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/raid1/www/Hosts/bankrupt/CAR_Public/040126.mbx C L A S S A C T I O N R E P O R T E R Monday, January 26, 2004, Vol. 6, No. 17 Headlines ABORTION LITIGATION: House Panel Approves Fetus-Protection Bill ANTI-TERRORISM: ACLU Alleges Crime Database Threatens Privacy BINDI NORTH AMERICA: Recalls Desserts For Undeclared Soy Content COMPUTER ASSOCIATES: Board Approves Stock Settlement DAIMLERCHRYSLER AG: Kirk Kerkorian Disputes New Evidence In Suit EATON VANCE: Faces Lawsuit for Securities Violations in MA Court ENRON CORPORATION: Justice Dept Charges Ex-Officer With Fraud ENRON CORPORATION: SEC Files Securities Fraud Charges in S.D. TX EQUITY ADVISORS: SEC Asks Court To Dismiss Civil Injunctive Suit ARCHIBALD CANDY: Union Files Federal Lawsuit Over Plant Closure HERCULES INC.: Discovery Proceeds in Georgia Gulf Lawsuit in LA HERCULES INC.: Discovery Proceeds in Employees Suit in DE Court HERCULES INC.: Faces Several Suits Over Agent Orange Defoliant LEAR CORPORATION: Faces Informal SEC Probe Of Securities Filing NCI BUILDING: Reaches $7 Million Settlement For Securities Suits NOKIA CORPORATION: MD Court Dismisses Consumer Mobile Phone Suit PARMALAT FINANZIARIA: Police Search Morgan Stanley Amid Probe PENNSYLVANIA: Website Name In Pap Smear Lawsuit To Be Changed PHILIPPINES: Tribunal Orders Transfer of Marcos Funds to Govt SERVICE CORPORATION: Shareholders Launch Securities Suit in FL TALX CORPORATION: MO Court Yet To Rule on Stock Suit Dismissal TERRORIST ATTACK: Lawsuits Commence As Fund Deadline Approaches UNION PACIFIC: Employee Lodges Suit Over Contraceptive Coverage US VETERANS: Congressman, Vets To Commence Lawsuit Over Benefits WHITEHALL JEWELLERS: Court Yet To Grant Final Approval to Pact New Securities Fraud Cases ADVANCED MARKETING: Lasky & Rifkind Files Securities Suit in CA ADVANCED MARKETING: Cauley Geller Launches Securities Suit in CA ADVANCED MARKETING: Schiffrin & Barroway Lodges Stock Suit in CA ADVANCED MARKETING: Paskowitz & Associates Files CA Stock Suit ALLIANCE CAPITAL: Brian Felgoise Launches Securities Suit in NV DYNACQ HEALTHCARE: Goodkind Labaton Files Securities Suit in TX REDBACK NETWORKS: Wolf Haldenstein Lodges Securities Suit in CA ********* ABORTION LITIGATION: House Panel Approves Fetus-Protection Bill ---------------------------------------------------------------- The House Judiciary Committee approved the "Unborn Victims of Violence Act," a bill that would make it a separate federal crime to kill or injure a fetus during an attack on a pregnant woman, the Associated Press reports. Supporters nickname the bill the "Laci and Conner's law," after Laci Peterson, a pregnant Modesto, California woman who disappeared in late 2002. Her husband, Scott Peterson, is charged with murdering his wife and their unborn child. Under current law, "injuring or killing an unborn child during an attack against a pregnant woman has no legal consequence. This situation is unacceptable," Rep. Steve Chabot, R-Ohio, the bill's sponsor told AP. However, Democrats sitting on the panel labeled the bill "a thinly veiled attempt to erode abortion rights." Democrats and abortion rights groups said the real motive was to establish "fetal personhood" by giving separate federal protection to a fertilized egg, embryo or fetus. "This is part of a larger cultural war that is going on," said Rep. John Conyers of Michigan, top Democrat on the committee, AP reports. Congress has been divided on this highly controversial, election year issue - with Republicans on the committee all voted in favor of the bill, and all Democrats against. Similar "unborn victims" bills have twice before passed the House, in 1999 and 2001, but in both cases there was no action in the Senate, where abortion rights lawmakers enjoy a stronger position. Sen. Mike DeWine, R-Ohio, is sponsoring parallel legislation in the Senate this year. California and nearly 30 other states have laws giving different degrees of protection to fetal victims. The bill before Congress probably would not apply in the Peterson case because it covers only federal crimes, including kidnapping across state lines, drug-related drive-by shootings, and assaults occurring on federal property. Rep. Chabot stressed that this legislation "has nothing to do with abortion," and that it specifically states that it does not permit the prosecution of legal abortions carried out with the consent of the mother. However, he and other Republicans rejected an amendment, offered by Rep. Zoe Lofgren, D- California. She would have increased penalties for attacks on a pregnant woman leading to the interruption of a pregnancy but not confer separate legal rights to the fetus. ANTI-TERRORISM: ACLU Alleges Crime Database Threatens Privacy ------------------------------------------------------------- The American Civil Liberties Union (ACLU) criticized the Multi- state Anti-Terrorism Information Exchange, a seven-state crime database, alleging that it was a more powerful threat to privacy than its organizers acknowledge, the Associated Press reports. The database was launched with $12 million in federal funds. After obtaining documents relating to the program, the American Civil Liberties Union (ACLU) and other privacy advocates contended that the program closely resembled a scrapped Pentagon program that aimed to mine a vast pool of data to spot patterns useful in terrorism investigations. Congress cut off funding last year for the so-called Total Information Awareness program after a privacy outcry. The law enforcement officials and Matrix, a private database company behind the project, defended the database, saying it is merely an investigative tool that helps police quickly gather already-available information on suspects. The ACLU said that documents obtained through a Freedom of Information Act request filed with Pennsylvania clearly showed the Matrix's data-mining abilities. Among them were minutes of a 2002 planning meeting that said the FBI, the Secret Service, the Immigration and Naturalization Service and the Drug Enforcement Agency helped craft data-mining software for Matrix. That represents more federal involvement in the program than previously known, though the Departments of Justice and Homeland Security invested $12 million to get the system running. The Pennsylvania documents include security and privacy policies that say Matrix is usable only in active criminal or intelligence investigations. Barry Steinhardt, director of the ACLU's technology and liberty program, calls those guidelines too broad and susceptible to abuse, AP reports. Clay Jester, Matrix coordinator for the Institute for Intergovernmental Research, the nonprofit group helping to expand the project from its original implementation in Florida, called any comparisons to the defanged Pentagon data-mining program "a fallacy" resulting from misconceptions about Matrix. Matrix lets states share criminal, prison and vehicle information with each other and cross-reference it with up to 20 billion records in databases held by Seisint Inc, AP reports. The Seisint records include people's property, boats and Internet domains, their address history, utility connections, bankruptcies, civil court history, liens, voter registration and business filings. BINDI NORTH AMERICA: Recalls Desserts For Undeclared Soy Content ---------------------------------------------------------------- Bindi North America of Belleville, NJ, in cooperation with the U.S. Food and Drug Administration (FDA), is recalling several of its dessert products because they contain undeclared soy. People who have allergies to soy run the risk of serious or life-threatening allergic reaction if they consume these products. There is no health risk to people who do not have allergies to soy. The products that are being recalled are chocolate chip cheesecake, chocolate ganache cheesecake, chocolate fondant cake, chocolate raspberry fondant cake, white chocolate mousse cake, and chocolate sorbet. The recalled cakes were distributed nationwide in restaurants and in retail stores in the state of New Jersey. The recalled sorbet was distributed nationwide through mail order and in Bindi retail stores in the state of New Jersey. The cakes come either in 4.69 lb white cardboard boxes, or in clear plastic containers. The sorbet comes in plastic containers, or in natural cocoa pods which are wrapped in clear plastic film. All packages that were sold before January 2004 are affected. The recall was initiated after it was discovered that the soy- containing product was distributed in packaging that did not reveal the presence of soy. All cakes that have expiration dates of 1/2005 or later are properly labeled and are unaffected by this recall. All sorbet plastic containers that have expiration dates of 09/2005 or later are properly labeled. All sorbet in natural cocoa pods that have expiration dates of 01/2005 or later are properly labeled. Consumers who have purchased these products may return them to the place of purchase for a full refund if desired. Consumers with questions may contact the company at 1-800-88-BINDI. COMPUTER ASSOCIATES: Board Approves Stock Settlement ---------------------------------------------------- Computer Associates International, Inc.'s Governance, Audit, and Compensation and Human Resource Committees of the Board of Directors approved the Company's proposed settlement for several shareholder class action and derivative suits filed against the Company and several of its executives. The Company, its former Chairman and CEO, Charles B. Wang, Sanjay Kumar, and Russell M. Artzt were defendants in a number of stockholder class actions, the first of which was filed July 23, 1998, alleging that a class consisting of all persons who purchased the Company's common stock during the period January 20, 1998 until July 22, 1998 were harmed by misleading statements, misrepresentations, and omissions regarding the Company's future financial performance. These cases, which sought monetary damages, were consolidated into a single action in the United States District Court for the Eastern District of New York, the proposed class was certified, and discovery was completed. Additionally, in February and March 2002, a number of stockholder lawsuits were filed in the same court against the Company and Mr. Wang, Mr. Kumar, Mr. Ira H. Zar, the Company's former Chief Financial Officer, and in one instance Mr. Artzt. The lawsuits generally alleged, among other things, that the Company made misleading statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading in connection with the Company's financial performance. Each of the named individual plaintiffs in the 2002 lawsuits sought to represent a class consisting of purchasers of the Company's common stock and call options and sellers of put options for the period May 28, 1999 through February 25, 2002. The 2002 cases were consolidated, and the Company's former independent auditor, Ernst & Young LLP, was named as a defendant. In addition, in May 2003, a class action lawsuit captioned John A. Ambler v. Computer Associates International, Inc., et al. was filed in the same court. The complaint in this matter, a purported class action on behalf of the Computer Associates Savings Harvest Plan (the CASH Plan) and the participants and beneficiaries of the CASH Plan for a class period running from March 30, 1998 through May 30, 2003, asserted claims of breach of fiduciary duty under ERISA, the federal Employee Retirement Income Security Act. The named defendants were the Company, the Company's Board of Directors, the CASH Plan, the Administrative Committee of the CASH Plan, and the following current or former employees and/or Board members of the Company: (1) Charles B. Wang, (2) Sanjay Kumar, (3) Ira Zar, (4) Russell M. Artzt, (5) Peter A. Schwartz, (6) Charles P. McWade and (7) various unidentified alleged fiduciaries of the CASH Plan. The complaint alleged that the defendants breached their fiduciary duties by causing the CASH Plan to invest in Company securities and sought damages in an unspecified amount. A derivative lawsuit was filed against certain current and former directors of the Company, based on essentially the same allegations as those contained in the February and March 2002 stockholder lawsuits. This action was commenced in April 2002 in Delaware Chancery Court, an amended complaint was filed in November 2002, and a new derivative action, containing essentially the same allegations, was filed in the Federal Court in August 2003 in connection with the settlement described below. The defendants named in the amended and new complaints were the Company as a nominal defendant, current Company directors Mr. Kumar, Mr. Artzt, Mr. Ranieri and Mr. D'Amato, and former Company directors Mr. Wang, Ms. Kenny, and Mr. de Vogel, Mr. Grasso, and Mr. Pieper. The derivative suit alleged breach of fiduciary duties on the part of all the individual defendants and, as against the current and former management director defendants, insider trading on the basis of allegedly misappropriated confidential, material information. The amended and new complaints sought an accounting and recovery on behalf of the Company of an unspecified amount of damages, including recovery of the profits allegedly realized from the sale of common stock of the Company. On August 25, 2003, the Company announced plans to settle all outstanding litigation related to the stockholder and derivative actions. Following the approval of the Federal Court, which was granted in December 2003, and which is subject to appeal, the Company will issue a total of up to 5.7 million shares of common stock to the shareholders represented in the three class action lawsuits including payment of attorneys' fees. If the Company's share price is below $23.43 per share at the time of distribution, up to 2.2 million of the 5.7 million shares will be payable in cash at that price - or a maximum of $51.546 million in cash. In that case, the stock portion of the settlement would be reduced to no less than 3.5 million shares. In January 2004, approximately 1.6 million settlement shares were issued along with approximately $3.3 million to the plaintiffs' attorneys for attorney fees and related expenses. In settling the derivative suit, the Company committed to adopt and maintain certain corporate governance practices. Under the settlement, the Company and the individual defendants are released from any potential claim by shareholders relating to accounting-related or other public statements made by the Company or its agents from January 1998 through February 2002 (and from January 1998 through May 2003 in the case of the employee ERISA action), and the individual defendants are released from any potential claim by the Company or its shareholders relating to the same matters. Ernst & Young LLP is not a party to the settlement. The settlement was reviewed by the independent directors who chair the Company's Governance, Audit, and Compensation and Human Resource Committees of the Board of Directors as well as by all non-interested, independent directors who were not named in any of the suits. It was also approved by the Board's independent directors as a whole. DAIMLERCHRYSLER AG: Kirk Kerkorian Disputes New Evidence In Suit ---------------------------------------------------------------- Billionaire investor Kirk Kerkorian challenged the findings of a probe into an evidence fumble that halted the trial of his fraud lawsuit against DaimlerChrysler AG, the Associated Press reports. Papers filed with the federal court say there is still no explanation for the sudden appearance late in the trial of documents Mr. Kerkorian's attorneys say were important to his case. Collins J. Seitz, the special master charged by the court with investigating the circumstances behind the late discovery of the documents, concluded the most likely explanation involved errors by two photocopying companies. He found no evidence indicating German-U.S. auto giant DaimlerChrysler hid the documents. U.S. District Judge Joseph Farnan is expected to make a final determination on the appropriate remedy for the late discovery of the notes. Papers filed Wednesday in U.S. District Court in Wilmington, Delaware say Mr. Kerkorian will seek sanctions against DaimlerChrysler for failure to hand over the evidence earlier. The investor won't, however, ask Judge Farnan to find intentional misconduct as a basis for the sanctions. Judge Farnan in December recessed the trial so Mr. Seitz could gather facts on the handling of the documents, handwritten notes of top executives at the former Chrysler Corporation. Not shown to Kerkorian's lawyers during two years of preparation for the trial, the notes turned up two days before the trial was scheduled to end. Included in the late-revealed documents are notes that date back to the early days of merger negotiations between Chrysler and Daimler-Benz AG in 1998. EATON VANCE: Faces Lawsuit for Securities Violations in MA Court ---------------------------------------------------------------- Eaton Vance Distributors, Inc. faces a lawsuit filed in the United States District Court for the District of Massachusetts on behalf of Eaton Vance Tax-Managed Growth 1.1 by Michelle Yameen, a shareholder owning approximately 613 Class B shares of the Fund. The complaint alleges that EVD violated Section 36(b) of the Investment Company Act of 1940 by charging the Fund excessive distribution fees. The complaint seeks injunctive relief and the award to the Fund of the amount of allegedly excessive distribution fees received by EVD during a one-year period preceding December 3, 2003. ENRON CORPORATION: Justice Dept Charges Ex-Officer With Fraud -------------------------------------------------------------- The United States Department of Justice charged Enron Corporation's former chief accounting officer Richard Causey with helping engineer a "massive fraud" that sent the energy company's stock price soaring before it went bankrupt in an accounting scandal, Reuters reports. Mr. Causey, 44, was the Company's chief accounting officer from 1998 until the Company collapsed in late 2001. Mr. Causey and former chief financial officer Fastow were just below former Enron Chairman Ken Lay and former Chief Executive Jeff Skilling during the energy giant's Wall Street heyday. The Company's stock price reached a high of $90 before it plunged when the Company filed for bankruptcy in December 2001. Mr. Causey reported to Mr. Skilling and worked with Mr. Fastow and Treasurer Ben Glisan, who in September became the first Enron executive sent to prison for his role in the scandal. The indictment charges Mr. Causey helped create a scheme to fraudulently manipulate the Company's publicly reported financial results and artificially inflate its stock price. Mr. Causey, Mr. Fastow and other unidentified senior managers allegedly used devices like improper financial structures and manipulation of reserve accounts to mislead investors an artificially inflate financial results. Mr. Causey pleaded not guilty before U.S. Magistrate Judge Frances Stacy to all six charges in the indictment, five counts of securities fraud and one count of conspiracy to commit securities fraud. Mr. Causey faces a maximum of 55 years in prison and a $5.25 million fine if convicted. Judge Stacy released him on $1 million bail. The U.S. Securities and Exchange Commission said it was also filing a civil action against Mr. Causey accusing him of filing misleading financial statements about the company, Reuters reports. Mr. Causey surrendered to the FBI in Houston and was led in handcuffs into the federal courthouse, just days after Enron's former chief financial officer Andrew Fastow agreed to cooperate with prosecutors probing downfall. "The dominoes continue to fall as we expose the truth about the massive fraud at Enron," Assistant Attorney General Christopher Wray told Reuters. His lawyer, Reid Weingarten, told Reuters his client had committed no crime. "He did nothing wrong. He's not happy to be here," Mr. Weingarten said outside the FBI offices. ENRON CORPORATION: SEC Files Securities Fraud Charges in S.D. TX ---------------------------------------------------------------- The Securities and Exchange Commission charged Richard A. Causey, the former Chief Accounting Officer of Enron Corporation, with violating, and aiding and abetting the violation of, the antifraud, periodic reporting, books and records, and internal controls provisions of the federal securities laws, namely Sections 10(b), 13(a), 13(b)(2) and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a1, 13a-13, 13b2-1 and 13b2-2. The Commission is seeking disgorgement of all ill-gotten gains, civil money penalties, a permanent bar from acting as a director or officer of a publicly held company, and an injunction against future violations of the federal securities laws. The Commission brought this action in coordination with the Justice Department's Enron Task Force, which filed related criminal charges against Mr. Causey. As alleged in the complaint, Mr. Causey, along with others at Enron, engaged in a wide-ranging scheme to manipulate Enron's publicly reported earnings through a variety of devices designed to produce materially false and misleading financial results. As alleged, Mr. Causey and others: (1) fraudulently manipulated Enron's merchant asset portfolio; (2) improperly used "off-balance-sheet" special purpose entities (SPEs); (3) manipulated Enron's "business segment reporting" to conceal losses at Enron's retail energy business, Enron Energy Services (EES); (4) manipulated expenses to conceal losses at Enron's broadband unit, Enron Broadband Services (EBS); and (5) manipulated reserves in Enron's wholesale energy trading business to conceal earnings volatility and losses. The Complaint also alleges that Mr. Causey, and others, made false and misleading statements concerning Enron's financial results and the performance of its businesses, and that these misrepresentations also were reflected in Enron's public filings with the Commission. Specifically, the Commission's complaint charged the defendants with manufacturing earnings by fraudulently manipulating asset values. Mr. Causey and other senior Enron managers artificially increased the book value of certain assets in Enron's "merchant asset portfolio" to manufacture earnings needed to meet Enron internal budget targets. Because the portfolio included many energy-related businesses that were not publicly traded, Enron valued the businesses according to its own internal accounting "models." Enron then manipulated these models in order to produce results necessary to meet internal budget targets. For example, under the direction of Mr. Causey and others, Enron personnel fraudulently increased the value of one of the largest of Enron's merchant assets, Mariner Energy, Inc., by $100 million in the fourth quarter of 2000; The suit also alleged the use of SPEs to manipulate reported financial results. Mr. Causey and others entered into fraudulent transactions with LJM Cayman, L.P and LJM2 Co- Investment, L.P., two "off-balance sheet" SPEs created and managed by Andrew Fastow, Enron's then-Chief Financial Officer, to manipulate Enron's reported financial results. These transactions primarily took the form of purported "asset sales," which were used to manufacture earnings for Enron and conceal debt. The transactions were not arm's-length and could not have been accomplished using legitimate independent counterparties. In many instances, the transactions were conducted pursuant to an undisclosed side agreement between Mr. Causey and Mr. Fastow that LJM would be guaranteed against loss in certain of its transactions with Enron, and that other losses to LJM would be made up through other transactions with Enron. In addition, the Commission's complaint describes Mr. Causey's role in the infamous "Raptor" transactions. Beginning in the spring of 2000, Enron and LJM engaged in a series of financial transactions with four SPEs called Raptor I, Raptor II, Raptor III and Raptor IV. Raptor I was designed to protect Enron from having to report publicly decreases in value in large portions of its energy "merchant asset portfolio" and technology investments by allowing Enron to "hedge" the value of those investments with an allegedly independent third party, known as Talon. The Raptor I structure, however, was invalid under applicable accounting rules because, among other things, Talon was not independent from Enron and LJM's investment in Talon was not at risk, and Mr. Causey and Mr. Fastow had entered into an oral side agreement that LJM would receive its initial investment in Talon ($30 million) plus a large profit ($11 million) from Enron, all prior to Talon engaging in any of the hedging transactions. To satisfy the side deal, Mr. Causey, Mr. Fastow, and others manufactured a transaction between Enron and Talon that generated a $41 million payment to LJM. Mr. Causey and others caused Enron to purchase a "put" on its own stock that had no business purpose, but instead was designed to ensure that LJM was returned its initial investment plus its promised profit. After satisfying the side deal, Enron used Raptor I to hedge the value of Enron's already-inflated assets. Mr. Causey and Mr. Fastow also used Raptor I to fraudulently misrepresent Enron's financial position by back-dating a hedge so that Enron could capture the all-time high stock value of one of the Enron assets at a time when they knew that the value had already declined. The suit also charged the defendants with concealing EES failures. Mr. Causey and others concealed massive losses at EES by fraudulently manipulating Enron's "business segment reporting." At the close of the first quarter of 2001, Enron, with Mr. Causey's approval, "reorganized" its business segments and moved a large portion of EES's business into Enron North America (ENA), part of Enron's wholesale energy business segment. The "reorganization" was fraudulently designed to conceal hundreds of millions of dollars of losses at EES, Enron's heavily touted retail energy trading business, which it would otherwise have had to disclose. Enron moved the losing portion of EES's business into ENA because, as Mr. Causey and others knew, ENA had ample earnings, including large reserves accounts as described below, and could cover the EES losses while continuing to meet Enron's internal budget targets. The defendants also concealed EBS Failures. In the first quarter of 2001, Mr. Causey and others concealed losses at EBS by fraudulently manipulating EBS's expenses. Mr. Causey manipulated EBS's expenses to ensure that EBS did not record first-quarter losses that exceeded the annual losses that Enron had budgeted for EBS and to achieve Causey's dictated first quarter 2001 financial result. The defendants also alleged manipulated reserves to conceal earnings volatility and losses. During 2000 and 2001, Enron's wholesale energy trading business, primarily its ENA business, began generating extraordinary trading profits as a result of rapidly rising energy prices in the western United States, especially in California. In order to mask these earnings and preserve them for later use, Mr. Causey and others fraudulently created and used reserve accounts within ENA both to conceal the extent of ENA's trading profits and to avoid reporting large losses in other areas of its business. The suit is styled "SEC v. Richard A. Causey, Civil Action No. H-04-0284." EQUITY ADVISORS: SEC Asks Court To Dismiss Civil Injunctive Suit ---------------------------------------------------------------- The Securities and Exchange Commission asked a federal judge to dismiss its pending civil injunctive action against Marc Barhonovich and his company, Equity Advisors. In connection with that dismissal, on January 21, the SEC entered a cease-and-desist and disgorgement order against Mr. Barhonovich and Equity Advisors, to which they consented without admitting or denying the SEC's findings. The Cease-and-Desist Order finds that Mr. Barhonovich violated Sections 17(a)(2) and (a)(3) of the Securities Act of 1933 in connection with the preparation and distribution of misleading newsletters touting thinly traded stocks of two public companies whose shares are quoted on the Over-the-Counter Bulletin Board. The Cease-and-Desist Order found that Mr. Barhonovich, acting as a consultant for the companies, hired the newsletter writers and paid for the mass faxing but failed to review the newsletters before they were publicly disseminated. The SEC also ordered Mr. Barhonovich to pay disgorgement and prejudgment interest stemming from his sales of stock during the faxing periods. The SEC had sued Mr. Barhonovich and Equity Advisors in U.S. District Court, alleging their actions violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The District Court Judge subsequently denied the SEC's request for a preliminary injunction against Mr. Barhonovich and Equity Advisors, but set trial on the SEC's request for a permanent injunction in September 2004. ARCHIBALD CANDY: Union Files Federal Lawsuit Over Plant Closure --------------------------------------------------------------- Archibald Candy Corporation faces a lawsuit filed in the United States District Court in Chicago, Illinois by workers at its 70- year-old Fanny May candy factory, alleging the Company violated federal labor law with its abrupt shutdown of the plant, the Associated Press reports. The suit, filed by Local 781 of the Teamsters Union, alleged that the Company failed to give workers 60 days' notice as required when it disclosed plans January 5 to close the plant. The plant is expected to close by the end of this month. The suit seeks an injunction against cuts of health coverage and severance pay in adherence to the terms of their contract, and also asks the court to appoint an arbitrator to settle the matter. "What we want is for Archibald to honor the contract that it signed," said Teamsters spokesman Brian Rainville, AP reports. Local 781 represents about half of Archibald's 625 factory workers. Archibald spokesman Ron Bottrell said Wednesday the company had not been served with a complaint. "The company has been in negotiations with the unions representing Archibald's employees and is optimistic that severance packages can be agreed to through collective bargaining and without the need for litigation," he told AP. HERCULES INC.: Discovery Proceeds in Georgia Gulf Lawsuit in LA --------------------------------------------------------------- Discovery is beginning in the consolidated class action filed against Hercules, Inc. in the 18th Judicial District Court for the Parish of Iberville, Louisiana. The suit also names as defendants: (1) the State of Louisiana, (2) American PetroFina, (3) Hercofina, (4) Ashland Oil, (5) International Minerals and Chemicals, (6) Allemania Chemical, (7) Ashland Chemical and (8) the Parish of Iberville Two suits were initially filed against the Company, styled "Jerry Oldham, et al. v. The State of Louisiana, et al., Civil Action No. 55,160," and "John Capone, et al. v. The State of Louisiana, et al., Civil Action No. 56,048C." The Oldham case is a purported class action comprised of as many as 4,000 plaintiffs, and the Capone case is a consolidated action by approximately 50 plaintiffs. The purported class members and plaintiffs, who claim to have worked or lived at or around the Georgia Gulf plant in Iberville Parish, allege injury and fear of future illness from the consumption of contaminated water and, specifically, elevated levels of arsenic in that water. As to the Company, plaintiffs allege that the Company, itself, and then as part of a joint venture, operated a nearby plant and, as part of those operations, used a groundwater injection well to dispose of various wastes, and that those wastes contaminated the potable water supply at Georgia Gulf. On October 17, 2002, the Company removed these matters to federal court. In January 2003, the U.S. District Court for the Middle District of Louisiana consolidated the Capone and Oldham matters with other lawsuits in which the Company is not a party. HERCULES INC.: Discovery Proceeds in Employees Suit in DE Court --------------------------------------------------------------- Discovery is ongoing in the class action filed against Hercules, Inc. in the Superior Court of Delaware, New Castle County, styled "Douglas C. Smith, Individually and on Behalf of All Others Similarly Situated v. Hercules Incorporated and Thomas Gossage, CA No. 01C-08-291 WCC." This lawsuit, which was filed on August 31, 2001, on behalf of Mr. Smith and a class of approximately 130 present and former Hercules employees, seeks payments under the "Integration Synergies Incentive Compensation Plan," a program put into place by the Company following its acquisition of BetzDearborn Inc. in October 1998. The goal of the Plan was to provide certain financial incentives to specific employees who were deemed to have significant impact on the integration of BetzDearborn Inc. into Hercules Incorporated. The amount to be paid under the Plan was tied to the successful achievement of "synergies," which were defined as the annualized reduction of expenses or improvement of profits realized as a result of the integration of BetzDearborn Inc. into Hercules. The lawsuit essentially alleges that the payments made under the Plan were not adequate and that the Company breached the terms of the Plan. The lawsuit seeks payments of between $25 million and $30 million, although the Company does not believe that any payments are owed to the class members. In February 2003, plaintiffs agreed to dismiss Thomas Gossage from the lawsuit. In June 2003, potential members who had previously signed releases in favor of the Company were provided an opportunity to "opt in" to the class, and the remaining class members were provided an opportunity to "opt out" of the class. As a result of this process, the size of the class has been reduced to approximately 87 members and, as a result, the maximum potential damages payable to the class, should plaintiffs prevail, should be significantly lower than the amounts noted above. HERCULES INC.: Faces Several Suits Over Agent Orange Defoliant -------------------------------------------------------------- Hercules, Inc. faces several class actions relating to Agent Orange, a defoliant that was manufactured by it and several companies, at the direction of the United States Government, and used by the United States Government in both Korea and Vietnam, primarily from 1965 to 1970. In 1984, as part of a class action settlement, the Company and other defendants settled the claims of persons who were in the United States, New Zealand and Australian Armed Forces who alleged injury due to exposure to Agent Orange. The suit was styled "In Re "Agent Orange" Prod. Liab. Litig., 597 F. Supp. 740 (E.D.N.Y. 1984)." Following that settlement, all claims for alleged injuries due to exposure to Agent Orange by persons who had served in the Armed Forces of those countries were treated as covered by that class action settlement. On June 9, 2003, the United States Supreme Court affirmed the decision of the United States Court of Appeals for the Second Circuit in a case captioned "Dow Chemical Company, et al. v. Daniel Raymond Stephenson, et al., 123 S. Ct. 2161 (2003)." As a result, the claims of persons who allege injuries due to exposure to Agent Orange and whose injuries first manifest themselves after exhaustion of the settlement fund created through the 1984 class action settlement may no longer be barred by the 1984 class action settlement. As a result, such persons may now be able to pursue claims against the Company and the other former manufacturers of Agent Orange. The Company is currently a defendant in sixteen lawsuits (including one purported class action) where plaintiffs allege that exposure to Agent Orange caused them to sustain various personal injuries. Despite the recent ruling by the United States Supreme Court, the Company believes that it has substantial meritorious defenses to these claims, denies any liability to plaintiffs and will vigorously defend all actions now pending or that may be brought in the future. LEAR CORPORATION: Faces Informal SEC Probe Of Securities Filing --------------------------------------------------------------- Lear Corporation faces an informal Securities and Exchange Commission (SEC) Inquiry into the Company's 2002 amendment of a 2001 securities filing, which disclosed that it employed or did business with several relatives of senior executives, the Associated Press reports. The Company's amended form 10-K revealed the names of 14 people working for or with Lear who are related to senior company executives. Among the transactions cited in the amended filing are $7.2 million in payments made in 2001 to Analysts International for software services and computer equipment. Analysts International's Sequoia Services Group employed Terrence Rossiter and Ray Green as sales representatives, the document says. Mr. Rossiter is the brother of Robert Rossiter, Lear's then-president and CEO, while Mr. Green is described as the brother-in-law of Charles Fisher, president of Lear's DaimlerChrysler division. Robert Rossiter is now chairman and CEO of Lear. The document also shows that David Way was sales director of Lear's premium car interiors division. The son of then-chairman Kenneth L. Way earned $186,081 in 2001 - including bonuses totaling $63,080, AP states. "No one's saying a red flag is raised here," Mel Stephens, the Southfield-based automotive supplier's vice president of investor relations and corporate communications, told The Detroit News. "We just have an informal, confidential inquiry from (the SEC). They're asking for some information. We're going to comply completely - give them whatever they want." SEC spokesman Timothy Warren told AP the agency does not comment on investigations and would not confirm that Lear is being probed. NCI BUILDING: Reaches $7 Million Settlement For Securities Suits ---------------------------------------------------------------- NCI Building Systems, Inc. reached a settlement for the class action lawsuits that had been filed in 2001 in connection with the restatement of the Company's financial statements for the last half of fiscal 1999, all of fiscal 2000 and the first quarter of fiscal 2001. The Company reached a proposed settlement of the lawsuits, without admitting any of the allegations against the Company or its officers, by agreeing to pay $7 million for the dismissal of all claims. This amount is within the Company's insurance coverage limits and has been agreed to by its insurance carriers. The Company has executed a definitive settlement agreement, which is subject to notice and the approval by the court and other procedural matters. NCI expects to complete the settlement before the end of its third fiscal quarter. Mr. Ginn commented, "We are pleased to announce the proposed settlement of these lawsuits, with no material impact on our financial results, and to be able again to focus all our attention on achieving profitable growth for our Company. This situation has reinforced our commitment to maintaining a strong ethical climate at NCI, supported by an effective internal control system designed to provide assurance as to the integrity and accuracy of the Company's consolidated financial statements." NOKIA CORPORATION: MD Court Dismisses Consumer Mobile Phone Suit ---------------------------------------------------------------- The United States District Court in Baltimore, Maryland dismissed a brain cancer suit filed against Nokia Corporation and other mobile phone companies, on behalf of Brian Barrett, an Atlanta resident who died in November 2002, due to brain tumor allegedly caused by mobile phone use, Global Wireless News reports. Justice Catherine Blake approved a request to drop the suit, which alleged mobile phone use causes brain cancer, and sought to force mobile phone companies to supply consumers with hands free devices to reduce health risks. Mr. Barrett is the second plaintiff among the nine with cancer lawsuits pending before Judge Blake to withdraw health litigation. In 2002, Blake threw out an $800 million cancer suit against wireless companies. A US appeals court in Richmond, Virginia, last year affirmed Judge Blake's decision. The same court will hear oral argument next month in a separate challenge to another Blake ruling that rejected five similar class actions. The outcome of the headset appeal, which turns on jurisdiction, could determine whether remaining brain-cancer suits remain in Judge Blake's court or return to various state courts. Government health officials here and overseas say research does not point to dangers from mobile phones, but add they cannot guarantee safety of wireless handsets until further research is conducted, Global Wireless News reports. PARMALAT FINANZIARIA: Police Search Morgan Stanley Amid Probe ------------------------------------------------------------- U.S.-based Morgan Stanley and Italy's Banca Intesa became the latest big banks drawn into an ever-widening investigation into the Parmalat scandal as financial police searched more offices in Milan on Wednesday, Reuters news reports. Magistrates trying to trace Parmalat's missing billions are looking at the group's ties with banks involved in the sale of its bonds, which totaled more than 8 billion euros. On Wednesday police took documents from Morgan Stanley and Intesa asset manager Nextra about Morgan Stanley's purchase of 300 million euros in Parmalat bonds from Nextra, a judicial source said, as well as the U.S. bank's later sale of the bonds. The searches were carried out on the suspicion that "Nextra and Morgan Stanley employees worked together with Parmalat to support its securities even as they knew the group's true situation," according to a search warrant read to Reuters over the phone by the source. Neither the banks themselves nor their employees are targets of the investigation. Nextra said in a statement it had done nothing wrong and was cooperating with the investigation, while a Morgan Stanley spokesperson confirmed without elaborating that its offices had been searched, Reuters reports. "I didn't know about it, I'm not worried," Intesa Chief Executive Officer Corrado Passera told reporters in Milan. Intesa is Italy's largest bank by assets. Mr. Passera said at a shareholders meeting last week that the Parmalat bond, which Nextra bought in June 2003 in a private placement, had been sold in four tranches in September and October to Morgan Stanley, which then sold it on again. Mr. Passera, who called the bond deal "normal," said he did not know who had bought the securities from Morgan Stanley. The latest searches in the scandal came amid fresh moves by the company's court appointed administrator Enrico Bondi to clear Parmalat's boardrooms of its founding family. Parmalat founder Calisto Tanzi, one of 11 people jailed in the fraud probe, has admitted to siphoning 500 million euros in funds out of the dairy firm, contributing to a hole in its accounts estimated at more than 10 billion euros. His son Stefano Tanzi quit the board of Parmalat and other affiliates and Calisto Tanzi's brother Giovanni and nephew Paolo also resigned from various linked companies, Parmalat said. "This sends a signal Bondi is starting to clean up the place," a source close to the matter told Reuters. Police earlier this month searched offices in Milan of Bank of America and took documents from Citigroup and Italy's Banca Popolare di Lodi as part of the probe, which is also being carried out in Parma. A former Bank of America executive in Italy is among at least 25 people being probed for possible market-rigging, fraudulent bankruptcy, falsified accounts and other offences. PENNSYLVANIA: Website Name In Pap Smear Lawsuit To Be Changed -------------------------------------------------------------- The University of Pittsburgh Medical Center's Magee-Women's Hospital and three law firms agreed to change the name of a web site being used to recruit women to join a class action suit, alleging a university-certified hospital certified thousands of Pap smears with doctors' signatures when they were never reviewed by physicians, the Associated Press reports. The University, law firms Lieff Cabraser Heimann & Bernstein of New York, Roda & Nast of Lancaster and Sprague & Sprague of Philadelphia, reached a settlement allowing the firms to continue the Web site under a name different than http://www.mageepapsmearsuit.com. The settlement was revealed in Pittsburgh federal court where a judge was scheduled to revisit a restraining order barring the law firms from using the hospital's name, AP reports. U.S. District Judge Arthur Schwab suggested that attorneys attempt to settle the matter before yesterday's injunction hearing, saying the law firms have a right to an Internet site to recruit class-action plaintiffs. He said the Web site shouldn't use a name or Web address that might confuse the public into thinking the site was affiliated with the hospital. PHILIPPINES: Tribunal Orders Transfer of Marcos Funds to Govt ------------------------------------------------------------- The Sandiganbayan tribunal court of the Philippines ordered the Philippine National Bank (PNB) to transfer to the government $683 million in funds allegedly illegally accumulated by the late former dictator Ferdinand Marcos, the Associated Press reports. The money was transferred from Mr. Marcos' Swiss bank accounts to a PNB escrow account in the late 1990s on the orders of the Swiss federal Supreme Court. Mr. Marcos, who was ousted in 1986 through a popular revolt, allegedly accumulated the wealth through massive corruption while in office. In July 2003, the Philippine Supreme Court ruled that the Marcos family failed to justify the source of its money, noting that the former dictator's wife, Imelda, legally earned only about $300,000 during her husband's two-decade reign. In November, the Court further ruled that Mr. Marcos illegally accumulated the money during his 20-year rule. The amount originally totaled $356 million in 1986, but grew with interest. The Sandiganbayan court ruling enforces last week's Supreme Court decision ordering the transfer of the money from an escrow account to the country's treasury. The Philippines National Bank has until early next week to make the transfer, Sheriff Ed Urieta told The Associated Press. Philippine law requires all recovered Marcos assets to be spent on land reform, but President Gloria Macapagal Arroyo said she wants a portion used to compensate 9,539 Filipinos who won a class action for human rights violations by the regime. SERVICE CORPORATION: Shareholders Launch Securities Suit in FL -------------------------------------------------------------- Houston-based Service Corporation International faces a securities class action filed by a group of investors in the United States District Court in Miami, Florida, the Associated Press reports. The suit, filed by Attorney Kenneth Vianale, also names as defendants three of the Company's executives. The Company, the world's largest in funeral services, was charged with misplacing bodies, overselling plots, smashing vaults and digging up remains to make room for new graves at the Menorah Gardens cemeteries it owned in Broward and Palm Beach counties in Florida. The Company agreed to settle two lawsuits for $100 million in December, and also settled a state lawsuit for $14 million. The suit alleges that the executives failed to disclose problems with mishandled remains and that the Company did not have enough money in reserve to deal with lawsuits stemming from the mistakes. The suit does not specify damages. Mr. Vianale told AP that shareholders affected by steep drops in the company's stock price were defrauded because company officials "made no disclosure of the problems at Menorah Gardens, which were substantial." SCI spokesman Don Mathis said he could not comment on the new lawsuit because he had not seen it, AP reports. TALX CORPORATION: MO Court Yet To Rule on Stock Suit Dismissal -------------------------------------------------------------- The United States District Court for the Eastern District of Missouri has yet to rule on Talx Corporation's motion to dismiss the consolidated class action filed against it and: (1) William W. Canfield, (2) Craig N. Cohen, (3) Richard F. Ford, (4) Stifel, Nicolaus & Company, Incorporated and (5) A.G. Edwards & Sons, Inc. The case was initially brought on behalf of all persons who purchased or otherwise acquired shares of the Company's common stock between July 18, 2001 and October 1, 2001, including as part of the Secondary Offering. The complaint alleges, among other things, that certain statements in the registration statement and prospectus for the Secondary Offering, as well as other statements made by the Company and/or the Individual Defendants during the Putative Class Period, were materially false and misleading because they allegedly did not properly account for certain software and inventory, did not reflect certain write-offs, and did not accurately disclose certain business prospects. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against the Company and the Individual Defendants, violations of Section 11 of the Securities Act of 1933 against the Company, the Individual Defendants and the underwriters, and violation of Section 15 of the Securities Act of 1933 against Mr. Canfield. In October 2002, the case was transferred from the Honorable Donald J. Stohr, United States District Judge, to the Honorable Henry E. Audrey, United States District Judge. The consolidated complaint seeks, among other things, an award of unspecified money damages, including interest, for all losses and injuries allegedly suffered by the putative class members as a result of the defendants' alleged conduct and unspecified equitable/injunctive relief as the Court deems proper. On May 20, 2002, the Company and the Individual Defendants filed a motion to dismiss the lawsuits, and the underwriter defendants filed a separate motion to dismiss. The plaintiffs filed their opposition to the motions to dismiss on June 19, 2002. The defendants' reply memoranda in support of the motions to dismiss were filed on July 9, 2002. The Court issued a Memorandum and Order on March 31, 2003 granting in part and denying in part the motion to dismiss. The Court's Order dismissed the plaintiffs' claims under Section 10(b) and 20(a) of the Exchange Act of 1934. The plaintiffs were granted leave to file an amended Consolidated Complaint on or before May 30, 2003. On May 29, 2003, plaintiffs in the several pending securities lawsuits filed an Amended Consolidated Complaint. The Amended Complaint changes the original Complaint by adding allegations pertaining to the Company's December 2002 restatement of financials and expanding the Putative Class Period to include all persons who purchased or otherwise acquired shares of the Company's common stock between April 25, 2001 and November 14, 2002. The Amended Complaint alleges, among other things, that certain details in the registration statement and prospectus for the Company's August 2001 secondary common stock offering, as well as other statements made by the Company and/or the Individual Defendants during the Amended Putative Class Period, were materially false and misleading because the Company: (1) capitalized instead of expensed $1.6 million related to a patent technology license agreement executed in March 2001; (2) expensed approximately $158,000 in bonus payments to executive officers in the first quarter of fiscal 2002 instead of the fourth fiscal quarter of 2001; (3) improperly recognized revenue and expenses during the Amended Putative Class Period; and (4) miscalculated diluted earnings per share during the Amended Putative Class Period. All of these matters were the subject of the Company's 2002 restatement of financials described in the Company's Form 10-K/A for the year ended March 31, 2002. The Amended Complaint also alleges, as did the original Complaint, that the Company did not properly account for certain software and inventory, did not reflect certain write-offs, and did not accurately disclose certain business prospects. The Amended Complaint seeks, among other things, an award of unspecified money damages, including interest, for all losses and injuries allegedly suffered by the putative class members as a result of the defendants' alleged conduct and unspecified equitable/injunctive relief as the Court deems proper. On July 30, 2003, the defendants filed a motion to dismiss the Amended Complaint. On September 26, 2003, plaintiffs filed their opposition to the motion to dismiss. On October 29, 2003, defendants filed their reply in support of the motion to dismiss. The company is currently engaged in settlement negotiations. However, due to the inherent uncertainties of litigation, the Company says it cannot accurately predict the ultimate outcome of the litigation. TERRORIST ATTACK: Lawsuits Commence As Fund Deadline Approaches --------------------------------------------------------------- Families of September 11 victims who still want to sue airlines, security companies and others for negligence have until Thursday to opt out of the federal government's compensation fund - the final step before what will probably be a lengthy legal battle, the Associated Press reports. Survivors of the nearly 3,000 people killed in the attacks had until December 22 to file initial paperwork with the federal program, but the fund gave them another month to submit the additional paperwork necessary to judge their cases. That deadline expires Thursday, although fund administrators will consider extenuating circumstances, like difficulty obtaining certain medical records. Aviation lawyer Mary Schiavo, who represents dozens intent on suing, told AP many of her clients spent Wednesday deciding which route to take. "There aren't many, but they have been fast and furious," Ms. Schiavo said. "As a litigator, it's been hard to be restrained for two years waiting for the fund" to close. To date, 2,924 death claims have been filed with the fund, and more than 4,300 claims for injuries relating to the attacks or the aftermath. By choosing the fund, families forgo the right to sue various US entities for alleged negligence related to the attacks. While estimates vary, lawyers for many of the families estimate nearly 100 families will ultimately sue. New York Federal Judge Alvin Hellerstein, who is overseeing the lawsuits, will hold a hearing early next month to begin laying out a pretrial schedule for the mammoth case. That will kick off the high-stakes court battle and begin the process of discovery and deposing witnesses that many families believe will show the companies did not follow their own security regulations. Ms. Schiavo said she will ask the judge for a trial date later this year, but could not predict when the case might actually be heard in open court. "Everybody's feet will be held to the fire," she told AP. UNION PACIFIC: Employee Lodges Suit Over Contraceptive Coverage --------------------------------------------------------------- Omaha-based Union Pacific Railroad faces a second class action filed by its employees, demanding the Company be required to provide prescription drug coverage for contraceptives, Knight- Ridder/ Tribune Business News reports. Samantha Brand, a Company employee, filed the suit in the United States District Court for the Western District of Washington. The suit alleges that Union Pacific's failure to include the coverage violates the portion of the Federal Civil Rights Act of 1964 that prohibits employers with 15 or more workers from making decisions on the basis of gender. The lawsuit calls for Union Pacific to provide coverage for contraceptives approved by the U.S. Food and Drug Administration and to reimburse employees who have paid for contraceptives themselves. Company spokesman John Bromley told the Tribune Business News the company had not yet seen the lawsuit but that it appeared to be identical to other lawsuits involving Planned Parenthood and filed against companies around the country. Ms. Brand is a union member, he said, and medical coverage is a matter for negotiation. Nonunion employees have had prescription contraceptive coverage "for some time," he said. "In theory, if the union wants to (add the coverage), then we'll do it. It's part of their health package negotiation," Mr. Bromley said. "It's something we would mutually agree on." The company disagrees that it has violated any of the statutes regarding discrimination, he added. Beverly Todd Nolte, vice president of communications for Planned Parenthood of Nebraska and Council Bluffs, said the case is interesting for Nebraska because the Company is one of its largest employers and the state is not among the 21 that have passed contraceptive-equity legislation. "Contraception really is basic health care because 85 percent of women will use contraception at some point, and if insurance doesn't cover it, they're paying out of their pocket," Ms. Nolte told the Tribune Business News. Several large employers, such as Albertsons, American Mobile Healthcare and Manpower, have added the coverage in the wake of a ruling in a lawsuit against Bartell Drug Co. in Seattle that the company had violated Title VII by failing to cover prescription contraceptives. "There's growing legal precedent as well as growing movement by companies to accept contraceptive coverage," Ms. Nolte said. US VETERANS: Congressman, Vets To Commence Lawsuit Over Benefits ---------------------------------------------------------------- Rep. Ted Strickland, D-Ohio, and advocacy group Vietnam Veterans of America intend to sue Department of Veterans Affairs Secretary Anthony Principi over the department's failure to publicize information about health care benefits and services for veterans and their families, the Associated Press reports. Citing a tight budget and overwhelming demand, the DVA stopped all efforts aimed at enrolling new veterans into the health care system. In a July 2002 memo, the department said that marketing health care services at health fairs, open houses or veterans meetings was inappropriate. After the VA opened its medical facilities to all veterans in 1998, veterans have waited as long as two years for appointments. Rep. Strickland told AP a congressional mandate requires the agency to perform outreach activities. He said he has written to and met with Secretary Principi about the issue and decided to file the lawsuit only as a last resort. "Rationing care or rationing services is just not acceptable," Strickland, a member of the House Veterans Affairs Committee, told AP. Phil Budahn, a VA spokesman, didn't immediately comment on the lawsuit, AP reports. WHITEHALL JEWELLERS: Court Yet To Grant Final Approval to Pact -------------------------------------------------------------- Whitehall Jewellers, Inc. await the California State Court's final approval of the settlement for the wage hour class action filed in California against the Company by three former store managers. The case is based principally upon the allegation that store managers employed by the Company in California should have been classified as non-exempt for overtime purposes. In April 2003, the parties reached a preliminary agreement to settle the matter resulting in a pre-tax charge of $1,000,000, inclusive of the plaintiffs' attorneys' fees, interest, penalties, administrative costs and other Company costs. This settlement covers the period from July 25, 1998 through the date of final settlement approval by the court. The final settlement agreement was preliminarily approved on August 1, 2003 and notices have been sent to class members. Class members were given until October 17, 2003 to opt out of the settlement. New Securities Fraud Cases ADVANCED MARKETING: Lasky & Rifkind Files Securities Suit in CA --------------------------------------------------------------- Lasky & Rifkind, Ltd. Initiated a class action lawsuit in the United States District Court for the Southern District of California, on behalf of persons who purchased or otherwise acquired publicly traded securities of Advanced Marketing Services Inc. between January 16, 1999 and January 13, 2004, inclusive, against Advanced Marketing and certain officers and directors. The complaint alleges that during the Class Period defendants issued a series of false and misleading statements to the market, resulting in Advanced Marketing's stock price being artificially inflated. Specifically, on January 14, 2004, Advanced Marketing announced that it would restate its financial results for the fiscal years in the five-year period ended March 31, 2003. The restatement relates to the improper reporting of some liabilities as income as well as overestimated circulation for some publications. In response to this news, shares of Advanced Marketing fell $1.82 or 15%, to $10.15 per share. For more information, contact (800) 495-1868 to speak with an advisor. ADVANCED MARKETING: Cauley Geller Launches Securities Suit in CA ---------------------------------------------------------------- Cauley Geller Bowman & Rudman, LLP initiated a class action lawsuit in the United States District Court for the Southern District of California, on behalf of purchasers of Advanced Marketing Services, Inc. publicly traded securities during the period between January 16, 1999 and January 13, 2004, inclusive, against Advanced Marketing Services (AMS), and: (1) Charles C. Tillinghast, (2) Michael M. Nicita, and (3) Edward J. Leonard The lawsuit alleges that Defendants violated 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 failed to disclose and indicate (i) that the Company was improperly recognizing advertising revenue in violation of Generally Accepted Accounting Principals; (ii) that the Company improperly reported advertising liabilities as income in violation of GAAP; (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 values of the Company's earnings, net income and earnings per share were materially overstated at all relevant times. On January 14, 2004, AMS announced that it would restate its previously filed financial statements for the fiscal years in the five-year period ended March 31, 2003. The restatement resulted from the Company's ongoing review of its cooperative advertising practices and related accounting, and related primarily to the timing and quantification of recognition of revenue and reversal of accrued liabilities. News of this shocked the market. Shares of AMS fell 15.2% or $1.82 per share to close at $10.15 per share on extremely high volume on January 14, 2004. For more information, contact Samuel H. Rudman, or David A. Rosenfeld, Client Relations Department: Jackie Addison, Heather Gann or Chandra West, by Mail: P.O. Box 25438, Little Rock, AR 72221-5438, by Phone: 1-888-551-9944 (toll free), Fax: 1-501-312-8505, or by E-mail: info@cauleygeller.com. ADVANCED MARKETING: Schiffrin & Barroway Lodges Stock Suit in CA ---------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the Southern District of California, on behalf of all purchasers of the common stock of Advanced Marketing Services, Inc. from January 16, 1999 through January 13, 2004, inclusive, against Advanced Marketing Services (AMS), and: (1) Charles C. Tillinghast, (2) Michael M. Nicita, and (3) Edward J. Leonard The lawsuit alleges that Defendants violated 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 failed to disclose and indicate (i) that the Company was improperly recognizing advertising revenue in violation of Generally Accepted Accounting Principles; (ii) that the Company improperly reported advertising liabilities as income in violation of GAAP; (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 values of the Company's earnings, net income and earnings per share were materially overstated at all relevant times. On January 14, 2004, AMS announced that it would restate its previously filed financial statements for the fiscal years in the five-year period ended March 31, 2003. The restatement resulted from the Company's ongoing review of its cooperative advertising practices and related accounting, and related primarily to the timing and quantification of recognition of revenue and reversal of accrued liabilities. News of this shocked the market. Shares of AMS fell 15.2% or $1.82 per share to close at $10.15 per share on extremely high volume on January 14, 2004. For more information, contact Marc A. Topaz, or Stuart L. Berman, by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706, or by E-mail: info@sbclasslaw.com. ADVANCED MARKETING: Paskowitz & Associates Files CA Stock Suit -------------------------------------------------------------- The law firm of Paskowitz & Associates initiated a class action lawsuit in the United States District Court for the Southern District of California, on behalf of purchasers of Advanced Marketing Services Inc. common stock between January 16, 1999 and January 13, 2004, inclusive. The complaint alleges that certain Advanced Marketing senior officers, and the Company, violated the Securities Exchange Act of 1934. During the Class Period, Defendants are alleged to have issued or caused to be issued a series of false and misleading statements to the marketplace resulting in Advanced Marketing's stock price trading at artificially inflated levels. The Company's stock traded as high as $25.00 during the relevant period. On January 14, 2004, the Company announced that it would restate its previously filed financial statements for each of the fiscal years in the five-year period ending March 31, 2003. The false and misleading statements allegedly concern the Company's net income, advertising revenue and related costs. For more information, contact Laurence D. Paskowitz, by Phone: (212) 685-0969 or (800) 705-9529. ALLIANCE CAPITAL: Brian Felgoise Launches Securities Suit in NV --------------------------------------------------------------- The Law Offices of Brian M. Felgoise, P.C. initiated a securities class action in the United States District Court for the District of Nevada, on behalf of shareholders who acquired Alliance Capital Management Holdings L.P. securities between January 1, 2001 and September 30, 2003, inclusive, against the company and certain key officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. For more information, contact Brian M. Felgoise, by Mail: 261 Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046, by Phone: (215) 886-1900, or by E-mail: securitiesfraud@comcast.net. DYNACQ HEALTHCARE: Goodkind Labaton Files Securities Suit in TX --------------------------------------------------------------- Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class action in the United States District Court for the Southern District of Texas, on behalf of persons who purchased or otherwise acquired publicly traded securities of Dynacq Healthcare, Inc. between January 14, 2003 and December 18, 2003, inclusive, against the Company and: (1) Philip S. Chan, and (2) Chiu M. Chan 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. Specifically, the complaint alleges that Defendants fraudulently certified that Dynacq's financial statements for the first three quarters of fiscal 2003 were compiled in accordance with Generally Accepted Accounting Principles. On December 2, 2003, Dynacq announced that it was requesting an automatic extension of 15 days to file its Form 10K with the SEC. Then on December 18, 2003, the Company announced that its auditor, Ernst & Young LLP, had resigned due to the Company's "lack of internal controls necessary to develop reliable financial statements." On that same day the Company announced that NASDAQ would delist its shares for failing to file its annual documentation in a timely manner, and it was notified that the SEC had opened an investigation into the company's financial reporting. The market reacted negatively to this news, falling $4.86 per share, or approximately 54%, to $4.09 per share. For more information, contact Christopher Keller, by Phone: 800-321-0476, or by E-mail: investorrelations@glrslaw.com. REDBACK NETWORKS: Wolf Haldenstein Lodges Securities Suit in CA ---------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a class action lawsuit in the United States District Court for the Northern District of California, on behalf of all persons who purchased securities of Redback Networks, Inc. between April 12, 2000 and October 10, 2003, inclusive, against the defendants, certain officers and directors of the Company. The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the Class Period that had the effect of artificially inflating the market price of the Company's securities. Redback's initial public offering, on May 17, 1999, was priced at $23. On June 28, 1999, Redback announced a multi-year, multimillion dollar agreement with Qwest Communications International, Inc. Although the duration and the specific amounts of the contract were not quantified, on July 9, 1999, Redback stock was trading at $146. The Complaint alleges that Defendants knew that there was no real commitment by Qwest and that Qwest had entered into the agreement solely because Qwest executives had received shares of Redback stock on the IPO. Throughout the Class Period, Redback and Qwest continued this practice of Qwest purchasing products from Redback in exchange for Qwest executives receiving shares of Redback stock. Additionally, the complaint further alleges that Qwest did not need or want the large quantities of product it had ordered, and in fact, had no strong obligation to purchase more products in the future. For more information, contact Fred Taylor Isquith, Gregory M. Nespole, Christopher S. Hinton, 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. ********* 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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