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/raid1/www/Hosts/bankrupt/CAR_Public/030428.mbx C L A S S A C T I O N R E P O R T E R Monday, April 28, 2003, Vol. 5, No. 82 Headlines ALASKA: Importer Alleges Poor Sockeye Salmon Caused Low Prices ALBERTSON'S INC.: WA Customers Sue Over Colored Farmed Salmon AMERICAN MEDICAL: FL Court Says Policy Did Not Violate State Law APPLIED CARD: Attorneys General Sue for Low-Income Consumers BARNES & NOBLE: Employee Launches Overtime Wage Suit in CA Court BRIDGESTONE CORPORATION: Court Refuses To Dismiss Steeltex Suit DESIGNPAC INC.: Voluntarily Recalls 37T Oil Lamps for Fire Hazard EMULEX CORPORATION: Reaches Tentative Settlement For Stock Suits ENRON CORPORATION: Securities Fraud Suit To Proceed To Discovery FIRST SECURITY: Board To Settle Lawsuit Over Wells Fargo Merger INDIAN FUNDS: Appeals Court Suspends Court Monitor Over Comments KRAFT FOODS: Kraft's Assets Won't Be Used For Tobacco Litigation OKLAHOMA: Former Candidate For Governor Denied $1M Attorney Fees PANASONIC CONSUMER: Recalls 64T Battery Packs For Injury Hazard QUALCOMM INC.: Court Grants Summary Judgment For Employee Suit QUALCOMM INC.: 21 Employees Launch Breach of Contract Suit in DE RDO EQUIPMENT: Shareholders Commence Securities Suit in DE Court SUPERIOR FINANCIAL: Reaches Agreement To Settle Securities Suits TOBACCO LITIGATION: Punitive Awards Disallowed In IL Lights Suit VERIZON/MICRONESIAN: Faces Saipan Lawsuit for Inter-Island Tolls WESTPOINT STEVENS: Recalls 11T Electric Blankets For Burn Hazard New Securities Fraud Cases ACCREDO HEALTH: Goodkind Labaton Commences Securities Suit in TN ALLIANT ENERGY: Milberg Weiss Commences Securities Lawsuit in WI ALLOY INC.: Marc Henzel Commences Securities Lawsuit in S.D. NY CIT GROUP: Rabin Murray Commences Securities Lawsuit in S.D. NY NORTHWESTERN CORPORATION: Scott + Scott Lodges Stock Suit in SD PROVIDENT FINANCIAL: Marc Henzel Commences Securities Suit in GA ROYAL AHOLD: Wolf Haldenstein Expands Class Period in Stock Suit ROYAL AHOLD: Kenneth Elan Files Securities Fraud Suit in S.D. NY VAXGEN INC.: Vianale & Vianale Files Securities Suit in N.D. CA ********* ALASKA: Importer Alleges Poor Sockeye Salmon Caused Low Prices -------------------------------------------------------------- A major Japanese trading company paid less to a small processor, who lasted only one season in Bristol Bay, because the processor's frozen sockeye did not meet standards, a manager with Okaya & Co. testified. The lowered payment was not made because the trading company wanted to drive the Baypack processor Red Sea out of business and limit competition, said manager Katsunori Mori, according to a report by Associated Press Newswires. Mr. Mori also denied that he ever put pressure on a processor to lower prices to fishermen. "I don't think it is an efficient way to do business," he said. Rick Magill of Sitka testified earlier, however, that Okaya had not tried to get a high price for Red Sea's high quality frozen salmon as it did for other processors upon resale to a second importer, Nichirei Corp. Mr. Magill said he was told that this was done because other processors, as well as the two importers, were angry because he was paying higher prices to the fishermen. Mr. Mori's comments came in response to questions from lawyers for 4,500 Bristol Bay commercial fishermen, all permit holders to fish for sockeye salmon, and all plaintiffs in the class action being tried in the Superior Court in Anchorage, Alaska. The lawsuit accuses several processors and Japanese importers of conspiring from 1989 to 1995 to keep down prices paid the fishermen. The processors and importers argue, however, that a glut of salmon and world economic conditions, not collusion triggered lowered prices. The trial began February 3 and is expected to run through May. ALBERTSON'S INC.: WA Customers Sue Over Colored Farmed Salmon ------------------------------------------------------------- Seattleite Lori Thomas says she never would have purchased farmed salmon had she known it was fed a color additive to make its flesh pink, as experts say most farmed salmon are. Ms. Thomas said that's why she's joined a class action against Albertsons Inc., alleging the Boise-based grocery chain failed to label its farmed salmon as artificially colored. It's one of three similar national class-action lawsuits filed yesterday in King County Superior Court against Safeway, The Kroger Co. (which owns QFC and Fred Meyer) and Albertsons. The companies had no immediate response, their spokesmen saying they had not seen the complaints. "There's no way I would have spent my money buying salmon if I'd known that it wasn't really a red or orange color the way it looks in the store," Ms. Thomas said in a statement. "I had no way of knowing the salmon I buy is artificially colored." The suits seek damages for all consumers who have purchased farmed salmon across the country in the last four years. That could involve millions of consumers, said Paul Kampmeier, one of the Seattle lawyers representing the plaintiffs. Combined, the three companies have some 6,000 stores in 30 states. The suit also seeks civil penalties and a court order requiring the stores to label farmed salmon as artificially colored. Americans consume about 53 million pounds of farmed salmon a year, nearly all of it imported from Canada, though a small amount is from Washington state, according to the Seattle office of the National Marine Fisheries Service. Pigments are mixed with the feed of almost all farmed salmon to give their flesh a pink or red color like that of wild salmon, experts say. The pigments are federally approved. Wild salmon have pink-to-red flesh from eating tiny crustaceans called krill. The suit alleges that because of the type of feed farmed salmon receive, their flesh would be gray without the color additives. Wild salmon is usually considerably more expensive than farmed fish. "Color is the No. 1 factor for the consumer who buys salmon," Mr. Kampmeier contended. "Pink sells salmon." However, a National Marine Fisheries Service spokesman said farmed- salmon flesh, minus added color, would be more pink than gray, although probably less pink than that of wild salmon. He said the added pigments provide a more consistent color. AMERICAN MEDICAL: FL Court Says Policy Did Not Violate State Law ---------------------------------------------------------------- Florida's First District Court of Appeals ruled in favor of American Medical Security Group, Inc., stating that its pricing practices did not violate state law, the Milwaukee Journal Sentinel reports. The suit, initially filed in May 2001, challenged the Company's practice of increasing rates for certain clients after they used their health plan. According to the Company, their practice of "tier rating," where rates were often raised for individuals in poor health, has been replaced with a system in which rates are spread over a larger group of clients, eliminating the practice of charging higher premiums for sicker clients. Samuel V. Miller, American Medical Security chairman, president and chief executive officer, told the Journal-Sentinel, "the decision supports our firm belief that we are and have been operating lawfully in Florida and everywhere we do business." Tim Moore, the firm's general counsel, told the Journal-Sentinel a class action in Florida still is awaiting a hearing regarding damages. That case is based on similar points of law involved in the appeals court ruling late Wednesday, but the ruling has no effect on the outcome of the class action. He said the company plans to appeal the class action after the damages phase is completed. APPLIED CARD: Attorneys General Sue for Low-Income Consumers ------------------------------------------------------------ Attorneys general in three states recently sued Applied Card Systems and its banking affiliate, Cross County Bank, located in Delaware, alleging that the defendants defrauded and harassed low-income consumers, the Associated Press Newswires reports. The lawsuits, filed in New Hampshire, Minnesota and New York, allege that Cross County Bank, which provides high-interest credit cards to consumers with bad credit histories, charged high fees that used up much of the cards' available credit lines. Next, allege the lawsuits, Applied Card employees used harassing tactics and abusive language to collect on overdue accounts. The companies defended their business practices in a recently issued joint statement. The companies' statement said that "over the years the companies have worked closely with leading consumer finance law firms to ensure compliance with applicable laws and regulations." Applied Card cited regulatory limits on lending to high-risk borrowers as the reason it closed two call centers in Beckley and Ashland, Kentucky. The recent closures left more than 1,000 workers without jobs. BARNES & NOBLE: Employee Launches Overtime Wage Suit in CA Court ---------------------------------------------------------------- Barnes & Noble, Inc. faces a class action filed in the Superior Court of California for the County of Orange, alleging that the Company improperly classified the assistant store managers, department managers and receiving managers working in its California stores as salaried exempt employees. The complaint alleges that these employees spent more than 50 percent of their time performing non-exempt work and should have been classified as non-exempt employees. The complaint alleges violations of the California Labor Code and California Business and Professions Code and seeks relief, including unpaid overtime compensation, prejudgment interest, penalties, attorneys' fees and costs. The Company intends to vigorously defend this action, including contesting its certification as a class action. The results of these proceedings are not expected to have a material adverse effect on the Company's consolidated financial position or results of operations. BRIDGESTONE CORPORATION: Court Refuses To Dismiss Steeltex Suit --------------------------------------------------------------- The Riverside Superior Court in California refused to dismiss a $3 billion class action filed against Bridgestone Corporation, charging it with concealing tread separation problems in its heavy-duty Steeltex tires, Reuters reports. The suit was initially filed in Los Angeles federal court, demanding that the Company recall 27.5 million Steeltex R4S, R4SII and A/T tires. The suit further asserts the tires, installed on 43 types of vehicles such as pickups, vans and mobile homes, caused thousands of serious accidents including fatalities. Earlier the federal court refused to rule on whether to dismiss the suit or remand it to state court. Riverside Superior Court Judge Christopher Sheldon allowed the lawsuit to proceed. He also left intact the suit's five claims -- for design negligence, concealing problems with the tire, tort liability and unfair business practices, court officials told Reuters. The judge also ordered the plaintiffs to refile the lawsuit without references to Bridgestone's alleged fraud against federal highway officials, their attorney Joseph Lisoni told Reuters. Mr. Lisoni said seven major insurance carriers have joined the lawsuit as plaintiffs on behalf of clients who filed damage and injury claims caused by tire blowouts. He added he expects to eventually represent some 8 million Steeltex tire owners, making the case one of the largest class actions in US history. A Bridgestone spokesman said the company does not want to litigate a potential recall in California courts, Reuters reports. "Our position has been consistent, that there is no reason for a recall of these tires," Bridgestone spokesman Dan MacDonald said. "(The National Highway Traffic Safety Administration) has reviewed these tires and clearly stated that they found no evidence of defect." The tire maker's lawyers have argued that only NHTSA has the authority to order a recall, and declined to recall the Steeltex line last April. Mr. Lisoni has asked the agency to reopen the probe. A NHTSA spokesman said the agency is still examining Mr. Lisoni's petition and expect to make a decision by May 27. DESIGNPAC INC.: Voluntarily Recalls 37T Oil Lamps for Fire Hazard ----------------------------------------------------------------- DesignPac, Inc. is cooperating with the US Consumer Product Safety Commission by voluntarily recalling 37,200 Oil Lamps. The glass wick holder can shatter when lit, posing a fire hazard. There has been one report of a glass wick-holder shattering. No injuries have been reported. The recalled lamps come in two styles: a clear, heart-shaped glass container approximately 6-inches tall called "The Vintage Rose Oil Lamp" and a clear, doorknob-shaped glass container approximately 5- inches tall with heart-shaped beads on the outside called "Love Potion Oil Lamp." Both recalled lamps have an insertable wick with a glass wick-holder, which sits on top of the glass container. The products were sold exclusively in Target stores nationwide from December 2002 through February 2003 for about $7. For more details, contact the Target Store by Phone: (800) 440-0680 between 7:00 am and 6:00 pm CT Monday through Friday, or visit the firm's Website: http://www.target.com/gp/browse.html/ref=br_bx_0/601- 3354650-3496108?node=3429381 EMULEX CORPORATION: Reaches Tentative Settlement For Stock Suits ---------------------------------------------------------------- Emulex Corporation (NYSE:ELX) reached tentative settlements to conclude securities class action and derivative lawsuits brought against the company and certain directors and officers in 2001. The suits were filed in the United States District Court, Central District of California. The securities class action, filed on behalf of purchasers of the Company's common stock during various periods ranging from January 18, 2001, through February 9, 2001, allege that the Company and certain of its officers and directors made misrepresentations and omissions in violation of sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. Under the settlements, all claims will be dismissed and the litigation will be terminated in exchange for a payment of $39.5 million. Additionally, the company will record a receivable from the company's D&O insurance of approximately 32% of the settlement. The resulting after-tax settlement charges of approximately $16.7 million will be recorded as a charge in the third fiscal quarter. "With these tentative settlements, we can put the expense and distraction of this litigation behind us and focus on executing our strategy of delivering innovative products to the market in order to enhance shareholder value," said Michael Rockenbach, Emulex Executive Vice President, Finance and Chief Financial Officer. "Emulex remains a financially strong company, with cash, cash equivalents and investments in excess of $570 million." The company entered into the settlement agreements solely for the purpose of settling this litigation and believes that settling these matters at this time is in the best interest of shareholders as it avoids further protracted litigation expense. The terms of the agreements, which are subject to final court approval and notice to class members, includes no admission of liability or wrongdoing by the company or other defendants. For more details, contact Michael J. Rockenbach (Investors) by Phone: 714/513-8213 or Robin Austin (Public Relations) by Phone: 714/513-8152 ENRON CORPORATION: Securities Fraud Suit To Proceed To Discovery ---------------------------------------------------------------- The huge lawsuit against collapsed energy giant Enron Corporation is ready to move to the discovery phase, after federal judge Melinda Harmon dropped only two of the defendants in the suit, the Houston Chronicle reports. Judge Harmon removed former Enron general counsel James Derrick and former Enron Broadband Services CEO Joe Hirko as defendants in the suit. Most of the top executives remain in the suit, including: (1) former Enron Chairman Ken Lay, (2) former President Jeff Skilling, (3) Ken Harrison, (4) Lou Pai, (5) Richard Buy, (6) Kenneth Rice, (7) Richard Causey, (8) Jeffrey McMahon and (9) Kevin Hannon Judge Harmon had consistently refused to release most of the defendants named in the suit, which was filed after Enron filed the biggest bankruptcy proceedings in the nations in late 2001. Shareholders accused the Company of securities law violations and fraudulent accounting practices. Judge Harmon previously ruled that most other third parties, such as financial institutions, the Vinson & Elkins law firm and accounting firm Arthur Andersen, will stay in the suit. In her 47-page order, Judge Harmon examined these Enron insiders' stock sales, bonuses, involvement in controlling positions and the allegations they were a part of specific fraudulent acts. The judge had to look at whether the suit's allegations would be sufficient to sustain a civil finding against various defendants, the Houston Chronicle reports. The judge further ruled the plaintiffs had failed to state a claim against Mr. Derrick because there was not enough evidence indicating he knew about certain alleged fraudulent business deals or made false statements. She also found his employment of his former law firm Vinson & Elkins to investigate allegations in a prophetic memo by Sherron Watkins could not be seen as deception. Mr. Derrick's lawyer, Clifford Gunter, told the Chronicle he was thrilled with the court's decision. "This is the major class action; it's round one. But there are still a few other lawsuits out there," Mr. Gunter noted. Some lawyers have fought to keep their lawsuits independent from the larger class action. Judge Harmon also dismissed Mr. Hirko from the suit, noting that he stayed in Portland rather than moving to Houston. She further noted that he was in the broadband division before the activities that have come into question. Trey Davis, director of special projects at University of California, which is the lead plaintiff, told the Chronicle the regents there are pleased with Judge Harmon's orders. "Taken as a whole, these rulings have substantially concurred with our position and represent a solid victory for the plaintiff. We are ready to move forward in our efforts to obtain a substantial recovery on behalf of the shareholders who were victimized in this fraud," Mr. Davis said. The next phase of the case will be trading documents, depositions and written questions among the myriad parties. Millions of documents are expected to change hands, and a depository has already been established on Allen Parkway to hold the potential evidence. The "class" of plaintiffs involved has yet to be certified, the Chronicle states. FIRST SECURITY: Board To Settle Lawsuit Over Wells Fargo Merger --------------------------------------------------------------- First Security Corporation's board of directors are preparing to settle for $29.9 million a shareholder class action filed against the Company when it agreed to sell First Security Bank to Wells Fargo & Co. in 2000, the Associated Press reports. The suit was filed just weeks before Wells Fargo completed its acquisition of First Security. The shareholder alleged that First Security board Chairman Spencer Eccles and other directors breached their fiduciary duty to shareholders by failing to get the best deal possible for their company's stock, an earlier Class Action Reporter story states. The shareholders' lawsuit argues that Chairman Eccles' decision to sell First Security to Wells Fargo was a rash decision, not grounded in the well-being of First Security. The shareholders say the decision was motivated in part by a desire to spurn Zions Bancorporation, after Zions' shareholders earlier had rejected their company's proposed acquisition of First Security. Zions was considering making another offer, but this was derailed by First Security's agreement with Wells Fargo. In March 3, 2000, First Security made the announcement and its shares lost more than a third of their market value, plunging from more than $22 a share to $13.97. Zions, too, got hit hard and the deal unraveled, AP reports. Attorneys for the parties in the suit are preparing settlement documents and will submit them by the end of the month to Utah's 3rd District Court for preliminary approval. The proposed settlement will have no impact on the financial performance of Wells Fargo. "We were not a party to the lawsuit and are not part of the settlement," Wells Fargo's Utah spokesman Mark Chapman told AP. A joint statement they issued Wednesday indicated that the legal representatives for shareholders believe the settlement is a good result. It went on to note that "defendant directors continue to deny liability and believe that the Wells Fargo merger was in the best interest of shareholders. However, the settlement was reached to avoid further costs and uncertainty." INDIAN FUNDS: Appeals Court Suspends Court Monitor Over Comments ---------------------------------------------------------------- The United States Court of Appeals for the District of Columbia Circuit suspended court monitor Joseph S. Keiffer, over his comments that harshly criticized the US Interior Department's handling of the Indian royalty fund, SignOnSanDiego reports. The ruling came after the court heard the government's appeal of a contempt ruling against Interior Secretary Gale Norton, over the Department's inability to account for millions of dollars in Indian royalties. The appeals judges who initialed the order said they were acting on their own initiative, not at the request of government or plaintiffs in the case, and that the suspension was effective until they issued further orders. They did not explain why. The suit was filed on behalf of thousands of Indians relating to royalties from the government for the use of their land since 1887. An undetermined amount of money was lost or stolen or never collected for more than a century. The suit claims the government mismanaged between $10 billion and $40 billion through failures of the Trust Asset and Accounting Management System. Norton is the third Cabinet member - the first two were from the Clinton administration - held in contempt for allegedly concealing failures to fix mismanaged royalties from Indian land. The civil contempt charge stems from actions between March 2000 and January 2001, the month Norton took office, the judges said. Federal Judge Royce Lamberth held Ms. Norton in contempt last year, stating that he found Ms. Norton and Assistant Secretary for Indian Affairs Neal A. McCaleb did not comply with his 1999 order to account for more than a century of money collected from oil, gas, mining and timber royalties on Indian land. Former Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin were also found in contempt in 1999, SignOnSanDiego reports. At the hearing, Chief Judge Douglas Ginsburg questioned Mr. Kieffer's multiple roles, saying he wondered whether "someone who served as investigator shouldn't be special master." Judge Lamberth appointed Mr. Kieffer in April 2001 to track the department's reform efforts and to file progress reports with the court, and Ms. Norton's agency had given Mr. Kieffer access to employees and information needed for his inquiry. Government attorneys later asked Judge Lamberth to relieve Mr. Kieffer after he harshly criticized the management of the money. Norton's attorneys also argued Mr. Kieffer was biased and overstepped his legal bounds. KRAFT FOODS: Kraft's Assets Won't Be Used For Tobacco Litigation ---------------------------------------------------------------- Louis Camilleri, Chairman of Kraft Foods Inc., a unit of parent company Altria Group Inc., in an effort to assuage investors' anxieties, told them that Kraft would not be paying any part of the cost of class action litigation against cigarette maker Philip Morris USA, also an Altria unit, according to a report by the Chicago Tribune. Shares of Kraft, largest North American food maker, have been pressured recently as potential investors, as well, have expressed fears that Kraft's assets would be tapped to defray the cost of the tobacco litigation loss lodged with Philip Morris. Chairman Camilleri, also is chief executive of Altria, which owns about 84 percent of Kraft. Altria took the food company public in June 2001. Moody's rating agency recently cut Altria's long-term debt ratings, but left Kraft's ratings unchanged, saying the company has governance policies in place to protect it from exposure to the tobacco lawsuits. However, earlier this month, Kraft's access to the short-term commercial paper lending market was cut off after its debt ratings were downgraded, along with Altria's, on risks of litigation surrounding Philip Morris USA. Philip Morris USA is appealing the $10.1 billion verdict in a class action it lost in March over its description of 'light' cigarettes in a way, said Judge Nicholas Byron of Madison County, Illinois, that violated Illinois' Consumer Fraud Law and led the state's 1.1 billion smokers of 'lights' to believe the cigarette they smoked was less harmful than regular cigarettes. Judge Byron ordered Philip Morris to post a $12 billion appeal bond to assure plaintiffs' judgment was protected during the course of the appeals, up to the Supreme Court if need be. Later, Judge Byron lowered the amount of the appeal bond, removing the immediate fears by the states nationwide - generated by the tobacco company itself - that Philip Morris might not be able to deliver its annual installment to 46 states under the terms of the Master Settlement Agreement and would seek the protection of Chapter 11 bankruptcy. OKLAHOMA: Former Candidate For Governor Denied $1M Attorney Fees ---------------------------------------------------------------- Oklahoma County District Judge Vicki Robertson has ruled that Gary Richardson, an unsuccessful candidate for governor, and his Tulsa law firm are not entitled to attorneys' fees of nearly $1 million for work done in a class action, filed in 1993, which forced the state to refund nearly $12 million to more than 40,000 people for overcharging motorists to reinstate driver's licenses, Associated Press Newswires reports. The civil lawsuit was filed by two Oklahoma motorists and subsequently certified as a class action, thereby opening the door for the state to pay 40,198 claims. Mr. Richardson and his law partner Keith Ward said they were hired by the law firm of Carpenter and Laquer because of their political influence with state leaders. Mr. Richardson said it was their job "to help open their (the state leaders') eyes to the importance of settling the case." Richard Laquer said the state was wasting $3,000 a day or about $1 million a year in taxpayer money for interest while it fought the lawsuit over the refunds for overcharging for license reinstatements. His firm, said Mr. Laquer, wanted someone who had the ability to speak directly with someone in authority. Mr. Ward, who is Mr. Richardson's partner, said that he and Mr. Richardson dined with then-Governor Frank Keating to discuss the litigation, and Mr. Keating told them the proper protocol was to write the governor's legal counsel, which they did. "I was doing what I was asked to do, which was to try to cut into the executive branch, when I did that," Mr. Ward testified. Mr. Richardson testified he talked to Public Safety Commissioner Robert Ricks and Attorney General Drew Edmonson. Judge Robertson heard the description of the kind of work done by the two attorneys with the purpose of encouraging the state to settle the case with the suing overcharged motorists. She found that the 1999 contract between the two law firms was a lobbying contract for a contingent fee. Judge Robertson ruled that such a contract was unlawful and denied Mr. Richardson's firm any money for attorney's fees. PANASONIC CONSUMER: Recalls 64T Battery Packs For Injury Hazard --------------------------------------------------------------- Panasonic Consumer Electronics is cooperating with the United States Consumer Product Safety Commission by voluntarily recalling about 64,000 Panasonic cordless power tool battery packs. Battery packs can detach from the power tool unexpectedly and strike the operator or bystander, resulting in injuries. Two reports of batteries detaching have been received. No injuries have been reported. Only battery packs manufactured between May 1, 2001 and November 20, 2002, with model numbers EY9230, EY9136, EY9231, EY9200, EY9106 and EY9201 stamped on the top of the battery pack are included in this recall. The battery pack is black and yellow. Home improvement, hardware and mail order outlets nationwide have sold these products. Battery packs were sold in the Panasonic Cordless Power Tool kit and separately as an accessory pack and replacement battery for the power tools. The battery packs cost between $150 and $400 (with kits) and between $50 and $100 (individually). For more details, contact the Company by Phone: (800) 833-9626 between 9 a.m. and 8 p.m. ET Monday through Friday or visit the firm's Website: http://Panasonic.com/consumer_electronics/bp_cordless_tools/notificatio n.asp QUALCOMM INC.: Court Grants Summary Judgment For Employee Suit -------------------------------------------------------------- The United States District Court for the Southern District of California granted summary judgment in favor of Qualcomm, Inc. in the suit filed by three former employees on behalf of themselves and those former employees of the Company whose employment was terminated in April 1999. Virtually all of the purported class of plaintiffs received severance packages at the time of the termination of their employment, in exchange for a release of claims, other than federal age discrimination claims, against the Company. The suit purports to state ten causes of action including: (1) breach of contract, (2) age discrimination, (3) violation of Labor Code Section 200, (4) violation of Labor Code Section 970, (5) unfair business practices, (6) intentional infliction of emotional distress, (7) unjust enrichment, (8) breach of the covenant of good faith and fair dealing, (9) declaratory relief and (10) undue influence The complaint seeks an order accelerating all unvested stock options for the members of the class, plus economic and liquidated damages of an unspecified amount. On June 27, 2000, the case was ordered transferred from Los Angeles County Superior Court to San Diego County Superior Court. On July 3, 2000, the Company removed the case to federal court, and discovery commenced. On May 29, 2001, the court dismissed all plaintiffs' claims except for claims arising under the federal Age Discrimination in Employment Act. On July 16, 2001, the court granted conditional class certification on the remaining claims, to be revisited by the Court at the end of the discovery period. Currently, there are 83 individuals included in the class. On April 15, 2003, the court granted the Company's summary judgment motions as to all class members' disparate impact claims and set a hearing regarding decertification of the class for May 27, 2003. Although there can be no assurance that an unfavorable outcome of the dispute would not have a material adverse effect on the Company's operating results, liquidity or financial position, the Company believes the claims are without merit and will vigorously defend the action. QUALCOMM INC.: 21 Employees Launch Breach of Contract Suit in DE ---------------------------------------------------------------- Qualcomm, Inc. faces a class action initially filed by 21 former employees in San Diego Superior Court, ostensibly on behalf of themselves and other former employees of the Company who purportedly are similarly situated and who opted out of a similar class action previously filed against the Company that was resolved in April 2001. The complaint alleges claims for: (1) declaratory relief, (2) breach of contract, (3) breach of fiduciary duty, (4) fraud, (5) suppression of material facts, (6) rescission, (7) specific performance and (8) work, labor and services The Company removed the case to the United States District Court for the Southern District of California. Although there can be no assurance that an unfavorable outcome of the dispute would not have a material adverse effect on the Company's operating results, liquidity or financial position, the Company believes the claims are without merit. RDO EQUIPMENT: Shareholders Commence Securities Suit in DE Court ---------------------------------------------------------------- RDO Equipment Co. faces a class action filed in the Delaware Court of Chancery purporting to be on behalf of the Company's public stockholders. The suit also names as defendants Ronald D. Offutt, the Company's Chairman and Chief Executive Officer and each of the individual directors of the Company. In general, the complaint alleges, among other things: (1) breaches of fiduciary duty by each of the Company, Mr. Offutt and the members of the Company's Board of Directors in connection with Mr. Offutt's contemplated Tender Offer; (2) inadequate disclosure to minority stockholders of RDOE; and (3) that the consideration offered is inadequate Among other remedies, the complaint seeks to enjoin the tender offer (and the follow-up merger) or, alternatively, damages in an unspecified amount and rescission, in the event the tender offer (and the follow-up merger) occur. The Company and Mr. Offutt believe the complaint is without merit. SUPERIOR FINANCIAL: Reaches Agreement To Settle Securities Suits ---------------------------------------------------------------- Superior Financial Corporation (NASDAQ: SUFI), holding company of Superior Bank, reached an agreement in principle to settle the consolidated federal class actions, a similar derivative suit pending in state court and other related litigation involving the Company's former employees. The settlement agreements are subject to final court approval and call for the Company and its insurance carrier to pay sums well within the Company's policy limits and materially less than the Company's estimates of the costs of litigation. The Company's contribution to the settlement is approximately $475,000 pretax, or $0.04 diluted earnings per share, which amount has been recorded as a non-recurring expense in the first quarter of 2003. The Company plans to release its first quarter 2003 earnings announcement and concurrently file its Quarterly Report on Form 10-Q reflecting the settlement expense as scheduled on May 5, 2003. "We are pleased to announce the conclusion of this litigation," Stan Bailey, Chairman and C.E.O. of Superior, said in a statement. "While we were confident of vindication had these matters gone to trial, given the exorbitant costs of litigation today, we believe that the Company and its shareholders have reaped a significant benefit by our settling all of these cases at an amount well below projected litigation costs. More importantly, the settlement frees management to focus exclusively on the positive - enhancing shareholder value." For more information, contact Robert A. Kuehl by Phone: 501/324-7255 or visit the firm's Website: http://www.superiorfinancialcorp.com TOBACCO LITIGATION: Punitive Awards Disallowed In IL Lights Suit ---------------------------------------------------------------- A Cook County, Illinois judge issued a temporary ruling in favor of Philip Morris USA, saying that the state of Illinois was not entitled to collect more damages than it was already allowed under a 1998 nationwide tobacco settlement, known as the Master Settlement Agreement (MSA), the Associated Press Newswires reports. Philip Morris had filed a lawsuit in Cook County, to keep the state from collecting its share of the damages under the verdict issued by Judge Nicholas Byron in Madison County, said Thomas Frederick, attorney for Philip Morris. Mr. Frederick said the state has until May 23 to respond and the two sides are due back in Cook County Court on May 30. In Madison County, Stephen Tillery, plaintiffs' lead attorney in the 'light' cigarettes case, has argued in his recent motion before Judge Nicholas Byron that if the state cannot have the $3 billion punitive damages awarded by Judge Byron, it should go to a charitable fund maintained by the Illinois attorney general and then be given to groups that health or medical related. However, Mr. Tillery said in the motion that he thinks Illinois eventually will get the awarded damages. Judge Byron could rule on Mr. Tillery's motion very soon. Philip Morris USA also had filed its motion, asking Judge Byron to reconsider his $10.1 billion verdict in the class action over `light' cigarettes; that the judge either reverse his verdict or reduce the judgment amount. The judge will rule on the issue soon. Last month, on March 21, Judge Byron ordered Philip Morris to pay $10.1 billion for misleading smokers into believing light cigarettes are less harmful than regular brands. The judge ordered $3 billion of that amount plus $600 million in interest to be paid in punitive damages to the state of Illinois. The remainder was to go as compensatory damages to the 1.1 million plaintiff smokers of light cigarettes in Illinois, who, Judge Byron adjudged, had been misled and deceived into believing light cigarettes were less harmful than the regular brands. Last week, Judge Byron responded to Philip Morris's request that he reduce the $12 billion appeal bond the cigarette maker would have to post in order to appeal by halving the amount of the appeal bond. Philip Morris had told Judge Byron that unless the appeal bond was reduced the company would not be able to make its annual payment to the 46 states under the terms of the 1998 tobacco settlement and would probably have to seek the protection of a Chapter 11 bankruptcy. VERIZON/MICRONESIAN: Faces Saipan Lawsuit for Inter-Island Tolls ---------------------------------------------------------------- Verizon/Micronesian Telecommunications Corporation faces a potential class action filed by the Rota and Tinian Legislative Delegations, in the United States District court in the CNMI, Saipan, for its alleged failure to abide by the conditions in the Submerged Lands Act related to the inter-island tolls, the Saipan Tribune reports. The suit will seek to stop the toll charges imposed on Tinian and Rota Verizon subscribers for domestic calls, and also recover the charges paid by the same subscribers since the Submerged Lands Act came into effect, Senate Public Utilities, Telecommunications and Communication Committee (PUTC) Chairman Diego M. Songao told the Tribune. The suit is separate from the pending local litigation that the Senate PUTC Committee had asked to be reactivated through the Office of the Attorney General. "We're looking at stopping continuation of charges and also reimbursement of charges that were made since the inception of this Submerged Lands Act, which came into effect around 1995," Mr. Songao told reporters yesterday, the Saipan Tribune states. Verizon General Manager Tony Mosely yesterday declined to comment, saying that he has not received any information about the class action suit. The Rota and Tinian Legislative Delegations will be the principal plaintiffs in the lawsuit. WESTPOINT STEVENS: Recalls 11T Electric Blankets For Burn Hazard ---------------------------------------------------------------- WestPoint Stevens, Inc. is cooperating with the US Consumer Product Safety Commission by voluntarily recalling 11,000 manufactured electric blankets. When the blanket is folded, the heating element can overheat, causing the heating element and blanket to melt. This poses the risk of thermal burns to consumers. The Company has received 10 reports of the blankets overheating, including four reports of minor skin burns. The Vellux (r) fahrenheitTM blankets were sold in various colors and sizes to fit all mattress sizes. The temperature controller is white with the words, "WESTPOINT STEVENS" and "fahrenheit Heated Blanket" printed on the front. The recall includes blankets manufactured from July 2002 through January 2003. The manufacture date is printed on a label sewn into the seam. Department stores, mail order catalogs and Web sites sold the blankets nationwide from July 2002 through April 2003 for between $80 and $130. For more details, contact the Company by Phone: (888) 439-4794 anytime. New Securities Fraud Cases ACCREDO HEALTH: Goodkind Labaton Commences Securities Suit in TN ---------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class action filed pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange Act of 1934, in the United States District Court for the Western District of Tennessee, on behalf of all open market purchasers of the common stock of Accredo Health, Inc. (NASDAQ:ACDO) during the period June 16, 2002 through April 7, 2003, inclusive. The named defendants are the Company and: (1) David Stevens, (2) John Grow and (3) Joel Kimbrough The complaint charges Defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10(b)-5 promulgated thereunder and Section 20(a) of the Exchange Act of 1934. Accredo provides specialized contract pharmacy and related services pursuant to agreements with biopharmaceutical drug manufacturers. The Complaint alleges that during the period June 16, 2002 through April 7, 2003, inclusive, defendants perpetrated a scheme to artificially inflate Accredo's stock price by issuing a series of materially false and misleading financial statements and press releases. Specifically, the complaint alleges that the Company reported record financial results, when in fact the Company was failing to timely record an impairment in the value of certain receivables pursuant to the purchase of an entity in 2002. On April 8, 2003, Accredo announced that it was revising its previously announced fiscal year 2003 revenue estimate and its previously announced fiscal year 2003 earnings per share estimate. The Company announced that it was examining the adequacy of the reserves of accounts receivable that it acquired in June 2002 and that it was in discussions with external auditors concerning the adequacy of the reserves. Furthermore, the Company reported that the review of its finances could result in an adjustment to the purchase price recorded by the Company, or result in a charge against the Company's fiscal 2003 earnings. Following the announcement on April 8, 2003, the price of Accredo's common stock fell precipitously and has not recovered. For more details, contact Henry J. Young by Mail: 100 Park Avenue, 12th Floor, New York, New York 10017-5563 by Phone: 212/907-0700 by E-mail: hyoung@glrslaw.com ALLIANT ENERGY: Milberg Weiss Commences Securities Lawsuit in WI ---------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Alliant Energy Corporation (NYSE: LNT) between January 29, 2002 to July 18, 2002, inclusive who have been damaged thereby. The action is pending in the United States District Court for the Western District of Wisconsin, against the Company and: (1) Erroll B. Davis, Jr. (CEO, President and Chairman), (2) Thomas M. Walker (CFO) and (3) John E. Kratchmer (Chief Accounting Officer, Controller) The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 29, 2002 to July 18, 2002. The complaint alleges that the Company falsely touted the performance of its non-regulated businesses and represented that those businesses would compensate for expected 2002 weakness in its utilities operations. The complaint further alleges that the Company also represented that its unregulated businesses were integral to the Company's operations and were key to the Company's expected annual growth rate of 7%-10%. Such statements were materially false and misleading when made, the complaint alleges, because defendants knew, or were reckless in not knowing, that the unregulated businesses were suffering from serious problems, that such businesses were a material drain on the Company overall and could not compensate for any weaknesses in the regulated businesses and that the Company could not meet its 2002 earnings targets by the results of its utilities businesses alone. On July 18, 2002, the Company announced that it was cutting its 2002 earnings expectations by over 35%. Investors, conditioned by defendants class period statements, reacted by selling-off the stock, which fell by 23% in one day, from $23.78 per share on July 18, 2002, to $18.22 per share on July 19, on unusually heavy trading volume. A few months after the end of the class period, the Company announced that it would sell many of its non-utility assets as part of an effort to re-focus its business around the Company's utilities operations. For more details, contact Steven G. Schulman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: alliantenergycase@milbergNY.com or visit the firm's Website: http://www.milberg.com ALLOY INC.: Marc Henzel Commences Securities Lawsuit in S.D. NY --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of purchasers of the securities of Alloy, Inc. (Nasdaq: ALOY) between August 1, 2002 and January 23, 2003, inclusive, and who suffered damages thereby. The action, is pending against the Company, Matthew C. Diamond (CEO), James K. Johnson Jr. (President and COO) and Samuel A. Gradess (CFO). The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 1, 2002 and January 23, 2003. Alloy is a teen-focused media company and direct marketer that targets Generation Y consumers, i.e. the approximately 60 million people in the United States between the ages of 10 and 24. The complaint alleges that the Company claimed that its merchandising and advertising segments complemented one another in a way that gave the Company an edge over competitor teen retailers and media businesses and which would enable it to succeed despite difficult market conditions in the second half of 2002. Unbeknownst to investors, the Company faced fierce competition for the youth market and the weak economy forced the Company to cut its prices and increase operating expenses, e.g. by offering free shipping and deep discounts, thereby eroding Alloy's gross profit margin. On January 23, 2003, the Company shocked the market by announcing that EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11 million to $12 million instead of the previously projected $15 million to $16 million and that fiscal 2002 EBTA would be in the range of $30 to $31 million instead of the previously forecast $34 million to $38 million. On this news, the Company's share priced plummeted by 49%, or $4.57, from the previous day's closing price of $9.10. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com CIT GROUP: Rabin Murray Commences Securities Lawsuit in S.D. NY --------------------------------------------------------------- Rabin Murray & Frank LLP initiated a securities class action in the United States District Court for the Southern District of New York, on behalf of all persons or entities who purchased CIT Group Inc. common stock (NYSE:CIT) in or traceable to the initial public offering made pursuant to the Registration Statement, of which the Prospectus was a part, which was declared effective on or about July 1, 2002. The suit names as defendants the Company and: (1) Albert R. Gamper, Jr., (2) Joseph M. Leone, (3) John F. Fort, III, (4) Mark H. Swartz, (5) J. Brad McGee, (6) Goldman, Sachs & Co., (7) Lehman Brothers Inc., and (8) Salomon Smith Barney Inc. The complaint alleges that defendants violated the Securities Act of 1933. In particular, it is alleged that the Prospectus contained materially false and misleading statements concerning the adequacy of the Company's loan loss reserves. On July 23, 2003, only three weeks after the IPO, CIT announced that had to take a $200 million charge to strengthen its telecommunications loan reserves. For more details, contact Eric J. Belfi or Sharon Lee by Mail: 275 Madison Avenue, New York, NY 10016, by Phone: (800) 497-8076 or (212) 682-1818, by Fax: (212) 682-1892, or by E-mail: email@rabinlaw.com. NORTHWESTERN CORPORATION: Scott + Scott Lodges Stock Suit in SD --------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action on behalf of institutional investors in the United States District Court for the District of South Dakota on behalf of purchasers of NorthWestern Corporation (NYSE: NOR) publicly traded securities during the period between February 7, 2002 and March 31, 2003. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Throughout the class period, defendants issued a series of materially false and misleading statements concerning the financial and operational condition of the Company. In fact, throughout the class period, while many of the Company's competitors were announcing revised guidance, NorthWestern consistently stated that the Company's proprietary business model was allowing NorthWestern to continue to achieve "improved performance" and earnings of between $2.30 to $2.55 per share by the end of 2002. Both prior to and throughout the class period, management of the Company consistently represented that its subsidiaries, including Expanets and Blue Dot, were achieving and would continue to achieve these results. In fact, however, investors would ultimately learn at the close of the class period, which defendants had managed to conceal throughout the class period, that: (1) The Company's non- utility subsidiaries were not performing according to plan, with at least 20 per cent of Blue Dot's locations performing so poorly that they would be sold or closed within the foreseeable future, and with Expanets running its reserves about $66 million short of its rapidly escalating delinquencies; (2) defendants had artificially inflated the Company's balance sheet as well as its reported earnings and EPS figures, by failing to write down the impairment of, and take necessary reserves for, its failing Blue Dot and Expanets businesses, which impairments and reserve adjustments ultimately resulted in a massive $880 million charge; (3) through a complicated scheme of questionable accounting and subsidiaries owned partially by senior management, losses at both Blue Dot and Expanets were subverted and reallocated to owners of minority interests or shareholders in the Company's subsidiary, which allowed the Company to keep these losses off its balance sheet, and to artificially inflate earnings and income and mask the poor performance of NorthWestern throughout the Class Period; and (4) defendants had materially misstated the conditions of both Blue Dot and Expanets, which were not poised for nor experiencing "long-term growth" nor "value creation," but were rather in poor financial and operational condition, with at least 20 per cent of Blue Dot's locations terminal and with an unknown amount of other locations also in poor condition, and with almost $302 million in charges and reserves required to be taken by Expanets, in addition to an approximate $289 million charge required for Blue Dot. As a result of the foregoing, at no time during the class period did defendants have a good faith basis to project earnings anywhere near $2.55 per share for fiscal year 2002. For more details, contact David R. Scott or Neil Rothstein by Mail: 108 Norwich Avenue, Colchester, Connecticut 06415 by Phone: 800/404-7770 by Fax: 860/537-4432 by E-mail: drscott@scott-scott.com or nrothstein@scott-scott.com or visit the firm's Website: http://www.scott-scott.com PROVIDENT FINANCIAL: Marc Henzel Commences Securities Suit in GA ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Georgia, on behalf of all persons who purchased securities of Provident Financial Group (Nasdaq: PFGI) between January 17, 1997 and March 5, 2003, inclusive, and who were injured thereby. Provident Financial Group Inc.'s earnings restatement is one for the record books - its six years worth of revisions is the longest continuous string of amendments in memory for a U.S. company. But if history is any indication, Provident's problems are only just beginning. The company's stock lost 20%, the day of the announcement by the Cincinnati banking company, but a study from New York University's Stern School of Business finds that the stocks of companies that announce restatements drop for three straight sessions on average. "Earnings restatements rewrite a company's history," generally in an unflattering way, said Min Wu of NYU's Department of Accounting, Taxation and Business Law, who conducted the study in conjunction with Softrax, whose software helps companies tally revenue. When companies restate earnings, and particularly when that's accompanied by a warning about future earnings - as was the case with Provident - there are usually reverberations, Mr. Wu said. "Analysts' downgrades, class-action lawsuits and management shuffles are not uncommon and they cast a shadow over the firms, quite often for a long time." But Provident launched a quick offensive in an effort to restore its credibility, said Christopher Carey, the company's executive vice president and chief financial officer. "We acted as soon as we found out and have been talking to people all day emphasizing this was totally inadvertent on our part and would never had been done if we had known differently," Mr. Carey told Dow Jones Newswires. "At some point we expect to go out and tell people face-to-face exactly why it happened and exactly why it won't happen again." He acknowledged Provident "has certainly experienced a big setback." Provident has plenty of company in revising its financial reports. Restatements appear as commonly today as increases in profit expectations did in the late 1990s. Restatements have spiked further since the Sarbanes-Oxley Act was passed in July. The law calls for stringent reporting by companies and requires executives to certify results. Consider how times have already changed. From 1994 through 1997, just 220 public companies restated earnings. Over the next four years - 1998 to 2001 - that number quadrupled to roughly 900, according to Wu's research. This year there have already been dozens of restatements, with one of the most high- profile being Royal Ahold NV (AHO), which said last month it would restate $500 million of earnings going back two years. But six years "is very, very unusual," said Joe Cooper of Thomson Financial/ First Call, who said he could not recall a longer string than the 24 quarters that Provident's move will encompass. Provident "voluntarily" made its disclosure like three-fourths of companies do, according to Wu's research, and that can be a plus for retaining investor credibility. The bank holding company has since notified the Federal Reserve and the Securities and Exchange Commission of the errors and said it expects to file its 10-K report, with the correct data, on time - another positive, Wu said. Provident is also in the majority of companies that give the amount of the restatement on the day they announce the development, Wu said. The other one- third do not, with the data coming as soon as two days after and as late as one and a half years. The average is one to two months, she added. Provident's restatement totaled $70.3 million over the six years, and the company said it was able to pin down the numbers immediately after recognizing the deals involved nine leases that were posted as off- balance-sheet transactions and shouldn't have been. By keeping these transactions off the balance sheet, the company "gave the appearance it had more capital and higher income," said Wilson Smith, banking analyst at Cohen Brothers in Philadelphia. "That's something that could hang over their head for a while, but be mitigated by the proactive steps they're discussing." For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com ROYAL AHOLD: Wolf Haldenstein Expands Class Period in Stock Suit ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP expanded the class period of the class action on file in the United States District Court for the Southern District of New York, on behalf of purchasers of the securities of KONINKLIJKE AHOLD N.V. d/b/a ROYAL AHOLD, Inc. (NYSE: AHO) between March 10, 1998 and February 21, 2003, inclusive, against the Company, certain of its officers and directors, and its accountants. The complaint alleges that defendants violated the 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. During the class period, defendants issued many statements and filed quarterly and annual reports with the SEC which depicted the Company's net income and financial performance. The complaint alleges that these statements were materially false and misleading because they omitted and/or misrepresented several undesirable facts, such as that, during the Class Period, AHOLD had significantly overstated its operating earnings for its U.S. Foodservice division and that AHOLD had reported the full revenues and operating results of several joint ventures in which the company held non-controlling interests, in contravention of applicable accounting rules. The complaint further alleges that the Company lacked sufficient internal controls resulting in an inability to determine the true financial condition of AHOLD, which lead to the value of the Company's net income and financial results being materially overstated at all pertinent times. On February 24, 2003, before the market opened for trading, AHOLD announced that it discovered over $500 million in "overstatements of income related to promotional allowance programs," requiring the Company to restate its previously-issued financial reports for fiscal years 2001 and 2002. On this day, the Company also announced that it would restate its historical financial statements so as to proportionally consolidate under GAAP ICA Ahold, Jeronimo Martins Retail and Disco Ahold International Holdings and, for the periods during which they were 50% owned, Bompreco and Paiz Ahold. On the day of this disclosure, shares of AHOLD declined over 60%, to close at $4.16 per share, on volume of more than 16 million shares traded, or nearly thirty times the average daily volume. The market capitalization loss on this one day alone was over $4 billion. For more details, contact Fred Taylor Isquith, Esq., Gustavo Bruckner, Esq., Michael Miske, George Peters, or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to AHOLD. ROYAL AHOLD: Kenneth Elan Files Securities Fraud Suit in S.D. NY ---------------------------------------------------------------- The Law Office of Kenneth A. Elan initiated a securities class action against Koninklijke Ahold N.V. (Amsterdam: AHLN) and certain of its officers and directors, in the United States District Court for the Southern District of New York. This suit is brought on behalf of all persons or entities, other than defendants, who purchased Ahold securities between May 16, 2000 and February 21, 2003, inclusive. The complaint alleges that during the class period, the defendants caused the release of false and misleading statements regarding the Company's financial results, causing Ahold's securities to trade at artificially inflated prices. On February 24, 2003, before the market opened, the Company announced significantly reduced earnings for the year ended December 29, 2002. It also announced that: (1) it would restate its financial statements for the fiscal year 2001 and interim results for 2002; and (2) during the fiscal 2002, year-end audit by Deloitte Touche Tohmatsu significant accounting irregularities were discovered in the recognition of income. According to the Company, Ahold's operating earnings for 2001 and expected operating earnings for fiscal year 2002 have been overstated by amounts exceeding $500 million. The accounting irregularities relate to the early booking of promotional income at US Foodservice Inc., a wholly owned subsidiary of Ahold. In addition to the restatement in earnings related to US Foodservice, the Company also announced it would restate its historical financial statements so as to proportionally consolidate under Generally Accepted Accounting Principles (GAAP) certain subsidiaries, which it partially owned. Previously, the full results of these subsidiaries were consolidated in Ahold's results with the minority share in earnings and equity then deducted, during the relevant periods. The consolidation of the full results inflated Ahold's reported sales results. As a result of the defendants' false and misleading statements during the class period, the price of Ahold's securities was artificially inflated throughout the class period. By way of example, in reaction to the above announcements, the Company's common shares price plummeted approximately 63% to close at EUR 3.59 on February 24, 2003. The news had similar affect on the ADRs. The price of the ADRs declined from $10.69 to $4.16. The price of Ahold's securities has not recovered. For more details, contact Kenneth A. Elan by Mail: 217 Broadway New York, NY 10007 by Phone: 212-619-0261 or by Fax: 212-385-2707 VAXGEN INC.: Vianale & Vianale Files Securities Suit in N.D. CA --------------------------------------------------------------- Vianale & Vianale LLP initiated a securities class action on behalf of purchasers of the securities of VaxGen, Inc. (Nasdaq:VXGN) between August 6, 2002 and February 26, 2003, inclusive. The action (C-03-1801 MHP) is pending in the United States District Court, Northern District of California, against the Company, Lance K. Gordon and Donald P. Francis, M.D. The complaint charges VaxGen and certain of its officers and directors with issuing materially false and misleading statements concerning its business and financial condition. VaxGen is engaged in the development and commercialization of AIDSVAX, a vaccine designed to prevent HIV infection or disease. During the class period, defendants were completing the final stages of AIDSVAX's Phase III clinical trials required to obtain FDA approval to market AIDSVAX as an AIDS vaccine. Throughout the class period, defendants make positive statements about the status of the trial and describing their plans to manufacture and market AIDSVAX, causing VaxGen's stock to trade at artificially inflated prices. On February 26, 2003, however, defendants admitted that the reliability of their earlier reports of higher efficacy rates for non-caucasians were impaired because they had not taken the requisite "penalties" to account for the fact that less than 500 of the 5000 clinical trial participants were non-caucasians, resulting in an extremely small subset of data being analyzed for non-caucasians. As the news that earlier promises that AIDSVAX could prove useful for non-caucasians fell apart, the stock declined further, resulting in a total loss in market cap since November 18, 2002 of approximately 85%. For more details, contact Kenneth J. Vianale or Julie Prag Vianale by Mail: 5355 Town Center Road, Suite 801, Boca Raton, Florida 33486 by Phone: (561) 391-4900 or by E-mail: info@vianalelaw.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 2003. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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