/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030715.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 15, 2003, Vol. 5, No. 138 Headlines CANADA: Canada Post Offers Refunds To Settle Consumer Fraud Suit CYBERGUARD CORPORATION: Agrees To Settle Securities Fraud Suit DEEP VEIN THROMBOSIS: Watching Long Movies Can Trigger Clots ENRON CORPORATION: Reorganization To Repay Part Of Compensation FASTFOOD LITIGATION: Seattle School Board Threatened With Suit ILLINOIS: Court Orders State Child Care Dept To Make Changes INDIAN FUNDS: Lawyer Says Indians Owed "Untold" Amounts INDIAN FUNDS: Govt Won't Settle Royalties Suit For Billions JAPAN: 16 Families Launch Suit V. Tokyo Hospital For Malpractice MICHIGAN: Detroit To Settle Lawsuit Filed on Detained Witnesses MICHIGAN: Macatawa Bank Inherits Suit With Buyout Of Grand Bank OKLAHOMA: Appeals Court Asked To Refuse Stay Of Bias Suit Pact OKLAHOMA: Residents Sue Tar Creek Mining Firms Over Pollution PEMSTAR INC.: Plaintiffs File Consolidated Securities Suit in MN PENNSYLVANIA: Security Guards Launch Age Discrimination Lawsuit PHILIP MORRIS: Shares Tumble As Bond Reduction Is Questioned RHODE ISLAND: Judge Allows Testing Of Evidence in Club Fire Suit TOBACCO LITIGATION: Wholesalers Sue Philip Morris, RJ Reynolds UNITED STATES: Six Sioux Allege Child Abuse In Indian Schools UNITED STATES: DC Appeals Court Rejects Suit Over Kenya Bombing New Security Fraud Cases BARRICK GOLD: Rabin Murray Lodges Securities Lawsuit in S.D. NY CORNERSTONE PROPANE: Wolf Haldenstein Lodges Stock Lawsuit in CA CORNERSTONE PROPANE: Marc Henzel Files Stock Lawsuit in N.D. CA CREE INC.: Bull & Lifshitz Lodges Securities Lawsuit in M.D. NC CREE INC.: Kaplan Fox Commences Securities Fraud Suit in M.D. NC CRYO-CELL INTERNATIONAL: Rabin Murray Files Stock Lawsuit in FL PARADIGM MEDICAL: Milberg Weiss Lodges Securities Suit in Utah PEDIATRIX MEDICAL: Marc Henzel Lodges Securities Suit in S.D. FL PEDIATRIX MEDICAL: Wolf Haldenstein Lodges Securities Suit in FL RECOTON CORPORATION: Wolf Haldenstein Files Stock Lawsuit in FL RECOTON CORPORATION: Marc Henzel Files Stock Lawsuit in M.D. FL ********* CANADA: Canada Post Offers Refunds To Settle Consumer Fraud Suit ---------------------------------------------------------------- Canada Post is providing a $9.95 refund and three months free Internet Services to more than 150,000 Canadians, to settle a class action filed over its promotional offer in the fall of 2000, CBC News reports. The Company started selling Internet for Life CD-ROMs, however, by August 2001, two internet companies - Cybersurf and 3Web - withdrew from the promotions. They instead substituted free unlimited Internet access with an offer of $9.95 a month. Customers filed a class action protesting the offer. "If we allowed Canada Post.and these two other corporations, which are publicly traded companies, to take $10 from 150,000 without any recourse or remedy, then there is something wrong with our system," David Thompson, the lawyer who initiated the lawsuit, told CBC News. He also said he was satisfied with the settlement, because it "deals with customer concerns" and made the corporation accountable to its customers. The court has yet to approve the settlement, after which the three defendant companies will be required to advertise the refunds in national newspapers. Canada Post has already started offering the refund at its outlets. CYBERGUARD CORPORATION: Agrees To Settle Securities Fraud Suit -------------------------------------------------------------- CyberGuard Corporation entered into a memorandum of understanding to settle the securities class action filed against it and certain of its former officers in the United States District Court in the Southern District of Florida on behalf of all persons who purchased or otherwise acquired the Company's common stock during various periods from November 7, 1996 through August 24, 1998. The complaint alleges, among other things, that as a result of accounting irregularities relating to the Company's revenue recognition policies, the Company's previously issued financial statements were materially false and misleading and that the defendants knowingly or recklessly published these financial statements which caused the Company's common stock prices to rise artificially. The settlement will become effective upon final approval by the court. The settlement amount of $10 million will require the company to incur a onetime charge of approximately $4.3 million in the fourth quarter of fiscal year 2003 for the amount in excess of the insurance coverage and related costs. The company's portion of the settlement will be made up of cash or cash and equity, at the company's option. Scott Hammack, chairman and CEO of CyberGuard, stated, "We are very pleased with the terms of the settlement. Closing this chapter in our history allows us to focus on successfully growing the company. The lawsuit has historically limited our options, but we are confident its resolution will provide the freedom to do things we have not been able to do otherwise. Growing the business and providing quality service to our customers will ultimately bring added value to our shareholders." DEEP VEIN THROMBOSIS: Watching Long Movies Can Trigger Clots ------------------------------------------------------------ The New Zealand Medical Journal recently revealed that sitting through long movies can trigger the formation of dangerous blood clots. Researchers have studied the case of Phyllis Caton, a resident of Raumati, north of Wellington, New Zealand. A half-hour after Ms. Caton left the theatre after watching the three-hour movie The Lord of the Rings: The Two Towers, she developed severe pain in her right leg. Her leg began to swell the next day and she was treated in hospital for a clot. The article dubbed the new condition "seated immobility thromboembolism" (SIT). Several families in the United Kingdom have filed personal injury suits against several airlines over a similar condition called "deep vein thrombosis," which affects passengers who are seated for a long time during a flight. The suits allege the airlines did not warn consumers enough about the dangers of DVT, also called the "economy class syndrome." Richard Beasley of the Medical Research Institute of New Zealand told the Journal Ms. Caton's habit of sitting at a computer for two to three hours at a time probably increased her risk of getting a clot. "There are many situations where you can put yourself at risk, and this is often not recognized by the medical profession," said Mr. Beasley. Mr. Beasley advised people who are sitting for a long time to do foot exercises while seated, not to cross their legs and if possible, to stand up and walk around regularly, CBC News reports. ENRON CORPORATION: Reorganization To Repay Part Of Compensation --------------------------------------------------------------- The thousands of creditors of Enron will receive a fraction of what they are owed when the company, driven into bankruptcy by an accounting scandal, contorted, tortuous and convoluted in its structure and operation, emerges from Chapter 11 as two companies with new names, The New York Times reports. The plan is subject to approval by the bankruptcy court. Enron's reorganization plan, which was filed early last Friday, after five deadline extensions, said that most creditors would receive 14.4 cents to 18.3 cents on every dollar owed. Some 20,000 creditors are owed an estimated $67 billion in the bankruptcy, one of the most expensive in history. "This is a good day in what has been a very complicated process," said restructuring expert Stephen Cooper, and Enron's interim chief executive. Enron was number 7 in the Fortune 500 in 2000, collapsed into bankruptcy in 2001, swamped by revelations of billions of dollars of hidden debt, inflated profits and complicated accounting entries intended to give an impression of good financial health. Thousands of employees lost their jobs, and the stock, which once traded as high as $90 a share, shrank to pennies. The expected payments to Enron's lenders fall short of other bankruptcies. Bondholders in the World.Com bankruptcy, the only Chapter 11 case larger than Enron's, are to receive 36 cents on the dollar, as compared to the 18.3 cents high, indicated above for most Enron creditors. Bondholders usually are behind creditors that hold collateralized loans, like large banks, when it comes to seeking what is left in a bankruptcy. In Enron's case, the financial institutions, including J.P. Morgan Chase and Citigroup, are unsecured creditors like the bondholders. Therefore, they will receive the same slight payback. The rest of Enron's plan, already approved by the major creditors, says creditors will divide proceeds from asset sales and auctions and receive equity in the two new companies - one domestic, the other international. The domestic business, Cross-Country Energy, will have Enron's full or partial interest in three North American natural gas pipelines. The second company, to be called Prisma Energy International, includes 19 international power and pipeline holdings. If Enron decides to keep Portland General Electric, its Pacific Northwest utility, it would be a third independent company, and creditors also would receive equity in that. Enron is soliciting bids for the utility. FASTFOOD LITIGATION: Seattle School Board Threatened With Suit -------------------------------------------------------------- The Seattle Board of Education was threatened with a lawsuit, if it voted to extend an exclusive-rights contract with Coca-Cola Co., Inc. to supply its soft drink vending machines, the Washington Times reports. George Washington University law professor John Bhanzaf III sent a legal notice to the board a few weeks ago, saying a group of trial lawyers would sue them should they extend the contract. Mr. Bhanzaf, who has supported several suits against several fast food chains, including the obesity suit against McDonald's, alleges that school officials are contributing to childhood obesity by selling sugar-laden beverages without offering healthier alternatives like water and 100-percent fruit juice. New York and Los Angeles have recently eliminated soft drinks from their vending machines, and are closely watching the Seattle board's vote this week on the extension of the vending contract. The Prince George's County school board is waiting on the vote before making any changes in its soft-drink vending machines, which serve some 52,000 students at middle and high schools. Spokeswoman Athena Ware told the Washington Times that Prince George's County is somewhat safeguarded from any lawsuits because it doesn't use exclusive-rights contracts and doesn't operate vending machines during school hours; students may buy drinks from the machines only during extracurricular events. Larry Bowers, chief operating officer for Montgomery County Public Schools, did not rule out food changes at county schools. The system recently took doughnuts off school menus, but schools with soft-drink machines continue to sell soda, sports drinks, fruit juice and water. "There may be more significant changes coming down the road," Mr. Bowers told the Times. Pressure from class actions could push Seattle and other school officials across the nation to ban soda from vending machines, as Los Angeles County and New York have done. Last year, the Los Angeles school board voted to phase out soft drinks and sugar-laden beverages from machines that sell to some 784,000 students. New York school officials recently passed a measure that eliminates soft drinks, hard candy and doughnuts. ILLINOIS: Court Orders State Child Care Dept To Make Changes ------------------------------------------------------------ Chicago Federal District Court Judge Rebecca R. Pallmeyer ordered the Illinois Department of Children and Family Services (DCFS) to institute substantial changes in the processes it uses for investigating, deciding, and administratively adjudicating cases of child abuse and neglect. Following the court's March 30, 2001 ruling that held that the DCFS investigative system was marked by extraordinarily high rates of error following what are often cursory and one-sided investigations, Judge Pallmeyer has now directed DCFS officials to revise its system for its investigations of child abuse and neglect (which number approximately 65,000 yearly) within 30 days. The ruling was the second major decision in a class action filed in 1997 (Dupuy v. McDonald) by lawyers associated with the Chicago Lawyers' Committee for Civil Rights, Inc. and two private civil rights law firms, Lehrer & Redleaf, and Johnson, Jones, Snelling, Gilbert & Davis. After conducting a three and one-half week trial in the case, Judge Pallmeyer found that the "massive record" solidly supported plaintiffs' claims. The plaintiff class exceeds 150,000 persons. The order entered today explicitly extends new procedural protections for the portion of the plaintiff class who work directly with children: teachers, day care owners and employees, nannies, social workers and other professionals who are accused of abuse or neglect, so as to prevent falsely accused persons from losing their jobs and careers. Previously, on the say-so of an investigator and flimsy evidence, thousands of caring professionals were branded as child abusers and blacklisted from employment. Under the court's order, these persons will have the right to a high level administrative review of the evidence before DCFS can take any action against them, and a right to a full hearing on the merits of the charges against them within 35 days. The court had previously found "unconscionable" delays -- averaging a year and a half -- in the DCFS administrative appeal system. The order also requires sweeping improvements in the notification given to all persons who are under DCFS investigation (including parents and guardians) as to the evidence against them and their appeal rights. It guarantees an expedited review to all persons who are engaged in employment that brings them into frequent contact with children, and a prompt review (within 90 days) for all other persons DCFS investigative staff label as guilty in "indicated reports" of abuse or neglect. In its ruling today, the court noted its conviction that "lengthy delays in review of reports ultimately held unfounded can be enormously prejudicial to child care workers, their families and the children for whom they care" but that "in all instances children are the victims, either because of the disruption and pain caused by the loss of an innocent and qualified care giver who is the target of an unfounded report, or because long delays or poor investigations result in the Department's inability to prove charges against guilty parties." One of plaintiffs' counsel, Diane L. Redleaf, noted that this ruling represented the court's reaffirmation of its earlier determination that "falsely branding a child care professional as a child abuser, hurts the very children DCFS claims to protect." Earlier, the court had found an extraordinarily high rate of error in the DCFS investigative process, holding that "Something is seriously and obviously flawed in a system where 75% of those child care employees who appeal an indicated finding against them have such a finding overturned or voluntarily expunged by the State months, sometimes even years, later. During the agonizing and frustrating period between accusation and exoneration, these individuals . lose not only their pride and reputation, but often their livelihood as well." The court's 19-page memorandum opinion and order, and the companion preliminary injunction order are available at the federal court Website: http://www.ilnd.uscourts.gov. INDIAN FUNDS: Lawyer Says Indians Owed "Untold" Amounts -------------------------------------------------------- Dennis Gingold, an attorney who is representing some 350,000 American Indians at the trial of the Indians' class action, argued that the federal government will never be able to account for the "untold" amounts of money owed to his clients, The Miami Herald reports. The government, Mr. Gingold said, has squandered and lost billions of dollars in royalties owed the Indians for the use of their lands. "We say it is the integrity of the United States on trial here," he said Mr. Gingold asked US District Court Judge Royce Lamberth to order the Interior Department to reimburse the Indians through a plan the plaintiffs devised that accounts for royalties collected from the use of Indian land for oil, gas, timber, grazing, mining and other uses of Indian lands. The Interior Department manages 11 million acres of land held in trust for the individual Indian landowners. The lands generate some $300 million annually. Mr. Gingold presented his remarks during the closing arguments of a 44-day trial. For more than a century, Mr. Gingold asserted, the government has squandered and mismanage the money owed to the Indian landowners, many of whom live in poverty and rely on proceeds from their land to buy food, medicine, and to heat their homes. Thousands have died without seeing the money to which they were entitled, he continued. "We are not just talking about money. We are not just talking about Indian lands. We are talking about the effect on human beings," he said. John T. Stemplewicz, the Justice Department attorney representing the government, said the Department of the Interior's plan would give Indian landowners an accounting of revenues generated from their land, as well as an accounting of payments that have been made to the Indians. He called the plaintiffs' proposal "a quick fix to a complex problem." Judge Lamberth ruled in 1999, that the government had breached its trust responsibility to manage the Indians' funds, and ordered the Interior Department to come up with a plan that both looked back at the past and looked to the present and future. He ordered the Interior Department to perform a full accounting of the Indian trust funds, and ordered them to fix its present management of the funds. INDIAN FUNDS: Govt Won't Settle Royalties Suit For Billions ----------------------------------------------------------- The Bush administration is not willing to accept a billion- dollar settlement for the suit filed against it on behalf of more than 500,000 Indians who alleged the government owed them royalties for the use of their land, Indianz.com reports. Elouise Cobell, lead plaintiff of the suit, assessed that the government owned them $137 billion in oil, gas, mining, timber, agriculture and other revenues, including interest generated since 1887 in the Individual Indian Money Trust (IIM). Department of Interior Associate Deputy Secretary Jim Cason told the House Resources Committee said that settlement figure was unrealistic. He based his conclusion on the Arthur Andersen study of the tribal trust, a controversial Ernst & Young report on a handful of individual Indian beneficiaries and the department's own initiatives, saying the settlement should be in the "very low millions versus billions." Ms. Cobell also pointed out that the plaintiffs and the government agree, at least in court, that $13 billion has been collected. "It's up to the government to determine what those disbursements were," whether they were for the right amount and whether they were made to the right beneficiaries, she told the panel, Indianz.com reports. Several House representatives are backing a fair and equitable resolution in the suit. Led by Rep. Richard Pombo (R-Calif.), the chairman of the committee, they vowed to defeat a proposal contained in the House's version of the Interior appropriations bill. "If there is a legislative resolution, it will be done in this committee, and it will not be done in the appropriations committee," Pombo said, drawing applause from tribal leaders and others in the hearing room, Indianz.com reports. Efforts to settle the seven year-old suit have failed so far. The main problem, Ms. Cobell testified, is that the government won't concede the full extent of its mismanagement over the past century. "They have to admit that they cannot do an accounting," she said, citing missing and destroyed records. "Then we'll be on the same page." JAPAN: 16 Families Launch Suit V. Tokyo Hospital For Malpractice ---------------------------------------------------------------- The Tokyo Women's Medical University Hospital faces a possible class action to be filed by parents whose children died or suffered brain damage after heart operations at the hospital, Japan Today reports. Sixteen families are forming a liaison group to exchange information on the issue, while several other families are thinking about joining the suit. The group's inauguration meeting is set for July 19. Last year, Dr. Kazuki Sato, a doctor at the hospital, was indicted on charges of professional negligence in connection with a heart operation in March 2001 that led to the death of 12-year-old girl Akika Hirayanagi. Another doctor, Kazuhiro Seo, was indicted the same day on charges of destroying evidence related to Akika's death as the head of the surgical team, Japan Today reports. The group was formed after several families started suspecting similar falsifications involving heart operations on their children. Seven families out of the 16 saw their children die in or after heart operations between 1995 and 2001, and children from seven other families were left with serious brain damage after operations during the period, the members said. The hospital has admitted that the cover-up was a coordinated act on the part of hospital staff. The Tokyo Women's University Hospital was one of the country's most prestigious heart- treatment institutions. Since the advanced treatment designation has been removed, the hospital is unable to receive certain forms of preferential treatment - such as added insurance reimbursement for medical services, according to Kyodo News. MICHIGAN: Detroit To Settle Lawsuit Filed on Detained Witnesses --------------------------------------------------------------- The city of Detroit agreed to settle several lawsuits filed on behalf of people who were detained by the police for being "uncooperative homicide witnesses," the Associated Press reports. The city agreed to pay $3.4 million to more than 100 people who alleged their civil rights were violated. The city forged an agreement with the federal government last month, after a 30-month investigation. The suits were started off with the case of Janetta Toles, who was detained for four days while investigators asked her about a deadly 1997 drive-by shooting. She has since settled with the city for $200,000. The city has since settled many cases to avoid litigation. The city also agreed that material witnesses can now be jailed only if investigators obtain a court order. "You have people who are in a unique position to take advantage of the system when police are desperate to get killers off the street," attorney David Zacks, who has defended police investigators in some of the cases, said in Sunday's Detroit News. "You can't hold girlfriends or cousins just to get other people to turn themselves in, or you're going to pay," Jeffrey Lewis, co-director of the Eastern Michigan University Staff and Command School, a training program for police managers told the Associated Press. "We're not set up for KGB justice." "The end goal is to get some justice, some recompense, for people who were the victims of a long-standing, unconstitutional policy of the Detroit Police Department," Mark Kriger, an attorney involved in the pending federal lawsuits told AP. MICHIGAN: Macatawa Bank Inherits Suit With Buyout Of Grand Bank --------------------------------------------------------------- Benjamin Smith, Macatawa Bank's chairman and chief executive officer, has been on the phone with analysts, clarifying how his bank inherited a lawsuit in its April 2002 buyout of Grand Bank, located in Grand Rapids, Michigan, The Grand Rapids Press reports. The "inherited" lawsuit was filed this spring in US District Courts in Grand Rapids and Texas, by investors in Trade Partners Inc. That Grand Rapids company has since closed, its founder has filed bankruptcy and investors are suing to find their money. Grand Bank, a private Grand Rapids bank, until acquisition by Macatawa Bank, acted as escrow agent for Trade Partners, and as a result is included in the class action, Macatawa told the SEC in its filing with that regulatory body. Trade Partners bought and sold viaticals, a little-known investment vehicle, in which terminally ill people sell their life insurance policies for less than face value. The buyer assumes responsibility for premiums, then collects when the seller dies. If death is quick, the buyer gets a better return on the investment. The investors allege Grand Bank breached the escrow agreements; breached its fiduciary duties and acted negligently in serving as a custodian of the plaintiff investors' investments in Trade Partners. Macatawa's filing also acknowledges the possibility of additional lawsuits "involving the custodial and escrow agent services provided by Grand Bank in connection with Trade Partners." However, Mr. Smith said he anticipates all possible legal actions may be consolidated, and hopes eventually to put the matter behind them. Mr. Smith said Grand Bank already has been dismissed as defendant from two other lawsuits in connection with Trade Partners. Mr. Smith said he still considers the Grand Bank buyout to be 90 percent a good deal, with a one percent surprise. Macatawa, with about $1.2 billion in assets and shareholders' equity in excess of $116 million, said in its SEC filing that it "believes that any litigation related to Trade Partners will not result in a material adverse impact on the corporation." OKLAHOMA: Appeals Court Asked To Refuse Stay Of Bias Suit Pact -------------------------------------------------------------- Attorneys for the City of Tulsa and a group of black officers who earlier sued the city for racial discrimination, recently filed documents with an appellate court, opposing the Fraternal Order of Police's (FOP) request for a stay in implementing the subsequent settlement resolving the discrimination issues raised in the class action. The lower court federal judge who denied the police union's attempt to delay implementing that lawsuit settlement made a "well-reasoned" ruling that should be upheld, the lawyers for the city and the black officers group argued before the Tenth US Circuit Court of Appeals. Attorney for the black officers group, Robert Blakemore, argued further that putting implementation "on ice for upwards of two years" while the FOP's appeal is considered by the appeals court, would not allow the City to move forward. On June 23, the FOP asked the appellate court to order the stay that US District Court Judge Sven Erik Holmes had chosen not to issue five days earlier. Judge Holmes ruled that any delay in implementation would increase the racial division the nine-year- old lawsuit already has caused in the community and might cause a "deterioration of the currently cooperative relationship between the plaintiff black officers group and the city." The FOP claimed in its appellate filing that no harm to the city or the "public interest" would result from freezing the case while its appeal of the settlement is pending. The FOP, which was allowed to intervene in the case in September, noted in its stay appeal that the case was at a standstill for about five years without objection by the plaintiffs or the city. Joel Wohlgemuth, an attorney for the city, wrote that the delay request is the latest example of the obstinate behavior by the police union, which he said "has remained intransigent since it intervened and has attempted to block or stay implementation of the consent decree at every turn." The FOP said in its stay appeal that its members want to defend "against the false claim of race discrimination and defend the current practices and policies of the Tulsa Police Department." The plaintiffs and the city wrote in their filings that any assertion the FOP is entitled to a trial on the merits of the class action is contrary to US Supreme Court precedent. OKLAHOMA: Residents Sue Tar Creek Mining Firms Over Pollution ------------------------------------------------------------- A northeast Oklahoma mining site is dotted with mountains of lead-filled mining waste, open mine shafts, lead-contaminated soil and sink holes after decades of mineral mining. This site, located in Picher, Oklahoma, is also the place where many Tar Creek mining companies conducted their operations. It is now a Superfund site, scheduled for remediation cleanup by the government, the Associated Press Newswires reports. Ten residents of Picher, the Picher-Cardin School Board and the city of Picher have filed a lawsuit, seeking class action status, which accuses six mining companies of trespass and creating a nuisance. The lawsuit also asks for relocation of residents, as well as for compensation for property and job placement. Medical monitoring is sought for residents who have been exposed to contamination. The lawsuit names six companies that mined the area from 1917 to 1972; the companies, which now operate under new names, are: (1) Asarco Inc., (2) Blue Tee Corporation, (3) Goldfields Mining Corporation, (4) NL Industries, (5) Childress Royalty Co. and (6) Doe Run Resources Corporation Robert F. Kennedy Jr. and other attorneys for the plaintiffs suing the Tar Creek mining companies, toured the Superfund site Thursday, for a firsthand look at the area's hazards. The attorneys, Mr.Kennedy, Christopher Seeger and Charles Speer also met with Picher and Cardin residents. PEMSTAR INC.: Plaintiffs File Consolidated Securities Suit in MN ---------------------------------------------------------------- Plaintiffs in the securities class actions filed against PEMSTAR, Inc. filed a consolidated securities class action in the United States District Court for the District of Minnesota. The suit also names as defendants several current and former officers and directors. The suit alleges violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 and Sections 11 and 12 of the Securities Act of 1933. The plaintiffs, several individual shareholders, allege, in essence, that the defendants defrauded our shareholders by making optimistic statements during a time when they should have known that business prospects were less promising and allege that the registration statement filed by us in connection with a secondary offering contained false, material misrepresentations. Last year, two different individual shareholders also commenced virtually identical shareholder derivative actions against the Company as nominal defendant and its Board of Directors, in United States District Court for the District of Minnesota. The allegations in the derivative actions are based on many of the same facts that gave rise to the securities action. The lawsuit alleges that the Company's Board breached its fiduciary duties. It is too early to predict the likelihood of prevailing on the various lawsuits, the Company stated in a disclosure to the United States Securities and Exchange Commission. PENNSYLVANIA: Security Guards Launch Age Discrimination Lawsuit --------------------------------------------------------------- A dozen older part-time security guards at the David L. Lawrence Convention Center in Pittsburgh, Pennsylvania filed an age- discrimination complaint against SMG, the private firm hired by the city to run the new $275 complex, the Pittsburgh Post- Gazette reports. The plaintiffs alleged that SMG's management there has sharply reduced their working hours and their incomes without giving any reason. The group of unhappy workers, who are mostly in their 50s, 60s and 70s, is led by part-time guard Kathleen Hussak of Arlington. The suit was filed with the city's Human Relations Commission. Other plaintiffs include fellow security guards John Harris, 50, of the Hill District, Blair Gorczyca, 61, of South Park Township, Alexander Dell, 76, of Arlington, and Howard Janzen, 53, of West Mifflin. PHILIP MORRIS: Shares Tumble As Bond Reduction Is Questioned ------------------------------------------------------------ Parent company Altria Group Inc.'s shares tumbled more than nine percent over new concerns that Altria's unit Philip Morris USA could be forced to post a potentially bankrupting bond in the class action over deceptive statements the tobacco company made about the safety of its light cigarettes, Reuters News reports. Litigation concern over tobacco also spread to other tobacco stocks, which were affected by a report of merger talks between RJ Reynolds and British American Tobacco, analysts said. An Illinois state appeals court heard arguments recently on the issue of lower-court Judge Nicholas Byron's authority to slash the bond Philip Morris must post while it appeals the $10.1 billion verdict against it in the class action over its "light" cigarettes. Judge Byron, in the case of Price vs. Philip Morris, originally ordered the tobacco company to post a $12 billion bond in order to protect company assets from being depleted during appeals. Weeks later, Judge Byron cut the bond almost in half amid fears that the higher amount could prevent Philip Morris from making its payment to the states under the terms of the landmark 1998 tobacco settlement. The size of the original bond also produced concerns that it could push Philip Morris into bankruptcy. Morgan Stanley's tobacco analyst David Adelman said the appeals court will likely find that Judge Byron "lacked the authority to alter" the bond. Such a finding, Mr. Adelman said, would "increase the market's legal anxiety. A decision from the Illinois appeals court could come any time in the next week, said Smith Barney analyst Bonnie Herzog. Ms. Herzog said there is a 50-50 chance the appeals court will hand the issue to the Illinois Supreme Court; a 30 percent chance the court will uphold Judge Byron's decision reducing the bond; and a 20 percent chance the court will reinstate the original $12 billion bond. Philip Morris USA has petitioned for an expedited hearing of its appeal in the Price v. Philip Morris case, but has not yet received a response. RHODE ISLAND: Judge Allows Testing Of Evidence in Club Fire Suit ---------------------------------------------------------------- Rhode Island Superior Court Judge Alice Gibney approved a plan to test evidence in lawsuits filed against The Station nightclub, over a deadly fire in February 2003 that killed 100 people and injured almost 200 others, the Associated Press reports. The tragedy occurred during a concert of 80's hard rock band Great White, which had just started playing when giant pyrotechnic sparklers on stage began shooting up and igniting the ceiling above the crowd, an earlier Class Action Reporter story states. The fire quickly spread through the low-ceilinged building, filling it with thick black smoke. The entire club was engulfed in flames within three minutes. Many of the customers thought the pyrotechnics were part of the act. Judge Gibney approved the plan for testing evidence from the building's charred ruins, including fans, foam and mangled wire, allowing experts to test 717 items from the club. Judge Gibney also decided attorneys for the victims' families and fire survivors can question West Warwick officials on the fire. Lawyers for the plaintiffs in the four suits are hopeful that the items will reveal the reason why the fire spread so quickly. Mark Mandell, one of the lead attorneys for potential plaintiffs, told the Associated Press he did not have a timetable for how long the testing would take or when it would begin. Lead counsel in the lawsuits Max Winstow earlier subpoenaed 11 town officials to appear with records relating to the club fire. Mr. Wistow and attorneys for the town worked out the evidence plan details last week. Mr. Wistow is seeking documents including the club's zoning applications, building inspections, fire inspections and reports of injuries. Foam manufacturers, club promoters and contractors are also expected to be subpoenaed for documents, Mr. Mandell told the Associated Press. Max Wistow, last month issued subpoenas ordering 11 town officials to appear at his law office with records pertaining to the club. He and Mr. Mandell are trying to build a case against product manufacturers and others they say are responsible for the rapid spread of the fire and the toxic fumes emitted by its smoke. TOBACCO LITIGATION: Wholesalers Sue Philip Morris, RJ Reynolds -------------------------------------------------------------- Philip Morris USA and RJ Reynolds Tobacco Co. face two lawsuits filed by more than a dozen cigarette wholesalers in the United States District Court in Greeneville, Tennessee, alleging that its pricing programs are illegally designed to stifle competition, the Associated Press reports. The suits alleged that it is illegal for the companies to offer deep discounts only to wholesalers who sell more of their brands than those of competitors. Kyle Keegan, the lead lawyer for the wholesalers, told AP that his clients sell cigarettes in rural areas, where consumer prefer cheaper brands than those that Philip Morris and RJ Reynolds produce. Mr. Keegan continued that his clients have no choice but to sell the cheaper brands that customers demand, though he said the wholesalers also need to buy some cigarettes made by industry leaders Philip Morris and RJ Reynolds. "If they cannot as a practical matter qualify for the better pricing then it is not available to them as Philip Morris suggests," Mr. Keegan told AP. Philip Morris spokesman Brendan McCormick denied the allegations, saying the pricing program is based on the percentage of company cigarettes wholesalers sell, not volume, and is therefore open to all wholesalers, large and small. "We make the discounts available to all wholesalers, and they are free to sell the brands that make the most sense for their business," Mr. McCormick told AP. RJ Reynolds attorney Darryl Marsch told AP some wholesalers emphasize deep discount brands not because of customer demand but because they make a larger profit on those cigarettes, some of which are made overseas where labor costs are low. The state of Tennessee has joined the suits against the companies, arguing it is intervening to protect consumers from unfair competition. Mississippi also is seeking to intervene. The distributors are based in Alabama, Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, New York, Texas and Virginia. UNITED STATES: Six Sioux Allege Child Abuse In Indian Schools ------------------------------------------------------------- Sonny One Star, a leader on the Rosebud Sioux Indian Reservation, where he grew up in a Roman Catholic boarding school, has joined with five other Sioux to sue the federal government for $25 billion on behalf of perhaps thousands of students allegedly abused at Indian boarding schools around the country, the Associated Press Newswires reports. The lead plaintiffs are seeking to have the case certified as a class action. Sonny One Star says he learned not to cry or scream when he was beaten and sexually assaulted at his boarding school on the Rosebud reservation. Now, four decades later, he has opted for taking legal action to give witness to a terrible wrong against children. Mr. One Star also said, "Today I am ready for retaliation." The lawsuit, filed in the US Court of Federal Claims in Washington, asks for $25 billion on behalf of the mistreated, sexually abused children. The lawsuit accuses the government of failing to live up to treaties dating to the 1800s requiring it to protect tribes from, as the treaties put it, "bad men among the whites." The lawsuit also argues that the government set up the boarding school system to try to wipe out the Indian culture, tradition and language. Some former students confirmed the plaintiffs' allegations. Sherwyn Zephier, for example, is one of the former students who confirmed some of Sonny One Star's claims. He said he and other students were beaten with boards and leather straps at St. Paul's in Marty, headquarters of the Yankton Sioux Tribe. "They did it in the name of God," said Mr. Zephier, now a teacher at the tribal school that replaced St. Paul's. He added that the priests were trying to torture the Indian children's "evil culture" out of them. Some students said it never happened to them; for example, 67- year-old Patrick Lee, today an administrator at Ogala Lakota College on the Pine Ridge Reservation, said the beatings and sexual abuse never happened to him and that he never heard of it happening to anybody while he attended Holy Rosary from 1942 to 1953. Priests and officials responded to the allegations by asserting their ignorance of the abuse described in the allegations. However, they expressed a desire to offer healing to any abused or harmed individuals. In one instance, officials of the Wisconsin Province of the Society of Jesus, which ran the St. Francis and Holy Rosary Schools, said they are investigating the charges made by the lawsuit and want to provide pastoral care to anyone who might have been abused. Lead attorney Jeffrey Herman said more lawsuits will be filed in other states, naming other schools and adding Catholic organizations as defendants. Mr. Herman said that while the government might argue that the statute of limitations for raising such claims has run out, such a defense could be overcome by arguing that the defendants concealed the children's claims, and that the abused youngsters were unable to take any action at the time. UNITED STATES: DC Appeals Court Rejects Suit Over Kenya Bombing --------------------------------------------------------------- The United States Court of Appeals for the District of Columbia threw out a lawsuit filed against the United States government, on behalf of the victims of the 1998 bombing of the American embassy in Nairobi, Kenya and their families, the Associated Press reports. The bombing and a near-simultaneous bombing of the United States embassy in Dar es Salaam, Tanzania, killed 224 people and injured more than 5,000. The government blamed the attacks on the al-Qaida, the terrorist group thought to be behind the September 11 attacks on the World Trade Center and the Pentagon. The suit charges the US government with failing to adequately protect their embassy from terrorists. A lower court ruled earlier that such suit could not be brought under American law, a ruling that the appellate court upheld. The appeals court ruled that a suit could proceed only if plaintiffs could show that the government violated a specific regulation, law or policy. There are no such rules that embassy employees must follow in providing security; rather, they make constant adjustments based on information they receive, the appeals court said, AP reports. "Embassy security is vested in the discretion of State Department employees, from the Secretary to the foreign service offices at various embassies," the court said. New Security Fraud Cases BARRICK GOLD: Rabin Murray Lodges 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 or otherwise acquired Barrick Gold Corporation securities (NYSE:ABX) during the period February 14, 2002 to September 26, 2002, both dates inclusive. The complaint names as defendants the Company and: (1) Randall Oliphant, (2) John K. Carrington, and (3) Jamie C. Sokalasky The complaint alleges that defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. In particular, the complaint alleges Barrick assured the markets that it was improving its operations by keeping its production costs in check and that the Company expected to earn $0.42-$0.47 per share in 2002, even taking into account the phasing out of several mines and decreasing ore quality which increases costs in several of its mines. These representations were materially false and misleading, according to the complaint, because they failed to disclose that (1) the Company's expected costs for the year would be well above the figures highlighted to the public, (2) Barrick's costs per ounce had increased dramatically in 2002 and would continue to increase throughout the year, and (3) the Company's repeated assurances that production and costs would continue to improve in 2002 were lacking in any reasonable basis and were contradicted by facts known to defendants, or, at the very least, recklessly disregarded by them. On September 26, 2002, the Company announced that it expected to earn materially less in 2002 than previously announced due to increased costs stemming from production issues at several mines which the Company misleadingly represented during the class period, would be resolved in the second half of 2002. In reaction to the announcement, which came only days after the Company reiterated its positive expectations, Barrick's stock fell by 10.5% in one day, from $17.77 on September 25, 2002 to $15.90 on September 26, 2002 on extremely heavy trading volume. For more details, contact Eric J. Belfi or Sharon Lee by Phone: (800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 or by E- mail: email@rabinlaw.com CORNERSTONE PROPANE: Wolf Haldenstein Lodges Stock Lawsuit in CA ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Northern District of California, on behalf of all persons who purchased the publicly traded units of CornerStone Propane Partners LP (OTC: CNPP.PK) between November 2, 1999 and February 11, 2003, inclusive, against CornerStone and certain officers of the Company. The complaint alleges that CornerStone disseminated false and misleading statements to the investing public with respect to its financial results during the class period. More specifically, throughout the class period, the Partnership faced the crisis of having to renegotiate its capital credit lending agreements, set to expire on November 30, 2001. The complaint further alleges that faced with the situation of either acquiring capital credit or undergoing liquidation, CornerStone issued statements that omitted and/or misrepresented the following adverse facts, such as: (1) the Partnership had materially overstated its earnings before interest, taxes, depreciation and amortization (EBITDA), net income and earnings per unit; (2) the Partnership lacked sufficient internal controls and was therefore unable to accurately determine the financial condition of CornerStone; and (3) consequently, the value of the Partnership's EBITDA, net income and financial results were materially overstated at all relevant times. On February 11, 2003, the Partnership filed a Current Report on Form 8-K and revealed that it had to restate its financial results for fiscal years 2000 and 2001. On this news, units in the partnership fell to a Class Period low of $.40 per unit. For more details, contact Fred Taylor Isquith, 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 Cornerstone. CORNERSTONE PROPANE: Marc Henzel Files Stock Lawsuit in N.D. CA --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of CornerStone Propane Partners LP (OTC Pink Sheets: CNPP) formerly (NYSE: CNO) publicly traded securities during the period between November 2, 1999 and February 11, 2003, inclusive. The complaint charges CornerStone and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Throughout the class period, defendants issued a series of material misrepresentations to the market between November 2, 1999, and February 11, 2003, which served to artificially inflate the price of CornerStone securities. More specifically, the Complaint alleges that during the Class Period, the Partnership was faced with the crisis of having to renegotiate its capital credit lending agreements, which were set to expire on November 30, 2001. Faced with this situation of needing to obtain capital credit or face liquidation, the Partnership issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Partnership had materially overstated its earnings before interest, taxes, depreciation and amortization (EBITDA), net income and earnings per unit; (2) that the Partnership lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Partnership; and (3) that as a result, the value of the Partnership's EBITDA, net income and financial results were materially overstated at all relevant times. On February 11, 2003, the Partnership revealed in its 8-K filed with SEC that it had to restate its financial results for fiscal years 2000 and 2001 due to the Partnership's knowledge of known errors in reporting its financial results for fiscal years 2000 and 2001. In response to this announcement, the price of CornerStone securities declined precipitously. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone: 888-643-6735 or 610-660-8000, by Fax: 610-660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. CREE INC.: Bull & Lifshitz Lodges Securities Lawsuit in M.D. NC --------------------------------------------------------------- Bull & Lifshitz LLP initiated a securities class action in the United States District Court for the Middle District of North Carolina on behalf of purchasers of Cree, Inc., (NasdaqNM:CREE) between July 24, 2001 and June 13, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market, thereby artificially inflating the price of Cree securities. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between July 24, 2001 and June 13, 2003. Specifically the complaint states that: (1) the Company failed to disclose that a material portion of the Company's revenues were generated from non ``arms-length'' sales to related entities that did not reflect the true demand for the Company's products; (2) the Company did not implement and maintain an adequate internal accounting control system; (3) since 2002, Cree's former President and CEO, Eric Hunter, had alleged to the Company's board of directors that the Company was improperly accounting for transactions with related entities and was issuing and filing materially false and misleading press releases and financial reports; and (4) a material portion of Cree's reported Class Period sales were improperly recognized and reported in the Company's financial statements in violation of Generally Accepted Accounting Principles. The market first learned of Cree's improper revenue recognition practices on June 13, 2003, when Cree announced that its former CEO, President and Chairman had filed a private action accusing the Company and current Chairman, F. Neal Hunter, of misleading investors and the SEC by issuing false press releases and filing false financial statements. In the wake of this announcement, the price of Cree common stock fell sharply, from $22.21 per share on June 12, 2003 to $18.10 per share on June 13, 2003. This change represents a 18.5% drop in one day, on unusually high trading volume of almost 28 million shares. For more details, contact Peter D. Bull, or Joshua M. Lifshitz by Phone: (212) 213-6222, by Fax: (212) 213-9405 or by E-mail: counsel@nyclasslaw.com or visit the firm's Website: http://www.nyclasslaw.com CREE INC.: Kaplan Fox Commences Securities Fraud Suit in M.D. NC ---------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Cree, Inc. (NasdaqNM:CREE) and certain of its officers and directors, in the United States District Court for the Middle District of North Carolina. This suit is brought on behalf of all persons or entities, other than defendants, who purchased Cree common stock between August 19, 1998, and June 13, 2003, inclusive. The complaint alleges that Cree and certain of its officers and directors violated the federal securities laws. During the class period, defendants issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income and earnings per share; (2) that the defendants artificially inflated Cree's operating income by improperly recognizing revenue on purported "sales" of Cree's silicon carbide crystals to C3 Inc., an affiliated company of Cree that was run by the brother of the company's former CEO; (3) that the defendants failed to disclose, in Cree's registration statements and its prospectuses, how proceeds from its secondary offerings would be used; (4) that the defendants artificially inflated Cree's operating income so that they could participate in the Company's "discretionary incentive program" and so that the Company's outside directors would qualify for additional Cree stock options; (5) that the defendants were concealing these facts in order to manipulate the Company's earnings so that defendants could unload material amounts of their Cree holdings for more than $68 million; and (6) that the false and misleading information disseminated by the defendants caused Cree's common stock to trade at artificially inflated prices. For more details, contact Robert N. Kaplan, Christine M. Fox by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 or by E-mail: mail@kaplanfox.com CRYO-CELL INTERNATIONAL: Rabin Murray Files Stock Lawsuit in FL --------------------------------------------------------------- Rabin Murray & Frank LLP initiated a securities class action in the United States District Court for the Middle District of Florida, on behalf of all persons or entities who purchased or otherwise acquired Cryo-Cell International securities (NasdaqSC:CCELE) during the period March 16, 1999 to May 20, 2003, both dates inclusive. The Complaint names as defendants the Company and: (1) Mercedes Walton, (2) Gerald F. Maass, (3) Jill M. Taymans, (4) Edward Modzelewski, (5) Frederick C. S. Wilhelm, (6) Wanda D. Dearth, (7) Junior Winokur, (8) Daniel D. Richard, (9) Ronald Richard, (10) Charles D. Nyberg, (11) John V. Hargiss, (12) Weinick Sanders Leventhal & Co., LLP, and (13) Mirsky, Furst & Associates, P.A. The complaint alleges that defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. In particular, the complaint alleges that defendants failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company had materially overstated its earnings, net income, and earnings per share; (ii) that the Company continually recognized revenue in violation of generally accepted accounting principles (GAAP) and the Company's own internal accounting principles with respect to related-party transactions, revenue sharing agreements and revenue recognition for the Sale Area Licenses; (iii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iv) that as a result, the Company's financial results were materially overstated at all relevant times. On April 15, 2003, the Company issued a press release wherein it disclosed that it may be necessary to restate its financial results for fiscal years 2001 and 2002 because of improper recognition of revenue. Shortly thereafter, on May 20, 2003, the Company issued a press release announcing the resignation of its auditor, Ernst & Young LLP and the Company's continued assessment of certain revenue recognition accounting policies. On news of this, Cryo-Cell shares fell 14%. For more details, contact Eric J. Belfi or Sharon Lee by Phone: (800) 497-8076 or (212) 682-1818 by Fax: (212) 682-1892 by E- mail: email@rabinlaw.com PARADIGM MEDICAL: Milberg Weiss Lodges Securities Suit in Utah -------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Paradigm Medical Industries, Inc. during the period from April 17, 2000 through May 14, 2003, inclusive (the "Class Period"), who have been damaged thereby. The action is pending in the United States District Court for the District of Utah, Central Division, against the Company and: (1) Thomas Motter (CEO), (2) Mark Miehle (President), and (3) John Hemmer (VP) 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 April 17, 2000 and May 14, 2003. The complaint alleges that the Defendants misrepresented to the investing public that Paradigm had received from the American Medical Association (AMA), authorization for a Common Procedure Terminology (CPT) code for reimbursement to doctors for use in connection with its Ocular Blood Flow Analyzer (BFA). The CPT code was critical. Without a reimbursement code physicians would not purchase the BFA because they could not receive compensation for performance of medical procedures using the machine. In truth, Paradigm had never received the reimbursement CPT code from the AMA during the Class Period or at any other time. Nevertheless, Paradigm continued to misrepresent in its SEC filings and press releases that it had received the CPT code. The Company never made a full, corrective disclosure with respect to this misstatement. During the Class Period, Paradigm also misrepresented to the investing public that it had received a $105 million dollar purchase order for the Company's products. Contrary to the Company's representation, Paradigm had never received a true purchase order for sale of its products. Plaintiff and the Class relied on Defendants' misrepresentations in purchasing and/or retaining PMED stock during the Class Period. Defendants' misrepresentations caused the market price of the stock to be artificially inflated during the Class Period. The putative class has therefore suffered millions of dollars in damages as a result of defendants' wrongful conduct. 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: paradigmcase@milbergNY.com or visit the firm's Website: http://www.milberg.com PEDIATRIX MEDICAL: Marc Henzel Lodges Securities Suit in S.D. FL ---------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Flordia on behalf of all purchasers of the common stock of Pediatrix Medical Group, Inc. (NYSE:PDX - News) from April 17, 2002 through June 23, 2003, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between April 17, 2002 and June 23, 2003, thereby artificially inflating the price of Pediatrix common stock. The complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (1) that the defendants engaged in fraudulent ``upcoding'' in its billing practices while telling the investing public that its billing practices were legitimate; (2) by virtue of having improperly received and recorded as revenue payments to which Pediatrix was not entitled, Pediatrix materially inflated several key indicators, including operating income, net inpatient revenue per admission, EBITDA and EBITDA margins; (3) that these unsafe and unsound business practices materially misrepresented the Company's business operations and financial performance by enabling the defendants to post better financial results; and (4) that as a result, the Company's stock price was artificially inflated. On June 24, 2003, the Company issued a press release with the headline: ``Pediatrix Notified of Billing Inquiry.'' Therein, the Company announced that it had been advised by the U.S. Attorney's Office that it was conducting a civil investigation into Pediatrix's Medicaid billing practices nationwide. Additionally, the Company announced that the U.S. Attorney's Office intended to make a document and information request, informally or by subpoena, within the next few weeks. Market reaction to the news was swift. Pediatrix's shares fell 24% or $9.90 per share, on unusually high trading volume, to close at $32.20 per share. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone: 888-643-6735 or 610-660-8000, by Fax: 610-660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. PEDIATRIX MEDICAL: Wolf Haldenstein Lodges Securities Suit in FL ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz 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 the common stock of Pediatrix Medical Group, Inc. (NYSE: PDX) between April 17, 2002 and June 23, 2003, inclusive, against the Company and certain officers of the Company. The complaint alleges that defendants issued a series of material misrepresentations to the market in order to artificially inflate the price of Pediatrix common stock. The complaint alleges that these statements were materially false and misleading because they omitted: (1) that the defendants utilized "upcoding," a fraudulent practice in its billing practices though they publicized its billing practices as legitimate; and (2) Pediatrix materially inflated its Class Period financial results by including these fraudulent revenues. On June 24, 2003, the Company announced in a press release that the US Attorney's Office had advised that it was performing a civil investigation into Pediatrix's Medicaid billing practices throughout the nation, though the defendants' had made public representations that its fraudulent billing practices were in the past. In addition, Pediatrix announced that the US Attorney's Office anticipated making a document and information request, within the following few weeks. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, Michael J. 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 Pediatrix. RECOTON CORPORATION: Wolf Haldenstein Files Stock Lawsuit in FL --------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Middle District of Florida, on behalf of all persons who purchased the common stock of Recoton Corporation (OTB: RCOTQ.PK) (Nasdaq: RCOTQ) between November 15, 1999 and August 19, 2002, inclusive, against certain officers and directors of the Company. The complaint alleges that the Company violated federal securities laws by falsely assuring the marketplace that it had adopted a "strategic business plan designed to improve operating efficiencies," as required by the Company's creditors as a condition to restructuring the Company's debt. Beginning in November 1999, the Company repeatedly reaffirmed that it had implemented its "strategic plan" and emphasized its success at improving operating efficiencies. The Company also stressed that it had established "a more incentive-based method of compensation" and "stringent financial controls." On May 8, 2002, however, the Company partially disclosed that it "did not anticipate the full implementation of the strategic plan until the end of May 2002." On August 19, 2002, the end of the class period, the Company revealed information showing that, contrary to its earlier statements on awarding only incentive- based compensation to management, bonuses had been paid to executives in advance of the Company's achievement of certain goals. The Company also revealed that it had granted additional price concessions to customers "on products previously purchased." The complaint alleges that defendants materially overstated revenue during the class period and failed to timely take material write-downs of inventory. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, Michael J. 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 Recoton. RECOTON CORPORATION: Marc Henzel Files Stock Lawsuit in M.D. FL --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Middle District of Florida, on behalf of purchasers of the securities of Recoton Corporation (NasdaqNM:RCOTQ) between November 15, 1999 through August 19, 2002, inclusive. The suit names as defendants: (1) Arnold Kezsbom, (2) Robert L. Borchardt, (3) Stuart Mont, and (4) Tracy Clark The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 15, 1999 and August 19, 2002, thereby artificially inflating the price of Recoton securities. During the class period, the Company issued statements that failed to disclose the following adverse facts, among others: (i) that a "strategic plan," which was required by its creditors, was not implemented to improve efficiencies, increase future profitability, improve cash flow, and increase return on assets; (ii) that company executives received bonuses prior to meeting corporate financial goals contrary to the Company's statements that Recoton was moving to a more "incentive-based method of compensation;" (iii) that the Company's reported financial results that were in violation of generally accepted accounting principles (GAAP) because of material inventory overstatements, and improper revenue recognition tactics. On August 19, 2002, the Company revealed that it had granted additional price concessions to customers "on products previously purchased." On this news, shares of Recoton stock fell 15% to close at $1.76 per share, a far cry from the Class Period high of over $20 per share. For more details, contact Marc S. Henzel, Esq. By Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by Phone: 888-643-6735 or 610-660-8000, by Fax: 610-660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. The Asbestos Defendant Profiles is backed by an online database created to respond to custom searches. 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