/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/021211.mbx C L A S S A C T I O N R E P O R T E R Wednesday, December 11, 2002, Vol. 4, No. 245 Headlines AVANTGO INC.: Court Dismisses Officers, Directors From Securities Suit BURLINGTON NORTHERN: Plaintiffs Ask TX State Court To Certify Lawsuit CANADA: Ontario Judge Okays Lawsuit By Gays Seeking Pension Benefits COLUMBIA ENERGY: Class Certification Discovery Starts in Royalties Suit CROWLEY MARITIME: Reaches Settlement in Securities Lawsuit in CA Court FLUOR CORPORATION: Plaintiffs Appeal Dismissal of Securities Fraud Suit FANNIE MAE: Suit Asserts Underwriting System Biased Against Minorities GEORGIA: Remains In Grave Desecration Case Both Human, Legal Concern HERBALIFE INTERNATIONAL: Agrees To Settle Suit Over Share Rights Plan HERBALIFE INTERNATIONAL: NV Court Approves Securities Suit Settlement HERBALIFE INTERNATIONAL: Asks CA Court To Dismiss Distributors' Lawsuit INRANGE TECHNOLOGIES: Asks NY Court To Dismiss Securities Fraud Lawsuit LUCENT TECHNOLOGIES: Lawsuits May Expose Firm's Internal Strife MASTERCARD INC.: Trial in Retailer Antitrust Suit Set April 2003 in NY NAHC INC.: Appeals Court Upholds Dismissal of Securities Fraud Lawsuit PHOENIX HOME: Plaintiffs To Appeal Dismissal of Suit V. Reorganization New Securities Fraud Cases AES CORPORATION: Schatz & Nobel Lodges Securities Fraud Suit in E.D. VA AMERICAN ELECTRIC: Schatz & Nobel Commences Securities Suit in Ohio ANSWERTHINK INC.: Bernstein Liebhard Lodges Securities Suit in S.D. FL CAPRIUS INC.: Lowenstein Sandler Commences Securities Fraud Suit in NJ CIGNA CORPORATION: Bernstein Liebhard Lodges Securities Suit in E.D. PA COLE NATIONAL: Schiffrin & Barroway Commences Securities Suit in Ohio COLE NATIONAL: Cauley Geller Commences Securities Fraud Suit in N.D. OH CREDIT SUISSE: Lockridge Grindal Files Securities Fraud Suit in S.D. NY FOOTSTAR INC.: Charles Piven Commences Securities Fraud Suit in S.D. NY H&R BLOCK: Wolf Haldenstein Commences Securities Fraud Suit in S.D. NY OM GROUP: Lockridge Grindal Commences Securities Fraud Suit in N.D. OH RETEK INC.: Wolf Haldenstein Launches Securities Fraud Suit in MN Court SCHERING-PLOUGH: Goodkind Labaton Seeks Lead Plaintiff Position in Suit SEACHANGE INTERNATIONAL: Charles Piven Commences Securities Suit in MA SYNCOR INTERNATIONAL: Chitwood & Harley Launches Securities Suit in CA UNAPIX ENTERTAINMENT: Katzman Wasserman Launches Securities Suit in FL ********* AVANTGO INC.: Court Dismisses Officers, Directors From Securities Suit --------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed Avantgo, Inc.'s officers and directors as defendants from the consolidated securities class action pending on behalf of purchasers of the Company's common stock from September 27,2000 to December 6,2000. The suit initially named as defendants the Company, certain of the Company's officers and directors and the underwriters of the Company's initial public offering. The complaint alleges that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices. Plaintiffs also allege the prospectus for the Company's initial public offering was false and misleading, in violation of the securities laws, because it did not disclose these arrangements. Over 300 companies involved in an initial public offering have been named as defendants in nearly identical lawsuits filed by some of the same plaintiffs' law firms. A motion to dismiss addressing issues common to the companies and individuals who have been sued in these actions was filed on July 15, 2002. The court has not yet ruled on this motion. On October 9, 2002, the court dismissed the individual defendants from the case without prejudice based upon stipulations of dismissal filed by the plaintiffs and the individual defendants. The Company believes it has meritorious defenses against these allegations. However, due to inherent uncertainties in litigation, management cannot predict accurately the ultimate outcome of the litigation. BURLINGTON NORTHERN: Plaintiffs Ask TX State Court To Certify Lawsuit --------------------------------------------------------------------- Plaintiffs in the state class action filed against Burlington Northern Santa Fe Corporation and The Burlington Northern and Santa Fe Railway Company asked the District Court of Tarrant County, Texas, 48th Judicial District) to certify the suit as a class action. The suit was filed with respect to a special dividend was paid in 1988 by a Burlington Northern Santa Fe Corporation (BNSF) predecessor, Santa Fe Southern Pacific Corporation (SFSP) and alleges breach of contract, negligence, and breach of fiduciary duties. The complaint alleges that SFSP erroneously informed shareholders as to the tax treatment of the dividend specifically, the apportionment of the dividend as either a distribution of earnings and profits or a return of capital, which allegedly caused some shareholders to overpay their income taxes. During the third quarter 2002, the plaintiffs provided their expert's report that asserted for the first time that SFSP had essentially no accumulated earnings and profits and that the entire dividend distribution should have been treated as a return of capital, rather than the approximately 34% that SFSP determined was a return of capital. Plaintiffs have a motion pending to certify a class of former SFSP shareholders, which BNSF Railway has opposed, but a decision on class certification issues is not expected until early 2003. The Company believes these claims lack merit and that it has substantial defenses on both the merits of these claims and the attempted class action. CANADA: Ontario Judge Okays Lawsuit By Gays Seeking Pension Benefits -------------------------------------------------------------------- A nationwide class action can proceed on behalf of homosexuals denied survivor pension benefits from the government after their partners died, the St. Louis Post-Dispatch reports. Ontario Superior Court Justice Maurice Cullity said a 2,000-member British Columbia class-action lawsuit can join a similar lawsuit representing about 8,000 people across the country. Quebec is the only province not represented in the lawsuit, because it operates a separate pension plan. The plaintiffs seek more than $260 million in pension benefits. "I am elated and delighted," said 75-year-old George Hislop, the lead plaintiff in the case. Mr. Hislop had a 28-year relationship with his partner, who died in 1986. Mr. Hislop will collect $55,100 if the lawsuit succeeds. The lawsuit, launched in Toronto last year, alleges discrimination against same-sex couples by denying benefits to homosexuals whose partners died before January 1, 1998. The federal government imposed the 1998 cutoff date when it granted various rights to same-sex couples in 2000. The lawsuit seeks benefits retroactive to 1985, when equality guarantees were included in the Canadian Charter of Rights and Freedoms. Such an interpretation of the Charter would set aside the 1998 cutoff as unlawful. COLUMBIA ENERGY: Class Certification Discovery Starts in Royalties Suit ----------------------------------------------------------------------- Discovery regarding class certification of a lawsuit filed against Columbia Energy Group, Columbia Natural Resources, Inc. (Columbia Natural Resources) and Columbia Transmission is commencing in New York State Court. The complaint alleges that lead plaintiff Victoria Kershaw owns an interest in an oil and gas lease in New York and that the defendants have underpaid royalties on the lease by, among other things, failing to base royalties on the price at which natural gas is sold to the end user and by improperly deducting post-production costs. The complaint also seeks class action status on behalf of all royalty owners in oil and gas leases operated by Columbia Natural Resources. Columbia Natural Resources and Columbia Transmission removed the case to federal court in March 2000. The federal court remanded the suit back to New York state court. The Columbia defendants' motion to dismiss was partially granted and partially denied by the New York state court judge. The defendants filed an answer to the plaintiffs' complaint. CROWLEY MARITIME: Reaches Settlement in Securities Lawsuit in CA Court ---------------------------------------------------------------------- Crowley Maritime Corporation settled the class action filed against it in the Superior Court of the State of California for the County of Alameda on behalf of Dennis Wood and a class alleged to consist of certain holders of the Company's common stock. The complaint named the Company and each member of its board of directors as defendants and alleged, among other things, that the defendants undertook certain actions to avoid subjecting the Company to public reporting requirements and caused shares of the Company's common stock to be purchased and sold at artificially low prices in connection with the Company's tender offer announced on April 16, 2001. The plaintiff originally asserted causes of action for breach of contract, breach of fiduciary duty and unjust enrichment and seeks unspecified damages and injunctive relief. The defendants subsequently answered the complaint and moved to dismiss the breach of contract claim on the grounds that, based on the facts of the case, the plaintiff could not properly allege such a claim as a matter of law. The court dismissed the breach of contract claim without leave to amend. On May 24, 2002, a hearing was held on plaintiff's motion to certify this case as a class action. On June 10, 2002, the court denied plaintiff's motion seeking to certify this case as a class action. The parties began settlement negotiations. On October 4, 2002, the entire matter was settled and the complaint was dismissed with prejudice. Neither the Company nor any members of the Board of Directors paid any damages or other amounts to the plaintiff. FLUOR CORPORATION: Plaintiffs Appeal Dismissal of Securities Fraud Suit ----------------------------------------------------------------------- Plaintiffs in the consolidated securities class action pending against Fluor Corporation and certain of its officers and directors appealed the United States District Court for the Central District of California's dismissal of the suit with prejudice. The suit alleges that certain of the Company's officers and directors violated the Securities Exchange Act of 1934 by providing false or misleading statements about the Company's business and prospects. These complaints purport to be class action complaints brought on behalf of purchasers of the company's stock during the period from May 22, 1996 through February 18, 1997. The Company's initial motion to dismiss the action was granted by the court with leave to amend. The plaintiffs filed their amended complaint and the company moved the court to dismiss the new amended complaint. The court has now granted the Company's motion and dismissed plaintiff's action without leave to amend on July 10, 2002. FANNIE MAE: Suit Asserts Underwriting System Biased Against Minorities ---------------------------------------------------------------------- A national class action against Fannie-Mae's automated-underwriting system was filed recently in federal court by a black homeowner, who raises the issue, whether black, Hispanic and other minority home buyers, get fair treatment when their mortgage applications are underwritten by computers instead of humans, according to a report by the Orlando Sentinel. Safiyyah Rahmaan of Wilson, North Carolina, a black homeowner, said in a national class action filed in federal court, that the banks where she applied for a $95,000 mortgage ran her application through Fannie Mae's "Desktop Underwriting" system and turned her down. The reason for the rejections, she charged, is that the system itself is biased against minorities. "The (electronic) model used by Fannie Mae," alleges Ms. Rahmaan in her lawsuit, "is inherently discriminatory" against African-Americans and other minorities, and "has a profoundly disparate impact" on them. Fannie Mae vigorously disputed Ms. Rahmaan's allegations and has asked the court to dismiss the class action. A decision is expected early next year. A similar lawsuit challenging Freddie Mac's electronic system is expected to be filed soon. The theory behind the litigation, wrote Kenneth R. Harney of the Washington Post Writers Group, as presented in the Orlando Sentinel, is that the complex statistical formulations, embedded in all electronic- underwriting systems, use financial and credit behavioral data obtained primarily from white consumers. Non-white and immigrant community consumers, by contrast, often show distinctive patterns in banking and credit uses that are not evaluated fairly by electronic underwriting. For instance, wrote Mr. Harney, some cultural groups have long traditions of avoiding established banking and financial institutions, relying instead on family or community resources. Such practices, however, tend to be penalized by risk-evaluation systems that are loaded with credit card and banking data predominantly from white customers. Since the advent of electronic underwriting in the mid-to- late-1990s, no comprehensive statistical study has been published on the bias issue. However, a new paper, Mr. Harney wrote, published by three researchers, a professor at George Washington University and two Freddie Mac economists, suggests that automated underwriting programs are more fair to minority home buyers and lower income mortgage applicants than traditional "manual" underwriting. The report appears in the latest issue of Housing Policy Debate, which is published by the Fannie Mae Foundation. The study is the first to examine loan-application and payment-performance data from a major computerized system. It involved thousands of borrowers' applications from the early and mid-1990s until 2001. By looking at mortgage applications from 1993 to 1995, that were underwritten manually by loan officers, and then running the same application data through Freddie Mac's Loan Prospector electronic-under system, Mr. Harney wrote, the researchers were able to compare acceptance and non-acceptance rates. They were also able to determine which underwriting method more accurately predicted defaults and which approach approved more loans for minority applicants. The results are that Freddie Mac's electronic system outperformed human underwriters in predicting later defaults. It produced net gains of 29 percent in loan approvals for minority groups and 36 percent for all low- and moderate-income applicants, when compared with approval rates by human underwriters in the mid-1990s. The researchers have said that their study is not the final word whether the computers treat applicants more fairly than human underwriters, Mr. Harney reported. Their conclusions are at the "macro" level, the big statistical picture, added Mr. Harney, rather than on a case-by-case basis, such as that raised by Ms. Rahmaan against Fannie Mae's underwriting system. The statistical evidence appears to suggest that computerized underwriting is more inclusive, less biased and more predictive of defaults than human underwriters. Better yet, electronic underwriting appears to put more blacks, Hispanic and other minorities into houses than the old-fashioned human underwriters do. GEORGIA: Remains In Grave Desecration Case Both Human, Legal Concern -------------------------------------------------------------------- For many people this holiday season, grieving over the death of a loved one is intensified by an element of uncertainty. In the vicinity of the Tri-State Crematory, in Noble, Georgia, some 340 dumped corpses were discovered, bringing to light that the man running the crematory was accepting money for cremations he never performed, Associated Press Newswires reports. Thoughts of pending class actions and pending criminal action, as well, have been put aside during this, the season- not-to-be-so-jolly for the families of the deceased. Forensics experts have been using sophisticated DNA testing to identify the remains of 195 people, but they now say that they cannot identify the rest, some 145 people. Katy Kinlaw, an associate director for the Center of Ethics at Emory University, said that while holidays intensify the grief from a death, for families with deceased relatives unaccounted for, as in the instance of the remains from the Tri-State Crematory that defy DNA identification, it is "almost like someone missing in action." Ray Brent Marsh, 29, was arrested about 10 months ago for allegedly accepting money for cremations he never performed. Complete and partial human remains were found on the crematory property in storage buildings, burial vaults, pits and a surrounding forest. Mr. Marsh remains free on bond awaiting trial on nearly 400 felony charges, including theft by deception and abuse of a body. A grand jury may hear the case in January. Mr. Marsh also faces numerous civil lawsuits in Georgia, some class action, and a federal class action in Tennessee. Mr. Marsh allegedly stopped performing cremations in 1997, when he took over the family business from his father. Investigators have said that Mr. Marsh sometimes gave funeral homes boxes filled with dirt, cement or crushed rocks, passing them off as cremated remains. John Bankhead, spokesman for the Georgia Bureau of Investigation, said that investigators were astounded they had identified as many remains as they did, given their age and the state of decomposition. Authorities plan to number and bury the unidentified remains when they find enough cemetery space. HERBALIFE INTERNATIONAL: Agrees To Settle Suit Over Share Rights Plan --------------------------------------------------------------------- Herbalife International, Inc. will settle two putative class actions filed in the District Court, Clark County, Nevada alleging breaches of fiduciary obligations by the Company's directors and its majority stockholder. The lawsuits were filed in connection with the Company's Preferred Share Purchase Rights Plan, and the rejection of a purported third party offer to acquire a controlling interest in the Company. The plaintiffs in the lawsuits request: (1) an order compelling the defendants to take steps to seek a sale of the Company, (2) an order enjoining the defendants in office, (3) unspecified damages, and (4) other relief The Company has reached a settlement agreement under which it will pay plaintiff's s legal fees of $190,000. The Company's insurer has agreed to pay 50% of the settlement amount. The settlement remains subject to court approval for which a hearing date has not yet been set. HERBALIFE INTERNATIONAL: NV Court Approves Securities Suit Settlement --------------------------------------------------------------------- The District Court of Clark County in the State of Nevada granted final approval to the settlement of a class action pending against Herbalife International, Inc., its board of directors, and a former director. In April 2002, Harbor Finance Partners, allegedly an Herbalife stockholder, filed the suit, alleging a claim of breach of fiduciary duty arising out of the announced merger transaction between Herbalife and WH Holdings. The court gave final approval to a settlement on November 1, 2002 providing for the payment of plaintiff's legal fees of $650,000, which is included in the Company's financial statements. Payments pursuant to the settlement were made in early November 2002. HERBALIFE INTERNATIONAL: Asks CA Court To Dismiss Distributors' Lawsuit ----------------------------------------------------------------------- Herbalife International, Inc. asked the United States District Court for the Central District of California to dismiss the class action filed against, alleging that specified marketing plans employed by the distributor defendants are illegal, and that the Company has permitted the use of these marketing plans and/or failed to supervise its distributors' conduct to prevent violations of law by them. The complaint does not challenge the legality of Herbalife's marketing system. The complaint seeks to state causes of action under the Racketeer Influenced and Corrupt Organizations Act (RICO) and various state and other federal laws. The Company has filed a motion to dismiss and a hearing was held on November 18, 2002. The Company believes it has meritorious defenses to the allegations contained in the lawsuit. However, an adverse result in this litigation could have a material adverse effect on the Company's financial condition and operating results. INRANGE TECHNOLOGIES: Asks NY Court To Dismiss Securities Fraud Lawsuit ----------------------------------------------------------------------- Inrange 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 officers, and the underwriters that participated in the Company's initial public offering. The suit alleges, in essence that the underwriters combined and conspired to increase their respective compensation in connection with the IPO by: (1) receiving excessive, undisclosed commissions in exchange for lucrative allocations of IPO shares; and (2) trading in the Company's stock after creating artificially high prices for the stock post-IPO through "tie-in" or "laddering" arrangements (whereby recipients of allocations of IPO shares agreed to purchase shares in the aftermarket for more than the public offering price for Inrange shares) and dissemination of misleading market analysis on the Company's prospects; and The suit further alleges that the Company violated federal securities laws by not disclosing these underwriter arrangements in its prospectus. The suit is identical to hundreds of shareholder class actions pending in the same court in connection with other recent IPOs and is generally referred to as In re Initial Public Offering Securities Litigation. The issuers (including the Company) and the underwriters have filed motions to dismiss the case in its entirety, which motions are pending before the court. At this point, it is too early to form a definitive opinion concerning the ultimate outcome. Management believes, after consultation with legal counsel, that none of these contingencies will not have a material adverse effect on the Company's financial condition or results of operations. LUCENT TECHNOLOGIES: Lawsuits May Expose Firm's Internal Strife --------------------------------------------------------------- Lucent Technologies was in a downward spiral two summers ago when a top executive, William O'Shea, sent a memo urging then-Chief Executive Richard McGinn to rally his demoralized band of officers, The Star- Ledger (Newark, NJ) reports. Such a memo is one example of the kind of memos about to be publicly aired in two anticipated lawsuits. One lawsuit is being brought by Nina Aversano against Lucent. Ms. Aversano once ran Lucent's North American sales group. The second lawsuit is a class action brought by shareholders who sued while the company's stock was losing 99 percent of its values. Exhibits, including e-mails, depositions and memos, such as the one cited above, paint a company willing to cut corners to meet aggressive growth targets and willing also to disparage each other in private. The sales outlook for communications gear is still bleak, but Lucent is striving to become profitable again by next September. The last thing the company needs, the analysts are saying, is a distraction from the intense focus on their goal. A handful of top executives slinging mud or being hit with it is just such a distraction, The Star-Ledger wrote. The Aversano lawsuit is scheduled to go to trial January 6, 2003, in Middlesex County, New Jersey. The former executive claims she was a corporate whistleblower forced to resign. Ms Aversano is seeking payment of a $2 million compensation package. No date has been set for the class-action lawsuit, which will be heard in US District Court in Newark, New Jersey. The company and the shareholders are currently in court-ordered mediation. Both lawsuits claim that Lucent's leadership misled investors with fraudulent financial guidance, a charge the company denies. "We look forward to having our day in court," said Lucent spokeswoman, Kathy Fitzgerald. Ms. Aversano, in her suit to obtain a compensation package, alleges that when Mr. McGinn, the then-CEO, failed to notify Wall Street of the seriousness of Lucent's predicament, she urged him to "come clean," and she was subsequently forced to resign. "Rich McGinn kept insisting that even after I told him how bad things were, that should still be driving towards 15 percent (growth)," Ms. Aversano said in a deposition. "This was a man who did not want to accept the truth." Ms. Aversano negotiated a generous severance package, and Lucent issued a press release celebrating her achievements. However, the $2 million check was held up while Lucent and the Securities and Exchange Commission looked into accounting irregularities involving credits the company gave to Winstar Communications, an account Ms. Aversano's unit handled. In a deposition, Henry Schacht, who replaced Mr. McGinn as CEO, has said that he was prepared to release Ms. Aversano's money once she was cleared of any wrongdoing. By the time that happened weeks later, Ms. Aversano already had filed her lawsuit in state Superior Court, and most of her allegations eventually found their way into an updated version of the class action. MASTERCARD INC.: Trial in Retailer Antitrust Suit Set April 2003 in NY ---------------------------------------------------------------------- Trial in the retailer class action filed against Mastercard, Inc. and Visa USA, Inc. by a number of US merchants is set to commence April 28,2003 in the United States District Court for the Eastern District of New York. Several class actions were commenced in October 1996 by a number of US merchants, including: (1) Wal-Mart Stores, Inc., (2) Sears Roebuck & Co., Inc., (3) The Limited Inc. and (4) Safeway, Inc. The suit challenges certain aspects of the payment card industry under US federal antitrust law. The plaintiffs challenge MasterCard's "Honor All Cards" rule (and a similar Visa rule), which ensures universal acceptance for consumers by requiring merchants who accept MasterCard cards to accept for payment every validly presented MasterCard card. Plaintiffs claim that MasterCard and Visa unlawfully have tied acceptance of debit cards to acceptance of credit cards. In essence, the merchants desire the ability to reject off-line, signature-based debit transactions (for example, MasterCard card transactions) in favor of other payment forms, including on-line, PIN- based debit transactions (for example, Maestro or regional ATM network transactions) which generally impose lower transaction costs for merchants. The plaintiffs also claim that MasterCard and Visa have conspired to monopolize what they characterize as the point-of-sale debit card market, thereby suppressing the growth of regional networks such as ATM payment systems. Plaintiffs allege that the plaintiff class has been forced to pay unlawfully high prices for debit and credit card transactions as a result of the alleged tying arrangement and monopolization practices. There are related consumer class actions pending in two state courts that have been stayed pending developments in this matter. In addition, a related case was filed by a merchant in federal district court in Michigan, alleging antitrust violations arising from a purported tie of signature-based debit transactions to credit transactions. The Company is presently evaluating the procedure to have this case consolidated with the pending action in the US District Court for the Eastern District of New York, if possible. The Company also denies the merchant allegations and believes that the "Honor All Cards" rule and MasterCard practices with respect to debit card programs in the United States are pro-competitive and fully consistent with US federal antitrust law. In February 2000, the court granted the plaintiffs' motion for class certification. MasterCard and Visa subsequently appealed the decision to the Second Circuit Court of Appeals. In October 2001, a three-judge panel affirmed the lower court decision by a two-to-one majority. The Company filed a petition for a writ of certiorari to the U.S. Supreme Court on April 3, 2002, which was denied on June 6, 2002. Motions seeking summary judgment have been filed by both sides and fully briefed in the district court. An argument date for summary judgment has now been set for January 10, 2003 by an order of the court. NAHC INC.: Appeals Court Upholds Dismissal of Securities Fraud Lawsuit ---------------------------------------------------------------------- The United States Third Circuit Court of Appeals upheld the United States District Court for the Eastern District of Pennsylvania's dismissal of the securities class action pending against NAHC, Inc. on behalf of all persons who purchased the common stock of the Company during the period between April 5, 1999 through and including November 22, 1999. The suit, which names the Company, certain of its directors and officers and PriceWaterhouseCoopers LLP as defendants, alleged violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 by making false and misleading statements and omissions regarding the prospects of the Company's business and the Company's liquidation value and by failing timely to disclose the impact of the Balanced Budget Act of 1997 on the long term care services business. The plaintiffs alleged that these statements and omissions artificially inflated the value of the Company's stock during the class period. The plaintiffs also asserted a violation of Section 14(a) of the Exchange Act and Rule 14a-9 against the Company and individual defendants as well as against Wasserstein Perella & Co. in connection with the Company's proxy statements dated August 13, 1999, as amended through September 10, 1999. The Plaintiffs allege that the defendants were negligent in disseminating the proxy statements, which allegedly contained materially false and misleading statements. In October 2001, the court dismissed the suit against the Company and PricewaterhouseCoopers LLP with prejudice. On October 3, 2002, the appeals court affirmed the dismissal. PHOENIX HOME: Plaintiffs To Appeal Dismissal of Suit V. Reorganization ---------------------------------------------------------------------- Plaintiffs in the class action pending against Phoenix Home Life Mutual Insurance Co. intend to appeal the Supreme Court of the State of New York for New York County's dismissal of the suit. The suit seeks to challenge the Company's reorganization and the adequacy of the information provided to policyholders regarding the plan of reorganization. The plaintiff seeks to maintain a class action on behalf of a putative class consisting of the eligible policyholders of the Company as of December 18, 2000, the date the plan of reorganization was adopted. The plaintiff also seeks compensatory damages for losses allegedly sustained by the class as a result of the demutualization, punitive damages and other relief. The defendants named in the lawsuit include the Company, its directors, as well as Morgan Stanley & Co. Incorporated, financial advisor to Phoenix Life in connection with the plan of reorganization. A motion to dismiss the claims asserted in this lawsuit has been granted. The Company believes that the suit lacks merit. New Securities Fraud Cases AES CORPORATION: Schatz & Nobel Lodges Securities Fraud Suit in E.D. VA ----------------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all persons who purchased or otherwise acquired the common stock of AES Corporation. (NYSE: AES) from April 26, 2001 through February 14, 2002, inclusive. The suit alleges that AES, a global energy and utility company, and certain of its officers and directors issued materially misleading statements concerning AES's business condition. Specifically, defendants failed to disclose that the United Kingdom had adopted a new framework for the pricing of energy that undermined AES's ability to achieve profitability in its United Kingdom activities, and that the Company lacked adequate long-term contracts to avoid a rapid decline in its United Kingdom operations. Defendants also touted AES's United Kingdom operations as profitable while the adoption of NETA (New Energy Arrangements) in the United Kingdom caused AES's Fifoots utility operations to operate at a loss. For the first quarter of 2001, Fifoots had an after tax loss of $11 million. On February 14, 2002, the Company announced that it had ceased operations at its Fifoots Point Power station in the United Kingdom because of sliding wholesale electric prices. On this news, the stock price plummeted over 25% from $9.50 on February 14, 2002 to $7.00 on February 15, 2002. For more details, contact Nancy A. Kulesa by Phone: 1-800-797-5499 by E-mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net AMERICAN ELECTRIC: Schatz & Nobel Commences Securities Suit in Ohio ------------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action in the United States District Court for the Southern District of Ohio on behalf of all persons who purchased or otherwise acquired the common stock of American Electric Power Company, Inc. (NYSE: AEP) from May 17, 1999 through October 9, 2002, inclusive. Also included are those who acquired shares through the acquisition of Central & Southwest Corp. The suit alleges that AEP, a public utility holding company that directly or indirectly owns domestic electric utility subsidiaries, and certain of its officers and directors and three underwriters violated the federal securities law by issuing materially false and misleading statements. Specifically, the Complaint alleges that AEP's trading operations were in disarray and its management controls left the Company at risk of contingent legal liabilities arising our of the actions of its electric power traders. AEP, after first denying that it had engaged in activities referred to as "wash" or "round-trip" trading later admitted to engaging in such trades. On August 30, 2002 AEP revealed that the Securities and Exchange Commission had initiated an informal inquiry into its trading practices and on October 9, 2002 the Company disclosed that it had fired five employees for reporting inaccurate price information. On this news, AEP's shares tumbled to $15.10 per share. During the class period the shares traded as high as $48.90. For more details, contact Nancy A. Kulesa by Phone: 1-800-797-5499 by E-mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net ANSWERTHINK INC.: Bernstein Liebhard Lodges Securities Suit in S.D. FL ---------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for Southern District of Florida, on behalf of all persons who purchased or acquired Answerthink, Inc. (NYSE: ANSR) securities (the "Class") between October 17, 2000 through April 25, 2002. During the class period, defendants issues a series of false and misleading statements announcing "record" financial results. In violation of Generally Accepted Accounting Principles (GAAP), defendants failed to disclose that the "record" results included revenues recognized from transactions with related parties who were near-bankruptcy and lacked the financial means to finalize the sales. On February 7, 2002, when defendants were no longer able to include these illusory revenues in their financial results, the Company reported a huge drop in revenues. Answerthink investors who purchased or acquired securities 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 Ms. Linda Flood, Director of Shareholder Relations by Phone: 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or (212) 779-1414 by E-mail: ANSR@bernlieb.com or visit the firm's Website: http://www.bernlieb.com CAPRIUS INC.: Lowenstein Sandler Commences Securities Fraud Suit in NJ ---------------------------------------------------------------------- Lowenstein Sandler, PC initiated a securities class action on behalf of purchasers of the securities of Caprius, Inc. (OTC BB: CAPR.OB) between February 14, 2000 and June 25, 2002, inclusive in the United States District Court for New Jersey. The suit alleges, among other things, violations of the federal securities laws, including Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, against the Company and its top two officers, defendants George Aaron and Jonathon Joels. According to the suit, the individual defendants first devised a fraudulent plan and scheme by which they sought to obtain control of Caprius. In May 1999, the individuals defendants proposed a merger transaction to Caprius' Board of Directors and executive officers. On June 28, 1999, Caprius consummated a merger through which the individual defendants acquired 45.6% ownership of Caprius -- equivalent to 6,178,978 million shares of Caprius' common stock. The suit alleges that once they gained control of Caprius, the Individual Defendants breached their fiduciary duties to Caprius and its shareholders by disseminating false and misleading statements concerning Caprius' business, operations, and financial results for fiscal 1999, 2000, 2001, and portions of fiscal 2002. The Complaint alleges that the Individual Defendants: (1) made misrepresentations to the Board and its officers in connection with Caprius' June 1999 merger with Opus Diagnostics, Inc. (Opus); (2) misrepresented to the Board and its officers that the I individual defendants were in a financial position to and would in fact consummate -- pre-merger the asset purchase called for in the merger agreement, would invest $1 million of their personal capital into the merged entity (3) exploited Caprius' resources by using Caprius' personnel, office space, and assets to run their private business, the Portman Group; (4) diverted Caprius' assets to their personal use by using Caprius' funds to consummate -- post-merger -- the asset purchase; causing Caprius to enter into a series of transactions designed to dilute public ownership in Caprius securities; (5) gouged Caprius' resources by spending substantial time pursuing unrelated, personal business interests while receiving a salary from Caprius; (6) deceived Caprius' Board and its officers into consummating the merger, resulting in business losses and consequential damages; and (7) breached their fiduciary duty to Caprius and its shareholders by subordinating the rights and interests of Caprius' shareholders to their own; depleting the assets of Caprius, increasing Caprius' debt, thereby diluting the value of Caprius securities; causing Caprius to borrow money to cover debt that the Individual Defendants unnecessarily created; and borrowing money on preferential terms to the lenders. Because of the Individual Defendants' fraudulent practices, Caprius' stock traded at artificially inflated prices during the class period. Further, due to these practices, Caprius' stock price steadily declined to its current price of $0.09 per share, since reaching a high price of $1.12 per share in February 2000. As alleged in the suit, the intentional or reckless misconduct of the Individual Defendants has severely damaged Caprius and its shareholders. For more details, contact R. Scott Thompson by Mail: 65 Livingston Avenue Roseland, New Jersey 07068 by Phone: (973) 597-2500 by Fax: (973) 597-2400 by E-mail: sthompson@lowenstein.com or visit the firm's Website: http://www.lowenstein.com CIGNA CORPORATION: Bernstein Liebhard Lodges Securities Suit in E.D. PA ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for Eastern District of Pennsylvania, on behalf of all persons who purchased or acquired CIGNA Corp. (NYSE:CI) common stock between May 2, 2001 and October 24, 2002, inclusive. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between May 2, 2001 to October 24, 2002. The complaint alleges that defendants issued press releases announcing CIGNA's quarterly and annual results of operations and filed reports with the SEC, which reported its financial performance, seemingly impressive earnings growth and represented that operating income in 2002 was expected to be $1.1 billion. The suit further alleges that the Company's representations issued during the class period were materially false and misleading when made because they failed to disclose that CIGNA had failed to adequately reserve (by at least hundreds of millions of dollars) for its obligations under the GMDB reinsurance that it had provided, thereby artificially inflating its earnings, net worth and its income. In addition, during the class period, CIGNA issued purported risk disclosures that were materially false and misleading in and of themselves as they failed to disclose the existence and magnitude of Company's risk exposure in providing the GMDB reinsurance, and instead, represented that its reinsurance obligations generally were not expected to have a materially negative impact on CIGNA's liquidity. 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: CI@bernlieb.com or visit the firm's Website: http://www.bernlieb.com COLE NATIONAL: Schiffrin & Barroway Commences Securities Suit in Ohio --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the District of Ohio, Eastern Division on behalf of all purchasers of the common stock of Cole National Corporation (NYSE: CNJ) between March 23, 1999, through and including November 26, 2002, inclusive. The suit charges that during the class period, the Company and certain of its officers and directors issued and/or failed to correct false and misleading financial statements and press releases concerning the Company's publicly reported revenues and earnings directed to the investing public. Specifically: (1) that the Company's revenues from optical warranties and net income for 1998, 1999, 2000, 2001 and for the two quarters of 2002 have been seriously overstated; (2) because of these problems, the value of the Company's balance sheet and income statement were materially overstated at all relevant times; and (3) despite Cole National's representations to the contrary, the Company's Class Period financial statements did not comply with GAAP, causing Cole National to investigate and consider restating its financial statements. On November 26, 2002, the Company shocked the market and revealed that: (i) the Company would conduct a re-audit of the financial statements for fiscal years 1998, 1999, 2000, 2001 and 2002 previously audited by Arthur Andersen LLP; (ii) re-audits would likely result in the restatement of the Company's financial statements; (iii) the Company was advised to recognize the revenues earned on the sale of the optical warranties at the time of sale; and (iv) as a result of these adjustments, material changes are likely in the timing of the recognition of the revenue and operating profits associated with these sales, in current and prior balance sheets relating to deferred revenue and shareholder's equity. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Website: http://www.sbclasslaw.com COLE NATIONAL: Cauley Geller Commences Securities Fraud Suit in N.D. OH ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Northern District of Ohio, Eastern Division on behalf of purchasers of Cole National Corporation (NYSE: CNJ) publicly traded securities during the period between March 23, 1999 and November 26, 2002, inclusive. The suit charges that during the class period, the Company and certain of its officers and directors issued and/or failed to correct false and misleading financial statements and press releases concerning the Company's publicly reported revenues and earnings directed to the investing public. Specifically: (1) that the Company's revenues from optical warranties and net income for 1998, 1999, 2000, 2001 and for the two quarters of 2002 have been seriously overstated; (2) because of these problems, the value of the Company's balance sheet and income statement were materially overstated at all relevant times; and (3) despite Cole National's representations to the contrary, the Company's Class Period financial statements did not comply with GAAP, causing Cole National to investigate and consider restating its financial statements. On November 26, 2002, the Company shocked the market and revealed that: (i) the Company would conduct a re-audit of the financial statements for fiscal years 1998, 1999, 2000, 2001 and 2002 previously audited by Arthur Andersen LLP; (ii) re-audits would likely result in the restatement of the Company's financial statements; (iii) the Company was advised to recognize the revenues earned on the sale of the optical warranties at the time of sale; and (iv) as a result of these adjustments, material changes are likely in the timing of the recognition of the revenue and operating profits associated with these sales, in current and prior balance sheets relating to deferred revenue and shareholders' equity. Further, the Company reported that the filing of its Form 10-Q for the third quarter of 2002 will be delayed and most likely the required restatements will be available at the time of the filing of its Form 10-K for its fiscal year ending February 1, 2003. The Company also stated that the investors should not rely on its previous financial statements. In response to the news that Cole National's previously-reported financial results may not in fact be what they seemed (an accurate financial summary of the Company's operations), the Company's shares fell $1.25 or approximately 10% per share to close at $11.09 on November 26, 2002. 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 CREDIT SUISSE: Lockridge Grindal Files Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Lockridge Grindal Nauen PLLP initiated a securities class action against Credit Suisse First Boston Corporation (CSFB), in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased the common stock of AOL Time Warner, Inc, formerly America Online, Inc. (NYSE:AOL) between January 16, 2001 and September 3, 2002, inclusive. The complaint alleges that defendant CSFB violated the federal securities laws by issuing analyst reports regarding AOL that recommended the purchase of AOL common stock and which set price targets for AOL common stock, without any reasonable factual basis. The complaint further alleges, among other things, that when issuing its AOL analyst reports, defendant CSFB failed to disclose material, non-public, adverse information which it possessed about AOL. Throughout the class period, CSFB maintained positive recommendation on AOL in order to obtain and support lucrative financial deals for CSFB. The class period begins on January 16, 2001 at which time CSFB maintained a "BUY" rating for AOL common stock, and ends on September 3, 2002, the date CSFB belatedly downgraded AOL to a "RESTRICTIVE" rating. As a result of CSFB's false and misleading analyst reports, AOL common stock traded at artificially inflated levels during the class period. For more details, contact Karen M. Hanson by Mail: 100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 by Phone: (612) 339-6900 or by E-mail: kmhanson@locklaw.com FOOTSTAR INC.: Charles Piven Commences Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- 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 Footstar, Inc. (NYSE:FTS) between February 8, 2002 and November 12, 2002, inclusive, in the United States District Court for the Southern District of New York, against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven, PA 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 H&R BLOCK: Wolf Haldenstein Commences Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased securities of H&R Block, Inc. (NYSE: HRB) between November 8, 1997 and November 1, 2002, inclusive. The suit names as defendants the Company and: (1) Mark A. Ernst, (2) Frank J. Cotroneo, (3) Frank L. Salizzoni, (4) Matthew A. Engel, (5) Cheryl L. Givens, (6) Ozzie Wenich, and (7) Patrick D. Petrie 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 during the class period thereby artificially inflating the price of Company securities. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, David L. Wales, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to H&R Block. OM GROUP: Lockridge Grindal Commences Securities Fraud Suit in N.D. OH ---------------------------------------------------------------------- Lockridge Grindal Nauen PLLP 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) common stock during the period between April 25, 2002 and October 30, 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. The Company produces and markets metal-based specialty chemicals and related materials. Certain of the Company's products are value- added and some are commodity. Specifically, the complaint alleges that 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 the Company's Chief Executive Officer had sold all his holdings to cover a margin call on some 710,000 shares on Company 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 Karen M. Hanson by Mail: 100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 by Phone: (612) 339-6900 by E-mail: kmhanson@locklaw.com RETEK INC.: Wolf Haldenstein Launches Securities Fraud Suit in MN Court ----------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the District of Minnesota, on behalf of purchasers of the securities of Retek, Inc. (Nasdaq: RETK) between October 17, 2001 and July 8, 2002, inclusive against the Company and certain of its officers and directors. The suit alleges that the representations and statements made by the defendants during the class period were materially false and misleading when made as they misrepresented and/or omitted one or more of the following adverse facts which then existed and disclosure of which was necessary to make the statements not false and/or misleading including, but not limited to: (1) Retek had more than $40 million in undisclosed deferred or delayed customer orders and contracts, which were material to the Company's results of operations and financial condition. To conceal the true status of these orders and contracts, Retek manipulated quarterly and annual financial statements and results of operations by, e.g., not itemizing quarterly bookings of software and license agreements, and spreading over several quarters revenues from large software and license agreements; (2) Retek customers were extending their procurement processes by, among other things, asking for pilot projects before signing software and license agreements, which they typically had done after signing, thereby adding "weeks or months" to a sale; (3) Retek was negotiating agreements with employees of existing and prospective customers who lacked authority to "close" the contracts, materially increasing the prospects of delayed or deferred orders and contracts; (4) that Retek was experiencing significant problems with Multi Asia Inc. (MAI), which would require the Company to reverse and restate on its balance sheet $4 million in non-cash deferred revenue associated with MAI due to, among other things, prematurely shipped product that did not work properly; and (5) that millions of dollars of the defendants' projections were attributable to transactions which defendants knew had little chance of ever being consummated. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, Scott J. Farrell or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Retek. SCHERING-PLOUGH: Goodkind Labaton Seeks Lead Plaintiff Position in Suit ----------------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP will file in the United States District Court for New Jersey a motion to be lead plaintiff in the case against Schering-Plough Corporation (NYSE: SGP) and other defendants. The suits against Schering-Plough Corporation allege it, its CEO Richard Jay Kogan and Putnam Investment Management, LLC failed to advise all Company shareholders of materially adverse information concerning the company's predicted earnings. The complaints allege that between October 1, 2002, and October 3, 2002, the Company informed Putnam Investment Management, LLC and certain analysts that the Company's 2003 and 2004 earnings would be far below expectations but failed to pass this information to other shareholders until late in the evening of October 3, 2002. While in possession of the adverse information, and before the same information was made public, Putnam Investment Management, LLC and others sold significant quantities of their Schering-Plough shares. When Schering-Plough finally informed the public of the adverse information the price of Schering-Plough shares fell significantly causing harm to the proposed class. For more details, contact Henry J. Young or Thomas A. Dubbs by Mail: 1000 Park Avenue, 12th Floor New York, NY 10017-5563 by Phone: 212-907-0700 by E-mail: hyoung@glrslaw.com or visit the firm's Website: http://www.glrslaw.com SEACHANGE INTERNATIONAL: Charles Piven Commences Securities Suit in MA ---------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of all persons (other than defendants) who purchased the common shares of SeaChange International, Inc. (Nasdaq:SEAC) in or traceable to the offering conducted by SeaChange on or about January 29, 2002. The case is pending in the United States District Court for the District of Massachusetts against the Company and certain of its officers and directors and the lead underwriters of the Offering. The action charges that defendants violated federal securities laws by issuing a false and misleading prospectus on or about January 29, 2002 which had the effect of artificially inflating the market price of the Company's securities. 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 or by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com SYNCOR INTERNATIONAL: Chitwood & Harley Launches Securities Suit in CA ---------------------------------------------------------------------- Chitwood & Harley initiated a securities class action in the United States District Court for the Central District of California, on behalf of purchasers of the securities of Syncor International Corporation. (Nasdaq:SCOR) between April 24, 2000 and November 5, 2002 against the Company and certain of its officers and directors. The suit charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of press releases and public filings trumpeting significant sales growth in the Company's international business. Unbeknownst to the investing public, however, the Company's success during the class period resulted from the making of illegal payments to Syncor's overseas customers by the Company's Chairman of the Board and the director of its Asian division. Before the market opened on November 6, 2002, the Company shocked the market by announcing that it was conducting an internal investigation into illegal payments to its overseas customers and had contacted the Justice Department and the Securities Exchange Commission, and that its previously announced acquisition by Cardinal Health, Inc. was in doubt. As a result of this news, Syncor's stock price dropped sharply in pre- market trading to $22.50 per share, down $13.42 per share from its previous closing price of $35.92, and NASDAQ halted trading of Syncor's stock pending a satisfactory response to its request for additional information from the Company. During the class period, the suit explains, the stock was trading at an artificially inflated price. As a result of this inflation, defendants were able to sell 333,500 shares of their Syncor stock for proceeds of $8.56 million. For more details, contact Jennifer Morris by Mail: 1230 Peachtree Street, Suite 23000, Atlanta Georgia 30309 by Phone: 1-888-873-3999 (toll-free) by E-mail: jlm@classlaw.com or visit the firm's Website: http://www.classlaw.com UNAPIX ENTERTAINMENT: Katzman Wasserman Launches Securities Suit in FL ---------------------------------------------------------------------- Katzman Wasserman & Bennardini, PA initiated a securities class action on behalf of purchasers of the securities of Unapix Entertainment, Inc. (AMEX:UPX) between June 9, 2000 and November 20, 2000, inclusive. The defendants in this lawsuit are Herbert M. Pearlman and David A. Dreilinger, the former Chairman of the Board of Directors, and Chief Executive Officer and Director, respectively, of the Company. The lawsuit was filed on September 9, 2002 before the United States District Court for the Southern District of Florida. The suit alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of misrepresentations to the open market during the class period concerning the valuation of one of Unapix's primary assets: its film and television library. Specifically, the defendants overstated the value of Unapix's film and television library by at least $51.1 million in order to artificially inflate the market price of Unapix. The defendants' misrepresentations artificially inflated the value of Unapix stock by a maximum of 50 cents per share during the class period; an increase of nearly 35% from one day prior to the start of the class period. At the time the defendants made these misrepresentations, Unapix had overdrawn its credit by $1,176,000, and was in dire financial straits. These misrepresentations were made in order to allow the Defendants to increase the value of their personally-held Unapix shares, keep a financially-troubled Unapix in business so that the Defendants could continue to receive their excessive level of executive compensation, and induce potential investors to provide much-needed financing. These misrepresentations almost caused a company named H5B5 Media AG, Munich to invest $4 million in Unapix. Ultimately, however, it did not do so. On November 21, 2000, the American Stock Exchange halted the trading of Unapix stock. On November 28, 2000, Unapix filed for protection under Chapter 11 of the Bankruptcy Code. For more details, contact Steven M. Katzman or Craig A. Rubinstein by Phone: 561/477-7774 by Fax: 561/477-7447 by E-mail: smk@kwblaw.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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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