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C L A S S A C T I O N R E P O R T E R
Thursday, April 8, 2004, Vol. 6, No. 70
Headlines
ARTEMIS INTERNATIONAL: Reaches Settlement For NY Securities Suit
CITGO PETROLEUM: NY Private Well Owners Commence Four Lawsuits
CITGO PETROLEUM: Trial in IL Contamination Suits Set Fall 2004
CITGO PETROLEUM: NY Court Orders Stay on Several MTBE Lawsuits
DAOU SYSTEMS: CA Court To Rule on Appeal of Stock Suit Dismissal
DYNABAZAAR INC.: Reaches Settlement For NY Securities Fraud Suit
EBS PENSION: Reaches Settlement For Fourth Party Complaint in DE
GENTEK INC.: DE Court Approves Settlement of Worker Injury Suit
GENTEK INC.: Automatic Stay on CA Personal Injury Suits Lifted
H&M OF NEW YORK: Recalls 6,300 Water Bottles For Choking Hazard
HANOVER COMPRESSOR: Settles Securities, Derivative, ERISA Suits
INTELLI-CHECK INC.: Reaches Settlement For NJ Securities Lawsuit
INVISION TECHNOLOGIES: NY Court Issues Injunction V. Stock Fraud
LANDACORP INC.: Plaintiffs Voluntarily Dismiss SPHS Merger Suit
LIQUID AUDIO: Committee Approves NY Securities Suit Settlement
NATIONAL MEDICAL: Administrative Judge Sanctions Ex-Controller
ONESOURCE INFORMATION: Faces DE Breach of Fiduciary Duty Suits
PC CONNECTION: Enters Settlement Discussions for Consumer Suit
PHILIPS INTERNATIONAL: Directors Seek Resolution of NY Lawsuit
REUNION INDUSTRIES: Faces Lawsuits Over Dealings with SFSC in CA
REVLON INC.: NY Securities Fraud Lawsuit Settlement Deemed Final
SAUDER WOODWORKING: Recalls 592T TV/VCR Carts For Injury Hazard
SPORTSLINE.COM: To Ask FL Court To Dismiss Securities Fraud Suit
SPORTSLINE.COM: Shareholder Launches Derivative Suit in S.D. FL
TELECOMMUNICACIONES DE PUERTO RICO: Subscribers Lodge Fraud Suit
UNITED LIBERTY: Enters Initial Mediation For Consumer Fraud Suit
UNITED STATES: Seven Americans Commence Suit Over "No-Fly" List
VAXGEN INC.: Expects CA Securities Lawsuits To Be Consolidated
WORLD AIRWAYS: Faces Seven Suits Over Charter Flights To Nigeria
VAXGEN INC.: Trial in Shareholder Derivative Suit Set March 2005
New Securities Fraud Cases
AGCO CORPORATION: Milberg Weiss Lodges Securities Lawsuit in GA
EL PASO: Weiss & Yourman Lodges Securities Suit in S.D. Texas
ROYAL DUTCH: Scott + Scott Commences ERISA Violations Lawsuit
TITAN CORPORATION: Cauley Geller Lodges Securities Suit in CA
TITAN CORPORATION: Schiffrin & Barroway Files Stock Suit in CA
*********
ARTEMIS INTERNATIONAL: Reaches Settlement For NY Securities Suit
----------------------------------------------------------------
Artemis International Solutions Corporation (formerly Opus360
Corporation) reached a settlement for the consolidated
securities class action filed against it in the United States
District Court for the Southern District of New York.
The Amended Complaint was brought on behalf of all persons who
acquired securities of the Company between April 7, 2000, and
March 20, 2001. Named as defendants in the Amended Complaint
were the Company, ten current and former officers and directors
of the Company, the underwriters of the Company's initial public
offering (IPO) and two shareholders who sold stock in a
secondary offering concurrent with the IPO.
The Amended Complaint alleged that, among other things, the
plaintiff and members of the proposed class were damaged when
they acquired securities of the Company because false and
misleading information and material omissions in the
registration statement relating to the IPO and the secondary
offering caused the price of the Company's securities to be
artificially inflated. The Amended Complaint asserted
violations of Sections 11, 12(a)(2), and 15 of the Securities
Act of 1933. Damages in unspecified amounts and certain
rescission rights were sought.
In October 2001, the Company and all other defendants filed
motions to dismiss the Amended Complaint. By Opinion and Order
dated October 2, 2002, the Court granted all of the motions and
dismissed the Amended Complaint, but granted plaintiffs leave to
serve a second consolidated amended class action complaint.
On October 30, 2002, plaintiffs served their Second Amended
Complaint, which contained allegations similar to those in the
Amended Complaint. The defendants, including the Company, moved
to dismiss the Second Amended Complaint on December 31, 2002.
Before the motion was heard, the parties reached an agreement in
principle to settle all claims asserted and any claims that
could have been asserted in this litigation.
On June 18, 2003 the Company announced that it had signed an
agreement for the settlement and release of all claims against
Artemis and those certain officers and directors and the
underwriters in the Second Amended Complaint. The Court
approved the settlement on October 10, 2003. The settlement
became final on November 12, 2003. The Company's insurer
covered substantially all of the $550,000 in total settlement
costs. The settlement should in no event be construed or deemed
to be evidence of or an admission or concession on the part of
the Company or any individually named defendant officer and
director with respect to any claim of any fault or liability or
wrongdoing or damage whatsoever.
CITGO PETROLEUM: NY Private Well Owners Commence Four Lawsuits
--------------------------------------------------------------
Discovery has yet to commence in four lawsuits filed against
CITGO Petroleum Corporation and others in New York state courts.
Two suits were filed by individual property owners, one was
filed by a public water supplier, and one is a purported class
action on behalf of private well owners in two New York
communities.
Dispositive motions are pending in all except the public water
supplier case. The defendants' motion to dismiss has been
denied and the parties are negotiating a scheduling order in
that case. A trial date has not been set.
CITGO PETROLEUM: Trial in IL Contamination Suits Set Fall 2004
--------------------------------------------------------------
The two lawsuits filed against CITGO Petroleum Corporation in
the Illinois State Court for Madison County are scheduled for
trial in the fall of 2004.
One of the suits is a purported class action on behalf of
Illinois private well owners. The other case was filed by the
Village of East Alton alleging contamination of its public water
supplies.
CITGO PETROLEUM: NY Court Orders Stay on Several MTBE Lawsuits
--------------------------------------------------------------
The United States District Court for the Southern District of
New York ordered a stay of all methyl tertiary-butyl ether
(MTBE) lawsuits filed against CITGO Petroleum Corporation not
pending in New York
To date, the Company has been served in approximately 32 of
these cases in California, Connecticut, New Hampshire, Illinois,
Indiana, Pennsylvania, Vermont and New York. Most of the
lawsuits were filed on behalf of public water suppliers and
allege MTBE contamination of public drinking water sources.
The New Hampshire case was filed by the New Hampshire State
Attorney General to protect the state's water resources. The
lawsuit seeks restoration and remediation, monitoring and
testing of all public and private water supplies in the state,
as well as compensatory and punitive damages and fines.
All cases are being removed to federal court, concurrent federal
declaratory judgment actions are being filed by certain of the
defendants in those federal courts, and Tag-Along Notices have
been filed with the federal Judicial Panel on Multidistrict
Litigation (JPML) requesting transfer and consolidation of all
of the cases to the Southern District of New York as part of MDL
1358, which was created in October 2000 to coordinate similar
litigation (now settled) and which remains administratively
open.
On December 19, 2003, Judge Shira Scheindlin, to whom MDL 1358
was previously assigned, entered an order requesting that all
MTBE cases, other than those pending before her, be stayed until
a decision is made by the JPML whether to transfer and
consolidate the cases as part of MDL 1358. Since that time, all
other recently filed cases have been stayed or are expected to
be.
Plaintiffs have moved or will move to remand each of the removed
cases. Briefing of the remand motions filed in two of the cases
pending before Judge Scheindlin has been completed but no
decision has been entered. Briefing of the remand motions
filed in the actions that have been stayed will not go forward
unless and until the stay orders are lifted. No discovery has
commenced.
DAOU SYSTEMS: CA Court To Rule on Appeal of Stock Suit Dismissal
----------------------------------------------------------------
The United States District Court for the Southern District of
California is expected to rule on the appeal of the dismissal of
the securities class action filed against Daou Systems, Inc. and
certain of its officers and directors in the second quarter of
2004.
On August 24, 1998, August 31, 1998, September 14, 1998 and
September 23, 1998, four separate complaints were filed. These
suits were later consolidated on January 21, 2000. Their second
amended complaint alleges that the Company improperly used the
"percentage-of-completion" accounting method for revenue
recognition. Claims are pleaded under both the 1933 Securities
Act (relating to the Company's initial public offering) and
section 10b of the 1934 Securities Act.
The complaint was brought on behalf of a purported class of
investors who purchased the Company's Common Stock between
February 13, 1997 and October 28, 1998, but it does not allege
specific damage amounts. A Motion to Dismiss the second amended
consolidated class action complaint was filed on February 22,
2000. On March 27, 2002, the Court granted the Motion but
extended to plaintiffs the opportunity to file a Third Amended
Complaint. The plaintiffs filed their Third Amended Complaint
on May 16, 2002, to which the Company responded with another
Motion to Dismiss. The Motion was filed on June 24, 2002 and
challenged the legal sufficiency of the allegations. As noted
above, on October 15, 2002, the Court granted that Motion, this
time with prejudice.
The plaintiffs timely noticed appeal and filed their Appellants'
Brief with the Ninth Circuit Court of Appeal on April 9, 2003.
On July 2, 2003, the Company filed its Respondents' Brief and
Cross-Appeal. The Cross-Appeal challenges the trial court's
failure to assess whether the complaint complied with applicable
pleadings standards. After the Appeal and Cross-Appeal were
fully briefed, oral arguments were heard before a panel in
February 2004. The Company is currently awaiting the court's
decision, which is expected after the second quarter 2004.
On October 7, 1998 and October 15, 1998, two separate complaints
were filed in the Superior Court of San Diego County,
California. These state court complaints mirror the allegations
set forth in the federal complaints. They also assert claims
for common law fraud and the violation of certain California
statutes. As with their federal counterparts, they do not
allege specific damage amounts.
On April 1, 1999, a Consolidated Amended Class Action was filed
on behalf of the same state court plaintiffs, and this new
complaint alleges the same factual basis as is asserted in the
federal litigation. The state litigation pleads claims for
fraud and violations of certain California Corporation Code
provisions. By stipulation of the parties and order of the
court, this state court litigation was stayed pending the
outcome of the motion to dismiss the federal lawsuits as well as
the resulting Appeal and Cross-Appeal.
DYNABAZAAR INC.: Reaches Settlement For NY Securities Fraud Suit
----------------------------------------------------------------
Dynabazaar, Inc. reached a proposed settlement for the
securities class action filed in the United States District
Court for the Southern District of New York against it and:
(1) Scott Randall (former President, Chief Executive
Officer and Chairman of the Board),
(2) John Belchers (former Chief Financial Officer),
(3) U.S. Bancorp Piper Jaffray Inc.,
(4) Deutsche Bank Securities Inc. and
(5) FleetBoston Robertson Stephens, Inc.
The suit was filed on behalf of all other similarly situated
persons who purchased the common stock of Dynabazaar between
March 14, 2000 and December 6, 2000. The lawsuit alleges that
certain underwriters of Dynabazaar's initial public offering
solicited and received excessive and undisclosed fees and
commissions in connection with that offering.
The lawsuit further alleges that the defendants violated the
federal securities laws by issuing a registration statement and
prospectus in connection with Dynabazaar's initial public
offering, which failed to accurately disclose the amount and
nature of the commissions and fees paid to the underwriter
defendants.
On October 8, 2002, the Court entered an Order dismissing the
claims asserted against certain individual defendants in the
consolidated actions, including the claims against Mr. Randall
and Mr. Belchers, without any payment from these individuals or
the Company. On February 19, 2003, the Court entered an Order
dismissing with prejudice the claims asserted against the
Company under Section 10(b) of the Securities Exchange Act of
1934. As a result, the only claims that remain against the
Company are those arising under Section 11 of the Securities Act
of 1934.
The Company has entered into an agreement-in-principle to settle
the remaining claims in the litigation. The proposed settlement
will result in a dismissal with prejudice of all claims and will
include a release of all claims that were brought or could have
been brought against the Company and its present and former
directors and officers.
EBS PENSION: Reaches Settlement For Fourth Party Complaint in DE
----------------------------------------------------------------
EBS Pension LLC reached a settlement for the fourth party
complaint filed against it and EBS Litigation, LLC in the United
States District Court in Delaware. The suit was brought by the
Third-Party Defendants:
(1) David B. Cooper, Jr.,
(2) Julian I. Edison,
(3) Peter A. Edison,
(4) Jane Evans,
(5) Alan A. Sachs,
(6) Craig D. Schnuck, and
(7) Martin Sneider
The suit was filed in the matter of EBS Litigation, L.L.C. v.
Barclays Global Investors, N.A., et al. C.A. No. 98-547 SLR.
Briefly, the Litigation brought by EBS Litigation alleged that
the Third Party Plaintiffs were liable for the return of D&B
stock received by them as a distribution from Edison in 1995.
The Third-Party Plaintiffs subsequently brought a Third-Party
claim in the Litigation alleging that if the Third-Party
Plaintiffs were found liable then the Edison Directors are
liable to the Third-Party Plaintiffs for all or a part of the
recovery.
The Fourth Party Complaint brought by the Edison Directors
alleges that if the Edison Directors are found liable in the
Third Party claim, then pursuant to Section 5.1(f) of the Plan
establishing the Indemnification Reserve, the Company and EBS
Litigation are liable to the Edison Directors for all costs and
expenses the Edison Directors have incurred or will incur in
connection with the Edison Director's defense of the Third Party
claim and with the prosecution of their Fourth Party Complaint.
Prior to the Litigation being filed, in February 2003, the
District Court hearing the Litigation referred the matter to
mediation before a magistrate judge. The mediation took place
on March 28, 2003. The mediation involves all claims involved
in the Litigation, as well as, the Fourth Party Complaint
indemnification claims brought by the Edison Directors against
the Company and EBS Litigation pursuant to indemnification
provisions in the Debtor's Amended Joint Plan or Reorganization.
There can be no assurances as to the outcome of any of the
claims as a result of the mediation, or the liability of the
Company, if any. The Fourth Party Complaint was also referred
to Mediation. The Mediation was continued at a mediation
conference on August 11, 2003. The mediation process concluded
with the parties reaching a proposed settlement.
On January 29, 2004, Judge Robinson in the U.S. District Court
for the District of Delaware approved the notice of settlement.
The notice of pendency of class action settlement was mailed to
the members of the class on February 12, 2004. The hearing on
the proposed settlement is set for March 31, 2004 at 4:00 p.m.
in Courtroom No. 6B at the United States Courthouse for the
District of Delaware.
GENTEK INC.: DE Court Approves Settlement of Worker Injury Suit
---------------------------------------------------------------
The Court of Common Pleas, Delaware County, Pennsylvania
approved the settlement of the individual and class action
lawsuits filed against Gentek, Inc. by employees of its Sunoco
refinery in Marcus Hook, Pennsylvania.
In April 1998, approximately 40 employees (and their respective
spouses) of the Sunoco refinery in Marcus Hook, Pennsylvania,
filed lawsuits in the Court of Common Pleas, Delaware County,
Pennsylvania, against General Chemical Corporation alleging that
sulfur dioxide and sulfur trioxide releases from the Company's
Delaware Valley facility caused various respiratory, pulmonary
and other injuries. Unspecified damages in excess of $50,000
for each plaintiff were sought. Active discovery has taken
place and the cases were initially set for trial in March 2003.
In addition, on September 24, 1999 the same attorneys that filed
the April 1998 individual actions also filed a purported class
action complaint against the Company, titled Whisnant vs.
General Chemical Corporation, (in the Court of Common Pleas,
Delaware County, Pennsylvania), on behalf of more than 1,000
current and former employees of the Sunoco Plant.
The complaint alleges that releases of sulfur dioxide and sulfur
trioxide caused injuries to the plaintiffs, and sought, among
other things, to establish a medical monitoring fund for
plaintiffs. In May 2002, the trial court denied plaintiffs'
motion to certify the case to proceed as a class action.
Plaintiffs filed an appeal of that decision.
Both the individual actions and the class action proceedings
were stayed as a result of the Company's bankruptcy filing. The
bankruptcy court lifted the automatic stay for the limited
purpose of allowing the parties to consummate a settlement
agreement that has been reached to resolve the individual and
class action lawsuits.
Pursuant to the settlement, the Company and its insurer will pay
a total of $2,095,000 ($1.3 million of which will be paid by the
Company's insurer) following final approval of the settlement by
the trial court. The settlement received preliminary approval
by the trial court and notice was sent to the class members.
Class members had until January 23, 2004 to opt out of the
Settlement, however, that deadline has been extended;
approximately 26 people have submitted opt out requests, but
approximately 4 reconsidered and opted-in before the extended
deadline. The settlement will become final after the exhaustion
of all appellate and termination rights, at which time payment
will be made.
GENTEK INC.: Automatic Stay on CA Personal Injury Suits Lifted
--------------------------------------------------------------
The automatic stay on litigation against Gentek, Inc. over its
Richmond, California facility has been lifted, allowing the
suits to proceed in California State Court.
Lawyers claiming to represent more than 47,000 persons have
filed approximately 24 lawsuits in several counties in
California state court (Alameda, Contra Costa, San Francisco
superior courts), making claims against General Chemical
Corporation and, in some cases, a third party arising out of a
May 1, 2001 release of sulfur dioxide and sulfur trioxide from
the Company's Richmond, California sulfuric acid facility.
The first case was filed in 2001 and all subsequent cases were
filed from March through July 2002. On May 1, 2002, a class
action lawsuit arising out of the same facts was also filed.
Some of the complaints also allege damages arising out of a
separate alleged release of sulfur trioxide from the Richmond
facility on November 29, 2001.
The lawsuits claim various damages for alleged injuries,
including, without limitation, claims for personal injury,
emotional distress, medical monitoring, nuisance, loss of
consortium and punitive damages. The Company filed a petition
for coordination to consolidate all of the state court cases
before a single judge, which was tentatively granted, but the
Company filed its bankruptcy petition before the final order was
entered. The state court cases were stayed as a result of the
Filing.
Approximately 73,000 proofs of claim were submitted in the
bankruptcy proceedings on behalf of the Richmond claimants,
seeking damages for the May 1, 2001 and/or November 29, 2001
releases. A preliminary review of the claimant list indicates
that the claimants include most of the plaintiffs in the state
court cases, plus several thousand duplicates and some
additional claimants. In addition, one class proof of claim was
submitted. A motion for class certification was filed but the
motion was later withdrawn. The Company filed a motion to lift
the automatic stay and discharge injunction to allow liquidation
of the claims to proceed in California State Court. That motion
was granted upon stipulation of the parties.
H&M OF NEW YORK: Recalls 6,300 Water Bottles For Choking Hazard
---------------------------------------------------------------
H&M is cooperating with the U.S. Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 6,300 Water
Bottles. The pull-up, black plastic drinking spout can detach,
posing a choking hazard to young children.
These are black plastic water bottles in green canvas sports
holders. "H&M" is written on the bottle and the strap of the
holder. The holder has a zip-up side, zipper pocket, a pocket
made with netting and an insulated silver lining.
H&M clothing stores nationwide distributed the water bottles as
a free premium with purchase of children's wear between February
2004 and March 5, 2004.
For more information, call the Company by Phone:
(877) 439-6261 between 8:30 a.m. and 5:30 p.m. ET Monday through
Friday, or visit their Website: http://www.hm.com.
HANOVER COMPRESSOR: Settles Securities, Derivative, ERISA Suits
---------------------------------------------------------------
Hanover Compressor Co. implemented the final settlement for the
shareholder class actions, derivative suits and Employee
Retirement Income Security Act (ERISA) violations suit filed
against it in Texas courts.
Commencing in February 2002, approximately 15 putative
securities class action lawsuits were filed against the Company
and certain of its current and former officers and directors in
the United States District Court for the Southern District of
Texas. These class actions (together with subsequently filed
actions) were consolidated into one case, "Pirelli Armstrong
Tire Corporation Retiree Medical Benefits Trust, On Behalf of
Itself and All Others Similarly Situated, Civil Action No. H-02-
0410," naming as defendants the Company, Michael J. McGhan,
William S. Goldberg and Michael A. O'Connor.
The complaints asserted various claims under Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and sought
unspecified amounts of compensatory damages, interest and costs,
including legal fees. The court entered an order appointing
Pirelli Armstrong Tire Corporation Retiree Medical Benefits
Trust and others as lead plaintiffs on January 7, 2003 and
appointed Milberg, Weiss, Bershad, Hynes & Lerach LLP as lead
counsel.
On September 5, 2003, lead plaintiffs filed an amended complaint
in which they sought relief under Sections 10(b) of the
Securities Exchange Act and Section 11 of the Securities Act
against Hanover, certain former officers and directors and its
auditor, PricewaterhouseCoopers LLP, on behalf of themselves and
the class of persons who purchased Hanover securities between
May 4, 1999 and December 23, 2002.
In the securities action, the plaintiffs allege generally that
the defendants violated the federal securities laws by making
misstatements and omissions in Hanover's periodic filings with
the SEC as well as in other public statements in connection with
the transactions that were restated in 2002.
Commencing in February 2002, four derivative lawsuits were filed
in the United States District Court for the Southern District of
Texas. Two derivative lawsuits were filed in state district
court for Harris County, Texas, one was non-suited and the
second was removed to Federal District Court for the Southern
District of Texas. One derivative lawsuit was filed in the Court
of Chancery for the State of Delaware in and for New Castle
County.
These derivative lawsuits, which were filed by certain of the
Company's shareholders purportedly on behalf of Hanover,
alleged, among other things, that the Company's directors
breached their fiduciary duties to shareholders in connection
with certain of the transactions that were restated in 2002, and
sought unspecified amounts of damages, interest and costs,
including legal fees.
The derivative lawsuits in the United States District Court for
the Southern District of Texas were consolidated on August 19
and August 26, 2002 into the Harbor Finance Partners derivative
lawsuit. With that consolidation, the pending derivative
lawsuits were:
(1) Harbor Finance Partners, derivatively on behalf of
Hanover Compressor Company, Michael J. McGhan, William
S. Goldberg, Ted Collins, Jr., Robert R. Furgason,
Melvyn N. Klein, Michael A. O'Connor, and Alvin V.
Shoemaker, Defendants and Hanover Compressor Company,
Nominal Defendant, United States District Court
for the Southern District of Texas
(2) Coffelt Family, LLC, derivatively on behalf of Hanover
Compressor Company, Michael A. O'Connor, Michael J.
McGhan, William S. Goldberg, Ted Collins, Jr., Melvyn
N. Klein, Alvin V. Shoemaker and Robert R. Furgason,
Defendants and Hanover Compressor Company, Nominal
Defendant, Court of Chancery for the State of Delaware
State Court in New Castle County
On October 2, 2003, the Harbor Finance Partners derivative
lawsuit was consolidated into the "Pirelli Armstrong Tire
Corporation Retiree Medical Benefits Trust" securities class
action.
On and after March 26, 2003, three plaintiffs filed separate
putative class actions against Hanover, certain named
individuals and other purportedly unknown defendants, in the
United States District Court for the Southern District of Texas.
The alleged class was composed of persons who participated in or
were beneficiaries of The Hanover Companies Retirement and
Savings Plan, which was established by Hanover pursuant to
Section 401(k) of the United States Internal Revenue Code of
1986, as amended.
The purported class action sought relief under ERISA based upon
Hanover's and the individual defendants' alleged mishandling of
Hanover's 401(k) Plan. The three ERISA putative class actions
are entitled:
(i) Kirkley v. Hanover, Case No. H-03-1155;
(ii) Angleopoulos v. Hanover, Case No. H-03-1064; and
(iii) Freeman v. Hanover, Case No. H-03-1095
On August 1, 2003, the three ERISA class actions were
consolidated into the "Pirelli Armstrong Tire Corporation
Retiree Medical Benefits Trust" federal securities class action.
On October 9, 2003, a consolidated amended complaint was filed
by the plaintiffs in the ERISA class action against Hanover,
Michael McGhan, Michael O'Connor and William Goldberg, which
included the same allegations as indicated above, and was filed
on behalf of themselves and a class of persons who purchased or
held Hanover securities in their 401(k) Plan between May 4, 1999
and December 23, 2002.
These actions alleged generally that, in connection with the
transactions that were restated in 2002, the Company and certain
individuals acting as fiduciaries of Hanover's 401(k) Plan
breached their fiduciary duties to the plan participants by
offering Hanover common stock as an investment option, failing
to provide material information to plan participants regarding
the suitability of Hanover common stock as an investment
alternative, failing to monitor the performance of plan
fiduciaries, and failing to provide material information
to other fiduciaries.
On October 23, 2003, the Company entered into a Stipulation of
Settlement, which settled all of the claims underlying the
putative securities class action, the putative ERISA class
action and the shareholder derivative actions described above.
The terms of the settlement provided for the Company to make a
cash payment of approximately $30 million (of which $26.7
million was funded by payments from Hanover's directors and
officers insurance carriers), issue 2.5 million shares of the
Company's common stock, and issue a contingent note with a
principal amount of $6.7 million. The note is payable, together
with accrued interest, on March 31, 2007 but will be
extinguished (with no money owing under it) if the Company's
common stock trades at or above the average price of $12.25 per
share for 15 consecutive trading days at any time between March
31, 2004 and March 31, 2007.
In addition, upon the occurrence of a change of control that
involves the Company, if the change of control or shareholder
approval of the change of control occurs before February 9,
2005, which is twelve months after final court approval of the
settlement, the Company will be obligated to contribute an
additional $3 million to the settlement fund.
As part of the settlement, the Company also agreed to implement
corporate governance enhancements, including allowing
shareholders owning more than 1% but less than 10% of its
outstanding common stock to participate in the process to
appoint two independent directors to the Company's board of
directors (pursuant to which on February 4, 2004 the Company
appointed Margaret K. Dorman and Stephen M. Pazuk to its board
of directors) and making certain changes to its code of conduct.
GKH Investments, L.P. and GKH Private Limited (collectively GKH)
which, as of December 31, 2003, together owned approximately 10%
of Hanover's outstanding common stock and which sold shares in
the Company's March 2001 secondary offering of common stock, are
parties to the settlement and have agreed to settle claims
against them that arise out of that offering as well as other
potential securities, ERISA, and derivative claims. The terms
of the settlement provide for GKH to transfer 2.5 million shares
of Hanover common stock from their holdings or from other
sources to the settlement fund.
On October 24, 2003, the parties moved the United States
District Court for the Southern District of Texas for
preliminary approval of the proposed settlement and sought
permission to provide notice to the potentially affected persons
and to set a date for a final hearing to approve the proposed
settlement. On December 5, 2003, the court held a hearing and
granted the parties' motion for preliminary approval of the
proposed settlement and, among other things, ordered that notice
be provided to appropriate persons and set the date for the
final hearing. The final hearing was held on February 6, 2004,
and no objections to the settlement or requests to be excluded
from the terms of the settlement had been received prior to the
deadline set by the court.
On February 9, 2004, the United States District Court for the
Southern District of Texas entered three Orders and Final
Judgments, approving the settlement on the terms agreed upon in
the Stipulation of Settlement with respect to all of the claims
described above including the dismissal of each of the actions
other than the Coffelt Family derivative action filed in the
Delaware Chancery Court. The court also entered an Order and
Final Judgment approving the plans of allocation with respect to
each action, as well as an Order and Final Judgment approving
the schedule of attorneys' fees for counsel for the settling
plaintiffs.
The time in which these Orders and Final Judgments may be
appealed expired on March 10, 2004 without any appeal being
lodged. In addition, on March 16, 2004, the Delaware Chancery
Court dismissed the Coffelt Family derivative action. The
settlement has therefore become final and will be implemented
according to its terms. In March 2004, the Company issued and
delivered to the escrow agent for the settlement fund 2.5
million shares of Hanover common stock, as required by the
settlement. The Company's independent auditor,
PricewaterhouseCoopers, is not a party to the settlement and
remains a party to the securities class action.
INTELLI-CHECK INC.: Reaches Settlement For NJ Securities Lawsuit
----------------------------------------------------------------
Intelli-check, Inc. reached a settlement for the class action
filed in the United States District Court for New Jersey on
behalf of short-sellers of the Company's stock, who allegedly
suffered losses because of the rise in the price of Company
stock.
In July 2002, the Company filed a motion to dismiss the lawsuit.
In July 2003 the court granted the motion to dismiss the
lawsuit. However, it did allow the Plaintiff to re-plead some
of the claims. The Plaintiff had filed an amended complaint
pertaining to certain of the pleadings.
Plaintiff has withdrawn the amended lawsuit with prejudice. The
settlement did not affect the Company's results of operations,
balance sheet or financial condition, it said in a disclosure to
the Securities and Exchange Commission.
INVISION TECHNOLOGIES: NY Court Issues Injunction V. Stock Fraud
----------------------------------------------------------------
The United States District Court for the Southern District of
New York issued a Preliminary Injunction continuing a freeze of
about $2.7 million in the accounts of certain Unknown Purchasers
of the Call Options of InVision Technologies, Inc.
The Securities and Exchange Commission's complaint alleges that
the frozen funds result from suspicious trading in call options
of InVision Technologies, Inc. in the days immediately prior to
a March 15, 2004, joint announcement by General Electric Company
(GE) and InVision, a manufacturer of explosive-detection
systems, that GE had agreed to acquire InVision in an all-cash
transaction valued at approximately $900 million, or $50 per
share of InVision common stock.
The Preliminary Injunction was issued in the Commission's
previously filed civil injunctive action, SEC v. One or More
Unknown Purchasers of Call Options for the Common Stock of
InVision Technologies, Inc., 04 Civ. 02037 (WHP) filed March 16,
2004.
The frozen proceeds are being held in accounts of UBS Securities
LLC, a U.S. brokerage firm and resulted from InVision call
option purchase orders that came to UBS Securities through
certain of its European affiliates. In addition to the freeze
provisions, the Preliminary Injunction continues the Temporary
Restraining Order's provisions requiring those who purchased the
InVision call options through the UBS Securities accounts to
identify themselves, and prohibiting the defendants from
destroying documents. To date, no defendant has come forward to
contact the Commission staff or the District Court.
Additionally, on March 31, 2004, the Commission amended its
complaint in the civil injunctive action to include additional
suspicious trading in InVision call options immediately ahead of
the joint GE/InVision announcement. The additional trading took
place in accounts of Deutsche Bank Securities Inc., a U.S.
brokerage firm, and resulted from purchase orders for InVision
call options placed through a Deutsche Bank Securities European
affiliate. These trades included orders to buy 1,000 April 45
InVision call options on March 12, 2004, the trading day
immediately prior to the GE/InVision joint announcement, at
prices ranging between $1.25 and $1.50 per contract. The
positions were sold the next trading day, at an average price of
$4.25 per contract, for a one-trading-day profit of
approximately $286,728.
On March 31, 2004, the District Court issued a second Temporary
Restraining Order in the Commission's action, this time ordering
a freeze of proceeds from the InVision option trading in the
Deutsche Bank Securities accounts, requiring those who purchased
those InVision call options to identify themselves, imposing an
expedited discovery schedule and prohibiting the defendants from
destroying documents.
LANDACORP INC.: Plaintiffs Voluntarily Dismiss SPHS Merger Suit
---------------------------------------------------------------
Plaintiffs voluntarily dismissed the securities class action
filed against Landacorp, Inc. in the Superior Court of Fulton
County, Georgia over the Company's merger with a wholly-owned
subsidiary of SHPS Holdings, Inc. (SHPS), where the Company's
shareholders will receive $3.09 per share in cash, and the
Company will become a wholly owned subsidiary of SHPS Holdings,
Inc. and its affiliates.
The suit, filed on behalf of the stockholders of the Company,
charges the Company and certain current and former members of
its Board of Directors with breaching their fiduciary duties in
connection with approving the Merger. The complaint seeks
declaratory relief and injunctive relief with respect to the
Merger, including an injunction preventing consummation of the
Merger. The complaint also seeks unspecified compensatory
damages, punitive damages, and fees and costs.
LIQUID AUDIO: Committee Approves NY Securities Suit Settlement
--------------------------------------------------------------
A special committee of Liquid Audio, Inc.'s board of directors
approved the proposed settlement of the securities class action
filed in the United States District Court for the Southern
District of New York against the Company, certain of its former
officers and directors, and various of the underwriters in the
Company's initial public offering (IPO) and secondary offering.
The suit, styled "In re Liquid Audio, Inc. Initial Public
Offering Securities Litigation, CV-6611," generally alleges that
various investment bank underwriters engaged in improper and
undisclosed activities related to the allocation of shares in
the Company's IPO and secondary offering of securities.
The plaintiffs brought claims for violation of several
provisions of the federal securities laws against those
underwriters, and also against the Company and certain of its
former directors and officers, seeking unspecified damages on
behalf of a purported class of purchasers of the Company's
common stock between July 8, 1999 and December 6, 2000.
Various plaintiffs filed similar actions asserting virtually
identical allegations against more than 40 investment banks and
250 other companies. All of these "IPO allocation" securities
class actions currently pending in the Southern District of New
York have been assigned to Judge Shira A. Scheindlin for
coordinated pretrial proceedings as In re Liquid Audio, Inc.
Initial Public Offering Securities Litigation, 21 MC 92.
Defendants have filed motions to dismiss the actions. In
October 2002, such directors and officers were dismissed without
prejudice. A proposal has been made for the settlement and
release of claims against the issuer defendants, including the
Company, in exchange for a contingent payment to be made by the
issuer defendants' insurance carriers and an assignment of
certain claims. The settlement is subject to a number of
conditions, including approval of the proposed settling parties
and the court.
NATIONAL MEDICAL: Administrative Judge Sanctions Ex-Controller
--------------------------------------------------------------
Robert W. Armstrong, III, formerly controller of National
Medical Care (NMC), a former subsidiary of W.R. Grace & Co. has
been sanctioned after a hearing before an administrative law
judge.
Mr. Armstrong was sanctioned for his role in W.R. Grace's scheme
to manipulate NMC's reported earnings to achieve predetermined
targets by accruing and then reducing reserves that were not in
accordance with Generally Accepted Accounting Principles in
order to offset higher-than-expected revenues or make up
shortfalls. W.R. Grace's quarterly and annual reports, filed
with the Securities and Exchange Commission (SEC) for the years
1991 through 1995, included financial statements that reported
the manipulated earnings.
The law judge concluded that Mr. Armstrong, although a reluctant
participant in the scheme, nonetheless violated and caused
violations of the antifraud, books and records, and reporting
provisions of the federal securities laws and ordered him to
cease and desist from such violations. The law judge dismissed
additional charges brought pursuant to an SEC rule under which
it can sanction accountants who appear or practice before it.
ONESOURCE INFORMATION: Face DE Breach of Fiduciary Duty Suits
-------------------------------------------------------------
OneSource Information Services, Inc. and its directors face two
purported class action lawsuits filed in the Delaware Court of
Chancery in February 2004, entitled "Hoffacker v. OneSource
Information Services, Inc., et al., Filing ID No.3140593," and
"Pennsylvania Avenue Funds v. Kamin, et al., Filing ID
No.3141683, respectively."
The complaints allege, among other things, that the defendants
breached their fiduciary duties in entering into the proposed
transaction with affiliates of ValueAct Capital. The complaints
seek unspecified damages and injunctive relief.
PC CONNECTION: Enters Settlement Discussions for Consumer Suit
--------------------------------------------------------------
PC Connections, Inc. is in settlement discussions with the
plaintiff in the consumer class action filed in the Superior
Court of California against it and numerous other computer-
related manufacturers and resellers. The suit alleges that the
defendants' listed memory specifications for MP3 players are
misleading.
The Company primarily obtain such specifications from the
manufacturers, and expect to be indemnified by them, although it
may be liable for some amount of damages. The Company may also
be required to modify the way MP3 player memory specifications
are set forth in our advertisements, it stated in a regulatory
filing. No specific amount has been claimed as damages.
PHILIPS INTERNATIONAL: Directors Seek Resolution of NY Lawsuit
--------------------------------------------------------------
Philips International Realty Corporation's board of directors is
seeking resolution of a class action was filed in the United
States District Court for the Southern District of New York
against the Company and its directors. The complaint alleged a
number of improprieties concerning the pending plan of
liquidation of the Company.
On November 9, 2000, the Court, ruling from the bench, denied
the plaintiff's motion for a preliminary injunction. This bench
ruling was followed by a written order dated November 30, 2000
wherein the Court concluded that the plaintiff had failed to
demonstrate either that it was likely to succeed on the merits
of its case or that there were sufficiently serious questions
going to the merits of its case to make it fair ground for
litigation.
On February 5, 2002 the Court denied the plaintiff's motion for
class action certification. The plaintiff may elect to proceed
with its claims on its own now that class certification has been
denied. The plaintiff also has asserted derivative claims for
alleged breaches of fiduciary duty by the directors of the
Company.
On February 28, 2002, the Company announced that the plaintiff
had sought permission from the Court of Appeals for the Second
Circuit to appeal the denial of class certification. In order
for plaintiff to have obtained permission to appeal, it had to
demonstrate that the denial of class certification effectively
terminated the litigation and that the District Court's decision
was an abuse of its discretion. The Company opposed plaintiff's
application. If the Court of Appeals granted plaintiff's
request, plaintiff would then have been able to appeal the
District Court's denial of class certification. On May 28,
2002, the United States Court of Appeals for the Second Circuit
ordered that the plaintiff's petition to appeal the District
Court's denial of class certification also be denied.
The Board of Directors of the Company is currently seeking final
resolution of this pending class action, and recovery of $2.1
million expended by the Company in defense of this action
pursuant of the terms of its directors' and officers' insurance
policy.
REUNION INDUSTRIES: Faces Lawsuits Over Dealings with SFSC in CA
----------------------------------------------------------------
Reunion Industries, Inc. continues to face several class actions
filed in the Superior Court for Los Angeles County California,
relating to loans that the Company received from Stanwich
Financial Services Corporation (SFSC).
The Company was initially named as a defendant in fifteen
consolidated lawsuits filed in December 2000 or early 2001 in
the Superior Court for Los Angeles County, California, three of
which are purported class actions asserted on behalf of
approximately 200 payees. The plaintiffs in these suits, except
one, are structured settlement payees to whom SFSC is indebted.
The Company and SFSC are related parties.
In addition to the Company, there are numerous defendants in
these suits, including SFSC, Mr. Charles E. Bradley, Sr., who is
Chairman of the Board, Chief Executive Officer and a director of
the Company and the sole shareholder of SFSC's parent, several
major financial institutions and certain others. All of these
suits arise out of the inability of SFSC to make structured
settlement payments when due. Pursuant to the court's order,
plaintiffs in the purported class actions and plaintiffs in the
individual cases actions filed a model complaint. Except for
the class allegations, the two model complaints are identical.
The plaintiffs seek compensatory and punitive damages,
restoration of certain alleged trust assets, restitution and
attorneys' fees and costs.
The plaintiffs in one of the suits are former owners of a
predecessor of SFSC and current operators of a competing
structured settlement business. These plaintiffs claim that
their business and reputations have been damaged by SFSC's
structured settlement defaults, seek damages for unfair
competition and purport to sue on behalf of the payees.
The plaintiffs allege that the Company borrowed funds from SFSC
and has not repaid these loans. The plaintiffs' theories of
liability against the Company are that it is the alter ego of
SFSC and Mr. Bradley and that the Company received fraudulent
transfers of SFSC's assets. The plaintiffs also assert direct
claims against the Company for inducing breach of contract and
aiding and abetting an alleged breach of fiduciary duty by SFSC.
On May 25, 2001, SFSC filed a Chapter 11 Bankruptcy Petition in
the U.S. Bankruptcy Court for the District of Connecticut. SFSC
filed an adversary proceeding in the bankruptcy case against the
plaintiffs seeking a declaration that the structured settlement
trust assets are the property of the bankruptcy estate. On July
16, 2001, the bankruptcy court granted a temporary restraining
order enjoining the plaintiffs from prosecuting their claims
against the Company, SFSC, Mr. Bradley and others. As a result
of this restraining order of the bankruptcy court, the Company
entered a standstill agreement with the plaintiffs on August 22,
2001. Pursuant to the standstill agreement and the stipulation
of the parties to the SFSC bankruptcy case, the plaintiffs,
while not agreeing to waive or release their direct claims
against the Company for damages, agreed to cease and desist the
prosecution of their claims against the Company until no earlier
than sixty days following service of written notice to the
Company stating that they have elected to unilaterally terminate
the standstill.
Plaintiffs filed second amended model complaints in the class
actions and individual cases on August 24, 2001. The court
granted plaintiffs' motion for class certification on February
13, 2002 and certified a class consisting of unpaid structured
settlement payees. Both model complaints allege causes of action
against the Company for interference with contract and aiding
and abetting breach of fiduciary duty. However, pursuant to the
standstill agreement, the plaintiffs are taking no action to
prosecute these claims against the Company at this time.
Certain of the financial institution defendants have asserted
cross-complaints against the Company for implied and express
indemnity and contribution and negligence. The Company denies
the allegations of the plaintiffs and the cross-complainant
financial institutions and intends to vigorously defend against
these actions and cross-actions.
A settlement (the "State Court Settlement") has been reached
among the plaintiffs and the following defendants (collectively,
the "Financial Institution Defendants") in the state court
action:
(1) Bankers Trust Co.,
(2) U.S. Trust Co.,
(3) Wells Fargo Bank,
(4) Bank of America,
(5) Bear Stearns and Settlement Services, Inc.
Under the settlement, the Financial Institution Defendants would
pay the plaintiffs $90,630,969 and Bankers Trust would receive
an assignment of the claims of the plaintiffs and the other
Financial Institution Defendants against the Company and certain
other defendants.
In the SFSC bankruptcy, the Company and certain others have
entered into a settlement (the "Bankruptcy Settlement") with
SFSC and Bankers Trust (for itself and as expected assignee of
the claims of the state court plaintiffs and the other Financial
Institution Defendants). The Bankruptcy Settlement, which has
been approved by the Bankruptcy Court, is subject to the
satisfaction of certain conditions, including the order entered
by the court in the state court action approving the State Court
Settlement becoming final.
Under the Bankruptcy Settlement, the Company would be obligated
to pay to SFSC $4.6 million (less a setoff of approximately
$310,000) by December 31, 2006, plus interest at 10% per annum
from the date on which SFSC's Plan of Reorganization becomes
effective and would be released from all claims that have been
made or could have been made by the plaintiffs and the Financial
Institution Defendants in the state court action and by SFSC in
its bankruptcy proceeding. The settlement amount would not
constitute a new liability of the Company, as the settlement
relates to indebtedness that is, and has been for some time,
included as a liability on the Company's balance sheet.
REVLON INC.: NY Securities Fraud Lawsuit Settlement Deemed Final
----------------------------------------------------------------
The settlement of the consolidated securities class action filed
against Revlon, Inc. and REV Holdings, Inc. is deemed final
after no appeal was filed in the United States District Court
for the Southern District of New York. The suit also names as
defendants certain of the Company's present and former officers
and directors.
The suit alleges among other things, violations of Rule 10b-5
under the Securities Exchange Act of 1934, as amended and limits
the alleged class to security purchasers during the period from
October 29, 1997 through October 1, 1998.
On June 30, 2003, the court approved the settlement agreement
that was executed in January 2003, which provides that the
defendants will obtain complete releases from the participating
members of the alleged class, and the period to appeal this
decision has expired.
A purported class action lawsuit was filed on September 27,
2000, in the United States District Court for the Southern
District of New York on behalf of Dan Gavish, Tricia Fontan and
Walter Fontan individually and allegedly on behalf of all others
similarly situated who purchased the securities of Revlon, Inc.
and REV Holdings Inc. between October 2, 1998 and September 30,
1999.
In November 2001, plaintiffs amended their complaint. The
amended complaint alleges, among other things, that Revlon,
Inc., certain of its present and former officers and directors
and REV Holdings Inc. violated, among other things, Rule 10b-5
under the Exchange Act.
In December 2001, the defendants moved to dismiss the amended
complaint. In light of the Insurance Settlement, the Company
does not expect to incur any further expense in this matter, it
said in a regulatory filing.
SAUDER WOODWORKING: Recalls 592T TV/VCR Carts For Injury Hazard
---------------------------------------------------------------
Sauder Woodworking Co. is cooperating with the U.S. Consumer
Product Safety Commission (CPSC) by voluntarily recalling about
592,000 TV/VCR carts. The carts can tip over and injure or kill
children and adults when the cart and the television fall.
The Company has received 13 reports of these carts tipping over.
The firm received a report of the death of a 19-month-old girl
in North Wales, Pennsylvania, who suffered a fractured skull
when the cart and television fell on her. There were four
reports of additional injuries involving children and adults.
One report involved a skull fracture to a child who recovered
and three reports involved bumps and bruises.
These TV/VCR carts were sold in a kit to be assembled by
consumers. They are identical in design and construction, but
not color. One model is a light-colored oak finish and the
other model is a dark-colored cherry finish. The TV/VCR carts
are about 29.5-inches wide, 18-inches deep and 27-inches high.
The carts are equipped with a top shelf intended to support up
to a 27-inch television, a middle shelf intended to hold a VCR
and a lower storage area intended to hold VCR tapes and
equipment. The products were provided with shelves for holding
VHS tapes that were to be installed on the inside of the two
hinged doors enclosing the lower storage area. The recalled
carts have four removable casters attached to each bottom corner
of the cart. The TV/VCR carts included in the recall are models
2655 and 2755. The model number is not on the cart, but it is
on the instruction booklet that came with the cart.
Department, discount and home electronic stores nationwide sold
these TV/VCR carts from January 1993 through December 1999 for
about $100.
For more information and to order the free repair kit, contact
the Company by Phone: (888) 800-4590 anytime, or visit the
firm's Website: http://www.sauder.com
SPORTSLINE.COM: To Ask FL Court To Dismiss Securities Fraud Suit
----------------------------------------------------------------
SportsLine.com, Inc. intends to ask the United States District
Court for the Southern District of Florida to dismiss the class
action filed against it, its chief executive officer and its
former chief financial officer, alleging violations of the
Securities Exchange Act of 1934, as amended.
The suit, styled "In re SportsLine.com Securities Litigation,
Master File No. 03-61849-CIV-MIDDLEBROOKS," was filed on behalf
of all persons who purchased the Company's common stock between
January 30, 2001 and September 25, 2003; and seeks money damages
in unspecified amounts and litigation expenses including
attorneys' and experts' fees. The essence of the allegations in
the complaint is that the Company intentionally or recklessly
made false or misleading statements in its previously issued
consolidated financial statements which were subsequently
restated due primarily to its failure to properly recognize non-
cash compensation expense relating to certain option grants.
The plaintiffs contend that such statements or omissions caused
the Company's stock price to be artificially inflated.
SPORTSLINE.COM: Shareholder Launches Derivative Suit in S.D. FL
---------------------------------------------------------------
A SportsLine.com, Inc. shareholder filed a derivative lawsuit in
the United States District Court for the Southern District of
Florida on behalf of the Company against its chief executive
officer, its former chief financial officer and each member of
the Company's Board of Directors as of September 25, 2003.
The plaintiff alleges violations of Section 304 of the Sarbanes-
Oxley Act of 2002 and breaches of fiduciary duty arising out of
the payment of incentive compensation by certain of the named
defendants and breaches of fiduciary duties and claims for
contribution and indemnification against all the named
defendants.
TELECOMMUNICACIONES DE PUERTO RICO: Subscribers Lodge Fraud Suit
----------------------------------------------------------------
Telecommunicaciones de Puerto Rico, Inc. face a class action
filed in the Superior Court of Puerto Rico by six residential
subscribers and eight business service subscribers under the
Puerto Rico Telecommunications Act of 1996 and the Puerto Rico
Class Action Act of 1971.
The plaintiffs claim that the Company's charges for touchtone
service are not based on cost, and are therefore in violation of
the Act. They have requested that the Court issue an Order
certifying the case as a class action, designate the plaintiffs
as representative of the class, find that the charges are
illegal, and order the Company to reimburse every subscriber for
excess payments made since September 1996.
On December 30, 2003, the Puerto Rico Telephone Company, Inc.
(wholly-owned by the company) filed its corresponding answer to
the complaint and requested the dismissal of the same based on
the grounds that the claim is not a legitimate class action
suit. On February 17, 2004, the plaintiffs filed their first
set of interrogatories and request for admissions as to initiate
a discovery proceeding. PRTC will ask the Court that the
threshold issue to decide first must be the class certification.
UNITED LIBERTY: Enters Initial Mediation For Consumer Fraud Suit
----------------------------------------------------------------
United Liberty Life Insurance Company has completed initial
mediation for the class action filed against it in the Court of
Common Pleas for Butler County, Ohio by two policyholders in
June 2000.
The complaint refers to a particular class of life insurance
policies that the Company issued over a period of years ending
around 1971. It alleges that the Company dividend payments on
these policies from 1993 through 1999 were less than the
required amount. It does not specify the amount of the alleged
underpayment but implies a maximum of about $850,000.
The plaintiffs also allege that the Company is liable to pay
punitive damages, also in an unspecified amount, for breach of
an implied covenant of good faith and fair dealing to the
plaintiffs in relation to the dividends. The action has been
certified as a class action on behalf of all policyholders who
were Ohio residents and whose policies were still in force in
1993.
The Company has denied the material allegations of the
complaint. Pre-trial discovery is continuing. The Company has
filed a motion for summary judgment, which has been completely
briefed and argued and awaits decision by the Court.
At the Company's request, an initial mediation session has been
completed and negotiations are continuing. As a pre-requisite
for the mediation, the Company offered to settle the matter for
payments over time, which would include attorneys' fees, and
which would be contingent upon an exchange or reformation of the
insurance policies currently owned by the members of the class.
UNITED STATES: Seven Americans Commence Suit Over "No-Fly" List
---------------------------------------------------------------
The United States government faces a class action filed by seven
American citizens, opposing the "no-fly" list, which is meant to
stop suspected terrorists from boarding planes, Reuters reports.
The plaintiffs allege they have been wrongly placed on the U.S.
Transportation Security Administration's "no-fly" list because
their names are similar or identical to names on the list. The
lawsuit, filed by the American Civil Liberties Union, demands
that the government remove their names so that they can travel
on planes without being interrogated and searched. The suit
also names as defendants the US Department of Homeland Security
and the Transportation Security Administration.
VAXGEN INC.: Expects CA Securities Lawsuits To Be Consolidated
--------------------------------------------------------------
Vaxgen, Inc. expects the securities class actions filed against
it in the United States District Court for the Northern District
of California to be consolidated. The suits also name as
defendants Chief Executive Officer Lance K. Gordon and former
President Donald P. Francis.
The suits uniformly allege violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 on behalf of class
of persons who purchased Company securities between August 6,
2002 and February 26, 2003. The suits allege that the
defendants misled investors about the progress of certain
clinical trials and its future manufacturing and marketing
WORLD AIRWAYS: Faces Seven Suits Over Charter Flights To Nigeria
----------------------------------------------------------------
World Airways, Inc. faces seven purported class action
complaints arising out of the discontinuance of charter flights
upon the expiration of the Company's obligation to provide
services under an air services agreement.
Four suits were filed in the United States District Court for
the Eastern District of New York, one in the United States
District Court for the Southern District of New York, one in the
Superior Court of DeKalb County, Georgia, and one in the United
States District Court for the Northern District of Illinois.
Four individual complaints were also filed - one in the United
States District Court for the Southern District of New York, one
small claims action in New York, one small claims action in New
Jersey, and one small claims action in California.
The Company had operated the charter flights between cities in
the United States and Lagos, Nigeria for Ritetime Aviation and
Travel Services, Inc. The Company's obligation to perform air
services for Ritetime ended with the last chartered flight on
December 30, 2003.
From the allegations made by the various plaintiffs, it appears
that Ritetime continued to sell tickets for flights purportedly
scheduled to depart after the expiration of the Company's
contractual obligations for air services. The plaintiffs
purport to act for themselves and on behalf of other persons who
held tickets issued by Ritetime for the non-contracted flights.
Ritetime is also named as a defendant in each of these lawsuits.
The plaintiffs seek compensatory, punitive and/or treble damages
and costs and expenses, including attorneys fees, based on
various legal theories including breach of contract, fraud,
negligent misrepresentation, unjust enrichment, illegal/excess
tax and violations of U.S. federal laws and regulations
governing air transportation and of the Federal Racketeer
Influenced and Corrupt Organization Statute.
The Company is cooperating with the DOT in its inquiry
concerning this matter. During March 2004, Ritetime filed a
Demand to Arbitrate in Peachtree City, Georgia, and subsequently
the Company responded and filed a counterclaim. The Company
believes that the allegations against it are without merit.
VAXGEN INC.: Trial in Shareholder Derivative Suit Set March 2005
----------------------------------------------------------------
Trial for the consolidated shareholder derivative suit filed
against certain of Vaxgen, Inc.'s current and former directors
is set for March 21,2005 in the California Superior Court for
San Mateo County. The suit names as defendants:
(1) Lance K. Gordon,
(2) Randall L-W. Caudill,
(3) William D. Young,
(4) Donald P. Francis,
(5) Phillip W. Berman,
(6) David W. Beier,
(7) Stephen C. Francis,
(8) Paul Allen and
(9) Vulcan Ventures, Inc.
Plaintiff purports to seek recovery on behalf of the Company and
allege that the Vulcan Defendants sold shares of Company stock
while in possession of material non-public information about the
Company. Plaintiffs, purportedly suing on behalf of VaxGen,
assert claims against all defendants for breach of fiduciary
duty, mismanagement, waste and unjust enrichment, and against
the Vulcan Defendants for breach of fiduciary duty and insider
trading.
The Company Directors and the Vulcan Defendants filed demurrers
challenging the demand futility allegations in the consolidated
complaint. The Court overruled the defendants' demurrers and
the parties have entered the discovery phase of the litigation.
New Securities Fraud Cases
AGCO CORPORATION: Milberg Weiss Lodges Securities Lawsuit in GA
---------------------------------------------------------------
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 Northern District of
Georgia on behalf of purchasers of AGCO Corporation ("AGCO")
(NYSE:AG) common stock during the period between February 6,
2003 and February 4, 2004.
The complaint charges AGCO and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934. AGCO is primarily engaged in
the manufacture and distribution of agricultural equipment and
related replacement parts worldwide.
The complaint alleges that during the Class Period, defendants
caused AGCO's shares to trade at artificially inflated levels
through the issuance of false and misleading financial
statements. As a result of this inflation, AGCO was able to
complete a private offering, raising proceeds of $150 million on
or about December 15, 2003.
Specifically, the complaint alleges that the statements
defendants issued during the Class Period were each materially
false and misleading when made as they failed to disclose and
misrepresented the following material adverse facts which were
then known to defendants or recklessly disregarded by them: (i)
the Company had improperly recorded revenue on its "bill and
hold" transactions where risk did not pass to the customer; and
(ii) as a result of the foregoing, the Company's revenue and
income recognition deviated from Generally Accepted Accounting
Principles and was therefore materially false and misleading.
On February 5, 2004, less than two months after the private
placement, the Company issued a press release which stated that
the Company's accounting practices were under investigation by
the SEC. The stock dropped below $17 per share on this news.
For more details, contact William S. Lerach by Mail: 401 B. St.,
Suite 1700, San Diego, CA 92101 by Phone: 800-449-4900 or by E-
mail: wsl@milberg.com
EL PASO: Weiss & Yourman Lodges Securities Suit in S.D. Texas
-------------------------------------------------------------
Weiss & Yourman initiated a securities class action against El
Paso Corporation (NYSE:EP) and its officers was commenced in the
United States District Court for the Southern District of Texas,
on behalf of purchasers of El Paso securities between March 30,
2003 and February 17, 2004.
The complaint charges the defendants with violations of the
Securities Exchange Act of 1934. The complaint alleges that
defendants issued false and misleading statements which
artificially inflated the stock.
For more details, contact Mark D. Smilow, James E. Tullman, or
David C. Katz, by Mail: The French Building, 551 Fifth Avenue,
Suite 1600, New York, New York 10176 by Phone: 888-593-4771 or
212-682-3025 or by E-mail: info@wynyc.co
ROYAL DUTCH: Scott + Scott Commences ERISA Violations Lawsuit
-------------------------------------------------------------
Scott + Scott, LLC initiated an ERISA action (Employee
Retirement Income Security Act of 1974) on behalf of the
participants and beneficiaries (not defendants) of the Shell
Provident and Shell Pay Deferral Investment Funds of Royal Dutch
Petroleum Company and affiliated companies (NYSE: RD and NYSE:
SC).
On April 2, 2004, five plaintiffs filed a class action complaint
under ERISA on behalf of the Shell Retirement Funds and the
thousands of the participants and beneficiaries of each whose
retirement accounts held securities in the Plans' Royal Dutch
Stock Fund from at least December 3, 1999 through and including
January 9, 2004 and who suffered losses due to defendants'
alleged breaches of fiduciary duties.
Plaintiffs allege that at least during this period, instead of
carefully observing their fiduciary duties to act solely in the
Plans' and the Class's best interests, defendants breached their
fiduciary duties by systematically and improperly manipulating
the financial results of the combined oil companies, Royal Dutch
Petroleum Company and Shell Transport and Trading Company, in
direct contravention of generally accepted accounting principles
("GAAP") and then misrepresenting such financial results to the
public and Class members.
Indeed, defendants deliberately violated accounting rules and
guidelines relating to oil and gas reserves which resulted in
shocking and unprecedented overstatements and the eventual
disclosures which materially affected the market and drove down
the value of the shares held in the Plans' Royal Dutch Stock
Fund-all to the detriment of the Class. On February 19, 2004,
Royal Dutch/Shell announced that the Securities and Exchange
Commission had begun a formal investigation into the Company's
surprise restatement of its oil and natural gas reserves.
Plaintiffs allege that defendants are liable under ERISA for
such breaches of fiduciary duty.
For more details, contact Neil Rothstein by Mail: Scott + Scott,
LLC is located at 108 Norwich Avenue, Colchester, CT by phone:
860/537-3818 by Fax: 860/537-4432 or by E-mail:
nrothstein@scott-scott.com.
TITAN CORPORATION: Cauley Geller Lodges Securities Suit in CA
-------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern
District of California on behalf of purchasers of The Titan
Corporation (NYSE: TTN) common stock during the period between
July 24, 2003 and March 22, 2004, inclusive.
The Complaint alleges that Titan, Gene Ray, Mark Sopp, and
Deanna Lund violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.
The Complaint alleges that defendants made material
misstatements with respect to the Company's financial results.
More specifically, the Complaint alleges that defendants failed
to disclose and indicate the following in defendants' effort to
get its merger with Lockheed Martin Corporation approved by
shareholders and various regulators:
(1) that foreign consultants for Titan were engaging in
questionable and potentially illegal activities;
(2) that foreign consultants for Titan made improper
payments to foreign government officials in violation
of Foreign Corrupt Practices Act;
(3) that Titan improperly accounted for the funds used in
these payments; and
(4) as a result, Titan's improper accounting for such
payments allowed Titan to enter into a definitive
merger agreement with Lockheed Martin.
On February 13, 2004, Titan announced that representatives of
Lockheed Martin and Titan recently initiated meetings with the
Department of Justice and the Securities and Exchange Commission
to advise of an internal review relating to certain agreements
between Titan and international consultants and related payments
in foreign countries.
On March 5, 2004, Lockheed Martin announced that it had learned
of allegations that improper payments were made, or items of
value were provided, by consultants for Titan or its
subsidiaries to foreign officials. Also on March 5, 2004, Titan
confirmed that it had learned of allegations that improper
payments were made, or items of value were provided, by
consultants for the company or its subsidiaries to foreign
officials. The allegations were identified as part of an
ongoing review conducted with Lockheed Martin of payments to
Titan's international consultants in connection with the
proposed acquisition of Titan by Lockheed Martin. News of this
shocked the market with shares of Titan falling $1.82 per share
to close at $19.11 per share.
On March 22, 2004, The Wall Street Journal reported that
internal investigators of both Titan and Lockheed Martin had
found that Titan had made potentially improper payments
oversees. According to the article, Titan made millions of
dollars in suspicious payments, some as recently as last year,
while competing for business in Africa, the Middle East, and
Asia. Moreover, the article reported that the Company was
scheduled to hold talks with the Department of Justice about a
possible plea agreement. On news of this shares of Titan fell
$0.43 per share to close at $19.73 per share.
For more details, contact Samuel H. Rudman, Esq., David A.
Rosenfeld, Esq., Jackie Addison by Mail: P.O. Box 25438, Little
Rock, AR 72221-5438 by Phone: 1-888-551-9944 by Fax:
1-501-312-8505 or by E-mail: info@cauleygeller.com
TITAN CORPORATION: Schiffrin & Barroway Files Stock Suit in CA
--------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities 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 The Titan Corporation (NYSE: TTN) from July 24, 2003
through March 22, 2004, inclusive.
The Complaint alleges that Titan, Gene Ray, Mark Sopp, and
Deanna Lund violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.
The Complaint alleges that defendants made material
misstatements with respect to the Company's financial results.
More specifically, the Complaint alleges that defendants failed
to disclose and indicate the following in defendants' effort to
get its merger with Lockheed Martin Corporation approved by
shareholders and various regulators:
(1) that foreign consultants for Titan were engaging in
questionable and potentially illegal activities;
(2) that foreign consultants for Titan made improper
payments to foreign government officials in violation
of Foreign Corrupt Practices Act;
(3) that Titan improperly accounted for the funds used in
these payments; and
(4) as a result, Titan's improper accounting for such
payments allowed Titan to enter into a definitive
merger agreement with Lockheed Martin.
On February 13, 2004, Titan announced that representatives of
Lockheed Martin and Titan recently initiated meetings with the
Department of Justice and the Securities and Exchange Commission
to advise of an internal review relating to certain agreements
between Titan and international consultants and related payments
in foreign countries.
On March 5, 2004, Lockheed Martin announced that it had learned
of allegations that improper payments were made, or items of
value were provided, by consultants for Titan or its
subsidiaries to foreign officials. Also on March 5, 2004, Titan
confirmed that it had learned of allegations that improper
payments were made, or items of value were provided, by
consultants for the company or its subsidiaries to foreign
officials. The allegations were identified as part of an
ongoing review conducted with Lockheed Martin of payments to
Titan's international consultants in connection with the
proposed acquisition of Titan by Lockheed Martin. News of this
shocked the market with shares of Titan falling $1.82 per share
to close at $19.11 per share.
On March 22, 2004, The Wall Street Journal reported that
internal investigators of both Titan and Lockheed Martin had
found that Titan had made potentially improper payments
oversees. According to the article, Titan made millions of
dollars in suspicious payments, some as recently as last year,
while competing for business in Africa, the Middle East, and
Asia. Moreover, the article reported that the Company was
scheduled to hold talks with the Department of Justice about a
possible plea agreement. On news of this shares of Titan fell
$0.43 per share to close at $19.73 per share.
For more details, 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
*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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