/raid1/www/Hosts/bankrupt/CAR_Public/030220.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, February 20, 2003, Vol. 5, No. 36
Headlines
AMERICREDIT CORPORATION: Shareholders Lodge Securities Suits in N.D. TX
ATMOS ENERGY: Court Hears Certification Motions in Gas Companies' Suit
ATMOS ENERGY: TX Court Denies Summary Judgment For Natural Gas Lawsuit
CABOT CORPORATION: Faces Antitrust Suit Over Carbon Black Pricing in MA
CERTEGY CHECK: Agrees To Settle Suit Over Service Fee on Unpaid Checks
GENESIS MICROCHIP: Says It Has Meritorious Defenses To Securities Suit
HENLEY LIMITED: Plaintiffs File Amended Consolidated Suit in DE Court
HENLEY LIMITED: Shareholders Sue Over Boston Celtics Partnership Sale
HOMEAMERICAN CREDIT: Court Dismisses Suit Over Document Preparation Fee
LINCOLN ELECTRIC: LA Residents Launch Suit Alleging Manganese Exposure
MAGELLAN HEALTH: Two Suits For RICO, ERISA Violations Moved To MD Court
NETWORK ENGINE: Asks DE Court To Dismiss Securities, Derivative Lawsuit
NUI CORPORATION: Plaintiffs To File Consolidated Securities Suit in NJ
OAK TECHNOLOGY: Appeals Court Upholds Dismissal of CA Securities Suit
QUALITY SYSTEMS: Fairness Hearing For Settlement Set April 2003 in CA
SYNCOR INTERNATIONAL: Labels "Without Merit" Securities Lawsuits in CA
SYNCOR INTERNATIONAL: Shareholders Commences Suits in DE Chancery Court
SYNCOR INTERNATIONAL: Faces Investor Derivative Suits in CA State Court
TYCO INTERNATIONAL: Plaintiffs File Consolidated Securities Suit in NH
TYCO INTERNATIONAL: JPML Transfers Securities Fraud Lawsuit To NH Court
VIRAGE INC.: Asks NY Court to Dismiss Consolidated Securities Lawsuit
New Securities Fraud Cases
ATMEL CORPORATION: Stull Stull Lodges Securities Fraud Suit in N.D. CA
CAPITAL REALTY: Abraham & Associates Lodges Securities Suit in S.D. NY
COSI INC.: Schiffrin & Barroway Lodges Securities Fraud Suit in S.D. NY
MCSI INC.: Stull Stull Commences Securities Fraud Lawsuit in S.D. OH
MICHAELS STORES: Schiffrin & Barroway Lodges Securities Suit in N.D. TX
PARAMETRIC TECHNOLOGY: Schiffrin & Barroway Files Securities Suit in MA
PATRIOT AMERICAN: Milberg Weiss Commences Securities Suit in N.D. CA
RURAL CELLULAR: Bernstein Liebhard Launches Securities Fraud Suit in MN
UNUM PROVIDENT: Alfred Yates Commences Securities Lawsuit in E.D. TN
VOICEFLASH NETWORKS: Weiss & Yourman Files Securities Suit in S.D. FL
*********
AMERICREDIT CORPORATION: Shareholders Lodge Securities Suits in N.D. TX
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Americredit Corporation faces several securities class actions filed in
the United States District Court for the Northern District of Texas, on
behalf of investors who acquired Company shares between April 14, 1999
and January 15, 2003.
The suit charges the Company and certain of its individual directors
and officers with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder. These
lawsuits, which seek class action status, all contend that deferments
were improperly granted by the Company to avoid delinquency triggers in
securitization transactions and enhance cash flow, thereby causing the
Company to misrepresent its financial performance throughout the
alleged class period.
The Company believes that its granting of deferments, which is a common
practice within the auto finance industry, complied at all times with
the covenants contained in its securitization and warehouse financing
documents, and that its deferment activities were properly disclosed to
all constituents, including shareholders, asset-backed investors,
creditors and credit enhancement providers.
In the opinion of management, these lawsuits are without merit and the
Company intends to vigorously defend against them. The Company
believes that it has taken prudent steps to address the litigation
risks associated with its business activities. In the opinion of
management, the resolution of the litigation pending or threatened
against the Company will not have a material affect on the Company's
financial condition, results of operations or cash flows.
ATMOS ENERGY: Court Hears Certification Motions in Gas Companies' Suit
----------------------------------------------------------------------
The District Court of Stevens County, Kansas heard the motions for
class certification of a lawsuit filed against Atmos Energy
Corporation, its Colorado-Kansas division and more than 200 natural gas
companies.
Quinque Operating Company, Tom Boles and Robert Ditto filed the suit
purportedly on behalf of a class consisting of gas producers, royalty
owners, overriding royalty owners, working interest owners and state
taxing authorities. The suit accuses the defendants of underpaying
royalties on gas taken from wells situated on non-federal and non-
Indian lands throughout the United States and offshore waters,
predicated upon allegations that the defendants' gas measurements are
simply inaccurate and that the defendants failed to comply with
applicable regulations and industry standards over the last 25 years.
Although the plaintiffs do not specifically allege an amount of
damages, they contend that this suit is brought to recover billions of
dollars in revenues that the defendants have allegedly unlawfully
diverted from the plaintiffs to themselves.
On April 10, 2000, this case was consolidated for pre-trial proceedings
with other similar pending litigation in federal court in Wyoming in
which the Company is also a defendant along with over 200 other
defendants in the case of In Re Natural Gas Royalties Quitam
Litigation. In January 2001, the federal court elected to remand this
case back to the Kansas state court. A reconsideration of remand was
filed, but it was denied.
The state court now has jurisdiction over this proceeding and has
issued a preliminary case management order. On January 13, 2003, the
court held a hearing on the plaintiffs' motion to certify this
proceeding as a class action. The court took the motion under
advisement and the Company is awaiting a ruling.
The Company believes that the plaintiffs' claims are lacking in merit.
While the results of this litigation cannot be predicted with
certainty, the Company believes the final outcome of such litigation
will not have a material adverse effect on the Company's financial
condition, results of operations or net cash flows.
ATMOS ENERGY: TX Court Denies Summary Judgment For Natural Gas Lawsuit
----------------------------------------------------------------------
The 287th District Court of Parmer County, Texas denied Atmos Energy
Corporation's motion for summary judgment in the class action filed
against it, arising out of an alleged breach of contract by the Company
and by a number of its divisions and subsidiaries concerning the sale
of natural gas used in irrigation activities since 1998 and an alleged
violation of the Texas Agricultural Gas Users Act of 1985.
The court has ruled proper venue to be in Parmer County, Texas. The
Company has been responding to numerous discovery requests from the
plaintiffs. The Company also filed suit in Travis County, Texas to
have the Texas Agricultural Gas Users Act of 1985 declared
unconstitutional.
The Company appealed the court's denial of summary judgment. The
plaintiffs ask for class action status and to recover unspecified
damages plus attorney's fees. The Company has denied any liability.
While the results of this litigation cannot be predicted with
certainty, the Company believes the final outcome of such litigation
will not have a material adverse effect on its financial condition,
results of operations or net cash flows.
CABOT CORPORATION: Faces Antitrust Suit Over Carbon Black Pricing in MA
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Cabot Corporation, along with other chemical firms, face a class action
filed in the United States District Court for the District of
Massachusetts on behalf of all individuals or entities who purchased
carbon black in the United States directly from the defendants from
approximately 1999 until the present. The suit also names as
defendants:
(1) Phelps Dodge Corporation,
(2) Columbian Chemicals Co.,
(3) Degussa Engineered Carbons, LP,
(4) Degussa AG, and
(5) Degussa Corporation
The action, which was brought under the United States antitrust laws,
alleges that the defendants conspired to fix, raise, maintain or
stabilize prices for carbon black sold in the United States during the
class period. The plaintiffs seek treble damages and legal costs.
The class of plaintiffs in this action has not been certified. The
Company believes it has strong defenses to this action.
CERTEGY CHECK: Agrees To Settle Suit Over Service Fee on Unpaid Checks
----------------------------------------------------------------------
Certegy Check Services, Inc. entered a memorandum of understanding with
plaintiffs in the class action filed against it (formerly Equifax Check
Services, Inc.) in the United States District Court for the Eastern
District of California.
This lawsuit was based on a claim that, during the period August 1992
through December 31, 1996, the Company improperly assessed a service
charge on unpaid checks, which allegedly violated provisions of the
Federal Fair Debt Collection Practices Act and California's Unfair
Business Practices Act. The action sought, among other remedies, a
refund of all service charges collected from California consumers
during this period, prejudgment interest, statutory damages under the
Fair Debt Collection Practices Act, and attorneys' fees.
These amounts in the aggregate could have exceeded $18 million if the
plaintiffs had prevailed in the case. In November 2002, the Company
entered into a memorandum of understanding with the plaintiffs
providing for a settlement whereby the Company will pay $3.975 million,
net of amounts covered under a Letter of Agreement with the Company's
insurance carriers, to the plaintiffs in exchange for a full and final
release of all claims asserted. The parties are currently proceeding
to obtain final approval of the settlement by the court.
GENESIS MICROCHIP: Says It Has Meritorious Defenses To Securities Suit
----------------------------------------------------------------------
Genesis Microchip, Inc. faces a securities class action filed in the
United States District Court for the Northern District of California,
on behalf of purchasers of the Company's common stock between April
29,2002 and June 14,2002. The suit also names as defendants former
Chief Executive Officer Amnon Fisher, and Chief Financial Officer Eric
Erdman.
The complaint alleges violations of Section 10(b) of the Securities and
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against the
Company and the individual defendants, and violations of Section 20(a)
of the Exchange Act against the individual defendants.
The Company believes that it has meritorious defenses to these
lawsuits. The future financial impact of this claim is not yet
determinable and no provision has been made in our consolidated
financial statements for any future costs associated with this claim.
HENLEY LIMITED: Plaintiffs File Amended Consolidated Suit in DE Court
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Henley Limited Partnership II faces a consolidated securities class
action filed by its unitholders in the Court of Chancery of the State
of Delaware in and for New Castle County. The suit also names as
defendant:
(1) Henley II, Inc. (formerly Celtics, Inc.),
(2) Paul E. Gaston,
(3) Don F. Gaston,
(4) Paula B. Gaston,
(5) John H.M. Leithead and
(6) John B. Marsh III
The suit alleges, among other things, that the reorganization of the
Partnership was unfair to former Henley II unitholders, and seeks to
recover an unspecified amount of damages, including attorneys' and
experts' fees and expenses.
The Company asked the court to dismiss the suit, but in August 1999,
the court issued an opinion granting in part, and denying in part, the
motion to dismiss. The plaintiffs then filed an amended consolidated
suit.
Although the ultimate outcome of the suit cannot be determined at this
time, management of the Partnership does not believe that the outcome
of these proceedings will have a material adverse effect on the
Partnership's financial position or results of operations.
HENLEY LIMITED: Shareholders Sue Over Boston Celtics Partnership Sale
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Henley Limited Partnership II faces a class action filed by by its
unitholders in the Court of Chancery of the State of Delaware in
and for New Castle County. The suit also names as defendants:
(1) BCLP GP, Inc.,
(2) Paul E. Gaston,
(3) Richard G. Pond,
(4) Don F. Gaston,
(5) Paula B. Gaston,
(6) John B. Marsh III,
(7) Tedmund W. Pryor and
(8) David A. Splaine
The defendants are directors or officers of BCLP GP, Inc. The named
plaintiff, who purported to bring its individual action on behalf of
itself and others similarly situated, is Breakwater Partners, LP.
The suit alleges, among other things, that the sale of assets and
liabilities of the Boston Celtics is structured in a manner that is
unfair to Henley Unitholders, and seeks to recover an unspecified
amount of damages, including attorneys' and experts' fees and expenses,
and to obtain appropriate injunctive or rescissionary relief.
Although the ultimate outcome of the suit cannot be determined at this
time, management of the Partnership does not believe that the outcome
of these proceedings will have a material adverse effect on the
Partnership's financial position or results of operations.
HOMEAMERICAN CREDIT: Court Dismisses Suit Over Document Preparation Fee
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The United States District Court for the Northern District of Illinois
dismissed the class action filed against HomeAmerican Credit, Inc.,
doing business as Upland Mortgage.
The suit, filed on behalf of borrowers in Illinois, Indiana, Michigan
and Wisconsin who paid a document preparation fee on loans originated
since February 4, 1997, alleges that the charging of, and the failure
to properly disclose the nature of, a document preparation fee were
improper under applicable state law. The plaintiff seeks restitution,
compensatory and punitive damages and attorney's fees and costs, in
unspecified amounts.
The plaintiffs have appealed the court's decision to the United States
Court of Appeals for the Seventh Circuit and the Court of Appeals has
directed both parties to submit briefs on the issue of jurisdiction.
The Company believes that its imposition of this fee is permissible
under applicable law and is vigorously defending the case. Due to the
Company's current expectation regarding the ultimate resolution of
these actions, management believes that the liabilities resulting from
these actions will not have a material adverse effect on the Company's
consolidated financial position or results of operations.
K-TEL INTERNATIONAL: Plaintiffs Fail To Pass Writ of Certiorari in Suit
-----------------------------------------------------------------------
Plaintiffs in the consolidated class action against K-tel
International, Inc. and certain of its current and former officers and
directors failed to file a writ of certiorari relating to the United
States Eighth Circuit Court of Appeal's refusal to hear its appeal of
the suit's dismissal.
The suit, initially filed as twenty-three class actions in various
federal courts in November 1998, was filed in the United States
District Court for the District of Minnesota. The suit challenges the
accuracy of certain public disclosures made by the Company regarding
its financial condition during the period from May 1998 through
November 1998. The plaintiffs asserted claims under the federal
securities laws and seek damages in an unspecified amount as well as
costs, including attorneys' fees and any other relief the court deems
just and proper.
The Company moved to dismiss the complaint, and on July 31, 2000, the
court granted the motion. The court also barred further actions by the
plaintiffs and denied plaintiffs' request to amend the complaint in
order to refile the complaint in the future.
The plaintiffs appealed to the United States Court of Appeals for the
Eighth Circuit, and the appeals court heard the matter in October 2001.
On August 7, 2002 the Court of Appeals, in a two to one decision,
denied the plaintiffs' appeal. On August 20, 2002 the plaintiffs
applied for a rehearing by the full Court of Appeals. On October 2,
2002, the court denied the petition for rehearing.
The plaintiffs had until January 1, 2003 to seek a writ of certiorari
(a petition asking the Court for a discretionary review of a lower
court decision) from the United States Supreme Court, but did not seek
this writ. The Company has two insurance policies under which the
insurers provide the defense of the claims on behalf of the Company.
The policies provide coverage of up to $20 million, which is subject to
the insurers' reservations of legal rights under the applicable
policies.
LINCOLN ELECTRIC: LA Residents Launch Suit Alleging Manganese Exposure
----------------------------------------------------------------------
Lincoln Electric Holdings, Inc. faces a class action filed in the
United States District Court in Louisiana on behalf of a purported
class of individuals who reside and/or work (or resided and/or worked)
in one of five Southern states. The suit, initially filed in state
court, alleges the plaintiffs' exposure to manganese induced illness,
and seeks compensatory and, in most instances, punitive damages,
usually for unspecified sums.
Since January 1, 1995, the Company has been a co-defendant in similar
cases involving claims by 61 claimants that have been resolved as
follows: 43 of those claims were dismissed, 6 were tried to defense
verdicts in favor of the Company and 12 were settled.
MAGELLAN HEALTH: Two Suits For RICO, ERISA Violations Moved To MD Court
-----------------------------------------------------------------------
The two class actions pending against Magellan Health Services, Inc.
have been transferred to the United States District Court for the
District of Maryland. The suits uniformly allege claims under the
Racketeer Influenced and Corrupt Organizations Act (RICO) and the
Employment Retirement Income Security Act of 1974 (ERISA).
The class representatives purport to bring the actions on behalf of a
nationwide class of individuals whose behavioral health benefits have
been provided, underwritten and/or arranged by the defendants since
1996 (RICO class) and 1994 (ERISA class). The complaints allege
violations of RICO and ERISA arising out of the defendants' alleged
misrepresentations with respect to and failure to disclose its claims
practices, the extent of the benefits coverage and other matters that
cause the value of benefits to be less than the value represented to
the members.
These actions are similar to suits filed against a number of other
health care organizations, elements of which have already been
dismissed by various courts around the country, including the Maryland
court where the suits are now pending.
While the suits are in the initial stages and an outcome cannot be
determined, the Company believes that the claims are without merit.
NETWORK ENGINE: Asks DE Court To Dismiss Securities, Derivative Lawsuit
-----------------------------------------------------------------------
Network Engine, Inc. asked the Delaware Court of Chancery to dismiss a
class action and derivative lawsuit filed on January 7, 2003 against it
and its Board of Directors relating to its acquisition of TidalWire.
The plaintiffs in the complaint allege that the Company and its Board
of Directors breached their fiduciary duties by, among other things,
paying an excessive amount in the acquisition of TidalWire and
purportedly failing to disclose material facts in the Company's Joint
Proxy Statement/Information Statement distributed to stockholders for
approval of the issuance of shares of Network Engines in the merger.
The plaintiffs are seeking damages, rescission of the merger and other
relief.
On February 10, 2003, the Company and the individual defendants filed a
motion to dismiss the suit for failure to state a claim on which relief
could be granted, and related relief. The court has not yet set a
briefing schedule for the motion. The Company believes that
it has highly meritorious defenses and intends to vigorously defend
against the suit, but given the early stage of the proceedings, the
Company cannot predict the ultimate outcome of the litigation.
NUI CORPORATION: Plaintiffs To File Consolidated Securities Suit in NJ
----------------------------------------------------------------------
Plaintiffs in the securities class actions filed against NUI
Corporation will file an amended consolidated lawsuit in the first
quarter of the year in the United States District Court for the
District of New Jersey.
The suits allege that the Company and its president and chief executive
officer violated federal securities laws by issuing false statements
and failing to disclose information regarding the company's financial
condition and current and future financial prospects in its earnings
statements, press releases, and in statements to analysts and others.
The plaintiffs are shareholders who assert claims on behalf of a
putative class of purchasers of the Company's common stock between
November 8, 2001 and October 17, 2002, except for the two complaints,
which assert a class period of July 26, 2001 to October 17, 2002.
Specifically, the plaintiffs allege that the company failed to disclose
that it was experiencing problems with regard to:
(1) increased costs in its telecommunications business;
(2) increased costs of insuring its medical benefits;
(3) a rise in bad debt from its customers; and
(4) a decline in the value of its pension plan assets
The plaintiffs allege that these non-disclosed costs put a strain on
the company's operating margins, and on October 18, 2002, caused the
company to announce that it would sustain greatly reduced earnings for
fiscal years 2002 and 2003. Based upon these allegations, the
plaintiffs allege claims under Section 10(b), including Rule 10b-5
promulgated thereunder, and Section 20(a) of the Securities Exchange
Act of 1934 (the Exchange Act).
The parties have adjourned by stipulation the time for responsive
pleadings to be filed to until thirty days after plaintiffs file and
serve a consolidated amended complaint. No discovery has yet occurred.
By order dated February 3, 2003, a lead plaintiff, lead counsel and
liaison counsel were appointed and an amended consolidated suit is to
be filed within 60 days of entry of the order.
On December 23, 2002, a law firm made a public announcement with
respect to a lawsuit purportedly filed in the Southern District of New
York on behalf of a putative class of purchasers of the Company's
common stock between November 8, 2001 and October 17, 2002 against the
Company Corporation and John Kean, Jr., alleging violations under
Section 10(b), including Rule 10b-5 promulgated thereunder, and Section
20(a) of the Exchange Act. Specifically, the announcement alleges
that the Company knowingly or recklessly failed to properly record
fixed cost expenses, accrue necessary pension expenses and reserve
adequate amounts for its self-insured medical benefits in its quarterly
financial statements. At this time, the company has not been served
with the purported complaint.
The company cannot, at this time, determine a likely outcome.
OAK TECHNOLOGY: Appeals Court Upholds Dismissal of CA Securities Suit
---------------------------------------------------------------------
The United States Sixth Circuit Court of Appeals upheld the dismissal
of the consolidated securities class action pending against Oak
Technology Corporation and several of its directors and former
officers, on behalf of all persons who purchased or acquired the
Company's common stock (excluding the defendants and parties related to
them) for the period July 27, 1995 through May 22, 1996.
This suit, filed in Santa Clara County Superior Court in Santa Clara,
California, alleged violations of California securities laws and
statutory deceit provisions as well as breaches of fiduciary duty and
abuse of control. The plaintiffs sought unspecified monetary damages.
The court earlier dismissed all claims except the California
Corporations Code Sections 25400/25500 cause of action against the
Company and four former officers. In August 2000, the court granted
defendant's motion for summary judgment and entered judgment in favor
of the Company and the former officers. The plaintiffs appealed the
court's decisions.
Based on its current information, the Company believes this suit to be
without merit and will continue to defend its position vigorously.
Although it is a remote possibility, the rulings may be overturned by
the California Supreme Court and Oak may incur a loss upon an adverse
conclusion of these claims, an estimate of any such loss cannot be
made.
QUALITY SYSTEMS: Fairness Hearing For Settlement Set April 2003 in CA
---------------------------------------------------------------------
The fairness hearing for final approval of the settlement of a
consolidated class action filed against Quality Systems, Inc. is set
for April 14, 2003 in the Superior Court of the State of California for
the County of Orange.
The suit, filed on behalf of purchasers of the Company's Common Stock
between June 26, 1995 and July 3, 1996, alleges that the Company, its
officers and directors or both during the class period, and other
defendants violated California Corporations Code Sections 25400 and
25500, California Civil Code Sections 1709 and 1710, and California
Business and Professions Code Sections 17200 et. seq., by issuing
positive statements about the Company that allegedly were knowingly
false, in part, in order to assist the Company and the individual
defendants in selling common stock at an inflated price in the
Company's March 5, 1996 public offering and at other points during the
class period. The suit also names as defendants:
(1) Sheldon Razin,
(2) Robert J. Beck,
(3) Gregory S. Flynn,
(4) Abe C. LaLande,
(5) Donn Neufeld,
(6) Irma G. Carmona,
(7) John A. Bowers,
(8) Graeme H. Frehner, and
(9) Gordon L. Setran
The Company and the other named defendants successfully demurred to the
plaintiffs' claim under California Civil Code Sections 1709 and 1710,
and that claim, which served as the only basis for plaintiffs' request
for punitive damages, has been dismissed from the suit.
In January 1999, the court denied plaintiffs' motion to certify the
class representative and class legal counsel. Plaintiffs appealed that
decision as to class legal counsel, but the Fourth District Court of
Appeals affirmed the order disqualifying the class counsel. In May
2000, the Court of Appeals issued its Remittur certifying its decision
as final.
In May 2000, plaintiffs associated in additional class legal counsel,
moved for approval by the court. Upon defendants' objection, the court
denied plaintiffs' motion, and ordered plaintiffs to retain new class
counsel.
At the end of November 2000, the plaintiffs retained new class counsel
who substituted in for plaintiffs' previous class counsel. The Company
and the other named defendants did not oppose plaintiffs' motion for
approval of the new class counsel. In January 2001, the court granted
the motion to certify class legal counsel. In March 2001, the court
approved a notice of class certification to be mailed to shareholders
who are potential class members. Between April 9, 2001 and May 9,
2001, class notice was mailed to potential class members.
In March 2002, defendant Graeme H. Frehner and certain other defendants
not affiliated with the Company were dismissed from the action with
prejudice by stipulated order.
On November 18, 2002, the parties reached an agreement to settle the
consolidated action. On January 14, 2003, the court granted
preliminary approval of the settlement, and approved a notice of the
settlement to be mailed to shareholders who are potential class
members. Shareholders who have not already requested exclusion from
the class will have until March 28, 2003 to request exclusion from or
opt out of the proposed settlement.
Upon the court's final approval of the settlement, the consolidated
action will be dismissed with prejudice as to all defendants. The
settlement agreement expressly provides that the Company and the named
defendants do not admit, and continue to deny, any and all allegations
of wrongdoing.
SYNCOR INTERNATIONAL: Labels "Without Merit" Securities Lawsuits in CA
----------------------------------------------------------------------
Syncor International Corporation and certain of its officers and
directors face ten securities class actions filed in the United States
District Court for the Central District of California, asserting claims
under the federal securities laws.
The suits purport to be brought on behalf of all purchasers of the
Company's shares during various periods, beginning as early as March
30, 2000, and ending as late as November 5, 2002 and allege, among
other things, that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder
and Section 20(a) of the Exchange Act, by issuing a series of press
releases and public filings disclosing significant sales growth in the
Company's international business, but omitting mention of certain
allegedly improper payments to the Company's foreign customers, thereby
artificially inflating the price of Company shares.
The suits are in their early stages and it is impossible to predict the
outcome of these proceedings or their impact on the Company. However,
the Company currently does not believe that the impact of any of these
actions will have a material adverse effect on the Company's financial
position, liquidity and results of operation. The Company and Syncor
believe the allegations made in each of the suits described above are
without merit and intend to vigorously contest such actions and have
been informed that the individual director and officer defendants deny
liability for the claims asserted in these actions.
SYNCOR INTERNATIONAL: Shareholders Commences Suits in DE Chancery Court
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Syncor International Corporation faces two class actions filed by its
stockholders in the Court of Chancery of the State of Delaware. The
suit also names as defendants seven of the Company's nine directors.
The complaints were identical and alleged that the director defendants
breached certain fiduciary duties to the Company by failing to maintain
adequate controls, practices and procedures to ensure that the
Company's employees and representatives did not engage in improper and
unlawful conduct. Both complaints asserted a single derivative claim,
for and on behalf of the Company, seeking to recover all of the costs
and expenses that the Company incurred as a result of the allegedly
improper payments and a single purported class action claim seeking to
recover damages on behalf of all holders of the Company shares in the
amount of any losses sustained if consideration received in the
merger by Company stockholders was reduced.
On November 22, 2002, the plaintiff in one of the two Delaware actions
filed an amended complaint adding as defendants the Company, its
subsidiary Mudhen Merger Corp. and the remaining two Company directors.
The suits are in its early stages and it is impossible to predict the
outcome of these proceedings or their impact on the Company. However,
the Company currently does not believe that the impact of any of these
actions will have a material adverse effect on the Company's financial
position, liquidity and results of operation. The Company believes the
allegations made in each of the complaints described above are without
merit and intends to vigorously contest such actions and have been
informed that the individual director and officer defendants deny
liability for the claims asserted in these actions.
SYNCOR INTERNATIONAL: Faces Investor Derivative Suits in CA State Court
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Syncor International Corporation faces two shareholder derivative suits
filed by several Company stockholders in the Superior Court of
California for the County of Los Angeles against the members of the
Company's board of directors.
The suits allege that the director defendants breached certain
fiduciary duties to the Company by failing to maintain adequate
controls, practices and procedures to ensure that the Company's
employees and representatives did not engage in improper and unlawful
conduct. Both complaints asserted a single derivative claim, for and
on behalf of the Company, seeking to recover costs and expenses that
the Company incurred as a result of the allegedly improper payments.
The suits are in their early stages and it is impossible to predict the
outcome of these proceedings or their impact on the Company. However,
the Company currently does not believe that the impact of any of these
actions will have a material adverse effect on the Company's financial
position, liquidity and results of operation. The Company believes the
allegations made in each of the complaints described above are without
merit and intends to vigorously contest such actions and have been
informed that the individual director and officer defendants deny
liability for the claims asserted in these actions.
TYCO INTERNATIONAL: Plaintiffs File Consolidated Securities Suit in NH
----------------------------------------------------------------------
Plaintiffs in the securities class action filed against Tyco
International Ltd., and certain of its former directors and officers
filed a consolidated suit in the United States District Court in New
Hampshire.
The suit asserts causes of action under Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section
14(a) of that Act and Rule 14a-9 promulgated thereunder, as well as
Sections 11 and 12(a)(2) of the Securities Act of 1933. Claims against
our former directors and officers are also asserted under Sections
20(a) and 20A of the Securities Exchange Act of 1934 and Section 15 of
the Securities Act of 1933.
The complaint asserts that the defendants violated the securities laws
by making materially false and misleading statements and omissions
concerning, among other things, the following:
(1) Tyco's mergers and acquisitions and the accounting therefor,
as well as allegedly undisclosed acquisitions;
(2) misstatements of Tyco's financial results;
(3) the impact of a new accounting standard (SAB 101, promulgated
in 1999) on the Company's earnings performance;
(4) compensation of certain of the Company's former executives;
(5) their improper use of funds for personal benefit and their
improper self-dealing real estate transactions;
(6) their sales of Tyco stock;
(7) payment of $20 million to one of the Company's former
directors and a charity of which he is a trustee; and
(8) the criminal investigation of the Company's former Chief `
Executive Officer
TYCO INTERNATIONAL: JPML Transfers Securities Fraud Lawsuit To NH Court
-----------------------------------------------------------------------
The Judicial Panel on Multidistrict Litigation (JPML) transferred the
class action filed against Tyco International Ltd., its auditors and
certain of its current and former directors and officers from the
United States District Court for the District of New Jersey to the
United States District Court for the District of New Hampshire.
The State of New Jersey's complaint asserts causes of action under
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, common law fraud, aiding and abetting common
law fraud, and negligent misrepresentation. Claims are asserted:
(1) against the Company's former and current directors and
officers under Section 20(a) of the Securities Exchange Act of
1934 and for common law breach of fiduciary duties;
(2) against the Company and certain of its former and current
directors and officers under Section 14(a) of Securities
Exchange Act of 1934 and Rule 14A-9 promulgated thereunder,
the New Jersey RICO statute and for aiding and abetting under
the New Jersey RICO statute, conspiracy to violate the New
Jersey RICO statute and conspiracy to commit common law fraud;
and
(3) against the Company only, for respondeat superior liability
under the New Jersey RICO statute
The complaint asserts that the defendants violated the securities laws
and otherwise engaged in fraudulent acts by making materially false and
misleading statements and omissions concerning, among other things:
(i) compensation of certain of the Company's former executives;
(ii) their improper use of Company funds for personal benefit and
their improper self-dealing real estate transactions;
(iii) their sales of Tyco stock;
(iv) payment of $20 million to one of the Company's former
directors and a charity of which he is a trustee; and
(v) the criminal investigation of the Company's former Chief
Executive Officer
Plaintiffs seek damages, including treble damages under New Jersey's
RICO statute and punitive damages, along with attorney's fees and
costs.
VIRAGE INC.: Asks NY Court to Dismiss Consolidated Securities Lawsuit
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Virage, Inc. asked the United States District Court for the Southern
District of New York to dismiss the consolidated securities class
action filed on behalf of all persons who purchased the Company's
common stock from June 28, 2000 through December 6, 2000. It names as
defendants the Company, one current and one former officer of the
Company and several investment banking firms that served as
underwriters of the Company's initial public offering.
The complaint alleges liability under Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, on the grounds that the registration statement
for the offering did not disclose that:
(1) the underwriters had agreed to allow certain customers to
purchase shares in the offerings in exchange for excess
commissions paid to the underwriters; and
(2) the underwriters had arranged for certain customers to
purchase additional shares in the aftermarket at
predetermined prices.
The amended complaint also alleges that false analyst reports were
issued. No specific damages are claimed.
The Company is aware that similar allegations have been made in other
lawsuits filed in the same court challenging over 300 other initial
public offerings and secondary offerings conducted in 1999 and 2000.
Those cases have been consolidated for pretrial purposes before the
Honorable Judge Shira A. Scheindlin.
On July 15, 2002, the Company (and the other issuer defendants) filed a
motion to dismiss. This motion was heard on November 1, 2002. The
Company believes that the allegations against it and the individual
defendants are without merit.
New Securities Fraud Cases
ATMEL CORPORATION: Stull Stull Lodges Securities Fraud Suit in N.D. CA
----------------------------------------------------------------------
Stull, Stull & Brody initiated a securities class action in the United
States District Court for the Northern District of California, on
behalf of purchasers of Atmel Corporation (NASDAQ: ATML) securities
between January 20, 2000 and July 31, 2002, inclusive against the
Company and its chief executive and chief financial officers.
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 concerning the Company's financial condition,
resulting in plaintiff and the class purchasing their Atmel stock at
artificially inflated prices.
Specifically, the Complaint charges that defendants repeatedly issued
press releases announcing "record" revenues, all the while knowing that
the Company should not have been recording revenue from the sale of
defective chips to its customers, including Seagate Technology Inc.,
the world's largest manufacturer of hard disk drives. The suit alleges
that if the Company had properly recorded revenue during the class
period, and not included the sales of defective chips, Atmel's stock
would have traded at lower prices during the class period.
The suit further alleges that on July 31, 2002, the truth regarding
Atmel's business practices became known when it became public that
Seagate had sued Atmel for selling Seagate defective chips. The suit
charges that as a result of defendants' actions, plaintiff and the
Class were damaged.
For more details,contact Tzivia Brody by Mail: 6 East 45th Street, New
York, NY 10017 by Phone: 1-800-337-4983 or visit the firm's Website:
http://www.ssbny.com
CAPITAL REALTY: Abraham & Associates Lodges Securities Suit in S.D. NY
----------------------------------------------------------------------
Abraham & Associates initiated a securities class action on behalf of
the limited partners of Capital Realty Investors 85 Limited Partnership
(CRI-85) against C.R.I., Inc., William B. Dockser and H. William
Willoughby asserting claims arising under Section 14(a) of the
Securities Exchange Act of 1934 and Rules 14a-4(b)(1) and 14a-9
promulgated thereunder by the Securities and Exchange Commission.
The action was filed in the United States District Court for the
Southern District of New York on Jan. 28, 2003, as Lewis v. C.R.I.,
Inc., et al., 03 CV 0651 and is pending before Judge Mukasey.
For more details, contact Jeffrey S. Abraham or Larry Levit by Mail:
One Penn Plaza, Suite 1910 New York NY 10119-1910 by Phone:
(800) 938-0015 or (212) 714-2444 or by E-mail: Jabraham@abrahamlaw.com
(for Jeffrey Abraham) or Larryl@abrahamlaw.com (for Larry Levit)
COSI INC.: Schiffrin & Barroway Lodges Securities Fraud Suit in S.D. NY
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The Law Firm of Schiffrin & Barroway, LLP initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of all purchasers of the common stock of Cosi, Inc.
(Nasdaq: COSI) from April 24, 2002 through December 17, 2002,
inclusive.
The complaint charges that the defendants violated Sections 11 and 15
of the Securities Act of 1933 by issuing a materially false and
misleading Prospectus and Registration Statement in connection with
Cosi's Initial Public Offering. As alleged in the complaint, the
Registration Statement and Prospectus contained several sections, which
discussed the Company's plans for growth and described how the proceeds
raised from the IPO would enable the Company to implement these plans.
These statements were materially false and misleading because:
(1) the Offering Materials failed to disclose that the funds
raised by the IPO would be insufficient to implement the
Company's expansion plan, contrary to the representations
repeatedly made in the Company's Offering Materials;
(2) at the time of the IPO, defendants should have known that the
costs of expansion would be greater than the cash available to
the Company (which included working capital and proceeds from
the IPO), making it highly improbable that the Company would
be able to successfully continue to open numerous new stores
at such a rapid pace; and
(3) the Offering Materials failed to disclose that a reduction in
the price of the IPO would result in the Company being forced
to abandon its growth strategy.
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
MCSI INC.: Stull Stull Commences Securities Fraud Lawsuit in S.D. OH
--------------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of Ohio, Western
Division, on behalf of purchasers of MCSI, Inc. (NASDAQ: MCSI)
securities between July 24, 2001, and February 26, 2002, inclusive
against the Company, Michael E. Peppel (CEO, President and Chairman)
and Ira H. Stanley (CFO, Sr. V.P.).
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 24, 2001 to February 26, 2002.
According to the complaint, throughout the class period, defendants
issued numerous statements in quarterly and annual press releases
regarding the supposed strength of its business, particularly the
success of its high-margin systems integration business.
According to the complaint, these, and other representations detailed
therein, were materially false and misleading because they failed to
disclose that MCSi's business was deteriorating overall and that its
integration services business was not operating as successfully as
defendants had represented.
The complaint further alleges that the scheme was designed to
artificially inflate the price of MCSi's common stock in order to allow
MCSi insiders to profit by selling their shares of MCSi common stock at
artificially inflated prices in two follow-on public offerings. On
August 15, 2001, MCSi sold 4 million shares in a secondary offering at
$11.50 per share and on December 19, 2001, the Company and certain
selling shareholders, including Mr. Peppel who sold 200,000 shares for
gross proceeds of $4,575,000, undertook another public offering,
selling a total of 5.2 million shares of MCSi common stock at $22.875
per share.
Then, on February 26, 2002, the Company shocked the market by reporting
a 29% decline in sales for the fourth quarter of 2001, and a loss of
$0.24 per share (including a restructuring charge). In reaction to
this announcement, the price of MCSi common stock plunged by 40%,
falling from a $17.35 per share close on February 25 to a close of
$10.40 per share on February 26, on extremely heavy trading volume.
For more details, contact Tzivia Brody, Esq. at Stull, Stull & Brody by
Mail: 6 East 45th Street, New York, NY 10017 by Phone: 1-800-337-4983
or visit the firm's Website: http://www.ssbny.com
MICHAELS STORES: Schiffrin & Barroway Lodges Securities Suit in N.D. TX
-----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Texas on
behalf of all purchasers of the common stock of Michaels Stores, Inc.
(NYSE: MIK) from August 8, 2002 through November 7, 2002, inclusive.
The complaint charges Michaels Stores and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants repeatedly
represented that Michaels Stores' financial condition was strong and
that the Company was increasing its market share and would continue to
do so in the foreseeable future. The Company was persistent in its
claims despite a known downturn in the consumer-goods markets and a
very, very difficult earnings environment. In fact, throughout the
class period, defendants consistently appeared at analyst conferences
and in other public forums and made very positive statements about
Michaels Stores.
It was only on November 7, 2002, when the Company released results for
its third quarter 2002, that investors learned that:
(1) defendants' claims that Michaels Stores' purported "record
setting" growth was the result of systems and/or
infrastructure upgrades, or any other improvements made by
defendants, were false;
(2) many of Michaels Stores' customers were already curtailing
their spending for hobby and entertainment -- or discretionary
purchases -- by the inception of the class period and, as a
result, Michaels Stores was experiencing the same adverse
market conditions which were negatively impacting the
Company's competitors;
(3) the Company was not "in great shape," it did not have
"considerable momentum" and was not proceeding according to
guidance sponsored or provided by defendants; and
(4) notwithstanding defendants' efforts to create the materially
false impression that the Company had achieved record results
in the fiscal second quarter, the truth was that Michaels
Stores was already suffering from the same adverse market
conditions other retailers were experiencing.
In all, during the class period, at the time that Michaels Stores was
being adversely affected by the aforementioned factors, but prior to
any disclosure to the market, certain of the defendants sold more than
$15.3 million worth of their personally held Michaels Stores common
stock while in possession of material adverse information. In fact,
the CEO and President of the Company sold over 125,000 shares of his
privately held Company shares during the class period for over $5.8
million in proceeds.
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/cgi/signup.cgi
PARAMETRIC TECHNOLOGY: Schiffrin & Barroway Files Securities Suit in MA
-----------------------------------------------------------------------
The Law Firm of Schiffrin & Barroway, LLP initiated a securities class
action in the United States District Court for the District of
Massachusetts, on behalf of all purchasers of the common stock of
Parametric Technology Corporation (Nasdaq: PMTC) from October 19, 1999
through December 31, 2002, inclusive.
The complaint charges that the defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between October 19, 1999 and December
31, 2002, thereby artificially inflating the price of Parametric common
stock. Throughout the class period, as alleged in the suit, defendants
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's increasing revenues and financial
performance.
The suit alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that since fiscal 1999, in violation of Generally Accepted
Accounting Principles (GAAP) and its own revenue recognition
policies, the Company had cumulatively overstated its
previously recognized maintenance revenue from its service
contracts by approximately $33.4 million;
(2) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) that as a result, the value of the Company's income and
financial results were materially overstated at all relevant
times.
On December 31, 2002, after the close of regular trading, Parametric
shocked the market by announcing that it had identified "$20 to $25
million of previously recognized maintenance revenue which should have
been deferred and recognized in fiscal 2003 and later periods."
Accordingly, the Company announced, it "expects to report a
corresponding reduction in maintenance revenue in prior periods,
primarily in fiscal year 2002." The next day of trading, on January 2,
2003, shares of Parametric closed at $2.19 per share, after hitting an
intraday low of $1.95, as compared with a class period high of $32.88
per share, reached on December 16, 1999.
Subsequent disclosures revealed that the Company would be restating its
financial results from fiscal year 1999 through fiscal year 2002
because a cumulative total of $33.4 million in maintenance revenue had
improperly been reported as revenue during that time.
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/cgi/signup.cgi
PATRIOT AMERICAN: Milberg Weiss Commences Securities Suit in N.D. CA
--------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action against Patriot American Hospitality, Inc., Wyndham
International, Inc., Paul A. Nussbaum and James D. Carreker is pending
in the United States District Court for the Northern District of
California on behalf of all persons who purchased or otherwise acquired
the paired-shares of Patriot American and Wyndham during the period
between January 5, 1998 and December 17, 1998.
The action was originally filed on August 19, 1999 in the United States
District Court for the Northern District of Texas and is one of nine
lawsuits alleging securities fraud filed in the Northern District of
California or the Northern District of Texas. On October 22, 1999, the
Judicial Panel on Multidistrict Litigation (JPML) transferred this
action to the United States District Court for the Northern District of
California and consolidated it with actions pending in that court.
Prior to transfer and consolidation of these cases, several groups of
plaintiffs filed motions for appointment as lead plaintiff and for
appointment of their attorneys as lead counsel. The court, however,
stayed the proceedings pending the JPML's final transfer. Once the
actions were transferred, they were assigned to the Honorable Vaughn R.
Walker. On July 20, 2000, Judge Walker consolidated the pending actions
for pre-trial purposes, and ordered the parties to litigate the
sufficiency of the pending complaints. On October 19, 2000, defendants
filed their motion to dismiss the complaint. After the briefing was
completed, the court on August 15, 2001 granted the motion to dismiss
with leave to amend the claims.
The complaint was amended on October 15, 2001. Defendants again filed a
motion to dismiss. This motion was granted with leave to amend on
September 3, 2002. On December 2, 2002, a second amended complaint was
filed.
The second amended complaint charges Patriot American, Wyndham,
Nussbaum and Carreker with violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934. Patriot American went public in
1995 as a real estate investment trust ("REIT"). In 1996, Patriot
American bought the California Jockey Club and Bay Meadows Operating
Co., which operated as a paired-share REIT, and adopted this
advantageous tax status after consummation of the purchase. Operating
as a paired-share REIT allowed Patriot American to both own and operate
hotels while at the same time sheltering income and availing itself of
the tax benefits, which included not paying federal taxes. To fund
acquisitions, defendants borrowed a total of $354 million using three
forward-equity contracts, which were structured so that, in effect,
defendants sold over 13.3 million shares of Patriot's stock at
approximately $26.21 per share (which over one year later the Company
would be required to buy back at that price).
These forward-equity contracts enabled defendants to purchase over $5.3
billion of assets within an 18-month period, including $4.5 billion
during the class period.
The class period begins with Patriot American's announcement of its
acquisition of Wyndham. Defendants proclaimed that they had the
"necessary components ... in place to facilitate rapid growth" and had
worked closely to ensure that they were "developing the best possible
infrastructure to manage our growth." Throughout the class period,
Patriot repeatedly told investors that it was successfully integrating
the $4.5 billion worth of companies that it acquired during the class
period, that it had the ability to pay its short-term debt, and that
Patriot was poised for growth.
However, defendants knew even before the acquisition of Wyndham was
completed that Patriot would face problems integrating the companies it
was acquiring, and that Patriot would not be able to provide the
necessary capital to integrate and operate all the properties it was
acquiring. These problems presented themselves as the absence of an
integrated computer system to allow the sharing of information between
the individual properties and Patriot's corporate headquarters, and a
cash crisis which resulted in the cancellation of hotel improvement and
renovations previously budgeted and approved, elimination of
advertising and travel incentive programs, and extended payment terms
with Patriot's vendors.
Ultimately, on December 16, 1998, defendants were forced to enter into
a highly unfavorable contract for an "equity infusion" of $1 billion
with Apollo Real Estate Advisors of New York, Apollo Management, L.P.,
Thomas H. Lee Company, Beacon Capital Partners, Inc. and Rosen
Consulting Group. In exchange, the Apollo Group received, for its $1
billion, 47% of the Company and half of its board seats. As investors
digested the implications of the Apollo Group equity infusion, the
price of Patriot stock collapsed to as low as $6.75 per share, 78% off
its class period high of $29.50 per share.
For more details, contact William Lerach by Phone: 800/449-4900 by E-
mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
RURAL CELLULAR: Bernstein Liebhard Launches Securities Fraud Suit in MN
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz, LLP initiated a securities class action
in the United States District Court for District of Minnesota, on
behalf of all persons who purchased or acquired Rural Cellular
Corporation (OTC BB: RCCC) securities between January 6, 2002 to
November 12, 2002, inclusive.
Throughout the class period, defendants represented that the Company's
financial statements were accurate and reported according to Generally
Accepted Accounting Principles (GAAP). However, on November 12, 2002,
the Company admitted that the financial results for fiscal year 2001
through the second quarter of 2002 were, in fact, materially misstated
and issued a restatement of such figures. Defendants' material
misstatements inflated the market price of Rural Cellular securities.
As a result of such artificial inflation, purchasers of Rural Cellular
securities during the class period suffered extensive damages.
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: RCCC@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
UNUM PROVIDENT: Alfred Yates Commences Securities Lawsuit in E.D. TN
--------------------------------------------------------------------
The Law Office of Alfred G. Yates, Jr., PC, initiated a securities
class action in the United States District Court for the Eastern
District of Tennessee on behalf of purchasers of Unum Provident
Corporation publicly traded securities during the period between May 7,
2001 and February 4, 2003.
The complaint charges Unum Provident and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. Unum
Provident provides group disability and special risk insurance, as well
as group life insurance, long-term care insurance, and payroll-deducted
voluntary benefits offered to employees at their work sites.
Unum Provident operates around the World. The complaint alleges that
during the class period, defendants caused Unum Provident's shares to
trade at artificially inflated levels through the issuance of false and
misleading financial statements. The Company failed to properly record
the impairment to its investments and operated "long-term denial
factories," causing the Company's financial results to be inflated. As
a result, the Company's shares traded at inflated prices enabling Unum
Provident to raise proceeds of $250 million on June 13, 2002 in its
bond offering.
The complaint alleges that Unum Provident and its top officers inflated
the prices of the Company's securities in order to pursue an
accelerated securities sale program. According to the complaint,
defendants knew that by concealing Unum Provident's true financial
results they could foster the perception in the business community that
Unum Provident was a "growth company," i.e., it was the only way Unum
Provident could post the revenue and earnings per share growth claimed
by defendants.
On February 5, 2003, Unum Provident announced that it had recorded
investment losses of $93 million and also reported that it was
responding to Securities and Exchange Commission requests for
information relating to its investment disclosures.
For more details, contact Alfred G. Yates, Jr. by Phone: 800/391-5164
or 412/391-5164 or by E-mail: yateslaw@aol.com
VOICEFLASH NETWORKS: Weiss & Yourman Files Securities Suit in S.D. FL
---------------------------------------------------------------------
Weiss & Yourman initiated a securities class action against VoiceFlash
Networks, Inc. (OTC:VFNX.PK) and certain of its officers was commenced
in the United States District Court for the Southern District of
Florida, on behalf of purchasers of VoiceFlash shares between March 15,
2002 and January 24, 2003.
The complaint charges defendants with violations of the Securities
Exchange Act of 1934. It alleges that defendants issued a series of
material misrepresentations that caused plaintiff and other members of
the class to purchase VoiceFlash common stock at artificially inflated
prices.
For more details, contact James E. Tullman, Mark D. Smilow, and David
C. Katz by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New
York, New York 10176 or by Phone: 888/593-4771 or 212/682-3025
*********
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
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Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
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