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/raid1/www/Hosts/bankrupt/CAR_Public/030904.mbx C L A S S A C T I O N R E P O R T E R Thursday, September 4, 2003, Vol. 5, No. 175 Headlines ACCEPTANCE INSURANCE: Moves For Summary Judgment in Stock Suit ADAM INC.: Parties Commence Discovery in Securities Suit in GA AEGIS COMMUNICATIONS: Faces TX Suit Over Acquisition By AllServe ATMEL CORPORATION: Faces Securities Fraud Lawsuits in N.D. CA ATMEL CORPORATION: Investors File Derivative Lawsuit in CA Court ATMOS ENERGY: Asks For Leave To Amend KS Gas Royalties Lawsuit BOWL CHAMPIONSHIP: House Committee To Probe Competition System COMMUNITY BANCSHARES: Faces AL Suit Over Churning Phantom Loans CORTLAND BANCORP: Plaintiffs Appeal Ohio Consumer Suit Dismissal CROSS TIMBERS: Finishes Settlement Payments For Royalties Suit DQE INC.: Pre-Trial Discovery in Suit To End by September 2003 HARBOR VILLAGE: Tenants Complain over MI Apartment's Conditions MATTEL INC.: CA Court Grants Preliminary Approval To Settlement NORTHWESTERN CORPORATION: Plaintiffs Consolidate Lawsuits in SD NORTHWESTERN CORPORATION: Montana Power Suit Moved NORTHWESTERN CORPORATION: Named as Defendant in Cornerstone Suit NTS PROPERTIES: Agrees To Settle Shareholder, Derivative Suits OSTEOTECH INC.: CA Court Refuses Certification To Consumer Suit PARADYNE NETWORKS: Agrees To Settle Securities Suit in S.D. NY REGENERON PHARMACEUTICALS: Faces Securities Lawsuits in S.D. NY RURAL CELLULAR: Plaintiffs File Consolidated MN Securities Suit SCIENTIFIC GAMES: Plaintiffs to Lodge Amended Unfair Trade Suit SCIENTIFIC GAMES: Asks CA Court To Dismiss Negligence Lawsuit SEITEL INC.: Plaintiffs Lodge Consolidated Securities Suit in TX SEITEL INC.: Plaintiffs Appeal Dismissal of Trespass Suit in TX SIX FLAGS: Enters Mediation For Discrimination Suit in CA Court STARBASE CORPORATION: Proceedings in CA Investor Lawsuit Stayed TEXAS: Plaintiff Sues Over Lap-Dance Surcharges on Credit Cards THQ INC.: CA Court Grants Approval To Securities Suit Settlement TRI-STATE CREMATORY: GA Grand Jury Issues 787-Count Indictment WESTPOINT STEVENS: Discovery V. Individual Defendants Continues WESTWOOD GROUP: Asks DE Court to Dismiss Lawsuit For "Mootness" XTO ENERGY: Plaintiffs File Amended Gas Royalties Lawsuit in KS New Securities Fraud Cases ALSTOM SA: Charles Piven Initiates Securities Lawsuit in S.D. NY ALSTOM SA: Abbey Gardy Launches Securities Fraud Suit in W.D. NY ALSTOM SA: Milberg Weiss Commences Securities Fraud Suit in CT BEARINGPOINT INC.: Berger & Montague Files Stock Suit in E.D. VA BEARINGPOINT INC.: Cohen Milstein Lodges Stock Suit in E.D. VA CATALINA MARKETING: Wolf Haldenstein Files Securities Suit in FL CHECK POINT: Charles Piven Commences Securities Suit in S.D. NY CROMPTON CORPORATION: Bernstein Liebhard Lodges Stock Suit in CA FIRSTENERGY CORPORATION: Berger & Montague Files Ohio Stock Suit IMPATH INC.: Berger & Montague Lodges Securities Suit in S.D. NY SOLUTIA INC.: Bernstein Liebhard Commences Stock Suit in N.D. CA STELLENT INC.: Wolf Haldenstein Lodges Securities Lawsuit in MN SUREBEAM CORPORATION: Charles Piven Lodges Securities Suit in CA ********* ACCEPTANCE INSURANCE: Moves For Summary Judgment in Stock Suit -------------------------------------------------------------- Acceptance Insurance Companies, Inc. filed a motion to decertify the class and a motion for summary judgment in the class action filed against it in the United States District Court for the District of Nebraska. Plaintiffs originally alleged the Company knowingly and intentionally understated the Company's liabilities in order to maintain the market price of the Company's common stock at artificially high levels and made untrue statements of material fact, and sought compensatory damages, interest, costs and attorney fees. The plaintiffs also alleged the Company intentionally understated liabilities in a registration statement filed in conjunction with the Company's Trust Preferred Securities. Plaintiffs sought to represent a class consisting of all persons who purchased either Company common stock between March 10, 1998 and November 16, 1999, or AICI Capital Trust Preferred Securities between the July 29, 1997 public offering and November 25, 1999. In the consolidated complaint, plaintiffs alleged violation of Section 11 of the Securities Act of 1933 through misrepresentation or omission of a material fact in the registration statement for the Trust Preferred Securities, and violation of Section 10b of the Securities Exchange Act of 1934 and Rule 10b5 of the US Securities and Exchange Commission through failure to disclose material information between March 10, 1998 and November 16, 1999. The Company, three of its former officers, the Company's Directors and independent accountants and other individuals, as well as the financial underwriters for the Company's Trust Preferred Securities, were defendants in the consolidated action. On March 2, 2001, the court entered an order dismissing all claims alleging violations of Section 11 of the Securities Act, and dismissing the Company's directors, financial underwriters, independent accountants and others as defendants in this action. The court also ruled that certain of plaintiffs' allegations regarding the remaining defendants' alleged failure to properly report contingent losses attributable to the decision did not state a claim under Section 10b and Rule 10b-5. In two subsequent rulings, the court and Magistrate Judge clarified the March 2 ruling to specify which of plaintiffs' Montrose-related allegations failed to state a Section 10b and Rule 10b-5 claim. These three rulings reduced the litigation to a claim that the Company and three of its former officers, during the period from August 14, 1997 to November 16, 1999, failed to disclose adequately information about various aspects of the Company's operations, including information relating to the Company's exposure after January 1, 1997 to losses resulting from the Montrose decision. Nevertheless, Plaintiffs continue to seek compensatory damages, reasonable costs and expenses incurred in this action and such other and such further relief as the Court may deem proper. On August 6, 2001, the Magistrate Judge granted Plaintiffs' Motion for Class Certification. Plaintiffs' fact discovery was concluded July 31, 2002 in accordance with a schedule established by the court. On September 16, 2002 Plaintiffs sought the court's permission to reinstate certain previously dismissed claims under Section 11 and 15 of the Securities Act. The court denied plaintiffs' request in its entirety on February 27, 2003; plaintiffs asked the court to reconsider this decision and the court has not ruled on that request. On March 31, 2003, however, the court established a schedule for the submission during May 2003 of briefs regarding the Company's proposed motion to decertify the class. The court also established a schedule concluding in August 2003 for submission of briefs regarding both parties' anticipated motions for summary judgment. No hearings have been scheduled with respect to either motion. ADAM INC.: Parties Commence Discovery in Securities Suit in GA -------------------------------------------------------------- Parties in the securities class action filed against Adam, Inc. and certain of its then officers and directors are engaged in discovery in the Fulton County Superior Court in Atlanta, Georgia. The complaint alleges violations of Sections 11, 12(2) and 15 of the Securities Act of 1933 and violations of the Georgia Securities Act arising out of alleged disclosure deficiencies in connection with the Company's initial public offering of common stock, which was completed on November 10, 1995. The complaint seeks compensatory damages in an unspecified amount. The Company and its officers and directors opposed the plaintiff's written motion for class certification. A hearing on the motion was held on January 30, 2003, but the Court has not yet ruled. AEGIS COMMUNICATIONS: Faces TX Suit Over Acquisition By AllServe ---------------------------------------------------------------- Aegis Communications Group, Inc. faces a class action filed by two Company public stockholders in the District Court of Dallas County, Texas. The suit also names as defendants specified individual members of the Company's Board of Directors. The complaints allege, among other things, that the proposed acquisition of the Company by AllServe is unfair to the public stockholders of the Company and that the defendants breached their fiduciary duties to the Company's public stockholders in connection with the proposed acquisition. ATMEL CORPORATION: Faces Securities Fraud Lawsuits in N.D. CA ------------------------------------------------------------- Atmel Corporation and certain of its current officers and a former officer faces several securities class actions filed in the United States District Court for the Northern District of California. The complaints allege that the Company made false and misleading statements concerning its financial results and business during the period from January 20, 2000 to July 31, 2002 as a result of sales of allegedly defective product to Seagate. The suit further alleges that the Company violated Section 10(b) of the Securities Exchange Act of 1934. ATMEL CORPORATION: Investors File Derivative Lawsuit in CA Court ---------------------------------------------------------------- Certain directors, officers and a former officer of Atmel Corporation faces a derivative class action filed in the Superior Court for the State of California for the County of Santa Clara. The Company is also named as a nominal defendant. The complaint alleges that between January 2000 and July 31, 2002, defendants breached their fiduciary duties to the Company by permitting it to sell defective products to customers. The complaint alleges claims for: (1) breach of fiduciary duty, (2) mismanagement, (3) abuse of control, (4) waste, and (5) unjust enrichment The complaint seeks unspecified damages and equitable relief as against the individual defendants. The Company disputes the claims and is vigorously defending this action. ATMOS ENERGY: Asks For Leave To Amend KS Gas Royalties Lawsuit -------------------------------------------------------------- The Quinque Operating Company, Tom Boles and Robert Ditto asked the District Court of Stevens County, Kansas for leave to amend the class action they filed against more than 200 companies in the natural gas industry including Atmos Energy Corporation and its Colorado-Kansas Division. The plaintiffs, who purport to represent a class consisting of gas producers, royalty owners, overriding royalty owners, working interest owners and state taxing authorities, allege the defendants have underpaid royalties on gas taken from wells situated on non-federal and non-Indian lands throughout the United States and offshore waters predicated upon allegations that the defendants' gas measurements are simply inaccurate and that the defendants failed to comply with applicable regulations and industry standards over the last 25 years. Although the plaintiffs do not specifically allege an amount of damages, they contend that this suit is brought to recover billions of dollars in revenues that the defendants have allegedly unlawfully diverted from the plaintiffs to themselves. On April 10, 2000, this case was consolidated for pre-trial proceedings with other similar pending litigation in federal court in Wyoming in which the Company are also a defendant along with over 200 other defendants in the case of In Re Natural Gas Royalties Qui Tam Litigation. In January 2001, the federal court elected to remand this case back to the Kansas state court. A reconsideration of remand was filed, but it was denied. The state court now has jurisdiction over this proceeding and has issued a preliminary case management order. On April 10, 2003, the court denied the plaintiffs' motion to certify this proceeding as a class action, which ruling was appealed by the plaintiffs. The plaintiffs have filed a motion with the court for leave to amend their pleadings to which the defendants have filed an objection. Oral arguments were held on July 8, 2003, at which time the court indicated that it will make a ruling on the plaintiffs' motion in due course. BOWL CHAMPIONSHIP: House Committee To Probe Competition System -------------------------------------------------------------- In the Bowl Championship Series' five-year history, no team from a so-called "mid-major" conference has been invited to one of the four elite bowl games - the Fiesta, Orange, Rose, Sugar - and, as a result, has had no chance to contend for the national championship. Whether that is a result of the natural competitive imbalance in sports, of an exclusionary system or a patent antitrust violation, will be explored in a House Judiciary Committee oversight hearing starting Thursday of this week, The Washington Post reports. Big Ten Commissioner Jim Delany will speak on behalf of the BCS alliance, which he helped create. Tulane President Scott Cowen will discuss what he and dozens of other college presidents think are the inequities of the system. Also expected at the hearing are NCAA President Myles Brand and future NFL Hall of Famer Steve Young, Brigham Young's record-setting quarterback, who has criticized the BCS as "a closed shop." Commissioner Delany rejects the claim that the BCS is exclusionary. "Our purpose was to try to create a 1-2 game - no more, no less," said the Commissioner. "It was not (aiming) to exclude anyone. In fact, we feel there is more access to the Rose Bowl after the BCS than there was before the BCS. For 55 years, no one played in the Rose Bowl except the Big Ten and the Pac-10." Under the BCS, a spot in the four major bowls is reserved for a representative of football's six major conferences. A school from outside these conferences can qualify if it finishes the season ranked among the top six. Brigham Young's Athletic Director Val Hale has questioned whether that is "legitimate access." "They say, 'Sure, you can have access. All you have to do is finish in the top six,' " Mr. Hale said. "But with the computer (ranking) system set up the way it is, it is next to impossible for someone in one of our conferences to do that." COMMUNITY BANCSHARES: Faces AL Suit Over Churning Phantom Loans --------------------------------------------------------------- Community Bancshares, Inc. and Community Bank faces a class action filed in Alabama State Court over alleged "churning phantom loans." The suit also named as defendants: (1) Holsombeck Motors, Inc., (2) Lee Brown d/b/a Alabama Bond & Investigation a/k/a ABI Recovery, (3) Chris Holmes d/b/a Alabama Bond & Investigation a/k/a ABI Recovery, (4) Regina Holsombeck, (5) Kennon "Ken" Patterson, Sr., (6) Hodge Patterson, (7) James Timothy "Tim" Hodge, (8) Ernie Stephens, and (9) the State of Alabama Department of Revenue The plaintiffs in this class action allege that Community Bank and others conspired or used extortionate methods to effect a lending scheme of "churning phantom loans", and that profits from the scheme were used to secure an interest in and/or to invest in an enterprise that affects interstate commerce. The allegations state that Community Bank used various methods to get uneducated customers with fair to poor credit to sign numerous "phantom loans" when the customers only intended to sign for one loan. Claims include: (i) racketeering activity within the meaning of the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO), (ii) conspiracy, (iii) spoliation, (iv) conversion, (v) negligence, (vi) wantonness, (vii) outrage, and (viii) civil conspiracy The Company and Community Bank are conducting discovery to ascertain what substance, if any, there is to the claims. Although management currently believes that this action will not have a material adverse effect on the Company's financial condition or results of operations, regardless of the outcome, the action could be costly, time consuming, and a diversion of management's attention. CORTLAND BANCORP: Plaintiffs Appeal Ohio Consumer Suit Dismissal ---------------------------------------------------------------- Plaintiffs appealed the Court of Common Pleas in Trumbull County, Ohio's dismissal of two related class actions against Cortland Bancorp, Inc. and Cortland Savings and Banking Company, namely "Frank Slentz, et al. v. Cortland Savings and Banking Company," and "McDonagh, et al., v. Cortland Savings and Banking Company." The court granted also granted Cortland Savings and Banking Company, summary judgment on all counts of plaintiffs' complaint in both cases. These two class actions originated in 1993 with filings in the Northern District of Ohio Eastern Division of the Federal Court system. In addition to their alleged federal claims, Plaintiffs had alleged state law claims which were included as pendent causes of action. On October 20, 1997 the federal judge presiding over these cases filed a judgment entry dismissing all federal claims against the registrant's subsidiary bank without prejudice. The judgment of the district court was appealed by plaintiffs. On March 2, 1999 the United States Court of Appeals for the Sixth Circuit affirmed the decision of the district court to grant summary judgment in favor of the defendant bank and dismissing all of plaintiffs' federal claims. While awaiting the ruling of the Sixth Circuit Court of Appeals, the plaintiffs asserted their alleged State law claims by filing suit in the Common Pleas Court of Trumbull County seeking damages of approximately $4.3 million. CROSS TIMBERS: Finishes Settlement Payments For Royalties Suit -------------------------------------------------------------- Cross Timbers Oil Company has fully paid for the settlement of a class action filed in the District Court of Dewey County, Oklahoma against it on behalf of all persons who, at any time since June 1991, have been paid royalties on gas produced from any gas well within the State of Oklahoma under which the Company has assumed the obligation to pay royalties. The plaintiffs allege that the Company reduced royalty payments by post-production deductions and entered into contracts with subsidiaries that were not arm's-length transactions. The plaintiffs further allege that these actions reduced the royalties paid to the plaintiffs and those similarly situated, and that such actions are a breach of the leases under which the royalties are paid. These deductions allegedly include production and post-production costs, marketing costs, administration costs and costs incurred by the Company in gathering, compressing, dehydrating, processing, treating, blending and/or transporting the gas produced. The Company contended that, to the extent any fees are proportionately borne by the plaintiffs, these fees are established by arm's-length negotiations with third parties or, if charged by affiliates, are comparable to fees charged by third party gatherers or processors. The Company further contended that any such fees enhance the value of the gas or the products derived from the gas. Under the terms of the settlement agreement approved by the court in April 2003, the Company agreed to pay $2.5 million to settle the plaintiffs' claims for the period January 1, 1993 through June 30, 2002. DQE INC.: Pre-Trial Discovery in Suit To End by September 2003 -------------------------------------------------------------- Pre-trial discovery in the consolidated securities class action filed against DQE, Inc. is expected to be finished by September 30, 2003 in the United States District Court for the Western District of Pennsylvania. In October and November 2001, a number of class actions were filed by purported shareholders of the Company against the Company and David Marshall, its former chairman, chief executive officer and president. These cases were later consolidated. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section 12(a)(2) of the Securities Act of 1933. The complaint also alleges controlling person liability under Section 20(a) of the Exchange Act and Section 15 of the Securities Act. The complaint alleges that between December 6, 2000 and April 30, 2001, the defendants issued a number of materially false and misleading statements concerning investments made by the Company's subsidiary, DQE Enterprises, and the impact that these investments would have on our current and future financial results. More particularly, the complaint alleges that DQE and Mr. Marshall stated their expectation that certain companies in which DQE Enterprises had invested would undertake initial public offerings of their shares, with the result that the Company's earnings would be positively impacted by the public market valuation of DQE Enterprises' interests in these companies, but failed to disclose allegedly adverse facts that made the possibility of successful public offerings of the securities of these companies unlikely. The complaint seeks an award of unspecified compensatory damages, and an order permitting class members who purchased DQE shares through a dividend reinvestment plan to rescind those purchases, pre- and post-judgment interest, attorneys' fees and expenses of litigation and unspecified equitable and injunctive relief. On May 20, 2003, the court certified a class to include purchasers of the Company's common stock during the period from December 6, 2000 through April 30, 2001, and a sub-class to include purchasers of the Company's common stock through its dividend reinvestment and stock purchase plan during the same period. Since December 2002 the Company and the plaintiffs have been in pre-trial discovery. The court has directed that this phase be concluded by September 30, 2003, followed by an expert discovery period through December 31, 2003. HARBOR VILLAGE: Tenants Complain over MI Apartment's Conditions --------------------------------------------------------------- Aurora, Michigan residents at the federally subsidized Harbor Village Apartments complex - focus of a mold-related federal civil rights lawsuit - said the city missed the mark when it cited dozens of the tenants for mold, mildew and cockroach infestation, the Chicago Tribune reports. Those problems, allege the tenants, are the result of water infiltration that is the responsibility of Midland Management Co., the complex's owner and operator. "I really do believe it is the landlord's fault," said Dredia Ross-White, class action plaintiff. Last month, she received a citation that ordered her to clean her apartment and exterminate. Ms. Ross-White and eight other Harbor Village residents recently filed appeals to the city's citations, issued after the annual inspection of the complex in June. Mark Anderson, director of the Aurora Division of Property Standards, said the appeals were filed after the 20-day deadline. However, he said tenants have until the next inspection September 16, to address the issues. Mr. Anderson said his division will work cooperatively with the tenants and Midland. Lester Barclay, Ms. Ross-White's attorney, said, "I am wondering how on Earth these individuals could have been charged personally (for the conditions in these apartments)." However, city officials said it also had issued about three dozen citations against Midland for water leaks, lack of watertight surfaces in bathrooms and damaged dry wall and paint. "The city's citation of certain tenants is consistent with our experts' opinions that no building-wide mold contamination problem exists at Harbor Village," said Katherine Smith Dedrick, an attorney defending Midland in the federal suit. "And in those very few apartments where apparent surface mold growth appeared in limited areas, it was due to the living and housekeeping practices involved." US District Court Judge Wayne Andersen ruled in late July that Ms. Ross-White could allege discrimination based on the 1964 Civil Rights Act and a federal law barring racial discrimination in connection with rental properties. He also ruled the statute of limitations had not expired. "He certified this as a civil rights case," said Mr. Barclay, adding that it no longer is just about mold. "Now, it is a racial, economic and social justice case." The next big hurdle is receiving class action status, he said. Even as Judge Andersen ordered Ms. Ross-White's attorney to file an amended complaint, Midland asked Judge Andersen to reconsider his rulings in relation to the Civil Rights Act and discrimination law. Ms. Ross-White appears to have successfully structured her discrimination case so as to include the maintenance of the apartments as a component of discrimination. The suit said Midland failed to address water and mold issues at the complex and thereby violated the civil rights of many of its tenants who are single African-American women and their children receiving Section 8 housing subsidies from the US Department of Housing and Urban Development. In her complaint, Ms. Ross-White contended white tenants of Midland not receiving Section 8 assistance are living in better-maintained apartments, an argument accepted by Judge Andersen in his ruling. Tenants said that no matter how much they clean their apartments, mold returns because of water coming in under the roofs and other areas of the complex. They allege the mold has made people sick with respiratory problems, skin rashes and other maladies. Mr. Barclay, plaintiffs' attorney, said a recent preliminary medical screening 14 tenants concluded 10 of them possibly have mold-related conditions. The city cited both tenant and landlord for units in which the mold and mildew were a repeat occurrence, which suggested the problem was "systemic," said Mr. Anderson of the city Division of Property Standards. "When it was a first instance of mold and mildew, we cited the tenants." MATTEL INC.: CA Court Grants Preliminary Approval To Settlement --------------------------------------------------------------- The United States District Court for the Central District of California granted preliminary approval to the settlement of the two consolidated class actions filed against Mattel, Inc. and certain of its present and former officers and directors. One suit was filed under Section 10(b) of the Securities Exchange Act of 1934 and the other under Section 14(a) of the Act. In November 2002, the court permitted the actions to proceed as class actions. Several stockholders filed related derivative complaints purportedly on behalf of Mattel. Some of the derivative suits were consolidated into one lawsuit in Los Angeles County Superior Court in California, which was dismissed for failure to make pre-suit demand on the board of directors. An appeal from that decision was filed, but was dismissed in July 2003 by stipulation of the parties. Another derivative suit was filed in the Court of Chancery in Delaware, and was dismissed without prejudice in August 2002. A third derivative suit, filed in federal court in the Central District of California, was dismissed in July 2002, and re-filed in November 2002 as part of the settlement. In November 2002, the parties negotiated and thereafter memorialized in a final settlement agreement a settlement of all the federal lawsuits in exchange for payment of $122.0 million and the Company's agreement to adopt certain corporate governance procedures. The settlement is conditioned upon court approval of the terms of the settlement, and entry of final judgments dismissing the federal lawsuits. NORTHWESTERN CORPORATION: Plaintiffs Consolidate Lawsuits in SD --------------------------------------------------------------- Plaintiffs consolidated two securities class actions filed against Northwestern Corporation and certain of its present and former officers and directors in the United States District Court for the District of South Dakota, Southern Division. Several suits were initially filed in South Dakota, alleging violations of Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaints contained varying allegations, including that the defendants misrepresented and omitted material facts with respect to the Company's 2000, 2001, and 2002 financial results and operations included in our filings with the SEC, press releases, and registration statements and prospectuses disseminated in connection with certain offerings of debt, equity, and trust preferred securities. The complaints seek unspecified compensatory damages, rescission, and attorneys' fees and costs as well as accountants' and experts' fees. In June 2003, the complaints were consolidated and given the caption "In re NorthWestern Corporation Securities Litigation, Case No. 03-4049." Carpenters Pension Trust for Southern California, Oppenheim Investment Management, LLC, and Richard C. Slump were named as co-lead plaintiffs. In July 2003, the Lead Plaintiffs filed a consolidated amended class action complaint naming as defendants the Company and: (1) NorthWestern Capital Financing II and III, (2) Blue Dot, (3) Expanets, (4) certain of the Company's present and former officers and directors, and (5) a number of investment banks that participated in the securities offerings The amended complaint makes many of the same allegations as the pre-consolidated complaints, including that the defendants: (i) misrepresented and omitted material facts concerning the business operations and financial performance of the Company, Expanets, Blue Dot and CornerStone, (ii) overstated NorthWestern's revenues and earnings by, among other things, maintaining insufficient reserves for accounts receivable at Expanets, failing to disclose billing problems and lapses and data conversion problems, failing to make full disclosures of problems (including the billing and data conversion issues) arising from the implementation of Expanets' EXPERT system, concealing losses at Expanets and Blue Dot by improperly allocating losses to minority interest shareholders, maintaining insufficient internal controls, and profiting from improper related- party transactions. The Company, and certain of its present and former officers and directors, were also named as defendants in two complaints purporting to be class actions which were filed in the United States District Court for the Southern District of New York, entitled "Sanford & Beatrice Golman Family Trust, et al. v. NorthWestern Corp., et al." and "Arthur Laufer v. Merle Lewis, et al." The two suits were brought on behalf of the purchasers of the Company's 7.20%, 8.25%, and 8.10% trust preferred securities which were offered and sold pursuant to the Company's registration statement on Form S-3 filed on July 12, 1999. The plaintiffs' claims are based on similar allegations of material misrepresentations and omissions of fact relating to the registration statement in violation of Sections 11 and 12 of the Securities Act of 1933. The suits seek unspecified compensatory damages, rescission and attorneys', accountants' and experts' fees. In July 2003, "Arthur Laufer v. Merle Lewis, et al." was transferred to the District of South Dakota and consolidated with the consolidated actions pending in that court. NORTHWESTERN CORPORATION: Montana Power Suit Moved -------------------------------------------------- Northwestern Corporation and other defendants removed the class action filed against them and The Montana Power Company to the United States District Court for the District of Montana. The lawsuit, which was filed by the former shareholders of The Montana Power Company (most of whom became shareholders of Touch America Holdings, Inc. as a result of a corporate reorganization of The Montana Power Company), claims that the disposition of various generating and energy-related assets by The Montana Power Company were void because of the failure to obtain shareholder approval for the transactions. Plaintiffs thus seek to reverse those transactions, or receive fair value for their stock as of late 2001, when plaintiffs claim shareholder approval should have been sought. The Company is named as a defendant due to the fact that it purchased Montana Power LLC, which plaintiffs claim is a successor to The Montana Power Company. Due to the recent filing by Touch America Holdings, Inc. for bankruptcy protection, the defendants removed the case to federal court, where it now is pending. NORTHWESTERN CORPORATION: Named as Defendant in Cornerstone Suit ---------------------------------------------------------------- Northwestern Corporation and certain of its present and former officers and directors, were named as defendants in certain class actions filed against CornerStone Propane Partners LP, and other defendants in the United States District Court for the Northern District of California. Purchasers of units of CornerStone Propane Partners filed the suits, which allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Through November 1, 2002, the Company held an economic equity interest in a subsidiary that serves as the managing general partner of CornerStone Propane Partners, LP. Certain present and former officers and directors of the Company who are named as defendants in certain of these actions have also been sued in their capacities as directors of the managing general partner. These complaints allege that defendants sold units of CornerStone Propane Partners, LP based upon false and misleading statements and failed to disclose material information about CornerStone Propane Partners' financial condition and future prospects, including overpayment for acquisitions, overstating earnings and net income, and that it lacked adequate internal controls. The plaintiffs seek compensatory damages, prejudgment and post judgment interest and costs, injunctive relief, and other relief. NTS PROPERTIES: Agrees To Settle Shareholder, Derivative Suits -------------------------------------------------------------- NTS Properties' general partner, along with the general partners of four public partnerships affiliated with it, reached an agreement in principle with representatives of the class of plaintiffs to settle the action captioned "Buchanan et al. v. NTS-Properties Associates et al.," originally filed in the Superior Court of the State of California for the County of Contra Costa against the general partners and several affiliated individuals and entities in December 2001. The settlement is subject to, among other things, preparing and executing a settlement agreement to be presented to the court for preliminary and final approval. The proposed settlement would include releases for all of the parties for any of the claims asserted in the litigation and the class action and derivative litigation filed in the Circuit Court of Jefferson County, Kentucky and captioned "Bohm et al. v. J.D. Nichols et al." As part of the proposed settlement, the general partners have agreed to pursue a merger of the partnerships along with other real estate entities affiliated with the general partners into a newly-formed partnership. The general partners would seek to list the limited partnership interests to be issued in the merger on a national securities exchange. The merger will be subject to, among other things, approval by holders of a majority of the limited partner interests in each partnership, final approval of the court in which the Buchanan litigation is pending and receipt by the general partners of an opinion regarding the fairness of the merger to the limited partners from a financial point of view. An independent appraiser has been retained to appraise all of the properties owned by the existing partnerships and affiliated entities and that would be owned after the merger by the new partnership. The appraisal will be used in establishing exchange values which will determine the number of interests that will be issued to each existing partnership in the merger. The interests in the newly-formed partnership will be subsequently distributed to the limited and general partners in each existing partnership as though each partnership had been liquidated. The general partners have also retained a third party to provide an opinion on the fairness of the merger to limited partners from a financial point of view. OSTEOTECH INC.: CA Court Refuses Certification To Consumer Suit --------------------------------------------------------------- The Superior Court for the State of California, Los Angeles County refused to grant class certification to the lawsuit filed against Osteotech, Inc., Inland Eye & Tissue Bank of Redlands, and other defendants. The suit sought class action status and initially alleged causes of action based on a violation of the California Business and Professional Code Section 17200 and negligence. The suit alleges that defendants are engaging in the activity of buying or selling organs or tissue for valuable consideration or profit. Although this litigation has been pending for some time, significant discovery has only recently commenced. Plaintiffs filed a motion for leave to file a fourth amended complaint to allow the adding of two additional class representatives and to make other changes to the complaint, which motion was denied without prejudice on February 3, 2003. Plaintiffs' counsel have recently indicated that, rather than seek to amend the complaint, they plan to file a new action on behalf of three plaintiffs alleging claims similar to those asserted in the case. That new action, Sorrels, Decker and Blake v. Inland Eye and Tissue Bank, et al, was served on the Company on March 24, 2003. It also purports to be a class action, and like the original case, it alleges violation of Section 17200 and negligence against the Company. The Company denies the claims and recently filed an answer to this complaint. On July 3, 2003, the Company filed a motion for summary judgment in the case. That motion hearing is scheduled on December 8, 2003. On July 14, 2003, the Court denied the motion for class certification filed by the plaintiffs in the case, and in a subsequent ruling, as a result of the decision, the class certification request in the new case was stricken. PARADYNE NETWORKS: Agrees To Settle Securities Suit in S.D. NY -------------------------------------------------------------- Paradyne Networks, Inc. agrees to settle the consolidated securities class action in the United States District Court for the Southern District of New York against it, some of the Company's executive officers and the former Chairman of the Board, and the underwriters of the Company's initial public offering. The suit alleges that defendants, during the period from July 15, 1999 through December 6, 2000, violated federal securities laws by allocating shares of the initial public offering to favored customers in exchange for their promise to purchase shares in the secondary market at escalating prices. The suit seeks damages in an unspecified amount for the purported class for the losses suffered during the class period as a result of an alleged inflated stock price. On June 5, 2003, the Company agreed to participate in a global settlement of this case (along with the settlement of hundreds of other similar IPO allocation cases pending in the Southern District of New York). Any settlement owed by the Company will be funded exclusively by a portion of the proceeds of the Company's directors' and officers' insurance policy and will result in the dismissal of this lawsuit and release by the plaintiff shareholder class of the IPO Defendants. REGENERON PHARMACEUTICALS: Faces Securities Lawsuits in S.D. NY --------------------------------------------------------------- Regeneron Pharmaceuticals, Inc. and certain of its officers and directors face several securities class actions filed in the United States District Court for the Southern District of New York. The complaints, which purport to be brought on behalf of a class consisting of investors in the Company's publicly traded securities between March 28, 2000 and March 30, 2003, allege that the defendants misstated or omitted material information concerning the safety and efficacy of AXOKINE, in violation of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Damages are sought in an unspecified amount. The Company's management believes that the lawsuits are without merit. RURAL CELLULAR: Plaintiffs File Consolidated MN Securities Suit --------------------------------------------------------------- Plaintiffs filed a consolidated securities class action against Rural Cellular Corporation and three of its executive officers in the United States District Court in Minnesota. The consolidated amended complaint adds as defendants four directors who were members of the Company's audit committee during the class period and Arthur Andersen LLP, the Company's former independent auditors. The lead plaintiffs seek to represent a class consisting of all persons (except defendants and members of their families and entities in which they held interests) who purchased or otherwise obligated themselves to purchase the Company's publicly traded equity and debt securities between May 7, 2001 and November 12, 2002. The lead plaintiffs allege that the Company's publicly announced financial results were false and misleading and that it made false and misleading statements about its operating performance and financial condition. The lead plaintiffs further allege that, as a result, the market price of the Company's securities was artificially inflated during the class period and investors were deceived into buying the securities at artificially inflated prices. The lead plaintiffs allege that defendants are liable under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The lead plaintiffs seek compensatory damages in an unspecified amount, plus their attorneys' fees and costs. SCIENTIFIC GAMES: Plaintiffs to Lodge Amended Unfair Trade Suit --------------------------------------------------------------- Plaintiffs intend to file an amended class action against Scientific Games Corporation, and Does 1-10 in the United States District Court in Los Angeles, California. A professional Pick Six bettor filed the suit on behalf of pari- mutuel bettors in the US, alleging, among other things, negligence, breach of contract and deceptive trade practices arising from the Company's handling of multiple-race wagers. The Company moved to dismiss the lawsuit. In response, the plaintiff agreed to file an amended complaint in an attempt to address some of the deficiencies that were the subject of the Company's motion. That amended complaint has not yet been filed. SCIENTIFIC GAMES: Asks CA Court To Dismiss Negligence Lawsuit -------------------------------------------------------------- Scientific Games Corporation asked the United States District Court for the District of California to dismiss the class action filed against it, Autotote Systems, Inc., and Does 1-20 by a bettor of the Breeders' Cup Pick Six wager, on behalf of all bettors of such Pick Six wagers. The lawsuit alleged negligence and fraud with respect to the Company's wagering systems in connection with the Breeders' Cup Pick Six. The motion to dismiss is currently pending. SEITEL INC.: Plaintiffs Lodge Consolidated Securities Suit in TX ---------------------------------------------------------------- Plaintiffs filed a consolidated amended securities class action against Seitel, Inc., certain of its former and current officers and directors and its auditors Ernst & Young LLP in the United States District Court for the Southern District of Texas. The consolidated amended complaint alleges that during a proposed class period of May 5, 2000 through April 1, 2002, the defendants violated sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by overstating revenues in violation of generally accepted accounting principles. The plaintiffs seek an unspecified amount of actual and exemplary damages, costs of court, pre- and post-judgment interest and attorneys' and experts' fees. The Company denies these consolidated lawsuits' allegations. No discovery has been conducted and the action is stayed as a result of the Company's Chapter 11 filing. SEITEL INC.: Plaintiffs Appeal Dismissal of Trespass Suit in TX --------------------------------------------------------------- Plaintiffs appealed a Texas state court's decision dismissing their claims in the class action filed against Seitel, Inc. and its subsidiary, Seitel Data, Ltd., for geophysical trespass. The suit, filed in the 229th District Court of Starr County, Texas, alleges that certain defendants conducted unauthorized 3- D seismic exploration of the mineral interests, and sold the information obtained to other defendants. The plaintiffs seek an unspecified amount of damages. All of the defendants have obtained summary judgments dismissing the plaintiffs' claims, and the case is now on appeal before the San Antonio Court of Appeals. SIX FLAGS: Enters Mediation For Discrimination Suit in CA Court --------------------------------------------------------------- Six Flags, Inc. entered into mediation for a class action filed against it in the California Superior Court for Los Angeles County, alleging that security and other practices at the Company's park in Valencia, California, discriminate against visitors on the basis of race, color, ethnicity, national origin and/or physical appearance. The suit asserts claims under California statutes and common law. They seek compensatory and punitive damages in unspecified amounts, and injunctive and other relief. There has been limited discovery on class issues. The litigation has been stayed pending mediation; in the absence of a negotiated resolution, the litigation is expected to resume. STARBASE CORPORATION: Proceedings in CA Investor Lawsuit Stayed --------------------------------------------------------------- The stockholder class action and derivative lawsuit against Starbase Corporation has been stayed until October 29,2003. The suit was filed against the Company and five of its former directors in the Superior Court of the State of California for Orange County and alleged that the former directors had breached fiduciary duties owed to the Company and its stockholders. On January 23, 2003, defendants filed a demurrer requesting that all the claims be dismissed, and also filed a motion to stay discovery pending a ruling on the demurrer. On February 25, 2003, plaintiff filed its first amended class action complaint, or the amended complaint, naming as defendants the five former directors and the investment banking firm that provided financial services to the Company, two law firms that provided legal services to Starbase and an individual and entity that helped arrange financing for Starbase. The amended complaint purported to be brought on behalf of Starbase stockholders who tendered shares of Starbase common stock in the tender offer commenced by Borland Software, Inc. on October 11, 2002 and that ended on November 11, 2002, or in the merger that was completed on January 7, 2003. Plaintiff alleged that the five former directors breached their fiduciary duties owed to Starbase in connection with a proposed financing of Starbase in mid-2002, and that the other defendants aided and abetted the purported breach of fiduciary duty. The director defendants filed a demurrer seeking dismissal of the amended complaint. On June 6, 2003, the court sustained the demurrer of all defendants and dismissed the lawsuit against all defendants but granted the plaintiff leave to amend the complaint against the director defendants. On July 3, 2003, the plaintiff filed a second amended complaint. On July 8, 2003, plaintiff filed a request for voluntary dismissal of the action without prejudice. Defendants opposed that request on the ground that plaintiff wanted to re-file the action in another jurisdiction while still being able to pursue the litigation in the Superior Court of the State of California of Orange County or appeal the court's decision to the California Court of Appeal. On July 31, 2003, the court held that the plaintiff's request for dismissal was deficient, but permitted the plaintiff to file another request. The court also stayed the litigation until October 29, 2003. The court has granted the motion of the director defendants to stay discovery. TEXAS: Plaintiff Sues Over Lap-Dance Surcharges on Credit Cards --------------------------------------------------------------- Paul Brian Meekey, a Houston-area resident, is the plaintiff in three lawsuits filed in Harris County State Court, Texas, trying to end the practice of $5 credit-card surcharges for $20 lap dances at Houston strip clubs, the Houston Chronicle reports. The named defendants are three strip clubs: (1) Treasures, (2) Centerfolds and (3) Rick's Cabaret The lawsuits state that Mr. Meekey visited three strip clubs in August of this year and was charged $25 on his credit card instead of the stated $20 for a lap dance purchase. The suits against the named strip clubs are brought on behalf of all other credit-card purchasers of lap dancing. Houston lawyer, David George, said he hopes to make these cases class actions to retrieve the $5 of every surcharge imposed on every charging lap dance purchaser in the past four years. "Texas law flat-out says you cannot charge a surcharge for a credit card transaction," Mr. George said. "This looks like a blatant violation." Mr. George said the lawsuit asks for a declaratory judgment agreeing that the practice violates the Texas Finance Code. The lawsuits ask further that the refunds be returned to all class members and that attorneys' fees be paid. THQ INC.: CA Court Grants Approval To Securities Suit Settlement ---------------------------------------------------------------- The United States District Court for the Central District of California granted final approval to the settlement of the consolidated securities class action filed against THQ, Inc. and certain of its officers and directors. The amended complaint alleged that defendants violated Rule 10b- 5 and Section 20(a) of the Securities Exchange Act of 1934, including allegations that defendants: (1) manipulated the Company's stock price; (2) distributed false and misleading information concerning revenue recognition, forecasts and earnings estimates; (3) selectively disclosed material information; and (4) engaged in insider trading The complaint sought an unspecified amount in damages. As of December 31, 2002, the Company entered into a settlement agreement with the plaintiffs. While denying plaintiffs' allegations, the Company agreed to pay $10.2 million under the terms of the settlement agreement to resolve all claims by plaintiffs against all defendants. The court granted final approval of the settlement on June 30, 2003. The Company's directors' and officers' insurance coverage provides for $10.0 million towards the settlement agreement and related legal fees. However, a dispute has arisen between the Company and its directors' and officers' insurance carrier. The insurance carrier asserts that it is only obligated to contribute $5.0 million in coverage towards the securities litigation settlement. Pursuant to the terms of our insurance policy, the matter has been submitted to arbitration under the rules of the American Arbitration Association. TRI-STATE CREMATORY: GA Grand Jury Issues 787-Count Indictment -------------------------------------------------------------- While criminal investigation of the Tri-State Crematory case has been rolling on, a potentially expensive civil case has taken shape, The Atlanta Journal-Constitution reports. At least 334 uncremated bodies were found on the grounds of the family business, the Tri-State Crematory, which was operated by Ray Brent Marsh, 30, in Noble, Georgia. The business, which cremated bodies mostly from Georgia, Tennessee and Alabama, was started in 1982, by Ray Marsh's father. The discovery of hundreds of uncremated bodies in February 2002, rocked the rural northwest Georgia community. Several death threats reportedly were made against Ray Marsh, who was released from jail after posting $39,200 bond on August 27, 2002. The county sheriff, the district attorney, the judge and the governor's office said Mr. Marsh would be safer in jail than under house arrest in his home. A federal judge granted class action status to civil lawsuits filed by families whose relatives' bodies were sent to Tri-State between 1997 and early 2002, chiefly from funeral homes in Georgia, Tennessee and Alabama. These funeral homes, 56 in all, were named as civil defendants in the lawsuits, along with Ray Brent Marsh and the crematory. Meanwhile, the case had been sent to the grand jury in Walker County, Georgia. The grand jury recently issued a 787-count indictment of Tri-State Crematory operator Ray Brent Marsh, 18 months after the first of at least 334 uncremated bodies was found on the grounds of the family business in Noble, Georgia. The charges focused on four felonies: fraud, corpse abuse, theft and making false statements. Mr. Marsh did not appear before the grand jury. Mr. Marsh remains free on bond and is scheduled to be arraigned September 23rd. McCracken Poston, defendant's money, said he does not believe Mr. Marsh can get a fair trial in Walker County and will try to have the trial moved out of LaFayette, the county seat. Ray Brent Marsh was indicted on 122 counts of burial service fraud; 47 counts of giving false statements; 179 counts of abuse of a dead body and 439 counts of theft by taking. WESTPOINT STEVENS: Discovery V. Individual Defendants Continues --------------------------------------------------------------- The consolidated securities class action filed against WestPoint Stevens, Inc. is proceeding to class certification and discovery against individual defendants in the United States District Court for the Northern District of Georgia, despite the Company's bankruptcy filing. The amended complaint asserts claims against all defendants under Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and against the Company and defendant Holcombe T. Green, Jr. as "controlling persons" under Section 20(a) of the Exchange Act. The amended complaint alleges that, during the putative class period (i.e., February 10, 1999 to October 10, 2000), the Company and certain of its officers and directors caused false and misleading statements to be issued regarding, inter alia, alleged overcapacity and excessive inventories of the Company's towel-related products and customer demand for such products and that certain individual defendants wrongfully sold or pledged Company stock at inflated prices for their benefit. The amended complaint refers to WestPoint Stevens' press releases and quarterly and annual reports on Securities Exchange Commission Forms 10-Q and 10-K, which discuss the Company's results and forecasts for the fiscal years 1999 and 2000. Plaintiffs allege that these press releases and public filings were false and misleading because they failed to disclose that the Company allegedly "knew sales would be adversely affected in future quarters and years." Plaintiffs also allege in general terms that the Company materially overstated revenues by making premature shipments of products. On June 6, 2002, Defendants filed motions to dismiss the complaint. On February 3, 2003, the court denied the motion. Proceedings against the Company are stayed due to the recent bankruptcy filing. However, the action is proceeding to class certification and discovery against the individual named defendants. WESTWOOD GROUP: Asks DE Court to Dismiss Lawsuit For "Mootness" --------------------------------------------------------------- Westwood Group, Inc. asked the Delaware Court of Chancery to dismiss a class action filed against it and its Board of Directors, seeking to enjoin the proposed reverse stock split proposed by the Company on the basis that is not fair to the stockholders and that the proxy statement omits information alleged to be "material." On June 17, 2003, the company filed a Motion to Dismiss for mootness on the grounds that the proposed going private transaction has not or will not be completed. To date, the plaintiffs have not filed a response to the motion, and no further action has been taken at this time. XTO ENERGY: Plaintiffs File Amended Gas Royalties Lawsuit in KS --------------------------------------------------------------- Plaintiffs filed an amended class action in the District Court of Stevens County, Kansas, against one of XTO Energy, Inc.'s subsidiaries, and over 200 natural gas transmission companies, producers, gatherers and processors of natural gas. Plaintiffs seek to represent a class of plaintiffs consisting of all similarly situated gas working interest owners, overriding royalty owners and royalty owners either from whom the defendants had purchased natural gas or who received economic benefit from those gas sales since January 1, 1974. The complaint alleges that the defendants have mismeasured both the volume and heating content of natural gas delivered into their pipelines resulting in underpayments to the plaintiffs. Plaintiffs assert: (1) a breach of contract claim, (2) negligent or intentional misrepresentation, (3) civil conspiracy, (4) common carrier liability, (5) conversion, (6) violation of a variety of Kansas statutes and (7) other common law causes of action The amount of damages was not specified in the complaint. A hearing was held in January 2003, and the court held that a class should not be certified. Plaintiffs' counsel has filed an amended class action petition, which reduces the proposed class to only royalty owners, reduces the claims to mismeasurement of volume only, conspiracy, unjust enrichment and accounting, and only applies as to gas measured in Kansas, Colorado and Wyoming. Plaintiffs then filed a new petition, which alleges the same improper analysis of gas heating content, which had previously been alleged in the Price case discussed above until it was removed from the case by the filing of the amended class action petition. In all other respects, the new petition appears to be identical to the amended class action petition in that it has a proposed class of only royalty owners, alleges conspiracy, unjust enrichment and accounting, and only applies as to gas measured in Kansas, Colorado and Wyoming. The amount of damages was not specified in the complaint. New Securities Fraud Cases ALSTOM SA: Charles Piven Initiates Securities Lawsuit in S.D. NY ---------------------------------------------------------------- The Law Offices of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Alstom SA (NYSE: ALS) between November 17, 1998 and June 29, 2003, inclusive. The case is pending in the United States District Court for the Southern District of New York. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. For more information, contact Charles J. Piven by Phone: 410/986-0036 or by E-mail: hoffman@pivenlaw.com ALSTOM SA: Abbey Gardy Launches Securities Fraud Suit in W.D. NY ---------------------------------------------------------------- Abbey Gardy, LLP initiated a securities class action in the United States District Court for the Western District of New York (03 CV 6419) on behalf of all persons who purchased securities of Alstom S.A. (NYSE: ALS) between May 7, 2002 and June 30, 2003 inclusive. The complaint names as defendants the Company and: (1) Pierre Bilger, (2) Francois Newey, (3) Stephan Rambaud-Measson, (4) Joe Janovec and (5) Patrick Kron 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 during the Class Period thereby artificially inflating the price of Alstom securities. The Complaint alleges that defendants issued a series of materially false and misleading press releases, public statements and filings with the Securities and Exchange Commission (SEC) starting on May 7, 2002 and continuing to June 30, 2003 concerning the Company's financial condition. In particular, the Complaint alleges that Alstom Transportation Inc., the Company's United States subsidiary, had: (i) materially understated losses; (ii) failed to recognize costs when incurred in anticipation of shifting the costs to other more profitable contracts; and (iii) understated forecast costs to completion. On June 30, 2003, Alstom reported that the SEC and the FBI had initiated investigations into accounting improprieties at Alstom Transportation Inc. On August 12, 2003, Alstom announced that the SEC had opened a formal investigation into Alstom Transportation Inc. The Company further reported that it has uncovered "accounting improprieties" at Alstom Transportation and as a result would be taking a $58.2 million charge for the year ending March 31, 2004. Alstom also announced the suspension of Stephan Rambaud-Measson and Joe Janovec pending the completion of the investigation. On this news the Company's securities fell to $2.51 from a class period high of $12.65. For more details, contact Nancy Kaboolian, or Susan Lee by Phone: (212) 889-3700 or 800-889-3701, or by E-mail: nkaboolian@abbeygardy.com or slee@abbeygardy.com ALSTOM SA: Milberg Weiss Commences Securities Fraud Suit in CT -------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of an institutional investor, in the United States District Court for the District of Connecticut on behalf of purchasers of ALSTOM S.A. (NYSE: ALS) securities during the period between November 17, 1998 and June 29, 2003. The complaint charges ALSTOM and certain of its officers and directors with violations of the Securities Exchange Act of 1934. ALSTOM is engaged in power generation, power transmission, power distribution and ship construction in France. The complaint alleges that during the Class Period, the individual defendants engaged in the scheme to conceal ALSTOM's problems growing its Marine segment in order to prevent the decline in the price of ALSTOM securities to: (1) protect and enhance their executive positions and substantial compensation; (2) raise Euro 387 million in a share offering on June 19, 2001, as well as Euro 630 million in a rights offering on June 4, 2002; and (3) enhance the value of their personal ALSTOM securities holdings and options. It was important to ALSTOM to be perceived favorably and to minimize the risks associated with its liquidity so that it could raise the necessary financing to fund its business. ALSTOM's bank borrowings increased from Euro 839 million at March 31, 1999 to Euro 2.7 billion at March 31, 2000, to Euro 4.5 billion at March 31, 2001. Thus, defendants concealed the off-balance-sheet risk associated with guarantees on debt incurred by customers, including Renaissance Cruises Inc. ("Renaissance"), making purchases from ALSTOM's fastest growing segment. The truth, known to the defendants but concealed from the shareholders entailed: (i) That the Company's first half financial results for FY 2000 were grossly overstated, as they overstated the Company's receivables and income associated with the Company's sales of GT24B and GT26B turbines. In fact, of nearly 80 of these turbines which had been sold, only 25 worked; (ii) That the disastrous problems associated with the Company's GT24B and GT26B turbines was causing customers to back out of their prior turbine orders. Thus, the Company's well-publicized "backlog" for turbines was grossly misrepresented; (iii) That the Company had failed to timely and adequately account for the liabilities associated with the Company's gas turbines (customers requesting compensation payment rather than a correction of the turbines) and transport problems totaling in excess of Euro 1 billion and plunging the Company into a loss of Euro 1.4 billion in FY 2003; (iv) That the Company's new compressor, which had been tested on the European grid, required substantial modification and testing prior to being used on the U.S. grid causing huge expenses in the business; (v) That the Company was hemorrhaging cash and would need to divest itself of its higher margin businesses, causing material earnings dilution and further rendering the Company's projections for its revenue and income to be false; (vi) That the Company's "underfunding" of its pension liabilities was materially "understated" by in excess of Euro 500 million; (vii) That the Company failed to timely disclose its liabilities associated with vendor financing and Renaissance cruise ships; (viii) That until November 2002, the Company concealed its exposure to 60 separate asbestos lawsuits involving 6,500 plaintiffs. The Company failed to account for these liabilities and thus overstated its financial statement by as much as Euro 60 million; (ix) That the Company's asset disposal program was well behind schedule and that its projected goal of raising proceeds of Euro 1.4 billion by March 2003 was a fallacy; (x) That even the Company's November 2002 revised guidance associated with restructuring the Company's Transport business was grossly understated; (xi) That the Company had materially understated its losses associated with a rail car contract by in excess of Euro 51 million; (xii) That the Company had concealed the fact that the Company had made written guarantees to banks that had loaned money to cruise lines so they could purchase ships from the Company and thereby inflate the Company's revenue via ship sales; and (xiii) That the Company had actually understated the Company's net debt by Euro 2 billion via its vendor financing scheme. For more information, visit the firm's Website: http://www.milberg.com BEARINGPOINT INC.: Berger & Montague Files Stock Suit in E.D. VA ---------------------------------------------------------------- Berger & Montague, PC initiated as securities class action on behalf of purchasers of the common stock of BearingPoint (NYSE:BE) between October 30, 2002 and August 13, 2003, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. This case was filed in the United States District Court for the Eastern District of Virginia. 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 October 30, 2002 and August 13, 2003. On August 14, 2003, before the market opened, defendants shocked the public when they issued a press release and concurrently filed a Form 8-K with the SEC announcing that BearingPoint's financial results would be restated for the first three quarters of fiscal 2003 due to acquisition and accounting relating adjustments. The market's reaction to the announcement was swift and drastic. On August 14, 2003, the price per share of BearingPoint common stock fell $2.41 or 23 percent from its previous day's trading to close at $7.90, on unusually heavy trading volume. For more details, contact Sherrie R. Savett, Glen L. Abramson, or Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103 by Phone: (215) 875-3000, (888) 891-2289 - toll free, by Fax: (215) 875-5715 by E-mail: Investorprotect@bm.net or visit the firm's Website: http://www.bergermontgue.com BEARINGPOINT INC.: Cohen Milstein Lodges Stock Suit in E.D. VA -------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class action on behalf of purchasers of the securities of BearingPoint, Inc. (NYSE:BE) between October 30, 2002, and August 13, 2003, inclusive in the United States District Court for the Eastern District of Virginia. 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 October 30, 2002, and August 13, 2003, thereby artificially inflating the price of BearingPoint securities. During the Class Period, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company materially overstated its net income and earnings per share and had undervalued intangible goodwill by approximately $20 million; (2) that the Company improperly accounted for restructuring charges relating to acquisitions, thereby materially inflating its earnings; (3) that the Company's reported resulted were not prepared in accordance with GAAP and did not fairly present the Company's financial condition; and (4) that, contrary to the Company's representations, the Company's reported results were attributable in material part to improper accounting rather than to successfully integrated business combinations and strategic acquisitions and transactions. On August 14, 2003, before the market opened, the Company issued a press release and concurrently filed a Form 8-K with the SEC announcing that BearingPoint's financial results would be restated for the first three quarters of fiscal 2003 due to acquisition and accounting related adjustments. In response to this announcement, shares of BearingPoint fell $2.41 per share or 23 percent to close at $7.90, on unusually heavy trading volume. For more information, contact Steven J. Toll, or Mary Ann Fink by Phone: 888-240-0775 or 202-408-4600, by E-mail: stoll@cmht.com or mfink@cmht.com or visit the website: http://www.cmht.com. CATALINA MARKETING: Wolf Haldenstein Files Securities Suit 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 or otherwise acquired the securities of Catalina Marketing Corporation (NYSE: POS) between April 18, 2002 and August 25, 2003, inclusive, against the Company and certain officers and directors of the Company. During the class period, the Company represented that its business was performing strongly and that it expected its revenues and earnings to continue to grow rapidly. The Company particularly emphasized the performance and growth of its HRP subsidiary. In fact, the Company was experiencing a slowdown in its revenue growth, in part, due to pharmaceutical clients' reduced spending on promotional items, including HRP's "newsletters." Moreover, retail pharmacies had become increasingly reluctant to distribute HRP's "newsletters" out of concern of the misleading nature of the "switch ads." On October 1, 2002, Catalina disappointed the market when, in its announcement updating its quarterly revenue and earnings outlook for the second quarter ended September 30, 2002 and the fiscal year ended March 31, 2003, the Company warned that, due primarily to problems experienced at its Health Resource division, it was reducing its earnings guidance for the full fiscal year 2003. The Company announced that it expected second quarter earnings to be in the range of $0.22 to $0.23 per share, on revenue growth of 6 to 8 percent over the prior year versus previous expectations of $.26 per share based on revenue growth of 15 to 20 percent. Moreover, the Company warned that for the full fiscal year 2003, it expected earnings in the range of $1.12 to $1.17 per share, on revenue growth of 10 to 13 percent versus previous expectations of revenue growth of 20 to 25 percent. As a result of this announcement, the price of Catalina common stock plummeted from the previous day's closing price of $27.97 per share to close at $17.90 per share, a drop of $10.07, or 36%. For more details, contact Fred Taylor Isquith, Gregory M. Nespole, Christopher S. Hinton, George Peters, or Derek Behnke by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com CHECK POINT: Charles Piven Commences Securities Suit in S.D. NY --------------------------------------------------------------- Law Offices Of Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Check Point Software Technologies, Ltd. (Nasdaq: CHKP) between July 10, 2001 and April 4, 2002, inclusive. The case is pending in the United States District Court for the Southern District of New York. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. For more information, contact Charles J. Piven by Phone: 410/986-0036 or by Email: hoffman@pivenlaw.com CROMPTON CORPORATION: Bernstein Liebhard Lodges Stock Suit in CA ---------------------------------------------------------------- Bernstein Liebhard & Lifshitz 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 or acquired Crompton Corporation (NYSE: CK) securities between October 26, 1998 and October 8, 2002, inclusive. The complaint charges Crompton and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants caused Crompton's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements by: (1) agreeing to charge prices at certain levels and otherwise to fix, increase, maintain or stabilize prices of rubber chemicals sold in the United States; (2) selling rubber chemicals at the agreed upon prices; and (3) inflating their profits via the above acts. As a result, the Company's shares traded at inflated prices enabling the Company to refinance its debt and consummate a major acquisition using its inflated securities as currency. For more information, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or (212) 779-1414 by E- mail at CK@bernlieb.com or visit the firm's Website: http://www.bernlieb.com FIRSTENERGY CORPORATION: Berger & Montague Files Ohio Stock Suit ---------------------------------------------------------------- Berger & Montague, PC initiated a securities class action on behalf of purchasers of the common stock of FirstEnergy Corporation (NYSE:FE) between April 24, 2002 and August 5, 2003, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. This case was filed in the United States District Court for the Northern District of Ohio. The complaint charges FirstEnergy 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. More specifically, the complaint alleges that defendants issued a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of FirstEnergy's 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 Company materially overstated its earnings, revenues, net income, and earnings per share; (2) that the Company had improperly accounted for costs incurred in connection with the deregulation of certain of its businesses by employing an inappropriately long amortization schedule, thereby understating costs and materially and artificially inflating earnings during the Class Period; (3) that the Company had materially overvalued certain leased power generation facilities that were carried as assets on the Company's balance sheet; (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. On August 5, 2003, the Company reported that it would have to restate its financial results for fiscal year 2002 and the first quarter of 2003 due to its improper accounting for its annual amortization expenses and for above-market leases. News of this shocked the market. Shares of FirstEnergy fell 8.5 percent to close at $31.33 per share on extremely heaving trading volume. For more details, contact Sherrie R. Savett, Glen L. Abramson, or Kimberly A. Walker, by Mail: 1622 Locust Street, Philadelphia, PA 19103, by Phone: (215) 875-3000, (888) 891-2289 - toll free by Fax: (215) 875-5715 by E-mail: Investorprotect@bm.net or visit the firm's Website: http://www.bergermontgue.com IMPATH INC.: Berger & Montague Lodges Securities Suit in S.D. NY ---------------------------------------------------------------- Berger & Montague, P.C. initiated a securities class action on behalf of purchasers of the common stock of IMPATH, Inc. (NasdaqNM: IMPH) between February 21, 2001 and July 29, 2003, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. The action is pending in the United States District Court for the Southern District of New York, against the Company and: (1) Carter Eckert, (2) James Agnello, (3) David Cammarata, (4) Richard P. Adelson, and (5) Anu D. Saad 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 February 21, 2001 and July 29, 2003. The complaint alleges that IMPATH's quarterly press releases and SEC filings were materially false and misleading because they failed to disclose that the Company had materially overstated its accounts receivables and improperly capitalized a material asset, thereby artificially inflating the Company's reported Class Period results and financial condition. On July 30, 2003, before the open of regular trading, IMPATH issued a press release announcing that its audit committee had begun an investigation into possible "accounting irregularities" by the Company and that the Company believes it had overstated its accounts receivable and had been improperly capitalizing its GeneBank asset. As a result of these developments, IMPATH warned that a restatement of previously filed financial reports was "likely," and that the Company has advised its creditors that its financial reports "may have been inaccurate as a result of these issues." In response to this announcement, the NASDAQ Stock Market halted trading in the Company's common stock and announced that the stock will not resume trading until IMPATH provides NASDAQ with additional information. For more details, contact Sherrie R. Savett, Douglas Risen, Esquire, or Kimberly A. Walker, by Mail: 1622 Locust Street, Philadelphia, PA 19103, by Phone: 888-891-2289 or 215-875-3000, by Fax: 215-875-5715, by e-mail: InvestorProtect@bm.net or visit the firm's Website: http://www.bergermontague.com SOLUTIA INC.: Bernstein Liebhard Commences Stock Suit in N.D. CA ---------------------------------------------------------------- Bernstein Liebhard & Lifshitz, 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 or acquired Solutia Inc. (NYSE: SOI) securities between August 7, 1998 and October 10, 2002, inclusive. The complaint charges Solutia and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Solutia maintained a 50% interest in Flexsys, Nev. (a supplier of process chemicals to the rubber industry) for which Solutia used the equity method of accounting. The complaint alleges that by engaging in the alleged illegal acts, as described below, defendants were able to recognize equity interest and control over Flexsys. Solutia's equity earnings from Flexsys were as follows: $11 million in 2002, $12 million in 2001 and $12 million in 2000. During the class period, defendants caused Solutia's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements via their control over Flexsys by: (1) agreeing to charge prices at certain levels and otherwise to fix, increase, maintain or stabilize prices of rubber chemicals sold in the U.S.; (2) selling rubber chemicals at the agreed upon prices; and (3) inflating their profits via the above acts. For more information, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or (212) 779-1414, by E-mail: SOI@bernlieb.com or visit the firm's Website: http://www.bernlieb.com STELLENT INC.: Wolf Haldenstein Lodges Securities Lawsuit in MN --------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class action in the United States District Court for the District of Minnesota, on behalf of all persons who purchased or otherwise acquired the securities of Stellent, Inc. (Nasdaq: STEL) between October 2, 2001 and April 1, 2002, inclusive, against the Company and certain officers and directors of the Company. The Complaint alleges that leading up to the class period, the Company portrayed itself as an undervalued, fast growing business and lauded its "record" revenues. Throughout this period, the Company highlighted numerous awards, partnership agreements, distribution deals and a stock buy back program of "up to $20 million" in order to create interest in the stock and inflate the stocks price. Within a month of the stock buy back announcement, defendant Olson sold 50,000 shares of Stellent stock he personally held generating proceeds for himself of approximately $1.17 million. Despite Hanzlik's statements that the Company's repurchasing of its "undervalued" stock would be "good use of available funds," the Company ultimately issued more shares than it repurchased during fiscal year 2002 and did not buy back only $3.59 million of the $20 million worth of stock the Board of Directors had approved. In reality, the Company's revenues and earnings were misrepresented. The Company failed to disclose to shareholders that: (1) The Company had issued a loan to a distributor to assist the distributor in purchasing Stellent products; (2) Revenues had been inflated as the result of affiliated transactions with other businesses that the Company and its executives had significant ownership of; (3) The Company was experiencing deteriorating demand for its products; and (4) The Company's receivables were grossly over-valued. Before the stock market opened on April 1, 2002, Stellent warned the market that the revenues for the fourth quarter of its fiscal year 2002, would be almost 50 percent less than the Company's previous forecast. As a result of the Company's warning, the price of the Company's opened down $2.30 per share, or 24%, from the previous days close of $9.63. Over the next few days, the stock continued to decline and closed on April 3, 2002, at $7.37, down $2.26, or 23.5%, from the closing price of the stock the day before the warning. For more details, contact Fred Taylor Isquith, Christopher S. Hinton, George Peters, or Derek Behnke by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com SUREBEAM CORPORATION: Charles Piven Lodges Securities Suit in CA ---------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. commenced a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of SureBeam Corporation (Nasdaq:SUREE) between March 16, 2001 and August 20, 2003, inclusive. The case is pending in the United States District Court for the Southern District of California. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. For more information, contact the Law Offices Of Charles J. Piven, P.A. by Phone: 410/986-0036 or by Email: hoffman@pivenlaw.com ********* 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. Go to http://litigationdatasource.com/asbestos_defendant_profiles.html ********* 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. 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