/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030331.mbx C L A S S A C T I O N R E P O R T E R Monday, March 31, 2003, Vol. 5, No. 63 Headlines ARIZONA: Senate Okays Proposal Restricting Homeowner Association Suits ARIZONA: Committee Renews Legislation Curbing Class-Action Tax Lawsuits COMPUCREDIT CORPORATION: Plaintiffs Won't Appeal Dismissed Case in GA COMPUCREDIT CORPORATION: Plaintiffs Have Yet to Amend Complaint DOW CHEMICAL CO.: Michigan Residents Sue Over Dioxin Contamination EL PASO: Settles With California to End Probe of Alleged Price Fixing FEDERAL EXPRESS: Appeals $68MM Judgment in Late Delivery Suit in Calif. FEDERAL EXPRESS: Objecting Plaintiffs Appeal Fuel Surcharge Settlement HITACHI KOKI: Recalls to Repair 14,300 Circular Saws For Injury Hazard HORSESHOE GAMING: Suit Challenging Pact With Bossier City Certified HORSESHOE GAMING: Appellate Court Reinstalls Previously Dismissed Case INSIGHT MIDWEST: KY Court OKs Settlement Reached in Illegal Tax Suits KMART CORPORATION: Investors Peg Liabilities for Stock Fraud at $700 M KMART CORPORATION: ERISA Suit Pending in Eastern District of Michigan KMART CORPORATION: Faces Six 'Wage Hour' Lawsuits in California KMART CORPORATION: Confident Wage Suit in Oklahoma Won't Prosper LIFEPOINT HOSPITALS: Sued in Tennessee for Disability Act Violations LIFEPOINT HOSPITALS: Former Parent to Answer Future Liabilities, Claims LUCENT TECHNOLOGIES: Settles All Securities Fraud Lawsuits for $600MM+ MAYTAG CORP: Recalls 23,000 Gemini Gas Ranges for Fire and Burn Hazard NORTHROP GRUMMAN: Securities Lawsuits vs. TRW in Ohio Dismissed NORTHROP GRUMMAN: California Derivative Lawsuits Submitted for Decision RAYTHEON COMPANY: Discovery Continues in 1999 Securities Lawsuit SEARS ROEBUCK: Recalls 5,200 Electric Routers for Injury Hazard ST. JUDE: Decision on Certification of Silzone Cases Expected This Year TORCHMARK CORPORATION: Plaintiffs in 1999 Suit Move for Certification TORCHMARK CORPORATION: Faces 16 Discrimination Lawsuits in Alabama TORCHMARK CORPORATION: 120 Discrimination Cases Pending in Mississippi TORCHMARK CORPORATION: Fraud, Misrepresentation Cited in 70 Other Cases TORO COMPANY: Recalls 3,400 Snowthrowers for Fire and Injury Hazard WORLDCOM: Pension Fund Sues Auditor and Bond Underwriters for Fraud ********* ACCLAIM ENTERTAINMENT: Bernstein Liebhard Files Lawsuit in E.D. NY AFC ENTERPRISES: Levy and Levy Files Securities Fraud Suit in N.D. GA AFC ENTERPRISES: Milberg Weiss Files Securities Fraud Suit in N.D. GA ALLOY INC: Wolf Haldenstein Files Securities Fraud Lawsuit in S.D. NY ANDRX CORPORATION: Brian M. Felgoise Files Securities Suit in S.D. FL CARREKER CORPORATION: Bernstein Liebhard Files Lawsuit in N.D. Texas ELECTRO SCIENTIFIC: Stoll Stoll Files Securities Fraud Suit in Oregon HEALTHSOUTH CORPORATION: Kaplan Fox Files Securities Lawsuit in N.D. AL I2 TECHNOLOGIES: Cauley Geller Commences Securities Lawsuit in N.D. TX KING PHARMACEUTICALS: Weiss & Yourman Files Securities Suit in E.D. TN MCSI INC: Bernstein Liebhard Commences Securities Fraud Suit in S.D. OH MICHAELS STORES: Bernstein Liebhard Launches Securities Suit in N.D. TX MICROTUNE INC: Bernstein Liebhard Commences Securities Suit in E.D. TX VAXGEN INC: Wolf Haldenstein Commences Securities Fraud Suit in N.D. CA ********* ARIZONA: Senate Okays Proposal Restricting Homeowner Association Suits ---------------------------------------------------------------------- The state Senate's Government Committee recently voted 5 to 4 to require homeowner associations to obtain approval from their memberships before filing lawsuits against the builders over shoddy construction, reported Associated Press Newswires. The bill, backed by homebuilders, now moves to the full Senate for possible debate and a vote by the whole body. Supporters of the bill say many homowners do not know their associations have sued over defects or that the existence of the cases filed on their behalf could affect the values of their properties. State law, however, already requires that homeowners' associations' boards notify all association members about planned defect lawsuits. Opponents, on the other hand, say the requirement for a membership vote would effectively stifle lawsuits because it would be next to impossible to get approval from a majority of the association's members, excluding votes by sellers, as the present bill (HB2034) requires. The bill moving through the Senate is the latest chapter in an ongoing fight by home builders to lower insurance costs, which the builders blame on class-action lawsuits filed by buyers over construction defects. In response to the home builders' pressure, Governor Jane Hull signed into law, in 2002, legislation that created a formal 90-day process for fixing construction defects without buyers going to court. Under that legislation, builders' failures to follow the process could be used against them in court. The 2002 law, characterized as a compromise, still allowed homeowners with safety or life-threatening problems to go straight to court. The 2003 legislation, now under consideration, places restrictions only on the homeowners associations, not the owners. ARIZONA: Committee Renews Legislation Curbing Class-Action Tax Lawsuits ---------------------------------------------------------------------- The Arizona Senate's Natural Resources and Transportation Committee recently voted 6 to 0 to jettison the contents of a bill (HB2038), inserting, instead, provisions to prohibit state courts from allowing people to join class-action tax lawsuits if they have not first filed administrative protests. The bill also includes a provision that prohibits the filing of a class-action administrative claim for refunds on behalf of others. The new bill replaces one which died in the House -- a measure which would have banned class-action lawsuits outright. The original bill as well as the one now moving through the Senate are responses to a $350 million dollar settlement that the state will pay to resolve the Ladewig class-action lawsuit that sought refunds for taxes paid on dividends from out-of-state corporations in the late 1980s. Neither bill would affect the court's ruling that such a levy was discriminatory nor would they affect the settlement. The new bill will affect only cases not yet certified as class actions. Opponents of the original bill banning class actions in Arizona said it violated taxpayers' rights and would be struck down by the courts. The aide to Governor Napolitano, Meg Wuebbels denied that the adminstration backed away from an outright ban because of concerns that it was illegal. Ms. Wuebbels said the new bill would help protect the state by requiring taxpayers to file administrative claims individually, thereby putting the state on notice of the need to preserve records; "it targets the real problem," she said. COMPUCREDIT CORPORATION: Plaintiffs Won't Appeal Dismissed Case in GA --------------------------------------------------------------------- CompuCredit Corporation and certain officers of CompuCredit were defendants in a class action lawsuit lodged in the Federal District Court for the Northern District of Georgia. The lawsuit arose in connection with the decline in the market value of the common stock of CompuCredit on October 25, 2000. The lawsuit alleged that, prior to that date, CompuCredit and the chief executive officer and chief financial officer of CompuCredit made false and misleading statements regarding CompuCredit in violation of federal securities laws. On February 19, 2002, the court dismissed the lawsuit. Subsequently, counsel for the plaintiffs indicated that they would not be appealing the dismissal. For more information, contact the company by Mail: 245 Perimeter Center Parkway, Suite 600, Atlanta GA 30346 or by Phone: 770-206-6200 COMPUCREDIT CORPORATION: Plaintiffs Have Yet to Amend Complaint --------------------------------------------------------------- CompuCredit; David Hanna, Chief Executive Officer; and Brett Samsky, Chief Financial Officer from its inception until January 2001, are currently defendants in a class action lawsuit pending in the Federal District Court for the Northern District of Georgia, Case No.1:00-CV- 2930-BBM. According to the company's SEC disclosure, this lawsuit arose from the decline in the market value of its common stock on October 25, 2000, and alleges that prior to that date CompuCredit, Mr. Hanna and Mr. Samsky made false and misleading statements in violation of Federal securities laws. The lawsuit seeks compensatory monetary damages and legal fees. In July 2001, the company filed a motion to dismiss the lawsuit. On February 19, 2002, the court granted the firm's motion to dismiss, but allowed the plaintiffs to file a motion seeking leave to amend their complaint. On March 22, 2002, the plaintiffs filed a motion requesting additional time to amend their complaint. That motion is pending. "We still maintain our position that we do not believe that this lawsuit has any merit, and we intend to continue to defend it vigorously," the SEC document reads. "We do not believe that the lawsuit is reasonably likely to have a material adverse effect on our financial position or results of operations." For more information, contact the company by Mail: 245 Perimeter Center Parkway, Suite 600, Atlanta GA 30346 or by Phone: 770-206-6200 DOW CHEMICAL CO.: Michigan Residents Sue Over Dioxin Contamination ------------------------------------------------------------------ Twenty-six residents of Saginaw County, Michigan, have filed a class- action lawsuit in Saginaw County Circuit Court, against Dow Chemical Co., alleging that its Midland manufacturing plant has caused contamination that threatens their heath and renders their property worthless, the Associated Press Newswires has reported. The lawsuit seeks class-action status to represent about 2,000 people who have lived along the Tittabawassee River and flood plain since 1984. The lawsuit, in addition to asking for compensatory and punitive damages to help the plaintiffs move to safer locations, asks the court to make Dow establish a medical monitoring trust fund for them. The fund would pay for dioxin poisoning testing and treatment, as well as for studies of the toxin's effects and possible cures. Attorney for the plaintiffs Jan P. Helder Jr. said such testing is very expensive and available in just a few places, such as the Atlanta-based Centers for Disease Control and Prevention. "We believe that Dow [the contaminator] should bear the burden of that; certainly not the innocent bystanders," said Mr. Helder. Given the original values of the properties involved, the compensatory damages alone could add up to more than $100 million if the judge certifies the class of 2,000 plaintiffs. Last year, Dow endeavored to obtain permission from the state's Department of Environmental Quality to raise the allowable dioxin contamination levels nine-fold in Midland. The negotiations fell apart in December. Michigan's current standard is 90 parts per trillion. The lawsuit contends that 7,300 parts per trillion has been detected in some contaminated areas. EL PASO: Settles With California to End Probe of Alleged Price Fixing --------------------------------------------------------------------- El Paso Corporation recently said it had reached an agreement in principle with California that the state would end its investigation of alleged manipulation of natural gas prices by the company during the state's energy crisis, Reuters English News Service reported. The settlement includes, according to reports by Reuters from sources, payments of $100 million in cash; $125 million in El Paso common stock, or about 26.4 million shares; and additional payments of $22 million a year over a 20-year period. El Paso said the settlement is subject to review and approval by the courts and FERC. The final execution of the agreement and the approvals are expected by the end of the year. The settlement gives California a political victory and helps it avoid the uncertainty associated with years of legal wrangling. For El Paso, the agreement eliminates the risk that the Federal Energy Regulatory Commission (FERC) will rule it had illegally withheld the gas supplies. The El Paso case has been one of the most visible of California's legal actions against the energy companies, which were spawned by the 2000-2001 energy crisis, when state's economy was over-whelmed by the blackouts and the soaring electricity and natural gas prices. The plaintiffs who are parties to the settlement include private class- action litigants in California, the state's governor and lieutenant governor, the California Public Utilities Commission, the California Department of Water Resources, PG&E Corp.'s bankrupt Pacific Gas and Electric Co. utility and Edison International's Southern California Edison utility. Other plaintiffs who are parties to the settlement include the attorneys general of California, Washington, Oregon and Nevada. FEDERAL EXPRESS: Appeals $68MM Judgment in Late Delivery Suit in Calif. ----------------------------------------------------------------------- A class action lawsuit is pending in Federal District Court in San Diego, California against Federal Express Corp. generally alleging that customers who had late deliveries during the 1997 Teamsters strike at United Parcel Service were entitled to a full refund of shipping charges pursuant to our money-back guarantee, regardless of whether they gave timely notice of their claim. At the hearing on the plaintiffs' motion for summary judgment, the court ruled against the company. The judgment totaled approximately $68 million, including interest and fees for the plaintiffs' attorney. "We have denied any liability with respect to this claim and intend to vigorously defend ourselves in this case. We have appealed the judgment to the U.S. Court of Appeals for the 9th Circuit and expect a ruling in the next 12 to 18 months. No accrual has been recorded as we believe the case is without merit and it is probable we will prevail upon appeal." For more information, contact the company by Mail: 3610 Hacks Cross Road, Memphis, TN 38125 or by Phone: 901-369-3600 FEDERAL EXPRESS: Objecting Plaintiffs Appeal Fuel Surcharge Settlement ---------------------------------------------------------------------- The Illinois state court has approved a settlement of the Illinois fuel surcharge class action against Federal Express Corporation. Class members objecting to the settlement have appealed. The lawsuit alleges that the company imposed a fuel surcharge in a manner that is not consistent with the terms and conditions of its contracts with customers. Under the terms of the settlement, the company will issue coupons to qualifying class members toward the purchase of future shipping services. The coupons will be subject to certain terms and conditions and will be redeemable for a period of one year from issuance. No coupons will be issued, however, pending resolution of the appeals. "The ultimate cost to us under the settlement agreement will not be material." For more information, contact the company by Mail: 3610 Hacks Cross Road, Memphis, TN 38125 or by Phone: 901-369-3600 HITACHI KOKI: Recalls to Repair 14,300 Circular Saws For Injury Hazard ---------------------------------------------------------------------- Hitachi Koki U.S.A., Ltd., of Norcross, Ga., in cooperation with the U.S. Consumer Product Safety Commission (CPSC), is voluntarily recalling about 14,300 circular saws. The lower blade guards on these saws can stick in the open position, exposing the blade and posing a serious laceration hazard. Hitachi has not received any reports of injuries, but has received two reports from consumers of the lower guards sticking. The recall involves 7 1/4-inch circular saws with model numbers C7SB2 or C7BD2 and serial numbers that begin with C62, C72, C82, C92, C02 or CN2. The model number is located on the green nameplate on the motor housing below the name "Hitachi." The serial number is stamped at the lower right of the nameplate. The saw's housing is green and the name "Hitachi" also is written on the metal blade guard. Home centers, hardware stores and industrial suppliers nationwide sold these circular saws from August 2002 through March 2003 for between $90 and $100. Consumers are advised to stop using these circular saws immediately and return them to Hitachi for a free repair. Hitachi circular saws with a circle stamped on the UPC label on the box are not included in this recall. Saws that have a light gray plastic stop between the upper and lower blade guards where they overlap also are not included in this recall. For more information, contact Hitachi by Phone: (800) 706-7337 between 8 a.m. and 8 p.m. ET Monday through Friday, or visit its Web site: http://www.hitachi.com. HORSESHOE GAMING: Suit Challenging Pact With Bossier City Certified ------------------------------------------------------------------- In 1996, legislation was passed in Louisiana authorizing each parish Police Jury, including the Bossier Police Jury, the governing body of Bossier Parish, to impose a boarding fee of $0.50 per patron entering riverboat gaming facilities in Bossier Parish. In response to this legislation, Horseshoe Bossier City commenced litigation against the Bossier Police Jury, asserting that the Bossier Police Jury had previously contracted away their right to impose an additional $0.50 boarding fee. In January 1997, Horseshoe Bossier City separately settled with the Bossier Police Jury, and the lawsuit was dismissed as it relates to Horseshoe Bossier City and the Bossier Police Jury. As part of the settlement, Horseshoe Bossier City agreed to pay a 1% tax on its gross casino revenues to Bossier Parish with a minimum annual payment of $1.5 million regardless of actual revenue. Subsequently, legislation was passed increasing the maximum amount the Bossier Police Jury could collect to $3.00 per person boarding gaming boats in Bossier City. On July 5, 2001, James Wellborn and Charles J. Nickel filed a lawsuit in the 26th Judicial Court (Bossier Parish) against the Municipality of Bossier City, Louisiana asking the Court to (i) order the City to collect a $3.00 per person boarding fee from Horseshoe Entertainment, (ii) invalidate a contract fixing the amount paid by Horseshoe Entertainment to Bossier Parish as opposed to a per person boarding fee and (iii) certify the suit as a class action on behalf of all citizens and taxpayers of Bossier Parish. "The Company believes the suit is without merit and will vigorously defend itself in the action, including the validity of the contract," states a recent SEC disclosure of Horseshoe Gaming Holding Corporation. For more details, contact the company by Mail: 18454 South West Creek Drive, Tinley Park City IL 60477 or by Phone: 708-429-8300 HORSESHOE GAMING: Appellate Court Reinstalls Previously Dismissed Case ---------------------------------------------------------------------- A separate suit filed by Billy Brooks Hudson, among others, is seeking the exact same relief sought in the case filed by Wellborn, as described in the preceding article. This suit brought by Hudson had previously been dismissed. However, in August 2002, the Louisiana Court of Appeals found that Billy Brooks Hudson, among others, have the right as taxpayers to prosecute a suit against the City of Bossier and others, seeking the same relief sought in the case filed by Wellborn on July 5, 2001. Accordingly, the Louisiana Court of Appeals directed that the trial court reinstate in the 26th Judicial District Court, Bossier Parish Louisiana, the previously dismissed case of Hudson et al. v. City of Bossier et al. "The Company believes that, like the Wellborn suit, the Hudson suit is without merit and the Company will vigorously defend itself in the action," said Horseshoe Gaming Holding Corporation in its latest SEC filing. For more details, contact the company by Mail: 18454 South West Creek Drive, Tinley Park City IL 60477 or by Phone: 708-429-8300 INSIGHT MIDWEST: KY Court OKs Settlement Reached in Illegal Tax Suits --------------------------------------------------------------------- Insight Kentucky and certain prior owners of the Kentucky systems, including affiliates of AT&T Broadband, have been named in class actions generally alleging that the Kentucky systems have improperly passed through state and local property tax charges to customers. The plaintiffs in these actions seek monetary damages and the enjoinment of the collection of such taxes. Such class actions are: (i) Alfred P. Sykes, Jr., Charles Pearl, Linda Pearl vs. InterMedia Partners of Kentucky, L.P. and TCI TKR of Jefferson County, Inc., which was filed on March 26, 1999 in Jefferson County Circuit Court and consolidated with James F. Dooley vs. TCI TKR of Jefferson County and InterMedia Partners of Kentucky, L.P., which was filed on March 24, 1999 in Jefferson County Circuit Court, and (ii) Charles Shaw and Loretta Shaw vs. TCI TKR of Northern Kentucky, Inc. TCI TKR of Southern Kentucky, Inc., TCI Cablevision of North Central Kentucky, Inc., TCI Cablevision of Kentucky, Inc. and InterMedia Partners of Kentucky, L.P., which was filed on June 4, 1999 in the Franklin County Circuit Court. "We have entered into agreements with Plaintiffs' counsel to settle these lawsuits, which received final court approval in December 2002. The settlements will not have a material effect on our results of operations," Insight Midwest L.P. said in a recent SEC disclosure. For more information, contact the company by Mail: 810 7th Avenue, New York, NY 10019 or by Phone: 917-286-2300 KMART CORPORATION: Investors Peg Liabilities for Stock Fraud at $700 M ---------------------------------------------------------------------- Since February 21, 2002, five separate purported class actions have been filed on behalf of purchasers of Kmart common stock. The initial complaints were filed on behalf of purchasers of common stock between May 17, 2001 and January 22, 2002, inclusive, and named Charles C. Conaway, former CEO and Chairman of the Board of Kmart as the sole defendant. The complaints filed in the United States District Court for the Eastern District of Michigan, allege, among other things, that Mr. Conaway made material misstatements or omissions during the alleged class period that inflated the trading prices of Kmart's common stock and seek, among other things, damages under Section 10b-5 of the Securities and Exchange Act of 1934. On October 15, 2002, an amended consolidated complaint was filed that enlarged the class of persons on whose behalf the action was brought to include purchasers of Kmart securities between March 13, 2001 and May 15, 2002, and added former officers Jeffrey N. Boyer, Mark S. Schwartz, Matthew F. Hilzinger, Martin E. Welch III, and PricewaterhouseCoopers LLP as defendants. Kmart is not a defendant in this litigation by virtue of the automatic stay [following its bankruptcy application in January 2002]. On July 31, 2002, attorneys for plaintiffs in the pending class action lawsuits filed a class proof of claim in the Court (the Class Proof of Claim) on behalf of the plaintiffs and all purchasers of Kmart common stock between May 17, 2001 and January 22, 2002, inclusive. The Class Proof of Claim, which is asserted against the Debtors, reserved the right to identify additional claimants or members of the class group in the future. In support of the Class Proof of Claim, the claimants rely on the above-referenced class actions filed against the parties identified above. The claimants state that the grounds for liability are alleged damages for violations of federal securities laws, including the Securities Exchange Act of 1934, in connection with the purchase or acquisition of Kmart common stock by the claimants during the class period. The Class Proof of Claim alleges that the Debtors are liable to the claimants for damages in a sum not presently determinable but believed to be not less than $700 million in the aggregate, plus interest, costs and allowed attorneys' fees. For more information, contact the company by Mail: 3100 W Big Beaver Road, Troy City MI 48084 or by Phone: 248-643-1000 KMART CORPORATION: ERISA Suit Pending in Eastern District of Michigan --------------------------------------------------------------------- On March 18, 2002, a purported class action was filed in the United States District Court for the Eastern District of Michigan on behalf of participants or beneficiaries of the Kmart Corporation Retirement Savings Plan against various current and former employees and directors of Kmart alleging breach of fiduciary duty under the Employee Retirement Income Security Act for excessive investment in Kmart stock; failure to provide complete and accurate information about Kmart common stock; and failure to provide accurate information regarding the company's financial condition. Subsequently, amended complaints were filed that added additional current and former employees and directors of Kmart as defendants. Kmart is not a defendant in this litigation by virtue of the stay. For more information, contact the company by Mail: 3100 W Big Beaver Road, Troy City MI 48084 or by Phone: 248-643-1000 KMART CORPORATION: Faces Six 'Wage Hour' Lawsuits in California --------------------------------------------------------------- Kmart is a defendant in six putative class actions and one multi- plaintiff case pending in California, all relating to Kmart's classification of assistant managers and various other employees as "exempt" employees under the federal Fair Labor Standards Act (FLSA) and the California Labor Code and Kmart's alleged failure to pay overtime wages as required by these laws. These seven wage-and-hour cases were all filed during 2001 and are currently pending in the United States District Court for the Eastern District of California (Henderson v. Kmart), the United States District Court for the Central District of California (Gulley v. Kmart, the multi-plaintiff case, which was originally brought in state court) and the Superior Courts of the State of California for the Counties of Alameda, Los Angeles and Riverside (Panossian v. Kmart, Wallace v. Kmart, Pierce v. Kmart, Hancock v. Kmart, Pryor v. Kmart). "If all of these cases were determined adversely to Kmart, the resulting damages could have a material adverse impact on our results of operations and financial condition," said the company in its latest SEC disclosure. "However, there have been no class certifications, all of the cases are stayed as a result of Kmart's bankruptcy and, based on our initial investigations, we believe that we have numerous defenses. We presently do not expect to have any significant financial exposure as a result of these cases," Kmart's SEC document reads. For more information, contact the company by Mail: 3100 W Big Beaver Road, Troy City MI 48084 or by Phone: 248-643-1000 KMART CORPORATION: Confident Wage Suit in Oklahoma Won't Prosper ---------------------------------------------------------------- Kmart is a defendant in a putative class action pending in Oklahoma relating to the proper payment of overtime to hourly associates under the FLSA. The plaintiff claims he represents a class of all current and former Kmart employees who have been improperly denied overtime pay. This case was filed on March 4, 2003 and is currently pending in the U.S. District Court for the Northern District of Oklahoma, according to the company's latest SEC filing. "At this time, the likelihood of a material unfavorable outcome is not considered probable," Kmart said. For more information, contact the company by Mail: 3100 W Big Beaver Road, Troy City MI 48084 or by Phone: 248-643-1000 LIFEPOINT HOSPITALS: Sued in Tennessee for Disability Act Violations -------------------------------------------------------------------- Lifepoint Hospitals, Inc., in a recent SEC disclosure, revealed that on January 12, 2001, Access Now, Inc., a disability rights organization, filed a class action lawsuit against each of its hospitals, alleging non-compliance with the accessibility guidelines under the Americans with Disabilities Act (ADA). The lawsuit, filed in the United States District Court for the Eastern District of Tennessee, does not seek any monetary damages but, instead, seeks only injunctive relief requiring facility modification, where necessary, to meet the ADA guidelines, along with attorneys' fees and costs. In January 2002, the District Court certified the class action and issued a scheduling order that requires the parties to complete discovery and inspection for approximately six facilities per year. "We intend to vigorously defend the lawsuit, recognizing our obligation to correct any deficiencies in order to comply with the ADA," the SEC document reads. For more details, contact the company by Mail: 103 Powell Court, Suite 200, Brentwood City TN 37027 or by Phone: 615-372-8500 LIFEPOINT HOSPITALS: Former Parent to Answer Future Liabilities, Claims ----------------------------------------------------------------------- HCA Inc. (the company's former parent) is currently the subject of various federal and state investigations, qui tam actions, shareholder derivative and class action suits, patient/payor actions and general liability claims. HCA is also the subject of a formal order of investigation by the SEC. "The description of the matters below is based on our review of HCA's public filings," clarified the company in its latest SEC disclosure. "We understand that the SEC's investigation of HCA includes the anti- fraud, insider trading, periodic reporting and internal accounting control provisions of the federal securities laws. These investigations, actions and claims relate to HCA and its subsidiaries, including subsidiaries that, before our formation as an independent company, owned many of the facilities that we now own." HCA is a defendant in several qui tam actions brought on behalf of the United States by private parties, known as relators, which have been unsealed and served on HCA. The actions allege, in general, that HCA and certain subsidiaries and/or affiliated partnerships violated the False Claims Act, 31 U.S.C. 3729, et seq. by submitting improper claims for reimbursement to the government. The lawsuits generally seek: (a) restitution of amounts paid to HCA entities as a result of any Medicare or Medicaid false claims, (b) a penalty in the amount of three times the restitution amount, (c) civil fines of not less than $5,500 nor more than $11,000 for each such claim, and (d) attorneys' fees and costs. HCA has disclosed that, on March 15, 2001, the Department of Justice announced its decision to intervene in certain of the qui tam actions against HCA. HCA stated that, of the original 30 qui tam actions, the Department of Justice elected to intervene in eight actions. HCA has disclosed that it is aware of additional qui tam actions that remain under seal and that it also believes there may be other sealed qui tam cases of which it is unaware. In December 2000, HCA entered into a series of agreements with the Criminal Division of the Department of Justice and various U.S. Attorneys' Offices and with the Civil Division of the Department of Justice, which resolved all federal criminal issues outstanding against HCA and certain issues involving federal civil claims by or on behalf of the government against HCA relating to DRG coding, outpatient laboratory billing and home health issues. These December 2000 agreements related only to conduct that was the subject of the various federal investigations and did not resolve various qui tam actions filed by private parties against HCA or pending state actions. On March 28, 2002, HCA announced that it reached an understanding with CMS to resolve all Medicare cost report, home office cost statement, and appeal issues between HCA and CMS. The understanding provides that HCA would pay CMS $250 million with respect to these matters. The resolution is subject to approval by the Department of Justice and execution of a definitive written agreement. On December 18, 2002, HCA announced that it reached an understanding with the Department of Justice to settle, subject to certain conditions, the remaining litigation brought by the Department of Justice against HCA. The understanding provides that, in exchange for releases by the Department of Justice, HCA will pay the Department of Justice an additional $631 million. HCA announced that, in addition, it has also reached an agreement in principle with representatives of certain states to pay $17.5 million to state Medicaid agencies to resolve similar claims against HCA made by those states. "HCA has agreed to indemnify us for any losses, other than consequential damages, arising from the governmental investigations of HCA's business practices prior to the date of the distribution and losses arising from legal proceedings, present or future, related to the investigation or actions engaged in before the distribution that relate to the investigation," the company said. "HCA has also agreed to make specified payments to us if any hospital owned by us at the time of the spin-off is permanently excluded from participation in the Medicare and Medicaid programs as a result of the proceedings described above. However, we could be held responsible for any claims that are not covered by the agreements reached with the federal government or for which HCA is not required to, or fails to, indemnify us. "In addition, should HCA be unable to fulfill its obligations to the federal government, we could ultimately be held responsible for any settlement related to the former HCA hospitals operated by us. If indemnified matters were asserted successfully against us or any of our facilities, and HCA failed to meet its indemnification obligations, such an event could have a material adverse effect on our business, financial condition, results of operations or prospects," the company said. "We cannot predict with accuracy the extent to which we may or may not continue to be affected by the ongoing investigations of HCA and the initiation of additional investigations, if any. These matters, if resulting in a successful claim against us, could have a material adverse effect on our business, financial condition, results of operations or prospects in future," the company added. For more details, contact the company by Mail: 103 Powell Court, Suite 200, Brentwood City TN 37027 or by Phone: 615-372-8500 LUCENT TECHNOLOGIES: Settles All Securities Fraud Lawsuits for $600MM+ ---------------------------------------------------------------------- Lucent Technologies has agreed to pay more than $600 million to settle more than 50 shareholder lawsuits according to David J. Bershad a senior partner at Milberg Weiss Bershad Hynes & Lerach LLP, which is Co-Lead Counsel for the shareholders in In re Lucent Technologies Inc, the lead case involved in the settlement. That action, which will receive approximately $500 million as part of the settlement agreement alleged that Lucent misled investors who purchased the Company's stock between October 26, 1999 and December 21, 2000. This agreement would provide compensation for a record number of shareholders in a securities suit, and marks the second largest securities settlement in history. Mr. Bershad, who negotiated the global agreement stated, "We are proud of this settlement. It is a victory for the hundreds of thousands of investors who purchased Lucent shares." Milberg Weiss Bershad Hynes & Lerach LLP filed a class action lawsuit in 2000 on behalf of lead plaintiffs Teamsters Locals 175 and 505 of West Virginia. The complaint charged that during the class period, in an effort to conceal from the investing public that the Company was experiencing serious undisclosed problems in its important optical networking business, Lucent misrepresented the demand for its optical networking products and engaged in a variety of improper accounting practices designed to artificially inflate Lucent's publicly reported financial results, including booking hundreds of millions of dollars of revenue from phony sales. When the truth about the company's products became known and the Company was forced to issue financial restatements, the stock price plummeted, from a class period high of $84.19 to $12.19. After the class period ended, Lucent's share price continued to erode dropping to below a dollar per share in late 2000. "The resolution demonstrates the impact of major institutional investors, like the Teamsters, can have, working in tandem with the plaintiff's bar to achieve fair recoveries for victims of corporate wrongdoing while keeping in mind the viability of the defendant's enterprise," Bershad continued. This settlement also resolves all outstanding class action cases of related litigation against Lucent involving securities fraud. Lucent will pay for the settlement in cash, Lucent stock, and Lucent warrants. "This settlement will permit Lucent to put the past behind and build for the future," Bershad continued. Lucent Technologies, headquartered in Murray Hill, N.J., USA, designs and delivers networks for the world's largest communications service providers. Backed by Bell Labs research and development, Lucent relies on its strengths in mobility, optical, data and voice networking technologies as well as software and services to develop next- generation networks. The company's systems, services and software are designed to help customers quickly deploy and better manage their networks and create new, revenue-generating services that help businesses and consumers. For more information on Lucent Technologies, visit its Web site at http://www.lucent.com. MAYTAG CORP: Recalls 23,000 Gemini Gas Ranges for Fire and Burn Hazard ---------------------------------------------------------------------- Maytag Corp., of Newton, Iowa, is cooperating with the U.S. Consumer Product Safety Commission (CPSC), by voluntarily recalling to repair about 23,000 Gemini gas ranges. The range can experience a delayed ignition flashback fire in the upper oven, which poses a fire and burn hazard to consumers. Maytag has received nine reports of flashback fires, including three minor burn injuries and incidents where consumers suffered singed hair or clothing. The recall involves all Maytag Gemini Gas Ranges. The Gemini ranges are free standing, have separate upper and lower ovens, and come in white, black, bisque and a stainless finish. The "Maytag" and "Gemini" names and logos appear on the control panel. The recalled ranges have a model number of MGR6772 and a serial number with the alpha characters AJ through AX or CA through CC, both of which are located on a flip-up serial tag behind the upper left corner of the control panel. The ranges were manufactured in the United States. Retail appliance stores nationwide sold the ranges from July 2002 through February 2003 for between $1,300 and $1,500. Consumers should immediately stop using the upper oven self-clean and broil features and consumers should not use the upper oven simultaneously with the lower oven. Use of the lower oven is not affected by this repair and may be used in normal operation. For more details, contact Maytag by Phone: (866) 580-9177, between 8 a.m. and 5 p.m. ET Monday through Friday to arrange for a free, in-home repair by an authorized Maytag Customer Service contractor, or visit the company's Web site http://www.maytag.com. NORTHROP GRUMMAN: Securities Lawsuits vs. TRW in Ohio Dismissed --------------------------------------------------------------- The putative class action lawsuits filed against TRW Inc. (now a subsidiary) relating to Northrop Grumman Corporation's then-proposed offer to acquire TRW, reported in TRW's Form 10-Q for the quarter ended March 31, 2002, have been dismissed with prejudice, says the company's latest SEC disclosure. The putative class action lawsuit filed against TRW on behalf of a proposed class of TRW shareholders in the United States District Court for the Northern District of Ohio was dismissed on October 3, 2002. The two putative class action lawsuits filed against TRW on behalf of a proposed class of TRW shareholders in Common Pleas Court, Cuyahoga County, Ohio, were dismissed on December 2, 2002. For additional information, contact the company by Mail: 1840 Century PK E, c/o Northrop Grumman Corporation, Los Angeles CA 90067 or by Phone: 310-553-6262 NORTHROP GRUMMAN: California Derivative Lawsuits Submitted for Decision ----------------------------------------------------------------------- In July and August 1998, three shareholder derivative lawsuits, respectively encaptioned Zabielski v. Kent Kresa, et al., Harbor Finance Partners v. Kent Kresa, et al., and Clarren v. Kent Kresa, et al., were filed in the Superior Court of California for the County of Los Angeles. These lawsuits each contain similar allegations that the directors of the company and certain of its officers breached their fiduciary duties in connection with the shareholder vote approving the proposed acquisition of the company by Lockheed Martin Corporation, and that certain defendants engaged in stock trades in violation of federal and state securities laws. The lawsuits are purportedly brought on the company's behalf and do not seek relief against the company. On January 31, 2001, the State Court dismissed these actions with prejudice and plaintiffs subsequently filed a timely appeal. Oral argument took place on February 18, 2003, and the matter stands submitted. The defendants deny the allegations made in these actions and intend to vigorously defend the actions. For additional information, contact the company by Mail: 1840 Century PK E, c/o Northrop Grumman Corporation, Los Angeles CA 90067 or by Phone: 310-553-6262 RAYTHEON COMPANY: Discovery Continues in 1999 Securities Lawsuit ---------------------------------------------------------------- During late 1999, Raytheon Company and two of its officers were named as defendants in several purported class action lawsuits. These lawsuits were consolidated into a single complaint in June 2000, when four additional former or present officers were named as defendants in a Consolidated and Amended Class Action Complaint (the Consolidated Complaint) with the caption, In Re Raytheon Securities Litigation (Civil Action No. 12142-PBS), filed in the U.S. District Court in Massachusetts. The Consolidated Complaint principally alleges that the defendants violated federal securities laws by purportedly making misleading statements and by failing to disclose material information concerning the Company's financial performance during the purported class period. In September 2000, the Company and the individual defendants filed a motion to dismiss the Consolidated Complaint. The plaintiffs opposed the motions. The court heard arguments in February 2001, and in August 2001 the court issued an order dismissing most of the claims asserted against the Company and the individual defendants. In March 2002, the court certified the class of plaintiffs as those people who purchased Raytheon stock between October 7, 1998 through October 12, 1999. On March 17, 2003 the named plaintiff filed a Second Consolidated and Amended Complaint which did not change the claims against the Company or the individual defendants, but which seeks to add the Company's auditor as an additional defendant. Discovery is proceeding on the two circumstances that remain the subject of claims. For more information, contact the company by Mail: 141 Spring Street, c/o Raytheon Co., Lexington MA 02421 or by Phone: 781-862-6600 SEARS ROEBUCK: Recalls 5,200 Electric Routers for Injury Hazard ---------------------------------------------------------------- Sears Roebuck and Co. (Sears), of Hoffman Estates, Ill., and OWT Industries, Inc., of Pickens, S.C., are cooperating with the U.S. Consumer Product Safety Commission (CPSC) by voluntarily recalling about 5,200 electric routers used in woodworking. The on-off switch on the routers could stick in the "on" position, posing a risk of serious lacerations to the operator and bystanders. Sears has not received any reports of injuries or incidents. This recall is being conducted to prevent the possibility of injury. This recall involves Craftsman(r) routers, model number 315.17510 with date codes of A3025 or lower. The model numbers and date codes are printed on a black data label located on the electric motor's housing. The routers have an aluminum base with black handles and a black motor. All affected routers were packaged with a cloth carry bag under the stock number 17518. Routers sold without the bag are not involved in the recall. Sears sold these routers nationwide from November 2002 through January 2003 for about $60. Consumers are advised to stop using these routers immediately and return them to their nearest Sears store for a product exchange. For more information, contact the company by Phone: (800) 932-3188 between 8 a.m. and 5 p.m. ET Monday through Friday, or visit the firm's Web site: http://www.sears.com. ST. JUDE: Decision on Certification of Silzone Cases Expected This Year ----------------------------------------------------------------------- St. Jude Medical, Inc. has been sued by patients alleging defects in the Company's mechanical heart valves and valve repair products with Silzone(R) coating. Some of these cases, both in the United States and Canada, are seeking monitoring of patients implanted with Silzone(R)- coated valves and repair products who allege no injury to date. Some of these cases are seeking class action status. The Company voluntarily recalled products with Silzone(R) coating on January 21, 2000, and sent a Recall Notice and Advisory concerning the recall to physicians and others. In 2001, the U.S. Judicial Panel on Multi-District Litigation ruled that certain lawsuits filed in U.S. federal district court involving products with Silzone(R) coating should be part of Multi-District Litigation proceedings under the supervision of U.S. District Court Judge John Tunheim in Minnesota. As a result, actions in federal court involving products with Silzone(R) coating have been and will likely continue to be transferred to Judge Tunheim for coordinated or consolidated pretrial proceedings. The hearing concerning requests by certain plaintiffs to have matters proceed as class actions occurred on October 2, 2002. Judge Tunheim is presently considering plaintiffs' motions for class certification, and a decision by Judge Tunheim in this regard is expected in early 2003. There are other actions involving products with Silzone(R) coating in various state courts that may or may not be coordinated with the matters presently before Judge Tunheim. The lawsuits in Canada are proceeding in accordance with separate schedules issued by the applicable provincial courts. A hearing concerning the certification of a class action in Ontario, Canada, is currently scheduled for June 2003. While it is not possible to predict the outcome of the various cases involving Silzone(R) products, the Company believes that it has adequate product liability insurance to cover the costs associated with them. The Company further believes that any costs not covered by product liability insurance will not have a material adverse impact on the Company's financial position or liquidity, but may be material to the consolidated results of operations of a future period. For more information, contact the company by Mail: One Lillehei Plaza, St. Paul, Minnesota 55117 or by Phone: (651) 483-2000 TORCHMARK CORPORATION: Plaintiffs in 1999 Suit Move for Certification --------------------------------------------------------------------- On December 8, 1999, purported class action litigation was filed against Liberty National Insurance Holding Co. (now Torchmark Corporation) in the United States District Court for the Northern District of Alabama (Moore v. Liberty National Life Insurance Company, Case No. CV-99-BU-3262-S), on behalf of all African-Americans who have or have had at the time of policy termination an ownership interest in certain life insurance policies ($25,000 face amount or less) marketed by Liberty and certain of its former subsidiaries. The alleged class period covers virtually the entire twentieth century. Plaintiffs allege racial discrimination in Liberty's premium rates in violation of 42 U.S.C. 1981, breach of fiduciary duty in sales and administrative practices, receipt of excessive and unreasonable premium payments by Liberty, improper hiring, supervision, retention and failure to monitor actions of officers, agents and employees, breach of contract in dismantling the debit premium collection system, fraudulent inducement and negligent misrepresentation. Unspecified compensatory and punitive damages are sought together with a declaratory judgment and equitable and/or injunctive relief, including establishment of a constructive trust for the benefit of class members. Defendants filed a motion for judgment on the pleadings or in the alternative for summary judgment on January 27, 2000. On April 7, 2000, the District Court entered an order granting Liberty's motion for judgment on the pleadings and dismissing plaintiffs' claims under 42 U.S.C. 1981 with prejudice as time-barred and dismissing their state law claims without prejudice to re-file in state court if desired. Plaintiffs subsequently filed motions with the District Court to reconsider its April 7, 2000 order and for permission to file an amended complaint adding similar claims under 24 U.S.C. 1982. Liberty opposed this motion. On June 22, 2000, a purported class action litigation with allegations comparable to those in the Moore case was filed against Liberty in the Circuit Court of Jefferson County, Alabama (Baldwin v. Liberty National Life Insurance Company, Case No.CV00-684). The Baldwin case is currently stayed pending disposition of the Moore case. On July 3, 2000, the District Court issued an order in the Moore case granting in part and denying in part the plaintiffs' motions. The District Court ordered the Moore plaintiffs to file an amended complaint setting forth their claims under 28 U.S.C. 1981 and 1982 and, if such claims are timely, any state law claims for breach of contract related to the discontinuance of debit collections, and dismissed with prejudice all remaining state law claims of the plaintiffs as time- barred by the common law rule of repose. On July 14, 2000, plaintiffs filed their amended complaint with the District Court and Liberty filed a motion to alter or amend the District Court's July order or, in the alternative, requested that the District Court certify for purposes of appeal the issue whether the state law doctrine of repose should be applied to and bar plaintiffs' actions under 28 U.S.C. 1981 and 1982. The District Court entered such an order on July 21, 2000 and stayed proceedings in Moore pending resolution of Liberty's petition to the U.S. Circuit Court of Appeals for the Eleventh Circuit. Liberty filed a petition on July 30, 2000 with the Eleventh Circuit seeking that Court's permission to appeal the portions of the District Court's July order in Moore granting the plaintiffs the right to file the amended complaint. The Eleventh Circuit Court granted Liberty's motion and agreed to consider Liberty's arguments regarding the applicability of the state law of repose to actions under 28 U.S.C. 1981 and 1982. Oral arguments were heard by the Eleventh Circuit Court on July 20, 2001. On September 28, 2001, the Eleventh Circuit Court ruled that the rule of repose was not a bar to the Moore claims in federal court and that there is no reverse pre-emption under the McCarrin Ferguson Act. Liberty filed a petition seeking an en banc rehearing in the Eleventh Circuit Court, which was subsequently denied. Liberty filed a petition for a writ of certiorari with the U.S. Supreme Court on February 21, 2002, which has been denied. The plaintiffs filed their motion for class certification in Moore with the District Court on December 20, 2002 and Liberty filed its opposition to this motion on February 3, 2003. For more details, contact the company by Mail: 2001 3rd Avenue S., Birmingham AL 35233 or by Phone: 205-325-4200 TORCHMARK CORPORATION: Faces 16 Discrimination Lawsuits in Alabama ------------------------------------------------------------------ Four individual cases with similar allegations to those in the Moore case, which were filed against Liberty in various state Circuit Courts in Alabama remain pending and have been removed and/or transferred to the U.S. District Court for the Northern District of Alabama. The Moore case and all cases transferred to the Northern District of Alabama have been assigned to Judge U.W. Clemon, a noted former civil rights attorney. In the earliest filed of the individual state court actions, Walter Moore v. Liberty National Life Insurance Company (Circuit Court of Dallas County, Alabama, CV 00-306) the Court entered an order granting summary judgment in favor of Liberty based upon the doctrine of repose and has subsequently denied a motion to reconsider its dismissal of this case. Hudson v. Liberty National Life Insurance Company, one of the four individual cases referenced above, was filed in the Circuit Court of Bullock County, Alabama on February 28, 2001 (Case No.CV2001-25) and contains similar allegations to those in Moore. After denials by the Bullock Circuit Court of Liberty's motion to dismiss and request that certain questions arising in the litigation be certified to the Alabama Supreme Court, Liberty sought a writ of mandamus on the certified questions issue from the Alabama Supreme Court. The Alabama Supreme Court agreed to hear Liberty's petition for writ of mandamus seeking to have the Supreme Court direct the trial court to grant Liberty's motion to dismiss or for a summary judgment or to certify for interlocutory appeal the Circuit Court's denial of such motion. On January 18, 2002, the Alabama Supreme Court denied Liberty's request for the writ of mandamus but noted that Liberty's motion for summary judgment based on the rule of repose remained pending in the trial court and was ripe for adjudication. Upon remand, plaintiff amended his complaint to add causes of action under federal law and this case has been removed to federal court as discussed above. In the fifth individual state court action, (Edwards v. Liberty National Life Insurance Company, Case No. CV 0005872), the trial court denied Liberty's motion seeking a summary judgment based upon the rule of repose but indicated that it would reconsider that motion after discovery. Liberty filed a motion to alter or amend the trial court's order, or in the alternative, for an interlocutory appeal. In September 2001, the trial court in that case vacated its earlier order and stayed the litigation pending resolution of the Hudson case, which is discussed above. On February 22, 2002, the trial court held a hearing regarding the stay in Edwards. The trial court permitted the plaintiffs very limited discovery. Separately, on March 15, 2001, purported class action litigation was filed against Liberty in the United States District Court for the District of South Carolina (Hinton v. Liberty National Life Insurance Company, Civil Action No. 3-01-68078 19), containing allegations largely similar to the Moore case filed in the Federal District Court for the Northern District of Alabama. Liberty was described in the suit as successor in interest of New South Life Insurance Company (New South), an insurer acquired out of receivership by an entity, which was subsequently acquired by Peninsular Life Insurance Company (Peninsular). In 1985, Liberty reinsured a block of insurance business from Peninsular, including business formerly written by New South. Liberty has requested indemnification in the Hinton litigation from Peninsular and its successors in interest. Liberty sought a writ of mandamus in Hinton from the Fourth Circuit Court of Appeals as well as a change of venue to consolidate the Hinton case with the Moore case currently pending in Federal District Court in Alabama. Both the change in venue and the writ of mandamus were denied. However, the South Carolina District Court issued an order inviting the parties to resubmit a motion for change of venue. Liberty National filed such a motion to transfer the case to the U.S. District Court for the Northern District of Alabama, which was granted by the South Carolina District Court on February 12, 2002. Another action with similar allegations to Moore, which also includes claims for race discrimination under 24 U.S.C. 1981 and 1982, was filed against Liberty in U.S. District Court for the Northern District of Alabama on January 28, 2002 (Hull v. Liberty National Life Insurance Company, Civil Action No. CV-02-C-0219-W). There are a total of 16 race-distinct mortality cases pending in the U.S. District Court for the Northern District of Alabama (with two of such cases having been originally filed in the U.S. District Court for the Northern District of Georgia), including Sunday v. Liberty National Life Insurance Company, Case No. CV02-BE-0639-S), in which approximately 460 individuals assert that they had discriminatory insurance policies with Liberty. The Baldwin and Edwards cases remain pending in Alabama Circuit Courts. Plaintiffs' attorneys have actively advertised for additional plaintiffs to join these suits or file additional suits. For more details, contact the company by Mail: 2001 3rd Avenue S., Birmingham AL 35233 or by Phone: 205-325-4200 TORCHMARK CORPORATION: 120 Discrimination Cases Pending in Mississippi ---------------------------------------------------------------------- On December 27, 2002, individual litigation involving 120 separate plaintiffs with substantially similar allegations, was filed against Liberty in the Circuit Courts of Holmes County, Mississippi (Billingsley v. Liberty National Life Insurance Company, Civil Action No.: 2002-532), of Bolivar County, Mississippi (Hudson v. Liberty National Life Insurance Company, Civil Action No.: 2002-170) and of Leflore County, Mississippi (Teague v. Liberty National Life Insurance Company, Civil Action No.: 2002-0218-CICI). Plaintiffs in each action assert that Liberty and its sales agents marketed small value debit insurance policies at racially discriminatory rates to African Americans using racially discriminatory sales and administrative practices and collected premium payments which are alleged to be excessive and unconscionable in that such premiums exceeded the face amount of insurance issued. Unspecified actual and punitive damages, attorneys fees, costs and interest, as well as the imposition of a constructive trust or disgorgement are sought for claims of fraud and fraudulent inducement, breach of the duty of good faith and fair dealing, tortuous breach of contract, breach of fiduciary duty, money had and received, unjust enrichment, negligence and/or gross negligence, violations of the Mississippi Consumer Protection Act, conversion and violations of Mississippi Code Ann. 83-7-3 (prohibiting discrimination by life insurers in the assessment of premiums to policyholders). For more details, contact the company by Mail: 2001 3rd Avenue S., Birmingham AL 35233 or by Phone: 205-325-4200 TORCHMARK CORPORATION: Fraud, Misrepresentation Cited in 70 Other Cases ----------------------------------------------------------------------- On December 23, 2002, seventy individual plaintiffs filed an action against Liberty and certain of its sales agents in the Circuit Court of Holmes County, Mississippi (Thurmond v. Liberty National Life Insurance Company, Cause No.: 2002-517). The plaintiffs, all African Americans, assert claims of fraudulent and reckless misrepresentation, innocent misrepresentation, fraudulent concealment and suppression, breach of contract in the dismantling of Liberty's debit collection system and racial discrimination under various sections of the Mississippi Code Annotated in connection with the marketing, sale and administration by Liberty of plaintiffs' industrial low value whole life, accident and/or burial insurance policies. Actual and punitive damages in an unspecified amount, interest and costs are sought. For more details, contact the company by Mail: 2001 3rd Avenue S., Birmingham AL 35233 or by Phone: 205-325-4200 TORO COMPANY: Recalls 3,400 Snowthrowers for Fire and Injury Hazard ------------------------------------------------------------------- The Toro Company, of Bloomington, Minn., in cooperation with the U.S. Consumer Product Safety Commission (CPSC), is voluntarily recalling about 3,400 Toro Snow Commander snowthrowers. The plastic fuel tank can crack and leak gasoline, posing a risk for fire and injury. Toro has received 29 reports of fuel leaking. No fires or injuries have been reported. This recall includes 2001 Toro Snow Commander snowthrowers with model number 38600 (serial numbers between 210000001 and 210999999) and model number 38602 (serial numbers between 210000001 and 210999999). The model and serial numbers are located on the rear of the axle plate between the wheels. The snowthrowers were sold nationwide October 2000 through March 2003 for between $850 and $950. For more information, contact Toro by Phone: (800) 689-8671 between 8 a.m. and 6 p.m. CT Monday through Friday or 9 a.m. and 4 p.m. Saturday, or visit the firm's Web site: http://www.toro.com. WORLDCOM: Pension Fund Sues Auditor and Bond Underwriters for Fraud ------------------------------------------------------------------- The Maryland-National Capital Park and Planning Commission's public pension fund, representing more than $400 million in the Planning Commission employees' retirement savings, announced a lawsuit to recover losses against the auditor and the major underwriters of WorldCom bonds purchased by the Pension Fund, reported Associated Press Newswires. The Park and Planning Commission Retirement System provides retirement and health services to 2,000 public servants. The lawsuit was filed in Prince George's County Circuit Court by the law firm of Milberg Weiss Bershad Hynes & Lerach, on behalf of the Maryland-National Capital Park and Planning Commission Employees' Retirement System. The suit calls for full recovery of losses relating to the purchases of the bonds. Named as defendants are: WorldCom's auditor, Arthur Andersen LLP and 17 underwriters including Citigroup, Salomon Smith Barney, J.P. Morgan, Bank of America Corp., Lehman Brothers, Goldman Sachs and Credit Suisse First Boston. "Our retirement system is financially sound and continues to perform well in this market; however, the Board will not tolerate our members and beneficiaries being taken advantage of by Wall Street," said George H. Lowe, Jr., Chairman of the Park and Planning Commission Retirement System. "Our suit charges that the company clearly knew -- and the banks clearly had reason to know -- that the WorldCom books falsely portrayed the company's true financial picture." Mr. Lowe is concerned that the banks named in the lawsuit underwrote the bonds so that WorldCom could use the monies raised to avoid drawing down on the same banks' outstanding credit line to WorldCom. "The complaint filed on behalf of the Park and Planning Commission Retirement System details extensive and widespread financial malfeasance by WorldCom executives and the underwriter banks. This sort of corporate and Wall Street misconduct places every public and private pension plan trustee on notice that the days of placing trust in Wall Street are over," said William Lerach, a managing partner for Milberg Weiss and counsel in this and many other major cases involving corporate fraud. "The lawsuit is not just an attempt to hold the company executives responsible. The trustees want the banking community to know they will not stand for this breach of the securities laws at the expense of the pension fund." ********* ACCLAIM ENTERTAINMENT: Bernstein Liebhard Files Lawsuit in E.D. NY ------------------------------------------------------------------ Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for Eastern District of New York, on behalf of all persons who purchased or acquired Acclaim Entertainment, Inc. (NASDAQ: AKLM) securities between January 11, 2002 and September 19, 2002, inclusive. Plaintiff alleges that Acclaim, which is a developer of interactive entertainment software, and certain of its executive officers, committed violations of federal securities laws. Among other things, Plaintiff claims that Defendants' material omissions and the dissemination of materially false and misleading statements concerning Acclaim's financial performance caused Acclaim's stock price to become artificially inflated, inflicting damages on investors. Plaintiff alleges that during the Class Period, Defendants improperly capitalized software development costs and overstated earnings by recording declining allowances for returns and price concessions together with failing to write down receivables despite deteriorating customer quality and increasing delinquent accounts receivables. Plaintiff further claims that these materially false and misleading statements caused Acclaim's shares to trade at artificially inflated levels and that, as a result of this inflation, Acclaim was able to complete a private placement offering raising net proceeds of $21.5 million on April 11, 2002. On September 19, 2002, just months after the offering was completed, Acclaim revealed that its fiscal year 2002 first and second quarter results and 2003 projections were false when issued. As a result of this news, Acclaim stock dropped from a Class Period high of $5.85 to less than $1 per share. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 or by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: AKLM@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com AFC ENTERPRISES: Levy and Levy Files Securities Fraud Suit in N.D. GA --------------------------------------------------------------------- Levy and Levy, P.C. initiated a securities class action in the United States District Court for the Northern District of Georgia on behalf of all purchasers of the common stock of AFC Enterprises, Inc. (Nasdaq: AFCE) from March 2, 2001 through March 24, 2003, inclusive. The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of statements that were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (a) that the Company was improperly accounting for the value of certain long-lived assets, thereby artificially inflating its operating results; (b) that the Company was improperly accounting for the sale of corporate-owned stores to franchisees, thereby artificially inflating its operating results; (c) that the Company was improperly accounting for cooperative advertising costs, thereby understating its advertising expenses and artificially inflating its operating results; (d) that the Company's Seattle Coffee Company was improperly accounting for inventory, sales allowances and slotting fees; and (e) as a result of the foregoing, the Company's financial statements published during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles and, therefore, it was not true that the Company's financial statements were a "fair presentation" of the Company's financial position. On March 24, 2003, after the market closed, AFC shocked the market by announcing that it would be restating its financial statements for fiscal year 2001 and the first three quarters of 2002. The Company also reported that it was examining whether or not its financial statements for fiscal year 2000 should be restated. In response to this negative announcement the price of AFC common stock dropped precipitously, falling to as low as $12.30 per share, on extremely heavy trading volume. For more details, contact Stephen G. Levy, Esq. by Mail: One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 or by Phone: 203-564-1920 or by E-mail: LLNYCT@aol.com AFC ENTERPRISES: Milberg Weiss Files Securities Fraud Suit in N.D. GA --------------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of AFC Enterprises, Inc. (NASDAQ: AFCE) between March 2, 2001 and March 24, 2003 inclusive. The action is pending in the United States District Court for the Northern District of Georgia, Atlanta Division, against defendants AFC, Frank J. Bellati (CEO) and Gerald J. Wilkins (CFO). The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between March 2, 2001 and March 24, 2003, thereby artificially inflating the price of AFC securities. According to the complaint, the Company's class period statements were materially false and misleading because the press releases and SEC filings issued during the Class Period failed to reveal that AFC inflated its operating results by: (1) improperly accounting for the sale of corporate-owned stores to franchisees; (2) improperly accounting for the value of certain long-lived assets; (3) understating advertising costs; and (4) improperly accounting for inventory at the Company's Seattle Coffee Company division. As a result of the Company's fraudulent accounting, AFC's financial statements published during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles and, therefore, it was not true that the Company's financial statements were a "fair presentation" of the Company's financial position. Indeed, by announcing its intention to restate its financial statements, AFC has admitted that its prior financial statements were materially false and misleading when issued. On March 24, 2003, after the market closed, AFC shocked the market by announcing that it would be restating its financial statements for fiscal year 2001 and the first three quarters of 2002. The Company also reported that it was examining whether or not its financial statements for fiscal year 2000 should be restated. In response to this negative announcement the price of AFC common stock dropped by over 20% on extremely heavy trading volume. AFC insiders privy to the Company's fraudulent accounting practices did not share investors' losses. In a December 2001 public offering, AFC insiders unloaded 7,000,000 shares of their holdings at $23 per share . Indeed, during the Class Period, defendants and other Company insiders cashed out at prices as high as $34 per share, reaping profits of over $30 million. For more information, visit the firm's Web site: http://www.milberg.com ALLOY INC: Wolf Haldenstein Files Securities Fraud Lawsuit in S.D. NY --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action against Alloy, Inc. (Nasdaq: ALOY) and certain officers and directors in the United States District Court for the Southern District of New York, on behalf of all persons who purchased the company's common stock between August 1, 2002 and January 23, 2003, inclusive. , During the Class Period, Alloy asserted that it had an advantage over competitor teen retailers and media businesses because of the complementary way its merchandising and advertising segments existed. Alloy also claimed that because of its complemented merchandising and advertising segments, the Company was enabled to thrive regardless of difficult market conditions in the second half of 2002. The complaint alleges that Alloy actually experienced great competition for the youth market and the frail economy caused the Company to lower its prices and raise operating expenses, through the offer of free shipping and deep discounts, diminishing Alloy's gross profit margin. On January 23, 2003, the Company disclosed that EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11 million to $12 million, not the earlier projected range of $15 million to $16 million. Alloy also announced that the prior forecast of fiscal 2002 EBTA, $34 million to $38 million, would instead be $30 to $31 million. Following this news, the Company's share priced dropped by 49%. For more information contact Fred Taylor Isquith, Esq., Gustavo Bruckner, Esq., Michael Miske, George Peters, or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Web site: http://www.whafh.com ANDRX CORPORATION: Brian M. Felgoise Files Securities Suit in S.D. FL --------------------------------------------------------------------- The Law Offices of Brian M. Felgoise, P.C. initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of shareholders who acquired Andrx Corporation (Nasdaq:ADRX) securities between October 31, 2002 and March 4, 2003, inclusive. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. For queries, contact: Brian M. Felgoise, Esquire by Mail: 261 Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046, by E-mail: FelgoiseLaw@aol.com or by Phone: (215) 886-1900. CARREKER CORPORATION: Bernstein Liebhard Files Lawsuit in N.D. Texas -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for Northern District of Texas, on behalf of all persons who purchased or acquired Carreker Corporation (NASDAQ: CANIE) securities between May 20, 1998 and December 10, 2002, inclusive. The lawsuit alleges that during the Class Period, Defendants issued numerous financial statements that were materially false and misleading because they included figures that reflected improper accounting practices, namely, improper revenue recognition, thereby artificially inflating the Company's reported financial results. On December 10, 2002, Defendants issued a press release announcing that they were reviewing Carreker's previously published and filed financial statements and that its previous financial reports should not be relied upon because the Company might have improperly recognized revenues by booking them immediately instead of ratably over a period of time, as required by Generally Accepted Accounting Principles ("GAAP"). Defendants stated that any errors would likely be fixed through a restatement shifting the revenues to the quarter in which they should properly have been recognized under GAAP. In response to this disclosure, Carreker common stock fell almost 23% from a December 9, 2002 close of $5.08 per share to a closing price of $3.98 per share on December 10, 2002. After this disclosure, the SEC opened an investigation into the Company's accounting practices, which is ongoing. On January 28, 2003, the Company announced that it would, indeed, be restating almost four years of its financial statements beginning with fiscal year 1998. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 or by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: CANIE@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com ELECTRO SCIENTIFIC: Stoll Stoll Files Securities Fraud Suit in Oregon --------------------------------------------------------------------- Stoll Stoll Berne Lokting & Shlachter P.C. initiated a securities class action in the United States District Court for the District of Oregon on behalf of all purchasers of the common stock of Electro Scientific Industries Inc. (Nasdaq: ESIO) between September 17, 2002 and March 20, 2003, inclusive. The complaint charges Electro Scientific Industries Inc. ("ESI") and certain of its officers and directors with issuing false and misleading statements concerning its reported financial condition, including its publicly reported earnings. Specifically, the complaint alleges that, during the Class Period, the Company issued materially false financial statements and reported materially false earnings to the market. These statements had the effect of artificially raising the price of ESI stock so that investors who purchased ESI shares during the Class Period did so at inflated prices and were damaged thereby. On March 20, 2003, ESI stunned investors by announcing that its previously issued financial statements for the quarters ended August 31, 2002 and November 30, 2002, overstated income by at least $3.2 million due to improper accounting. For queries, contact David F. Rees by Phone: 1-503-227-1600 or by E- mail: drees@ssbls.com. HEALTHSOUTH CORPORATION: Kaplan Fox Files Securities Lawsuit in N.D. AL ----------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against HealthSouth Corporation (NYSE:HRC) and certain of its officers and directors, in the United States District Court for the Northern District of Alabama. This suit is brought on behalf of all persons or entities, other than defendants, who purchased HealthSouth securities between March 31, 1998 and March 18, 2003, inclusive. The complaint alleges that HealthSouth and certain of its officers and directors violated the federal securities laws by issuing false and misleading financial statements during the Class Period. The Complaint alleges that shortly after HealthSouth's initial public offering in 1986, the Company began to artificially inflate its earnings to match Wall Street analysts' expectations and maintain the market price of HealthSouth's common stock. Between 1999 and the second quarter of 2002, HealthSouth intentionally overstated its earnings by at least $1.4 billion. For more details contact Frederic S. Fox, Esq. or Hae Sung Nam, Esq. by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E-mail: mail@kaplanfox.com or visit the firm's Web site: http://www.kaplanfox.com I2 TECHNOLOGIES: Cauley Geller Commences Securities Lawsuit in N.D. TX ---------------------------------------------------------------------- The Law Firm of Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of purchasers of i2 Technologies, Inc. (Nasdaq: ITWO) publicly traded securities during the period between April 18, 2000 and January 24, 2003, inclusive. The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 18, 2000 and January 24, 2003, thereby artificially inflating the price of i2 securities. The complaint alleges that throughout the Class Period, in press releases and in filings with the SEC, the Company reported increasing revenues and "record" financial results. As alleged in the complaint, these statements were each materially false and misleading when made because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its revenue by improperly recognizing revenue on certain customer contracts; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) as a result of the foregoing, the Company's financial statements issued during the Class Period were materially false and misleading. On January 27, 2003, before the opening of trading, i2 shocked the investing public when it announced that it would re-audit its financial statements for the years ended December 31, 2000 and 2001 because "recent information developed during the audit committee's ongoing investigation of certain allegations regarding the company's revenue recognition with respect to certain customer contracts and its financial reporting for those years." The Company further reported that it had notified the SEC of these allegations, and that the SEC staff has begun an informal inquiry into these matters. The Company also advised investors that they should not rely on the financial information contained in the company's annual reports on Form 10-K for the years ended December 31, 2000 and 2001 or in the company's quarterly reports on Form 10-Q for the quarters ended March 31, 2000 through September 30, 2002. Market reaction was swift and negative, with i2 common stock falling from a close of $1.26 on January 24, 2003 to a close of $0.92 on January 27, 2003, the next trading day, or a single-day decline of more than 26%, on very heavy trading volume. For queries, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438 Little Rock, AR 72221-5438 or by Phone: 1-888-551-9944 or by E-mail: info@cauleygeller.com or visit the firm's Web site at http://www.cauleygeller.com KING PHARMACEUTICALS: Weiss & Yourman Files Securities Suit in E.D. TN ---------------------------------------------------------------------- Weiss & Yourman Law Office initiated a securities class action against King Pharmaceuticals, Inc. (NYSE:KG) and certain of its officers in the United States District Court for the Eastern District of Tennessee, on behalf of purchasers of King securities between April 26, 1999 and March 11, 2003, including shareholders who exchanged Jones Pharma, Inc. shares for Kings shares in connection with their merger. The complaint charges defendants with violations of the Securities Act of 1933 and 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 King securities at artificially inflated prices. For more information contact Mark D. Smilow, David C. Katz, or James E. Tullman by Mail: by writing Weiss & Yourman, The French Building, 551 Fifth Avenue, Suite 1600, New York, New York 10176 or by Phone: (888) 593-4771 or (212) 682-3025, by E-mail: info@wynyc.com MCSI INC: Bernstein Liebhard Commences Securities Fraud Suit in S.D. OH ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action on behalf of all persons who acquired securities of MCSi, Inc. (NASDAQ: MCSI) between July 24, 2001 and February 26, 2003, inclusive. The case is pending in the United States District Court for the Southern District of Ohio, Western Division against Defendants MCSi, Michael E. Peppel, and Ira H. Stanley. 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 during the Class Period, thereby artificially inflating the price of MCSi securities. Specifically, the Complaint alleges that throughout the Class Period, Defendants made numerous false and misleading public statements concerning the success of the Company's systems integration business and the valuation of the Company's goodwill. During this time, the Company completed two public offerings, pursuant to which approximately $165 million of MCSi stock was sold to the public and Defendant Michael Peppel sold 300,000 shares of MCSi stock, for proceeds of approximately $6,862,500. Finally, on February 26, 2003, contradicting repeated Class Period statements concerning the vigor of its systems integration business, MCSi reported a net loss of $189 million for the fourth quarter ended December 31, 2002, including a charge of $161.7 million related to the impairment of goodwill. For the year ended December 31, 2002, the Company stated it suffered a net loss of $222.5 million. The Company also reported that, as a result of its financial results for the fourth quarter, it was in violation of certain financial covenants under its existing secured credit facility, entitling its lenders to accelerate all amounts due under the facility. In reaction to this disclosure, the price of MCSi common stock plunged by 55% on extremely heavy trading volume. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 or by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: MCSI@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com MICHAELS STORES: Bernstein Liebhard Launches Securities Suit in N.D. TX ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action on behalf of all persons who acquired securities of Michaels Stores, Inc. (NYSE: MIK) between August 8, 2002 and November 7, 2002, inclusive. The case is pending in the United States District Court for the Northern District of Texas, Dallas Division against the Company and: (1) R. Michael Rouleau, (2) Bryan M. DeCordova, (3) Duane E. Hiemenz, (4) Richard C. Marcus, (5) Thomas C. Decaro, (6) James F. Tucker, (7) Edward F. Sadler, and (8) Robert M. Spencer. 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 during the Class Period, thereby artificially inflating the price of Michaels Stores securities. Specifically, the Complaint alleges that throughout the Class Period, Defendants repeatedly represented that Michaels Stores' financial condition was strong and that the Company was increasing its market share. Defendants also consistently made positive statements about Michaels Stores that conditioned investors to believe that: (i) as a result of Michaels Stores' unique combination of assets and market condition, the Company was poised to continue growth and acceleration of market share, despite, or rather as a result of, very difficult market conditions; (ii) despite market conditions that were resulting in downward revisions at Michaels Stores' competitors, the Company was not in danger of failing to meet Company-sponsored expectations for revenue growth; and (iii) the Company's phenomenal second quarter 2002 results were caused by Michaels Stores' strong operating performance. What investors did not know, was that Defendants had been able to achieve a 359% increase in net income by fully utilizing a $14.8 million "markdown reserve" without disclosing it at the time it was taken. In addition to concealing the fact that the reversal of markdown reserves padded the Company's second quarter 2002 results, Defendants also concealed that the Company was suffering from a host of undisclosed adverse factors which were negatively impacting its business. The truth was revealed on November 7, 2002, when Defendants disclosed for the first time that the Company was operating well below guidance, that Michaels Stores would substantially reduce estimates going forward, and that Michaels Stores were experiencing the same adverse market conditions which were negatively impacting the Company's competitors. Immediately following the publication of this release, as soon as trading of Michaels Stores began, shares plummeted over 30%, or over $11.18 per share, more than wiping out all gains made during the Class Period. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 or by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: MIK@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com MICROTUNE INC: Bernstein Liebhard Commences Securities Suit in E.D. TX ---------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for Eastern District of Texas, on behalf of all persons who purchased or acquired Microtune, Inc. (NASDAQ: TUNE) securities between April 22, 2002 and February 20, 2003, inclusive. Microtune designs, manufactures and markets radio frequency-based solutions for the global broadband communications, automotive electronics and wireless connectivity markets. Throughout the Class Period, Defendants made numerous false and misleading public statements describing Microtune's increasing revenues and financial performance. Defendants' statements were materially false and misleading when made because they failed to disclose and/or misrepresented the following adverse facts, including: (i) that the Company had materially overstated its revenue by immediately recognizing as revenue certain sales that should have been categorized as deferred revenue, as payment was not assured, and, in fact, was not made for substantial periods of time; (ii) that the Company failed to disclose that a material portion of its revenues had not been paid for; (iii) that the Company lacked adequate internal controls, and was therefore unable to ascertain the true financial condition of the Company; and (iv) as a result of the foregoing, the financial statements issued by the Company during the Class Period were materially false and misleading. When news of Microtune's losses was revealed on February 20, 2003, the price of Microtune stock dropped more than 36% to approximately $1.19 per share on February 21, 2003, far below the Class Period high of $15.20 per share. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 or by Phone: (800) 217-1522 or (212) 779-1414 or by E-mail: TUNE@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com VAXGEN INC: Wolf Haldenstein Commences Securities Fraud Suit in N.D. CA ----------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Northern District of California, on behalf of all persons who purchased the securities of VaxGen, Inc. (Nasdaq: VXGN) between August 6, 2002 and February 26, 2003, inclusive. Throughout the Class Period, defendants issued numerous statements concerning the status of VaxGen's Phase III clinical trials for their product, AIDSVAX, and their manufacturing and marketing plans following FDA approval of the drug. The Complaint alleges that, contrary to defendants' representations: (a) AIDSVAX was proving ineffective in clinical trials while the number of strains of HIV was rising exponentially; (b) at the start of the Class Period, the U.S. clinical trials were over 80% completed and defendants were aware that the rate of HIV infection observed in the clinical trials suggested an efficacy rate which was statistically immaterial when compared to the infection rate as encountered by the general population; and (c) the clinical trial efficacy rate would be unable to satisfy FDA approval standards. On February 23, 2003, VaxGen disclosed U.S. trial results, revealing that the "study did not show a statistically significant reduction of HIV infection within the study population as a whole, which was the primary endpoint of the trial." Following this news, VaxGen's shares dropped over 50% to roughly $3 per share on February 24, 2003. However, defendants only partly divulged the results on February 24, 2003, as they asserted that the trials had demonstrated 30% - 84% efficacy rates in U.S. blacks and Asians. These corrective statements resulted in a surge of VaxGen's stock price, closing at $7 per share on February 24, 2003. Yet, on February 26, 2003, defendants were obliged to acknowledge that the reliability of their previous reports of higher efficacy rates for non- caucasians was impaired as defendants had not taken the "penalties" necessary to account for the fact that a much smaller subset of data was evaluated for non-caucasians. Following this revelation, the stock decreased additionally, causing an 85% total loss in market cap since November 18, 2002. For more details contact Fred Taylor Isquith, Esq., Gregory Nespole, Esq., Michael Miske, George Peters, or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735), by E-mail: classmember@whafh.com or visit the firm's Web site: http://www.whafh.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. 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