/raid1/www/Hosts/bankrupt/CAR_Public/050405.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, April 5, 2005, Vol. 7, No. 66
Headlines
ALLIANZ INSURANCE: CA Resident Lodges Suit V. Local Firm Agents
BANK ONE: Securities Lawsuit Settlement Hearing Set May 19, 2005
C.H. ROBINSON: MI Gender Discrimination Suit Given Class Status
CORNING INC.: Appeals Court Upholds Securities Suit Dismissal
CV THERAPEUTICS: Discovery Proceeds in CA Securities Fraud Suit
DAILY NEWS: Attorney Set To File Suit Over Bungled Contest in NY
DYNEGY INC.: Reaches Settlement For Consolidated TX ERISA Suit
DYNEGY INC.: Illinois Power Employees Launch ERISA Fraud Lawsuit
DYNEGY INC.: Working To Settle Consolidated TX Securities Suit
DYNEGY INC.: To Ask CA Court To Dismiss Remaining Energy Suits
DYNEGY INC.: Continues To Face CA Gas Index Manipulation Suits
DYNEX CAPITAL: NY Fraud Suit Launched Over Merit Series 13 Bonds
EQUITY RESIDENTIAL: Appeals $1.6M Ruling in FL Property Lawsuit
FORD MOTOR: CA Appeals Court Rejects Argument In Manifold Case
GENTA INC.: Faces Consolidated Securities Fraud Lawsuit in NJ
GILEAD SCIENCES: CA Court Dismisses Consolidated Securities Suit
JLG INDUSTRIES: Recalls Trailers Due To Misprinted User Manual
LONE STAR: Pre-Trial Discovery Proceeds in Shareholder Lawsuit
MAINE: Judge Authorizes Settlement Notices For Strip Search Case
MARYLAND: Injured Officers Launch Suit To Stop Force Retirement
MATRIX FINANCIAL: Faces Fraud Lawsuit in AL Bankruptcy Court
MEDIFAST INC.: CA Health Bars Lawsuit Stayed, Pending FDA Appeal
MONTANA POWER: Firms Go Back Court To Discuss Settlement Dispute
NEKTAR THERAPEUTICS: Faces Shareholder Fraud Lawsuit in N.D. CA
NEW YORK: Judge Approves $1.7M Newburgh Strip-Search Settlement
NEW YORK: Uninsured Plaintiffs' Lawsuit V. Hospital Dismissed
NEWMAR CORPORATION: Recalls Motorhomes Due To Safety Hazards
OMNICOM GROUP: NY Court Dismisses Purported Securities Complaint
PLATO LEARNING: Asks NY Court To Dismiss Securities Fraud Suit
STERLING TRUST: Enters Arbitration For Investor Lawsuit in TX
STERLING TRUST: Faces CA Lawsuit For Breach of Fiduciary Duty
TRIAD GUARANTY: Discovery on KY Suit Summary Judgment Proceeds
UNITED STATES: Reaches Consumer Fraud Settlements With 2 Firms
New Securities Fraud Cases
AXONYX INC.: Lockridge Grindal Files Securities Fraud Suit in NY
CELL THERAPEUTICS: Lerach Coughlin Lodges Securities Suit in WA
CHOICEPOINT INC.: Stull Stull Lodges Securities Fraud Suit in CA
DELPHI CORPORATION: Wolf Haldenstein Files Securities Suit in NY
IMERGENT INC.: Milberg Weiss Lodges Securities Fraud Suit in UT
IMERGENT INC.: Shalov Stone Lodges Securities Fraud Suit in UT
MAMMA.COM INC.: Stull Stull Lodges Securities Fraud Suit in NY
MOLEX INC.: Spector Roseman Lodges Securities Fraud Suit in IL
VIISAGE TECHNOLOGY: Klafter & Olsen Lodges Securities Suit in MA
*********
ALLIANZ INSURANCE: CA Resident Lodges Suit V. Local Firm Agents
---------------------------------------------------------------
Anthony J. Iorio, a Carlsbad resident initiated a lawsuit
against one of the nation's largest sellers of annuity products
for elder abuse, claiming that he was intentionally misled to
purchase a product that did little or nothing to improve his
investment portfolio, the North County Times reports.
In his lawsuit, which was filed as a class action in U.S.
District Court in San Diego, Mr. Iorio states that although he
was already 65 years old when he was sold a deferred annuity in
2000, it would not pay him benefits for 20 years.
Neither Allianz Life Insurance Co. of North America, a Minnesota
Company that issued the annuity, nor San Diego based Asset
Marketing Systems Inc. or its salesman, Michael Botkin, returned
calls to comment on the suit, the North County Times states.
Annuities are products that require a large payment up front,
which then pay benefits in small installments over a long
period, or for the buyer's lifetime. They are useful, therefore,
to older people who wish to establish a steady stream of cash
they can use to pay day-to-day expenses. In contrast, life
insurance policies usually require periodic premium payments by
the buyer and pay a lump sum when the buyer dies. A deferred
annuity is an insurance product that requires a lump-sum
payment, but does not pay out any money for a fixed term of
years. The purchase price often is lower, because the time
during which no pay out is taking place allows the insurance
Company to invest the money and earn revenues that will be
available to pay the buyer, who is called an annuitant.
Mr. Iorio's attorney, Ronald Marron, Asset Marketing's salesman,
Mr. Botkin, told the North County Times that the Company sold
the deferred annuity to Mr. Iorio by persuading him to invest
his Individual Retirement Account (IRA) assets in it. Since the
IRA was a tax deferred investment account, any presumed tax
benefit of buying a deferred annuity was meaningless, so the
product offered a bonus, which however could only be realized
after a long time, and would be lost if Mr. Iorio cashed in his
annuity ahead of schedule, which he ended up doing. The suit
states that it resulted in his 2000 investment of $12,000 paid
out $10,404 in 2005 and that the sale began with a mailed
invitation to attend a senior citizen investment seminar.
The companies involved sell billions of dollars of annuities
annually. According to the complaint, they exhibited a pattern
of failure to ensure that the products they sold to senior
citizens were appropriate for their financial needs, a
requirement of California law. Currently, Mr. Botkin is
executive vice president of sales at Asset Marketing and also is
president of Preservation Financial and Insurance Services, a
Company sharing an office address with Asset Marketing in San
Diego.
BANK ONE: Securities Lawsuit Settlement Hearing Set May 19, 2005
----------------------------------------------------------------
The United States District Court for the Northern District of
Illinois - Eastern division will hold a fairness hearing for the
proposed settlement of the matter: In re Bank One Securities
Litigation - First Chicago Shareholder Claims (Civil Action No.
00 c 767) on behalf of all persons and entities who acquired
their shares of Bank One Corporation ("Bank One") common stock
in exchange for their First Chicago NBD Corporation ("First
Chicago") common stock pursuant to the Registration Statement
and Merger Proxy/Prospectus, in connection with the Merger
between Bank One and First Chicago on October 2, 1998, excluding
all persons who sold their stock prior to August 30, 1999,
Defendants, any entity in which a Defendant has a controlling
interest or is part or subsidiary of, or is controlled by Bank
One and the directors, officers, affiliates, legal
representatives, heirs, predecessors, successors and assigns of
any of the Defendants (the "Class").
According to the court, a Hearing will be held on May 19, 2005,
at 8:45 a.m. before the Honorable Wayne R. Andersen for the
purposes of determining:
(1) whether a proposed Settlement of the above Litigation
for the principal amount of One Hundred Twenty Million
Dollars ($120,000,000), plus accrued interest, should
be approved by the Court as fair, reasonable and
adequate;
(2) whether an Order of Final Judgment and Dismissal
approving the Settlement and dismissing the Litigation
on the merits and with prejudice should be entered;
(3) whether the proposed Plan of Allocation is fair and
reasonable; and
(4) whether the application for attorneys' fees and
reimbursement of expenses is reasonable and should be
approved.
The litigation is a consolidated class action under the federal
securities laws concerning the Merger of First Chicago and Bank
One in October of 1998. Plaintiffs allege that Bank One and the
other Defendants made material misstatements and omissions in
connection with that transaction. Defendants deny all
allegations of wrongdoing, deny any violations of the securities
laws, maintain that they acted properly in all respects and make
no admission of fault, liability or damages in connection with
the proposed Settlement or otherwise.
For more details, contact First Chicago Shareholder Litigation -
Claims Administrator c/o Strategic Claims Services by Mail: 2710
Concord Road, Suite 5, Aston, Pennsylvania 19014 by Phone: 1-
866-274-4004 or visit their Web site:
http://www.strategicclaims.netOR Susman, Watkins & Wylie, LLP
by Mail: Two First National Plaza, Suite 600, Chicago, Illinois
60603 or by Phone: 1-800-833-7803.
C.H. ROBINSON: MI Gender Discrimination Suit Given Class Status
---------------------------------------------------------------
Except for female employees' claims of sexual harassment, the
gender discrimination lawsuits against C.H. Robinson Worldwide
recently received class action status, thus moving the suits
against the Eden Prairie-based trucking and transport firm
closer to trial, the Pioneer Press reports.
The ruling by U.S. District Court Judge Joan N. Ericksen in St.
Paul, Minnesota said claims alleging that equally qualified
women were paid less than men for the same work, and that
another set of claims alleging that women were denied promotions
at the firm, can each proceed as class action cases.
Steve Sprenger, an attorney representing women who are suing the
Company, told the Pioneer Press the portion of the case relating
to pay discrimination involves about 2,000 women. He also
explained that Judge Ericksen's decision stated that salaried
employees could bring a suit as a class, but not part-time
employees. The lawsuit involving promotions involves about 600
women, adds Mr. Sprenger, who is hopeful that trials on those
two portions of the lawsuits could start later this year.
However, Judge Ericksen's ruling also said that the plaintiffs'
anecdotal claims of sexual harassment in C.H. Robinson branch
offices all over the country didn't prove that the Company had a
common policy of promoting such behavior. Class action for that
portion of the case could have involved 3,000 female employees.
While the women alleging sexual harassment can still file
individual claims, the likely route to court would be less
direct than a class action. Next week, according to Mr. Sprenger
said they would file claims for many women with the federal
Equal Employment Opportunity Commission. They would then hope to
get a right-to-sue notice and pursue individual claims, or the
EEOC could file a suit of its own on the women's behalf.
Janet C. Evans, an attorney representing C.H. Robinson in the
case, told the Pioneer Press that she was pleased with the
rulings but that it was premature to discuss what the Company's
next steps in the case might be. In a recently released
statement, the Company even said that while "we have had
isolated instances of individuals violating our policies" on
harassment and inappropriate conduct, the violations are dealt
with on a timely basis when the Company finds out about them.
The examples of sexual harassment cited in the case included
pornographic images on computer screens that women saw as they
passed male co-workers' desks. Evidence included images of sex
acts that were sent to women in e-mails, the suit even goes on
to claim that men talked about their sexual exploits and rated
female employees based on their appearance.
Working in branch offices around the world, C.H. Robinson
employees last year coordinated 3.8 million shipments for 18,000
customers. The Company had revenue of $4.3 billion last year,
and net income of $137.3 million.
CORNING INC.: Appeals Court Upholds Securities Suit Dismissal
-------------------------------------------------------------
The United States Court of Appeals for the Second Circuit has
upheld the dismissal of a proposed class action securities fraud
complaint against Corning Incorporated and several of its
officers alleging violations of Sections 11 and 15 of the
Securities Act of 1933, and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934. In a decision dated March 30,
2005, the appellate court ruled that Judge Charles J. Siragusa
of the United States District Court for the Western District of
New York correctly decided that the defendants, represented by
Nixon Peabody LLP, were not liable for losses caused by the
decline in the price of Corning stock between September 2000 and
July 2001. The corporate officers named in the suit included
Roger G. Ackerman, who served as chief executive officer and
chairman of the board of directors; Katherine A. Asbeck, who
served as senior vice president, controller, and principal
accounting officer; and James B. Flaws, who served as executive
vice president and chief financial officer.
The plaintiffs alleged that the defendants misrepresented demand
for Corning's photonics products, the value of goodwill
associated with two multibillion-dollar acquisitions, and the
value of Corning's photonics-related inventory. According to the
plaintiffs, although Corning made a series of increasingly
cautionary warnings and dire predictions about its business
beginning in January 2001, as the telecommunications market
deflated, the true facts were disclosed only in July 2001.
The Court of Appeals held that Judge Siragusa was correct in
dismissing all claims of wrongdoing by Corning and its
executives. Noting that plaintiffs had not provided any support
to prove that Corning was aware that its business would slow,
the Court affirmed Judge Siragusa's ruling that Corning was not
required to be clairvoyant, and that Corning's expressions of
hope regarding future earnings were tempered by sufficient
warnings of risks.
Carolyn G. Nussbaum and Richard A. McGuirk, partners at Nixon
Peabody LLP, represented the defendants.
CV THERAPEUTICS: Discovery Proceeds in CA Securities Fraud Suit
---------------------------------------------------------------
Discovery is ongoing in the consolidated securities class action
filed against CV Therapeutics, Inc. and certain of its officers
and directors in the U.S. District Court for the Northern
District of California captioned "In re CV Therapeutics, Inc.
Securities Litigation."
The first suit, styled "Crossen v. CV Therapeutics, Inc., et
al.," was filed on behalf of a purported class of purchasers of
the Company's securities, and seeks unspecified damages. As is
typical in this type of litigation, several other purported
securities class action lawsuits containing substantially
similar allegations were filed against the defendants. In
November 2003, the court appointed a lead plaintiff, and in
December 2003, the court consolidated all of the securities
class actions filed to date into a single action. In January
2004, the lead plaintiff filed a consolidated complaint.
The Company and the other named defendants filed motions to
dismiss the consolidated complaint in March 2004. In August
2004, these motions were granted in part and denied in part. The
court granted the motions to dismiss by two individual
defendants, dismissing both individuals from the action with
prejudice, but denied the motions to dismiss by the Company and
the two other individual defendants. After the motion to
dismiss was decided, this action entered the discovery phase.
DAILY NEWS: Attorney Set To File Suit Over Bungled Contest in NY
----------------------------------------------------------------
The Daily News is preparing for the first class-action lawsuit
filed against it, on behalf of cheated winners of its bungled
"Scratch n' Stiff" contest, the New York Post reports.
According to attorney Steven Gildin, he will file the suit in
Bronx Civil Court, seeking unspecified damages on behalf of
"thousands" of people who were cruelly jilted by the Snooze's
contest mess.
"We fleshed out the legal theory of gross negligence, breach of
contract, consumer fraud," the Queens attorney told the Post.
"We've been contacted by 1,200 to 1,400 people, and God knows
how many more people are out there," he adds.
The class-action suit has three named plaintiffs, Angela Deoleo,
a 25-year-old paralegal, Moustapha Diop, a 49-year-old court
interpreter and Melissa Clarke, 22, who is unemployed. "I have
$20,000 in student loans that I wanted to pay back," Ms. Clarke
told the New York Post. "When I found out the truth, it crushed
my heart."
Though currently, Mr. Gildin's suit does not have a dollar
figure, he has estimated that it could run into the "many
millions" as more plaintiffs sign on, the Post reports.
DYNEGY INC.: Reaches Settlement For Consolidated TX ERISA Suit
--------------------------------------------------------------
Dynegy, Inc. reached a settlement for the consolidated class
action filed against Dynegy Inc.'s 401(k) Savings Plan in the
United States District Court for the Southern District of Texas.
The class action was filed on behalf of participants holding
Company common stock in the Dynegy 401(k) Savings Plan during
the period from April 1999 to January 2003. This complaint
alleges violations of the Employee Retirement Income Safety Act
(ERISA) in connection with the Company's 401(k) Savings Plan,
including claims that the Company's Board and certain of its
former and current officers, past and present members of its
Benefit Plans Committee, former employees who served on a
predecessor committee to its Benefit Plans Committee, and
Vanguard Fiduciary Trust Company and CG Trust Company (trustees
of the trust that held Plan assets for portions of the class
period) breached their fiduciary duties to the Plan's
participants and beneficiaries in connection with the Plan's
investment in Dynegy common stock - in particular with respect
to our financial statements, Project Alpha, round-trip trades
and gas price index reporting. The lawsuit seeks unspecified
damages for the losses to the Plan, as well as attorney's fees
and other costs.
In July 2003, the Company filed a motion to dismiss this action.
The judge entered an order on the Company's motion in March
2004, dismissing several of the plaintiff's claims and all of
the defendants except the Company and the members of its Benefit
Plans Committee from January 2002 to January 2003, the
substantially reduced class period established by the order. In
May 2004, in response to the plaintiff's request, the judge
ordered the parties to engage in mediation. The parties
mediated for two months, and ultimately reached a settlement
under which the defendants agreed to pay $30.75 million to the
plaintiff for a full and final release of all claims. In
December 2004, the Court granted final approval of the agreement
and the settlement was fully funded by insurance proceeds.
Plaintiff's counsel is currently in the process of distributing
the settlement funds to the class members.
DYNEGY INC.: Illinois Power Employees Launch ERISA Fraud Lawsuit
----------------------------------------------------------------
Dynegy, Inc. faces a class action filed in the United States
District Court for the Southern District of Illinois by three
Illinois Power employees and participants in the Illinois Power
Company Incentive Savings Plan For Employees Covered Under a
Collective Bargaining Agreement, which the Company refers to as
the Illinois Power 401(k) Plan, purporting to represent all
Illinois Power employees who held the Company's common stock
through the Illinois Power 401(k) Plan during the period from
February 2000 through September 2004. The suit also names as
defendants Illinois Power, Dynegy Midwest Generation, Inc. (DMG)
and several individual defendants.
The complaint alleges violations of the Employee Retirement
Income Security Act (ERISA) in connection with the Illinois
Power 401(k) Plan, including claims that certain of the
Company's former and current officers (who are past and present
members of its Benefit Plans Committee) breached their fiduciary
duties to the plan's participants and beneficiaries in
connection with the plan's investment in Dynegy common stock in
a manner similar to that alleged in the complaint filed with
respect to the ERISA litigation the Company settled in December
2004 described above. The lawsuit seeks unspecified damages for
the losses to the plan, as well as attorney's fees and other
costs.
The suit is styled "Lively, et al. v. Dynegy, Inc., et al., case
no. 3:05-cv-00063-MJR," filed in the United States District
Court for the Southern District of New York, under Judge Michael
J. Reagan. Representing the defendants is Charles L. Joley,
Donovan, Rose et al., Generally Admitted 8 East Washington
Street Belleville, IL 62220 Phone: 618-235-2020 Fax: 618-235-
9632, E-mail: cjoley@ilmoattorneys.com. Representing the
plaintiffs are:
(1) Matthew B. Leppert, James I. Singer, Schuchat, Cook et
al. 1221 Locust Street 2nd Floor St. Louis, MO 63103-
2364 Phone: 314-621-2626, Fax: 314-621-2378, E-mail:
MBL@SCHUCHATCW.COM, JIS@SCHUCHATCW.COM;
(2) Jeffrey Lewis, Teresa S. Renaker, Lewis, Feinberg et
al., 1330 Broadway Suite 1800 Oakland, CA 94612 Phone:
510-839-6824 Fax: 510-839-7839, E-mail:
jlewis@lewisfeinberg.com or trenaker@lewisfeinberg.com
DYNEGY INC.: Working To Settle Consolidated TX Securities Suit
--------------------------------------------------------------
Dynegy, Inc. is actively mediating the securities class action
filed against it in the United States District Court for the
Southern District of Texas, on behalf of purchasers of the
Company's publicly traded securities from January 2000 to July
2002 seeking unspecified compensatory damages and other relief.
The lawsuit as filed principally alleged that the Company and
certain of its current and former officers and directors
violated the federal securities laws in connection with our
disclosures, including accounting disclosures, regarding Project
Alpha (a structured natural gas transaction entered into by the
Company in April 2001), round-trip trading, the submission of
false trade reports to publications that calculate natural gas
index prices, the alleged manipulation of the California power
market and the restatement of the Company's financial statements
for 1999-2001. The Regents of the University of California are
lead plaintiff and Lerach Coughlin Stoia & Robbins, LLP is class
counsel.
The plaintiff filed an amended complaint in January 2004 and, in
March 2004, the Company filed motions to dismiss. Briefing on
the Company's motions was completed in June 2004. The judge
entered an order on the Company's motion in October 2004
dismissing all claims brought by the plaintiff under the
Securities Act of 1933, except those relating to the Company's
March 2001 note offering and December 2001 common stock
offering, and the Securities Exchange Act of 1934, except those
dealing with Project Alpha and two alleged round-trip trades.
Further, the judge scheduled the trial to commence in May 2005.
Also in October 2004, the plaintiff voluntarily dismissed its
claim under the Securities Act of 1933 relating to our March
2001 note offering. The parties filed motions on the class
certification issue throughout the fourth quarter 2004.
In December 2004, the court issued an order identifying the
class period for the Exchange Act claims as June 21, 2001
through July 22, 2002, and the class period for the Securities
Act claims to begin December 20, 2001. The court is taking
discovery on the issue of the closing date for the Securities
Act class period. The Company has been, and will continue to
actively mediate this matter to reach a reasonable settlement if
possible. However, the Company will be fully prepared for the
trial scheduled for May 2005 in the event a settlement cannot be
reached with the plaintiff.
In addition, the Company is a nominal defendant in several
derivative lawsuits brought by shareholders on the Company's
behalf against certain of its former officers and current and
former directors whose claims are similar to those described
above. These lawsuits have been consolidated into two groups -
one pending in federal court and the other pending in state
court. A hearing on the Company's motion to dismiss the federal
derivative claim was held in February 2005, at which time the
judge indicated his intent to stay or dismiss this matter
pending the resolution of the shareholder litigation described
above. Subsequently, in February 2005, the plaintiffs
voluntarily dismissed this lawsuit. Discovery in the state
derivative matter is ongoing.
The suit is styled ". The Regents of the University of
California v. Dynegy, Inc., et al, case no. 4:02-cv-02374,"
filed in the United States District Court for the Southern
District of Texas, under Judge Sim Lake. Representing the
plaintiffs is Lerach Coughlin Stoia Geller et al, 9601 Wilshire
Bld, Ste 510 Los Angeles, CA 90210 Phone: 310-859-3100.
DYNEGY INC.: To Ask CA Court To Dismiss Remaining Energy Suits
--------------------------------------------------------------
Dynegy, Inc. intends to ask California Superior Court to dismiss
the remaining class actions filed against it and numerous other
power generators and marketers, arising from their participation
in the western power markets during the California energy
crisis.
Eight lawsuits, which primarily allege manipulation of the
California wholesale power markets and seek unspecified treble
damages, were consolidated before a single federal judge. That
judge dismissed two of the cases in the first quarter 2003 on
the grounds of Federal Energy Regulation Commission (FERC)
preemption and the filed rate doctrine. The Ninth Circuit Court
of Appeals affirmed these dismissals in June 2004 and September
2004, respectively. An appeal from the Ninth Circuit's
affirmation of the September 2004 dismissal has been taken to
the United States Supreme Court, and the Company filed its
response brief in January 2005. Regarding the remaining six
consolidated cases, the Ninth Circuit denied the Company's
appeal of a prior decision to remand those cases to state court
and affirmed the remand in December 2004. The Company intends
to file a motion to dismiss these cases in the state court in
the first quarter 2005.
In addition to the eight consolidated lawsuits discussed above,
nine other putative class actions and/or representative actions
were filed in state and federal court on behalf of business and
residential electricity consumers against the Company and
numerous other power generators and marketers between April and
October 2002. The complaints allege unfair, unlawful and
deceptive practices in violation of the California Unfair
Business Practices Act and seek an injunction, restitution and
unspecified damages.
While some of the allegations in these lawsuits are similar to
the allegations in the eight lawsuits described above, these
lawsuits include additional allegations relating to, among other
things, the validity of the contracts between these power
generators and the California Department of Water Resources
(CDWR). The court dismissed eight of these nine actions,
although the plaintiffs appealed, and the briefing on that
appeal was completed in October 2004. In February 2005, the
Ninth Circuit issued its decision affirming the denial of remand
and dismissal of these cases. The ninth case was remanded to
state court, where a newly added defendant filed a motion in
February 2004 to remove the case back to federal court. In
January 2005, following a hearing on the issue, the court denied
the removal and returned the case to state court. The Company
intends to file expeditiously a motion to dismiss this case.
In December 2002, two additional actions were filed with similar
allegations on behalf of residents of Washington and Oregon. In
May 2003, the plaintiffs voluntarily dismissed these actions and
refiled them in California Superior Court as a class action
complaint. The complaint, which was brought on behalf of
consumers and businesses in Oregon, Washington, Utah, Nevada,
Idaho, New Mexico, Arizona and Montana that purchased energy
from the California market, alleges violations of the Cartwright
Act and unfair business practices. The Company has removed the
action from state court and consolidated it with existing
actions pending before the United States District Court for the
Northern District of California. The hearing on plaintiffs'
appeal to remand to state court occurred in February 2004. The
judge stayed his ruling on the appeal pending the Ninth
Circuit's ruling on the six consolidated cases referenced above.
DYNEGY INC.: Continues To Face CA Gas Index Manipulation Suits
--------------------------------------------------------------
Dynegy, Inc. faces several lawsuits in California courts,
claiming damages resulting from the alleged manipulation of gas
index publications and prices by the Company and others energy
companies. The suits are styled:
(1) ABAG v. Sempra Energy et al., filed in state court in
November 2004);
(2) Ableman Art Glass v. Encana Corporation et al. class
action filed in federal court in December 2004);
(3) Benschiedt (class action filed in state court in
February 2004);
(4) Bustamante v. The McGraw Hill Companies et al. (class
action filed in state court in November 2002);
(5) City and County of San Francisco v. Dynegy Inc. et al.
(filed in state court in July 2004);
(6) County of San Diego v. Dynegy Inc., Dynegy Marketing
and Trade, West Coast Power, et al. (filed in state
court in July 2004);
(7) County of San Mateo v. Sempra Energy et al. (filed in
state court in December 2004);
(8) County of Santa Clara v. Dynegy Inc., Dynegy Marketing
and Trade, West Coast Power, et al. (filed in state
court in July 2004);
(9) Fairhaven Power Company v. Encana Corp. et al, (class
action filed in federal court in September 2004);
(10) In re Natural Gas Commodity Litigation (class action
filed in federal court in January 2004);
(11) Leggett v. Duke Energy et al. (class action filed in
state court in January 2005);
(12) Multiut v. Dynegy Inc. (filed in federal court in
December 2004);
(13) Nelson Brothers LLC v. Cherokee Nitrogen v. Dynegy
Marketing and Trade and Dynegy Inc. (filed in state
court in April 2003);
(14) Nurserymen's Exchange v. Sempra Energy et al. (filed in
state court in October 2004);
(15) Older v. Dynegy Inc. et al. (filed in federal court in
September 2004);
(16) Owens-Brockway v. Sempra Energy at al. (filed in state
court in January 2005);
(17) People of the State of Montana et al. v. Williams
Energy Marketing et al. (filed in federal court in July
2003);
(18) Sacramento Municipal Utility District (SMUD) v. Reliant
Energy Services, et al. (filed in state court in
November 2004);
(19) School Project for Utility Rate Reduction v. Sempra
Energy et al. (filed in state court in November 2004);
(20) Sierra Pacific Resources and Nevada Power Company v. El
Paso Corp. et al. (filed in federal court in April
2003);
(21) Tamco v. Dynegy Inc. et al. (filed in state court in
December 2004);
(22) Texas-Ohio Energy, Inc. v. CenterPoint Energy Inc., et
al. (class action filed in federal court in November
2003); and
(23) Utility Savings & Refund v. Reliant Energy Services, et
al. (class action filed in federal court in November
2004).
In each of these suits, the plaintiffs allege that the Company
and other energy companies engaged in an illegal scheme to
inflate natural gas prices by providing false information to gas
index publications, thereby manipulating the price. All of the
complaints rely heavily on the Federal Energy Regulatory
Commission (FERC) and Commodity Futures Trading Commission
(CFTC) investigations into and report concerning index-reporting
manipulation in the energy industry. The plaintiffs generally
seek unspecified actual and punitive damages relating to costs
they claim to have incurred as a result of the alleged conduct.
The Company has not been served in the Montana or Leggett cases.
Pursuant to various motions filed by the parties to the
litigation described above, the gas index pricing lawsuits
pending in state court (except for "Nelson Brothers" ) have been
consolidated before a single judge in state court in San Diego.
These cases are now entitled the "Judicial Counsel Coordinated
Proceeding (JCCP) 4221, 4224, 4226, and 4228, the Natural Gas
Anti-Trust Cases, I, II, III, & IV," which the Company refers to
as the "Coordinated Gas Index Cases." A case management
conference is expected in the next 60 days.
The "Nelson Brothers" lawsuit, in which the Company has been
brought in as a third party by the defendant, Cherokee Nitrogen,
involves an alleged breach of a gas purchase contract and
continues in state court in Alabama. The parties are presently
engaged in discovery.
As to the gas index pricing lawsuits that have been filed in
federal court, the "Sierra Pacific" case was dismissed in
December 2004 on defendants' motion. In "Texas-Ohio," the
defendants filed a motion to dismiss in May 2004, on which the
court held a hearing in January 2005. The Company is awaiting
the court's ruling. The parties are actively engaged in
discovery in the "In re Natural Gas Commodity Litigation"
matter, following denial of the appeal of the previous denial of
defendants' motion to dismiss. The "Multiut" case involves a
counterclaim filed by the defendant, Multiut, against whom the
Company has a pending breach of gas purchase contract claim.
That case is proceeding in federal court in Illinois. The
remaining federal court cases are pending transfer, or have
already been transferred, to the federal judge in Nevada who is
also currently presiding over the "Sierra Pacific" and "Texas-
Ohio" matters.
DYNEX CAPITAL: NY Fraud Suit Launched Over Merit Series 13 Bonds
----------------------------------------------------------------
Dynex Capital Inc., a specialty finance Company based in
Richmond, Virginia, is facing a lawsuit seeking class-action
status that has been filed on behalf of a Teamsters pension fund
in U.S. District Court for the Southern District of New York,
which charges it of securities fraud and misleading investors,
the Richmond Times Dispatch reports.
Stephen Benedetti, chief financial officer of Dynex told the
Richmond Times Dispatch, "We intend to vigorously defend
ourselves."
Filed in February and handled by the law firm of Schoengold
Sporn Laitman & Lometti of New York, the suit's allegations
involve bonds issued in 1999 by Merit Securities Corp., a Dynex
subsidiary, which had been bought by Teamsters Local 445 Freight
Division Pension Fund in 2002. The bonds were officially known
as the Merit Series 13 bonds, they were subsequently downgraded
by rating agencies and are secured by manufactured housing
loans. The complaint alleges that the bond prospectus contained
false and misleading information. Misstatements resulted in
artificially high credit ratings and pricing, the suit contends.
Defendants named in the suit, include Mr. Benedetti and Thomas
H. Potts, the former president of the Company as well as Dynex
Capital, Merit Securities, Lehman Brothers Inc. and Greenwich
Capital Markets Inc.
In a press statement, the Company said that the performance of
the bonds was "generally in line or exceeded most other similar
vintage securities," based on information available from third
parties, the Richmond Times Dispatch reports.
Dynex invests in single-family, commercial-mortgage and
manufactured housing loans. The Company, which in essence is a
real estate investment trust, employs about 20 people in
Pittsburgh and 15 at its western Henrico County headquarters.
EQUITY RESIDENTIAL: Appeals $1.6M Ruling in FL Property Lawsuit
---------------------------------------------------------------
Equity Residential appealed the Palm Beach County Court in
Florida's decision, which granted $1.6 million in damages in
favor of the plaintiffs in the class action filed against it,
regarding certain charges made to residents who terminated their
leases early or failed to provide sufficient notice of intent to
vacate.
In December 2004, the Court issued a Findings of Fact and
Conclusions of Law holding those fees legally uncollectible
under Florida law. In recognition of the Findings of Fact and
Conclusions of Law, which awarded damages and interest to the
class in the amount of approximately $1.6 million, the Company
established a reserve of approximately $1.6 million and
correspondingly recorded this as a general and administrative
expense. Due to pending appeals, the award is neither final nor
enforceable.
FORD MOTOR: CA Appeals Court Rejects Argument In Manifold Case
--------------------------------------------------------------
Ford Motor Co., the second-biggest automaker in the United
States, lost a court appeal that sought to keep a lawsuit over
an allegedly defective engine part from proceeding as a group
claim on behalf of about 100,000 people, who are seeking more
than $100 million in damages and attorneys' fees, the Bloomberg
News reports.
The U.S. 9th Circuit Court of Appeals in San Francisco rejected
Ford's argument that a trial judge in Oakland improperly decided
that the plaintiffs could sue as a class. In its appeal, Ford
had sought a review by the appeals court before the case goes to
trial, arguing that certification of a class action created
"tremendous pressure" to settle. In its decision the appeals
court explained, "Although the district court was succinct, it
provided detailed, substantive examples of the common issues.
Requiring the district court to expand its analysis would
produce nothing more than a lengthy explanation of the obvious."
Ford spokeswoman Kathleen Vokes told Bloomberg News, the appeals
court's decision to not review the certification order was based
on "its view that appeals before trial are strongly disfavored."
She added, "If necessary, Ford will again ask the 9th Circuit to
review the trial court's order after trial."
Court documents revealed that the suit had claimed that Ford
installed plastic intake manifolds that were prone to cracking
and causing coolant leaks on its 1996 to 2001 Mercury Grand
Marquis, Lincoln Town Car and Ford Crown Victoria cars, as well
as 2002 Explorers and 1998 to 2001 Mustangs. Ford had stopped
using the manifolds in 2002.
GENTA INC.: Faces Consolidated Securities Fraud Lawsuit in NJ
-------------------------------------------------------------
Genta, Inc. and certain of its principal officers face a
consolidated securities class action filed in the United States
District Court for the District of New Jersey on behalf of
purported classes of the Company's shareholders who purchased
Company securities during several class periods.
The consolidated suit alleges that the Company and certain of
its principal officers violated the federal securities laws by
issuing materially false and misleading statements regarding
Genasense, for the treatment of melanoma that had the effect of
artificially inflating the market price of the Company's
securities. The shareholder class action complaint in the
various actions seeks monetary damages in an unspecified amount
and recovery of plaintiffs' costs and attorneys' fees.
In addition, three shareholder derivative actions have been
filed against the directors and certain officers of the Company
in New Jersey State and Federal courts. Based on facts
substantially similar to those asserted in the shareholder class
actions, the derivative plaintiffs claim that defendants have
breached their fiduciary duties to the shareholders and other
violations of New Jersey law.
The suit is styled "In re Genta, Inc. Securities Litigation,
case no. 2:04-cv-02123-JAG-GDH," filed in the United States
District Court in New Jersey, under Judge Joseph A. Greenaway,
Jr. Representing the plaintiffs are Melvyn I. Weiss,
MILBERG, WEISS, BERSHAD & SCHULMAN, ESQS., One Pennsylvania
Plaza, New York NY 10119 Phone: 212-594-5300; and Patrick Louis
Rocco, SHALOV STONE & BONNER LLP 163 Madison Avenue PO Box 177
Morristown, NJ 07962-1277 Phone: (973) 775-8997 E-mail:
procco@lawssb.com. Representing the Company are Thomas A.
Cunniff, Jack L. Kolpen FOX ROTHSCHILD LLP Princeton Pike
Corporate Center 997 Lenox Drive Building 3, Lawrenceville NJ
08648-2311 Phone: (609) 896-3600 Email:
tcunniff@foxrothschild.com or jkolpen@foxrothschild.com.
GILEAD SCIENCES: CA Court Dismisses Consolidated Securities Suit
----------------------------------------------------------------
The United States District Court for the Northern District of
California dismissed without prejudice the consolidated
securities class action filed against Gilead Sciences, Inc. and
certain of its executive officers.
A purported class action complaint was filed on November 10,
2003, alleging that the defendants violated federal securities
laws, specifically Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 of the Securities and
Exchange Commission, by making certain allegedly false and
misleading statements and omissions. The plaintiff seeks
unspecified damages on behalf of a purported class of purchasers
of Company securities during the period from July 14, 2003
through October 28, 2003. Other similar actions were
subsequently filed and the court issued an order consolidating
the lawsuits into a single action on December 22, 2003.
On February 9, 2004, the court issued an order appointing lead
plaintiffs in the consolidated action. On April 30, 2004, lead
plaintiffs, on behalf of the purported class, filed their
consolidated amended complaint. On June 21, 2004, the Company
and individual defendants filed their motion to dismiss the
consolidated amended complaint. On January 25, 2005, the Court
granted defendants' motion to dismiss with leave to amend.
The suit is styled "In re Gilead Sciences Securities litigation,
case no. 03-CV-4999," filed in the United States District Court
for the Northern District of California under Judge Martin J.
Jenkins. The plaintiff firms in this litigation are:
(1) Geller Rudman, PLLC, 197 South Federal Highway, Suite
200, Boca Raton, FL, 33432, Phone: 561.750.3000, Fax:
888.262.3131, E-mail: info@geller-rudman.com;
(2) Kaplan Fox & Kilsheimer, LLP (San Francisco, CA), 100
Pine Street, 26th Floor, San Francisco, CA, 94111,
Phone: 415.772.4700, Fax: 415.677.1233, E-mail:
info@kaplanfox.com
(3) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(4) Milberg, Weiss, Bershad, Hynes & Lerach LLP (Seattle,
WA), 1001 Fourth Avenue - Suite 3200, Seattle, WA,
98154, Phone: 206.839.0730,
JLG INDUSTRIES: Recalls Trailers Due To Misprinted User Manual
--------------------------------------------------------------
JLG Industries, Inc. is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by voluntarily recalling
335 trailers, namely:
(1) JLG / 1012, model 2005
(2) JLG / 1014, model 2005
(3) JLG / 248, model 2004
(4) JLG / 449, model 2005
(5) JLG / 4610, model 2005
(6) JLG / 7610, model 2005
(7) JLG / 7612, model 2004-2005
(8) JLG / 7614, model 2004
(9) JLG / 7616, model 2004
(10) JLG / EC-10, model 2005
(11) JLG / UT28, model 2004
(12) JLG / UT410, model 2004
(13) JLG / UT49, model 2004-2005
(14) JLG / UT610, model 2005
(15) JLG / UT612, model 2004-2005
(16) JLG / UT614, model 2004
(17) JLG / UT914, model 2005
User manuals sent with these trailers incorrectly state the
values for the wheel lug nut torque. In the event that the lug
nuts are torqued in accordance with the incorrect information
contained in the manual, the lug nuts will not be torqued
properly prior to the towing of the trailer. Improperly torqued
lug nuts may lead to broken studs and wheel detachment. A crash
may occur resulting in serious injuries.
The Company will mail to dealers and owners a new user's manual.
The recall is expected to begin March 31,005. For more details
contact the Company by phone: 877-554-7233 or contact the
NHTSA's auto safety hotline: 1-888-327-4236.
LONE STAR: Pre-Trial Discovery Proceeds in Shareholder Lawsuit
--------------------------------------------------------------
Pre-trial discovery is proceeding in the shareholder derivative
and class action lawsuit filed against certain of Lone Star
Steakhouse & Saloon, Inc.'s present and former directors in
California state court.
The California Public Employees Retirement System ("CalPERS")
filed the shareholders derivative action on October 16, 2001,
alleging breach of fiduciary duties by certain present and
former Directors and that certain of such defendants were
unjustly enriched through related party transactions and by the
re-pricing of stock options previously issued. The lawsuit also
seeks to prevent enforcement of certain change of control
agreements granted to executive officers of the Company, seeks
declaratory and injunctive relief and seeks damages to be paid
to the Company. The Company is a nominal defendant. The
Company has indemnified present and former Directors with
respect to the shareholders derivative action filed by CalPERS
by contractual agreement, as well as by the Articles of
Incorporation of the Company as provided in accordance with the
Delaware General Corporation Law.
On January 9, 2002, CalPERS filed an amended complaint and added
a class action claim to attempt to certify a class action based
on their allegation that a provision in the change of control
agreements violates Delaware law. A motion to dismiss was filed
by all defendants on February 8, 2002, seeking to dismiss all
claims of CalPERS. Discovery was stayed pending a court
decision on the motion to dismiss.
The Vice Chancellor issued his decision on December 18, 2002
dismissing numerous counts and also substantially reducing the
scope of two other claims, both involving the repricing of stock
options. Two of the counts sustained by the court involve
challenges to change of control agreements now expired. On
January 17, 2003, the Vice Chancellor agreed to permit the
plaintiff to proceed with its discovery to obtain certain
documents from certain third parties and the named defendants,
and ordered the plaintiff to timely file its motion to amend its
complaint.
On April 16, 2003, CalPERS filed a Motion for Leave to Amend
Plaintiff's First Amended Complaint, which complaint added no
additional causes but added allegations which are subsequent to
the date of the first complaint and allegations which also
address counts which were dismissed by the Vice Chancellor on
December 18, 2002. All defendants filed objections to CalPERS
attempt to amend and oral argument was heard by the Vice
Chancellor on August 21, 2003. On May 26, 2004, the Court
rendered its decision and allowed CalPERS to amend their
complaint.
MAINE: Judge Authorizes Settlement Notices For Strip Search Case
----------------------------------------------------------------
Judge D. Brock Hornby, of U.S. District Court in Maine,
authorized attorneys representing the plaintiffs in Nilsen v.
York County, a class-action lawsuit alleging that York County
corrections officers conducted illegal strip searches has moved
another step forward, to send out notices of a proposed $3.3
million settlement to those who may have been searched, the
Portsmouth Herald News reports.
Filed in 2002, the suit contends that the York County Sheriff's
Department violated federal law by requiring all persons brought
into the jail for holding to strip and shower in the presence of
a corrections officer, regardless of the reason for their
arrest. The suit was originally filed by Michele Nilsen of North
Andover, Massachusetts, who alleges that she was subjected to a
strip search after being arrested on charges of driving with a
suspended driver's license. According to attorney Howard
Friedman, the judge reviewed the case and determined there is
enough merit to allow notices to be sent out to about 8,000
people.
As previously reported in the March 11, 2005 edition of the
Class Action Reporter, York County had agreed to pay $3.3
million to settle the class-action suit with a hearing date to
review the fairness of the settlement being set for August 1.
If the court grants final approval for the settlement, payments
will be sent to class members with the amount depending on how
many claims are submitted by the July 1 deadline, Mr. Friedman
said. Those who want to be excluded also may file by that date,
he adds.
In April 2004, a three-judge panel of the 1st U.S. Circuit Court
of Appeals in Boston unanimously affirmed the decision of Judge
D. Brock Hornby of the U.S. District Court in Maine to allow the
class-action suit. Judge Hornby in his 2003 ruling had stated
that a suit could be brought against jail and other county
officials on behalf of "all people strip-searched at the York
County Jail after October 14, 1996, under a policy of conducting
the searches without evaluating whether there was reasonable
suspicion to require the search." Eventually class-action
lawsuit members were identified through the jail's computerized
booking data.
York County jail officials, in their response contend that what
they were doing was not a strip search, but a clothing search.
In court documents, the officials are saying that since the
viewing of the inmates' naked bodies is not "deliberate," it
does not qualify as a strip search.
MARYLAND: Injured Officers Launch Suit To Stop Force Retirement
---------------------------------------------------------------
About 30 injured and disabled Baltimore police officers, who are
being forced to retire due to injuries or illnesses launched a
federal class action lawsuit claiming that they are being
unlawfully forced to retire, the WBAL Channel.com reports.
The suit, which names Police Commissioner Leonard Hamm, Mayor
Martin O'Malley and others as defendants, alleges that the
officers' forced retirements violate the federal Americans with
Disabilities Act.
Michael J. Snider, an attorney for the officers, told WBAL a
federal judge was scheduled to hear a request last week to
temporarily halt any changes in the employment status of four of
the disabled officers. Though city police spokesman Matt Jablow
declined to comment on the lawsuit, he has said that the
department issued the retirement orders to save money that could
be used to put more officers on the street, WBAL reports.
The officers filing the suit are among about 160 injured and ill
officers some hurt in the line of duty, who were told in January
to apply for retirement pensions or be fired. Most of the
injured officers were either out of work or have been working
light-duty jobs, and they are unlikely to return to patrol. As
early as last month, some of those officers filed an
administrative complaint with the Equal Employment Opportunity
Commission in hopes of getting the U.S. Department of Justice to
step in and file suit. Mr. Snider said though that the EEOC has
not yet completed its investigation of that complaint.
Lt. Frederick V. Roussey, president of the local police union,
told WBAL he did not pursue a lawsuit against the department
because union lawyers told him it would have about a "20
percent" chance of succeeding. But he did add, "I hope they can
prove everybody wrong and win."
The officers will be retained if they do not receive a pension,
though there is a great disparity between the values of the
types of pensions they could be awarded.
MATRIX FINANCIAL: Faces Fraud Lawsuit in AL Bankruptcy Court
------------------------------------------------------------
Matrix Financial Services Corporation faces a putative class
action lawsuit styled "Monica Thigpen v. Matrix Financial
Services Corporation," filed in the United States Bankruptcy
Court for the Southern District of Alabama.
The plaintiff claims that the Company filed an improper and
false affidavit in connection with plaintiff's Chapter 13
bankruptcy proceeding because the signature page of the
affidavit was executed separate and apart from the other pages,
and has asked the Court to award the plaintiff actual damages,
punitive damages, injunctive relief, attorney's fees and other
relief as may be appropriate. Discovery is ongoing.
MEDIFAST INC.: CA Health Bars Lawsuit Stayed, Pending FDA Appeal
----------------------------------------------------------------
The class action filed against Medifast, Inc. in the Superior
Court for the State of California, City and County of San
Francisco has been stayed pending an appeal to the United States
Food and Drug Administration (FDA) to clarify its regulations.
John Donavin, on behalf of the General Public, filed the suit in
December 2003, alleging Medifast bars contain Vitamin D3 or
Vitamin D in violation of Federal laws and regulations, and asks
for equitable relief and damages. The Company's General counsel
believes that the Company's formulation used in its "meal
replacement" bars for over 20 years has been and is in
conformity with current and past FDA regulations. The Company
believes that the plaintiff's claim lacks merit and may even be
considered frivolous. The Company believes recent legislation
restricting the ability of plaintiff's lawyers from filing local
class action suits should favor the Company's legal position in
this case, the Company said in a disclosure to the Securities
and Exchange Commission.
MONTANA POWER: Firms Go Back Court To Discuss Settlement Dispute
----------------------------------------------------------------
The four law firms representing investors in a class action
lawsuit filed against Montana Power Co. that was recently
settled for $67 million, which is believed to be the second
largest legal settlement in Montana history, are going back to
court April 29 in Butte to ask U.S. District Judge Sam Haddon to
settle an argument on how to implement the settlement and
distribute the money, the Billings Gazette reports.
Known as McGreevey v. Montana Power Co., the suit was filed by
investors claiming they lost $3 billion when the Company sold
off its assets and then quickly went bankrupt. It also claims
that the transformation of Montana Power into the telecom
Company Touch America was never legal because investors weren't
given a chance to vote before the assets were sold.
Under Montana law, a corporation must get prior approval from
its investors before selling off most or all of its assets.
Three years ago, MPC sold its last utility assets to
NorthWestern Corp. The remaining telecommunications Company in
Butte, Touch America, filed for bankruptcy 16 months later.
NorthWestern Corp., the parent Company of NorthWestern Energy,
which succeeded MPC, went bankrupt 19 months later. Court
documents revealed that three insurance companies agreed to pay
the settlement in exchange for the release of all claims against
them, including their insured officers and directors. These
companies held $75 million in insurance policies for Montana
Power, Touch America, NorthWestern, and The Clark Fork and
Blackfoot LLC, plus their directors and officers.
Filed in 2001 at Butte District Court, the McGreevey lawsuit had
asked the judge to nullify the sale of 1999 Montana Power dams
and coal-fired assets to PPL Montana. In lieu of voiding the
sale, the lawsuit sought up to $3 billion for the value
investors lost when the stock collapsed from a high of $65 per
share in March 28, 2000.
Judge Haddon will have several issues to decide during the April
29 hearing. One such decision is regarding on how to notify
people in the lawsuit. No one knows how many investors are in
this class-action lawsuit because people buy and sell stock all
the time. According to estimates, there are around 65,000
shareholders who owned MPC stock five years ago.
Four Montana law firms, including Morrison & Frampton of
Whitefish, represent the investors. Frank Morrison Jr., a former
state Supreme Court judge, told the Billings Gazette, "It's a
gargantuan task to notify 65,000 people."
The other key issue is whether members of the class can opt out
of the settlement. Attorneys for top executives, including Chief
Executive Bob Gannon, do not want people opting out. "Mr.
Gannon's lawyer, for instance, says, no, they can't elect. They
don't want to get sued again," Mr. Morrison said.
People in the class action are unlikely to reject the settlement
though, Mr. Morrison said, since this is a huge lawsuit. He also
pointed out that proceeding with legal action solo or with a few
other investors would be a "daunting task." Additionally, the
bankruptcy judges in both the NorthWestern and Touch America's
cases also must approve the $67 million settlement, if ever it
is distributed.
NEKTAR THERAPEUTICS: Faces Shareholder Fraud Lawsuit in N.D. CA
---------------------------------------------------------------
Nektar Therapeutics, Inc. faces a securities class action filed
in the United States District Court for the Northern District of
California, styled "Norman Rhodes, et al. v. Nektar
Therapeutics, Ajit Gill, J. Milton Harris, and Robert B Chess,
Case No. C 04-03735 JSW." The suit also names as defendants
certain of the Company's current officers and directors.
The complaint alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5. The
plaintiff seeks to represent a putative class of all purchasers
of the Company's s securities between March 4, 2004 and August
4, 2004 (the "Class Period"). The complaint generally alleges
that, during that Class Period, the Company and the individual
defendants made false or misleading statements in certain press
releases regarding Exubera. The Complaint seeks unspecified
monetary damages and other relief against all defendants. One
motion for appointment of a lead plaintiff has been filed, and
that motion is pending.
The suit is "Norman Rhodes, et al. v. Nektar Therapeutics, Ajit
Gill, J. Milton Harris, and Robert B Chess, Case No. C 04-03735
JSW," filed in the United States District Court for the Northern
District of California, under Judge Jeffrey S. White.
Representing the Company are Boris Feldman, Cheryl W. Foung,
Ignacio E. Salceda, Wilson Sonsini Goodrich & Rosati 650 Page
Mill Road Palo Alto, CA 94304-1050 Phone: 650-493-9300 Fax: 650-
565-5100, E-mail: boris.feldman@wsgr.com or cfoung@wsgr.com or
isalced@wsgr.com; and Claudia N. Main, Wilson Sonsini Goodrich &
Rosati One Market Street Spear Tower Suite 3300 San Francisco,
CA 94105 Phone: 415-947-2053 E-mail: cmain@wsgr.com.
Representing the defendants are:
(1) Robert S. Green, Green Welling LLP 235 Pine Street 15th
Floor San Francisco, CA 94104 Phone: 415/477-6700 Fax:
415-477-6710 E-mail: CAND.USCOURTS@CLASSCOUNSEL.COM;
(2) Richard A. Maniskas, Marc A. Topaz, Schiffrin &
Barroway, LLP 280 King of Prussia Road Radnor, PA 19087
Phone: 610-667-7706 Fax: 610-667-7056
(3) Tamara Skvirky Schiffrin & Barroway, LLP Three Bala
Plaza East Suite 400 Bala Cynwyd, PA 19004 Phone: 610-
667-7706
NEW YORK: Judge Approves $1.7M Newburgh Strip-Search Settlement
---------------------------------------------------------------
Federal Judge Charles Brieant recently approved a $1.7 million
settlement of a class action strip-search lawsuit against the
City of Newburgh and its police department, the Times Herald-
Record reports.
Submitted to the Judge Brieant last week, it calls for $1.2
million in payments by the city to people who were strip-
searched between March 1998 and August 2000, after being
arrested on charges that didn't involve drugs or weapons. The
settlement was the product of negotiations by lawyers for the
city, former police Chief William Bloom and Timothy Maneely, the
New Windsor man who filed the suit in 2000.
By April 12, the city must begin posting notices of the
settlement at City Hall and the police department and must
advertise the settlement in the Times Herald-Record, which is
intended to give notice to people who may be eligible to collect
up to $1,000 each. In addition, a copy of the settlement should
also be available in the city clerk's office. A hearing on the
fairness of the settlement will be held on June 24 before Judge
Brieant in U.S. District Court in White Plains. If the
settlement goes uncontested, it'll take effect after the
hearing.
NEW YORK: Uninsured Plaintiffs' Lawsuit V. Hospital Dismissed
-------------------------------------------------------------
The New York and Presbyterian Hospital, represented by the law
firm of Sills Cummis Epstein & Gross P.C., gained a significant
victory when the Honorable Loretta A. Preska of the U.S.
District Court for the Southern District of New York dismissed
with prejudice all of plaintiffs' claims in Kolari v. New-York
Presbyterian Hospital, 04-Cv-5505. The District Court found that
none of plaintiffs' claims had any legal basis and held that
neither federal nor New York law required the hospital to
provide care to allegedly uninsured plaintiffs at the same rates
it had negotiated with health insurers.
The Hospital takes great pride in being a charitable institution
that provides a substantial amount of uncompensated care to the
community, as well as a vast array of other community services.
It is pleased that the District Court dismissed this burdensome
litigation and recognized that the issue of funding affordable
health care for the uninsured has to be addressed by
legislatures rather than by the courts.
Kolari was one of a group of suits against not-for-profit
hospitals in federal and state courts throughout the country.
This decision is the first by a federal court to dismiss all of
the state law claims, as well as federal law claims, with
prejudice. The District Court began its opinion by saying:
"Plaintiffs here have lost their way; they need to consult a map
or a compass or a Constitution because Plaintiffs have come to
the judicial branch for relief that may only be granted by the
legislative branch."
James S. Frank, Jeffrey J. Greenbaum and James M. Hirschhorn of
Sills Cummis Epstein & Gross and James V. Kearney and Stuart S.
Kurlander of Latham & Watkins represented the New York and
Presbyterian Hospital. James S. Frank is a Member of Sills
Cummis Epstein & Gross and heads the Firm's New York Health and
Hospital Law Practice. Jeffrey J. Greenbaum is Chairman of the
Firm's Class Action Litigation Practice Group.
Mr. Greenbaum, who argued on behalf of the Hospital, is the
former Co-Chair of the Class Actions and Derivative Suits
Committee of the American Bar Association's Section on
Litigation and a member of the ABA President's Task Force on
class action reform, and has testified on class action reform
before the U.S. Supreme Court Committee responsible for
recommending revisions to the Federal Rules of Civil Procedure.
NEWMAR CORPORATION: Recalls Motorhomes Due To Safety Hazards
------------------------------------------------------------
Newmar Corporation is cooperating with the National Highway
Traffic Safety Administration by voluntarily recalling several
motorhomes, namely:
(1) NEWMAR / KOUNTRY STAR, model 2003-2004
(2) NEWMAR / MOUNTAIN AIRE, model 2003-2004
(3) NEWMAR / SCOTTSDALE, model 2003-2004
Certain Class A motorhomes built on workhorse chassis fail to
comply with the requirements of federal motor vehicle safety
standard (FMVSS) no. 101, "Controls and Display" and Standard
no. 105 "hydraulic and electric brake systems." Models with
actia instrument cluster, the incorrect software programmed into
the cluster such that certain warnings are not displayed.
Incorrect software may not have the ability to illuminate
warning lamps indicating brake system failures. The standards
require driver warning when brake failure codes are set.
Workhose is conducting the owner notification and remedy for
this campaign. For more details, contact Workhorse by Phone:
1-877-294-6773 or the Company by Phone: 574-773-7719, or contact
the NHTSA's auto safety hotline: 1-888-327-4236.
OMNICOM GROUP: NY Court Dismisses Purported Securities Complaint
----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
entered an order dismissing, in part, a purported securities
class action complaint filed against Omnicom Group Inc.
("Omnicom") and various officers of the Company.
The Court dismissed, without prejudice, those portions of the
complaint that alleged securities fraud arising from Omnicom's
organic-growth calculations and earn-out and put-option
liabilities. The Court's decision denying Omnicom's motion to
dismiss the remainder of the complaint did not in any way
address the merits of the case, but only technical pleading
issues. Omnicom believes that the substantive allegations of the
complaint are baseless, and intends to defend vigorously against
the suit.
Omnicom Group Inc. (NYSE: OMC) is a leading global advertising,
marketing and corporate communications Company.
PLATO LEARNING: Asks NY Court To Dismiss Securities Fraud Suit
--------------------------------------------------------------
Lightspan Partnership, Inc. filed a motion to dismiss the
securities class action filed in the United States District
Court for the Southern District of New York, against Credit
Suisse First Boston and several of its clients, including the
Company, styled "Liu, et al. v. Credit Suisse First Boston
Corp., et al."
The complaint alleges that Credit Suisse First Boston, its
affiliates, and the securities issuer defendants (including the
Company) manipulated the price of the issuer defendants' shares
in the post-initial public offering market. The securities
issuer defendants (including Lightspan, Inc.) have filed a
motion to dismiss the complaint in September 2004 on the grounds
of multiple pleading deficiencies. The court has not yet ruled
on the motion to dismiss.
The suit is styled "Liu v. Credit Suisse First Boston
Corporation, case no. 1:04-cv-03757-SAS," filed in the United
States District Court for the Southern District of New York,
under Judge Shira A. Scheindlin. Representing the plaintiffs is
John G. Watts, Yearout & Traylor, P.C. 800 Shades Creek Parkway,
Ste 500 Birmingham, Al 35209 Phone: (205)-414-8160.
Representing the Company is Michael L. Hirschfeld, Milbank,
Tweed, Hadley & McCloy, L.L.P. 1 Chase Manhattan Plaza New York,
NY 10005 Phone: (212) 530-5000 Fax: (212) 530-5219.
STERLING TRUST: Enters Arbitration For Investor Lawsuit in TX
-------------------------------------------------------------
Sterling Trust Company entered arbitration for several class
actions filed in the United States District Court for the
Western District of Texas.
A Pennsylvania law firm filed several suits in November 2000,
namely:
(1) Douglas Wheeler, et al. v. Pacific Air Transport, et
al.;
(2) Paul C. Jared, et al. v. South Mountain Resort and Spa,
Inc., et al.;
(3) Lawrence Rehrig, et al. v. Caffe Diva, et al.;
(4) Merrill B. Christman, et al. v. Millennium 2100, Inc.,
et al.;
(5) David M. Veneziale, et al. v. Sun Broadcasting Systems,
Inc., et al.; and
(6) Don Glazer, et al. v. Technical Support Servs., Inc.,
et al.
All of such lawsuits were originally filed in the United States
District Court for the Western District of Pennsylvania. On
April 26, 2001, the District Court for the Western District of
Pennsylvania ordered that all of such cases be transferred to
the United States District Court for the Western District of
Texas so that the Company could properly present its motion to
compel arbitration. The Company filed separate motions to
compel arbitration in these actions, all of which were granted.
Each of the six plaintiffs timely filed arbitration demands with
the American Arbitration Association. The demands seek damages
and allege the Company breached fiduciary duties and was
negligent in administrating each claimant's self-directed
individual retirement account holding a nine-month promissory
note. Each of these arbitration actions has been abated pending
the outcome of the Munoz matter described below.
STERLING TRUST: Faces CA Lawsuit For Breach of Fiduciary Duty
-------------------------------------------------------------
The Sterling Trust Company faces a class action filed in the
Superior Court of the States of California, styled "Heraclio A.
Munoz, et al. v. Sterling Trust Company, et. al." The suit also
names as defendants:
(1) Matrix Bancorp,
(2) Matrix Bank,
(3) The Vintage Group, Inc. and
(4) Vintage Delaware Holdings, Inc.
The complaint requests class action status, requests unspecified
damages and alleges negligent misrepresentation, breach of
fiduciary duty and breach of written contract on the part of the
Company. In November 2004, the Court certified two classes,
one consisting of California plaintiffs alleging breach of
fiduciary duty and second class consisting of plaintiffs
nationwide alleging breach of contract.
TRIAD GUARANTY: Discovery on KY Suit Summary Judgment Proceeds
--------------------------------------------------------------
Discovery is underway on Triad Guaranty Insurance Corporation's
motion for summary judgment in the class action filed against it
in the United States District Court for the Western District of
Kentucky, styled "Broessel v. Triad."
The suit was filed on behalf of a nationwide class of home
mortgage borrowers. The complaint alleges that the Company
violated the Fair Credit Reporting Act (FCRA) by failing to
provide notices to certain borrowers when mortgage insurance was
offered to lenders with respect to those borrowers' mortgage
loans at a rate in excess of the Company's lowest available
rate.
The suit is styled "Broessel v. Triad Guaranty Insurance Corp.,
case no. 1:04-cv-00004-JHM," filed in the United States District
Court for the Western District of Kentucky, under Judge Joseph
H. McKinley Jr.
UNITED STATES: Reaches Consumer Fraud Settlements With 2 Firms
--------------------------------------------------------------
The Federal Trade Commission (FTC) has accepted two separate
settlements against companies that, the Commission alleged,
deceived Spanish-speaking consumers responding to ads for low-
cost computer systems. The settlements are with California-
based Unicyber Technology, Inc., and Florida-based Latin
Shopping Network.
In both cases, the FTC alleged that the defendants engaged in
deceptive business practices that violated federal laws. The
Unicyber defendants' ads attracted consumers with offers of
guaranteed financing with no credit check. The Latin Shopping
Network ads offered computers for cash. The settlements
prohibit the defendants from misrepresenting any fact material
to a consumer's decision to buy or accept computers or any other
good or service. The Unicyber settlement requires the defendant
to pay $100,000 in redress to consumers, to be added to the
$400,000 already obtained from the corporate defendants. The
Latin Shopping Network defendants must pay $45,000 in redress.
The cases are part of the FTC's Hispanic Law Enforcement and
In March 2004, the FTC filed charges against Unicyber
Technology, Inc., Unicyber Gilboard, Inc., Uri Technology, Inc.,
Uri Communications, Inc., and Chul K. Han, alleging that the
defendants deceptively offered Spanish-speaking consumers a
complete computer system for three payments of $199. According
to the Commission, the defendants delivered only keyboards and
parts that would be useless without the computer itself, rather
than delivering the entire computer at the time the first
payment was made. Consumers then allegedly learned that they
would not receive the full computer until they sent more money.
The complaint further states that those who made the payments
ended up with computers that did not work properly, if at all.
The stipulated final judgment and order announced today is with
defendant Chul K. Han. The order requires Han to pay $100,000 in
consumer redress, and permanently prohibits him from making
misrepresentations in connection with the advertising or sale of
computer equipment or any other good or service. The order also
prohibits Han from failing to disclose material facts in
connection with the sale of computer equipment, including that
the computer is salvaged, refurbished, or damaged. The order
includes a $4.6 million avalanche clause - the estimated amount
of consumer injury - which will become due if it is found that
Han misrepresented his financial condition. Finally, the
settlement contains various recordkeeping requirements to assist
the FTC in monitoring the defendant's compliance. In addition to
the settlement announced today, the FTC has obtained default
judgments against the four corporate defendants, and the
receiver secured approximately $400,000 from the corporate
defendants to use for redress.
The proposed stipulated final judgment and order was entered by
the U.S. District Court, Central District of California, Western
Division, on March 25, 2005. The FTC has set up a hotline for
consumer inquiries on the Unicyber case. Consumers may call
1-866-535-1626 for more information.
The FTC filed a complaint and proposed stipulated final judgment
and order against Crediamerica Group, Inc., doing business as
Latin Shopping Network, America Communications Group, Inc., and
their owner, Felipe Taveras. These defendants also advertised
computer systems to Hispanic consumers on national Spanish-
language television. The defendants' commercials promised
consumers the opportunity to buy a complete computer system for
between $500 and $1000. Consumers were told that the computer
system would arrive within 15 to 30 days. According to the FTC,
many consumers never received their computers; many others
received defective or incomplete products; others received
neither computers nor refunds although they repeatedly contacted
the defendants. The FTC alleges that the defendants violated the
FTC Act by misrepresenting that consumers would receive a
complete computer system, or any computer equipment or other
product or service, by paying the advertised purchase price, and
misrepresenting any material aspect of the performance,
efficacy, nature, price, or central characteristics of the
product or service offered for sale.
In addition, the complaint alleges that the defendants violated
the Mail Order Rule by:
(1) failing to possess a reasonable basis to expect that
they could deliver computer systems within the promised
time frames, or at all;
(2) failing to give required delay or cancellation option
notices to consumers; and
(3) failing to issues refunds in a timely manner
The proposed stipulated final judgment and order prohibit the
defendants from falsely representing that consumers will receive
a complete computer system, or any computer equipment or other
product or service, by paying the advertised price; and
misrepresenting any material aspect of the performance,
efficacy, nature, price, or central characteristics of the
product or service. In addition, the order prohibits the
defendants from:
(i) soliciting orders for goods without a reasonable basis
for believing that they can ship the goods within the
time stated in the solicitation or, if no time is
stated, within 30 days;
(ii) failing to give consumers the option to accept a delay
or cancel the order if the defendants are unable to
ship within the promised time frame; and
(iii) failing to deem an order canceled and make a prompt
refund
Based on the defendants' ability to pay, the order requires them
to pay approximately $47,000 in consumer redress. The order
includes a $2.9 million avalanche clause which would become due
immediately if it is found that the defendants misrepresented
their financial condition. Finally, the settlement contains
various recordkeeping requirements to assist the FTC in
monitoring the defendant's compliance.
The complaint and proposed stipulated final judgment and order
was entered by the U.S. District Court, Southern District of
Florida, and signed by the judge on February 24, 2005.
For more details, contact the FTC's Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580
by Phone: 1-877-FTC-HELP (1-877-382-4357), or visit the Website:
http://www.ftc.gov.
New Securities Fraud Cases
AXONYX INC.: Lockridge Grindal Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law firm of Lockridge Grindal Nauen, P.L.L.P. initiated a
class action lawsuit in the United States District Court for the
Southern District of New York on behalf of all purchasers of the
common stock of Axonyx Inc. ("Axonyx") (Nasdaq:AXYX), between
June 26, 2003 and February 4, 2005, inclusive (the "Class
Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The complaint charges that defendants Axonyx, Inc., Marvin S.
Hausman (CEO and Chairman) and Gosse B. Bruinsma (President,
COO, and Vice President) violated sections 10(b) and 20(a) of
the Exchange Act, and Rule 10b-5, by issuing a series of
material misrepresentations to the market during the Class
Period. The complaint alleges that Axonyx, a biopharmaceutical
Company, engaged in two late-stage Phase III clinical trials of
Phenserine, an experimental drug for the treatment of mild to
moderate Alzheimer's disease. More specifically, the Complaint
alleges that the Company failed to disclose and misrepresented
these material adverse facts known to defendants or recklessly
disregarded by them:
(1) that the Company's only viable drug candidate,
Phenserine, an acetylcholinesterase ("AChE") inhibitor,
failed to curb symptoms of Alzheimer's disease;
(2) that the Company knew or recklessly disregarded the
fact that Phenserine failed to partially block the
effects of AChE, an enzyme that breaks down a
neurotransmitter in the brain important for memory
cognition;
(3) that as a consequence of the foregoing, the Company
would not be able to commercialize Phenserine,
currently its only potential source of revenue; and
(4) that as a result the Company's positive statements
about the development and potential approval of
Phenserine were lacking in all reasonable basis when
made.
On February 7, 2005, Axonyx announced that Phenserine did not
achieve significant efficacy in Phase III Alzheimer's Disease
trial. The news shocked the market. Shares of Axonyx fell $3.04
per share, or 62.68%, on February 7, 2005, to close at $1.81 per
share.
Plaintiffs are represented by the law firm of Lockridge Grindal
Nauen P.L.L.P. The firm has considerable experience in
prosecuting securities class actions, has extensive experience
representing shareholders in class actions, and has successfully
recovered billions of dollars for defrauded investors and
shareholders. The reputation and expertise of the firm in
shareholder and other class action litigation have been
repeatedly recognized by courts, which have appointed the firm
to major positions in complex multi-district and consolidated
litigations. Lockridge Grindal Nauen P.L.L.P. has offices in
Minneapolis and Washington, D.C.
For more details, contact Karen Riebel, Esq. of Lockridge
Grindal Nauen P.L.L.P. by Mail: 100 Washington Avenue South,
Suite 2200, Minneapolis, MN 55401 by Phone: (612) 339-6900 or
by E-mail: khriebel@locklaw.com.
CELL THERAPEUTICS: Lerach Coughlin Lodges Securities Suit in WA
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Western District of Washington on
behalf of purchasers of Cell Therapeutics, Inc. ("Cell
Therapeutics") (NASDAQ:CTIC) publicly traded securities during
the period between June 7, 2004 and March 4, 2005 (the "Class
Period").
The complaint charges Cell Therapeutics and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. Cell Therapeutics develops, acquires and
commercializes treatments for cancer.
The complaint alleges that during the Class Period, defendants
made false and misleading statements about the success of the
Company's clinical trials for its drug XYOTAX for the treatment
of non-small cell lung cancer ("NSCLC"). The true facts, which
were known by each of the defendants but concealed from the
investing public during the Class Period, were:
(1) the observations associated with XYOTAX evidenced that
the primary endpoint for the XYOTAX study would not be
met as claimed;
(2) claims associated with the Company's ability to
commence pre-launch activities or otherwise even begin
to submit a new drug application for XYOTAX were
grossly overstated, and in fact, the Company's ability
to ever reach these points was highly questionable; and
(3) the survival rate for individuals with NSCLC using
XYOTAX was not superior to the prevailing treatment.
On March 7, 2005, the Company announced that its study of XYOTAX
has missed its primary endpoint. On this news, the Company's
shares fell almost 50% to close at $5.25 per share on volume of
33 million shares. As a result of the defendants' false
statements during the Class Period, Cell Therapeutics' stock
traded at inflated levels, increasing to as high as $10.49 on
March 2, 2005. Taking advantage of the inflation, the Company
sold more than $18.4 million worth of the Company's shares via a
private placement just months before the March 7, 2005
announcement.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800-449-4900 or 619-231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/celltherapeutics/.
CHOICEPOINT INC.: Stull Stull Lodges Securities Fraud Suit in CA
----------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Central
District of California, against ChoicePoint Inc. ("ChoicePoint"
or the "Company") (NYSE:CPS), on behalf of purchasers of
ChoicePoint publicly traded securities between April 22, 2004
and March 3, 2005, inclusive (the "Class Period").
The complaint alleges that ChoicePoint violated federal
securities laws by issuing false or misleading information.
Specifically, the Complaint alleges that ChoicePoint
misrepresented the effectiveness of its operational security. On
February 18, 2005, the Associated Press published a report
entitled "Info Breach Puts Data Firm in Hot Seat" and described
the manner in which a criminal enterprise used ChoicePoint to
acquire personal financial data on over 500,000 individuals. The
complaint further alleges that on March 3, 2005, the LA Times
published an article entitled "ChoicePoint CEO Had Denied Any
Previous Breach of Database." The article, in relevant part,
read: "The chief executive of information broker ChoicePoint
Inc. told interviewers last week that a recent security breach
was the only such incident in the Company's history, despite the
fact that criminals had gained access to its database with
similar methods at least once before." On March 4, 2005,
ChoicePoint filed a report with the Securities and Exchange
Commission ("SEC") stating that on September 27, 2004,
ChoicePoint had found evidence of suspicious activity similar to
the current breach of security. ChoicePoint stated that the SEC
was conducting an informal inquiry of these matters. On this
news, shares of ChoicePoint fell from a close of $40.28 per
share on March 3, 2005, to close at $37.65 per share on March 4,
2005.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022 or by E-
mail: SSBNY@aol.com.
DELPHI CORPORATION: Wolf Haldenstein Files Securities Suit in NY
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP
initiated a class action lawsuit in the United States District
Court for the Southern District of New York, on behalf of all
persons who purchased the securities of Delphi Corporation
("Delphi" or the "Company") (NYSE: DPH) between April 12, 2000
and March 3, 2005, inclusive, (the "Class Period") against
defendants Delphi and certain officers of the Company. The case
name is Gaines v. Delphi Corporation, et al.
The complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's
securities.
In connection with the allegations set forth in the complaint,
Wolf Haldenstein is also considering additional claims
specifically on behalf of employees of Delphi. This
investigation centers on possible violations of the Employee
Retirement Income Security Act of 1974 in connection with the
holdings of Delphi common stock in the retirement plans. The
investigation is examining whether the Company, and fiduciaries
of the retirement plans, breached their fiduciary duties to the
Plan, and the employees who participated in the Plan, by
allowing the Plan to continue to offer Delphi common stock as an
investment option and utilize it as a matching contribution when
the Company and fiduciaries knew, or should have known, that it
was an inappropriate investment because of the financial
condition of the Company. Members of any Delphi sponsored 401(k)
Plans, including current or former employees, who purchased or
acquired Delphi stock through one of the plans may contact Wolf
Haldenstein concerning their rights in this matter. The affected
retirement plans include the Delphi Retirement Plan, Delphi
Union 401(K) Plan, Delphi Products Savings Investment Plan, and
the Delphi Products Employee 401(K) Savings Plan.
The Complaint alleges that during the Class Period, defendants
made statements that were materially false and misleading when
made because defendants failed to disclose the following adverse
facts:
(1) that improper accounting for off-balance sheet
financing transactions in 2000 resulted in the Company
overstating cash flow from operations, determined in
accordance with Generally Accepted Accounting
Principles ("GAAP"), for that year by approximately
$200 million;
(2) that improper accounting for certain rebate
transactions, credits or other lump-sum payments from
information technology service providers resulted in
the Company overstating pre-tax income under GAAP in
excess of $100 million in 2001 and prior periods;
(3) that the Company prematurely recognized revenue for
technology contracts and rebates when it should have
spread them over the life of the contract;
(4) that it improperly capitalized expenses over time,
rather than recognizing them immediately and boosted
cash flow from operations and pretax earnings by
claiming it sold assets and inventory that it had
actually agreed to buy back later;
(5) that the Company's financial statements were not
prepared in accordance with GAAP;
(6) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(7) that as a result, the Company's reported revenue, net
income and financial results were materially overstated
during the Class Period.
For more details, contact Fred Taylor Isquith, Esq., Christopher
S. Hinton, Esq. or Derek Behnke of Wolf Haldenstein Adler
Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New
York 10016 by Phone: (800) 575-0735 by E-mail:
www.classmember@whafh.com or visit their Web site:
http://www.whafh.com.
IMERGENT INC.: Milberg Weiss Lodges Securities Fraud Suit in UT
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of purchasers of the securities
of iMergent, Inc. (AMEX: IIG; "iMergent" or the "Company"),
between November 30, 2004 and February 25, 2005, inclusive (the
"Class Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934 (the "Exchange Act").
The lawsuit was filed in the United States District Court for
the District of Utah against defendants iMergent, Brandon B.
Lewis, Robert M. Lewis, Donald L. Danks, David L. Rosenvall,
David T. Wise, Peter Fredericks and Thomas Scheiner.
The Complaint alleges that the Company failed to disclose
material defects with the operation of its software, and the
fact that its sales practices violated the laws of many of the
states iMergent operates in. On February 22, 2005, the Texas
Attorney General filed a lawsuit against iMergent in support of
a nationwide roundup targeting the operators of fraudulent
business opportunities. The Texas Attorney General's complaint
alleged that the Company's wholly owned subsidiary,
StoresOnline.com, was selling defective storefront software and
service packages and extorting thousands of dollars in
additional "executive mentoring" fees from its customers in
violation of state law.
In response to the unexpected news, shares of iMergent fell
$3.33 per share or almost 15 percent, on February 23, 2005, and
another $2.80 per share or 14.55 percent, on February 24, 2005,
to close at $16.45 per share.
On February 25, 2005, additional adverse information about
iMergent's financial condition was revealed. On that day,
defendant Danks admitted at an investment conference that
iMergent had been selling software packages through installment
contracts to customers with subprime credit. Danks admitted that
only slightly more than half of the purchase price was
eventually collected from these subprime customers. The
revelation of this information caused iMergent's stock price to
fall even further, closing at $16.06 per share.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New
York, NY, 10119-0165 by Phone: (800) 320-5081 or by E-mail:
sfeerick@milbergweiss.com OR Maya Saxena or Joseph E. White III
by Mail: 5200 Town Center Circle, Suite 600, Boca Raton, FL
33486 by Phone: (561) 361-5000 by E-mail:
msaxena@milbergweiss.com or jwhite@milbergweiss.com or visit
their Web site: Website: http://www.milbergweiss.com.
IMERGENT INC.: Shalov Stone Lodges Securities Fraud Suit in UT
--------------------------------------------------------------
The Law Firm of Shalov Stone & Bonner LLP initiated a class
action in the United States District Court for the District of
Utah on behalf of all persons who purchased the securities of
iMergent, Inc. (AMEX: IIG) in the period from October 26, 2004,
through February 25, 2005.
The complaint alleges that the defendants made material
misrepresentations and omissions of material facts concerning
the Company's business performance during the relevant time
period. According to the complaint, throughout the relevant time
period, iMergent represented that it was a prospering software
Company while it simultaneously concealed that its sales
practices violated the laws of many of the states in which it
conducts business. The complaint further alleges that iMergent
was concealing the full extent of the uncollectability of its
installment contracts with its clients, many of which did not
meet the Company's own credit criteria.
According to the complaint, as a result of the defendants' false
and misleading statements and omissions, iMergent's stock traded
at inflated levels during the relevant period, rising above $25
per share on February 9, 2005, when the Company's ranking
officers and directors sold more than $6.5 million of their own
shares. After the market digested this news, the Company's stock
declined from its class period high of over $25.00 per share on
February 9, 2005, to below $12 per share on March 1, 2005, when
trading was halted.
For more details, contact Thomas G. Ciarlone, Jr. of Shalov
Stone & Bonner LLP by Mail: 485 Seventh Avenue, Suite 1000, New
York, New York 10018 by Phone: (212) 239-4340 or by E-mail:
tciarlone@lawssb.com.
MAMMA.COM INC.: Stull Stull Lodges Securities Fraud Suit in NY
--------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Southern
District of New York, on behalf of all persons who purchased the
common stock of Mamma.com, Inc. ("Mamma.com") (NASDAQ:MAMA)
between March 2, 2004 and February 16, 2005 (the "Class
Period").
The Complaint alleges that Mamma.com violated federal securities
laws by issuing false or misleading public statements.
Specifically, defendants failed to disclose these material
adverse facts:
(1) that Irving Kott ("Kott"), a Canadian stock promoter
with a long history of stock manipulation, had a
significant undisclosed interest in Mamma.com;
(2) that Kott and his associates were manipulating the
Company's stock price by engaging in a classic "pump
and dump" scheme; and
(3) that Mamma.com was manipulating its financial results
so that the scheme would endure. Additionally, as a
result of its stock trading at artificially inflated
levels, Mamma.com was able to acquire Digital Arrow LLC
and entered into a letter of intent ("LOI") whereby
Mamma.com would acquire all of the shares of Copernic
Technologies for a combination of cash and shares of
Mamma.com. Finally, Mamma.com raised $16.6 million
through a private placement.
On February 16, 2005, midday, trading of Mamma.com was halted.
Shortly thereafter, Mamma.com announced that it had been unable
to reach an agreement on the terms of its audit with
PricewaterhouseCoopers LLP ("PWC") for the year ended December
31, 2004. Accordingly, PWC would not act as the Company's
independent auditor. On this news, Mamma.com fell $2.02 per
share to close at $4.25 per share.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022 or by E-
mail: SSBNY@aol.com.
MOLEX INC.: Spector Roseman Lodges Securities Fraud Suit in IL
--------------------------------------------------------------
The law firm of Spector, Roseman & Kodroff, P.C. initiated a
securities class action lawsuit in the United States District
Court for the Northern District of Illinois, on behalf of
purchasers of the common stock of Molex Incorporated ("Molex" or
the "Company") (Nasdaq: MOLX) between April 15, 2004 through
February 14, 2005, inclusive (the "Class Period").
The Complaint alleges that the defendants violated Section 10b-5
of the Securities Exchange Act of 1934 by issuing materially
false and misleading statements contained in press releases and
filings with the Securities and Exchange Commission ("SEC")
during the Class Period. Specifically, the Complaint alleges
that during the Class Period, the defendants caused Molex to
issue materially false and misleading financial statements which
caused the shares of Molex to trade at artificially inflated
prices. Unbeknownst to the investment community, certain Molex
officers and directors were able to sell over $34 million worth
of the Company's common stock at the inflated prices before the
truth was disclosed.
On November 11, 2004, Molex announced that it delayed filing its
latest quarterly report to the SEC and had replaced and demoted
its Chief Financial Officer ("CFO"). It further announced that
it would report a charge against earnings because of inventory
accounting issues. According to the Company's press release, its
independent auditors, Deloitte & Touche LLP ("Deloitte"),
faulted the Company's Chief Executive Officer ("CEO") and CFO,
stating that problems regarding inventory accounting information
should have been disclosed by them to Deloitte in a August 20,
2004 representation letter in connection with the audit of the
Company's financial statements for the year ended June 30, 2004.
Further, the press release stated that Deloitte would never
again accept the signature of the Company's CFO on the Company's
financial results and was reviewing whether it would ever again
accept the signature of the Company's CEO on future financial
filings.
On November 15, 2004, the Company issued another press release
announcing the filing of its Quarterly Report on Form 10-Q and
that Deloitte resigned, citing Molex's refusal to oust its CEO
or its CFO. Shortly thereafter, on November 30, 2004, Deloitte
sent a letter to the SEC disputing the Company's version of the
course of events leading up to its resignation. As a result of
Deloitte's resignation, the Company's first quarter 2005
financial results were filed without being audited.
Subsequently, Molex was notified by the NASDAQ that it was not
in compliance with NASDAQ Marketplace Rule 4310(c)(14), which
required Molex to file audited financial statements with the
SEC, and the Company's securities were, therefore, subject to
delisting from the NASDAQ National Market. On December 10, 2004,
both Molex's CEO and CFO were terminated at the insistence of
the new auditors hired to replace Deloitte.
Finally, on February 14, 2005, Molex revealed that its results
for its first quarter 2005, and possibly other quarters, were
false when issued and that the SEC was investigating and did not
agree with the Company's accounting treatment. Following this
news, the Company's stock dropped below $25.00 per share,
erasing millions of dollars of shareholder value.
For more details, contact Robert M. Roseman by Phone:
888-844-5862 by E-mail: classaction@srk-law.com or visit their
Web site: http://www.srk-law.com.
VIISAGE TECHNOLOGY: Klafter & Olsen Lodges Securities Suit in MA
----------------------------------------------------------------
The law firm of Klafter & Olsen LLP initiated a securities fraud
class action complaint against Viisage Technology, Inc.
("Viisage") (Nasdaq: VISG) in the U.S. District Court for the
District of Massachusetts.
The complaint asserts claims on behalf of investors who
purchased the publicly traded securities of Viisage during the
period from July 22, 2004 through and including March 2, 2005
(the "Class Period"). This lawsuit is different than other
lawsuits recently filed by plaintiffs, which allege a shorter
class period beginning on October 25, 2004.
On March 31, 2005, after, Klafter & Olsen LLP filed this
lawsuit, Viisage announced that it would delay the filing of its
Annual Report for the year ended December 31, 2004 "to provide
additional time for the Company, its independent auditors and
outside counsel to complete a review of pending litigation
involving the Company and to assess their effect, if any, on the
Company's financial statements for the year ended December 31,
2004."
The complaint alleges that Viisage and its top officers and
directors engaged in a scheme to defraud Viisage investors in
violation of the federal securities laws. During the Class
Period, defendants embarked on a plan to falsely portray Viisage
as a turnaround story in order to complete a secondary public
offering to raise funds to pay off the millions of dollars in
debts owed to two of its directors and to further enrich
Viisage's insiders through their sales of Viisage stock from
their personal holdings. The reality was that:
(1) Viisage had engaged in improper conduct with respect to
a $20 million contract with the State of Georgia's
Department of Motor Vehicle Safety;
(2) Viisage had improperly inflated its reported revenues
in the third and fourth quarters 2004; and
(3) Viisage's internal accounting controls were so flawed
that they qualified as having a "material weakness"
under Public Company Accounting Oversight Board's
Accounting Standard No. 2 and, as such, violated the
provisions Sarbanes-Oxley relating to the Company's
ability to file accurate financial statements.
For more details, contact Klafter & Olsen LLP by Phone:
202/261-3553 or visit their Web site:
http://www.klafterolsen.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
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USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
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