 2002, inclusive, according to an earlier Class Action
Reporter story.
In October 2002, the Company and members of its Board of Directors were
named as defendants in a lawsuit filed in the United States District
Court for the Northern District of Illinois by an alleged participant
in the Baxter Incentive Investment Plan, purportedly on behalf of the
Plan and a class of Plan participants who purchased shares of the
Company's common stock.
This lawsuit sets forth claims for unspecified damages under the
Employee Retirement Income Security Act of 1974, as amended, and is
based on allegations similar to those made in the securities lawsuits
described above.
The Company believes that all of these lawsuits are without merit and
intends to defend itself vigorously against these claims.
BAXTER INTERNATIONAL: Faces Several Suits Over Althane Series Dialyzers
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Baxter International, Inc. and certain of its subsidiaries face six
civil lawsuits seeking damages on behalf of persons who allegedly died
or were injured as a result of exposure to the Company's A, AF and AX
series dialyzers.
The company has reached settlements with a number of the families of
patients who died in Spain, Croatia and the United States after
undergoing hemodialysis on Baxter Althane series dialyzers. A
government criminal investigation concerning the patient deaths is
pending in Spain.
The Croatian government has closed its criminal investigation without
initiating any criminal action against the Company. Other lawsuits and
claims may be filed in the United States and elsewhere.
BAXTER INTERNATIONAL: JPMDL Refuses To Vacate Transfer of Medicaid Suit
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The Judicial Panel of Multi-District Litigation refused plaintiff's
motions in the class actions against Baxter International, Inc.,
certain of its subsidiaries and other pharmaceutical companies, to
vacate orders transferring the actions brought in Nevada and Montana to
the United States District Court for the District of Massachusetts for
consolidated pretrial case management under the Multidistrict
Litigation rules.
The suits were commenced in September 2002 in various US federal courts
on behalf of various classes of purchasers of Medicare and Medicaid
eligible drugs alleged to have been injured by the Company and
other defendants as a result of pricing practices for such drugs, which
are alleged to be artificially inflated. All eight of these federal
court cases have been transferred to Massachusetts federal court for
consolidated pretrial case management under Multidistrict Litigation
rules.
In addition, in January 2002, the Attorney General of Nevada filed a
civil suit in the Second Judicial District Court of Washoe County,
Nevada. In February 2002, the Attorney General of Montana filed a
civil suit in the First Judicial District Court of Lewis and Clark
County, Montana.
These two lawsuits, which each name a subsidiary of the Company as a
defendant. The two suits allege that prices for Medicare and Medicaid
eligible drugs were artificially inflated in violation of various state
laws.
Various state and federal agencies are conducting civil investigations
into the marketing and pricing practices of Baxter and others with
respect to Medicare and Medicaid reimbursement.
BAXTER INTERNATIONAL: Texas Federal Court Dismisses Thimerosal Lawsuit
----------------------------------------------------------------------
The United States District Court for the Southern District of Texas
dismissed one lawsuit filed against Baxter International, Inc. and
certain of its subsidiaries, relating to vaccines containing
thimerosal.
As of September 30, 2002, the Company and certain of its subsidiaries
have been served as defendants, along with others, in 71 lawsuits filed
in various state and US federal courts, eight of which are purported
class actions, seeking damages, injunctive relief and medical
monitoring for claimants alleged to have contracted autism or other
attention deficit disorders as a result of exposure to vaccines for
childhood diseases containing thimerosal.
The court dismissed the suit based on the application of the National
Vaccine Injury Compensation Act. Additional Thimerosal cases may be
filed in the future against the Company and other companies that
marketed Thimerosal-containing products.
CABLETRON: Appeals Court Restores Suit V. Gov. Benson, Computer Firm
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A federal appeals court has reinstated an investor lawsuit against
Governor-Elect Craig Benson of New Hampshire and his former networking
computer firm, Cabletron, in which investors alleged that the company
tried to hide its downward spiral by inflating revenues and booking
fictitious sales orders, Associated Press Newswires reports.
The First Circuit Court of Appeals, in a recent ruling, said the lower
court erred in dismissing the case. The lower court said the
investors' complaint did not meet certain standards for alleging fraud.
"While some of the allegations are stronger than others, and those
against the defendant outside directors present a close call, we
conclude that the complaint as a whole states a claim against Cabletron
and against all but one of the individual defendants," the appeals
court said.
The court affirmed the dismissal of one of two claims against
engineering and manufacturing director Christopher Oliver, but
reinstated all claims against the other six defendants, including
Governor-Elect Craig Benson and Cableton co-founder Robert Levine.
Cabletron, which no longer exists, also is listed as a co-defendant.
The lawsuit now goes back to the US District Court in Concord, New
Hampshire for further proceedings.
In June 1999, Mr. Benson stepped down as chief executive of Cabletron,
which later went out of business and spun off into several other
companies. The class action, filed in 1998, on behalf of investors,
accuses Cabletron of issuing upbeat forecasts even in the face of its
problems.
The lawsuit alleges the defendants "tried to hide this downward spiral
by fraudulently inflating the company's quarterly net revenue with a
number of techniques, some blatant and some more subtle." These
"techniques" included booking entirely fictitious sales, making
shipments late in one quarter, which had the effect of bumping up that
quarter's revenue, while knowing that the goods would be returned
during the next quarter and setting aside newly received raw materials
and booking them in a later quarter so they would not appear as
liabilities in the quarter when they actually arrived.
Mr. Benson, the suit alleges, got an employee to store items at his
home. The items were recorded as sold, but later were returned to
inventory.
The complaint also alleges that sales of $180 million of Cabletron
stock by several of the defendants, during the period in question, as
evidence of the fraud scheme.
Cabletron, founded by Messrs. Benson and Levine, in an Ashland,
Massachusetts, garage in 1983, at its height employed 7,000 people, had
annual sales of $1.6 billion, and was a leading manufacturer and vendor
of equipment for large enterprise computer networks, as well as related
hardware, software and consulting services. Its customers included
large corporations, universities and government agencies.
COOPER CAMERON: Faces Suit For Groundwater Pollution in TX State Court
----------------------------------------------------------------------
Cooper Cameron Corporation faces a putative class action filed in
Harris County, Texas State District Court, on behalf of certain
residents of a community near a former Cameron Iron Works manufacturing
site in Houston, Texas.
The suit alleges that groundwater beneath the residents' property has
been affected by chemical residue migrating from the site. The suit
seeks additional testing, reclamation and remediation as well as
unspecified property value diminution.
It is too early to assess the likely outcome of this case, but the
Company has insurance for this type of claim and the effects of this
suit are not expected to be material to the financial position of the
Company.
CREDIT CARDS: Visa, Mastercard Campaigned To Undercut Rival Debit Cards
-----------------------------------------------------------------------
Visa and MasterCard undertook a decade-long effort to discourage the
use of rivals' debit cards in favor of their own more-expensive
versions, driving up costs for retailers and consumers, newly unsealed
court documents show, The Wall Street Journal reports.
Depositions and internal company memos depict the companies as paying
banks millions of dollars to curtail rival debit-card transactions,
demanding that merchants take their debit cards or lose access to
credit-card sales, and even trying to disguise their debit cards so
merchants could not tell them from credit cards.
Thousands of pages were unsealed in a massive federal antitrust class
action, seeking damages from Visa USA Inc. and MasterCard International
Inc., the world's biggest credit-card issuers - by the nation's
retailers, led by the world's largest merchant, Wal-Mart Stores, Inc.
The suit alleges the two companies responded to the growing threat from
debit cards by creating their own more-costly, less-efficient versions
and illegally leveraging their power in the credit-card market to force
merchants to use them.
For example, one Visa strategy document from 1997, said of regional
debit-card rivals, "It is time to declare the war." Another document
headed "Visa Objectives," included the words, "Prevent consolidation of
debit business (and) block or disrupt formation of super-regional
networks that may undercut Visa's brand dominance."
The lawsuit, filed six years ago in the US District Court in Brooklyn,
was cleared by the Supreme Court in June to proceed as a class action.
That last court action added nearly every retailer in the nation as a
plaintiff.
Visa and MasterCard say none of their actions were illegal and all were
aimed at giving consumers more choices by making their own debit cards
more widely accepted. "By promoting wider debit use, we actually have
helped the regional networks and expanded the market," said a
MasterCard spokeswoman.
To consumers at the cash register, Visa and MasterCard's versions of
debit cards look and can appear to work like credit cards. However,
when used that way, they impose fees on retailers that are far higher
than conventional debit cards, which electronically draw cash instantly
from consumers' checking accounts. Visa and MasterCard's debit-card
transactions withdraw money from checking accounts, but use an offline,
signature-based system.
Retailers say that forces them to pay billions of dollars a year in
extra processing charges, costs, they say, they must pass on to
customers.
To make sure that Visa's and MasterCard's costly debit cards were
accepted by the retailer, the two defendants instituted an "honor all
cards" rule, barring any retailer who refused their debit cards from
continuing to accept their ubiquitous credit cards, the documents show.
CYBERGUARD CORP.: Trial in FL Securities Fraud Suit Set For March 2004
----------------------------------------------------------------------
Trial in the consolidated class action pending against Cyberguard
Corporation commences in March 2004 in the United States District Court
for the Southern District of Florida.
Several suits were commenced after the Company announced in August 1998
that due to a review of its revenue recognition practices relating to
distributors and resellers, it would restate prior financial results.
The suits were filed by alleged shareholders against the Company and
certain former officers and directors, and were later consolidated.
The consolidated suit seeks damages purportedly on behalf of all
persons who purchased or otherwise acquired the Company's common
stock during various periods from November 7, 1996 through August 24,
1998.
The complaint alleges, among other things, that as a result of
accounting irregularities relating to the Company's revenue recognition
policies, the Company's previously issued financial statements were
materially false and misleading and that the defendants knowingly or
recklessly published these financial statements which caused the
Company's common stock prices to rise artificially.
The action alleges violations of Section 10(b) of the Securities
Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder and
Section 20(a) of the Exchange Act.
Subsequently, the defendants, including the Company, filed their
respective motions to dismiss the lawsuit. The Court issued a ruling
denying the Company's and Robert L. Carberry's (the Company's CEO from
June 1996 through August 1998) motions to dismiss. The court granted
the motions to dismiss with prejudice for defendants:
(1) William D. Murray (the Company's CFO from November 1997
through August 1998),
(2) Patrick O. Wheeler (the Company's CFO from April 1996 through
October 1997),
(3) C. Shelton James (the Company's former Audit Committee
Chairman), and
(4) KPMG Peat Marwick LLP
On August 14, 2000, the plaintiffs filed a motion for reconsideration
of that order. The Court ruled on the plaintiffs' motion for
reconsideration that the previously dismissed defendants William D.
Murray, Patrick O. Wheeler and C. Shelton James should not have been
dismissed from the action and shall be defendants in this action under
the control person liability claims under Section 20(a) of the Exchange
Act, and that the plaintiffs may amend the suit to bring claims against
C. Shelton James under Section 10(b) of the Exchange Act and Rule 10b-5
promulgated thereunder. On April 5, 2001, the plaintiffs filed their
second consolidated and amended suit to include amended claims against
C. Shelton James.
On August 14, 2002, the court granted the plaintiffs' motion for
class certification and certified the class to include all investors
who acquired the Company's common stock between November 7, 1996 and
August 24, 1998 and were damaged by the purchase of such stock. The
parties are currently conducting discovery.
ELOQUENT INC.: Officers, Directors Dismissed From Securities Fraud Suit
-----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed without prejudice certain of Eloquent, Inc.'s officers and
directors from the consolidated securities class action pending against
them and the Company.
The suit alleges that the Company, certain of its officers and
directors and the underwriters of its initial public offering violated
the federal securities laws because the IPO registration statement and
prospectus contained untrue statements of material fact or omitted
material facts regarding the compensation to be received by, and the
stock allocation practices of, the IPO underwriters.
Similar complaints were filed in the same court against hundreds of
other public companies that conducted IPOs of their common stock in the
late 1990s. In August 2001, the IPO Lawsuits were consolidated for
pretrial purposes before United States Judge Shira Scheindlin of the
Southern District of New York.
Judge Scheindlin held an initial case management conference on
September 7, 2001, at which time she ordered, among other things, that
the time for all defendants in the IPO Lawsuits to respond to any
complaint be postponed until further order of the court. Thus, the
Company has not been required to answer any of the complaints, and no
discovery has been served on it.
In accordance with Judge Scheindlin's orders at further status
conferences in March and April, the appointed lead plaintiffs' counsel
filed amended, consolidated complaints in the IPO Lawsuits on April 19,
2002. Defendants then filed a global motion to dismiss the IPO
Lawsuits on July 15, 2002, as to which the Company does not expect a
decision until late 2002.
On October 9, 2002, the court entered an order dismissing the Company's
named officers and directors from the IPO Lawsuits without prejudice,
pursuant to an agreement tolling the statute of limitations with
respect to these officers and directors until September 30, 2003.
The Company believes that this litigation is without merit and intends
to defend against it vigorously. However, this litigation, as well as
any other litigation that might be instituted, could result in
substantial costs and a diversion of management's attention and
resources.
GENESIS ENERGY: Asks DE Court To Dismiss Suit Opposing Restructuring
--------------------------------------------------------------------
Genesis Energy, LP asked the Delaware Court of Chancery to dismiss the
putative class action filed against it and:
(1) Genesis Energy LLC,
(2) members of the board of directors of Genesis Energy, LLC, and
(3) Salomon Smith Barney Holdings, Inc.
The suit alleges numerous breaches of fiduciary duty loyalty owed by
the defendants to the purported class in connection with making a
proposal for restructuring, according to an earlier Class Action
Reporter story.
In November 2000, the plaintiff amended its complaint. In response,
the defendants removed the amended complaint to federal court. On
March 27, 2002, the federal court dismissed the suit and the plaintiff
filed a motion to alter or amend the judgment. On May 15, 2002, the
federal court denied the motion to alter or amend. The time for an
appeal to be taken expired without an appeal being filed.
On June 11, 2002, the plaintiff refiled the original complaint in the
Delaware Court of Chancery. The defendants later moved to dismiss the
complaint for failure to state a claim upon which relief can be
granted. The court has not ruled on that motion.
The Company believes that the complaint is without merit.
HENRY SCHEIN: High Court Reverses Certification For Consumer Fraud Suit
-----------------------------------------------------------------------
The Texas Supreme Court reversed the class certification granted by the
District Court in Travis County Texas, to a consumer lawsuit filed
against Henry Schein, Inc. and:
(1) Easy Dental Systems, Inc. and
(2) Dentisoft, Inc.
The suit was commenced in January 1998, asserting claims involving the
sale of certain practice management software products sold prior to
1998 under the Easy Dental name, such as:
(1) negligence,
(2) breach of contract,
(3) fraud, and
(4) violations of certain Texas commercial statutes
The court later certified, on motion, both a Windows(R) sub-class and a
DOS sub-class to proceed as a class action pursuant to Tex. R. Civ. P.
42. It is estimated that 5,000 Windows(R) customers and 10,000 DOS
customers were covered by the suit that was certified by the trial
court.
The Company then filed an interlocutory appeal of the trial court's
determination to the Texas Court of Appeals on the issue of whether
this case was properly certified as a class action. On September 14,
2000, the Court of Appeals affirmed the trial court's certification
order.
On January 5, 2001, the Company filed a Petition for Review in the
Texas Supreme Court asking the Court to find that it had "conflicts
jurisdiction" to permit review of the trial court's certification
order. The Texas Supreme Court heard oral argument on February 6,
2002.
On October 31, 2002, the Texas Supreme Court issued an opinion in the
case holding that it had conflicts jurisdiction to review the decision
of the Court of Appeals and finding that the trial court's
certification of the case as a class action was improper.
The Supreme Court further held that the judgment of the court of
appeals which affirmed the class certification order must be reversed
in its entirety. Upon reversal of the class certification order, the
Supreme Court remanded the case to the trial court for further
proceedings consistent with its opinion.
Because this matter has not yet come before the trial court for
consideration consistent with the Texas Supreme Court's opinion
reversing the trial court's certification order, it is not possible to
determine what the trial court will do if the plaintiffs file another
motion for class certification.
Further, because of the decertification of the class by the Texas
Supreme Court, because it is not possible to determine whether the
trial court will certify a different class upon motion, if any, and
other factors, it is not possible to determine the possible range of
damages or other relief sought by the plaintiffs in the trial court.
HENRY SCHEIN: Medical Lawsuit Alleges Fraud in NJ Court
-------------------------------------------------------
Henry Schein faces a class action filed in the Superior Court of New
Jersey, Law Division, Morris County, filed by West Morris Pediatrics on
behalf of a nationwide class of all physicians, hospitals and other
healthcare providers throughout New Jersey and across the United
States. This complaint, as amended in August 2002, alleges, among
other things:
(1) breach of oral contract,
(2) breach of implied covenant of good faith and fair dealing,
(3) violation of the New Jersey Consumer Fraud Act,
(4) unjust enrichment,
(5) conversion, and
(6) promissory estoppel relating to sales of a vaccine product in
the year 2001
Because damages have not been specified by the plaintiffs, it is not
possible to determine the range of damages or other relief sought by
the plaintiffs.
HOLLAND AMERICA: Eight Passengers Fall Ill Aboard Company Cruise Ship
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Eight passengers have become ill aboard a cruise ship of the Holland
America line, the Associated Press Newswires reports. The cruise ship
had been scoured to eliminate a virus that had sickened more than 400
people on recent voyages, cruise officials said on Wednesday.
There are two class actions pending against Holland America, including
one on behalf of a 56-year-old New York man who died seven days after
his cruise ended. He never recovered from his bout with a virus
apparently contracted aboard one of the company's ships, Los Angeles
attorney Geoffrey Norton said.
The likelihood of additional lawsuits remains an issue. This is at
least the second virus outbreak aboard a Holland America vessel in the
last four months. The Ryndam, which sailed to Alaska over the summer,
had 218 passengers on one trip and 176 on another, sickened by virus.
Holland America's Amsterdam departed Fort Lauderdale Monday evening,
with 1,316 passengers on a 10-day Caribbean cruise after 600 workers
cleaned and sanitized the ship. By Wednesday afternoon, eight people
were sick with the same Norwalk-type virus symptoms, Holland
spokeswoman Erik ElveJord stated. While not considered serious, the
contagious virus strikes people with up to two days of diarrhea,
vomiting and stomach pain.
"Since the ship is at sea, we are asking them to stay in their cabins
and we are bringing them food," Ms. Elvejord said.
A total of 425 passengers and crew members have caught the virus during
the Amsterdam's last three voyages, before the one which departed
Monday, company officials said. Passengers departing on the cruise
Monday, were given a letter notifying them of the earlier virus, but
they all decided to board.
The Seattle-based cruise line has been in daily contact with the
Centers for Disease Control and Prevention in Atlanta. David Forney,
chief of the CDC's vessel sanitation program, said the cruise line has
been doing "anything and everything" to clean the ship and prevent the
spread of the virus.
"If we continue to have the case levels that we did approaching the
last cruise, then a more drastic step should be taken," said Mr.
Forney. "About the only thing we have left is to take the ship out of
service for a length of time that will allow total cleansing and
sanitizing."
POLO RALPH: Enters into Settlement of Saipan Factory Workers' Lawsuit
---------------------------------------------------------------------
Polo Ralph Lauren Corporation has entered into a settlement agreement
in the class action filed against it and several other clothing
retailers, over its operations in Saipan.
According to an earlier Class Action Reporter story, two similar suits
were filed, one in San Francisco Superior Court and the other in the
United States District Court in Hawaii. The suits generally alleged
that the Company and other garment manufacturers and retailers
asserting claims that the Saipan factories engaged in unlawful
practices relating to the recruitment and employment of foreign
workers, according to an earlier Class Action Reporter story.
The defendants include both companies selling goods purchased from
factories located on the island of Saipan and the factories themselves.
This complaint alleges claims under Racketeer Influenced and Corrupt
Organizations (RICO) Act, the Alien Tort Claims Act, federal anti-
peonage and indentured servitude statutes and state and international
law.
The Company has entered into a settlement of the claims against it,
which is still subject to court approval. The court granted
preliminary approval of the settlement in May 2002, and a hearing as to
whether to grant final approval of the settlement is currently
scheduled to occur on January 23, 2003.
POLO RALPH: Employee Commences Suit Over Store Worker Policy in N.D. CA
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Polo Ralph Lauren Corporation faces a class action filed in September
2002 by Toni Young, an employee at one of the Company's stores in the
United States District Court for the District of Northern California
alleging violations of California antitrust and labor laws.
The suit, which also names Polo Retail LLC as a defendant, purports to
represent a class of employees who have allegedly been injured by the
Company's requirement that certain retail employees purchase and wear
Polo Ralph Lauren merchandise as a condition of their employment. The
complaint, as amended, seeks an unspecified amount of actual and
punitive damages, disgorgement of profits and injunctive and
declaratory relief.
The Company believes that the plaintiff's claims are substantially
without merit and intends to defend against them vigorously.
RACING CHAMPIONS: Appeals Court Upholds Dismissal of Consumer Lawsuit
---------------------------------------------------------------------
The United States Ninth Circuit Court of Appeals affirmed the dismissal
of a class action against Racing Champions Corporation, charging the
Company with violations of the Racketeer Influenced and Corrupt
Organizations (RICO) Act and the California Unfair Competition Law.
The suit was filed in the United States District Court for the Southern
District of California on behalf of all US residents who purchased
sports cards manufactured, licensed, marketed, sold or distributed by
any defendant within a time period of up to four years.
The suit alleges that the defendants have violated the California
unfair trade practices and consumer protection laws by selling packs of
sports trading cards containing random assortments of varying values,
according to an earlier Class Action Reporter story.
In May 2001, the court denied the defendants' motion for summary
judgment. The defendants promptly filed an appeal with the California
Supreme Court, but in September 2001, the Supreme Court denied
permission to the defendants to appeal the denial of their motion for
summary judgment. The plaintiffs' motion for class certification is
currently pending with the trial court. The suit was later dismissed by
the court.
RICA FOODS: FL Court Dismisses Securities Fraud Lawsuit With Prejudice
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The United States District Court for the Southern District of Florida
dismissed with prejudice the securities class actions filed against
Rica Foods, Inc. (Amex: RCF) on behalf of all persons who acquired Rica
Foods, Inc. (Amex: RCF) common stock between January 16, 2001 and
December 28, 2001 against the Company and:
(1) Calixto Chaves, the Company's Chairman and CEO,
(2) Randall Piedra, the Company's CFO and
(3) Jose Pablo Chaves, the Company's COO.
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The suit alleges, among other things that throughout the
class period, defendants filed documents with the SEC, which failed to
disclose that the Company was not in compliance with the credit
agreement entered into with Pacific Life Insurance Company on January
16, 2001, an earlier Class Action Reporter story states.
The Court's decision provides in part that the named plaintiff failed
to allege a cognizable claim against the Company.
"Rica Foods is pleased to announce the Court's recent decision and
reaffirms the company's initial position concerning these actions and
management's commitment to vigorously defend the Company's interests.
The decision is still subject to appeal by the end of this month,"
Mauricio Marenco, general counsel of Rica Foods, said in a statement.
"With this chapter now closed, the Company intends to continue working
to improve its fundamental to enhance shareholder value," Mr. Marenco
concluded.
SALOMON SMITH: Employee Stock Analyst Jack Grubman Says E-Mails A Boast
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Jack Grubman, a former stock analyst at Citigroup's brokerage unit,
Salomon Smith Barney, said that his e-mail statements to a colleague,
in which he claimed his stock ratings were influenced by Citigroup
Chairman Sanford Weill, were empty boasts to impress the friend,
Associated Press Newswires reports.
Mr. Grubman is among analysts under investigation and is named, along
with Salomon Smith Barney, in some 62 class actions over alleged
manipulation of stock ratings, according to Citigroup's recent filing
with the Securities and Exchange Commission. Mr. Grubman resigned in
August from Salomon, but insists he never issued a biased rating.
In his recent statement about his e-mails, Mr. Grubman said, "I have
said a number of inappropriate, even silly, things in a few private e-
mails that have been made public over the last few months. The
contents of these particular e-mails, while personally embarrassing,
are completely baseless. My research on AT&T was always done on the
merits."
The contents of some of Jack Grubman's e-mails was reported in a Wall
Street Journal story. Mr. Grubman had written to his colleague that
Mr. Weill had pushed him to review his rating of AT&T stock so as to
curry favor from AT&T CEO C. Michael Armstrong, a Citigroup board
member. Mr. Weill wanted Mr. Armstrong's support in a bid to oust a
boardroom rival, co-chairman John Reed, Mr. Grubman wrote in the same
e-mail.
Mr. Weill denies that account in a recent memo to senior executives,
saying that he never influenced Mr. Grubman's stock research and said
further that he would never attempt to influence a board member's vote
in this case, Mr. Armstrong's. He also denied suggestions that his
efforts to help Mr. Grubman's children get into an exclusive Manhattan
nursery school, run by the 92 Street "Y," played any role in the
analyst upgrading his opinion of AT&T in his ratings. Mr. Weill said
that he tried to help Mr. Grubman with his children's application
simply because he was an important employee who sought his help.
Investigators are probing links between Citigroup's pledge of $1
million to the "Y" and Mr. Weill's help in having the school review Mr.
Grubman's application for his children' acceptance.
In the late 1990's, Mr. Grubman became one of Wall Street's most
powerful analysts. When technology stocks collapsed and many high-
flying companies such as Global Crossing and WorldCom fell in
bankruptcy or scandal, he and other leading analysts were accused of
touting weak stocks to lure business to their companies.
New York State Attorney General Eliot Spitzer, who has been probing
conflicts of interest at Wall Street firms involved in researching and
trading stocks, is interest in what role Mr. Weill had in Salomon's
AT&T rating, including an upgrade by Mr. Grubman right before the
telephone company was planning a massive stock sale to finance its
wireless unit.
Last month, Citigroup said it was separating its stock research from
its investment banking operation, which is in line with an industry
wide restructuring.
SWITZERLAND: Lawyers For Russian Families Plan US Suit Over Plane Crash
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Lawyers representing Russian families whose children were killed in a
mid-air collision in July, recently said they plan to file a class
action in the United States that could force compensation from
Switzerland's air traffic control company, the Associated Press
Newswires reports.
Lawyers Michael Witti and Gerrit Wilmans said they will be representing
the families of 40 children killed in the crash between a Russian
charter airliner and a cargo plane over an area of southern Germany
controlled by Switzerland's air traffic control company, SkyGuide.
Mr. Witti and Mr. Wilmans told a news conference that initial
investigations into the collision put much of the responsibility on
Skyguide, which is about 99 percent owned by the Swiss government.
Seventy-one people were killed.
"But Sky Guide has so far declined to discuss the case with us," said
Mr. Witti. The two lawyers did not specify how much money they would
be seeking, but other attorneys representing families of 12 crewmembers
already are asking for $20 million from SkyGuide.
Mr. Witti said he expected the children's suit would be joined with the
crew members' case. He said the lawsuit presented a number of
complications because of the different countries involved. They said
they were unable to sue SkyGuide in the United States, but were naming
Honeywell, the US manufacturer of the collision avoidance system and
DHL courier service, which was flying the cargo plane. This could put
pressure on SkyGuide to reach an out-of-court settlement.
"We don't really care whether it falls back on Skyguide, the insurance
companies or someone else," said Mr. Witti about where the
responsibility for payment of damages may land. The US legal system
allows for much bigger compensation than the Swiss one, which does not
provide for class actions.
Skyguide spokesman Patrick Herr said the company had declined to enter
into talks pending a final accident report from crash investigators and
clarification of legal questions.
The crash occurred in the late evening of July 1, when one of two air
traffic controllers in Zurich had taken a break. The remaining
controller told the Russian plane, a Tupolev 154, to descend to avoid a
collision with the Boeing 757 cargo plane. That kept the Tu-154 on
collision course with DHL's cargo plane, which was descending in
accordance with its collision-avoidance equipment.
The Western pilots are trained to follow the instructions of the
equipment, and did so. The DHL plane descended. However, the Tu-154
pilot obeyed the human controller and also descended, unaware that his
on-board systems were correctly telling him to climb.
TOBACCO LITIGATION: Judge Returns Light Cigarette Suit To State Court
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A lawsuit contending cigarette maker Philip Morris deceived smokers
into believing "light" cigarettes are safer, should be handled in state
court, a federal judge ruled, according to a report by Associated Press
Newswires.
Smokers who filed the class action maintain the Company engaged in
consumer fraud, and should be covered under state law. The Company
argued that the case should be in federal court, saying the Company is
not based in New Hampshire, it acted under federal nicotine testing
guidelines and that the amount the smokers seek places the case in
federal jurisdiction.
US District Judge Paul Barbadoro ruled the amounts, per smoker who
would be entitled to damages, would be far below the $75,000 limit. He
also ruled the Company misunderstands the activities of the Federal
Trade Commission and mischaracterizes the smokers' complaint.
The lawsuit was filed last spring by Denise Tremblay and Karen
Lawrence, both of Manchester. They want the court either to order the
Company to refund everything the thousands of people who smoked
Marlboro Lights spent in the state since 1971, or split with them the
profits from the sales.
"This is, in effect, a refund case to everyone who smoked Marlboro
Lights, who thought they were getting low tar and nicotine, when in
fact they were not," said lawyer Charles Douglas, who represents the
smokers. Mr. Douglas said the lawsuit involves at least tens of
thousands of people.
Ms. Tremblay switched from regular Marlboro cigarettes to Marlboro
Light in 1985; Ms. Lawrence switched in 1973 or 1974. Both believed
light cigarettes were less harmful, said Mr. Douglas. The tobacco
industry generally uses the word "light" to describe cigarettes with
less than 15 milligrams of tar, a carcinogen produced when tobacco is
burned. Tar helps deliver the nicotine to smokers.
The lawsuit cites a National Cancer Institute study that found people
who smoke light cigarettes tend to inhale more deeply and more often in
order to get the nicotine they need. The study also said cigarette
manufacturers knew that and designed their products to register low tar
readings in machine tests.
Specifically, said Mr. Douglas, the light filters are designed to
deliver more tar and nicotine to smokers, who compress the filters with
their fingers or lips, than to the testing machine, which does not.
The company maintains it is being sued for trying to comply with
federal policies on the testing and labeling of light cigarettes, but
Judge Barbadoro disagreed.
"Although Philip Morris is a participant in a regulated industry, this
is not enough to demonstrate that it acted under the direction of a
federal officer when it designed its light cigarettes and elected to
market them as low in tar and nicotine," Judge Barbadoro wrote.
He wrote that the smokers are not challenging a federal policy in
a state court. Instead, they allege the company aimed to manipulate
the policies by "exploiting loopholes" in the testing method.
Mr. Douglas said recent multi-million-dollar verdicts around the
country against cigarette makers are messages from angry jurors.
"Jurors come into the box kind of with their arms crossed, saying,
'They smoked, they got cancer, so what?'" he said. "But when they see
the documents and hear the testimony about what manufacturers have
known and done, they get teed off."
TRANSMETA CORPORATION: CA Court To Rule On Certification December 2002
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The United States District Court for the Northern District of
California is set to hear class certification motions for the
consolidated securities lawsuit filed against Transmeta Corporation in
December 2002.
The consolidated suit names the Company, its directors, and certain of
its officers, alleging federal securities violations on behalf of
purchasers of the Company's common stock during the period from
November 7, 2000 to July 19, 2001.
The second amended complaint alleges violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-
5 promulgated thereunder, and Sections 11 and 15 of the Securities Act
of 1933, as amended.
In May 2002, the court granted in part and denied in part defendants'
motion to dismiss the second amended complaint, and denied plaintiffs'
motion for leave to file a third amended complaint. In June 2002,
defendants answered the second amended complaint as to the only
surviving claim.
In July 2002, defendants filed a motion for summary judgment relating
to that claim. Plaintiffs have moved for class certification, and the
Court is scheduled to hear defendants' motion for summary judgment and
plaintiffs' motion for class certification in December 2002.
The Company believes that the allegations in the second amended
complaint and the antecedent complaints are without merit and intends
to defend the consolidated action vigorously.
Beginning in June 2001, the directors and certain officers of Transmeta
were sued in three purported shareholder derivative actions filed in
the Superior Courts of the State of California for the Counties of
Santa Clara and San Mateo. In October 2001, those cases were
consolidated in and by the Superior Court for Santa Clara County into a
single action. In April 2002, plaintiffs filed a consolidated amended
complaint and in June 2002, plaintiffs filed a second amended
complaint.
Like its antecedents, the second amended complaint is based upon the
same general allegations set out in the purported federal class action
described above. In May and June 2002, the Company and the individual
defendants filed two demurrers to the second amended complaint.
In July 2002, the Court sustained the Company's demurrer based on
plaintiffs' lack of standing, ordered plaintiffs to file an amended
complaint, and deferred consideration of the individual defendants'
demurrer as moot.
The Company believes that the allegations in the second amended
complaint and its antecedents are without merit.
VITAMIN ANTITRUST: MA Court Preliminarily Approves Suit Settlements
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Massachusetts state court granted preliminary approval to four class
action settlements with vitamin producers, which will result in an
additional $2.5 million being distributed to Massachusetts charities
for food and nutrition programs. Earlier this year six other major
producers of bulk vitamins entered into a master settlement that
provided more than $19 million for Massachusetts' charities.
The master settlement was given final approval on September 11, 2002
and the grants to charities from those funds are anticipated in the
next 10 days. The new settling defendants are:
(1) Merck KGaA,
(2) EM Industries, Inc.,
(3) Sumitomo Chemical America, Inc.,
(4) Sumitomo Chemical Co., Ltd.,
(5) Tanabe Seiyaku Co., Ltd.,
(6) Tanabe U.S.A., Inc.,
(7) Lonza AG,
(8) Degussa A.G.,
(9) Degussa Corp.,
(10) Reilly Chemical, S.A.,
(11) Reilly Industries, Inc.,
(12) Nepera, Inc.,
(13) UCB Chemicals Corporation,
(14) Akzo Nobel Chemicals B.V., and
(15) Akzo Nobel Chemicals, Inc.
All had small shares of the bulk vitamin market.
The consumer class action, originally filed in June 1999, alleged that
more than 40 companies engaged in a widespread international conspiracy
over a ten-year period to fix prices and allocate markets for the bulk
vitamins that are used in many processed products, including milk,
cereals, juices, and pet foods.
"This settlement not only sends a message to corporations who engage in
price-fixing schemes aimed at Massachusetts markets, but also benefits
Massachusetts consumers by allocating funds to assist programs which
provide food and nutrition services," said Fredric L. Ellis, lead
counsel for the consumer class.
For more details, contact Fredric L. Ellis of Ellis & Rapacki LLP by
Mail: 85 Merrimac Street, Suite 500, Boston, MA 02114 by Phone;
617-523-4800 or visit the Website: http://www.massvitaminlitigation.com
WJ COMMUNICATIONS: Fiduciary Breaches Alleged in Securities Suit in DE
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WJ Communications, Inc. faces a class action filed in the Court of
Chancery of the State of Delaware on behalf of all the Company's
shareholders. The suit also names as defendants Fox Paine & Company,
LLC and certain of the Company's current and former directors.
The suit was filed in connection with Fox Paine's proposal to purchase
all of the shares of common stock of the Company not held by Fox Paine
and its affiliates. The complaint alleges that the defendants have
breached their fiduciary and other duties to the Company's public
shareholders in connection with the proposed transaction.
The Company denies the allegations and intends to vigorously defend
itself against this action. Since the lawsuit is in the early stages
of litigation, it is difficult at this time to evaluate whether the
Company will incur any liability or to estimate the damages, or range
of damages.
New Securities Fraud Cases
ALLEGHENY ENERGY: Cohen, Milstein Commences Securities Suit in MD Court
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Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the US District Court for the District of Maryland, Northern
Division, on behalf of persons who purchased or otherwise acquired the
securities of Allegheny Energy, Inc. (NYSE:AYE) during the period from
April 23, 2001 through and including October 8, 2002. The suit names
as defendants the Company and:
(1) Alan J. Noia, the company's President, Chairman and CEO,
(2) Michael P. Morrell, a Senior Vice President of Allegheny
Energy and the president of subsidiary Allegheny Energy
Supply;
(3) Bruce E. Walenczyk, a Senior Vice President and Chief
Financial Officer of Allegheny Energy; and
(4) Daniel L. Gordon, the president of Allegheny Energy Supply's
energy trading division, Allegheny Energy Global Markets
The complaint asserts securities fraud claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. The complaint alleges that the defendants
violated the federal securities law.
Specifically, the complaint alleges that during the class period,
defendants made false and misleading statements and failed to disclose
materially adverse information regarding the company's financial
prospects, as the company's revenue and revenue growth was falsely
inflated by the use of round-trip or "wash" energy trades, with
partners such as Enron.
In March, 2001, Allegheny announced to the investing public that it had
acquired an energy trading unit, Global Energy Markets, from Merrill
Lynch & Co. However, throughout the class period, Allegheny allegedly
did not disclose that it knew, or was reckless in not knowing, that a
substantial portion of its energy trading revenues were falsely
inflated by the use of wash transactions.
On September 25, 2002, Allegheny filed a complaint against Merrill
Lynch, alleging that Allegheny overpaid for the Global Energy Markets
unit because its revenues were falsely inflated by wash transactions
with Enron, in which Allegheny admitted that such sham transactions
inflated Global Energy Markets' revenues and growth rates.
These revelations caused Allegheny's stock price to collapse -- from
the stock's high of $12.85 on September 25, 2002, the stock plummeted
70% to $3.80 on October 8, 2002, when the company revealed that it was
in default on its credit agreements.
For more details, contact Steven J. Toll or Mary Ann Fink by Mail: 1100
New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005 by
Mail: 888-240-0775, 202-408-4600 by E-mail: stoll@cmht.com or
mfink@cmht.com or visit the firm's Website: http://www.cmht.com
ANSWERTHINK INC.: Stull Stull Launches Securities Fraud Suit in S.D. FL
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Stull Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of Florida, Miami
Division, on behalf of all purchasers of the common stock of
Answerthink, Inc. (NASDAQ:ANSR) between October 17, 2000 and April 25,
2002, inclusive against the Company and:
(1) John F. Brennan,
(2) Ted A. Fernandez,
(3) Allan R. Frank,
(4) Edmund R. Miller,
(5) William Kessinger and
(6) Bruce Rauner
The complaint alleges that, during the class period, defendants issued
a series of false and misleading statements announcing "record"
financial results. In violation of Generally Accepted Accounting
Principles (GAAP), however, defendants failed to disclose that the
"record" results included revenues recognized from transactions with
related parties who were near-bankruptcy and lacked the financial means
to finalize the sales.
On February 7, 2002, when defendants were no longer able to include
these illusory revenues in their financial results, the Company
reported a huge drop in revenues. Company investors who purchased
stock in reliance on the integrity of defendants' statements and
publicly-filed financial reports have sustained tremendous losses.
Company stock, which traded at $18 per share on October 17, 2000,
dramatically declined and traded at only $1.98 per share on November
13, 2002.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York, NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 by E-mail:
SSBNY@aol.com or visit the firm's Website: http://www.ssbny.com
ANSWERTHINK INC.: Milberg Weiss Commences Securities Lawsuit in S.D. FL
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Answerthink, Inc.
(NYSE: ANSR) between October 17, 2000 and April 25, 2002, inclusive, in
the United States District Court, Southern District of Florida, against
defendants the Company and:
(1) John F. Brennan,
(2) Ted A. Fernandez,
(3) Allan R. Frank,
(4) Edmund R. Miller,
(5) William Kessinger and
(6) Bruce Rauner
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. As alleged in the complaint, throughout the class period,
defendants issues a series of false and misleading statements
announcing "record" financial results.
In violation of Generally Accepted Accounting Principles (GAAP), the
complaint alleges, defendants failed to disclose that the "record"
results included revenues recognized from transactions with related
parties who were near-bankruptcy and lacked the financial means to
finalize the sales.
Specifically, in order to boost reported revenues and earnings during
the third and fourth quarters of 2000, the Company recognized
approximately $16.7 million of revenue in connection with various
transactions with related parties who were either facing imminent
bankruptcy or were otherwise unable to survive as a going concern and
remit the full $16.7 million as promised. As
a result, the complaint alleges, defendants were able to report
artificially inflated results which permitted Mr. Fernandez and Mr.
Frank to receive performance-based bonuses and allowed certain of the
defendants to sell stock at inflated prices.
Ultimately, more than $6 million of receivables and worthless stock in
one of the related party companies, which was received as partial
payment, was written off through a charge to earnings.
On February 7, 2002, when defendants were no longer able to include
these illusory revenues in their financial results, the Company
reported a huge drop in revenues. As a result, Answerthink investors
who purchased stock in reliance on the integrity of defendants'
statements and publicly-filed financial reports have sustained
tremendous losses. Answerthink stock, which traded at $18 per share on
October 17, 2000, dramatically declined and traded at only $1.98 per
share on November 13, 2002.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl., New York, NY 10119-0165 by
Phone: 800-320-5081 or contact Kenneth Vianale or Maya Saxena by Mail:
The Plaza, 5355 Town Center Road, Suite 900, Boca Raton, FL 33486 by
Phone: 561-361-5000 by Email: AnswerthinkCase@milbergNY.com or visit
the firm's Website: http://www.milberg.com
ELECTRONIC DATA: Berger & Montague Commences Securities Suit in E.D. TX
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Berger & Montague, PC initiated a securities class action against
Electronic Data Systems, Corp. (NASDAQ:EDS) and some of its officers
and directors in the United States District Court for Eastern District
of Texas on behalf of all persons or entities who purchased Electronic
Data Systems, Corp. common stock between April 19, 2002 and September
24, 2002, inclusive.
The complaint charges EDS and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint
alleges that during the class period, defendants misled their investors
by issuing false and misleading statements and failing to disclose
material facts about the Company's business, and claims defendants
misrepresented the truth about, inter alia EDS's operations and
financial condition and as a result, the price of EDS securities was
artificially inflated during the class period.
During the class period, the complaint asserts that defendants issued
numerous statements highlighting the Company's strong financial
performance despite the fact that:
(1) its revenues were contingent on factors not in the Company's
control;
(2) overseas contracts were performing below expectations; and
(3) the Company was recording and reporting receipts from
contracts as assets even though the contracts were not yet
fully completed.
When Wall Street began to learn about the foregoing on September 18,
2002 after executives of EDS warned that a lack of new revenues would
wipe out more than $0.60 per share of its Q3 earnings target of $0.74,
the price of EDS stock plummeted to a 52- week low of $17.20, down from
a class period high of over $55.00.
After further revelations regarding EDS's put-option and other
liabilities emerged in the wake of the foregoing disclosures. EDS's
share price tumbled even further, reaching intraday low of $10.09
before closing at $11.68 on September 24, 2002.
For more details, contact Sherrie R. Savett, Christopher L. Nelson or
Kimberly A. Walker by Mail; 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Website:
http://www.bergermontague.com
GREENVIEW COVE: Hackney & Plowman Lodges Suit Over Golf Club in FL
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Hackney & Plowman, LLP initiated a class action in the Circuit Court of
the 15th Judicial Court in and for Palm Beach County, Florida against:
(1) Greenview Cove Golf & Country Club,
(2) Binks Forest Golf & Country Club,
(3) P. David Hickey,
(4) V. Robert Colton, P.D.V.R., L.L.C.,
(5) RCH Land Investments, Inc.,
(6) Marco Acquisitions, Inc.,
(7) Tarter Acquisitions, Inc.,
(8) Marco Acquisitions, Limited, and
(9) Key West Acquisitions, L.L.C.
The suit was filed on behalf of all persons who have remitted
membership fees to play on Greenview Cove Golf & Country Club, Binks
Forest Golf & Country Club and Village Golf & Country Club courses,
where such fees were applicable to the time period after April 15, 2002
when the courses were shut down and the members were forbidden to play.
The complaint alleges that the defendants obtained golf membership fees
in advance from members for the right to play on any of the three
courses, known as Greenview Cove Golf & Country Club, Binks Forest Golf
& Country Club and Village Golf & Country Club.
The complaint further alleges that the defendants used extensive
advertising to entice consumers to remit the fees, which were
considerably lower than the surrounding clubs. The complaint alleges
that the defendants were aware that they would be unable to provide
access to the clubs, and knew that they would not be able to ensure the
continued operations at the clubs due to inadequate funding.
Even though the defendants aggressively marketed the use of the three
courses throughout membership, many of the members experienced
significant deteriorating conditions on Greenview Cove and Binks Forest
courses, and then were refused access to the courses on April 15, 2002.
Village Golf & Country Club was being leased by the defendants, and has
reverted back to its owners because the defendants failed to pay the
lease payments.
The representative Plaintiff Seymour Sentnor, a resident of Florida,
paid annual membership fees to the Defendants to have access to the
three golf courses from November of 2001 until January of 2003. He has
not been allowed access since April 15, 2002, has been unable to obtain
a refund, and has incurred additional costs to play golf elsewhere.
For more details, contact Carol Anne Plowman by Phone: 561-776-8600 or
by E-mail: cap@hackneyplowman.com
OM GROUP: Three Law Firms Commence Securities Fraud Lawsuit in N.D. OH
----------------------------------------------------------------------
Stanley Chesley and James Cummins of Waite, Schneider, Bayless &
Chesley Co. L.P.A (Cincinnati), John Climaco of Climaco, Lefkowitz,
Peca, Wilcox & Garofoli Co. L.P.A (Cleveland) and Richard Wayne of
Strauss & Troy L.P.A (Cincinnati), as joint trial counsel, filed a
securities class action in the United States District Court for the
Northern District of Ohio, on behalf of all persons who purchased the
common stock of OM Group, Inc. (NYSE: OMG) between November 8, 2001 and
October 29, 2002.
The complaint alleges that the Company and certain of its officers and
directors manipulated the earnings and assets of the company and
misrepresented the Company's business affairs and deteriorating
financial condition by publicly issuing materially false and misleading
news releases, financial statements and regulatory filings.
The complaint alleges that these activities violated federal and state
law, including the Securities Exchange Act of 1934, and the fiduciary
duty of the officers and directors owed to the company shareholders.
The lawsuit says that the Company overstated the value of its cobalt
inventories by more than $100 million, falsely elevated the Comapnys'
earnings and financial condition by delaying necessary inventory
adjustments and asset valuation and failed to address the significant
unfunded pension liability.
When the Company eventually made the disclosures of its true financial
condition, Company stock lost over 90% of its value with a combined
shareholder loss of approximately $1.9 billion.
The plaintiff in this action seeks to recover damages on behalf of all
individuals that purchased or otherwise acquired the Company's common
stock between November 8, 2001 and October 29, 2002.
For more details, contact Stanley Chesley or James Cummins of the Waite
Schneider Firm by Phone: 513-621-0627 or by E-mail: jcummins@bcblaw.com
or John Climaco or Christina Janice of the Climaco firm by Phone: 216-
621-8484 or by E-mail: cmjani@climacolaw.com or Richard Wayne of the
Strauss firm by Phone: 800-669-9341 or by E-mail: classactions@strauss-
troy.com.
SEACHANGE INTERNATIONAL: Milberg Weiss Commences Securities Suit in MA
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of all persons other than defendants who purchased the
common shares of SeaChange International, Inc. (Nasdaq:SEAC) in or
traceable to the offering conducted by SeaChange on or about January
29, 2002, in the United States District Court, District of
Massachusetts against the Company, certain of its directors and
officers and the lead underwriters of the offering.
The Complaint alleges that defendants violated Sections 11, 12(a)(2)
and 15 of the Securities Act of 1933 by issuing a false and misleading
prospectus on or about January 29, 2002. As alleged in the suit, at
all relevant times, the Company purported to be a leading developer,
manufacturer and marketer of video storage systems which purportedly
automate the management and distribution of video streams, such as
movies and other feature presentations and advertisements.
The suit further alleges that the Prospectus was materially false and
misleading because it failed to disclose, among other things, that the
Company was unable to compete effectively due to its inability to
provide server systems large enough to meet the needs of cable
companies located in major metropolitan areas and that the Company's
products were dependent on technology, developed and patented by a key
competitor, as to which SeaChange did not have proprietary rights.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: 800-320-5081 by E-mail: Seachangecase@milbergNY.com or visit the
firm's Website: http://www.milberg.com.
SYNCOR CORPORATION: Wolf Popper Launches Securities Fraud Lawsuit in NY
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Wolf Popper LLP initiated a securities class action against Syncor
International Corp. (Nasdaq:SCOR) on behalf of persons who purchased
the Company's common stock during the period March 30, 2000 through and
including November 5, 2002 in the United States District Court in New
York.
The plaintiff alleges in the action that during the class period,
Syncor and certain of its senior officers and directors issued a series
of press releases and SEC filings trumpeting significant sales growth
in Syncor's international business, and that defendants knew or
recklessly disregarded that those statements were materially false and
misleading in that they failed to disclose that the individual
defendants were making illegal payments to Syncor's overseas customers.
The true facts were first disclosed on November 6, 2002 when Syncor
shocked the market by issuing a press release announcing that it was
conducting an internal investigation into illegal payments to its
overseas customers.
Syncor's disclosure has caused its stock price to decline approximately
37%, or over $13 per share, from its closing price of $35.92 on
November 5, 2002.
For more details, contact James A. Harrod by Mail: 845 Third Avenue,
New York, NY 10022 by Phone: 212-451-9642 or 877-370-7703 by Fax:
212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit
the firm's Website: http://www.wolfpopper.com
TENET HEALTHCARE: Spector, Roseman Commences Securities Suit in C.D. CA
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Spector, Roseman & Kodroff, PC initiated a securities class action in
the United States District Court for the Central District of California
on behalf of purchasers of Tenet Healthcare Corporation (NYSE:THC)
publicly traded securities during the period between October 3, 2001
and October 31, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
Company, through its subsidiaries, owns or operates general hospitals
and related health care facilities serving communities in the United
States.
The complaint alleges that during the class period, defendants
represented that the Company's favorable financial results were due to
its commitment to quality and cost-effective care. Throughout the
class period, defendants repeatedly stated that:
(1) Tenet's financials were strong,
(2) the Company's stellar bottom line was attributed to its state-
of-the-art facilities and high-quality patient care, and
(3) Tenet was consistently achieving record results
Defendants actually knew that the quality of Tenet's profits were
inflated by, among other things, wrongfully inducing patients into
undergoing unnecessary and invasive surgeries. Defendants knowingly or
in conscious disregard for the truth engaged in a scheme to cause
patients to undergo unnecessary invasive coronary procedures. The
scheme included unnecessary heart catheterizaton, including angiogram
and intravascular ultrasound, stent placement, angioplasty, coronary
artery bypass surgery and heart valve replacement surgery.
On October 31, 2002, The Associated Press issued a press release
entitled, "Tenet Healthcare Stock Plunges After Report of
Investigation." The press release stated in part: "Shares of Tenet
Healthcare Corp. plunged more than 26 percent Thursday after federal
prosecutors in Sacramento filed an affidavit regarding alleged false
billing by two doctors at the company's hospital in Redding, Calif. The
stock was also hurt by a rumor, denied by the company, that the FBI had
searched its corporate headquarters in Santa Barbara, Calif."
These disclosures shocked the market, causing Tenet's stock to decline
to less than $29 per share before closing at $28.75 per share on
October 31, 2002, on volume of more than 50 million shares.
For more details, contact Robert M. Roseman by Phone: 888-844-5862 by
E-mail: classaction@srk-law.com or visit the firm's Website:
http://www.srk-law.com.
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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