/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/040520.mbx C L A S S A C T I O N R E P O R T E R Thursday, May 20, 2004, Vol. 6, No. 99 Headlines ART TECHNOLOGY: MA Court Dismisses All But One Claim in Lawsuit CESSO LLC: Recalls 15,000 Tree Stand Levelers For Injury Hazard EXXON MOBIL: Ohio Attorney General Lodges Retirement System Suit FORD MOTOR: Recalls Taurus, Mercury Sable Cars For Fire Hazard FORD MOTOR: Recalls 938,789 Ford Cars For Stop Lamp Malfunction GENAN IMPORT: Recalls 17,760 Lighting Pictures For Fire Hazard GENERAL MOTORS: Recalls Oldsmobile Aurora Cars For Fire Hazard GENERAL MOTORS: Recalls 3,662,211 Cars Because of Injury Hazard GO FRESH: Recalls Dried Fruit Mix Because of Undeclared Sulfites GRAND SUPERCENTER: Recalls Chocolate Cookies for Undeclared Eggs GRIC COMMUNICATIONS: Securities Pact To Be Presented Summer 2004 HOP LEE: Recalls Garoye Lily Flower Due to Undeclared Sulfites INTERCEPT INC.: Reaches Settlement For GA Securities Fraud Suit ITXC CORPORATION: Faces NJ Investor Lawsuit V. Teleglobe Merger KMART CORPORATION: Recalls 588 Safety Matches Due to Fire Hazard KOS PHARMACEUTICALS: Court Denies Plaintiffs' Writ of Certiorari MACATAWA BANK: MI Court Stays Trade Partners Investors Lawsuit NEW CENTURY: Reaches Settlement For TILA Violations Suit in CA NEW CENTURY: High Court Allows Appeal of Consumer Suit Dismissal NEW CENTURY: Files Motion Seeking Dismissal of Consumer Lawsuit NEW CENTURY: Plaintiffs Appeal CA Consumer Fraud Suit Dismissal NEW CENTURY: Court Grants Motion Removing 2 Defendants From Suit NEW CENTURY: Plaintiffs Seek Review of TILA Lawsuit Dismissal NEW CENTURY: Plaintiffs Seek Leave To File Amended TILA Lawsuit NEW CENTURY: Plaintiffs Appeal NY Yield Spread Lawsuit Dismissal NEW VALLEY: Seeks Summary Judgment For Remaining Claims in Suit PAYPAL.COM: Certification Hearing Reset To July 17, 2004 in CA PAYPAL.COM: Plaintiffs Voluntarily Dismiss DE, CA Stock Lawsuits PLAINS RESOURCES: Stockholders Launch Fiduciary Duty Suit in DE PROVIDIAN FINANCIAL: Discovery Proceeds in CA Securities Lawsuit PROVIDIAN FINANCIAL: Discovery Proceeds in NY Consumer Lawsuit PROVIDIAN FINANCIAL: Reaches $5.7M Settlement For CA Labor Suit PROVIDIAN NATIONAL: CA Consumers Lodge Breach of Contract Suit SEMINIS CORPORATION: CA Court Approves Stock Lawsuit Settlement SKECHERS USA: CA Employees Launch Overtime Violations Lawsuits SKECHERS USA: Plaintiffs File Consolidated Securities Suit in CA SKECHERS USA: Plaintiffs File Consolidated Derivative Suit in CA VITALWORKS INC.: CT Court Hears Motion To Dismiss Stock Lawsuit New Securities Fraud Cases GENTA INC.: Cohen Milstein Lodges Securities Fraud Lawsuit in NJ KRISPY KREME: Lasky & Rifkind Lodges Securities Suit in M.D. NC LANCER CORPORATION: Charles Piven Launches Securities Suit in TX MASTEC INC.: Chitwood Harley Lodges Securities Suit in S.D. FL MERILL LYNCH: Milberg Weiss Lodges Securities Lawsuit in S.D. NY NOVASTAR FINANCIAL: Scott + Scott Lodges Securities Suit in MO NYFIX INC.: Charles Piven Lodges Securities Fraud Lawsuit in CT SPSS INC.: Charles Piven Lodges Securities Fraud Suit in N.D. IL ********* ART TECHNOLOGY: MA Court Dismisses All But One Claim in Lawsuit --------------------------------------------------------------- The United States District Court for the District of Massachusetts dismissed all but one claim in the consolidated securities class action filed against Art Technology Group, Inc. and certain former officers. The suit alleges that the Company and certain former officers have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule10b-5 thereunder, which generally may subject issuers of securities and persons controlling those issuers to civil liabilities for fraudulent actions or defects in the public disclosure required by securities laws On December 13, 2001, the Court issued an Order of Consolidation in which it consolidated all actions filed against the Company and appointed certain individuals as Lead Plaintiffs in the consolidated action. It also appointed two law firms as Co-Lead Counsel, and a third law firm as Liaison Counsel. Counsel for the plaintiffs has filed a Consolidated Amended Complaint applicable to all of the consolidated actions. On April 19, 2002, the Company filed a motion to dismiss the case. The remaining allegation is based on the veracity of a public statement made by a former officer of the Company. CESSO LLC: Recalls 15,000 Tree Stand Levelers For Injury Hazard --------------------------------------------------------------- CESSO LLC is cooperating with the U.S. Consumer Product Safety Commission by voluntarily recalling 15,000 "Tree Lounge" Tree Stand Levelers. If the "Tree Lounge" is subjected to significant impact from a heavy load, a tube on the leveler can crack. If the leveler is installed beneath the "Tree Lounge," the bolts attaching the leveler to the "Tree Lounge" can bend or begin to pull through the leveler. In either of these circumstances, users can lose their balance and possibly fall. CESSO has received three reports of consumer injury associated with leveler failure. Levelers are designed for use with the "Tree Lounge" tree stand. The levelers are powder-coated green, with a T handle screw that spreads or contracts the two tubes of the leveler as necessary in order to level the "Tree Lounge" as the diameter of the tree changes during ascent or descent. Firm's Web site, mail-order catalogue and at outdoor specialty stores sold these items nationwide from January 2001 through December 2003 for about $70. Consumers should return their levelers to the firm for a free repair. For more details, contact CESSO, LLC by Phone: (800) 808-1541 between 9 a.m. and 5 p.m. ET Monday through Friday or by Mail: CESSO LLC at 8630 Wallace Tatum Road, Cumming, GA 30040. EXXON MOBIL: Ohio Attorney General Lodges Retirement System Suit ---------------------------------------------------------------- Ohio sued Exxon Mobil Corporation (XOM) on Tuesday, saying thousands of state retirees lost millions of dollars when the companies merged because Exxon misled investors about the value of its oil reserves, the Dow Jones Business News reports. Exxon "grossly overstated" the worth of its shares during merger negotiations with Mobil because it didn't reduce the value of its oil fields when prices dropped in the 1990s, Attorney General Jim Petro told Dow Jones. This meant investors got less value from their shares after the 1999 merger than they should have, he said. The Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio lost $40 million to $120 million, Petro said. Ohio is seeking to be lead plaintiff in a class-action lawsuit against Exxon Mobil because of the state's large losses. AG Petro likened the lawsuit to one he filed last summer against the media conglomerate then known as AOL Time Warner to recover hundreds of millions of dollars in investments lost by state retirement funds. AOL Time Warner stock plunged after the merger. In this case, Petro is alleging that the value of the shares was overstated, though the price did not fall. Exxon Mobil shares fell 36 cents to close at $42.69 Tuesday on the New York Stock Exchange, Dow Jones states. FORD MOTOR: Recalls Taurus, Mercury Sable Cars For Fire Hazard -------------------------------------------------------------- Ford Motor Company is cooperating with the National Highway Traffic Safety Administration by recalling 399,926 Ford Taurus cars, model 2003 and Mercury Sable cars, model 2003. The cars were manufactured from April 2002 to September 2003. On certain passenger vehicles, the air filter paper can smolder or burn. This can lead to damage to the air induction system on these vehicles and/or an underhood fire. Dealers will replace the air filter element. The manufacturer has reported that owner notification began on March 10, 2004. Owners may contact Ford at 1-800-392-3673. FORD MOTOR: Recalls 938,789 Ford Cars For Stop Lamp Malfunction --------------------------------------------------------------- Ford Motor Company is cooperating with the National Highway Traffic Safety Administration by recalling 938,789 Ford Taurus and Mercury Sable cars, model 2000 to 2003, manufactured from May 1999 to March 2003. Certain passenger vehicles are being recalled to correct a problem with a malfunctioning stop lamp switch and/or associated wiring. This malfunctioning could render the stop lamps inoperable or cause them to stay on all the time. This could cause confusion to a following driver, which could lead to a crash. In addition, if the switch and/or associated wiring fail in the open position, the brake lights will not actuate and the driver will not be able to shift the vehicle out of "Park." If they fail in the closed position, the brake lights will remain on, which will not allow the speed control to be activated. This could also cause the battery to discharge. Dealers will remove the stop lamp switch and associated wiring assembly and install a newly designed stop lamp switch and wire assembly. The manufacturer has reported that owner notification began on April 5, 2004. Owners may contact Ford at 1-800-392-3673. GENAN IMPORT: Recalls 17,760 Lighting Pictures For Fire Hazard -------------------------------------------------------------- Genan Import, Inc. is cooperating with the U.S. Consumer Product Safety Commission by voluntarily recalling 17,760 Kinetic Lighting Pictures (Moveable Waterfall Pictures). These pictures have inadequate construction, incorrect wiring, and use flammable materials, all of which pose fire and electric shock hazards to consumers. Genan Import has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The recalled Kinetic Lighting Pictures are framed artwork that utilize electric lights and sound and feature moving background scenes, including waterfalls and snow. Some of the pictures have nature scenes with a church or a barn in the background. The paintings come with wooden, glass mirror, or plastic frames that depict wolves, elephants, or dolphins. The pictures come in seven different sizes: 178cm x 112cm; 148cm x 99cm; 118cm x 74cm; 110cm x 74cm; 99cm x 48cm; 65cm x 47cm; and 41cm x 32cm. Dollar and furniture stores sold these items nationwide from June 2002 through February 2003 for between $20 and $150 (depending on the size of the picture). Return the picture to Genan Import for a refund. For information on returning the picture, consumers should call Genan Import by Phone: (800) 517-5795 between 9:30 a.m. and 4:30 p.m. CT Monday through Friday or log on to the company's Website: http://www.genanimport.com GENERAL MOTORS: Recalls Oldsmobile Aurora Cars For Fire Hazard -------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration by recalling 93,572 Oldsmobile Aurora cars, model 1995 to 1997, manufactured from September 1993 to June 1997. Certain passenger vehicles equipped with a 4.0-liter V8 engine have a condition in which the nylon tubing used in the fuel rail construction may degrade and crack. Additionally, the MY 1995 Aurora uses a unique underhood fuel return line that may crack. Cracking of the fuel rail or return line tubing can result in a fuel leak into the engine compartment. Fuel leakage, in the presence of an ignition source, could result in a fire. Dealers will install a new fuel rail assembly constructed out of stainless steel. Dealers will also install a revised chassis fuel return line. The manufacturer has reported that owner notification is expected to begin during May 2004. Owners may contact Oldsmobile at 1-800-630-6537. GENERAL MOTORS: Recalls 3,662,211 Cars Because of Injury Hazard --------------------------------------------------------------- General Motors Corporation is cooperating with the National Highway Traffic Safety Administration by recalling: (1) Chevrolet Silverado cars, year 2000-2004, (2) GMC Sierra cars, year 2000-2004, (3) Chevrolet Avalanche cars, year 2002-2004, and (4) Cadillac Escalade EXT, year 2002-2004 3,662,211 cars are potentially involved in the recall. They were manufactured from October 1999 to November 2003. On certain pickup trucks and sport utility vehicles, the galvanized steel tailgate support cables that retain the tailgate in the full open (horizontal) position may corrode, weaken, and eventually fracture. If both cables fracture, the tailgate suddenly drops and strikes the top surface of the rear bumper. Anyone sitting or standing on the horizontal surface of the tailgate when both cables fracture could be injured by the fall from the tailgate. On vehicles that have had the bumper removed, the tailgate may drop even lower. Additionally, if there is cargo on the tailgate the cargo may fall off if the support cables fracture. Dealers will replace the cables. The manufacturer has reported that owner notification is expected to begin during the third quarter of 2004. Owners may contact Chevrolet at 1-800-630-2438; Cadillac at 1-866-982-2339; or GMC at 1-866-996-9463. GO FRESH: Recalls Dried Fruit Mix Because of Undeclared Sulfites ---------------------------------------------------------------- GO FRESH PRODUCE, INC., 77 Riverdale Ave., Yonkers, NY 10701 is recalling GO FRESH DRIED FRUIT MIX because it contains undeclared sulfites. People who have severe sensitivity to sulfites run the risk of serious or life-threatening allergic reactions if they consume this product. The recalled GO FRESH DRIED FRUIT MIX sold in 6.5 oz., plastic containers were sold in the NYC area. The product's UPC number is 2983200033. The recall was initiated after routine sampling by New York State Department of Agriculture and Markets Food Inspectors revealed the presence of undeclared sulfites in packages of GO FRESH DRIED FRUIT MIX which did not declare sulfites on the label. The consumption of 10 milligrams of sulfites per serving has been reported to elicit severe reactions in some asthmatics. Anaphylactic shock could occur in certain sulfite sensitive individuals upon ingesting 10 milligrams or more of sulfites. No illnesses have been reported to date in connection with this problem. Consumers who have purchased GO FRESH DRIED FRUIT MIX should return it to the place of purchase. Consumers with questions may contact the company at 914-844-0238. GRAND SUPERCENTER: Recalls Chocolate Cookies for Undeclared Eggs ---------------------------------------------------------------- New York State Agriculture Commissioner Nathan L. Rudgers today warned consumers who are sensitive to eggs, not to consume certain "Haiti Soft Castle Chocolate Chip Cookies" distributed by Grand Supercenter, Inc., 47-08 Grand Avenue, Maspeth, New York 11378, due to the presence of undeclared eggs. People who are allergic to eggs run the risk of serious or life-threatening allergic reactions if they consume these products. Grand Supercenter, Inc. is voluntarily recalling the product. "Haiti Soft Castle Chocolate Chip Cookies" are packaged in a 2.29-oz., red and white cardboard box with code 2004.06.03.C. It is a product of Korea. The UPC number is 8 801019 301803. Routine sampling by New York State Department of Agriculture and Markets food inspectors revealed the product contained undeclared eggs. The product was distributed in the New York/New Jersey metropolitan area. No illnesses have been reported to date. Consumers who are allergic to eggs and purchased "Haiti Soft Castle Chocolate Chip Cookies" are urged to return them to the place of purchase. GRIC COMMUNICATIONS: Securities Pact To Be Presented Summer 2004 ---------------------------------------------------------------- GRIC Communications, Inc. expects the settlement of the consolidated securities class action filed against it and certain of its officers to be presented in the summer of 2004 to the United States District Court for the Southern District of New York, styled "In re GRIC Communications,Inc. Initial Public Offering Securities Litigation, No.01 Civ 6771 (SAS)." The suit was consolidated with more than three hundred substantially identical proceedings as In re Initial Public Offering Securities Litigation, Master File No.21 MC92 (SAS). The Consolidated Amended Class Action Complaint for Violation of the Federal Securities Laws was filed on April 19, 2002, and alleges claims against certain of the Company's officers and against CIBC World Markets Corporation, Prudential Securities Incorporated, DB Alex. Brown, as successor to Deutsche Bank, and U.S. Bancorp Piper Jaffray, Inc., underwriters of the Company's December 14, 1999 initial public offering (underwriter defendants). The suit was filed under Sections 11 and 15 of the Securities Act of 1933, as amended, and under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. Citing several press articles, the Consolidated Complaint alleges that the underwriter defendants used improper methods in allocating shares in initial public offerings, and claim the underwriter defendants entered into improper commission agreements regarding aftermarket trading in the Company's common stock purportedly issued pursuant to the registration statement for the initial public offering. The Consolidated Complaint also alleges market manipulation claims against the underwriter defendants based on the activities of their respective analysts, who were allegedly compromised by conflicts of interest. The plaintiffs in the Consolidated Complaint seek damages as measured under Section 11 and Section 10(b) of the Securities Act of 1933, pre-judgment and post-judgment interest, and reasonable attorneys' and expert witnesses' fees and other costs; no specific amount is claimed in the plaintiffs' prayer in the Consolidated Complaint. By Order of the Court, no responsive pleading is yet due, although motions to dismiss on global issues affecting all of the issuers have been filed. In October 2002, certain of the Company's officers and directors who had been named as defendants in the In re Initial Public Offering Securities Litigation were dismissed without prejudice upon order of the presiding judge. In February 2003, the presiding judge dismissed the Section 10(b) claims against the Company and its named officers and directors with prejudice. From September 2002 through June 2003, the Company participated in settlement negotiations with a committee of Issuers' litigation counsel, plaintiffs' executive committee and representatives of various insurance companies. The Company's Insurers were actively involved in the settlement negotiations, and strongly supported a settlement proposal presented to the Company for consideration in early June 2003. The settlement proposed by the plaintiffs would be paid for by the Insurers and would dispose of all remaining claims against the Company. After careful consideration, the Company decided to approve the settlement proposal in July 2003. Although the Company believes that plaintiffs' claims are without merit, it decided to accept the settlement proposal (which does not admit wrongdoing) to avoid the cost and distraction of continued litigation. Because the settlement will be funded entirely by its Insurers, the Company does not believe that the settlement will have any effect on the Company's financial condition, results or operations or cash flows. HOP LEE: Recalls Garoye Lily Flower Due to Undeclared Sulfites -------------------------------------------------------------- Hop Lee Trading Co., Inc., 337 Butler Street, Brooklyn, N.Y. 11217, is recalling Garoye Lily Flower because it may contain undeclared sulfites. People who have severe sensitivity to sulfites run the risk of serious or life-threatening allergic reactions if they consume this product. The recalled Garoye Lily Flower, sold in 6 oz., clear plastic packages were sold in Rochester, N.Y. Garoye Lily Flower is a product of China. The recall was initiated after routine sampling by New York State Department of Agriculture and Markets Food Inspectors revealed the presence of undeclared sulfites in packages of Garoye Lily Flower which did not declare sulfites on the label. The consumption of 10 milligrams of sulfites per serving has been reported to elicit severe reactions in some asthmatics. Anaphylactic shock could occur in certain sulfite sensitive individuals upon ingesting 10 milligrams or more of sulfites. No illnesses have been reported to date in connection with this problem. Consumers who have purchased the Garoye Lily Flower product should return it to the place of purchase. Consumers with questions may contact the company at 1-718-821-2315. INTERCEPT INC.: Reaches Settlement For GA Securities Fraud Suit --------------------------------------------------------------- Intercept, Inc. reached an agreement to settle the securities class action filed against it, two of its officers - John W. Collins and G. Lynn Boggs - and two former officers, Scott R. Meyerhoff and Garrett M. Bender, in the United States District Court for the Northern District of Georgia. The plaintiff sought to represent a class of individuals who purchased InterCept common stock between September 16, 2002 and January 9, 2003. The plaintiff alleged that InterCept and the individual defendants made material misrepresentations and/or omitted to make material disclosures throughout the class period due to their false assurances that the adult entertainment portion of the company's merchant services business was insignificant and their failure to disclose the impact of the implementation of new Visa regulations in November 2002. The plaintiff alleged violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated under Section 10(b), and Section 20(a) of the Exchange Act. Similar actions were filed by multiple plaintiffs, and on May 2, 2003, the plaintiffs filed a motion to consolidate claims. On June 23, 2003, the court denied the plaintiffs' motions to consolidate. On July 11, 2003, the plaintiffs filed a new motion for consolidation. On February 18, 2004, InterCept announced that it has reached an agreement to settle the case. Under the terms of the proposed settlement agreement, which was filed with the court on February 17, 2004, InterCept and its insurance carrier will pay $5.3 million to the plaintiffs and their counsel. InterCept will fund $3.95 million and its insurance carrier will fund $1.35 million of the proposed settlement, which is subject to court approval. These amounts have been place into escrow pending settlement of the case. Upon final approval of the settlement, the pending claims against InterCept and the individual defendants will be dismissed without any admission of liability or wrongdoing. ITXC CORPORATION: Faces NJ Investor Lawsuit V. Teleglobe Merger --------------------------------------------------------------- ITXC Corporation faces a class action filed in the New Jersey Superior Court, alleging breach of fiduciary duty and breach of the duty of candor. The suit also names as defendants directors: (1) Tom Evslin, (2) Edward Jordan, (3) Frank Gill and (4) Fred Wilson Although the Company was identified as a defendant, no cause of action is asserted against the Company for damages. The action seeks to enjoin the stockholders' meeting to approve ITXC's proposed merger with Teleglobe until certain alleged deficiencies in the proxy statement have been cured and seeks to permanently enjoin the consummation of the merger. The Company had previously announced that New Teleglobe filed a registration statement on Form S-4 with the Securities and Exchange Commission in connection with the proposed merger. KMART CORPORATION: Recalls 588 Safety Matches Due to Fire Hazard ---------------------------------------------------------------- KMart Corporation is cooperating with the U.S. Consumer Product Safety Commission by voluntarily recalling 588 boxes of Martha Stewart Everyday(r) Safety Matches. These matches may ignite upon impact, posing a fire hazard to consumers. Kmart has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The recalled matches come in a yellow checkered box, with the UPC code - 045774700237 - printed on the back. The matches are 11 inches long. Kmart Stores sold these items from January 2004 through March 2004 for about $2. Consumers should stop using the matches immediately and return them to the store where purchased for a full refund. For additional information, contact Kmart by Phone: (866) 562-7848 anytime or log on the company's Web site: http://www.kmart.com KOS PHARMACEUTICALS: Court Denies Plaintiffs' Writ of Certiorari ---------------------------------------------------------------- The United States Supreme Court denied plaintiffs' writ of certiorari from an appeals court decision affirming the dismissal of the class action filed against Kos Pharmaceuticals, Inc., members of its board of directors, certain of its officers and the underwriters of its October 1997 common stock offering. The suit was filed in the United States District Court for the Northern District of Illinois, Eastern Division on behalf of purchasers of the Company's Common Stock during the period from July 29, 1997, through November 13, 1997. The suit alleges claims under: (1) sections 11, 12(a)(2) and 15 of the Securities Act of 1933; (2) sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; and (3) for common law fraud, negligent misrepresentation and breach of fiduciary duty. The claims in the lawsuit relate principally to certain statements made by the Company, or certain of its representatives, concerning the efficacy, safety, sales volume and commercial viability of the Niaspan product. The complaint sought unspecified damages and costs, including attorneys' fees and costs and expenses. Upon the Company's motion, the case was transferred to the United States District Court for the Southern District of Florida. The Company filed a motion to dismiss the complaint against the Company and the individual Kos defendants on January 7, 1999. On May 24, 1999, the United States District Court for the Southern District of Florida dismissed the lawsuit with prejudice. The plaintiffs filed an appeal on June 7, 1999, with the United States Circuit Court of Appeals for the 11th Circuit. On July 16, 2002, the 11th Circuit Court of Appeals affirmed the District Court's dismissal of the plaintiff's claims with prejudice. The plaintiffs petitioned the Court of Appeals for a rehearing of the appeal, which was denied by the Court of Appeals. MACATAWA BANK: MI Court Stays Trade Partners Investors Lawsuit -------------------------------------------------------------- The United States District Court for the District of Western Michigan stayed the class action filed by Forrest W. Jenkins and Russell S. Vail against Macatawa Bank Corporation and LaSalle Bank Corporation, on behalf investors who invested in limited liability companies formed by Trade Partners. On November 6, 2003, the court permitted the plaintiffs to amend their complaint to expand the purported class to include all individuals who invested in Trade Partners viatical investments. The class has not been certified. The court stayed this action to avoid interference with the process of the receivership proceedings, though plaintiffs may apply to the Court for relief from the stay after May 6, 2004. The plaintiffs allege that Grand Bank breached certain escrow agreements, breached its fiduciary duties, acted negligently or grossly negligently with respect to the plaintiff's investments and violated the Michigan Uniform Securities Act. The amended complaint seeks certification of the action as a class action, unspecified damages and other relief. NEW CENTURY: Reaches Settlement For TILA Violations Suit in CA -------------------------------------------------------------- New Century Mortgage Corporation reached a settlement for the class action filed in the U.S. District Court for the Northern District of California by Richard L. Grimes and Rosa L. Grimes. The action seeks rescission, restitution and damages on behalf of the two plaintiffs, others similarly situated and on behalf of the general public for an alleged violation of the Federal Truth in Lending Act (TILA) and Business & Professions Code 17200. The judge held that the Company had not violated the TILA and dismissed the 17200 claim without prejudice. The plaintiffs appealed in February 2002 and in August 2003, the U.S. Court of Appeals ruled that a material issue of fact as to the existence and terms of the contract remained, reversed summary judgment and remanded the case for further proceedings in the District Court. The parties settled this matter on January 13, 2004 and have finalized the settlement documentation. NEW CENTURY: High Court Allows Appeal of Consumer Suit Dismissal ---------------------------------------------------------------- The United States Supreme Court consolidated two consumer class actions and allowed plaintiffs to appeal the dismissal of one suit filed against New Century Mortgage Corporation. In December 2001, Sandra Barney filed a class action against the Company in the Circuit Court in Cook County, Illinois. The complaint alleges the unauthorized practice of law and violation of the Illinois Consumer Fraud Act for performing document preparation services for a fee by non-lawyers, and seeks to recover the fees charged for the document preparation, compensatory and punitive damages, attorneys' fees and costs. The Company filed a motion to dismiss in February 2002. The court thereafter consolidated our case with other similar cases filed against other lenders. In August 2002, the court ordered the plaintiffs in all the consolidated cases to dismiss their cases with prejudice. Ms. Barney filed her Notice of Appeal in September 2002. The appeal was consolidated with 36 similar cases, the Jenkins case, and appellate argument was heard on December 2, 2003. The Appellate Court affirmed the dismissal of the consolidated Jenkins case on December 31, 2003. Ms. Barney timely filed a petition for leave to appeal the Appellate Court's decision. Plaintiffs' counsel sought to stay the Jenkins case while they proceeded with another unrelated but similar case, the King case. In February 2004, the Company, together with the other lender defendants in the Jenkins case filed an answer to the petition for leave to appeal, a response to the plaintiffs' motion to stay the Jenkins case and filed a motion to expedite ruling on the petition for leave to appeal. In March 2004, the Supreme Court ruled on the motions, granting the petition for leave to appeal in the Jenkins case, consolidated the Jenkins case with the King case, and ordered a new briefing schedule. The plaintiffs/appellants filed their consolidated brief and the Company's consolidated reply brief is due on June 2, 2004. NEW CENTURY: Files Motion Seeking Dismissal of Consumer Lawsuit --------------------------------------------------------------- New Century Mortgage Corporation filed a consolidated motion to dismiss the class action filed by Paul Bernstein in the Circuit Court of Cook County, Chicago, Illinois seeking damages for receiving unsolicited advertisements to telephone facsimile machines in violation of the Telephone Consumer Protection Act, 47 U.S.C. 227, and the Illinois Consumer Fraud Act. The plaintiffs filed an amended complaint on May 1, 2003 and on September 18, 2003, the judge granted the Company's motion to dismiss with respect to the Illinois Consumer Fraud Act and permitted the plaintiff to re-plead on an individual, not consolidated, basis. On September 30, 2003, the plaintiff filed a motion for class certification and a second amended complaint. The Company sought and obtained an order permitting it to join other lender defendants in a consolidated action and on November 23, 2003, filed a consolidated motion to dismiss the second amended complaint. Oral argument on our consolidated motion was heard on March 30, 2004. The Company awaits a ruling. The court has stayed the class certification motion until it rules on the motion to dismiss. Discovery is proceeding. NEW CENTURY: Plaintiffs Appeal CA Consumer Fraud Suit Dismissal --------------------------------------------------------------- Plaintiffs appealed the dismissal of a class action filed against New Century Financial Corporation, New Century Mortgage Corporation and others in the Superior Court for the County of Alameda, California. In September 2002, Robert E. Overman and Martin Lemp filed a class action complaint against the Company, New Century Mortgage, U.S. Bancorp, Loan Management Services, Inc., and certain individuals affiliated with Loan Management Services. The complaint alleges: (1) violations of California Consumers Legal Remedies Act, (2) unfair, unlawful and deceptive business and advertising practices in violation of Business & Professions Code 17200 and 17500, (3) fraud-misrepresentation and concealment, (4) constructive trust/breach of fiduciary duty and (5) damages including restitution, compensatory and punitive damages, and attorneys' fees and costs The plaintiffs filed an amended complaint in July 2003 and in September 2003, the judge granted the Company's demurrer challenging their claims in part. The Consumers Legal Remedies Act claim was dismissed and the plaintiffs withdrew the constructive trust/breach of fiduciary duty claim. The Company filed its answer to the plaintiffs' amended complaint in September 2003. The Company filed a 128.7 sanctions motion seeking dismissal of the case. On December 8, 2003, the court granted the Company's motion for sanctions against the plaintiffs for filing an amended complaint with allegations against it and New Century Mortgage that were devoid of evidentiary support and ordered all of those claims stricken without prejudice. On January 27, 2004, the court entered a judgment of dismissal without prejudice in the Company's favor. The court issued similar relief to three other lenders in cases that were concurrently heard by the same judge. The plaintiffs filed a notice of appeal on February 20, 2004 from both the judgment entered in the Company's favor and the order granting its motion for sanctions. The plaintiffs'/appellants' brief is due on May 28, 2004. The plaintiffs also filed a motion with the Appellate Court to consolidate this appeal with three additional appeals they have sought in the similar cases against other lenders. The Company awaits a ruling. NEW CENTURY: Court Grants Motion Removing 2 Defendants From Suit ---------------------------------------------------------------- The United States District Court for the Middle District of Louisiana granted New Century Financial Corporation's motion to dismiss Worth Funding Corporation and Anyloan Company as defendants in the class action filed by two former, short-term employees, Kimberly A. England and Gregory M. Foshee. The suit also names as defendants the Company and New Century Mortgage Corporation. The suit was originally filed in the 19th Judicial District Court, Parish of East Baton Rouge, State of Louisiana, but later removed to the U.S. District Court for the Middle District of Louisiana in response to the Company's petition for removal. The complaint alleges failure to pay overtime wages in violation of the Federal Fair Labor Standards Act. The plaintiffs filed an additional action in Louisiana state court (19th Judicial District Court, Parish of East Baton Rouge) on September 18, 2003, adding James Gray as a plaintiff and seeking unpaid wages under state law, with no class claims. This second action was removed on October 3, 2003 to the U.S. District Court for the Middle District of Louisiana, and has been ordered consolidated with the first action. In April 2004, the U.S. District Court unilaterally de- consolidated the James Gray individual action. In September 2003, the plaintiffs also filed a motion to dismiss their claims in Louisiana to enable them to join in a subsequently filed case in Minnesota entitled Klas vs. New Century Financial, et al. The Company opposed the motion and the court agreed with its position and refused to dismiss the plaintiffs' case, as it was filed first. The Klas case has now been consolidated with this case and discovery is proceeding. NEW CENTURY: Plaintiffs Seek Review of TILA Lawsuit Dismissal ------------------------------------------------------------- Plaintiffs asked the United States District Court for the Northern District of Illinois to reconsider its dismissal of the class action filed against New Century Mortgage Corporation and: (1) Tamayo Financial Title, Inc., (2) Presidential Title, Inc., (3) Juan Tamayo Jr., (4) Jose Tamayo and (5) Luis Tamayo In October 2003, Canales Jose Ines and Maria S. Marquez filed the suit, alleging violations of the Truth in Lending Act TILA related to the fees charged for title insurance and recording fees. The Company filed its motion to dismiss in December 2003 and the motion was fully briefed in January 2004. On April 5, 2004, the court granted its motion to dismiss. On April 13, 2004, the plaintiffs filed a motion for reconsideration and for leave to amend their complaint. NEW CENTURY: Plaintiffs Seek Leave To File Amended TILA Lawsuit --------------------------------------------------------------- Plaintiffs asked the United States District Court for the Northern District of Illinois to allow them to file an amended class action against New Century Mortgage Corporation. Denise Wade filed the original suit, which also names as defendants: (1) Providential Bancorp, Ltd., (2) Jet Title Services, LLC, and (3) Ocwen Federal Bank, FSB The complaint similarly alleges violations of the Truth in Lending Act (TILA) related to the fees charged for title insurance and recording fees. The Company filed its motion to dismiss in November 2003 and the motion was fully briefed in January 2004. The Company awaits a ruling. NEW CENTURY: Plaintiffs Appeal NY Yield Spread Lawsuit Dismissal ---------------------------------------------------------------- Plaintiffs appeal the New York State Court for Suffolk County's dismissal of the class action filed against New Century Mortgage Corporation. Elaine Lum filed the suit, alleging that certain payments the Company makes to mortgage brokers, sometimes referred to as yield spread premiums, interfered with the contractual relationship between Ms. Lum and her broker. The complaint also seeks damages related thereto for fraud, wrongful inducement/breach of fiduciary duty, violation of deceptive acts and practices, unjust enrichment and commercial bribing. The complaint seeks class certification for similarly situated borrowers in the State of New York. The Company believes the allegations lack merit; especially in light of HUD's Policy Statement upholding the use of yield spread premiums, the Company stated in a regulatory filing. The Company filed a motion to dismiss on January 30, 2004. The judge granted its motion and dismissed all claims on March 29, 2004. NEW VALLEY: Seeks Summary Judgment For Remaining Claims in Suit --------------------------------------------------------------- New Valley Corporation filed a motion for summary judgment for the remaining claims in the class action filed on behalf of its former Class B preferred shareholders, in Delaware Chancery Court. The suit names as defendants the Company, Brooke Group Holding and certain directors and officers of the Company. The complaint alleges that the recapitalization, approved by a majority of each class of the Company's stockholders in May 1999, was fundamentally unfair to the Class B preferred shareholders, the proxy statement relating to the recapitalization was materially deficient and the defendants breached their fiduciary duties to the Class B preferred shareholders in approving the transaction. The plaintiffs seek class certification of the action and an award of compensatory damages as well as all costs and fees. The Court has dismissed six of plaintiff's nine claims alleging inadequate disclosure in the proxy statement. Brooke Group Holding and the Company believe that the remaining allegations are without merit. PAYPAL.COM: Certification Hearing Reset To July 17, 2004 in CA -------------------------------------------------------------- The class certification hearing for the consumer class action filed against PayPal.com has been rescheduled for July 17, 2004 in the United States District Court for the Northern District of California. In February 2002, the Company was sued in California state court in a purported class action alleging that its restriction of customer accounts and failure to promptly unrestrict legitimate accounts violates California state consumer protection laws and is an unfair business practice and a breach of the Company's User Agreement. This action was re-filed with a different named plaintiff in June 2002 (No.CV-808441), and a related action was also filed in the United States District Court for the Northern District of California in June 2002. In March 2002, the Company was sued in the U.S. District Court for the Northern District of California (No.C-02-1227) in a purported class action alleging that its restrictions of customer accounts and failure to promptly unrestrict legitimate accounts violates federal and state consumer protection and unfair business practice laws. The federal court has denied the Company's motion to compel individual arbitration as required by the PayPal User Agreement and has invalidated that provision of the User Agreement. PayPal has appealed that decision to the U.S. Court of Appeals for the Ninth Circuit. The two federal court actions have been consolidated into a single case, and the state court action has been stayed pending developments in the federal case. In September 2003, the plaintiffs filed their motion for class certification. In November 2003, the parties tentatively reached agreement as to the monetary terms for settlement of the disputes. The parties have notified the court that they need time to negotiate and document other terms of any resulting Agreement. PAYPAL.COM: Plaintiffs Voluntarily Dismiss DE, CA Stock Lawsuits ---------------------------------------------------------------- Plaintiffs in the class actions filed against PayPal.com over its July 2002 merger with eBay, Inc. voluntarily dismissed the suits without prejudice. Following the announcement of the merger, three purported class actions were filed in the Delaware Court of Chancery by PayPal stockholders. Two additional purported class action complaints were filed in the Superior Court of the State of California, County of Santa Clara, by PayPal stockholders. All of the complaints named as defendants PayPal and each member of its board of directors as well as eBay. The complaints alleged that eBay controlled PayPal prior to the execution of their merger agreement, the defendants breached fiduciary duties they allegedly owed to PayPal's stockholders in connection with PayPal entering into the merger agreement, and the exchange ratio in the merger was unfair and inadequate. The plaintiffs sought, among other things, an award of unspecified compensatory damages. In January 2004, the plaintiffs in the Delaware actions voluntarily dismissed their actions without prejudice, and in March 2004, the plaintiffs in the California actions voluntarily dismissed their actions without prejudice. PLAINS RESOURCES: Stockholders Launch Fiduciary Duty Suit in DE --------------------------------------------------------------- Plains Resources, Inc. faces a class action filed the Delaware Chancery Court, New Castle County, entitled "Alfons Sperber v. Plains Resources, Inc., et al." This suit, brought on behalf of a putative class of Plains All American Pipeline, L.P. common unit holders, asserts breach of fiduciary duty and breach of contract claims against the Company and: (1) Plains AAP, L.P., (2) Plains All American GP LLC and (3) its directors. The suit also asserts breach of fiduciary duty claims against Plains ResourcesInc. and its directors. The complaint seeks to enjoin or rescind a proposed acquisition of all of the outstanding stock of Plains Resources, Inc., as well as declaratory relief, an accounting, disgorgement and the imposition of a constructive trust, and an award of damages, fees, expenses and costs, among other things. PROVIDIAN FINANCIAL: Discovery Proceeds in CA Securities Lawsuit ---------------------------------------------------------------- Discovery is proceeding in the consolidated securities class action filed against Providian Financial Corporation in the United States District Court for the Northern District of California, styled "In re Providian Financial Securities Litigation." The suit alleges that the Company and certain of its officers made false and misleading statements concerning its operations and prospects for the second and third quarters of 2001, in violation of federal securities laws. The actions seek damages, interest, costs, and attorneys' fees. The Company's motion to dismiss was denied in December 2002. The class was certified on January 15, 2004 and comprises those persons or entities who acquired the Company's stock between June 6, 2001 and October 18, 2001. Trial is set for June 7, 2004. PROVIDIAN FINANCIAL: Discovery Proceeds in NY Consumer Lawsuit -------------------------------------------------------------- Discovery is proceeding in the consumer class action filed against Providian Financial Corporation, Visa USA, Inc., MasterCard and a number of credit card issuing banks, styled "Ross v. Visa, U.S.A. Inc., et al." The suit is pending in the United States District Court for the Southern District of New York. The suit was originally filed in the United States District6 Court for the Eastern District of Pennsylvania. The suit alleges that uniform foreign currency surcharges allegedly imposed by the defendants are the result of a conspiracy in restraint of trade and violate the federal antitrust laws. The suit also alleges that the defendant banks violated the Truth- in-Lending Act by failing to separately identify these surcharges to their customers on their monthly statements. Similar lawsuits were filed in California and New York. In August 2001, the Federal Judicial Panel on Multidistrict Litigation transferred all of these cases to the Southern District of New York. In January 2002, plaintiffs filed an amended consolidated complaint, which the defendants moved to dismiss. In July 2003 the court granted the motion to dismiss the plaintiffs' claim for actual damages under the Truth-in- Lending Act, and denied the motion to dismiss the plaintiffs' antitrust claims. PROVIDIAN FINANCIAL: Reaches $5.7M Settlement For CA Labor Suit --------------------------------------------------------------- Providian Financial Corporation settled on a classwide basis the class action filed in California State Court, styled "Shoars v. Providian Bancorp Services, Providian Financial Corporation, et al." The Company agreed to settle the suit for $5.7 million. The suit alleges that the Company's Paid Time Off (PTO) plan violated California Labor Code section 227.3 because the Company capped the payout of PTO benefits for terminated employees at 40 hours. PROVIDIAN NATIONAL: CA Consumers Lodge Breach of Contract Suit -------------------------------------------------------------- Providian National Bank faces two class actions filed in California Superior Court for Orange County, alleging breach of contract relating to the Bank's minimum payment calculation results. In January 2004, a putative state court class action, styled "Ventura v. Providian National Bank," was filed, alleging that PNB's minimum payment calculation results in improper overlimit fees and that its payment posting practices result in improper interest charges and late fees. The complaint alleges a single breach of contract claim and seeks damages, attorneys' fees, and other relief. In February 2004, a putative state court class action, styled "Marotta v. Providian National Bank," alleged that plaintiffs' APRs were increased improperly without proper notice. The complaint alleges a single breach of contract claim and seeks damages, attorneys' fees, and other relief. SEMINIS CORPORATION: CA Court Approves Stock Lawsuit Settlement --------------------------------------------------------------- The California Superior Court granted preliminary approval to the settlement proposed by Seminis Corporation for the consolidated securities class action filed against it relating to its acquisition transactions. Four suits were initially filed, styled " (1) Garry Firth v. Alfonso Romo Garza, et al., Civil Action No. 20085, (2) Boris Pozniak v. Alfonso Romo Garza, et al., Civil Action No. 20097, (3) Pablo Herranz v. Seminis, Inc., et al., Civil Action No. 20105 (4) Mark Rosales v. Seminis, Inc., Case No. CIV216255, The first three suits were filed in Delaware Chancery Court for Newcastle County with the last was filed in California Superior Court (Ventura County). Since that time, a fifth case, Haven Capital Management v. Alfonso Romo Garza, et al., Civil Action No. 20140 has also been filed in Delaware. In February 2003, the Firth, Pozniak, Herranz and Haven Capital cases were consolidated into one proceeding entitled In re Seminis, Inc. Shareholders' Litigation, Consolidated C.A. No. 20140-NC, and the Haven Capital complaint was designated as the operative complaint in the consolidated lawsuit. That complaint names as defendants Savia, Company and its Directors. The Rosales (California) complaint names as defendants Company and its Directors. Both the Delaware consolidated action and the Rosales action purport to be brought on behalf of Company common stockholders or their successors. Both of these actions "which were brought prior to the public announcement of Company entering into the acquisition transactions agreements" allege that the acquisition transactions, when consummated, would provide insufficient consideration to Company's common stockholders and allege that the defendants breached their fiduciary duties in connection with the acquisition transactions. The complaints sought a preliminary and permanent injunction to enjoin the acquisition transactions and, since the acquisition transactions have been consummated, rescission and damages. On September 24, 2003, the parties reached a memorandum of understanding that settled all of the alleged claims. The parties have finalized the settlement agreement and the California court preliminarily approved the terms of the settlement in April 2004. A hearing for final approval of the settlement is expected to be scheduled by the California court for July or August 2004. The California court has also ordered that Delaware counsel may intervene in the California action and participate in the final settlement hearing. SKECHERS USA: CA Employees Launch Overtime Violations Lawsuits -------------------------------------------------------------- Skechers USA, Inc. faces two class actions filed in California State Courts alleging violations of the overtime wage laws. A class action complaint entitled OMAR QUINONES v. SKECHERS USA, INC. et al. was filed in the Superior Court for the State of California for the County of Orange (Case No.02CC00353). The complaint, as amended, alleges overtime and related violations of the California Labor Code on behalf of managers of Skechers' retail stores and seeks, inter alia, damages and restitution, as well as injunctive and declaratory relief. Another related class action complaint entitled MYRNA CORTEZ v. SKECHERS USA, INC. et al. was filed in the Superior Court for the State of California for the County of Los Angeles (Case No.BC290932) asserting similar claims and seeking similar relief on behalf of assistant managers. SKECHERS USA: Plaintiffs File Consolidated Securities Suit in CA ---------------------------------------------------------------- Plaintiffs filed a consolidated securities class action against Skechers USA, Inc. in the United States District Court for the Central District of California. Several suits were filed against the Company and certain of its officers, namely: (1) HARVEY SOLOMON v. SKECHERS USA, INC. et al., Case No. 03-2094 DDP; (2) CHARLES ZIMMER v. SKECHERS USA, INC. et al., Case No. 03-2296 PA; (3) MARTIN H. SIEGEL v. SKECHERS USA, INC. et al., Case No 03-2645 RMT; (4) ADAM D. SAPHIER v. SKECHERS USA, INC. et al., Case No. 03-3011 FMC; (5) LARRY L. ERICKSON v. SKECHERS USA, INC. et al., Case No. 03-3101 SJO; Each of these class action complaints alleged violations of the federal securities laws on behalf of persons who purchased publicly traded securities of SKECHERS between April 3, 2002 and December 9, 2002. In July 2003, the court in these federal securities class actions, all pending in the United States District Court for the Central District of California, ordered the cases consolidated and a consolidated complaint to be filed and served. On September 25, 2003, the plaintiffs filed a consolidated complaint entitled "In re SKECHERS USA, Inc. Securities Litigation, Case No. CV-03-2094-PA in the United States District Court for the Central District of California, consolidating all of the federal securities actions above. The complaint names as defendants SKECHERS and certain officers and directors and alleges violations of the federal securities laws and breach of fiduciary duty on behalf of persons who purchased publicly traded securities of SKECHERS between April 3, 2002 and December 9, 2002. The complaint seeks compensatory damages, interest, attorneys' fees and injunctive and equitable relief. SKECHERS USA: Plaintiffs File Consolidated Derivative Suit in CA ---------------------------------------------------------------- Skechers USA, Inc. faces a consolidated shareholder derivative suit filed in the Superior Court of California for Los Angeles County. Several suits were initially filed against the Company and certain of its officers, styled: (1) BRADFORD MITCHELL v. JEFFREY GREENBERG et al., (Case No. BC 293317); (2) GEORGIA MANOLAS v. JEFFREY GREENBERG et al., (Case No. BC293388); (3) JEFF GRAVITTER v. ROBERT Y. GREENBERG, (Case No. BC293561) Each of these class action complaints included allegations of violations of California Corporation Code 25402 and breach of fiduciary duty. On August 29, 2003, the plaintiffs in these state derivative actions filed a consolidated complaint entitled In re SKECHERS USA, Inc. Derivative Litigation, Case No. BC- 293317, in the Superior Court of the State of California, Los Angeles County, consolidating all of the state derivative actions above. The complaint alleges violations of California Corporation Code 25402, breaches of fiduciary duty, waste of corporate assets and unjust enrichment. The complaint seeks compensatory damages, treble damages, disgorgement of profits, imposition of a constructive trust, equitable and injunctive relief, and costs. VITALWORKS INC.: CT Court Hears Motion To Dismiss Stock Lawsuit --------------------------------------------------------------- The United States District Court for the District of Connecticut heard Vitalworks, Inc.'s motion to dismiss the consolidated securities class action filed on behalf of purchasers of the Company's common stock during the class period of January 24, 2002 to October 23, 2002. The defendants are the Company and three of its individual officers and directors. Plaintiffs have asserted claims against the defendants under Section 10(b) of the Securities Exchange Act of 1934 and against the individual defendants under Section 20(a) of the Exchange Act. According to the Consolidated Complaint, the defendants made materially false and misleading statements during the Class Period concerning the Company's products and financial forecasts. In addition, the Consolidated Complaint alleges that the individual defendants acted as controlling persons in connection with the Company's alleged securities law violations. Compensatory damages in an unspecified amount, pre-judgment and post-judgment interest, costs and expenses, including reasonable attorneys' fees and experts' fees and other costs, as well as other relief the Court may deem just and proper are sought. On November 14, 2003, the defendants filed with the Court a motion to dismiss the Consolidated Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and (9)(b). The motion has been fully briefed and is awaiting disposition by the Court. At this time, discovery is automatically stayed under the Private Securities Litigation Reform Act and no class has been certified. New Securities Fraud Cases GENTA INC.: Cohen Milstein Lodges Securities Fraud Lawsuit in NJ ---------------------------------------------------------------- The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. initiated a securities class action suit against Genta, Inc. (Nasdaq:GNTA) and certain of its principal officers and directors in the United States District Court for the District of New Jersey on behalf of all persons who purchased or otherwise acquired GNTA securities between March 26, 2001 and May 3, 2004. On April 30, 2004, the staff of the Oncologic Drugs Advisory Committee (ODAC) of the FDA stated in briefing materials in advance of the May 3, 2004 ODAC meeting that the Phase 3 clinical trial of Genasense failed to demonstrate a survival benefit, which was the primary trial endpoint. The staff stated: "Uncertainty also exists regarding whether an improvement in PFS and RR of this magnitude outweighs the increase in toxicity ... Survival was not improved and toxicity was increased." After this announcement, the price of Genta shares dropped $5.83 or 40.4% to close at $8.60 on the Nasdaq market on an unusually high volume of over 30 million shares traded. On May 3, 2004, the ODAC ruled by a 13-3 vote that, in the absence of increased survival, the evidence presented did not provide substantial evidence of effectiveness to outweigh the increased toxicity of Genasense. After this announcement, the price of Genta shares fell more than $3 per share, to close at $5.11 on May 3, 2004 at a high volume of over 17 million shares traded. For more details, contact Steven J. Toll, Esq. or Gail Regina of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. by Mail: 1100 New York Avenue, N.W., West Tower - Suite 500, Washington, D.C. 20005 by Phone: (888) 240-0775 or (202) 408-4600 or by E-Mail: stoll@cmht.com or gregina@cmht.com KRISPY KREME: Lasky & Rifkind Lodges Securities Suit in M.D. NC --------------------------------------------------------------- Lasky & Rifkind, Ltd. initiated a securities class action in the United States District Court for the Middle District of North Carolina, on behalf of persons who purchased or otherwise acquired publicly traded securities of Krispy Kreme Doughnuts Inc. (NYSE:KKD) between August 21, 2003 and May 7, 2004, inclusive. The lawsuit was filed against Krispy Kreme and Randy S. Casstevens, Scott A. Livengood, Michael C. Phalen and John W. Tate. The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Complaint alleges that during the Class Period, Krispy Kreme touted its strong growth, reporting significant increases in revenues and earnings and representing that it could continue to grow at a rapid pace. The Complaint further alleges that, unknown to investors, Defendants failed to disclose that as a result of the trend to low-fat and low carbohydrate diets, Krispy Kreme had in fact been suffering poor performance. In addition, the complaint alleges that there were other undisclosed reasons for the poor performance: (1) that Krispy Kreme stores could not sustain initial sales excitement; (2) that the Company was experiencing undisclosed operational and distribution issues concerning its wholesale shipments to supermarkets; and (3) that its Montana Mills operation, purchased a year ago, was significantly impaired despite statements to the contrary. On May 7, 2004, Krispy Kreme announced that it expected fiscal 2005 diluted earnings per share from continuing operations, excluding charges to be 10% lower than previously anticipated, and that it was closing certain underperforming company-owned stores. It also announced that it was closing its Montana Mills brand stores, an operation which it had purchased a year ago, and that it was going to write off the entire investment - as much as $40 million. In reaction to this news, shares of Krispy Kreme fell $9.29, or 29% to close at $22.51 in heavy trading volume. For more details, contact Lasky & Rifkind, Ltd., by Phone: (800) 495-1868 by E-Mail: investorrelations@laskyrifkind.com or visit their Web Site: http://laskyrifkind.com/contact.htm LANCER CORPORATION: Charles Piven Launches Securities Suit in TX ---------------------------------------------------------------- The Law Offices of Charles J. Piven, P.C. initiated a securities class action lawsuit on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Lancer Corporation (AMEX:LAN) between October 26, 2000 and February 4, 2004, inclusive. Though still pending in the United States District Court for the Western District of Texas, the suit has not yet certified a class. The class action alleges that defendants issued materially false and misleading statements to the market during the Class Period, which had the effect of artificially inflating the market price of Company securities. The statements, the action claims was a blatant violation of federal securities laws. For more details, contact the Law Offices Of Charles J. Piven, P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland by Phone: 410/986-0036 or by E-Mail: hoffman@pivenlaw.com MASTEC INC.: Chitwood Harley Lodges Securities Suit in S.D. FL -------------------------------------------------------------- Chitwood & Harley LLP initiated a securities class action in the United States District Court for the Southern District of Florida against MasTec, Inc. (NYSE: MTZ). The civil action number is 04-20924. The suit alleges claims on behalf of a class consisting of purchasers of the publicly traded securities of MasTec between May 13, 2003 and April 12, 2004, inclusive. The complaint charges MasTec, Austin Shanfelter, and Donald Weinstein with violations of 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: (1) that the Company was materially inflating its financial results; (2) that the Company was prematurely recognizing revenue on various contracts; (3) that the Company's practice of improperly recognizing revenue was in violation of Generally Accepted Accounting Principles; (4) that the Company overstated its inventory; (5) that the Company failed to have adequate reserves for bad debts, inventory, cost overruns, and projected losses on certain projects; and (6) as a result, the Company's financial results were materially inflated at all relevant times. According to the Complaint, the truth about the Company's inflated financial results began to emerge on March 10, 2004, when MasTec announced that the filing of its 10-K would be delayed past the March 15th deadline. Upon this news, MasTec shares fell $2.00 per share (16.75%) on March 10, 2004 to close at $9.94 per share. On March 18, 2004, MasTec further declined $2.31 per share (23%) to close at $7.75 per share when Standard & Poor's Rating Services put the Company's BB credit rating on watch for a downgrade. On April 13, 2004, MasTec announced its 2003 operating results and disclosed material problems that could result in a restatement of its previously announced financial results. More specifically, the Company announced a net loss of $39.7 million ($0.83 per share) on revenue of $873.9 million for the year. Additionally, the Company disclosed that during its review and analysis of the Company's annual results, MasTec's management identified a number of matters that impacted current and prior- period operating results. These included additional reserves for bad debts and inventory, cost overruns and projected losses on certain projects, valuation reserves for state deferred tax assets, revenues recognized on various contracts, work in progress and inventory overstatements at a Canadian subsidiary, the closing of Brazilian operations, the accrual for certain insurance reserves which was complicated by the receivership of a prior insurance carrier, and other items. Defendants concluded that these matters required a detailed analysis and evaluation to determine the appropriate accounting treatment. Some of these issues may require restatements of amounts previously reported. This news shocked the market. MasTec's stock price dropped $1.50 per share (15.5%) on April 13, 2004 on unusually large trading volumes. For more details, contact Lauren Antonino by Mail: 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309 by Phone: 1-888-873-3999 (toll-free) by E-Mail: lsa@classlaw.com or visit their Web Site: www.classlaw.com MERILL LYNCH: Milberg Weiss Lodges Securities Lawsuit in S.D. NY ---------------------------------------------------------------- Milberg Weiss Bershad & Schulman LLP initiated a securities class action on behalf of a class consisting of all persons who purchased or otherwise acquired shares or other ownership units of any of the mutual funds carrying the "Merrill Lynch" brand name (the "MLIM Funds") through Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") acting as broker between May 20, 1999 to the present (the "Class Period") and who were damaged thereby, seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action is pending in the United States District Court for the Southern District of New York against defendants Merrill Lynch & Co. ("ML&Co."), Merrill Lynch Pierce Fenner & Smith Incorporated ("MLPF&S") and Merrill Lynch Investment Managers L.P ("MLIM LP"). The action charges defendants with engaging in an unlawful and deceitful course of conduct designed to improperly financially advantage defendants to the detriment of plaintiffs and other members of the Class. As part and parcel of defendants' unlawful conduct, defendants, in contravention of their disclosure obligations, fiduciary responsibilities and National Association of Securities Dealers ("NASD") Rules, failed to properly disclose that defendants systematically applied incentives and demerits to induce and compel MLPF&S's mid-level managers to maximize sales of mutual funds carrying the MLIM brand name. In turn, these mid-level managers --- Regional Directors, Directors and Resident Managers --- brought intense pressure to bear on the Financial Advisors under their supervision to steer the Financial Advisors' clients away from mutual funds owned and managed by other entities and into MLIM Funds. By investing in the MLIM Funds, plaintiffs and other members of the Class received a return on their investment that was substantially less than the return on investment that they would have received had they invested the same dollars in a comparable fund. MLPF&S's undisclosed plan and scheme has operated as a wrongful and deceptive exploitation of the misplaced trust of its clients. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado Milberg Weiss Bershad & Schulman LLP by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-Mail: sfeerick@milbergweiss.com or Web Site: http://www.milbergweiss.com NOVASTAR FINANCIAL: Scott + Scott Lodges Securities Suit in MO -------------------------------------------------------------- Scott + Scott, LLC initiated a securities class action in the United States District Court for the Western District of Missouri on behalf of purchasers of NovaStar Financial, Inc. (NYSE: NFI) common stock during the period between October 29, 2003 and April 8, 2004. The complaint charges NovaStar and certain of its officers and directors with violations of the Securities Exchange Act of 1934. NovaStar is a specialty finance company that originates, invests in and services residential nonconforming loans. The Company offers a range of mortgage loan products to borrowers (nonconforming borrowers) that generally do not satisfy the credit, collateral, documentation or other underwriting standards prescribed by conventional mortgage lenders and loan buyers, including government-sponsored entities such as Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac). NovaStar retains interests in the nonconforming loans it originates through its mortgage securities investment portfolio. Through its servicing platform, the Company then services all of the loans it retains interests in, in order to better manage the credit performance of those loans. The complaint alleges that during the Class Period, the Company's shares were artificially inflated, hitting a high of $67 per share, as the defendants continued to create the illusion that the number of NovaStar offices was increasing and record results would follow. Desperate to create this illusion in order to finance the Company through stock sales, defendants went so far as to overstate the actual number of offices NovaStar had and to operate offices illegally in multiple states. The true facts which were known by each of the defendants, but concealed from the investing public during the Class Period, were as follows: (1) that the Company's growth through branch office expansions was grossly overstated as these offices were illegally conducting business in Nevada and elsewhere; (2) that the Company's projected growth would be thwarted once regulators unearthed the defendants' unlawful business; (3) that the Company actually exaggerated the number of its branches in existence; for example, the Company overstated the number of its Nevada branches by 120%; and (4) that the full extent of defendants' unlawful practices are only beginning to be known, and in fact, it has just been reported that none of the Company's branches in Texas are licensed to do business. As a result of the defendants' false statements, NovaStar stock traded at inflated levels during the Class Period, increasing to as high as $67 on March 22, 2004, whereby the Company sold more than $107 million worth of its shares to the unsuspecting public. For more details, contact Scott + Scott attorney Neil Rothstein by Phone: 800/404-7770 or 860/537-3818 (EST) or 800/332- 2259 or 619/233-4565 (PST) by E-Mail: nrothstein@scott-scott.com or NovaStarSecuritiesLitigation@scott-scott.com or visit their Web Site: www.scott-scott.com NYFIX INC.: Charles Piven Lodges Securities Fraud Lawsuit in CT --------------------------------------------------------------- The Law Offices of Charles J. Piven, P.C. initiated a securities class action lawsuit on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of NYFIX, Inc. (Nasdaq:NYFXE) between March 30, 2000 and March 30, 2004, inclusive. Though still pending in the United States District Court for the District of Connecticut, the suit has not yet certified a class. The class action alleges that defendants issued materially false and misleading statements to the market during the Class Period, which had the effect of artificially inflating the market price of Company securities. The statements, the action claims was a blatant violation of federal securities laws. For more details, contact the Law Offices Of Charles J. Piven, P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland by Phone: 410/986-0036 or by E-Mail: hoffman@pivenlaw.com SPSS INC.: Charles Piven Lodges Securities Fraud Suit in N.D. IL ---------------------------------------------------------------- The Law Offices of Charles J. Piven, P.C. initiated a securities class action lawsuit on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of SPSS, Inc. (Nasdaq:SPSSE) between May 2, 2001 and March 30, 2004, inclusive. Though still pending in the United States District Court for the Northern District of Illinois, the suit has not yet certified a class. The class action alleges that defendants issued materially false and misleading statements to the market during the Class Period, which had the effect of artificially inflating the market price of Company securities. The statements, the action claims was a blatant violation of federal securities laws. For more details, contact the Law Offices Of Charles J. Piven, P.A. by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland by Phone: 410/986-0036 or by E-Mail: hoffman@pivenlaw.com ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Se�orin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *