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C L A S S A C T I O N R E P O R T E R
Wednesday, April 9, 2003, Vol. 5, No. 70
Headlines
APARTHEID LITIGATION: Ed Fagan Launches Suits V. South African Firms
AMERICAN EXPRESS: Final Approval Hearing For Settlement Set April 2003
BAYER AG: Receives Favorable Jury Verdicts In First Two American Trials
BEVERLY ENTERPRISES: Appeals Court Upholds Dismissal of Securities Suit
BEVERLY ENTERPRISES: Named As Nominal Defendant in AK Derivative Suit
BLUE MARTINI: NY Court Dismisses in Part Consolidated Securities Suit
BLUE MARTINI: Plaintiffs Appeal Dismissal of Investors Derivative Suit
CALIFORNIA: Team to Monitor Oakland Police Reforms From Riders Scandal
CALIPER TECHNOLOGIES: NY Court Dismisses Consolidated Securities Suit
CHICAGO PIZZA: Former Employee Lodges Overtime Wage Lawsuit in CA Court
DALEEN TECHNOLOGIES: NY Court Refuses To Dismiss Securities Fraud Suit
DIGITAL RIVER: NY Court Refuses to Dismiss Consolidated Securities Suit
DUANE READE: NY Court Issue Summary Judgment V. Company in FLSA Lawsuit
FOCAL COMMUNICATIONS: NY Court Dismisses in Part Securities Fraud Suit
IMMERSION CORPORATION: NY Court Dismisses in Part Securities Fraud Suit
ISP CHEMCO: Agrees To Settle Claims in Shareholder Fraud Suit in DE, NJ
KRAFT FOODS: Credit Rating Affected By Philip Morris Tobacco Suit Bond
LATITUDE COMMUNICATIONS: NY Court Dismisses in Part Securities Lawsuit
LUCENT TECHNOLOGIES: Measly Securities Settlement Share Predicted
LUMENIS LTD.: Stockholders Commence Securities Fraud Lawsuit in N.D. IL
LUMENIS LTD.: Intends To Ask NY Court To Dismiss Securities Fraud Suits
MIDWAY GAMES: Parties in Columbine Lawsuit Reach Dismissal Settlement
NEW CENTURY: Reaches Settlement For Consumer Fraud Lawsuit in OH Court
NEW CENTURY: Oral Arguments on Plaintiffs' Appeal Set April 2003 in CA
NEW CENTURY: Enters Settlement Discussions For RESPA Lawsuit in N.D. GA
NEW CENTURY: Deadline For Respondents' Brief in Suit Set for June 2003
NEW CENTURY: Asks IL Court To Consolidate TCPA Suit With Similar Suits
NEW CENTURY: Awaits CA State Court's Ruling on Motion To Transfer Venue
SECURE COMPUTING: Court Grants Approval To Securities Suit Settlement
SECURE COMPUTING: Court Grants Final Approval To Stockholder Settlement
STAMPS.COM: NY Court Refuses To Dismiss Consolidated Securities Lawsuit
TOBACCO LITIGATION: Philip Morris Running Out of Options in Appeal Bond
UNITED AIRLINES: Trial in Agents' Antitrust Lawsuit Set September 2003
UNITED AIRLINES: To Ask For Dismissal of September 11 Suits in S.D. NY
WJ COMMUNICATIONS: DE Court Consolidates Two Securities Fraud Lawsuits
WJ COMMUNICATIONS: Faces Securities Lawsuit Over Fox Paine Offer in CA
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
ANDRX CORPORATION: Charles Piven Commences Securities Suit in S.D. FL
BLACK BOX: Charles Piven Commences Securities Fraud Lawsuit in W.D. PA
COLLINS & AIKMAN: Charles Piven Commences Securities Lawsuit in E.D. MI
i2 TECHNOLOGIES: Bernstein Liebhard Launches Securities Suit in N.D. TX
KING PHARMACEUTICALS: Bernstein Liebhard Launches Securities Suit in TN
KING PHARMACEUTICALS: Charles Piven Launches Securities Suit in E.D. TN
PEC SOLUTIONS: Charles Piven Commences Securities Fraud Suit in E.D. VA
ROYAL AHOLD: Berman DeValerio Launches Securities Fraud Suit in S.D. NY
VAXGEN INC.: Wechsler Harwood Launches Securities Fraud Suit in N.D. CA
VOICEFLASH NETWORKS: Bernstein Liebhard Launches Securities Suit in FL
*********
APARTHEID LITIGATION: Ed Fagan Launches Suits V. South African Firms
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American lawyer Ed Fagan, who helped Holocaust victims win $1.25
billion from Swiss banks, is suing two more businesses that he claims
helped perpetuate the apartheid system in South Africa, the Los Angeles
Times reports.
Mr. Fagan, working with a team of South African lawyers recently filed
lawsuits in federal jurisdictions in New York and Nevada, asking for up
to $6.1 billion in damages from South Africa's top mining corporation
Anglo American, and the diamond company DeBeers in which Anglo American
has a 45 percent stake.
The timing of the lawsuit was calculated to capitalize on the growing
frustration in South Africa with the pace of economic change, and on
the publicity surrounding the recent release of the final report of the
country's Truth and Reconciliation Commission.
"It is something that everybody has been waiting for," said Ed Fagan
about the Anglo American class action on behalf of 50,000 former
employees, the first such lawsuit to target a major South African
corporation for wrongdoing during the apartheid era.
"What this is about is corporate accountability and rectifying not just
wrongs that happened 50 to 60 years ago but also present-day human
right violations as well. That's what is so exciting about the case,"
Mr. Fagan said.
Anglo American said in a statement that it "strongly rejects the
efforts made by the United States lawyers and others to use US courts
to resolve important issues for South Africa's future."
The mining company, one of the largest in the world, said it is
involved in many efforts to foster reconciliation and to help rebuild
South Africa. Anglo American added that it had opposed many apartheid
policies. "We firmly believe that our opposition helped bring about an
end to the apartheid system," the Anglo American mining company said.
Further, the company said it would not engage in a dialogue with Mr.
Fagan's team, and that the debate over how best to rebuild South Africa
"must necessarily take place in South Africa by South Africans through
their democratic institutions."
"Anglo American believes that the question of whether reparations to
individuals is an appropriate or effective way to assist in the
rebuilding of South Africa, is a matter to be resolved through South
Africa's democratic processes -- including, if necessary, its courts
--as part of South Africa's ongoing broad efforts to bring about
reconciliation with reconstruction after apartheid," the mining company
said.
Mr. Fagan, who last summer filed US lawsuits against a group of foreign
banks and businesses involved in South Africa during the 40 years of
apartheid, said attempts to portray his work in South Africa as carpet-
bagging are unfair.
Mr. Fagan also announced plans to file a similar class action in
California against the Aliso Viejo-based construction company Fluor
Corp., which helped the South African synthetics company Sasol during
the apartheid era. That lawsuit seeks damages of up to $1 billion, and
will be brought on behalf of 4,500 former Sasol employees, Mr. Fagan
said.
The Fluor construction lawsuit is designed to draw attention to the
company's involvement in apartheid-era South Africa just when it has
been invited by the Bush Administration to bid on reconstruction work
in postwar Iraq, Mr. Fagan said.
AMERICAN EXPRESS: Final Approval Hearing For Settlement Set April 2003
----------------------------------------------------------------------
Hearing for final approval of the settlement of a class action filed
against American Express Company, American Express Travel Related
Services Company, Inc. and American Express Centurion Bank (AECB) is
set for April 2003 in the United States District Court for the Central
District of California.
The complaint principally alleges that class members improperly were
charged daily compounded interest on the Optima line of credit cards
and that AECB improperly applied credits for returned merchandise
against Optima balance transfer balances. The suit asserts various
claims including:
(1) violation of the federal Truth In Lending Act,
(2) breach of contract,
(3) fraud and unfair and deceptive practices and
(4) violations of the California Consumer Legal Remedies Act
Although the company believes it has meritorious defenses to this
action, in light of the inherent uncertainties and the burden and
expense of lengthy litigation, the Company reached an agreement to
settle the lawsuit. In November 2002 the court preliminarily approved
the proposed settlement filed by the parties.
The proposed settlement provides for certification of two classes. The
first class, defined as the "finance charge" class, includes all
customers who incurred finance charges between August 1994 and
September 2002. The proposed settlement of the first class consists of
a settlement fund in the amount of $15,950,000 that will be distributed
on a pro rata basis to those class members who are entitled to a
refund. The second class, defined as the "delayed notice" class,
includes all customers who did not receive change in terms notices and
who, as a result, incurred increased charges between September 2001 and
September 2002. These class members will receive a refund of charges
affected by the terms changes that were incurred during the class
period.
BAYER AG: Receives Favorable Jury Verdicts In First Two American Trials
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Bayer AG said the number of out-of-court settlements over Baycol, the
cholesterol drug Bayer withdrew in 2001, has risen, but the company
declined to give any figures, however, The Wall Street Journal reports.
The German drug maker's shares rose 3.6 percent Friday in Frankfurt, on
speculation that plaintiffs will rush to settle out of court, after a
Mississippi jury ruled in Bayer's favor on Thursday last week. This
was the second trial in the United States to render a verdict in
Bayer's favor. The first Baycol trial, at a court in Corpus Christi,
Texas, in mid-March, also ended in Bayer's favor.
Bayer has refused to say whether the number of cases pending has fallen
from the 8,400 figure given previously. In mid-March, Bayer said it
had settled more than 500 cases in the United States.
A trial at a federal court in Minneapolis is still pending. A ruling
in this case will determine if the Baycol case can go forward as a
class action in the United States.
BEVERLY ENTERPRISES: Appeals Court Upholds Dismissal of Securities Suit
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The United States Eighth Circuit Court denied plaintiffs' appeal of the
dismissal of the securities class action filed against Beverly
Enterprises and certain of its officers.
The suit was filed in the United States District Court for the Eastern
District of Arkansas and asserted claims under Section 10(b) (including
Rule 10b-5 promulgated thereunder) and under Section 20 of the
Securities Exchange Act of 1934 arising from practices being
investigated by the US Department of Justice and the Office of
Inspector General of the Department of Health and Human Services. The
federal agencies earlier conducted an investigation of the Company's
allocation to the Medicare program of certain nursing labor costs in
our skilled nursing facilities from 1990 to 1998, an earlier Class
Action Reporter story states.
The defendants filed a motion to dismiss that complaint and oral
argument on this motion was held on April l6, 2000. By order and
judgment dated October 17, 2001, defendants' motion to dismiss was
granted, and the complaint was dismissed with prejudice. Plaintiffs
appealed this decision to the Eighth Circuit Court of Appeals.
On January 23, 2003, the appeals court entered an order affirming the
district court's order dismissing the case with prejudice. The
plaintiffs appealed the order of the Eighth Circuit enbanc, but, on
February 27, 2003, the appeals court denied the petition. The appeals
court is obligated to issue a mandate within seven days of the date of
the order denying the petition, thereby ordering the district court to
enforce its ruling and dismiss the case. If the plaintiffs decide to
petition for a writ of certiorari to the United States Supreme Court
within 90 days, plaintiffs may move to stay the mandate pending the
filing of this petition.
BEVERLY ENTERPRISES: Named As Nominal Defendant in AK Derivative Suit
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Beverly Enterprises was named as a nominal defendant in a shareholder
derivative action entitled Paul Dunne and Helene Dunne, derivatively on
behalf of nominal defendant Beverly Enterprises, Inc. v. Beryl F.
Anthony, Jr., et al. filed in the Circuit Court of Sebastian County,
Arkansas, Fort Smith Division.
This case is purportedly brought derivatively on behalf of the Company
against various current and former officers and directors. The Company
learned of this case when it was served on one defendant on January 22,
2003. The complaint alleges causes of action for breach of
fiduciary duty against the defendants based on:
(1) allegations that defendants failed to establish and
maintain adequate accounting controls such that the Company
failed to record adequate reserves for patient care liability
costs; and
(2) allegations that certain defendants sold Company stock while
purportedly in possession of material non-public information.
While this case is in its preliminary stages, the Company does not
believe there is any merit to this lawsuit.
BLUE MARTINI: NY Court Dismisses in Part Consolidated Securities Suit
---------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action filed
against Blue Martini Software, Inc. and certain of its officers and
directors.
The suit claims that the Company, certain of its officers and
directors, and the underwriters of its initial public offering, or IPO,
violated the federal securities laws because the Company's IPO
registration statement and prospectus allegedly contained untrue
statements of material fact or omitted material facts regarding the
compensation to be received by, and the stock allocation practices of,
the IPO underwriters. The plaintiffs seek unspecified monetary damages
and other relief.
Similar complaints were filed in the same court against hundreds of
other public companies that conducted IPOs of their common stock since
the mid-1990s. On August 8, 2001, all IPO-related lawsuits were
consolidated for pretrial purposes before United States Judge Shira
Scheindlin of the Southern District of New York. In accordance with
Judge Scheindlin's orders, the Company has not answered the complaint,
and no discovery has been served.
The Company joined in a global motion to dismiss the IPO Lawsuits on
July 15, 2002. In October 2002, the Company's directors and officers
were dismissed without prejudice pursuant to a stipulated dismissal and
tolling agreement between the plaintiffs and certain individual
defendants. On November 1, Judge Scheindlin presided over an all-day
hearing on the global motions to dismiss. On February 19, 2003, Judge
Scheindlin issued a ruling on the global motion to dismiss; with
respect to the Company, the motion was granted in part and denied in
part.
The Company believes that this lawsuit is without merit, and further
believes that the ultimate outcome of this lawsuit will not have a
material adverse effect on its financial position and results of
operations.
BLUE MARTINI: Plaintiffs Appeal Dismissal of Investors Derivative Suit
----------------------------------------------------------------------
Plaintiffs appealed the dismissal of the shareholder derivative suit
filed against Blue Martini Software, Inc. (as a nominal defendant) and:
(1) Monte Zweben, chief executive officer,
(2) John Calonico, then-chief financial officer,
(3) James C. Gaither,
(4) A. Michael Spence,
(5) Edward R. Vick,
(6) Andrew Verhalen,
(7) William F. Zuendt) and
(8) Goldman Sachs, the managing underwriter of the Company's IPO
The suit was initially filed in the Superior Court of the State of
California, County of San Mateo, and alleges that the defendants
breached fiduciary and other duties, were negligent, and were unjustly
enriched because the IPO price of the Company's stock allegedly was set
too low. The plaintiff sought unspecified monetary damages and other
relief. The case was subsequently removed to the United States
District Court for the Northern District of California.
The Company filed a motion to dismiss incorporating the motion for
judgment on the pleading filed by co-defendant Goldman Sachs. In
October 2002, the court granted the motions to dismiss and motion for
judgment on the pleadings without leave to amend and entered a judgment
dismissing the complaint. In December 2002, the plaintiff filed a
notice of appeal.
The appeal is pending before the US Ninth Circuit Court of Appeals,
with briefs to be filed in the spring of 2003. The Company believes
that the appeal is without merit. The Company believes that the
ultimate outcome of this action will not have a material adverse effect
on its financial position and results of operations.
CALIFORNIA: Team to Monitor Oakland Police Reforms From Riders Scandal
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A team including two civil rights lawyers, a small-town police chief
and a retired Los Angeles sheriff will monitor reforms instituted by
the Oakland Police Department, under the terms of the settlement of the
class actions brought by 100 people victimized by a group of rogue
police officers called The Riders, according to Associated Press
Newswires. The police chief and the lawyers involved in the settlement
already have approved the team. The list of the team's members goes
next to the City Council for approval, and finally a judge must sign
off on it.
The team will be led by a police chief from South Barrington, Illinois
and a retired Los Angeles County Sheriff's Department division chief,
who oversaw reforms in her department. Both currently serve as
consultants for the US Department of Justice. The team also includes
two lawyers from Relman and Associates, a firm best known for its
racial discrimination class action against the Denny's restaurant
chain.
The reforms will cover everything from increased supervision in the
field, reporting use of force and an early warning system alerting
supervisors to problem behavior. During the team's five-year term, the
team will cost about $2.6 million, plus another $1 million for travel,
subcontractors and communications, among other things.
City officials also have agreed to pay nearly $11 million to implement
the police reforms and settle civil rights lawsuits brought by more
than 100 people who claimed they were victimized by a group of rogue
police officers called The Riders.
CALIPER TECHNOLOGIES: NY Court Dismisses Consolidated Securities Suit
---------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed the consolidated securities class action filed against
Caliper Technologies, Inc. and three of its officers and directors:
(1) David V. Milligan,
(2) Daniel L. Kisner and
(3) James L. Knighton
The suit alleges claims under Sections 11 and 15 of the Securities Act
of 1933, and under Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, as well as Rule 10b-5 promulgated thereunder. The
consolidated suit also names certain underwriters of the Company's
December 1999 initial public offering of common stock.
The complaint alleges that these underwriters charged excessive,
undisclosed commissions to investors and entered into improper
agreements with investors relating to aftermarket transactions. The
complaint seeks an unspecified amount of money damages.
Similar complaints were filed in the same court against hundreds of
other public companies that conducted IPOs of their common stock
since the late 1990s. In August 2001, the IPO Lawsuits were
consolidated for pretrial purposes before United States Judge Shira
Scheindlin of the Southern District of New York. Together, those cases
are denominated "In re Initial Public Offering Securities
Litigation, 21MC92(SAS)."
The Company and the other issuers named as defendants in the IPO
Lawsuits moved on July 15, 2002, to dismiss all claims on multiple
grounds. By Stipulation and Order dated October 9, 2002, the claims
against Mr. Milligan, Mr. Kisner and Mr. Knighton were dismissed
without prejudice. On February 19, 2003, the court granted the
Company's motion to dismiss all claims against it. Plaintiffs were not
given the right to replead the claims against the Company; the time to
appeal the dismissal has not yet expired.
CHICAGO PIZZA: Former Employee Lodges Overtime Wage Lawsuit in CA Court
-----------------------------------------------------------------------
Chicago Pizza & Brewery, Inc. faces a class action filed by a former
employee of the Company, on behalf of himself and other employees and
former employees of the Company similarly situated and working in
California, in the Superior Court of California for the County of
Orange.
The complaint alleges that the Company has violated provisions of the
California Labor Code covering meal and rest breaks for employees,
along with associated acts of unfair competition, and seeks payment of
wages for all meal and rest breaks allegedly denied to California
employees of the Company for the period from October 1, 2000 to the
present.
Due to the recent filing of this action, this matter is in the early
discovery phase and management is currently unable to estimate the
range of possible liability, if any.
DALEEN TECHNOLOGIES: NY Court Refuses To Dismiss Securities Fraud Suit
----------------------------------------------------------------------
The United States District Court for the Southern District of New York
refused to dismiss the consolidated securities class action filed
against Daleen Technologies, Inc. and:
(1) James Daleen,
(2) David B. Corey,
(3) Richard A. Schell,
(4) BancBoston Robertson Stephens, Inc.,
(5) Hambrecht & Quist, LLC, and
(6) Salomon Smith Barney, Inc.
The suit was filed on behalf of persons purchasing the Company's common
stock between September 20, 1999 and December 6, 2000. The suit
includes allegations of violations of:
(i) Section 11 of the Securities Act of 1933 by all named
defendants,
(ii) Section 15 of the Securities Act of 1933 by the individual
defendants, and
(iii) Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder by the underwriter defendants
Specifically, the plaintiffs allege in the complaint that, in
connection with the Company's IPO, the defendants failed to disclose
"excessive commissions" purportedly solicited by and paid to the
underwriter defendants in exchange for allocating shares of the
Company's common stock in the IPO to the underwriter defendants'
preferred customers. Plaintiffs further allege that the underwriter
defendants had agreements with preferred customers tying the allocation
of shares sold in our IPO to the preferred customers' agreements to
make additional aftermarket purchases at pre-determined prices.
Plaintiffs also allege that the underwriters used their analysts to
issue favorable reports about the Company to further inflate its share
price following the IPO. Plaintiffs claim the defendants knew or
should have known of the underwriters' actions and that the failure to
disclose these alleged arrangements rendered the Company's prospectus
included in its registration statement on Form S-1 filed with the SEC
in September 1999 materially false and misleading. Plaintiffs seek
unspecified damages and other relief.
The individual defendants, Mr. Corey, Mr. Schell and Mr. Daleen, have
entered into tolling agreements with the plaintiffs resulting in their
dismissal from the case without prejudice. The remaining defendants
include the Company and certain of the underwriters in the Company's
initial public offering (IPO).
More than 300 similar class action lawsuits filed in the Southern
District of New York against numerous companies and their underwriters
have been consolidated for pretrial purposes before one judge under the
Caption, "In re Initial Public Offering Securities
Litigation." The joint motion to dismiss filed by the defendants was
denied as to the underwriters and certain issuers, including the
Company.
Currently a loss cannot be determined because the lawsuit is in its
initial stages and there is no guarantee that either the
indemnification agreement or a settlement with the plaintiffs will be
finalized.
DIGITAL RIVER: NY Court Refuses to Dismiss Consolidated Securities Suit
-----------------------------------------------------------------------
The United States District Court for the Southern District of New York
refused to dismiss the consolidated securities class action pending
against Digital River, Inc. and certain of its officers and directors.
The suit alleges that the Company, certain of its officers and
directors and the underwriters of its initial public offering, or IPO,
violated Section 11 of the Securities Act of 1933 based on allegations
that the Company's IPO registration statement and prospectus failed to
disclose material facts regarding the compensation to be received by,
and the stock allocation practices of, the IPO underwriters.
The complaint also contains a claim for violation of Section 10(b) of
the Securities Exchange Act of 1934 based on allegations that this
omission constituted a deceit on investors. The plaintiffs seek
unspecified monetary damages and other relief. Similar complaints,
referred to here as the IPO Lawsuits, were filed in the same court
against hundreds of other public companies.
In August 2001, the IPO Suits were consolidated for pretrial purposes
before United States Judge Shira Scheindlin of the Southern District of
New York. Judge Scheindlin held an initial case management conference
on September 7, 2001, at which time she ordered, among other things,
that the time for all defendants in the IPO Lawsuits to respond to any
complaint be postponed until further order of the court. Thus, the
Company has not been required to answer any of the complaints, and no
discovery has been served on it.
On July 15, 2002, the Company joined in a global motion to dismiss the
suits filed by all of the issuers (among others). On October 9, 2002,
the court entered an order dismissing the Company's named officers and
directors from the IPO Lawsuits without prejudice, pursuant to an
agreement tolling the statute of limitations with respect to these
officers and directors until September 30, 2003.
On February 19, 2003, the court issued a decision denying the motion to
dismiss the Section 11 claims against the Company and almost all of the
other issuers and denying the motion to dismiss the Section 10(b)
claims against the Company and many of the other issuers. The Company
believes that this lawsuit is without merit.
DUANE READE: NY Court Issue Summary Judgment V. Company in FLSA Lawsuit
-----------------------------------------------------------------------
The United States District Court for the Southern District of New York
issued a partial summary judgment in favor of the plaintiffs in a class
action filed against Duane Reade, Inc., regarding alleged violations of
the Fair Labor Standards Act as to a group of individuals who provided
delivery services on a contract basis to the Company.
The Company has established reserves that it believes are appropriate
in accordance with applicable accounting rules. The Company also
believes it has a number of meritorious arguments on appeal.
FOCAL COMMUNICATIONS: NY Court Dismisses in Part Securities Fraud Suit
----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action filed
against Focal Communications Corporation and:
(1) Robert C. Taylor,Jr., former Chairman of the Board, Chief
Executive Officer and Director;
(2) John R. Barnicle, former President, Chief Operating Officer
and Director; and
(3) Joseph A. Beatty, former Executive Vice President and Chief
Financial Officer
The suit alleges violations of Sections 11 and 15 of the Securities Act
of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. The essence of the
complaints is that defendants issued and sold the Company's common
stock pursuant to the Registration Statement for the Company's 1999
initial public offering (IPO) without disclosing to investors that
certain underwriters in the offering had solicited and received
excessive and undisclosed commissions from certain investors. The
complaints also allege that the registration statement for the IPO
failed to disclose that the underwriters allocated Company shares in
the IPO to customers in exchange for the customers' promises to
purchase additional shares in the aftermarket at pre-determined prices
above the IPO price, thereby maintaining, distorting and/or inflating
the market price for the shares in the aftermarket. The action seeks
damages in an unspecified amount.
The action is being coordinated with over three hundred other nearly
identical actions filed against other company-issuers. A motion to
dismiss addressing issues common to the companies and individuals who
have been sued in these actions was filed on July 15, 2002. The motion
was granted in part and denied in part on February 19, 2003.
The Company is not aware of any wrongdoing on its part or on the part
of the Individual Defendants, and no specific facts have been alleged
that demonstrate any wrongdoing.
IMMERSION CORPORATION: NY Court Dismisses in Part Securities Fraud Suit
-----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class actions filed
against Immersion Corporation and:
(1) Louis Rosenberg (former Chief Executive Officer, President and
Chairman of the Company),
(2) Victor Viegas (current President, Chief Executive
Officer and Chief Financial Officer),
(3) Bruce Schena (former Chief Technology Officer and Director),
and
(4) certain underwriters of the Company's November 12, 1999
initial public offering.
Subsequently, two of the individual defendants stipulated to a
dismissal without prejudice.
The case is purportedly brought on behalf of all persons who purchased
the Company's common stock from November 12, 1999 through December 6,
2000. The suit alleges violations of Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, on the grounds that the prospectus incorporated
in the registration statement for the Company's initial public offering
failed to disclose, among other things, that:
(i) the underwriter had solicited and received excessive and
undisclosed commissions from certain investors in exchange for
which the underwriter allocated to those investors material
portions of the shares of the Company's stock sold in the
offering; and
(ii) the underwriter had entered into agreements with customers
whereby the underwriter agreed to allocate shares of the
Company's stock sold in the offering to those customers in
exchange for which the customers agreed to purchase additional
shares of the Company's stock in the aftermarket at pre-
determined prices.
The amended complaint appears to allege that false or misleading
analyst reports were issued. The amended complaint does not claim any
specific amount of damages.
The lawsuit has been consolidated for pretrial purposes with similar
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000 before the Honorable Judge Shira A.
Scheindlin.
On July 15, 2002, the Company (as well as the other issuers and their
affiliated individual defendants) filed a motion to dismiss. On
February 19, 2003, the motion was granted in part and denied in part.
The motion was denied as to claims under the Securities Act of 1933 in
all but ten of the cases, including the Company's case. The motion was
denied as to the claim under Section 10(b) of the Securities Exchange
Act of 1934 as to the Company, on the basis that the complaint alleged
that the Company had made acquisition(s) following the initial public
offering. The motion was granted as to the claim under Section 10(b)
of the Securities Exchange Act, but denied as to the claim under
Section 20(a) of that Act, as to the remaining individual defendant.
ISP CHEMCO: Agrees To Settle Claims in Shareholder Fraud Suit in DE, NJ
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ISP Chemco, Inc. reached an agreement to settle the consolidated class
action filed against it on behalf of its stockholders in the Court of
Chancery of the State of Delaware. The suits also name as defendants
members of the Company's board of directors.
A similar suit against the Company is also pending in the United States
District Court, District of New Jersey, which was subsequently amended
to assert derivative claims as well.
The plaintiffs in the Delaware and New Jersey litigations seek to
represent the same class of Company stockholders. The complaints
allege, among other things, that the defendants have breached fiduciary
and other duties in connection with a going private transaction that
was recently completed. These complaints variously seek an award of
unspecified damages and attorneys' fees, the unwinding of any
transaction and other unspecified equitable relief.
In November 2002, the parties to the stockholder litigation pending in
Delaware agreed on and executed a memorandum of understanding to
reflect a proposed settlement of the Delaware litigation. The parties
to the Delaware litigation also agreed, subject to the conditions
described below, to enter into a settlement agreement, cooperate in
public disclosures related to the settlement and use best efforts to
gain approval of the settlement by the Delaware courts.
Without any admission of fault by the defendants, the memorandum of
understanding contemplates a dismissal of all claims with prejudice and
a release in favor of all defendants of any and all claims related to
the going private transaction, including the claims in the New Jersey
litigation, that have been or could have been asserted by the
plaintiffs and all members of a plaintiff class. The memorandum of
understanding further provides that the increased cash merger
consideration of $.30 per share paid pursuant to the going private
transaction constituted fair, adequate and reasonable consideration for
the settlement of all claims asserted or that could have been asserted.
The Company refers to these claims as the "settled claims".
The proposed settlement of the Delaware litigation is subject to
numerous conditions, including the completion of confirmatory
discovery, execution of a settlement agreement containing a provision
permitting defendants to terminate the settlement if, prior to final
court approval, any action other than the New Jersey litigation is
pending in any state or federal court which raises any settled claims,
a determination by defendants prior to final court approval that the
dismissal of the litigation in accordance with the settlement agreement
will result in the release with prejudice of the settled claims, final
approval of the settlement by the Delaware courts and completion of the
going private transaction. If the parties to the Delaware litigation
do not proceed with the proposed settlement, or in the event the
proposed settlement ultimately is not approved by the Delaware courts,
the Delaware and New Jersey litigations could proceed and the
plaintiffs could seek the relief sought in their complaints, including
rescission of the going private transaction or an award of damages in
favor of the ISP stockholders in any plaintiff class that might be
certified.
The Company believes that the proposed settlement of the Delaware
litigation will become final although there are no assurances in this
regard, and any and all settled claims against the defendants in the
New Jersey litigation will be released and the defendants will move for
a dismissal of the New Jersey litigation based on the final order in
the Delaware litigation.
KRAFT FOODS: Credit Rating Affected By Philip Morris Tobacco Suit Bond
----------------------------------------------------------------------
Kraft Foods Inc., the No. 1 US food maker, is majority-owned by Altria
Group Inc., which also owns cigarette-maker Philip Morris USA.
Consequently, the spiraling of events surrounding the Philip Morris
appeal bond dilemma has begun to affect Kraft Foods. Kraft Foods
announced Friday last week that it has begun to borrow against its
revolving credit, after credit rating downgrades, tied to the tobacco
litigation, cut its access to the commercial paper lending market,
according to a report by Reuters English News Service.
Philip Morris USA said it is unable to post a $12 billion appeal bond
needed to appeal Judge Nicholas Byron's $10.1 billion verdict in an
Illinois State court in Madison County. Judge Byron, who ruled on
March 21, has stayed his judgment for 30 days.
Meanwhile, Philip Morris warned it may have to declare bankruptcy if it
posts the $12 billion appeal bond, and that it will not be able to meet
its April 15 annual installment payments it owes to 46 US states under
the Master Tobacco Settlement Agreement of 1998. Even if Philip Morris
decides it cannot or will not appeal, the $10 billion verdict owed the
Illinois smokers will become due.
Moody's and other credit agencies have downgraded the Altria Group
companies credit ratings. Consequently, Kraft's access to commercial
paper was restricted, short-term debt obligations that typically carry
maturities of no more than 270 days. Kraft has had to begin borrowing
against its revolving credit facilities, and has drawn down $1 billion
of its $2 billion credit revolver for normal business operations,
according to Loan Pricing Corporation, a Reuters unit.
Kraft said that using revolving credit facilities instead of commercial
paper results in higher overall borrowing costs. However, Kraft said
it does not expect the impact to be significant to 2003 full-year
earnings.
"We believe that management could consider filing Chapter 11" for
Philip Morris USA, opined Andrew Conway, a tobacco analyst with Credit
Suisse First Boston. "We believe it would prove difficult for
plaintiffs to pierce the corporate veil and get access to the assets of
the parent company, Altria Group, or its subsidiary, Kraft Foods."
Kraft denied analysts' reports that it may have been using its recent
borrowings to bail out Altria, saying it was using the funds for normal
business operations only.
LATITUDE COMMUNICATIONS: NY Court Dismisses in Part Securities Lawsuit
----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action filed
against Latitude Communications, Inc. and two of its officers at that
time, Emil C. Wang and Rick M. McConnell.
The suit alleges, among other things, that the underwriter defendants
violated the securities laws by failing to disclose alleged
compensation arrangements in the initial public offering's registration
statement and by engaging in manipulative practices to artificially
inflate the price of the Company's common stock after the initial
public offering.
The amended complaint also alleges, among other things, that the
Company and the named officers violated section 11 of the Securities
Act of 1933 and section 10(b) of the Securities Exchange Act of 1934 on
the basis of an alleged failure to disclose the underwriters' alleged
compensation arrangements and manipulative practices. No specific
amount of damages has been claimed.
Similar complaints have been filed against more than 300 other issuers
that have had initial public offerings since 1998, and all of these
actions have been included in a single coordinated proceeding. Mr.
McConnell and Mr. Wang have subsequently been dismissed from the action
without prejudice pursuant to a tolling agreement.
Furthermore, in July 2002, the Company and the other issuers in the
consolidated cases filed motions to dismiss the amended complaint for
failure to state a claim. The motion to dismiss claims under section
11 was denied as to virtually all the defendants in the consolidated
actions, including the Company. However, the claims against the
Company under section 10(b) were dismissed.
Due to the inherent uncertainties of litigation and because the
litigation is still at a preliminary stage, the Company stated the
ultimate outcome of the matter cannot be predicted.
LUCENT TECHNOLOGIES: Measly Securities Settlement Share Predicted
-----------------------------------------------------------------
The recent Lucent Technologies settlement with its shareholders is the
second largest shareholder class action settlement in US history.
However, it is likely the settlement will be stretched thin, according
to a report by The Wall Street Journal.
First, the total value of the complex award of $568 million in cash,
stock and stock warrants, is a lot smaller than it seems, given the
relatively little cash offered. Second, while it is difficult if not
impossible, according to plaintiffs' lawyers, to estimate how many
shareholders will file claims, the fact that there are about five
million stockowners gives rise to a prediction that per-share
awards will be measured in nickels not dollars.
Another factor stretching the settlement is that the shareholders are
not the only ones collecting under the agreement's terms. Lucent also
agreed to pay claims from six other sets of lawsuits, representing 54
lawsuits altogether. These lawsuits include, among others, suits filed
by some Lucent bondholders, the company retirement plan and
shareholders of now-defunct telecom Winstar Communications Inc., whose
shareholders blame Lucent for its demise.
The Lucent settlement -- second in size only to the $3.5 billion paid
out by Cendant Corp. in a 1998 securities-fraud case -- reveals a
dynamic controlling the way shareholder class actions battle their
companies which they have discovered to be rife with fraud. While
the plaintiff shareholders may discover evidence of fraud giving them
claims in the billions of dollars, collecting the full amount would
pitch the company into bankruptcy, effectively ending their chances of
recovery. The class action must be designed in a way that will avoid
that conclusion.
"We all acknowledged that if we tried the case and got a judgment, it
would be beyond Lucent's ability to pay," said attorney David Bershad
of Milberg Weiss Bershad Hynes & Lerach LLP, in an interview.
To preserve the company, the attorneys must structure the settlements,
as they did in the Lucent instance, to include large components of
company stock. In addition, of the total settlement, Lucent's insurers
will contribute $148 million. The Murray Hill, New Jersey company will
kick in $315 million, either cash, stock or a blend, while also
administering the program for about $5 million. It will issue 200
million stock warrants that it values at about $100 million.
The 200 million stock warrants entitle holders to shares if Lucent's
stock price goes over $2.75 in the three years after their issuance.
Plaintiffs' lawyers are expected to take a fee valued at 20 percent of
the settlement, or about $115 million, paid in the same blend of cash,
stock and warrants that their clients will receive.
LUMENIS LTD.: Stockholders Commence Securities Fraud Lawsuit in N.D. IL
-----------------------------------------------------------------------
Lumenis Ltd. faces a class action filed in the United States District
Court for the Northern District of Illinois on behalf of Aqua Fund,
LP and certain additional purchasers of Company securities. The suit
also names as defendants Yacha Sutton, the Company's former Chief
Executive Officer, and Sagi Genger, the Company's Chief Operating
Officer.
The complaint generally alleges that the defendants violated US Federal
securities laws by making material misrepresentations and/or omissions,
and also includes claims for common law fraud and negligence. The
complaint alleges that, at various times during the period from
September 17, 2001 through February 27, 2002, plaintiffs purchased the
Company's securities in reliance on such statements, and suffered
economic loss as a result.
The defendants have not been served with a summons in this action. The
Company believes that all of the allegations and claims are baseless.
LUMENIS LTD.: Intends To Ask NY Court To Dismiss Securities Fraud Suits
-----------------------------------------------------------------------
Lumenis Ltd. intends to ask the United States District Court for the
Southern District of New York to dismiss several securities class
actions filed on behalf of purchasers of Company securities between
January 7 and February 28, 2002. The named defendants include, in
addition to the Company, certain present and former officers and
directors of the Company, including Prof. Jacob A. Frenkel, Yacha
Sutton, Sagi Genger and Asif Adil.
The complaints generally allege that the defendants violated US federal
securities laws by issuing materially false and misleading statements
throughout the class period that had the effect of artificially
inflating the market price of the Company's securities. The complaints
allege that throughout the class period, defendants discounted and
disputed marketplace rumors about the Company's operations even as the
Company knew it was being investigated by the SEC and that its
distributors had been contacted by the SEC.
The Company has been served with a summons and complaint in some but
not all of these actions. There is currently pending before the court
a motion by plaintiffs to appoint a lead plaintiff and for approval of
selection of lead counsel. Upon the disposition of this motion, it is
anticipated that a consolidated complaint will be filed.
The Company's time to respond to the complaints has been extended. It
is anticipated that, following the appointment of a lead plaintiff and
approval of lead class counsel, and subject to review and evaluation of
any consolidated complaint that is filed, the Company will file a
motion to dismiss for failure to state a claim and failure to plead
fraud with particularity as required by the Private Securities
Litigation Reform Act of 1995 and Rule 9(b) of the Federal Rules of
Civil Procedure.
MIDWAY GAMES: Parties in Columbine Lawsuit Reach Dismissal Settlement
---------------------------------------------------------------------
Parties in the class action filed against Midway Games, Inc. and other
media companies reached a dismissal settlement of a class action filed
in April 2001, by individuals representing the victims (parents,
teachers, students living, injured and deceased) of the shootings by
Eric Harris and Dyland Klebold on April 20, 1999 at Columbine High
School in Jefferson County, Colorado.
The suit was filed in the United States District Court for the District
of Colorado, against 25 defendants. The defendants include 18
companies in the videogame business, five companies that produced or
distributed the movie "The Basketball Diaries" and two companies that
allegedly provided obscene Internet content.
The complaint alleges, with respect to the Company and other videogame
companies, that Mr. Harris and Mr. Klebold, then 17 years old, were
influenced by the allegedly violent content of unspecified videogames
and that the videogame manufacturers and suppliers are liable for Mr.
Harris' and Mr. Klebold's conduct. The complaint seeks up to $10
million in compensatory damages for each of the members of the
plaintiff class and $5 billion in punitive damages and relief
"necessary to correct the abuses of the violent videogame industry &
its marketing of these wares to children."
In March 2002, the court entered an opinion and order dismissing
plaintiff's complaint in its entirety as to the Company and the other
defendants. Plaintiffs filed a notice of appeal to the US Court of
Appeals for the Tenth Circuit. The parties have stipulated to a
dismissal agreement, which was filed with the appeals court.
Accordingly, the appeal was dismissed on December 10, 2002. This
matter is now concluded.
NEW CENTURY: Reaches Settlement For Consumer Fraud Lawsuit in OH Court
----------------------------------------------------------------------
New Century Mortgage Corporation has reached a settlement with parties
in a class action filed in the United States District Court for the
Southern District of Ohio. The suit also names as defendants:
(1) Central Mortgage,
(2) Equibanc Mortgage Corporation,
(3) Century 21 Home Improvements and
(4) Incredible Exteriors
Hazel Jean Matthews, Ruth D. Morgan and Marie I. Summerall filed an the
suit on behalf of themselves and other consumers located in the State
of Ohio whose credit transaction was brokered by Equibanc and Central
Mortgage. The complaint alleges breaches of:
(i) the Federal Fair Housing Act,
(ii) Equal Credit Opportunity Act,
(iii) Truth in Lending Act,
(iv) gender discrimination,
(v) fraud,
(vi) unconscionability,
(vii) civil conspiracy,
(viii) the Racketeer Influenced and Corrupt Organizations Act (RICO),
and
(ix) other claims against the other defendants
The Company filed motions to dismiss in response to the first and
second amended complaint, which the court granted and denied in part,
dismissing the claims brought under the Fair Housing Act, 42 U.S.C. &
3604(b). Plaintiffs filed a motion to strike the class allegations on
October 2, 2001, the judge granted the motion.
The case was settled at mediation on January 8, 2003, and the Company
is finalizing the settlement documentation. The amount of the
settlement did not have a material adverse effect on the Company's
results of operations or financial position.
NEW CENTURY: Oral Arguments on Plaintiffs' Appeal Set April 2003 in CA
----------------------------------------------------------------------
Oral arguments for the plaintiffs' appeal of the dismissal of one of
the claims in a class action filed against New Century Mortgage
Corporation is set for April 2003 in the United States District Court
for the Northern District of California.
The suit seeks rescission, restitution and damages on behalf of the two
plaintiffs, others similarly situated and on behalf of the general
public. The complaint alleges a violation of the Federal Truth in
Lending Act (TILA) and Business & Professions Code 17200.
Specifically, the complaint alleges that the Company gave the borrowers
the required three-day notice of their right to rescind before the loan
transaction had technically been consummated.
The Company filed a motion for summary judgment that was granted in
January 2002. The judge held that the Company had not violated TILA
and dismissed the 17200 claim without prejudice. Plaintiffs filed
their notice of appeal in February 2002.
NEW CENTURY: Enters Settlement Discussions For RESPA Lawsuit in N.D. GA
-----------------------------------------------------------------------
New Century Mortgage Corporation is engaged in settlement discussions
with plaintiffs in a class action filed against it in the United States
District Court for the Northern District of Georgia. The complaint
alleges that payments we make to mortgage brokers, referred to as yield
spread premiums, violate the federal Real Estate Settlement Procedures
Act (RESPA).
The Company filed its answer in January 2002 and thereafter filed a
motion to stay the case, which was granted in April 2002. In light of
recent favorable case law, plaintiffs have agreed to dismiss the class
claims and settle the matter on an individual basis. A stipulation of
dismissal and settlement agreement are being finalized. The nominal
payment to plaintiff did not have a material adverse effect on the
Company's results of operations or financial position.
NEW CENTURY: Deadline For Respondents' Brief in Suit Set for June 2003
----------------------------------------------------------------------
New Century Mortgage Corporation's consolidated respondents' brief for
a class action filed against it is due to be filed in June 2003 in the
Circuit Court of Cook County, Illinois. The suit alleges the
unauthorized practice of law and violation of the Illinois Consumer
Fraud Act for performing document preparation services for a fee
by non-lawyers, and seeks to recover the fees charged for the document
preparation, compensatory and punitive damages, attorneys' fees and
costs.
The Company filed a motion to dismiss in February 2002. The court
thereafter consolidated the Company's case with other similar cases
filed against other lenders. In August 2002, the court ordered
plaintiffs in all the consolidated cases to dismiss their cases with
prejudice. The plaintiff in the suit against the Company filed a
notice of appeal in September 2002. The appeal was consolidated.
NEW CENTURY: Asks IL Court To Consolidate TCPA Suit With Similar Suits
----------------------------------------------------------------------
New Century Mortgage Corporation asked the Circuit Court of Cook
County, Illinois to consolidate a class action filed against it
alleging violations of the Telephone Consumer Protection Act with other
similar suits.
The Company allegedly sent unsolicited advertisements to telephone
facsimile machines in violation of the Telephone Consumer Protection
Act, 47 U.S.C. 227, and the Illinois Consumer Fraud Act. The Company
timely removed the case from the Circuit Court of Cook County, Illinois
to federal court on May 9, 2002. Plaintiff's motion to remand the case
to state court was granted. The Company awaits a ruling on their
motion.
NEW CENTURY: Awaits CA State Court's Ruling on Motion To Transfer Venue
-----------------------------------------------------------------------
New Century Financial Corporation is set to respond to a class action
filed against it and other lending institutions, after the Superior
Court for Alameda County, California issues a ruling on the motion to
transfer the suit to another venue. The suit was filed in September
2002 against the Company and:
(1) New Century Mortgage Corporation,
(2) US Bancorp,
(3) Loan Management Services, Inc., and
(4) certain individuals affiliated with Loan Management Services
The complaint alleges:
(i) violations of California Consumers Legal Remedies Act,
(ii) Unfair, Unlawful and Deceptive Business and Advertising
Practices in violation of Business & Professions Code Sections
17200 and 17500,
(iii) Fraud-Misrepresentation and Concealment and Constructive
Trust/Breach of Fiduciary Duty and
(iv) damages including restitution, compensatory and punitive
damages, and attorneys' fees and costs.
The motion to transfer venue that was heard on March 28, 2003.
SECURE COMPUTING: Court Grants Approval To Securities Suit Settlement
---------------------------------------------------------------------
The United States District Court for the Northern District of
California granted final approval to the settlement of a consolidated
securities class action filed against Secure Computing, Inc. and
certain of its officers and directors.
The suit alleges that defendants made false and misleading statements
about the Company's business condition and prospects during a purported
class period of November 10, 1998 through March 31, 1999, and asserts
claims for violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and SEC Rule 10b-5.
In July 2002, the Company reached a settlement of the suit. In
November 2002, the court granted final approval of the settlement for
$10.1 million. $2.8 million in cash will be covered by the Company's
insurance. The $7.3 million balance of the settlement will be
contributed by the Company in common stock or in a combination of
common stock and cash at the date of distribution. The Company will
determine its final contribution allocation, at its sole option.
Distribution of the settlement is anticipated sometime in mid-2003.
SECURE COMPUTING: Court Grants Final Approval To Stockholder Settlement
-----------------------------------------------------------------------
The California Superior Court in Santa Clara County granted final
approval to the settlement of a shareholder derivative action against
certain of Secure Computing, Inc.'s current and former officers and
directors. The Company is named as nominal defendant. Plaintiff
alleges that defendants breached their fiduciary duties by making false
and misleading statements about the Company's business condition and
prospects during the period of November 10, 1998 through March 31,
1999.
In April 2002, the court dismissed the complaint with leave to amend.
The parties subsequently negotiated a settlement of $300,000 by which
plaintiff will dismiss the action with prejudice.
STAMPS.COM: NY Court Refuses To Dismiss Consolidated Securities Lawsuit
----------------------------------------------------------------------
The United States District Court for the Southern District of New York
refused to dismiss the consolidated securities class action filed
against Stamps.com, Inc. and certain of its current or former board
members and/or officers.
The suit alleged violations of the Securities Act of 1933 and the
Securities Exchange Act of 1934 in connection with the Company's
initial public offering and secondary offering of the Company's common
stock. The suit also names as defendants the principal underwriters in
connection with the Company's initial and secondary public offerings,
including Goldman, Sachs & Co. (in some of the lawsuits sued as The
Goldman Sachs Group Inc.) and BancBoston Robertson Stephens, Inc.
The lawsuits allege that the underwriters engaged in improper
commission practices and stock price manipulations in connection with
the sale of the Company's common stock. The lawsuits also allege that
the Company and/or certain of its officers or directors knew of or
recklessly disregarded these practices by the underwriter defendants,
and failed to disclose them in our public filings. Plaintiffs seek
damages and statutory compensation, including prejudgment and post-
judgment interest, costs and expenses (including attorneys' fees), and
rescissionary damages.
In July 2002, the Company moved to dismiss the consolidated amended
class action. In October 2002, pursuant to a stipulation and tolling
agreement with plaintiffs, the Company's current and former board
members and/or officers were dismissed without prejudice. In February
of 2003, the court denied the Company's motion to dismiss the
complaint.
In addition to the class action against the Company, over 1,000 similar
lawsuits have also been brought against over 250 companies which issued
stock to the public in 1998, 1999, and 2000, and their underwriters.
These lawsuits (including those naming the Company) followed publicized
reports that the SEC was investigating the practice of certain
underwriters in connection with initial public offerings. All of these
lawsuits have been consolidated for pretrial purposes before United
States District Court Judge Shira Scheindlin of the Southern District
of New York.
The Company believes that the claims against it and its officers and
directors are without merit.
TOBACCO LITIGATION: Philip Morris Running Out of Options in Appeal Bond
-----------------------------------------------------------------------
Philip Morris USA - now a unit in parent company Altria Group Inc. -
may be running out of options to avoid posting a $12 billion appeal
bond. However, legal experts in tobacco litigation say Philip Morris
could consider cutting an expensive, but manageable, deal with
plaintiffs' lawyers in the Illinois lawsuit, The Wall Street Journal
reports.
On Friday of last week, Philip Morris asked the Illinois court to
reduce the amount of the appeal bond now required to appeal the $10.1
billion verdict adjudging the cigarette-maker guilty of deceiving
Illinois smokers that light cigarettes are less harmful than regular
cigarettes. In court filings, the company informed a Madison County,
Illinois state court that the largest surety bond available is for $1.5
billion. The company also petitioned another state court to halt any
attempt by Illinois to collect the $3 billion in punitive damages
awarded to the state.
If Philip Morris cannot persuade the courts to reduce the appeal bond
requirement, it may have to consider cutting the kind of deal reached
in 2001 with plaintiffs' lawyers in Florida. In order to appeal a
$144.8 billion verdict against the five largest tobacco companies,
Philip Morris struck an unusual deal with plaintiffs' lawyers,
forfeiting $500 million in exchange for their pledge to forego bonding
for the full amount of damages.
William S. Ohlemeyer, associate general counsel of Philip Morris,
denied a partial settlement is under consideration. "All these people
who say this is so simple and we need to cut these guys a check are
missing something important. You should not have to pay people extra
money for the right to pursue an appeal," said Mr. Ohlemeyer. "They
did like the company and they dislike the product, but to say that we
should not have the right to appeal is a perversion of the whole
system."
Mr. Ohlemeyer added, "If the courts and lawmakers don't help out,
Philip Morris may be forced to turn to bankruptcy court."
"I am willing to sit down and talk to them at any time," said Stephen
Tillery, an attorney for the plaintiffs in the class action over
light cigarettes. "They told me they were not interested."
Some analysts say Philip Morris is posturing. Richard Daynard, a
professor at Northeastern University School of Law, in Boston, who
works with anti-tobacco lawyers, for example, said "Bankruptcy is way
down on the list of the things Philip Morris would like to see happen .
The odds are very high for a settlement or a nonrefundable payment (as
in the Florida case described above) to enable it (Philip Morris) to
appeal the verdict."
At the moment, however, Philip Morris is encouraging Illinois lawmakers
to pass a law capping the amount of appeal bond a defendant would be
required to post in order to appeal a verdict. Although last-minute
efforts may be made to enact a bond cap again, it is likely that such
efforts will fail as earlier ones have done.
The $12 billion appeal bond quandary has created large financial ripple
effects. Ratings agencies have downgraded Altria's debt, acknowledging
that Philip Morris USA, the domestic tobacco division of parent company
Altria, may be forced to file for bankruptcy protection. The pressure
is growing not only on Philip Morris, but also on Altria's other major
subsidiary, Kraft Foods Inc. Kraft, like many companies, relies on the
commercial-paper market for its short-term financing needs, but found
that avenue cut off as Moody's and other credit ratings firms
downgraded Kraft, leaving few investors willing to buy the Company's
debt.
Some Wall Street investors have been concerned that Altria, which owns
84 percent of Kraft, could siphon cash from the food company if needed.
There seem to be few legal restrictions prohibiting such a move, some
investors said on Friday.
Philip Morris also has warned that it might not be able, on April 15,
to make the annual $2.5 billion payment to the 46 states with which the
company reached settlement in the 1998 Master Tobacco Settlement.
Plans by many of the states to issue government bonds backed by future
payments from the tobacco companies are threatened as are the
budget-balancing bookkeeping entries that factor in that future tobacco
payment.
UNITED AIRLINES: Trial in Agents' Antitrust Lawsuit Set September 2003
----------------------------------------------------------------------
Trial in the travel agents' antitrust class action filed against United
Airlines and other carriers is set for September 2,2003 in the United
States District Court in North Carolina.
The suit was filed following the reduction by the Company and other
carriers in November 1999 of commission rates payable to travel agents.
Plaintiffs allege that the Company and the other carrier-defendants
conspired to fix travel agent commissions in violation of the Sherman
Act and seek treble damages and injunctive relief.
Subsequent to this initial filing, the case has been expanded by the
addition of five new travel agencies, ARTA, and eight new carrier
defendants, including two Star Alliance carriers. In addition, the
court has allowed the addition of claims related to carriers'
commission reduction actions in 1997, 1998, 2001, and 2002.
Earlier this year the court granted plaintiffs' motion to certify the
case as a class action consisting of all US (and its possessions)
travel agencies. Plaintiffs have claimed lost commissions, assuming
liability, in the amount of approximately $13 billion, although the
plaintiffs have not determined the Company's alleged share of this
amount.
Upon UAL's Chapter 11 filing, this case was stayed as against United.
Since that date, all remaining defendants have moved for summary
judgment. Those motions are pending before the court. Trial has been
set for September 2, 2003.
In addition to the above suit, the Company has been named in several
other cases filed in the US and Canada, involving commission rates
payable to travel agencies. These cases are in their early stages.
United does not expect the outcome of the suits to have any material
effect upon its consolidated financial position or results of
operations.
UNITED AIRLINES: To Ask For Dismissal of September 11 Suits in S.D. NY
----------------------------------------------------------------------
United Airlines intends to participate in a motion to dismiss
approximately 40 lawsuits served on it in the United States District
Court for the Southern District of New York related to the September 11
terrorist attacks. The suits seek a variety of recoveries, including
wrongful death, injury or property damage, and claim that the Company
and others breached their duty of care to the passengers and to the
ground victims.
Under federal law, the Company's liability on such claims will be
limited to the amount of the Company's insurance coverage. United
anticipates the filing of other lawsuits related to the September 11
attacks in the future. Also, a forum was created under federal law to
provide, as an alternative to litigation, an administrative avenue for
the payment of compensation to victims of the terror attacks.
The Company has stipulated that the automatic stay applicable to these
lawsuits under the US Bankruptcy Code will be lifted for 60 days to
permit its participation in a motion to dismiss the claims of the
ground victims.
WJ COMMUNICATIONS: DE Court Consolidates Two Securities Fraud Lawsuits
----------------------------------------------------------------------
The Court of Chancery in the State of Delaware in and for New Castle
County consolidated two class actions filed against WJ Communications,
Inc., each member of its board of directors and Fox Paine & Company,
LLC.
Solomon Weiss, an alleged Company stockholder, filed the first suit was
filed in September 2002. The suit alleges, among other things, that:
(1) Fox Paine & Company, LLC controls WJ Communications, Inc.;
(2) the defendants have breached fiduciary duties they assertedly
owed to the Company's stockholders in connection with Fox
Paine & Company, LLC's intent to purchase all of the Company
shares it is not holding; and
(3) the merger consideration is unfair and inadequate.
The plaintiff seeks, among other things, an injunction against the
consummation of the merger, recision of the transaction if it is
consummated and an award of rescissory damages, an accounting and
unspecified damages, an award of costs, and such other relief as the
court may deem just and proper.
Luke Liem, another Company stockholder, filed the second class action
in the same court. The suit was substantially similar to the first
suit. On November 7, 2002, an order of consolidation was entered by
the court which consolidated the above two suits.
The Company denies the allegations and intends to vigorously defend
itself against these actions. Since these lawsuits are in the early
stages of litigation, it is difficult at this time to evaluate whether
we will incur any liability or to estimate the damages, or range of
damages. While the Company does not expect the ultimate result of
these lawsuits to have a material adverse effect on its results of
operations, financial position or cash flow, there can be no assurance
that this will be the case.
WJ COMMUNICATIONS: Faces Securities Lawsuit Over Fox Paine Offer in CA
----------------------------------------------------------------------
WJ Communications, Inc. faces a purported class action filed in the
Superior Court of the State of California, County of Santa Clara by
Herbert Weil, an alleged Company stockholder. The complaint also names
as defendants each member of the Company's board of directors as well
as Fox Paine & Company, LLC.
The complaint alleges, among other things, that:
(1) Fox Paine & Company, LLC controls WJ Communications, Inc.;
(2) the defendants have breached fiduciary duties they assertedly
owed to the Company's stockholders in connection with Fox
Paine & Company, LLC's intent to purchase all of the Company's
shares common stock not held by it and entering into the
merger, with Fox Paine & Company, LLC; and
(3) the merger consideration is unfair and inadequate
The plaintiff seeks, among other things, an injunction against the
consummation of the merger, an award of costs and such other relief as
the court may deem just and proper.
The Company denies the allegations. Since these lawsuits are in the
early stages of litigation, it is difficult at this time to evaluate
whether the Company will incur any liability or to estimate the
damages, or range of damages. While the Company does not expect the
ultimate result of these lawsuits to have a material adverse effect on
its results of operations, financial position or cash flow, there can
be no assurance that this will be the case.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
April 10-11, 2003
HANDLING CONSTRUCTION RISKS 2003:
ALLOCATE NOW OR LITIGATE LATER
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
April 15, 2003
WALL STREET FORUM: ASBESTOS
Mealey Publications
The Ritz-Carlton Hotel Battery Park
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 28-29, 2003
EPHEDRA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 28-29, 2003
BAD FAITH AND PUNITIVE DAMAGES
American Conference Institute
Hotel Nikko, San Francisco
Contact: 1-888-224-2480; http://www.americanconference.com
May 1, 2003
TOXIC TORT IN CALIFORNIA
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
May 1-2, 2003
ASBESTOS LITIGATION 2003
Andrews Publication
New Orleans Grande Hotel, New Orleans
Contact: seminar@andrewspub.com
May 3, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Coast Anaheim Hotel, Anaheim
Contact: 1-800-232-3444; http://www.ceb.com
May 5-6, 2003
THE CURRENT STATE OF MEDICAL MALPRACTICE IN PA & NJ
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
May 7-8, 2003
MANAGING MOLD LIABILITIES
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
May 10, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Wilshire Grand Hotel & Centre, Los Angeles, CA
Contact: 1-800-232-3444; http://www.ceb.com
May 14-15, 2003
CALIFORNIA ENVIRONMENTAL UPDATE
Bridgeport Continuing Education
San Jose
Contact: 818-505-1490
May 17, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Red Lion Hotel, Sacramento, CA
Contact: 1-800-232-3444; http://www.ceb.com
May 31, 2003
2003 CRITICAL ISSUES IN EMPLOYMENT LITIGATION
Continuing Education of the Bar
Crowne Plaza Hotel, San Francisco, CA
Contact: 1-800-232-3444; http://www.ceb.com
June 2-3, 2003
BAYCOL LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 2-3, 2003
ASBESTOS BANKRUPTCY CONFERENCE
Mealey Publications
The Westin Hotel Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 9, 2003
ANTI-SLAPP STATUTE CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 12-13, 2003
CCA-TREATED WOOD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 12-13, 2003
ENVIRONMENTAL INSURANCE: PAST, PRESENT AND FUTURE
American Law Institute
Boston
Contact: 215-243-1614; 800-CLE-NEWS x1614
June 16-17, 2003
LITIGATING EMPLOYMENT DISCRIMINATION & SEXUAL HARASSMENT CLAIMS
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
June 16-17, 2003
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 16-17, 2003
MANAGING MOLD LIABILITIES
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
June 19-20, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Chicago
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
June 24-25, 2003
SECURITIES CLASS ACTIONS
American Conference Institute
Crowne Plaza Times Square, New York
Contact: 1-888-224-2480; http://www.americanconference.com
June 26-27, 2003
THE CLASS ACTION LITIGATION SUMMIT
Northstar Conferences
The Westin Embassy Row, Washington, DC
Contact: 866-265-1975; 212-596-6006; cservice@northstarconferences.com
July 15, 2003
LEXISNEXIS PRESENTS: WALL STREET FORUM: MASS TORT LITIGATION
Mealey Publications
The Ritz-Carlton Hotel, Battery Park, New York
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
July 31-August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 8-9, 2003
CORPORATE GOVERNANCE: LIABILITY OF CORPORATE
OFFICERS AND DIRECTORS
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
September 15-16, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 19-21, 2003
THE 20TH TOBACCO PRODUCTS LIABILITY PROJECT CONFERENCE
Northeastern University School of Law
Contact: scuri@tplp.org
October 2-3, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
November 6-7, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Ritz Carlton, New Orleans, Louisiana
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
November 13-14, 2003
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
March 18-19, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
The Fairmont, San Francisco, California
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
June 10 & 11, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Atlantis, Paradise Island, Bahamas
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
TBA
Water Contamination Litigation Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
TBA
Fair Labor Standards Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
April 06-30, 2003
ETHICAL CONSIDERATIONS IN MASS TORT AND CLASS
ACTION LITIGATION IN TEXAS
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
April 06-30, 2003
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
April 09-10, 2003
LITIGATION MEMBER BENEFIT
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
April 15, 2003
LITIGATING POSTTRAUMATIC STRESS DISORDER
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
May 08-10, 2003
EMPLOYMENT DISCRIMINATION & CIVIL RIGHTS ACTIONS IN
FEDERAL AND STATE COURTS
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
May 14, 2003
CLASS ACTION BASICS
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
______________________________________________________________________
The Meetings, Conferences and Seminars column appears in the Class
Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged
New Securities Fraud Cases
ANDRX CORPORATION: Charles Piven Commences Securities Suit in S.D. FL
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Andrx Corporation (Nasdaq:ADRX)
between October 31, 2002 and March 4, 2003, inclusive, in the United
States District Court for the Southern District of Florida against the
Company and certain of its officers and directors.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
BLACK BOX: Charles Piven Commences Securities Fraud Lawsuit in W.D. PA
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Black Box Corporation
(Nasdaq:BBOX) between October 15, 2002 and March 11, 2003, inclusive,
in the United States District Court for the Western District of
Pennsylvania.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
COLLINS & AIKMAN: Charles Piven Commences Securities Lawsuit in E.D. MI
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The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Collins & Aikman Corp.
(NYSE:CKC) between August 7, 2001 and August 2, 2002, inclusive, in the
United States District Court for the Eastern District of Michigan
against the Company, Heartland Industrial Partners, LP and ten senior
officers and/or directors of CKC.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
i2 TECHNOLOGIES: Bernstein Liebhard Launches Securities Suit in N.D. TX
-----------------------------------------------------------------------
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 i2 Technologies, Inc.
(NASDAQ: ITWO) securities.
Plaintiff alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated under
Section 10(b), by issuing a series of material misrepresentations to
the market during the class period, thereby artificially inflating the
price of i2 securities. Plaintiff alleges that Defendants repeatedly
issued financial results that were materially false and misleading when
made because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) the Company had materially overstated its revenue by
improperly recognizing revenue on certain customer contracts;
(2) the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) as a result 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, Defendants
announced that i2 would re-audit its financial statements for the years
ended December 31, 2000 and 2001 due to "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."
Defendants further reported that i2 had notified the SEC of these
allegations, and that the SEC staff has begun an informal inquiry into
these matters. After this news, i2 common stock fell from a close of
$1.26 per share on January 24, 2003 to a close of $0.92 per share on
January 27, 2003, the next trading day, amounting to a single-day
decline of more than 26% on very 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 by
Phone: (800) 217-1522 or (212) 779-1414 by E-mail: ITWO@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
KING PHARMACEUTICALS: Bernstein Liebhard Launches Securities Suit in TN
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for Eastern District of Tennessee,
on behalf of all persons who purchased or acquired King
Pharmaceuticals, Inc. (NYSE: KG) securities (the "Class") between April
26, 1999 and March 10, 2003, inclusive.
King Pharmaceuticals is a vertically integrated pharmaceutical company
that manufactures, markets and sells primarily branded prescription
pharmaceutical products. Throughout the class period, the Company
claimed it had positive earnings and growth and exceeded consensus of
earnings expectations. However, unbeknownst to the investing public,
the Company materially misstated or omitted to state that the Company's
rebate practices and "best price" lists subjected it to heightened
regulatory scrutiny as governmental agencies increased their activity
in this area and that the Company had understated the competition for
certain products and engaged in questionable sales practices.
On March 11, 2003, King Pharmaceuticals revealed that it was subject to
an SEC investigation concerning:
(1) the sales of King's products to VitaRx and Prison Health
Services during 1999 and 2000;
(2) King's "best price" lists;
(3) the pricing of King's pharmaceutical products to any
governmental Medicaid agency during 1999; and
(4) the accrual and payment of rebates from 2000 to the present.
As a result of this announcement, the price of King Pharmaceuticals
common stock fell from $15.90 per share to $12.17 per share.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or (212) 779-1414 by E-mail: KG@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
KING PHARMACEUTICALS: Charles Piven Launches Securities Suit in E.D. TN
-----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of King Pharmaceuticals, Inc.
(NYSE:KG) between February 16, 2000 and March 10, 2003, inclusive, in
the United States District Court for the Eastern District of Tennessee,
Northeastern Division at Greeneville.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
PEC SOLUTIONS: Charles Piven Commences Securities Fraud Suit in E.D. VA
-----------------------------------------------------------------------
The Law Offices Of Charles J. Piven initiated a securities class action
on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of PEC Solutions, Inc.
(Nasdaq:PECS) between October 23, 2002 and March 14, 2003, inclusive,
in the United States District Court for the Eastern District of
Virginia, Alexandria Division, against the Company and certain of its
officers.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
ROYAL AHOLD: Berman DeValerio Launches Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action against Koninklijke Ahold N.V. (Royal Ahold) (NYSE:AHO)
and two former officers, accusing the Company of issuing false and
misleading financial statements to the public. The complaint was filed
in the US District Court for the Southern District of New York, on
behalf of all investors who bought Ahold securities from March 6, 2001
through and including February 21, 2003.
The lawsuit claims that Ahold and its officers issued false and
misleading financial statements that misrepresented the Company's true
revenue and earnings, causing its securities to trade at artificially
inflated prices.
Ahold stunned investors on February 24, 2003 when it announced that:
(1) the Company's US Foodservice subsidiary had materially
overstated its income by close to $500 million by improperly
including higher promotional allowances, provided by
suppliers to promote their products, than the Company
actually received in payment;
(2) the Company's Disco subsidiary had engaged in certain
transactions that were possibly illegal and were improperly
accounted for; and
(3) the Company's historical financial statements would be
restated to proportionally consolidate, under Dutch GAAP and
US GAAP, several of the Company's joint ventures
Moreover, the Company also revealed that its CEO and CFO had resigned
and that the Company's independent auditors had suspended their fiscal
year 2002 audit pending completion of the investigations into the
foregoing accounting irregularities.
As a result of this news, the price of Ahold ADRs fell $6.53 per share,
or more than 61%, to close at $4.16, on heaving volume. On February
26, 2003, it was announced that the US Securities and Exchange
Commission and the US Attorney's Office were investigating Ahold.
For more details, contact Julie A. Richmond by Mail: One Liberty
Square, Boston, MA 02109 by Phone: (800) 516-9926 or (617) 542-8300 by
E-mail: law@bermanesq.com
VAXGEN INC.: Wechsler Harwood Launches Securities Fraud Suit in N.D. CA
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Wechsler Harwood LLP initiated a securities class action on behalf of
persons or entities who purchased or otherwise acquired the securities
of VaxGen, Inc. (Nasdaq:VXGN) during the period between February 24,
2003 and February 26, 2003. The case is pending in the United States
District Court for the Northern District of California against the
Company and certain of its officers and directors.
VaxGen is engaged in the development and commercialization of AIDSVAX,
a vaccine designed to prevent infection or disease caused by HIV (Human
Immunodeficiency Virus), the virus that causes AIDS. The original
AIDSVAX technology was developed by Genentech, Inc. and then licensed
exclusively to the Company.
The complaint alleges that on Sunday, February 23, 2003, the Company
shocked the market by reporting that the long-awaited results of its US
clinical trials were a failure as the "study did not show a
statistically significant reduction of HIV infection within the study
population as a whole . the primary endpoint of the trial." On the
following Monday morning, February 24, 2003, after trading was halted
for an hour, VaxGen stock plummeted approximately 65%.
It is further alleged that by later that day, however, as the stock was
still reeling from news of the failed clinical trials, defendants
announced that the trials had actually demonstrated an efficacy rate in
the range of 30% to 84% for an ethnic subgroup of non-Caucasian, non-
Hispanic volunteers and that the vaccine could be approved for such
populations. Upon this encouraging news, the VaxGen stock shot back up
nearly 130% from the trading day low of $3.00 to over $7.60 per share.
Nonetheless, two days later, on February 26, 2003, defendants again
shocked the investing community by revealing that the statements
regarding elevated efficacy rates for non-Caucasians were inaccurate
and unsubstantiated because the Company had not taken the necessary
"penalties" to account for the fact that less than 10% of the clinical
trial participants were actually non-Caucasians. On this news, VaxGen
stock again plummeted to a close of $4.82 per share and progressively
lost value thereafter. As of April 3, 2003, shares of VaxGen were
trading at approximately $2.50 per share.
For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: 877-935-7400 (Toll Free) by
E-mail: dleifer@whesq.com or visit the firm's Website:
http://www.whesq.com
VOICEFLASH NETWORKS: Bernstein Liebhard Launches Securities Suit in FL
----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
in the United States District Court for the Southern District of
Florida, on behalf of all persons who purchased or acquired VoiceFlash
Networks, Inc. (OTC BB: VFNX) securities between March 15, 2002 and
January 24, 2003, inclusive.
Plaintiff alleges that Defendants violated the Securities Exchange Act
of 1934 by issuing materially false and misleading statements
concerning the Company's financial results during the class period. In
particular, plaintiff alleges that defendants improperly accounted for
reserves and improperly recognized certain revenues and income at its
wholly owned subsidiary, United Capturdyne Technologies, Inc.
Plaintiff further alleges that as a result of these false and
misleading statements, the price of VoiceFlash securities was
artificially inflated throughout the class period, causing plaintiff
and the other members of the class to suffer damages.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations, by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or (212) 779-1414 by E-mail: VFNX@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
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