/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/021210.mbx C L A S S A C T I O N R E P O R T E R Tuesday, December 10, 2002, Vol. 4, No. 244 Headlines 724 SOLUTIONS: Court Dismisses Officers, Directors From Securities Suit ALIEN TORTS: Business Groups Oppose Use of Torts Act For Rights Suits ANTIGENICS INC.: NY Court Dismisses Chairman From Securities Fraud Suit AOL TIME: Seeking Consolidation of 27 Securities Fraud Suits in S.D. NY APROPOS TECHNOLOGY: Asks Court To Dismiss Consolidated Securities Suit ASIAINFO HOLDINGS: NY Court Dismisses Directors From Securities Lawsuit BONZI SOFTWARE: Faces Suit For Deceptive Advertising in WA State Court BOSTON ARCHIDIOCESE: Gets Local Approval For Ch. 11 Bankruptcy Filing CENTRA SOFTWARE: NY Court Dismisses Officers, Directors From Fraud Suit DIGITAL IMPACT: NY Court Hears Arguments For Securities Suit Dismissal EXPEDIA INC.: Asks NY Court To Dismiss Consolidated Securities Lawsuit EXPEDIA INC.: Asks WA Court To Dismiss Lawsuit V. Proposed USA Merger iMANAGE INC.: Court Dismisses Officers, Directors From Securities Suit INDIANA: Judge Approves Settlement of Inmates Suit V. Floyd County Jail MASSACHUSETTS ELECTRIC: Reaches Settlement For Lawsuit Over Overcharges MATTEL INC.: Agrees To Settle Securities Fraud Suits For $122 Million MINNESOTA: Temporary Order Helps 8 Somali Refugees Escape Deportation MTI TECHNOLOGY: Reaches Agreement To Settle Securities Fraud Suit in CA NASH FINCH: Investors Commence Suit For Securities Act Violations in MN NORTHWEST AREA: WA Workers Lodge Suit Over Pull Out Of Antipoverty Plan OKLAHOMA: Tulsa, Black Police Officers Settle Race Discrimination Suit OPENTV CORPORATION: NY Court Dismisses Officers, Directors From Lawsuit RARE MEDIUM: DE Court Grants Approval To Securities Lawsuit Settlement ROCKFORD HEALTH: Settling Over-billing Suit With 10,000 Patients SONICWALL INC.: Officers, Directors Dismissed From Securities Lawsuit SPANISH BROADCASTING: Asks NY Court To Dismiss Securities Fraud Lawsuit VIANET.WORKS INC.: Asks Court To Dismiss Consolidated Securities Suit WINK COMMUNICATIONS: Plaintiffs File Amended Securities Suit in S.D. NY Z-TEL TECHNOLOGIES: Asks Court To Dismiss Consolidated Securities Suit *Consumer Advocate Groups Say Predatory Lending Instances On the Rise New Securities Fraud Cases AES CORPORATION: Bernstein Liebhard Launches Securities Suit in E.D. VA ANNUITY AND LIFE: Cauley Geller Commences Securities Suit in CT Court ANNUITY AND LIFE: Milberg Weiss Launches Securities Lawsuit in CT Court ANNUITY AND LIFE: Scott + Scott Commences Securities Suit in CT Court ANNUITY AND LIFE: Charles Piven Commences Securities Suit in CT Court ANSWERTHINK INC.: Alfred Yates Lodges Securities Fraud Suit in S.D. FL COMERICA INC.: Bernstein Liebhard Commences Securities Suit in E.D. MI KINDRED HEALTHCARE: Bernstein Liebhard Files Securities Suit in W.D. KY NASH FINCH: Milberg Weiss Commences Securities Fraud Suit in MN Court NASH FINCH: Cauley Geller Commences Securities Fraud Suit in MN Court NASH FINCH: Charles Piven Commences Securities Fraud Suit in MN Court NASH FINCH: Reinhardt & Anderson Lodges Securities Lawsuit in MN Court OM GROUP: Scott + Scott Launches Securities Fraud Lawsuit in N.D. Ohio RETEK INC.: Milberg Weiss Commences Securities Fraud Suit in MN Court SEARS ROEBUCK: Wolf Haldenstein Lodges Securities Fraud Suit in N.D. IL SMARTFORCE PLC: Berman DeValerio Commences Securities Suit in NH Court ********* 724 SOLUTIONS: Court Dismisses Officers, Directors From Securities Suit ----------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed 724 Solutions, Inc.'s officers and directors from the consolidated securities class action pending against them, the Company and certain underwriters of the Company's initial public offering. In general, the amended complaint alleges that the underwriter defendants: (1) allocated shares of the Company's offering of equity securities to certain of their customers, in exchange for which these customers agreed to pay the underwriter defendants extra commissions on transactions in other securities; and (2) allocated shares of the Company's initial public offering to certain of the Underwriter Defendants' customers, in exchange for which the customers agreed to purchase additional common shares of the Company in the after-market at certain pre- determined prices. The amended complaint also alleges the Company and the individual defendants failed to disclose these facts and that the Company and the individual defendants were aware of, or disregarded, the underwriter defendants' conduct. Due to the inherent uncertainties of litigation, and because the IPO Litigation is at a preliminary stage, the Company cannot accurately predict the ultimate outcome of the IPO Allocation Litigation. ALIEN TORTS: Business Groups Oppose Use of Torts Act For Rights Suits --------------------------------------------------------------------- The International Chamber of Commerce (ICC) urged the US government to stop the growing use of a 1789 law to sue US and foreign firms for alleged violations of human rights outside this country, according to a report by Agence France-Presse. The Paris-based business group, which has thousands of member companies worldwide, described the use of the Alien Tort Claims Act in such cases as "an unacceptable extension of US jurisdiction." Use of the legislation threatens to chill US investment abroad as well as foreign investment in the United States, the ICC said. "ICC urges the US government and Congress to take steps to curb the misuse of this long-standing statute against private companies, whether US or from other countries," the group said in a statement. "We appeal to other governments to raise the issue with the US government. Other governments should also guard against any tendency to use new or existing laws to assert extra-territorial jurisdiction." US lawyers who have championed the use of the statute in human rights cases against corporations denounced the ICC position as an attempt to shield companies from accountability. "It shocks the conscience that these companies are seeking to immunize themselves from human rights violations," said Terry Collingsworth, a lawyer with the International Labor Rights Fund, who represents plaintiffs in several high-profile Alien Tort cases. Only a handful of lawsuits have been filed in the United States against corporation in the last decade under the act, which allows non-US citizens to file civil suits in US courts for alleged violations of international law committed abroad. ExxonMobil, Rio Tinto, Royal Dutch/Shell, Chevron Texaco, Coca-Cola, The Gap and Unocal are among the defendants in pending cases. Indonesian villagers are suing oil giant ExxonMobil under the law for the torture and murder they allegedly suffered at the hands of Indonesian security forces protecting the Exxon gas plant in Aceh, Indonesia, where a separatist rebellion has been simmering for more than two decades. Ethnic Ogoni villagers from Nigeria are suing Royal Dutch/Shell under the statute for allegedly lending support to Nigerian government forces that conducted a brutal crackdown against opponents to Shell's operations in Ogoniland province. The suit claims 750 Ogoni villagers were killed in the operation. A class action seeking reparations for Holocaust victims from German and Swiss banks was also filed under the Alien Torts Act, but the cases were settled out of court for $2.3 billion. A similar class action, filed this summer, appears to have spurred the ICC to take a stand against the use of the act. The suit accuses over 1,000 companies that did business in South Africa during apartheid of "vicarious liability" for the abuse blacks suffered. "The net is being cast ever wider and the sky is the limit," Thomas Niles, president of the ICC's US affiliate, the US Council for International Business, told the AFX Global Ethics Monitor, a subsidiary of AP. ANTIGENICS INC.: NY Court Dismisses Chairman From Securities Fraud Suit ----------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed Antigenics, Inc's Chairman and Chief Executive Officer Garo Armen from the consolidated securities class action pending against him, the Company and two investment banking firms that served as underwriters in the Company's initial public offering. The suit, filed on behalf of a class of purchasers of the Company's stock between February 3, 2000 and December 6, 2000, alleges that the brokerage arms of the investment banking firms charged secret excessive commissions to certain of their customers in return for allocations of Company stock in the offering. The suit also alleges that shares of the Company's stock were allocated to certain of the investment banking firms' customers based upon an agreement by such customers to purchase additional shares of the Company's stock in the secondary market. The complaint alleges that the Company is liable under Section 11 of the Securities Act of 1933, as amended (the Securities Act), and Dr. Armen is liable under Sections 11 and 15 of the Securities Act because the Company's registration statement did not disclose these alleged practices. The suit further alleges that the Company and Dr. Armen violated Section 10(b) of the Securities Exchange Act and SEC Rule 10(b)-5 by making false and misleading statements and/or omissions in order to inflate the Company's stock price and conceal the investment banking firms' alleged secret arrangements. The amended complaint further alleges that Dr. Armen, as a "control person" of Antigenics, violated Section 20 of the Securities Exchange Act. Virtually identical complaints were filed against 300 other issuers, their underwriters, and their directors and officers. These cases have been coordinated under the caption "In re Initial Public Offering Securities Litigation." On July 15, 2002, the Company and Dr. Armen joined the Issuer Defendants' motion to dismiss the consolidated suit. By order of the Court, this motion set forth all "common issues" i.e., all grounds for dismissal common to all or a significant number of Issuer Defendants. The claims against Dr. Armen, in his individual capacity, have been dismissed without prejudice. The hearing on the Issuer Defendant's Motion to Dismiss was held on November 1, 2002. The Company intends to defend against these claims vigorously. AOL TIME: Seeking Consolidation of 27 Securities Fraud Suits in S.D. NY ----------------------------------------------------------------------- AOL Time Warner, Inc. is working for the consolidation of twenty-seven putative class actions alleging violations of the federal securities laws against it, certain current and former Company executives and, in three instances, America Online. Twenty-two of these are pending in the United States District Court for the Southern District of New York, four are pending in the United States District Court for the Eastern District of Virginia and one in the United States District Court for the Eastern District of Texas. The complaints purport to be made on behalf of certain shareholders of the Company and allege that the Company made material misrepresentations and/or omissions of material fact in violation of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. Plaintiffs claim that the Company failed to disclose the Company's declining advertising revenues and that the Company and America Online inappropriately inflated advertising revenues in a series of transactions. Certain of the lawsuits also allege that certain of the individual defendants and other insiders at the Company improperly sold their personal holdings of AOL Time Warner stock. Certain of the lawsuits, in addition to the above allegations, allege that the Company failed to disclose that the Merger was not generating the synergies anticipated at the time of the announcement of the Merger and, further, that the Company inappropriately delayed writing down more than $50 billion of goodwill. On August 29, 2002, the Company filed a motion with the Judicial Panel on Multidistrict Litigation to transfer all federal lawsuits within the AOL Time Warner Shareholder Litigation to the Southern District of New York for coordinated and consolidated pretrial proceedings. That motion was heard on November 21, 2002. In addition, all AOL Time Warner Shareholder Litigation now pending and to be filed in the Southern District of New York have been consolidated into one action for all purposes. Nine parties are seeking "lead plaintiff" status in the AOL Time Warner Shareholder Litigation. The Company is unable to predict the outcome of the cases or reasonably estimate a range of possible loss. APROPOS TECHNOLOGY: Asks Court To Dismiss Consolidated Securities Suit ---------------------------------------------------------------------- Apropos Technology, Inc. asked the United States District Court in Chicago to dismiss the consolidated securities class action pending against it, certain of its current and former directors and officers, and the underwriters of its initial public offering. The suit asserts the Company violated the federal securities laws by making misstatements and omissions in its Registration Statement and Prospectus in connection with the Company's initial public offering in February 2000. The Company has moved to dismiss that complaint in its entirety on various legal grounds, and its motion is currently pending. Although legal proceedings are inherently uncertain and their ultimate outcome cannot be predicted with certainty, the Company believes the allegations are without merit. ASIAINFO HOLDINGS: NY Court Dismisses Directors From Securities Lawsuit ----------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed AsiaInfo Holdings, Inc.'s directors from the consolidated securities class action filed on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of the Company between March 2, 2000 and December 6, 2000, inclusive. The suit names as defendants the Company, certain of the underwriters of its initial public offering (IPO) and: (1) Louis Lau, Chairman of the Board, (2) James Ding, President and Chief Executive Officer and (3) Ying Han, Chief Financial Officer The complaint alleges that the Company and certain of its officers and directors at the time of the IPO violated the federal securities laws by issuing and selling the Company's common stock pursuant to the IPO without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. While the outcome of this litigation is uncertain, management believes that the Company has meritorious defenses to the suit. On October 9, 2002, the court dismissed without prejudice all claims against the individual defendants in the litigation. The dismissals were based on stipulations signed by those defendants and the plaintiffs' representatives. The case remains pending against the Company. BONZI SOFTWARE: Faces Suit For Deceptive Advertising in WA State Court ---------------------------------------------------------------------- Bonzi Software, one of the most prolific banner advertisers on the Internet, has been hit with a lawsuit alleging the company has engaged in a "diabolical scheme" of deceptive advertising. The class action was filed in Washington State Superior Court on behalf of "all persons residing in the United States who have, while operating a computer, encountered an advertising banner" placed by Bonzi. Philip Carstens, a Spokane, Wash. resident and Internet user, is named as the plaintiff and representative of the class. The firm working with the plaintiff, Lukins & Annis, said it has filed a motion to have the class certified by the court early next year. The suit alleges the Company's advertising banners, which mimic dialog boxes that feature "message alert," security alert," or "warning," trick Internet users into clicking through to the Company's site, where it sells software. The suit asks the Company to pay $500 for each Internet user who has encountered one of the ads and $5 per impression served. Besides naming the Company as a defendant, it also names its chief executive officer and chief financial officer. Lukins & Annis, the Spokane, Wash., law firm filing the suit, estimates the Company has served more than 300 million impressions of these banners. "The Internet has unfortunately become a cornucopia for deceptive business practices," said Darrell Scott, the Lukins lawyer handling the complaint. "Deceptive practices that would quickly put a local corner businessman out of business have unfortunately become routine and profitable tools of the trade when business is conducted over the Internet." A representative for San Luis Obispo, Calif.-based Bonzi Software said he was unaware of the lawsuit. The suit alleges Bonzi's advertising methods are part of a "conspiratorial enterprise" that tricks Internet users into visiting its Web site, Bonzi.com, which functions as a portal and a promotional vehicle for its software products. Bonzi sells a number of software products, including a voice e-mail program and BonziBUDDY, a purple gorilla that accompanies users around the Net and suggests sites to visit. The class action centers on the appearance and text of Bonzi's advertisements. According to Lukins, the ads are intentionally similar to system warnings issued by Windows, in shape, color and layout. The result of these ad efforts, the suit alleges, is to rank Bonzi.com as the third highest-trafficked software site on the Internet. In October, the site garnered just over 2 million unique visitors, according to Nielsen//NetRatings. Nielsen//NetRatings' AdRelevance unit ranked Bonzi as the top software advertiser in October, serving more than 743,000 impressions, more than double that of the No. 2 software advertiser, Expertcity. The allegations of deceptive advertising practices follow on the many legal troubles faced by another software maker, Gator, which is under fire from publishers who claim that Gator deceives users into downloading its ad-serving OfferCompanion software. Gator has responded that its users know they are downloading ad-supported software. "I think that the business practices of some businesses on the Internet are ripe for litigation," Mr. Scott said. "I think litigation will be one tool that will elevate the legitimacy and prestige of Internet advertising." BOSTON ARCHIDIOCESE: Gets Local Approval For Ch. 11 Bankruptcy Filing --------------------------------------------------------------------- The Finance Council of the Roman Catholic Archbishop of Boston (RCAB) voted this week to allow the RCAB to pursue reorganization under Chapter 11 of the Federal Bankruptcy Code, if the RCAB ultimately deems such action necessary to ensure an expeditious and equitable global settlement for the victims of sexual abuse by priests of the Archdiocese. In addition to the approval by the Finance Council, the RCAB would also require other approvals before it could file a Chapter 11 case. The RCAB must also seek approval from the Vatican. No final determination to file Chapter 11 has been made at this time. The Archdiocese of Boston is named as a defendant in scores of lawsuits alleging sexual abuse by clergy members. Rumors about the Archdiocese seeking Chapter 11 protection as a way to manage large judgments on account of more than 400 known claims have swirled for months. Earlier this year, attorneys for the Archdiocese turned to Daniel M. Glosband, Esq., at Goodwin Procter, for bankruptcy counseling. On the business side, contributions to the church have fallen sharply this year. An involuntary petition brought against the church is impossible, because 11 U.S.C., Sec. 303 (a) prohibits that. As in all mass tort cases, the Bankruptcy Court can't liquidate individual tort claims. 11 U.S.C. Sec. 1112 prohibits: (1) conversion of the case to a Chapter 7 liquidation, unless the debtor makes the request; and (2) having the words church, sex and bankruptcy appear on the front page of the newspaper has to be the ultimate PR nightmare; Lawyers will be scrambling to figure-out: (i) what, exactly, a "corporation sole" is (Black's Law Dictionary defines it as a continuous legal personality attributed to successive holders of ecclesiastical positions, like bishops); how it functions and what import the term has in the bankruptcy context; (ii) how would the Archdiocese fund a Chapter 11 plan? By selling assets (Boston land and tax records indicate the church owns 249 pieces of real estate assessed at $220 million), or by asking for donations? (iii) what role would the Holy See and the Holy Father play if the Archdiocese sought protection from creditors? According to the new "Fundamental Law of the State of Vatican City" signed by Pope John Paul II, on November 26, 2000, he possesses the abundance of the legislative, implementing and judicial power as head of the Vatican State. Would any judgment against the Vatican from any US court ever be enforceable? Jeffrey A. Newman, Esq., and Roderick MacLeish Jr., Esq., at Greenberg Traurig, represent more than 200 alleged victims. They have told Boston newspaper reporters that they see no reason for a bankruptcy filing any time soon. Aetna and Kemper, the church's major insurers, can provide $100 million of coverage to the Archdiocese, and Mr. Newman and Mr. MacLeish think a comprehensive settlement is in the works. The RCAB reaffirmed this week that it is seeking to establish a global settlement with all abuse victims, including those who already have filed claims against it and those that may have claims have not yet been asserted. A global settlement would serve as an alternative to resolving each case by separate litigation or negotiation --an approach that would take many, many years to complete and would likely produce very inconsistent results for the victims. A global settlement, the church said in a prepared statement, would provide the opportunity to achieve an expeditious result for all parties, that maximizes the recoveries legally available to all parties and that assures that all claimants receive equal treatment based on the harm they have suffered. In its initial approach to achieving this goal, the Archdiocese and a mediator have begun meeting with the group of lawyers representing the many victims who have filed claims. "Our goal is to achieve a global settlement for all the victims, which is fair, equitable and satisfactory to claimants. In addition, we would like to ensure that all cases are resolved expeditiously and that the funds available will go to the victim-survivors instead of into litigation costs," said Donna M. Morrissey, spokesperson for the RCAB. "We believe a mediated resolution would be preferable to seeking Chapter 11 protection and remain hopeful that this process, currently underway, will be successful. We feel, however, that it also is necessary to consider carefully the alternative or complementary approach of a Chapter 11 reorganization," he added. In seeking a global settlement, the Archdiocese went on to say, the RCAB wants to mitigate these awful events and provide consistent, equitable and expeditious compensation to the victims of this abuse. In addition to a financial settlement, RCAB has provided the Office for Assistance and Healing Ministry, led by Barbara Thorp to listen and respond to the needs of victim-survivors, who are facing the terrible pain of the consequences of past sexual abuse, through counseling and other means of support. The RCAB, eleven months ago, implemented a comprehensive new policy that does not allow any priest of whom we are aware, who has a single credible allegation of abuse of a minor made against him, to serve in ministry. The policy also requires that all parish staff, clergy, employees and volunteers, particularly those who have custodial responsibility of children, be mandated reporters, so that suspected instances of abuse of children, learned outside of the sacrament of confession, are reported immediately to the appropriate legal and social service authorities. The RCAB is currently in the process of training 200,000 adults and children, in parishes and schools, as part of a comprehensive educational and abuse prevention program. Wilson Rogers, Esq., at the Rogers Law Fir, P.C. serves as General Counsel to the Roman Catholic Archbishop of Boston. J. Owen Todd, Esq., at Todd & Weld LLP, and President of the Massachusetts Trial Lawyers Association, also represents the Archdiocese. CENTRA SOFTWARE: NY Court Dismisses Officers, Directors From Fraud Suit ----------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed Centra Software, Inc.'s officers and directors as defendants in the consolidated securities class action pending against them, the Company and the underwriters of the Company's initial public offering. The suit, filed on behalf of the class of persons who purchased the Company's common stock between February 3, 2000 and December 6, 2000, asserts claims under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that, in connection with the Company's initial public offering in February 2000, the underwriters received undisclosed commissions from certain investors in exchange for allocating shares to them and also agreed to allocate shares to certain customers in exchange for the agreement of those customers to purchase additional shares in the after-market at pre-determined prices. The complaint asserts that the Company's registration statement and prospectus for the offering were materially false and misleading due to their failure to disclose these alleged arrangements. The Company believes the allegations lack merit. The underwriter defendants and the company defendants joined in motions to dismiss the suit on July 3 and July 15, 2002, respectively. Reponses to the motions to dismiss are expected from plaintiffs, but to date no response has been filed and no action has been taken by the court. DIGITAL IMPACT: NY Court Hears Arguments For Securities Suit Dismissal ---------------------------------------------------------------------- The United States District Court for the Southern District of New York heard oral arguments on Digital Impact, Inc.'s motion to dismiss the consolidated securities class action pending against it, certain of its officers and directors and certain investment bank underwriters for the Company's initial public offering (IPO). The suit alleges undisclosed and improper practices concerning the allocation of the Company's IPO shares, in violation of the federal securities laws, and seek unspecified damages on behalf of persons who purchased the Company's stock during the period from November 22, 1999 to December 6, 2000. The court has appointed a lead plaintiff for the consolidated suit. Other actions have been filed making similar allegations regarding the IPOs of more than 300 other companies. All of these lawsuits have been coordinated for pretrial purposes as In re Initial Public Offering Securities Litigation. Defendants in these cases filed omnibus motions to dismiss on common pleading issues. Oral argument on these motions to dismiss was held on November 1, 2002. The Company's officers and directors have been dismissed without prejudice in this litigation. The Company believes it has meritorious defenses to the claims against it. In the opinion of management, after consultation with legal counsel and based on currently available information, the ultimate disposition of these matters is not expected to have a material adverse effect on its business, financial condition or results of operations, and hence no amounts have been accrued for these cases. EXPEDIA INC.: Asks NY Court To Dismiss Consolidated Securities Lawsuit ---------------------------------------------------------------------- Expedia, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it, certain of its officers and directors and certain underwriters of its initial public offering (IPO). The suit alleges violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20 of the Securities Exchange Act of 1934. The suit further alleges that the Company's prospectus was false or misleading in that it failed to disclose: (1) that the underwriters allegedly were paid excessive commissions by certain customers in return for receiving shares in the IPO; and (2) that certain of the underwriters' customers allegedly agreed to purchase additional shares of the Company in the aftermarket in return for an allocation of shares in the IPO. The complaint further alleges an agreement by the underwriters with the Company to provide positive market analyst coverage for the Company after the IPO that had the effect of manipulating the market for the Company's stock. Plaintiffs contend that, as a result of the alleged omissions from the prospectus and alleged market manipulation through the use of analysts, the price of the Company's stock was artificially inflated between November 9, 1999, and December 6, 2000, and that the defendants are liable for unspecified damages to those persons who purchased stock during that period. On August 9, 2001, the suit was consolidated before a single judge along with cases brought against numerous other issuers and their underwriters that make similar allegations involving the IPOs of those issuers. The consolidation was for purposes of pretrial motions and discovery only. On July 15, 2002, the Company and the individual defendants, along with the other issuers and their related officer and director defendants, filed a joint motion to dismiss based on common issues. Arguments for and against the motion to dismiss were presented to the court on November 1, 2002. The court has not yet ruled on the motion. EXPEDIA INC.: Asks WA Court To Dismiss Lawsuit V. Proposed USA Merger --------------------------------------------------------------------- Expedia, Inc. asked the Superior Court of the State of Washington for King County to dismiss the consolidated class action pending against it relating to statements made by USA Interactive, Inc. regarding its intent to acquire the remaining shares in the Company by commencing an exchange offer. Eight class actions were filed in early June 2002, alleging, in essence, that the price that USA stated it intended to offer was too low and that approval of the offer by the Company's board would constitute a breach of fiduciary duty. On June 27, 2002, the plaintiffs in each of the eight lawsuits filed a joint motion to consolidate the cases into one case, and on July 17, 2002, the court issued an order consolidating the eight lawsuits. On October 10, 2002, USA announced that it was ending the ongoing process to acquire all of the publicly held shares of the Company. In light of this announcement, the Company is seeking dismissal of this litigation. iMANAGE INC.: Court Dismisses Officers, Directors From Securities Suit ---------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed without prejudice iManage, Inc.'s officers and directors from the consolidated securities class action pending against them, the Company and the the underwriters of the Company's initial public offering (IPO). The suit, filed on behalf of all persons who purchased the Company's common stock from November 17, 1999 through December 6, 2000, alleges liability under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on the grounds that the registration statement for the offering did not disclose that: (1) the underwriters had agreed to allow certain customers to purchase shares in the offering in exchange for excess commissions paid to the underwriters; and (2) the underwriters had arranged for certain customers to purchase additional shares in the aftermarket at predetermined prices. The amended complaint also alleges that false analyst reports were issued. The Company is aware that similar allegations have been made in lawsuits challenging over 300 other public offerings conducted in 1999, 2000 and 2001. All of these cases have been consolidated for pretrial purposes before a judge in the Southern District of New York. On July 15, 2002, the Company and its related individual defendants (as well as the other issuers named as defendants) filed a motion to dismiss the suit. Subsequently, the individual defendants stipulated with plaintiffs to dismiss from the case without prejudice, subject to a tolling agreement. While the Company believes that the allegations against it and its officers/directors are without merit, there can be no assurance that this matter will be resolved without costly litigation or in a manner that is not adverse to the Company's consolidated financial position, results of operations or cash flows. INDIANA: Judge Approves Settlement of Inmates Suit V. Floyd County Jail ----------------------------------------------------------------------- A federal judge has approved the settlement of a class action against the Floyd County Jail for illegal strip searches conducted from early 1997 through early 1999, the Associated Press Newswires reports. The settlement agreement includes payments of $1,000 each to 619 plaintiffs. US District Judge Sarah Evans Barker, who recently approved the settlement, ruled in October 2001, that the county's strip-search policy violated inmates' constitutional rights. Bart Betteau of New Albany, one of the plaintiffs' lawyers, estimated that more than 2,000 men and women jailed for minor, non-violent offenses were illegally required to remove their clothes for a visual inspection and delousing during the period covered by the lawsuit. Fewer than a third of those who underwent the illegal treatment chose to take part in the lawsuit, which named the county, the jail and the sheriff as defendants. MASSACHUSETTS ELECTRIC: Reaches Settlement For Lawsuit Over Overcharges ----------------------------------------------------------------------- Massachusetts Electric Co. will refund $2.63 million in overcharges to 17,333 residential customers to settle a class action company officials said, according to Associated Press Newswires. Superior Court Judge Bertha Josephson approved the settlement. People who have been continuous customers of the same utility since the state's utility deregulation took effect in March 1998, qualify for the lower standard class rates. The confusion seems to have stemmed from the fact that the standard and default classifications were initially similar, and default customers did not start paying substantially more until last year. Average refunds to customers who were erroneously placed in the higher- priced "default" category, range from $137 to $195, said spokeswoman for the utility Deborah Drew. MATTEL INC.: Agrees To Settle Securities Fraud Suits For $122 Million --------------------------------------------------------------------- Three years after Mattel Inc.'s acquisition of the Learning Co., the toy company has agreed to pay shareholder lawsuits alleging mismanagement and breach of fiduciary duty by Mattel's directors and former executives involved in the deal, The Wall Street Journal reports. Shareholder suits filed in 1999 and 2000 alleged that former executives and some directors made false statements about the proposed Learning Co. acquisition that persuaded the Company's shareholders to approve the acquisition and artificially inflated Company's stock price. The acquisition, which proved disastrous, resulted in the resignation of then Chief Executive Jill Barad, under whom the acquisition was executed, in the spring of 1999, for $3.5 billion in stock. After Mattel's board paid Ms. Barad a severance package valued at nearly $50 million, other shareholder suits were filed, alleging breach of fiduciary duties, mismanagement and waste of corporate assets. By October of 1999, the new division was hemorrhaging money, and Mattel's stock plunged from more than $45 in 1998 to below $10 by early 2000. The many plaintiffs, represented by class action attorney William Lerach and other lawyers, are also negotiating with Mattel to tighten corporate governance procedures in the future, the company said. The introduction of improved corporate governance into negotiations of securities lawsuits has become a matter of importance and principle to Mr. Lerach, and the corporation is discussing possible changes with the plaintiffs' attorneys. Mattel said its own legal costs of $13.5 million will bring the toal cost of the settlement to $135.5 million. The Learning Co. was sold to corporate turnaround firm Gores Technology Group for no cash and a share of any future profits. Mattel took a $430 million after-tax loss related to the disposition and agreed to pay off $500 million in debt. MINNESOTA: Temporary Order Helps 8 Somali Refugees Escape Deportation --------------------------------------------------------------------- At least eight Somalis from Minnesota awaiting deportation to their war-torn homeland have won temporary orders blocking their removal, the St. Paul Pioneer Press (MN) reports. Additionally, Seattle advocates have filed a class action to bar all Somali deportations nationwide. Lawyers for the Somalis, meanwhile, contend that deporting them to a country without a functioning government would violate US law. Family members and advocates argue that the consequences would be far worse. "They look at deportation as a death sentence, because they are being thrown into a place where there is lawlessness, chaos and anarchy," said Omar Jamal, executive director of the Twin Cities-based Somali Justice Advocacy Center, which is acting on their behalf. The eight Somalis are presently in Louisiana, in the custody of the US Immigration and Naturalization Service (INS). All are subject to final orders of removal for having felony convictions or failing to receive asylum. Most were arrested last month and were in detention in Minnesota, until last week, when authorities flew them to Louisiana. The detainees told lawyers that they were to leave late Tuesday, last week, until weather concerns grounded the flight. Lawyers scrambled to file papers seeking to block the removal. Mr. Jamal said he has heard from relatives who know of 20 from Minnesota, who apparently are in Louisiana awaiting removal. In St. Paul, US District Judge Donovan Frank issued a stay barring deportation of one Somali pending a hearing. A federal judge in Louisiana issued a temporary restraining order keeping the others in the country at least until a hearing early this week. The recent deportation plans have revived fears among Somalis in the Twin Cities, home to one of the country's largest concentrations of refugees from the East African nation torn apart by civil war. In February, the INS deported 10 Somalis from Minnesota, along with 20 from elsewhere in the United States and Canada. While authorities said law abiding refugees had no reason to worry, some Somalis expressed the fear that the government was singling out Muslims for arbitrary reprisals in response to the September 11 terrorist attacks. The current deportation plans are troubling, Somali community leaders said, because the action comes despite an order last March from US District Judge John Tunheim in Minneapolis, who ruled that sending Somali native Keyse G. Jama, convicted of assault in Hennepin County, to a country with no functioning government was illegal. That ruling, however, applies only to the case of Mr. Jama, and the government has appealed Judge Tunheim's order. "I really think they should stop and they should not do this unless the rules are clear," said Osman Sahardeed, assistant executive director of the Somali community of Minneapolis, a non-profit assistance agency. In Seattle, lawyers citing Judge Tunheim's rulin won an order blocking deportation of five Somalis. MTI TECHNOLOGY: Reaches Agreement To Settle Securities Fraud Suit in CA ----------------------------------------------------------------------- MTI Technology Corp. (Nasdaq:MTIC) signed an agreement for the settlement and release of all claims against it and certain officers in the consolidated amended class action filed in the United States District Court for the Southern District of California. Several suits were filed against the Company and its officers from July through September 2000, alleging that the Company was aware of adverse information that it failed to disclose primarily during fiscal year 2000 and, hence, that it violated specified provisions of the Securities Exchange Act of 1934 and the rules promulgated thereunder. The suits were later consolidated, with the consolidated complaint alleging a class period from July 22, 1999 to July 27, 2000 and alleges that the defendants were aware of certain adverse information that they failed to disclose during that period. The Company's insurers will cover all but $125,000 of the total settlement amount. The settlement is subject to final approval by the court. NASH FINCH: Investors Commence Suit For Securities Act Violations in MN ----------------------------------------------------------------------- A group of investors filed a class action against food retailer and distributor Nash Finch Co., alleging the Edina, Minnesota-based Company violated securities regulations, according to an Associated Press Newswires report. The lawsuit, filed in US District Court in Minnesota, seeks to recover damages. According to the complaint, the Company issued false statements in order to maintain favorable credit ratings on its debt. Last month, the Company twice postponed its third-quarter earnings release, citing an internal review by the US Securities and Exchange Commission relating to some promotional allowances. Food manufacturers usually pay grocers allowances called "slotting fees" to make sure their products are given attractive shelf space. The Company said it was reviewing its procedures related to the allowances. Following the announcement, the company's stock lost nearly a third of its value. The Company owns and operates 112 grocery stores in the Upper Midwest under the names Buy 'N Save, Econofoods, Sun Mart, Family Thrift Center and Avanza. The Company also distributes groceries to independent retailers and military commissaries. NORTHWEST AREA: WA Workers Lodge Suit Over Pull Out Of Antipoverty Plan ----------------------------------------------------------------------- A group of citizen volunteers in central Washington's Yakima Valley, who worked with the Northwest Area Foundation of St. Paul and claims to have put in hundreds of hours helping plan a multimillion-dollar antipoverty program has filed suit against the foundation. The group says the foundation breached a "unilateral" contract when it ended project planning, the Star Tribune, newspaper of the Twin Cities, reports. Angered by the foundation's decision to cease its efforts in the Yakima Valley, Julio Romero, an agricultural worker, filed a class action on behalf of himself and more than 300 other volunteers, in Yakima County Superior Court. The lawsuit asks that the foundation be required to give community groups the $1.25 million it "promised" to support the planning process to its completion, as well as triple damages for unfair and deceptive acts under the state Consumer Protection Act, plus attorney fees. The foundation, which works in eight states once served by the Great Northern Railway, has embarked on a plan to pump $150 million into about 16 communities to fight poverty during the next decade. The idea is to demonstrate what concentrated resources can do in a few communities of great need to build a long-term sustainable future. Northwest Area already has formed partnerships in rural South Dakota, central Oregon and with the Indian Land Tenure Foundation. It has engaged in a planning process in north Minneapolis. However, Northwest Area ended the same sort of planning in the Yakima Valley recently, saying the three parts of the valley seemed unwilling to work toward the regional approach the foundation wanted. Some volunteers denied that statement. The volunteers, perceiving "an unprecedented opportunity to improve their lives and the lives of their children," put in thousands of hours, sometimes taking time off from work for daylong meetings, traveling 40 miles or more and paying for child care, the lawsuit said. Ellery July, the foundation's director of community activities and learning, said recently that "we don't make promises" like those suggested in the lawsuit, and did not authorize anyone else to make such promises, and sees no basis for the lawsuit. The foundation did spend more than $750,000 for consultants, translators and childcare during more than two years of planning, Mr. July said. After planning ended, the Associated Press reported that David Silva, a Yakima Valley consultant hired by Northwest Area, acknowledged that there was some divisiveness among established social-service agencies over the regional concept, but said the proposal had a lot of support from low-income Hispanics and American Indians. OKLAHOMA: Tulsa, Black Police Officers Settle Race Discrimination Suit ---------------------------------------------------------------------- After nearly nine years of federal court litigation, the city of Tulsa and a group of black police officers, claiming racial discrimination, have reached an agreement, according to a report by The Daily Oklahoman. Mayor William LaFortune announced the agreement. Under the terms of the settlement, in which the city admits no wrongdoing, all recruiting, promotions and specialty assignments will be given on merit. The agreement also contains an explicit prohibition of racial bias. It also calls for an independent auditor to monitor compliance and provides for dispute resolution by a committee composed of members from all parties to the lawsuit. The consent decree requires court approval, and is under the jurisdiction of US District Judge Sven Erik Holmes, with participation from US District Judge Claire V. Eagan, both of the Northern District of Oklahoma. US District Judge Lee West of the Western District, based in Oklahoma City, also participated in the negotiations. The Fraternal Order of Police did not join in the consent decree, as it did not seek permission to enter the class action until May. It was the second consent decree in the case that has involved two mayors and two chiefs of police. The first decree was accepted by Mayor Susan Savage as she was leaving office, but it was rejected by incoming Mayor LaFortune. It will cost the city about $6 million to implement the decree, compared with an estimated $40 million under earlier plans. Not included in this cost is the payment the city will have to make to the attorney for the four officers named in the lawsuit. The court will determine the amount according to established procedures, Mayor LaFortune said. The Black Officers Coalition filed a class action in 1994, alleging blacks face a segregated work environment, are discriminated against in hiring and promotions, get no help when calling for backup and face retaliation if they complain about discrimination. The hallmark of the proposed 36-page settlement "is its fairness to all parties,"achieved by "addressing the questions" raised by the black officers, the Fraternal Order of Police as well as the city, its citizens and the police department, said Mayor LaFortune. At the end of October, Mayor LaFortune proposed a settlement in hopes of restarting negotiations that had ended bitterly after he rejected the earlier agreement entered into by his predecessor. The Associated Press contributed to this report. OPENTV CORPORATION: NY Court Dismisses Officers, Directors From Lawsuit ----------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed without prejudice OpenTV Corporation's officers and directors from the consolidated securities class action pending against them, the Company and certain investment banks which acted as underwriters for the Company's initial public offering. The suit alleges undisclosed and improper practices concerning the allocation of the Company's initial public offering shares, in violation of the federal securities laws, and seek unspecified damages on behalf of persons who purchased the Company's Class A Ordinary Shares during the period from November 23, 1999 through December 6, 2000. The Court has appointed a lead plaintiff for the consolidated cases. Other actions have been filed making similar allegations regarding the initial public offerings of more than 300 other companies. All of these lawsuits have been coordinated for pretrial purposes as In re Initial Public Offering Securities Litigation, Civil Action No. 21-MC- 92. Defendants in these cases have filed omnibus motions to dismiss on common pleading issues. Oral arguments on these omnibus motions to dismiss were held on November 1, 2002. The Company believes that it has meritorious defenses against these claims. RARE MEDIUM: DE Court Grants Approval To Securities Lawsuit Settlement ---------------------------------------------------------------------- The Delaware Court of Chancery approved the settlement proposed by Rare Medium Group, Inc. (NASDAQ: RRRR) that was entered into by the Company and announced in April 2002 relating to the securities class action pending against it. In connection with the settlement agreement, the Company effectuated a one for ten reverse stock split and completed a rights offering in July, 2002, and the Company's preferred stockholders completed a limited tender offer in May, 2002, among other things. With court approval of the settlement agreement, warrants held by the preferred stockholders to purchase 275,245 shares of our common stock will be cancelled, and the dividends on the preferred stock will continue to be paid in the form of additional shares of preferred stock in lieu of cash through September 30, 2004. Such dividends would have otherwise become payable in cash at the option of the preferred stockholders beginning with the quarter ended September 30, 2002. As part of the settlement approved by the court, the Company and other defendants received a release from members of the class, and the Company will pay $100,000 cash and issue 357,143 shares of its common stock to plaintiffs' counsel, including lead counsel Milberg Weiss Bershad Hynes & Lerach LLP, in payment of fees and expenses. Despite the settlement, the Company and the other defendants denied all allegations made by the plaintiffs. ROCKFORD HEALTH: Settling Over-billing Suit With 10,000 Patients ---------------------------------------------------------------- Rockford Health System plans to settle a class action involving up to 10,000 patients who were billed for services that already had been paid, according to court documents, Associated Press Newswires reports. None of the claims is expected to exceed $500, according to Rockford Health System's chief executive, Gary Katz. A judge is expected to approve the settlement February 25, 2003. David Danielson of Woodstock filed the class action in the 17th District Court in Illinois, alleging that he had been billed for services in 1999, that he already had paid. The lawsuit further accused the owners of Rockford Memorial Hospital and Rockford Clinic of failing to return excess payments or to tell patients about errors. Rockford Health System outsourced billing to Health Care Billing Services in 1999. Court documents stated it was unclear whether the HMO had been paid for certain services when records were transferred. Health Care Billing Service then attempted to collect on more than 100,000 bills. Rockford Health System now handles its own billing. SONICWALL INC.: Officers, Directors Dismissed From Securities Lawsuit --------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed SonicWALL, Inc.'s officers and directors from the consolidated securities class actions pending against them, the Company and certain of the underwriters in the Company's initial public offering in November 1999 and its follow-on offering in March 2000. The amended complaint alleges claims under the Securities Act of 1933 and the Securities Exchange Act of 1934, and seeks damages or rescission for misrepresentations or omissions in the prospectuses relating to, among other things, the alleged receipt of excessive and undisclosed commissions by the underwriters in connection with the allocation of shares of common stock in the Company's public offerings. Similar complaints were filed in the same court against numerous public companies that conducted initial public offerings (IPOs) of their common stock since the mid-1990s. All of these lawsuits were consolidated for pretrial purposes before Judge Shira Scheindlin. On July 15, 2002, the issuers filed an omnibus motion to dismiss for failure to comply with applicable pleading standards. On October 8, 2002, the court entered an order of dismissal as to all of the individual defendants in the SonicWALL IPO litigation, without prejudice. While the Company believes that the claims against it and its officers and directors are without merit, the litigation could result in substantial costs and divert the Company's attention and resources, which could have a material adverse effect on the Company's business, operating results, liquidity and financial condition. SPANISH BROADCASTING: Asks NY Court To Dismiss Securities Fraud Lawsuit ----------------------------------------------------------------------- Spanish Broadcasting Systems, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed on behalf of purchasers who acquired shares of the Company's Class A common stock pursuant to the registration statement and prospectus relating to its initial public offering which closed on November 2, 1999. The lawsuit was filed against the Company, eight underwriters of the IPO and/or their successors-in-interest, two members of its senior management team, one of which is the Company's Chairman of the Board of Directors, and an additional director. The consolidated suit alleges violations of the federal securities laws, specifically that the prospectus contained materially false and misleading statements based on alleged misstatements and/or omissions of material facts relating to underwriting commissions. The complaint also alleges Rule 10b-5 violations by the underwriters and the Company, but not by the individuals. In addition, the complaint alleges violations of Section 15 of the Securities Act and Section 20(a) of the Exchange Act by the Individuals. The claims being made under the complaint are similar to claims currently being made in over 300 class action suits filed against companies with recent initial public offerings and their underwriters. All of these suits, including the one involving the Company, have been assigned for consolidated pretrial purposes to one judge. Motions to dismiss the complaints covering issues common among all issuer defendants in the consolidated cases and issues common among all underwriter defendants in the consolidated cases have been fully briefed and were argued on November 1, 2002. Discovery has been stayed pending decision on the motions to dismiss. VIANET.WORKS INC.: Asks Court To Dismiss Consolidated Securities Suit --------------------------------------------------------------------- VIANET.WORKS, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed against it, certain of its officers and certain of the underwriters who supported the Company's initial public offering (IPO), The suit alleges that the prospectus the Company filed with its registration statement in connection with its IPO was materially false and misleading because it failed to disclose, among other things, that: (1) the named underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for the right to purchase large blocks of VIA IPO shares; and (2) the named Underwriters had entered into agreements with certain of their customers to allocate VIA IPO shares in exchange for which the customers agreed to purchase additional VIA shares in the aftermarket at pre-determined prices, thereby artificially inflating the Company's stock price. The suit further alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder arising out of the alleged failure to disclose and the alleged materially misleading disclosures made with respect to the commissions and the Tie-in Arrangements in the prospectus. This suit is one of over 300 similar suits filed to date against underwriters, issuers and their officers alleging similar activities, known as "laddering," all of which are included in a single coordinated proceeding in the Southern District of New York. The Company believes that any allegations in the suit of wrongdoing on its part or its officers are without legal merit. The Company has retained legal counsel and intends to vigorously defend against these allegations. WINK COMMUNICATIONS: Plaintiffs File Amended Securities Suit in S.D. NY ----------------------------------------------------------------------- Plaintiffs in the securities class actions pending against Wink Communications, Inc. filed a consolidated amended suit in the United States District Court for the Southern District of New York on behalf of purchasers of the Company's common stock from August 19,1999 through December 6,2000. The suit, which names as defendants the Company, two of the Company's officers and directors, and certain investment bank underwriters for the Company's initial public offering, asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder against the Company, certain of its officers and directors, and its underwriters. The Company described the suit as a "laddering" case, similar to hundreds of other laddering cases filed against other newly public companies by other class action defendants in the same Court, according to an earlier Class Action Reporter story. The suit is among the lawsuits that have been consolidated for pretrial purposes as In re Initial Public Offering Securities Litigation, Civil Action No. 21-MC-92. The Company believes that it has meritorious defenses to the claims brought against it. Z-TEL TECHNOLOGIES: Asks Court To Dismiss Consolidated Securities Suit ---------------------------------------------------------------------- Z-Tel Technologies, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it, certain of its current and former directors and officers and firms engaged in the underwriting of the Company's initial public offering of stock (IPO). The suit is based on the allegations that the Company's registration statement on Form S-1, filed with the Securities and Exchange Commission (SEC) in connection with the IPO, contained untrue statements of material fact and omitted to state facts necessary to make the statements made not misleading by failing to disclose that the underwriters had received additional, excessive and undisclosed commissions from, and had entered into unlawful tie-in and other arrangements with, certain customers to whom they allocated shares in the IPO. The plaintiffs in the suit assert claims against the Company and the individual defendants pursuant to Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The plaintiffs in the lawsuit assert claims against the individual defendants pursuant to Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The lawsuit, along with approximately 310 other similar lawsuits filed against other issuers arising out of initial public offering allocations, have been assigned to a judge in the United States District Court for the Southern District of New York for pretrial coordination. On July 15, 2002, the Company and the individual defendants moved to dismiss all claims. The court has not ruled on this motion. Discovery is stayed pending the outcome of the motion to dismiss. The Company intends to vigorously defend against this lawsuit. *Consumer Advocate Groups Say Predatory Lending Instances On the Rise --------------------------------------------------------------------- Consumer advocates locally and across the nation report a rise in predatory lending practices, all of which can lead to foreclosure for the homeowner who has resorted to this kind of home loan, according to a report by the Contra Costa Times (Walnut Creek, CA). The practices span the spectrum, but all make a home loan available at so exorbitant a rate that the homeowner quickly falls behind, and may have to give up the collateral - his home - to cover the debt. The goal of the predatory lender "is to exploit a vulnerable person and put him in a worse position than he was before," said David Carducci, managing attorney of Bay Area Legal Aid. "Rather than give the (debtor) a loan that would get him out of debt, the lender gives the debtor a loan that gets him even further in debt." The elderly and minorities are much more likely to be targeted, according to a new study by the Washington, D.C.-based Association of Community Organizations for Reform Now, or ACORN, entitled "Separate and Unequal: Predatory Lending In America." Some of the common practices include: (1) High Fees: Some lenders tuck excessive fees into loans, such as paperwork fees of up to eight percent, compared to the one to two percent most banks charge; (2) Balloon Payments: The report also shows an increase in loans that include balloon payments, in which a series of mortgage payments at a low rate are followed by a disproportionately large lump sum. Then the homeowner must borrow from his lender to pay off the balloon, usually at a high rate. (3) Loan Flipping: Homeowners are often encouraged to continue refinancing at a higher rate and with higher accompanying fees. ACORN presents the case of a 72-year-old woman whose loan was flipped seven times in five years. She lost her home in a subsequent foreclosure. "Borrowers who are not in a position to qualify for an 'A' loan, are also routinely overcharged in the subprime market, with rates and fees that reflect what a lender or broker thinks he can get away with, rather than any assessment of the actual credit risk," the ACORN report says. The loans are particularly insidious since "they specifically target members of our society who can least afford to be stripped of their equity or life savings, and have the fewest resources to fight back when they have been cheated," says the ACORN report. In recent months, two major subprime mortgage lenders, Household International and The Associates, the latter of which is now owned by Citigroup, announced settlements of $485 million and $240 million for indulging in predatory practices. ACORN has characterized such "second-tier" lenders as institutional loan sharks. However, financial predators run the gamut from major institutions to door-to-door sellers to family members. "A woman calls because she is being evicted and she doesn't know why," said Linda Anderson, division manager for Adult Protective Services of Contra Costa County. "Her house is being foreclosed and she cannot understand it. We look into it and discover it has been refinanced several times by a son or daughter." According to Dana Filkowski, Contra Costa deputy district attorney in charge of elder abuse, the elderly person often has no idea what the terms of the loan are." Before settling on a loan, advises Ms. Filkowski, get the terms of the loan in writing, then show them to a lawyer or an adviser at a senior services agency. Mr. Carducci, the managing attorney of Bay Area Legal Aid, is representing a woman who was targeted for a predatory loan after she had had several strokes. "The company did research on her house, sent a slick-talking person to her door saying the company he represents could help her," He said. "It's a classic example." That company was Congress Mortgage, which is still settling with victims after being sued by a class action alleging predatory lending, according to the Contra Costa Times. Mr. Carducci wants the consumer to remember that "lending brokers have a fiduciary duty not to take advantage of their clients." New Securities Fraud Cases AES CORPORATION: Bernstein Liebhard Launches Securities Suit in E.D. VA ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court, Eastern District of Virginia, on behalf of all persons who purchased or acquired AES Corporation (NYSE: AES) common stock (the "Class") between April 26, 2001 and February 14, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges defendants issued numerous statements highlighting the Company's strong financial performance, specifically its business operations in the United Kingdom. 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: (1) that the United Kingdom adopted a new framework for the pricing of energy that undermined the Company's ability to achieve profitability in its United Kingdom activities, and as a result, the Company would experience a rapid decline in its UK financial operations; (2) the adoption of NETA (New Energy Arrangements) in the United Kingdom caused the Company's Fifoots utility operations to operate at a loss, as expected; defendants, however, continuously touted AES's United Kingdom operations as profitable; (3) that in the first quarter of 2001, Fifoots had an after-tax loss of $11 million; and (4) that the Company's United Kingdom operations were severely impaired as a result of new pricing arrangements adopted there and that the Company lacked adequate long-term contracts to avoid a rapid decline in its United Kingdom operations as a result of the new pricing arrangements. On February 14, 2002, AES shocked the market by announcing that it had ceased operations at its Fifoots Point power station in the United Kingdom because of "sliding wholesale electricity prices." The price of the Company's stock dropped precipitously in inordinate trading volume when the Company, for the first time, announced that it was experiencing problems in its Fifoots Point power plant in the United Kingdom and as a result the plant would be closed. In response to the news, AES plummeted over 25% on February 15, 2002 after the truth concerning AES's Fifoots Point plant and future prospects were finally revealed. Prices dropped from $9.50 per share on February 14, 2002, to $7.00 per share on February 15, 2002, on enormous trading volumes of 29,962,400, far greater than the Company's average trading volume of 3.3 million shares. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 by E-mail: AES@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. ANNUITY AND LIFE: Cauley Geller Commences Securities Suit in CT Court --------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of Connecticut on behalf of purchasers of Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) publicly traded securities during the period between February 12, 2001 and November 19, 2002, inclusive. The complaint alleges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements and/or concealing material adverse facts throughout the class period, thereby artificially inflating the price of the Company's securities. Throughout the class period, the Company reported strong revenue growth and stable projected earnings. The complaint alleges, however, that defendants failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had failed to properly account for embedded derivatives contained in its annuity reinsurance contracts in 2001; (2) that, since at least 2001, the Company had understated a portion of its liabilities and expenses; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's balance sheet and financial results were materially overstated at all relevant times. On November 19, 2002, the last day of the class period, the Company announced that it would be restating its financial results for 2000, 2001 and the first and second quarters of 2002 due to the Company having improperly accounted for embedded derivatives contained in its annuity reinsurance contracts during those years. The Company's stock plummeted 44% upon this revelation. For more details, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com ANNUITY AND LIFE: Milberg Weiss Launches Securities Lawsuit in CT Court ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Annuity and Life Re (Holdings), Ltd. (NYSE:ANR) between February 12, 2001 and November 19, 2002, inclusive, in the United States District Court, District of Connecticut, against the Company and: (1) Frederick S. Hammer, (2) Lawrence S. Doyle and (3) John F. Burke The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between February 12, 2001 and November 19, 2002, thereby artificially inflating the price of Company 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 revenues 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 the Company had failed to properly account for embedded derivatives contained in certain of its annuity reinsurance contracts in 2001; (ii) that, since at least 2001, the Company had understated a portion of its liabilities and expenses; (iii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iv) that as a result, the values of the Company's balance sheet and financial results were materially overstated at all relevant times. On November 19, 2002, the last day of the class period, the Company announced that it would restate its financial results for years 2000, 2001 and the first and second quarters of 2002, the period ending June 30, 2002. As detailed in the announcement, the restatement was necessary because the Company had failed to properly account for embedded derivatives contained in certain of its annuity reinsurance contracts in 2001, and, that since at least 2001, the Company had understated a portion of its liabilities and expenses. Following this disclosure, shares of Annuity and Life fell as much as 44%, culminating a 91% decline in the price of the Company's common stock in the prior twelve months. For more details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl., New York, N.Y. 10119-0165 by Phone: 800/320-5081 by E-mail: AnnuityandLifecase@milbergNY.com or visit the firm's Website: http://www.milberg.com ANNUITY AND LIFE: Scott + Scott Commences Securities Suit in CT Court --------------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court, District of Connecticut on behalf of purchasers of the securities of Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) during the period from February 12, 2001 through November 19, 2002, inclusive against the Company and: (1) Frederick S. Hammer, (2) Lawrence S. Doyle and (3) John F. Burke The suit alleges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements and/or concealing material adverse facts throughout the class period, thereby artificially inflating the price of the Company's securities. Throughout the class period, the Company reported strong revenue growth and stable projected earnings. The suit alleges, however, that defendants failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had failed to properly account for embedded derivatives contained in its annuity reinsurance contracts in 2001; (ii) that, since at least 2001, the Company had understated a portion of its liabilities and expenses; (iii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iv) that as a result, the value of the Company's balance sheet and financial results were materially overstated at all relevant times. On November 19, 2002, the last day of the class period, the Company announced that it would be restating its financial results for 2000, 2001 and the first and second quarters of 2002 due to the Company having improperly accounted for embedded derivatives contained in its annuity reinsurance contracts during those years. The Company's stock plummeted 44% upon this revelation. For more details, contact David R. Scott or Neil Rothstein by Phone: 1-800-404-7770 by E-mail: drscott@scott-scott.com or nrothstein@scott-scott.com or visit the firm's Website: http://www.scott-scott.com. ANNUITY AND LIFE: Charles Piven Commences Securities Suit in CT Court --------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Annuity and Life Re (Holdings), Ltd. (NYSE:ANR) between February 12, 2001 and November 19, 2002, inclusive, in the United States District Court for the District of Connecticut against the Company and: (1) Frederick S. Hammer, (2) Lawrence S. Doyle and (3) John F. Burke The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements including false financial information to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities and required the Company to restate its financial results for years 2000, 2001 and the first and second quarters of 2002. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com ANSWERTHINK INC.: Alfred Yates Lodges Securities Fraud Suit in S.D. FL ---------------------------------------------------------------------- Alfred G. Yates Jr., P.c. initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of purchasers of the securities of Answerthink, Inc. (NYSE:ANSR) between October 17, 2000 and April 25, 2002, inclusive. The suit names as 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 defendants allegedly 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 issued 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 defendants Fernandez and 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 Alfred G. Yates Jr. by Phone: 800/391-5164 or 412/391-5164 or by E-mail: yateslaw@aol.com COMERICA INC.: Bernstein Liebhard Commences Securities Suit in E.D. MI ---------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for the Eastern District of Michigan, on behalf of all persons who purchased or acquired Comerica, Inc. (NYSE: CMA) common stock (the "Class") between July 17, 2002 and October 1, 2002, inclusive. The complaint charges the Company and certain of its executive officers with issuing false and misleading statements concerning the Company's business and financial condition. Specifically, the complaint alleges that: (1) the Company had materially overstated its net income by approximately $23 million in the second quarter of 2002; (2) the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 by E-mail: CMA@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. KINDRED HEALTHCARE: Bernstein Liebhard Files Securities Suit in W.D. KY ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for the Western District of Kentucky, on behalf of all persons who purchased or acquired Kindred Healthcare, Inc. (NASDAQ: KIND) common stock between August 14, 2001 and October 10, 2002, inclusive. The suit alleges that defendants made numerous materially false and misleading statements concerning the Company's reserves for claims with respect to professional liability insurance. Specifically, the suit alleges that defendants failed to maintain adequate reserves for Kindred's professional liability insurance claims after the State of Florida's May, 2001 enactment of tort-reform legislation (the "Florida Act") capping punitive damage awards on such claims. The Florida Act contained an October 2001 filing deadline for certain claims, causing a one-time surge in lawsuits. Unlike its competitors, who took costly charges in preparation for the increased lawsuits resulting from the Florida Act, defendants failed to maintain adequate reserves as was revealed by the Company on October 10, 2002 when it announced that Kindred would record approximately $55 million of additional costs for professional liability claims for 2001 and 2002, two-thirds of which concerned the Company's Florida operations. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 by E-mail: KIND@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. NASH FINCH: Milberg Weiss Commences Securities Fraud Suit in MN Court --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action in the United States District Court for the District of Minnesota on behalf of purchasers of Nash Finch Company (NASDAQ:NAFC; NAFCE) common stock during the period between July 15, 2002 and November 8, 2002. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is a food distribution and retail company in the United States. The complaint alleges that during the class period, the Company issued false statements, including false financial results in which the Company included income from vendor promotions to which the Company was not entitled, so as to maintain favorable credit ratings on its debt. As a result of defendants' false statements, the Company's stock traded at artificially inflated levels, permitting the Company to maintain credit ratings on its $400 million in debt. Then, on November 8, 2002, the Company issued a press release entitled "Nash Finch Explains Postponement of Earnings Release" which disclosed an SEC inquiry into its accounting practices. Once this news was revealed, Nash Finch's stock collapsed to $7.60 before closing at $8.18, some 70% below the class period high of $28.85. It was also noted in November 2002, that Nash Finch's former CFO had sued the Company claiming he was fired in 2000 for refusing to manipulate Nash Finch's reported financial results. For more details, contact William Lerach by Phone: 800/449-4900 by E- mail: wsl@milberg.com or visit the firm's Website: http://www.milberg.com NASH FINCH: Cauley Geller Commences Securities Fraud Suit in MN Court --------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the District of Minnesota on behalf of purchasers of Nash Finch Company (Nasdaq: NAFCE) common stock during the period between July 15, 2002 and November 8, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Nash Finch is a food distribution and retail company in the United States. The complaint alleges that during the class period, the Company issued false statements, including false financial results in which the Company included income from vendor promotions to which Nash Finch was not entitled, so as to maintain favorable credit ratings on its debt. As a result of defendants' false statements, the Company's stock traded at artificially inflated levels, permitting Nash Finch to maintain credit ratings on its $400 million in debt. Then, on November 8, 2002, Nash Finch issued a press release entitled "Nash Finch Explains Postponement of Earnings Release" which disclosed an SEC inquiry into its accounting practices. Once this news was revealed, Nash Finch's stock collapsed to $7.60 before closing at $8.18, some 70% below the class period high of $28.85. It was also noted in November 2002, that Nash Finch's former CFO had sued the Company claiming he was fired in 2000 for refusing to manipulate Nash Finch's reported financial results. For more details, contact Jackie Addison, Heather Gann or Sue Null by Phone: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com NASH FINCH: Charles Piven Commences Securities Fraud Suit in MN Court --------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Nash Finch Company (Nasdaq:NAFCE) (Nasdaq:NAFC) between July 15, 2002 and November 8, 2002, inclusive, in the United States District Court for the District of Minnesota against the Company and (1) Ron Marshall and (2) Robert Dimond The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements including false financial information to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities and resulted in the Company postponing the release of its earnings and in an SEC inquiry into the Company's accounting practices. For more details, contact Charles Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com NASH FINCH: Reinhardt & Anderson Lodges Securities Lawsuit in MN Court ---------------------------------------------------------------------- Reinhardt & Anderson filed a securities class action in the United States District Court of Minnesota on behalf of investors who acquired shares of Nash Finch Company (Nasdaq:NAFC; NAFCE) between July 15, 2002 and November 8, 2002 against individual directors and officers of the Company. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Nash Finch is a food distribution and retail company in the United States. The complaint alleges that during the class period, Nash Finch issued false statements, including false financial results in which the Company included income from vendor promotions to which Nash Finch was not entitled, so as to maintain favorable credit ratings on its debt. As a result of defendants' false statements, the Company's stock traded at artificially inflated levels, permitting Nash Finch to maintain credit ratings on its $400 million in debt. Then, on November 8, 2002, Nash Finch issued a press release entitled "Nash Finch Explains Postponement of Earnings Release" which disclosed an SEC inquiry into its accounting practices. Once this news was revealed, Nash Finch's stock collapsed to $7.60 before closing at $8.18, some 70% below the class period high of $28.85. It was also noted in November 2002, that Nash Finch's former CFO had sued the Company claiming he was fired in 2000 for refusing to manipulate Nash Finch's reported financial results. For more details, contact Garrett D. Blanchfield by Phone: 888-253-5139 or 651-227-9990 by Fax: 651-297-6543 by E-mail: g.blanchfield@ralawfirm.com or visit the firm's Website: http://www.ralawfirm.com. OM GROUP: Scott + Scott Launches Securities Fraud Lawsuit in N.D. Ohio ---------------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court for the Northern District of Ohio on behalf of purchasers of OM Group Inc. (NYSE:OMG) publicly traded securities during the period between July 30, 2002 and Oct. 30, 2002. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. OM Group produces and markets metal-based specialty chemicals and related materials. Certain of the Company's products are value-added and some are commodity. The complaint alleges that during the class period, defendants made false statements about the Company's business and prospects. After reporting somewhat disappointing 2ndQ 02 results, defendants told investors that its business was strong and all the indicators were for a good second half. As a result, Company stock continued to trade above $50 per share. On September 19,2002, the Company warned the 3rdQ 02 results would be slightly lower than prior statements, but that results would still be significantly higher than in the prior year. Then, on October 29,2002, the Company announced a huge loss, an inventory write-down and a future restructuring. Company stock dropped to as low as $8.60 per share on volume of $22 million shares. Later, on October 31,2002, it was disclosed that OM Group's Chief Executive Officer had sold all his holdings to cover a margin call on some 710,000 shares on OM Group stock which he had used as collateral for a huge loan. On this news, the stock dropped even further to as low as $6.12 per share. For more details, contact David R. Scott by Phone: 800/404-7770 or visit the firm's Website: http://www.scott-scott.com RETEK INC.: Milberg Weiss Commences Securities Fraud Suit in MN Court --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action in the United States District Court for the District of Minnesota on behalf of purchasers of Retek Inc. (Nasdaq: RETK) securities during the period between October 17, 2001 and July 8, 2002. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is a leading provider of software solutions and services to the retail industry. In April 2000, the Company announced that it had formed an alliance with IBM to develop a partnership to develop a merchandising solution for the food and drug segment of the retail market. The complaint alleges that the defendants continuously led the market to believe not only that the alliance was fully intact but also that the alliance was on track to generate revenues of more than $1 billion for the two companies for the year 2003. Defendants, however, concealed that not only was the $1 billion prospect a fallacy, but that throughout the class period the so-called alliance was in shambles. The Company wanted access to IBM's consulting deals and IBM wanted the Company to change its software applications so that they ran on IBM's platform, not Oracle's. By October 2001, defendants realized that the conversion would be too costly in the short run and delayed the full conversion to IBM platforms, including the most critical, a merchandising product for large-scale retail operations. The complaint further alleges that by the beginning of the class period, many of the Company's projects (IBM) were faltering and its new products (Retek 10), which were scheduled to boast earnings, were riddled with bugs. Moreover, one of the Company's joint ventures, PerformanceRetail Inc. (PRI), was hemorrhaging nearly $200,000 of the Company's monies per month. Finally, the defendants' projections were not only stale but actually false when made as the defendants knew or made a conscious decision to ignore the fact that circumstances underlying those projections (i.e., problems with Retek 10, the IBM alliance, PRI, an eroding customer base) actually compelled the conclusion that the Company could not possibly achieve the projections. For more details, contact William Lerach, or Darren Robbins by Phone: 1-800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Website: http://www.milberg.com/cases/retekinc SEARS ROEBUCK: Wolf Haldenstein Lodges Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Northern District of Illinois, Eastern Division, on behalf of purchasers of the securities of Sears, Roebuck & Co. [NYSE: S] between January 17, 2002 and October 17, 2002, inclusive against the Company and certain of its officers and directors. During the class period, the defendants materially mislead the investing public, thereby inflating the price of the Company's common stock, by publicly issuing false and misleading statements and omitting to disclose material facts necessary to make the defendants statements not false and misleading. The defendants statements were false and misleading by overstating the profitability of the Company credit business, by: (1) under-reserving for uncollectible accounts; (2) falsely stating the allowance for uncollectible debts was adequate; (3) falsely describing the strength and future prospects of growth of its credit business; (4) falsely stating the risk of the credit business, including the delinquency rate; (5) falsely stating the reasons for and circumstances of Kevin Keleghan's firing; and (6) making false statements to hide the deterioration of credit risk during the class period. In response to the revelations in a press release and a subsequent meeting with analysts, the price of Company stock plummeted, falling from a close of $33.95 per share on October 16, 2002 to close at $23.15 on October 17, 2002, on more than 36 million shares traded. For more details, contact Fred Taylor Isquith, Michael Miske, Gregory Nespole, David L. Wales, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 or by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Sears. SMARTFORCE PLC: Berman DeValerio Commences Securities Suit in NH Court ---------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities class action filed against Smartforce PLC d.b.a. Skillsoft PLC (Nasdaq:SKIL), accusing the educational software company of defrauding shareholders, in the United States District Court for the District of New Hampshire. The suit seeks damages for violations of federal securities laws on behalf of all investors who bought the Company's common stock from January 18, 2000 through November 18, 2002 including: (1) all purchasers of the Company's American Depository Shares (ADS) from January 18, 2000, through September 6, 2002, trading under the Nasdaq ticker symbol SMTF; (2) all persons who acquired Smartforce PLC's ADSs as part of the merger between Smartforce PLC and Skillsoft Corporation completed on or around September 6, 2002; and (3) all purchasers of Smartforce PLC's ADSs after September 6, 2002, when the company began doing business as "Skillsoft" and trading under the Nasdaq ticker symbols SKILD or SKIL. The lawsuit claims that the Company issued false and misleading financial statements about it based on accounting gimmickry that improperly inflated the company's reported revenues and earnings. On November 19, 2002, two months after completing its merger with Smartforce, Skillsoft stunned investors by revealing that the company intended to delay its third quarter report for 2002 and restate its financial statements for the years 1999, 2000, 2001, and for the first half of 2002. According to the complaint, both the delay and the restatements were prompted by Skillsoft's discovery of numerous accounting improprieties that had occurred at its merger partner Smartforce. The irregularities include the premature recognition of revenue and failure to properly account for bad debt. On the day of these disclosures, Skillsoft stock dropped 33% to $1.57 per share, on unusually high trading volume. For more details, contact Patrick T. Egan or Bryan A. Wood by Mail: One Liberty Square, Boston, MA 02109 by Phone: (800) 516-9926 or (617) 542-8300 or by E-mail: law@bermanesq.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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