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/raid1/www/Hosts/bankrupt/CAR_Public/021226.mbx C L A S S A C T I O N R E P O R T E R Thursday, December 26, 2002, Vol. 4, No. 254 Headlines ACCELR8 TECHNOLOGY: Reaches Settlements in Securities, Derivative Suits AGILE SOFTWARE: Asks NY Court To Dismiss Consolidated Securities Suit AUTODESK INC.: Court Hears Arguments on Securities Fraud Suit Dismissal CABLEVISION SYSTEMS: Employees Commence Suit Alleging WARN Violations CANADA: Metis Veterans Bring Suit Seeking Compensation For War Efforts CANADA: Court Rejects Concept of Benefits Secured Under Constitution COMVERSE TECHNOLOGY: NY Court Dismisses With Prejudice Securities Suit CRACKER BARREL: Recalls 27,000 Motion Lamps For Electrocution Hazard DVT LITIGATION: Court Clears Way For Consumer Lawsuits Against Airlines ENRON CORPORATION: Federal Judge Grants Delay In Securities Fraud Suit FINISAR CORPORATION: NY Court Dismisses Officers, Directors From Suit FLORIDA: Software Maker Sues, Alleging Taxes Inhibited Free Speech GAP INC.: Preliminary Approval Granted to Settlement of Sweatshop Suit GERBER SCIENTIFIC: CT Court Consolidates Eight Securities Fraud Suits GOTHAM PARTNERS: Asks Court To Review Injunction of First Union Merger ILLINOIS: Judge Orders Irrigation Operations In Old Cemetery Stopped JAPAN: Judge Orders Tokyo Condo Removed To Save Scenic View in Lawsuit METHODE ELECTRONICS: Faces Securities Lawsuit V. McGinley Merger in DE NIKU CORPORATION: Officers, Directors Dismissed From Securities Suits NVIDIA CORPORATION: Plaintiffs File Amended Securities Fraud Suit in CA OPTIO SOFTWARE: Attempts To Reach Settlement in NY Securities Lawsuit SEACHANGE INTERNATIONAL: Declares MA Securities Suits "Without Merit" UTAH: Advocacy Group For Disabled Files Lawsuit Over Delays In Services WAL-MART STORES: Workers Glad To Tell of Wage Concerns After Victory WEAR ME: Voluntarily Recalls 3,000 Infant Garments For Poisoning Hazard WORLD WRESTLING: Asks NY Court To Dismiss Consolidated Securities Suit ZALE CORPORATION: Agrees To Settle Two Consumer Suits in AL, TX Courts ZUTANO INC.: Voluntarily Recalls 3,000 Stuffed Toys For Choking Hazard *Attorney General Eliot Spitzer Brings The Investment Banks "To Heel" New Securities Fraud Cases ALLIANCE CAPITAL: Shalov Stone Lodges Securities Fraud Suit in S.D. NY ANNUITY AND LIFE: Bernard Gross Commences Securities Suit in CT Court CYTYC CORPORATION: Milberg Weiss Commences Securities Suit in MA Court MERRILL LYNCH: Finkelstein Thompson Lodges Securities Suit in S.D. NY SYNCOR INTERNATIONAL: Cohen Milstein Lodges Securities Suit in C.D. CA SYNCOR INTERNATIONAL: Bernstein Liebhard Launches Securities Suit in CA ********* ACCELR8 TECHNOLOGY: Reaches Settlements in Securities, Derivative Suits ----------------------------------------------------------------------- Accelr8 Technology Corporation reached settlement agreements in the consolidated securities class action and the shareholder derivative suit filed in the United States District Court for the District of Colorado. The consolidated securities class action names as defendants the Company and: (1) Thomas V. Geimer, (2) Harry J. Fleury, and (3) James Godkin Additionally, Derrick Hongerholt filed in the same court a shareholder derivative action against: (i) Thomas V. Geimer, (ii) David C. Wilhelm, (iii) A. Alexander Arnold III, (iv) Harry J. Fleury, (v) James Godkin and (vi) the Company as a nominal defendant The consolidated securities suit alleges violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, relating to the Company's accounting and public disclosure from October 1997 to November 1999. The defendants have answered the amended complaint, in which they denied liability and raised affirmative defenses. On January 23, 2001, the court granted the plaintiff's motion for class certification. The defendants also answered the Hongerholt derivative complaint, and denied all claims. In connection with this proceeding, the Company's Board of Directors appointed David G. Palmer, Esquire, as independent counsel to serve as a Special Litigation Committee to investigate the claims and circumstances relating to the derivative action filed by Derrick Hongerholt and to determine whether the derivative action should be terminated. On September 10, 2002, the Special Litigation Counsel determined, after investigation, that the derivative claims were without factual merit, and should be dismissed. On October 30, 2002, the parties agreed to a settlement of the derivative action, under which that action would be dismissed with prejudice upon an exchange of releases, with no payments made by or on behalf of any of the defendants. The settlement is subject to Court approval, and while the Company believes that approval is probable, there can be no assurance that the settlement will be approved. In the event that the settlement is not approved, and the litigation proceeds, the Company is bearing the costs of defense in accordance with indemnification agreements for all defendants, which costs may be material to the Company. No claims are asserted against the Company in the derivative action. On October 30, 2002, the parties to the consolidated amended suit also executed a memorandum of understanding setting out an agreement in principle to settle the suit against all parties. Under the contemplated settlement, the Company will contribute to a settlement fund $450,000, and 375,000 shares of common stock in the Company. The settlement fund will be distributed in a manner over which the Company has no control. This agreement in principle is subject to formal documentation and court approval. Although the Company believes that it is probable that the parties will complete formal documentation of the settlement agreement, and that the settlement will be approved, there can be no assurance that completion of the settlement, and court approval will occur. In the event that the settlement is not completed, the litigation will continue. While the Company believes it has substantial defenses to the claims, there is no assurance that the resolution of the suit will not have a material adverse effect on the Company. AGILE SOFTWARE: Asks NY Court To Dismiss Consolidated Securities Suit --------------------------------------------------------------------- Agile Software, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed against it, several of its officers and directors, and the underwriters of its initial public offering. The plaintiffs allege that the prospectus for the initial public offering of Company securities, incorporated in the Registration Statement on Form S-1 filed with the Securities and Exchange Commission, was materially false and misleading because it failed to disclose, among other things, that the underwriters had made secret arrangements for aftermarket purchases of the securities, and made arrangements for excessive and improper underwriters compensation in the form of increased brokerage commissions. The plaintiffs subsequently filed an amended complaint that additionally alleges that the prospectus for a secondary offering of Agile securities, conducted on December 13, 1999, and incorporated into a Registration Statement on Form S-1 filed with the Securities and Exchange Commission, also was materially false and misleading for the same alleged reasons. The plaintiffs also allege that the Company's stock price was artificially inflated as a result of the alleged underwriter practices. Plaintiffs attempt to state and claim violations by the Company, the individuals and the underwriters of Section 11 of the Securities Act of 1933, violations by the individual defendants and underwriters of Section 12(a)(2) of the Securities Act, and violations by the underwriters of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. The suit has been consolidated for pre-trial purposes with more than one thousand other actions, filed against more than 300 other issuers of securities, affiliated individuals, and dozens of underwriters of the securities offerings in In Re Initial Public Offering Securities Litigation, 21 MC 92 (SAS). The Company and individual defendants, together with other issuer and individual defendants, recently argued motions to dismiss the complaint, and are awaiting the judge's rulings on the motions. The Company believes that it has meritorious defenses against these actions. AUTODESK INC.: Court Hears Arguments on Securities Fraud Suit Dismissal ----------------------------------------------------------------------- The United States Ninth Circuit Court of Appeals heard oral arguments on the appeal of the dismissal of a consolidated securities class action against Autodesk, Inc. and certain of its officers and directors. The suit, filed on behalf of purchasers of the Company's common stock during the period between September 14, 1998 and May 4, 1999 and are seeking unspecified damages, alleges violations of federal securities laws. On November 14, 2000 the court granted the Company's motion to dismiss the lawsuit, allowing the plaintiffs to amend their complaint. The plaintiffs filed an amended complaint and the Company filed a motion to dismiss the amended complaint, an earlier Class Action Reporter story states. The court dismissed the suit with prejudice in November 2001. The plaintiffs' attorneys then appealed the decision to the US District Court of Appeal for the Ninth Circuit. CABLEVISION SYSTEMS: Employees Commence Suit Alleging WARN Violations ---------------------------------------------------------------------- A lawsuit was filed recently in federal court in Brooklyn, claiming that Cablevision Systems Corp. failed to give employees the required 60 days' notice when it laid off hundreds of them this year, Newsday reports. The lawsuit seeks 60 days of wages for the former employees, saying that because the job cuts represented a mass layoff of more than 500 employees it was subject to the requirements of the federal Worker Adjustment and Retraining Notification (WARN) Act. Two former employees who were laid off are named as plaintiffs in the lawsuit. The lawsuit, filed in the United States District Court for the Eastern District of New York, seeks class action status in order to represent other employees who were laid off in August and September. Leonard N. Flamm, a Manhattan attorney, is representing the former employees. The Company had said that it was laying off more than 2,400 employees as part of a major restructuring. The lawsuit says that some of the laid-off employees signed releases to waive requirements of the WARN Act, but those documents were improper because they contained false and misleading statements. CANADA: Metis Veterans Bring Suit Seeking Compensation For War Efforts ---------------------------------------------------------------------- About 3,000 Metis fought for Canada in the Second World War and the Korean War. Many of these veterans afterwards received no benefits, or substantially reduced benefits, Maclean's reports. These Metis veterans, some 600 of whom are still alive, have been caught in a bureaucratic quagmire, partly due to the fact that, as non-status Indians, they were not entitled to aboriginal veterans benefits. From time to time, however, officialdom would lump the Metis in with other status natives, but no reliable benefits program for the Metis themselves ever has been developed. William Woodward is one of the Metis, who is frustrated with Ottawa's failure to address the situation. Recently, the National Metis Veterans Association, on behalf of William Woodward and some other Metis, launched a class action against the government, seeking fair compensation for the Metis' war efforts in World War II, and in the Korean War as well. William Woodward, at age 19, left the northern Alberta bush to join the fight against the Nazis. He fought at Mount Cassino in Italy, one of the war's bloodiest battles, and he was later taken prisoner. After spending 208 days in a German POW camp, Mr. Woodward returned to an uncertain life in Canada, without government financial assistance to get an education, start a business or purchase land. Now 79, Mr. Woodward is a retired construction contractor. He lives with his wife Nancy in Anzac, 400 km northeast of Edmonton. The lawsuit seeks the recognition and compensation given other Canadian veterans. CANADA: Court Rejects Concept of Benefits Secured Under Constitution -------------------------------------------------------------------- The Supreme Court of Canada rejected a landmark attempt, made in a class action led by a young woman, Louise Gosselin, to characterize social benefits as secured by constitutional guarantees, according to a report by The Globe and Mail. The lawsuit was launched after the Quebec Legislature enacted legislation requiring the deduction of a certain amount of money from social benefits received by healthy unemployed individuals under 30 who refused to join a public program aimed at helping such individuals secure employment. Ms. Gosselin argued that the social benefit received by the unemployed individuals under 30 is a right to minimum social assistance secured under the Canadian Charter that could not be diminished because they did not join a program. Chief Justice Beverley McLachlin ruled that far from demeaning the dignity of individuals such as Ms. Gosselin, the Quebec scheme wisely uses financial inducements to steer young people toward the work force. Nevertheless, poverty activists took heart from Chief Justice McLachlin's assertion that a right to social assistance may be recognized in the future if the right case comes along. "They are saying that some day they may say 'yes' to our claim, but just not on the facts in this case," said Vincent Calderhead, a Halifax lawyer for the Charter Committee on Poverty Issues. "It is a victory for us that they have not slammed the door." Constitutional expert Mahmud Jamal agreed, calling the ruling "monumental." Mr. Jamal added, "Is there a constitutional right to welfare or Medicare? The majority has not foreclosed this possibility, and that alone is a significant Charter milestone." Mr. Calderhead said that poverty activists across the country are formulating challenges that will meet the criteria inferred by the court. "We see this as a green light to keep bringing cases forward." The ruling bared a sharp philosophical split on the court. Four judges found the Quebec scheme to have violated equality guarantees. Two of those four judges also said the Quebec scheme breached Charter Section "7" guarantees to life, liberty and security. However, the majority urged caution in forcing governments to enhance their social welfare schemes. They went so far as to praise Quebec for creating an enlightened welfare regime. "The regime constituted an affirmation of young people's potential rather than a denial of their dignity," Chief Justice McLachlin said. He added, "The longer a young person stays on welfare, the more difficult it becomes to integrate into the work force at a later time." Judge Louise Arbour, a member of the minority in this case, warned that confining guarantees of life, liberty and security to extreme fringes of the criminal law, such as capital punishment, will choke off the Charter's promises. COMVERSE TECHNOLOGY: NY Court Dismisses With Prejudice Securities Suit ---------------------------------------------------------------------- The United States District Court for the Eastern District of New York dismissed with prejudice the consolidated securities class action pending against Comverse Technology, Inc., and certain of its executive officers. The suit generally alleges violations of federal securities laws on behalf of individuals who allege that they purchased the Company's common stock during a purported class period between April 30, 2001 and July 10, 2001. The suit sought an unspecified amount in damages. On April 22, 2002, the Company filed a motion to dismiss the amended consolidated complaint in its entirety. On September 30, 2002, the court granted the motion. On November 8, 2002, the Court entered a final judgment dismissing the amended consolidated complaint with prejudice. On November 26, 2002, plaintiffs agreed to waive their right to appeal the judgment in exchange for the Company's agreement that each side bear its own costs and legal fees. Plaintiffs' time to appeal has expired and no appeal was filed, and the case is now closed. CRACKER BARREL: Recalls 27,000 Motion Lamps For Electrocution Hazard -------------------------------------------------------------------- Cracker Barrel Old Country Store is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 27,000 motion lamps. Approximately 6,400 of those lamps were sold to consumers. Wires near the light's socket can become exposed, posing a risk of electric shock or electrocution to consumers. There have been no reports of incidents or injuries. This recall is being conducted to prevent the possibility of injury. The recall involves the Pumpkin and Snowman model motion lamps. The ceramic lamps have liquid-filled globes that become warm and the heat moves the glitter inside. The Pumpkin lamp has orange liquid in its globe, straw hair and a burlap hat. The Snowman wears a black top hat and a red and black scarf. The Snowman's globe is filled with a clear liquid. On the bottom of each lamp is a sticker that reads, "Made in China." Cracker Barrel Old Country Stores(r) sold the motion lamps nationwide from August 2002 through October 2002 for about $20. For more details, contact the Company by Phone: (888) 645-6516 between 9 am and 9 pm ET Monday through Friday or visit the firm's Website: http://www.crackerbarrel.com. DVT LITIGATION: Court Clears Way For Consumer Lawsuits Against Airlines ----------------------------------------------------------------------- In a landmark ruling, an Australian court recently cleared the way for passengers who developed potentially fatal blood clots during long-haul flights to sue airlines, Associated Press Newswires reports. The state of Victoria's Supreme Court rejected a claim by Qantas Airways and British Airways that a clot suffered by a Sydney man onboard its flights should not be classed as an accident. Under international aviation law, airlines are liable for damages only in the case of an accident. Justice Bernard Bongiorno's ruling means the case likely will go to trial late next year. The test case is the first of 497 potential lawsuits lodged with Australian firm Slater & Gordon regarding deep-vein thrombosis, or DVT. "It is a very good decision in relation to the futures of this litigation," Slater & Gordon lawyer Paul Henderson said outside the court. "All the plaintiffs in this action, some 500, are now in a position to have their case determined on its merits. Deep-vein thrombosis is a condition in which a blood clot forms in the deep veins of the legs. It can be fatal when part of the clot breaks off and blocks a blood vessel in the lungs. The condition, which also has been tagged "economy class syndrome," has been linked to long-haul flights and other environments in which people sit still for long periods. The test case in Victoria's Supreme Court concerns a 59-year-old man who was hospitalized and no longer works after developing a blood clot while on a three-day return business trip from Sydney to London, his lawyers said. The ruling came ahead of a decision expected within days in a similar case in Britain into airlines' responsibility for DVT. If the British court rules in their favor, the claimants plan to take action against up to 30 airlines, including British Airways, Delta Airlines and American Airlines. ENRON CORPORATION: Federal Judge Grants Delay In Securities Fraud Suit ---------------------------------------------------------------------- US District Judge Melinda Harmon, who is overseeing the shareholder class action against Enron Corporation, its bankers, lawyers and accountants, recently granted a request to give plaintiffs more time to file additional claims, Reuters English News Service reports. In court papers recently made public, Judge Harmon, in Houston, said she would revise the trial schedule after she finished answering motions to dismiss. She also gave an inkling that her much-awaited decisions to such motions could come soon. "The court is working vigorously on the motions to dismiss," Judge Harmon wrote. Defendants in federal class actions are given an opportunity to argue why they should be removed from the suit by the judge. The University Board of Regents, the lead plaintiff in the shareholders' lawsuit, has asked for more time because it believes it will need to investigate other possible parties who are likely to be added to the lawsuit. "The lead plaintiff has been unable to determine the identities of certain parties which it believes are culpable, and likely will not be able to identify those parties until after discovery," the board wrote in its motion requesting the delay. The trial originally had been set to begin on December 1, 2003. FINISAR CORPORATION: NY Court Dismisses Officers, Directors From Suit --------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed Finisar Corporation's officers and directors from the consolidated securities class action pending on behalf of all persons who purchased the Company's common stock from November 17, 1999 through December 6, 2000. The suit initially named as defendants the Company and: (1) Jerry S. Rawls, President and Chief Executive Officer, (2) Frank H. Levinson, Chairman of the Board and Chief Technical Officer, (3) Stephen K. Workman, Vice President Finance and Chief Financial Officer, and (4) an investment banking firm that served as an underwriter for the Company's initial public offering in November 1999 and a secondary offering in April 2000. The suit 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, on the grounds that the prospectuses incorporated in the registration statements for the offerings failed to disclose, among other things, that: (i) the underwriter had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriter allocated to those investors material portions of the shares of Company stock sold in the offerings and (ii) the underwriter had entered into agreements with customers whereby the underwriter agreed to allocate shares of Company stock sold in the offerings to those customers in exchange for which the customers agreed to purchase additional shares of Company stock in the aftermarket at pre-determined prices. The Company is aware that similar allegations have been made in lawsuits relating to more than 300 other initial public offerings conducted in 1999 and 2000. Those cases have been consolidated for pretrial purposes. The issuer defendants, including the Company, filed a motion to dismiss the complaints. A hearing date on the motion has not been set. The Company believes that the allegations against it and its officers and directors are without merit. However, the litigation is in the preliminary stage, and it cannot predict its outcome. The litigation process is inherently uncertain. FLORIDA: Software Maker Sues, Alleging Taxes Inhibited Free Speech ------------------------------------------------------------------ Citrix Systems, a Fort Lauderdale software maker, has sued the Florida's Department of Revenue, claiming that the company should receive a refund of about $5 million in state corporate income taxes it has paid over the past five years, The Miami Herald reports. Citrix also contends that its customers should receive refunds on sales taxes they paid when buying Citrix's products and services, a claim that could far exceed what Citrix is seeking for itself. "This case is not about Citrix," said Allen Libow, a Boca Raton tax lawyer who represents Citrix. Mr. Libow filed the lawsuit recently in Broward Circuit Court. "It's about the customers having to pay sales tax on their ability to communicate and receive news without the chilling effect of sales taxes." Mr. Libow is seeking Citrix customer, and even newspaper and magazine publishers who disseminate information and pay taxes, to join the suit. He is also trying to get the lawsuit certified as a class action. There are some who call Citrix's claim novel; others see it as a bit flaky. "It is a stretch to suggest that taxing a software maker is an infringement on free speech," said David Bruns, a Department of Revenue spokesman. GAP INC.: Preliminary Approval Granted to Settlement of Sweatshop Suit ---------------------------------------------------------------------- The United States District Court for the District of Mariana Islands granted preliminary approval to a settlement proposed by Gap, Inc. and other clothes retailers of a class action filed by workers of the defendants' factories in Saipan. The suit alleges, among other things, that the Company and other defendants violated the Racketeer Influenced and Corrupt Organizations Act in connection with the labor practices and treatment of workers of factories in Saipan that make product for the defendants. The plaintiffs seek injunctive relief as well as actual and punitive damages. The suit was originally filed in the United States District Court, State of Hawaii but in July 2000 was ordered transferred to the United States District Court, District of the Mariana Islands. On March 23, 2001, the Ninth Circuit Court of Appeals denied plaintiffs' writ of mandamus requesting that the action either be transferred back to the District Court in Hawaii or to the Central District of California. On October 29, 2001, the District Court of the Mariana Islands issued an order granting in part and denying in part the motion to dismiss. On December 17, 2001, plaintiffs filed a second amended complaint. On May 10, 2002, the court granted in part and denied in part the defendants' motion to dismiss the second amended suit, giving plaintiffs leave to amend some of the dismissed claims. Also on May 10, 2002, the court granted plaintiffs' motions for class certification and for preliminary settlement approval. The Company continues to defend itself in the suit and believes the claims against it are without merit. GERBER SCIENTIFIC: CT Court Consolidates Eight Securities Fraud Suits --------------------------------------------------------------------- The United States District Court for the District of Connecticut ordered consolidated the eight securities class actions pending against Gerber Scientific, Inc. and several of its current and former officers and directors. The suits were filed on behalf of a proposed class of purchasers of the securities of the Company between May 27, 1999 and April 12, 2002 seeking to pursue remedies under the Securities Exchange Act of 1934. The first lawsuit was filed shortly after the Company announced, on April 15, 2002, that it expected to take a $12.0 million pre-tax charge in its fiscal fourth quarter, the period ending April 30, 2002, and that the Company was conducting an internal review of its financial reporting for the period January 1, 1998 through April 30, 2002 in response to an investigation by the Securities and Exchange Commission into its inventory and reserve accounting practices. In this announcement, the Company stated that once its investigation had been completed, the Company would likely restate its financial results for the appropriate periods. By order dated July 12, 2002, the court ordered the suits consolidated, appointed the Louisiana Municipal Employees' Retirement System as lead plaintiff, and appointed the law firm of Bernstein Litowitz Berger & Grossman as lead counsel. The lead plaintiff was ordered to file a consolidated amended suit on or before December 13, 2002 and, thereafter, the Company expects to be responding to the consolidated suit. Presently, the litigation is in its very early stages and the Company intends to defend vigorously the suits. Given the current status of the litigation, the Company cannot predict the outcome of the lawsuits nor reasonably estimate a range of loss. GOTHAM PARTNERS: Asks Court To Review Injunction of First Union Merger ---------------------------------------------------------------------- First Union asked the Appellate Division of the Supreme Court of New York to review a trial court's decision continuing the injunction preventing consummation of its merger with Gotham Partners, LP. On April 15, 2002, Gotham Partners, First Union and its five trustees were served with a complaint filed in the Supreme Court of New York for New York County on behalf of a purported holder of First Union's convertible preferred shares. Among the allegations made by the plaintiff is that the proposed transaction with Gotham Golf Corp. was approved by the First Union's Board of Trustees in violation of fiduciary duties owed to the holders of First Union's convertible preferred shares. The suit seeks, among other things, unspecified damages, an injunction of the proposed transaction and the court's certification of the lawsuit as a class action. On November 22, 2002, the Supreme Court of New York for New York County issued a preliminary injunction enjoining the merger transaction. A further hearing was held and, on December 6, 2002, the court issued an order continuing the injunction pending a full trial on the merits of the claim brought by the plaintiffs. ILLINOIS: Judge Orders Irrigation Operations In Old Cemetery Stopped -------------------------------------------------------------------- In a potentially far-reaching class action, a judge in Marshall County, Illinois, has ordered two farmers to stop operating irrigation equipment in an old country cemetery south of Henry, the Peoria Journal Star reports. Lead plaintiff Thomas Bogner of Henry and 15 other people originally sued the two farmers, and the judge certified the case as a class action because of the potentially large number of people who could be affected. The pivot irrigator operated by Kenneth and Gerald Villiger violates the "physical integrity and sanctity" of the 150-year-old burial site, commonly known as the Old Catholic Cemetery, Circuit Judge Scott Shore ruled in a recently filed order. "This is a landmark case. (Judge Shore) has brought the wisdom of the U.S. Supreme Court down to Marshall County," plaintiffs' attorney W. Durley Boyle of Hennepin said. Granting the plaintiffs' request for a permanent injunction against continual operation of the irrigator, Judge Shore ruled that the Villigers "have caused and continue to cause the tandem wheels of their irrigation equipment to tread over the gravesites, headstones and adjunct cemetery grounds." In a sometimes strongly worded finding, based on evidence presented at the recent trial, Judge Shore found that "the equities weigh heavily against" the Villigers, because they had purchased the 170 acres of cropland surrounding the cemetery with "full knowledge of the existence of the cemetery grounds." Citing trial evidence about changes that have taken place at the cemetery when the irrigator was installed, Judge Shore found that the Villigers "have disposed of fencing, moved and disposed of headstones, and cut or removed trees on cemetery grounds, all for their own convenience and economic benefit, without reverence or consideration for the sacred and sentimental character of the cemetery or the rights or sensitivities of those whose ancestors' remains are there interred." Nile Williamson, one of two Peoria attorneys representing the Villigers, said that an appeal might ensue against the injunction, because the two brothers maintain that the surrounding land could not be farmed profitably without the irrigator passing through the cemetery. "We would certainly contest (the ruling) from the standpoint that we have done all we could to protect the sanctity of the cemetery," Mr. Williamson said. The approximately half-acre cemetery is owned by the Catholic Diocese of Peoria, which had granted the Villigers an easement to operate the irrigator. However, Judge Shore's order reaffirmed another judge's earlier ruling that the relatives of the approximately 112 people buried there have separate legal rights with respect to the protection of gravesites and monuments. Although there apparently are no prior Illinois cases directly addressing the controversy, Mr. Boyle, plaintiffs' attorney, maintained that the US Supreme Court has affirmed an obligation to "protect the repose of the dead and religious sensibilities of the living." JAPAN: Judge Orders Tokyo Condo Removed To Save Scenic View in Lawsuit ---------------------------------------------------------------------- In a landmark ruling, a Tokyo court ordered the upper half of a 14- story suburban condominium to be removed because it destroys the scenery of a tree-lined avenue, Agence France-Press reports. Disgruntled citizens filed the suit, demanding the removal of the protruding part of the tower. "When a landscape unique to an area has been formed, benefits from its scenery are entitled to legal protection," presiding Judge Akira Miyaoka said. "Landowners have been sacrificing their rights to use of land in order to preserve the scenery for more than 70 years . The condominium sticks out from the line of trees and infringes on its scenery." There have been cases in Japan in which rights to fine sceneries have been recognized, but this case is the first time that the removal of a building, or part of a building, has been ordered to protect added value from good views. The building under fire is one of four towers in a plush condominium project. The street in question has been lined with cherry and ginko trees, strictly pruned at a height of 20 meters, since they were planted 75 years ago when a state university of commerce moved into the area. After the construction project was announced in 1999, the city of Kunitachi imposed an ordinance in early 2000, banning new buildings from standing at the same height or above the trees along the road, called University Avenue. However, the ground already had been prepared for the project. The Tokyo District Court also demanded the condominium's developer, Meiwa Estate Co., to pay monthly damages of 10,000 yen ($80) to each of three residents who live next to the 44-meter (147-foot) tower until its removal. The doomed half of the building houses 58 apartments, but only one of them has been occupied. The Company was also ordered to pay nine million yen in legal costs to some 50 residents, the plaintiffs in the suit. The developer of the condominium, calling the verdict "unexpected," said it was considering an appeal to a higher court. METHODE ELECTRONICS: Faces Securities Lawsuit V. McGinley Merger in DE ---------------------------------------------------------------------- Methode Electronics, Inc. and certain of its directors faces a class action filed on behalf of all holders of the Company's Class A common stock and derivatively on behalf of the Company in the Court of Chancery of the State of Delaware. The plaintiff alleges in the suit that the directors of the Company breached their fiduciary duties of disclosure, care and loyalty by approving an agreement between the Company and the Estate of William B. McGinley and members of the McGinley family pursuant to which the Company agreed, among other things, to make a tender offer for the repurchase of all of the Company's Class B common stock at a price of $20 per share. Plaintiff further alleges in the suit that the Company's board: (1) approved the tender offer for the repurchase of the Company's Class B common stock, (2) caused the Company to enter into certain employment agreements with the Company's chairman of the board and certain of its officers and (3) failed to disclose and misrepresented certain information in connection with the Company's 2002 Proxy Statement, as part of a scheme to entrench the incumbent board and management. Additionally, the plaintiff alleges in the suit that the directors of the Company, by approving the repurchase of the Class B common stock, diverted a corporate opportunity away from the Company and the Class A stockholders. Plaintiff seeks, among other things, to enjoin the repurchase of the Class B common stock, as well as other equitable relief. NIKU CORPORATION: Officers, Directors Dismissed From Securities Suits --------------------------------------------------------------------- Niku Corporation's officers and directors were dismissed as defendants in the consolidated securities class action pending against them, the Company and various underwriters of its initial public offering (IPO) in the United States District Court for the Southern District of New York, arising out of the Company's initial public offering in February 2000. The suit alleges, among other things, that the registration statement and prospectus filed with the Securities and Exchange Commission for purposes of the IPO were false and misleading because they failed to disclose that the underwriters allegedly: (1) solicited and received commissions from certain investors in exchange for allocating to them shares of Company stock in connection with the IPO; and (2) entered into agreements with their customers to allocate such stock to those customers in exchange for the customers agreeing to purchase additional Company shares in the aftermarket at pre-determined prices. On August 8, 2001, the court ordered that these actions, along with hundreds of IPO allocation cases against other issuers, be transferred to Judge Shira Scheindlin for coordinated pre-trial proceedings. In October 2001, Judge Scheindlin adjourned all defendants' time to respond to the complaints until further order of the court. In July 2002, omnibus motions to dismiss the complaints based on common legal issues were filed on behalf of all issuers (and underwriters). The court has not issued a decision on any of those motions. By Order dated October 8, 2002, Judge Scheindlin dismissed the Company's officers and directors without prejudice. This case remains at a preliminary stage and no discovery proceedings have taken place. The Company believes that the claims asserted against it in these cases are without merit. NVIDIA CORPORATION: Plaintiffs File Amended Securities Fraud Suit in CA ----------------------------------------------------------------------- Plaintiffs in the securities class actions pending against NVIDIA Corporation filed a consolidated amended securities class action in the United States District Court for the Northern District of California. The suit also names as defendants certain of the Company's officers, alleging violations of the federal securities laws arising out of the Company's announcement on February 14, 2002 of an internal investigation of certain accounting matters. Three related shareholder derivative actions against the Company, certain of its executive officers, directors and its independent auditors, KPMG LLP, in California Superior Court and in Delaware Chancery Court, collectively the actions. The two related derivative actions filed in California Superior Court have been consolidated. These suits allege claims in connection with various alleged statements and omissions to the public and to the securities markets and seek damages together with interest and reimbursement of costs and expenses of the litigation. The derivative actions also seek disgorgement of alleged profits from insider trading by officers and directors. The actions are in the preliminary stages. The federal class actions have been consolidated and lead plaintiffs appointed. The Company is unable to predict the ultimate outcome of the suits. There can be no assurance the Company will be successful in defending the suits and if the Company is unsuccessful the Company may be subject to significant damages. Even if the Company is successful, defending the suits is likely to be expensive and may divert management's attention from other business concerns and harm the Company's business. OPTIO SOFTWARE: Attempts To Reach Settlement in NY Securities Lawsuit --------------------------------------------------------------------- Optio Software, Inc. is engaged in settlement negotiations with plaintiffs in the securities class action pending in the United States District Court for the Southern District of New York against the Company, its officers and directors and the underwriters in the Company's initial public offering as well as certain officers and directors. The suit, filed on behalf of purchasers of the Company's common stock between December 14, 1999 and December 6, 2000, includes allegations of violations of: (1) Section 11 of the Securities Act of 1933 by all named defendants, (2) Section 12(a)(2) of the Securities Act of 1933 by the underwriter defendants, (3) Section 15 of the Securities Act of 1933 by the individual defendants, and (4) Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the underwriter defendants. The complaint seeks unspecified amounts as compensatory damages as a result of the Company's alleged actions, as well as punitive damages and reimbursement for the plaintiff's attorney's fees and associated costs and expenses of the lawsuit. SEACHANGE INTERNATIONAL: Declares MA Securities Suits "Without Merit" --------------------------------------------------------------------- Seachange International Inc. faces several securities class actions filed in the United States District Court for the District of Massachusetts on behalf of all purchasers of the Company's common stock in or traceable to the offering conducted by the Company on or about January 29, 2002. The suit also names as defendants: (1) Morgan Stanley & Co. Incorporated, (2) Thomas Weisel Partners LLC, (3) RBC Dain Rauscher, Inc., (4) William C. Styslinger, III, (5) William L. Fiedler, (6) Martin R. Hoffmann, (7) Thomas F. Olson and (8) Carmine Vona The suits allege that the registration statement and prospectus issued by the Company in connection with its stock offering completed on January 31, 2002 contained statements that were materially inaccurate. The plaintiffs are seeking damages in an unspecified amount, together with interest thereon, recissory damages, reimbursement of costs and expenses, and further relief that the court may determine to be appropriate. The Company labeled the allegations in the suits "without merit." UTAH: Advocacy Group For Disabled Files Lawsuit Over Delays In Services ----------------------------------------------------------------------- Utah's largest advocacy group for the disabled recently filed a class action charging that the state has failed to provide required services to several hundred disabled persons, the Deseret News reports. The Disability Law Center, on behalf of the Arc of Utah and nine individuals, claims in a class action, filed in US District Court, that the state for 12 years has been delaying on fulfilling its obligation to the disabled whose conditions are severe, but not so severe as to require institutionalization. Even though the state agrees that the services are required, and the federal government through Medicaid has mandated that they be offered, Utah agencies have put off providing them to everyone who is eligible, and has placed those it is not helping on a waiting list, which now numbers 1,316. Legislators say the state does not have enough money to offer services to everyone who needs them. Therefore, say the legislators, the best the state can do is keep track of the disabled and try to trim the list a little each year. Fraser Nelson, executive director of the Disability Law Center, charges that even when the state had funding to cover everyone, at times during the past 12 years, the legislators showed no interest in doing so. "That is why we ultimately decided it won't happen unless the court makes them." Despite some additional funding over the years, the list continues to grow. In 1990, there were about 600, and now there are more than twice that, said Robert Denton, senior attorney at the law center. "You really won't find a (legislative) commitment to solve something unless it's a highway," Mr. Denton said. The class action does not ask for a specific amount of money, only that the state adopt a reasonable time frame for providing services to all who qualify and getting rid of the list. Not only has the waiting list been a sore spot in state government since it was started 12 years ago, but an audit completed a year ago by the Legislative Auditor General found that the state has been doing a poor job of tracking who should be on it. Services, such as respite for in-home care providers and job support, for people on the list, would cost approximately $4.3 million, according to the state's disability division, Division of Services for People With Disabilities. The list last received additional funding in the 2001 budget, and received no increases for 2002 or 2003. The list in effect increases risk of unnecessary institutionalization and violates the Americans with Disabilities Act, not to mention the Supreme Court's Olmstead ruling that declares unnecessary institutionalization is a form of discrimination against people with disabilities, said Robert Denton, senior law center attorney. Most of the people on the waiting list are eligible under Medicaid, the joint state and federal insurance program, to obtain services with "reasonable promptness." For most Medicaid services, that means within 90 days. Most of the people on the list have been waiting more than two years. A few have been waiting as long as 10 years. WAL-MART STORES: Workers Glad To Tell of Wage Concerns After Victory -------------------------------------------------------------------- Wal-Mart workers won a court victory and they are glad, but they are just as glad for the chance to tell the world what they feared would not be believed; that "Sam's store" was making people work for free. "The people at Wal-Mart wanted to be heard; they wanted to know that somebody was listening," said James Piotrowski, one of the attorneys who represented 425 former and current Wal-Mart workers in Oregon who sued the retail giant. Theirs was a story of store managers who forced employees to work unpaid overtime or risk demotion, or even firing, their lawsuits contended. A federal jury in Oregon became the first in the nation to deliver a verdict, in more than three-dozen class actions against the Company, when it ruled unanimously that the suing employees were forced to work "off the clock" in violation of state and federal wage laws. "They told us over and over again that managers in the stores would not listen to their complaints about working for free, about altering their time cards, about paychecks that came out short," Mr. Pietrowski said. The jury did not rule on the monetary damages, which will be decided by a different jury in a separate trial. US District Judge Garr M. King thanked the eight jurors saying "it was a long trial and you worked hard and very diligently." Each juror was polled after the verdict, and each responded with an emphatic "yes" about the decision that the Company had "willfully" violated the law from 1994 through 1999, the entire period covered by the lawsuit. Wal-Mart spokesman William Wertz said the company was disappointed with the verdict, stating that "Wal-Mart has a strong policy of paying its associates for all the time they work." Shane Youtz, another attorney for the workers, and Mr. Piotrowski said four weeks of testimony and four days of jury deliberations showed otherwise. The company still faces 39 other class-action lawsuits in 30 states, from California to New York, seeking tens of millions of dollars in back overtime pay. Wal-Mart, a $218 billion company, employs one million workers in 3,250 stores in the United States. Mr. Pietrowski said that unpaid overtime is a problem across the entire retail industry, but "in our collective experience, which is about 25 years, we have never seen a problem as egregious as at Wal-Mart." WEAR ME: Voluntarily Recalls 3,000 Infant Garments For Poisoning Hazard ----------------------------------------------------------------------- Wear Me Apparel Corporation is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 3,000 infant girls' garments. The paint on the "smiley face" zipper-pull attached to the sweat jacket of these garments contains lead. Young children could ingest lead from the zipper-pull, presenting a lead poisoning hazard. The Company and CPSC have not received any reports of injuries involving these garments. This recall is being conducted to prevent the possibility of injury. The recalled garments were sold under the "Joe Boxer" brand name in sizes 12-months through 18-months and size 24-months. The garments were sold as sets that include a light tan sweat jacket with the word "Smile" embroidered on the front and a painted "smiley face" yellow zipper-pull and red sweat pants. Only style numbers 40801002 and 40801003 are included in the recall and can be found on the reverse side of the care label. Writing on the collar label includes "MADE IN/HECHO EN CHINA." Kmart stores nationwide exclusively sold these garments from August 2002 through October 2002 for between $10 and $13. For more details, contact the Company by Phone: (866) 469-6257 anytime. WORLD WRESTLING: Asks NY Court To Dismiss Consolidated Securities Suit ---------------------------------------------------------------------- World Wrestling Entertainment, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed, asserting claims for alleged violations of the federal securities laws. Also named as defendants in this suit were: (1) Bear, Stearns & Co., Inc., (2) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, (3) Credit Suisse First Boston Corporation, (4) WIT Capital Corporation, (5) Donaldson, Lufkin & Jenrette Securities Corporation, (6) Chase H&Q (Hambrecht & Quist LLC), (7) Vincent K. McMahon, (8) Linda E. McMahon and (9) August J. Liguori The suit alleges, inter alia: (i) claims under Section 11 of the Securities Act against all defendants, (ii) claims under Section 12(2) of the Securities Act against the Underwriter Defendants, (iii) claims under Section 15 of the Securities Act against the Company and the individual defendants, (iv) claims under Section 10(b) of the Exchange Act and Rule 10(b)(5) against all defendants, and (v) claims under Section 20(a) of the Exchange Act against the individual defendants According to the allegations of the suit, the underwriter defendants allegedly engaged in manipulative practices by pre-selling allotments of shares of the Company's stock in return for undisclosed, excessive commissions from the purchasers and/or entering into after-market tie- in arrangements which allegedly artificially inflated the Company's stock price. The plaintiff further alleges that the Company knew or should have known of such unlawful practices. The Company denied all allegations against it and believes that it has meritorious defenses on plaintiffs' claims. The Company also understands that nearly 1,000 suits with similar claims and/or allegations have been filed over the past couple of years against companies which have gone public in that general time period. All of these claims have been consolidated before the same judge in the United States District Court for the Southern District of New York. The Company is a part of a motion to dismiss filed on behalf of all issuers on July 15, 2002. The Company cannot at this time predict the likely outcome of this litigation. ZALE CORPORATION: Agrees To Settle Two Consumer Suits in AL, TX Courts ---------------------------------------------------------------------- Zale Corporation reached a settlement for two class actions filed against it in the Circuit Court for Colbert County, State of Alabama and in the United States District Court for the Eastern District of Texas, Texarkana Division. The state suit names as defendants the Company and: (1) Jewelers National Bank, (2) Zale Indemnity Company, (3) Zale Life Insurance Company, (4) Jewelers Financial Services, (5) Jewel Re-Insurance, Ltd. and (6) certain employees of the Company The federal suit names as defendants the Company and: (i) Jewelers National Bank, (ii) Zale Indemnity Company, (iii) Zale Life Insurance Company, (iv) Jewel Re-Insurance, Ltd. and (v) certain employees of the Company Both suits concern allegations that the defendants marketed credit insurance to customers in violation of state statutory and common laws and bring claims based on, inter alia, fraud, breach of contract and consumer protection laws. The federal complaint alleges that the Company's credit insurance practices violated federal anti-racketeering laws. In both complaints, the plaintiff seeks, among other things, compensatory and punitive damages, as well as injunctive relief. Both actions are in the discovery stage, and neither has been certified as a class action. The Company has reached an agreement with counsel for the plaintiffs to settle these actions. The settlement is subject to the approval of the respective courts. ZUTANO INC.: Voluntarily Recalls 3,000 Stuffed Toys For Choking Hazard ---------------------------------------------------------------------- Zutano, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 3,000 "Hip Hoppy" stuffed bunny toys with buttons. The buttons on the front of the bunnies' jacket can detach, posing a choking hazard to young children. The Company has not received any reports of injuries relating to these stuffed bunny toys. This recall is being conducted to prevent the possibility of injuries. The recall includes bunny toys that measure about 10-inches tall and have jackets that button up the front. Some of the jackets, pants and hats on the bunnies have a multi-colored striped or a patterned print. "Zutano" is printed on a tag attached to the bunny. "Hip Hoppy" is printed on a hang tag attached to the bunny. Only bunny toys with buttons are included in the recall. The bunnies were made in China. Department and specialty stores nationwide sold the recalled bunny toys from July 2000 through December 2002 for about $18. For more details, contact the Company by Phone: (800) 287-5139 between 10 am and 5 pm ET Monday through Friday. *Attorney General Eliot Spitzer Brings The Investment Banks "To Heel" --------------------------------------------------------------------- The name Eliot Spitzer barely registered on Wall Street's radar a year ago. These days, the mere mention of it is sufficient to strike fear and anger in the hearts of investment bankers and research analysts, the Financial Times reports. In just a matter of months, Mr. Spitzer, the New York State attorney general, has charged from relative obscurity to national prominence on the back of a crusading investigation that has tarnished the banks' reputations and led to the most sweeping Wall Street reforms since the Depression. Mr. Spitzer achieved this by wielding an obscure state securities law, the Martin Act, that gave him wide discretion to pursue banks. Along, the way he also proved to be a diligent reader of other people's e-mails. Arguably, however, his greatest weapon has been a talent for legal stagecraft. Mr. Spitzer, a former Mafia prosecutor, could appear aggressive to the point of being reckless when it suited him in negotiations, and then assume a reasonable posture. The effect was to push his adversaries to the brink in order to pull them back into settlement. To his detractors, namely, the many bankers, Mr. Spitzer is an opportunist who has destroyed confidence in the markets to propel himself to the New York Governor's mansion. However, Mr. Spitzer would not have had his chance if it had not been for the banks' misconduct and the inability of federal regulators such as Harvey Pitt, former chairman of the Securities and Exchange Commission (SEC), to mount an effective response. In hindsight, the political ramifications of the stock market collapse should have been obvious. Ordinary investors who put their shirts on Wall Street's casino in the 1990s lost billions of dollars when the bubble burst. Just how much the stock analysts were to blame is a matter of debate. However, it was well known on Wall Street that these bull market celebrities often dressed up their research to help investment banking colleagues capture more business. Mr. Spitzer accused Merrill Lynch of just this conflict of interest in April, after months of intense investigation. To support his claim, the attorney general published a pile of internal e-mails in which the banks' internet analysts, including Henry Blodget, derided the very companies they publicly were touting to investors. "This was a shocking betrayal of trust," said Mr. Spitzer. At first, Merrill resisted. It said that the e-mails had been taken out of context, and that Mr. Spitzer had over-stepped his jurisdiction. However, the power of the e-mails was devastating. In a matter of days, the largest US broker's share price plunged, knocking billions from its market value. Mr. Spitzer threatened to release more e-mails, but there was no need. Within two months, Merrill caved in, agreeing to a $100 million settlement, a public apology from its chairman and reforms designed to increase the separation between the research analysts and the investment bankers. While the rest of Wall Street groused about Mr. Spitzer, their actions betrayed a new found respect. Salomon Smith Barney, the investment banking arm of Citigroup, Credit Suisse First Boston and others quickly adopted the new reforms to head off the attorney general's widening investigation. The federal regulators were less accommodating. Despite numerous meetings in Washington, Mr. Pitt resisted Mr. Spitzer and his investigation. The SEC would not join forces with Mr. Spitzer until months later, when Mr. Pitt's own fate was in doubt. Michael Oxley, chairman of the House Financial Services committee, blasted Mr. Spitzer, warning that he was heading down a dangerous path that would impose "balkanized" state regulations on a national industry. However, Mr. Spitzer persevered. Rebuffed by the fess, he enlisted other state authorities, assigning each to review a different bank. Massachusetts took charge of the CSFB investigation, while Utah was assigned to Goldman Sachs. Mr. Spitzer turned his attention to Salomon Smith Barney and its star telecommunications analyst, Jack Grubman. In so doing, the attorney general also learned that banks were dangling lucrative initial public offerings before executives who had the power to steer their companies' underwriting assignments their way. It is known as "spinning." In October, the attorney general filed suit against senior telecoms executives, including WorldCom founder Bernie Ebbers, demanding that they return $28 million in "ill-gotten" profits reaped from Salomon IPOs. Although the lawsuit targeted the executives, it was packed with unsavory details about Salomon. In one e-mail, Mr. Grubman, a star analyst with Salomon, complained that the broker was supporting companies it knew were "pigs." As with Merrill, the evidence was not only a public relations disaster, but also a treasure trail of evidence for class-action lawyers representing angry investors. In one of the more surreal episodes of the saga, Mr. Spitzer, an avid jogger, bumped into Mr. Grubman early one morning in Central Park at the height of the investigation. Miraculously, the combative attorney general and the pugnacious analyst, who was once an amateur boxer, had a cordial chat before going their own ways. It was a rare display of restraint. For, even as a deal came into sight, Mr. Spitzer kept up the prosecutorial pressure. He continued his investigation all the way to Sandford Weill, Citigroup's chairman and chief executive, raising questions as to whether the head of the world's largest financial services company might be swallowed by the crusade. Critics have charged that Mr. Spitzer was unfairly trying his case in the press. Of particular concern were e-mails embarrassing to Mr. Weill that found their way into the newspapers. The attorney general also has been criticized for being excessively hostile. At a recent dinner to honor the year's best stock analyst, Mr. Spitzer was invited as the guest speaker. Far from extending an olive branch to the industry, the attorney general confronted the assembled analysts with data about their pitiful stock-picking record. In the end, however, Mr. Spizer has displayed enough diplomacy to broker an agreement between a slew of investment banks and an unwieldy coalition of federal and state regulators. The final verdict on the attorney general's crusade will rest on the success of the new reforms in protecting investors from the conflicts of interest inherent in Wall Street. However, no one can deny Mr. Spitzer has succeeded in giving ordinary investors a revealing glimpse into the ways of Wall Street. New Securities Fraud Cases ALLIANCE CAPITAL: Shalov Stone Lodges Securities Fraud Suit in S.D. NY ---------------------------------------------------------------------- Shalov Stone & Bonner LLP initiated a securities class action on behalf of a class of all persons who suffered damages as a result of their acquisition of shares of the Alliance Premier Growth Fund during the period from October 31, 2000 to February 14, 2002. The complaint names as defendants: (1) Alliance Capital Management, L.P., (2) Alliance Premier Growth Fund, Inc., (3) John D. Carifa, (4) Alfred Harrison, (5) Mark D. Gersten, (6) Ruth Block, (7) David H. Dievler, (8) John H. Dobkin, (9) William H. Foulk, Jr., (10) James M. Hester, (11) Clifford L. Michel and (12) Donald J. Robinson The suit, filed in the United States District Court for the Southern District of New York, alleges that defendants violated the federal securities laws by disseminating materially false and misleading Registration Statements and Prospectuses pursuant to which shares of the Fund were issued to the public. While the Fund stated that its investments were based on extensive research and in-depth understanding of the business fundamentals of investee companies, the complaint alleges, among other things, that the Fund's investments in Enron Corp. were not based on these criteria. Ultimately, the Fund lost over $700 million in its investments in Enron. For more details, contact Susie Cowen by Mail: 485 7th Avenue, Suite 1000, New York, NY 10018 by Phone: (212) 239-4340 by E-mail: scowen@lawssb.com ANNUITY AND LIFE: Bernard Gross Commences Securities Suit in CT Court --------------------------------------------------------------------- The Law Offices of Bernard M. Gross initiated a securities class action in the United States District Court for the District of Connecticut, on behalf of all persons and entities who purchased or otherwise acquired the securities of Annuity and Life Re (Holdings), Ltd. (NYSE:ANR) between February 12, 2001 and November 19, 2002, inclusive. The action is pending in the United States District Court, District of Connecticut against the Company and: (1) Frederick S. Hammer, Chairman of the Board of Directors, (2) Lawrence S. Doyle, Chief Executive Officer and President and (3) John F. Burke, Chief Financial Officer, Senior Vice President and Corporate Secretary 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 material misrepresentations to the market between February 12, 2001 and November 19, 2002, thereby artificially inflating the price of Annuity and Life 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, Annuity and Life 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 the 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 Deborah R. Gross or Susan R. Gross by Phone: 866-561-3600 (toll-free) or 215-561-3600 by E-mail: susang@bernardmgross.com or debbie@bernardmgross.com or visit the firm's Website: http://www.bernardmgross.com CYTYC CORPORATION: Milberg Weiss Commences Securities Suit in MA Court ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Cytyc Corporation (NASDAQ: CYTC) between July 25, 2001 to June 25, 2002 inclusive, in the United States District Court for the District of Massachusetts, against the Company, Patrick J. Sullivan (CEO throughout the Class Period, President until January 30, 2002, Chairman since November 7, 2001) and Robert L. Bowen (CFO). 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 July 25, 2001 to June 25, 2002. Among other things, the complaint alleges that throughout the class period the Company issued press releases representing that: (1) it was enjoying record revenue and earnings growth, increasing the market share of its primary product (ThinPrep); (2) its revenues would grow by 25% in 2002 over 2001, to $275-$300 million; and (3) the Company was not negatively impacted, and would not be negatively impacted, by the general economic slowdown that was well underway at the time. These statements were materially false and misleading, according to the complaint, because they failed to disclose that the Company's seemingly-impressive revenue and earnings growth was attributable, in material part, to overstocking of inventory at the laboratories which purchased ThinPrep in large volumes in reaction to deep discounts offered by Cytyc (which recognizes revenue upon shipment). The complaint further alleges that defendants were motivated to commit the alleged securities laws violations in order to pump up the Company's results so that it could use its inflated stock as currency for key corporate acquisitions. On December 3, 2001, Cytyc acquired Pro-Duct Health, Inc. for $167 million in Cytyc common stock and cash and, on February 2, 2002, announced that it has entered a definitive merger agreement to acquire Digene Corporation using Cytyc common stock and cash. At the time of the announcement, the Digene acquisition was valued at $554 million. On April 24, 2002, after the close of trading, Cytyc revealed, in a conference call, that its revenues and earnings for 2002 would be materially less than the market had been led to believe. Instead of revenues between $295-$305 million, the Company stated 2002 sales would be as low as $270 million, and reduced earnings expectations from $0.66 per share to $0.55-$0.55 per share. According to the Company, the cut was due to inventory reduction by its customers (laboratories), which had overstocked ThinPrep in the first quarter of 2002 and would meet end-user demand from inventory instead of new orders. In response to the announcement, which was contrary to repeated assurances by the Company, the price of Cytyc common stock plummeted by 36.5%, falling from a $24.80 per share close on April 24 to close at $15.73 on April 25, on extremely heavy trading volume. The truth regarding the Company's business, however was still undisclosed, according to the complaint. On June 25, 2002, Cytyc shocked the market by again lowering its expected revenues for 2002 to $230- $245 million and earnings per share to $0.40- $0.44. In a conference call held later that day, Cytyc announced that it was considering switching its revenue recognition model from its current recognition-on-shipment to a system more reflective of end-user demand. In response, Cytyc's stock price plummeted again, this time by 39%, falling from a $11.46 per share close on June 24, to close at $6.88 per share on June 25, on extremely heavy trading volume. For more details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: cytyccase@milbergNY.com or visit the firm's Website: http://www.milberg.com MERRILL LYNCH: Finkelstein Thompson Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Finkelstein, Thompson & Loughran, initiated a securities class action on behalf of purchasers of Homestore.com common stock (Nasdaq: HOMS) between the period of September 8, 1999 and September 21, 2001, against Merrill Lynch & Co., Inc. (NYSE: MER) and Henry Blodget, its former head of the internet research group, in the United States District Court for the Southern District of New York. The suit alleges that the general disclosures in the Homestore.com Research Reports were materially false and misleading because it failed to disclose conflicts of interest, which include, but are not limited to, the following: (1) analysts' compensation was tied to the success of Merrill Lynch's investment banking business with the covered company; (2) Merrill Lynch pre-sold favorable research ratings to companies that it took public; (3) Merrill Lynch's research reports failed to disclose actual cause for concern when it had that information available; (4) price targets were based upon a manipulative price; and (5) Merrill Lynch research reports failed to disclose that its research division was not independent from the investment banking division. For more details, contact Andrew J. Morganti or Conor R. Crowley by Phone: 1-202-337-8000 by E-mail: ajm@ftllaw.com or crc@ftllaw.com or visit the firm's Website: http://www.ftllaw.com SYNCOR INTERNATIONAL: Cohen Milstein Lodges Securities Suit in C.D. CA ---------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class action on behalf of purchasers of the securities of Syncor International, Inc. (Nasdaq:SCOR) between March 30, 2000 and November 5, 2002 inclusive, in the United States District Court for the Central District of California against the Company and certain of its officers and directors. The Company claims to be a leading provider of high technology health care services. The complaint alleges that throughout the Class Period, the Company's Chairman of the Board and the director of its Asian division were making illegal payments to Syncor's overseas customers. Before the market opened on November 6, 2002, the Company announced 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 plummeted. NASDAQ halted trading of Syncor's stock pending a satisfactory response to its request for additional information from the Company. For more details, contact Steven J. Toll or Mary Ann Fink by Phone: 888/240-0775 or 202/408-4600 by E-mail: stoll@cmht.com or mfink@cmht.com or visit the firm's Website: http://www.cmht.com SYNCOR INTERNATIONAL: Bernstein Liebhard Launches Securities Suit in CA ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action in the United States District Court for the Central District of California, Western Division, on behalf of all persons who purchased or acquired Syncor International Corp. (Nasdaq: SCOR) common stock between April 25, 2000 and November 5, 2002, inclusive. The suit charges 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 press releases and public filings trumpeting significant sales growth in the Company's international business. These press releases and public filings were materially false and misleading in that they failed to disclose that throughout the class period, the Company's Chairman of the Board and the director of its Asian division were making illegal payments to Syncor's overseas customers. 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. 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: SCOR@bernlieb.com or visit the firm's Website: http://www.bernlieb.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. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *