/raid1/www/Hosts/bankrupt/CAR_Public/050503.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, May 3, 2005, Vol. 7, No. 86
Headlines
ABATIX CORPORATION: Reaches Settlement For TX Securities Lawsuit
AIRNET COMMUNICATIONS: NY Court Approves Stock Suit Settlement
ALLIANCE MORTGAGE: Accidental Defendant Asks To Be Dismissed
AMERICAN SUZUKI: Recalls Eiger, Vinson ATVs Due To Fire Hazard
ANCHOR GLASS: Shareholders Launch Securities Lawsuits in M.D. FL
ASCENDANT SOLUTIONS: Appeal of Suit Certification Denial Briefed
ATICO INTERNATIONAL: Recalls 1.5M Folding Chairs For Injury Risk
CALLIDUS SOFTWARE: Plaintiffs File Amended Securities Suit in CA
CHEMED CORPORATION: Reaches Settlement For IL Consumer Lawsuit
CHEMED CORPORATION: Plaintiffs Dismiss OH Unfair Practices Suit
CHI-CHI'S INC.: Pays $800T To Settle Suit Over Hepatitis Shots
CHORDIANT SOFTWARE: NY Court Preliminarily OKs Suit Settlement
CIGNA HEALTHCARE: FL Judge OKs $11.55M Settlement With Providers
DUQUESNE LIGHT: Reaches Settlement for PA Securities Fraud Suit
FOREST AND BROOK: Recalls Sandwiches For Listeria Contamination
LAERDAL MEDICAL: Adapter Cables Recalled For Breaking Easily
LEAPFROG ENTERPRISES: Expects CA Fraud Suits To Be Consolidated
MCGRAW DAVIDSON: Files Motion To Dismiss RESPA Class Action Suit
NATIONAL STUDENT: Held In Contempt For Violating FTC Order Terms
O'CHARLEY'S INC.: Reaches Agreement To Settle 18 Hep A Lawsuits
SKECHERS USA: CA Federal Court Dismisses Securities Fraud Suit
TRIPLE-S MANAGEMENT: PR Court Allows Repleading of Lawsuit Claim
VISHAY INTERTECHNOLOGY: Settles DE Lawsuit Over Siliconix Offer
WILLIAMS TECHNOLOGIES: Prisoners Launch Wage, Fraud Suit in SC
WYETH PHARMACEUTICALS: Settles UT Woman's Fen-Phen Suit in PA
VITAS HEALTHCARE: California Nurses Launch Overtime Wage Lawsuit
New Securities Fraud Cases
AVAYA INC.: Lerach Coughlin Lodges Securities Fraud Suit in NJ
AVAYA INC.: Schatz & Nobel Lodges Securities Fraud Lawsuit in NJ
BEARINGPOINT INC.: Christopher J. Gray Lodges Stock Suit in VA
BEARINGPOINT INC.: Donovan Searles Lodges Securities Suit in VA
DORAL FINANCIAL: Berger & Montague Lodges Securities Suit in NY
DORAL FINANCIAL: Schoengold Sporn Lodges Securities Suit in NY
IMERGENT INC.: Wolf Haldenstein Lodges Securities Lawsuit in UT
LEAPFROG ENTERPRISES: Charles J. Piven Lodges Stock Suit in CA
LEAPFROG ENTERPRISES: Schatz & Nobel Files Securities Suit in CA
R&G FINANCIAL: Brian M. Felgoise Lodges Securities Suit in NY
R&G FINANCIAL: Goldman Scarlato Lodges Securities Lawsuit in NY
R&G FINANCIAL: Wechsler Harwood Lodges Securities Lawsuit in NY
TYCO INTERNATIONAL: Adam H. Smith Lodges Securities Suit in FL
WATCHGUARD TECHNOLOGIES: Zwerling Schachter Lodges Suit in WA
WILLIAM LYON: Chimicles & Tikellis Lodges Suit Over Stocks in DE
*********
ABATIX CORPORATION: Reaches Settlement For TX Securities Lawsuit
----------------------------------------------------------------
Abatix Corporation reached a settlement for the consolidated
securities class action filed in the United States District
Court for the Northern District of Texas, styled "Family
Medicine Specialists, et al v. Abatix, et al., Cause No. 3-04CV-
872-D."
Several complaints were initially filed, alleging that
defendants violated the Securities and Exchange Act of 1934 by
allegedly making a series of materially false and purportedly
misleading statements concerning the Company's business
agreement with the Goodwin Group LLC and, as a result, the price
of the Abatix stock was allegedly artificially inflated causing
plaintiff and other members of the class to allegedly suffer
damages. The suits were styled:
(1) Family Medicine Specialists and Howard Kalnitsky, and
on Behalf of All Others Similarly Situated, Plaintiffs
v. Abatix Corp., Terry Shaver, Frank Cinatl IV and Gary
Cox, Defendants, case no. 304CV-872 D
(2) David Maione, Individually And On Behalf of All Others
Similarly Situated, Plaintiff vs. Abatix Corp and Terry
Shaver, Defendants (304 CV0926-P)
(3) Eve Gelman, individually and on behalf of all others
similarly situated, Plaintiff v. Abatix Corporation,
Terry Shaver and Frank Cinatl (4-04CV-341-A)
(4) Vincent Teal, individually and on behalf of all others
similarly situated, Plaintiff v. Abatix Corp., Terry
Shaver, Frank Cinatl, IV and Gary Cox, Defendants (3-
04CV-1002P)
(5) John S. Rankin, On Behalf of Himself and All Others
Similarly Situated, Plaintiff, v. Abatix Corp., and
Terry Shaver Defendants (504CV 116)
All of these lawsuits were transferred to one Federal District
Court in the Northern District of Texas, Dallas Division and
have been consolidated into a single case.
In early April 2005, the Company reached a preliminary agreement
to settle the suit and a related suit filed in state District
Court in Dallas for $900,000. In a filing with the Securities
and Exchange Commission, Abatix stated that it agreed to settle
both lawsuits "so that management and its employees can
concentrate their full attention on growing the business by
eliminating the distraction of further protracted litigation."
In addition, the filing also stated that the $900,000 settlement
is covered by the company's insurance policy and shouldn't
affect earnings, an earlier Class Action Reporter story (April
8,2004) stated.
The suit is styled "Family Medicine Specialists et al v. Abatix
Corporation et al., case no. 3:04-cv-00872," filed in the United
States District Court for the Northern District of Texas, under
Judge Jane J. Boyle. Representing the Company are Richard S.
Krumholz, Fulbright & Jaworski Texas Commerce Bank Tower 2200
Ross Ave Suite 2800 Dallas, TX 75201-2784 Phone: 214/855-8000
Fax: 214/855-8200 E-mail: rkrumholz@fulbright.com; and Gerard G.
Pecht, Fulbright & Jaworski - Houston 1301 McKinney St Suite
5100 Houston, TX 77010-3095 Phone: 713/651-5151 Fax: 713/651-
5246 E-mail: gpecht@fulbright.com. Representing the plaintiffs
are Sharon M. Lee and Lee A. Weiss of Milberg Weiss Bershad &
Schulman - New York, 1 Pennsylvania Plaza 49th Floor New York,
NY 10119 Phone: 212/594-5300 E-mail: lweiss@milbergweiss.com,
and W D Masterson, III of Kilgore & Kilgore, 3109 Carlisle
Suite 200 Dallas, TX 75204 Phone: 214/969-9099 Fax: 214/953-0133
E-mail: wdm@kilgorelaw.com.
AIRNET COMMUNICATIONS: NY Court Approves Stock Suit Settlement
--------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Airnet
Communications Corporation, two of its former officers and
members of the underwriting syndicate involved in its initial
public offering.
The action, number 21 MC 92 (SAS), alleges that the defendants
violated federal securities laws and seeks unspecified damages
and certification of a plaintiff class consisting of all persons
and entities who purchased, converted, exchanged or otherwise
acquired shares of the Company's common stock between December
6, 1999 and December 6, 2000, inclusive. The complaint charges
ostensible violations of Sections 11 and 15 of the Securities
Act of 1933 and Section 10(b) of the Securities Exchange Act of
1934. In substance, the suit alleges that the underwriters of
the Company's IPO charged commissions in excess of those
disclosed in the IPO materials and that these actions were not
properly disclosed.
More than 300 similar class action lawsuits filed in the
Southern District of New York have been consolidated for
pretrial purposes under the caption of "In re Initial Public
Offering Securities Litigation." On July 15, 2002, a joint
Motion to Dismiss was filed by the defendants. In February
2003, the Motion to Dismiss was granted in part (with respect to
the Company) and denied in part (with respect to all issuer
defendants). The claims against the Company's two former
officers named in the class action lawsuit have been dismissed
without prejudice, pursuant to agreement.
The issuer defendants and the plaintiffs have since drafted and
agreed upon a settlement, which is pending approval by the
court. A committee of the Company's Board of Directors has
accepted the pending settlement. Under the terms of the
settlement agreement, the defendant issuers' insurers have
agreed to pay the plaintiffs the amount of one billion dollars
less the total of all of the plaintiffs' recoveries from the
underwriter defendants. Furthermore, pursuant to the agreement,
the issuer defendants have assigned all their potential claims
against the underwriter defendants to a litigation trust, to be
represented by plaintiffs' counsel.
On February 15, 2005, the Court granted preliminary approval of
the proposed settlement. The Court's approval is contingent on
certain modifications of the settlement provisions concerning a
bar on claims of contribution. Under the terms of the
settlement, there would be no liability to be recorded by the
Company. Pursuant to a separate agreement, the insurers have
also agreed to pay the issuers' defense costs incurred on or
subsequent to June 1, 2003 on a pooling basis. Furthermore,
pending approval, the individual tolling agreements dismissing
the named individual defendants have been extended, so that the
individual defendants will be covered by the settlement as well.
Final approval of the settlement remains pending before the
Court. While awaiting final court approval of the settlement,
the issuers, including the Company, have complied with discovery
obligations specified in the settlement, by providing a limited
number of documents.
The suit is styled "In Re Airnet Communications Corporation
Initial Public Offering Securities Litigation," filed in
relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES
LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New
York, under Judge Shira N. Scheindlin. The plaintiff firms in
this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
ALLIANCE MORTGAGE: Accidental Defendant Asks To Be Dismissed
------------------------------------------------------------
Emert Wyss, the Alton attorney who made national news by
accidentally suing himself has asked to be dismissed from the
lawsuit, The Madison County Record reports. The lawsuit,
initially filed against Alliance Mortgage boomeranged on Mr.
Wyss after Madison County Circuit Judge Phillip Kardis added Mr.
Wyss as a third party defendant.
In a motion filed on April 8, Mr. Wyss' attorney, A.J. Bronsky
of Brown and James in St. Louis said that it was unfair for
Alliance to include his client as a defendant, the County Record
reports. He also said, "(It's) simply an attempt to harass Mr.
Wyss and damage his professional reputation."
The lawsuit began when Mr. Wyss invited Carmelita McLaughlin to
his law office to discuss what he believed were improper $60 fax
fees charged by Alliance Mortgage, which refinanced her
mortgage. Centerre Title, a company Mr. Wyss owned, closed the
loan. In preparation for filing a class action lawsuit, Ms.
McLaughlin signed a retainer for Mr. Wyss, the Lakin Law Firm of
Wood River, and three other firms, which all filed in Madison
County in 2003.
Arguing that if anything was wrong at closing, the title company
should have picked up on it, Alliance asked that Centerre Title
be declared a defendant. In December, Judge Kardis signed an
order naming Centerre Title as a third party defendant, the
judge however went a step further by naming Mr. Wyss personally
as a third party defendant. Alliance thus filed a third party
complaint against Centerre and Mr. Wyss.
Mr. Bronsky took issue with Alliance saying the mortgage company
admitted in deposition that it would have waived the fax fee if
Ms. McLaughlin had protested. He writes in the motion, "One does
not, as a matter of routine, waive a fee that is reasonable and
necessary."
AMERICAN SUZUKI: Recalls Eiger, Vinson ATVs Due To Fire Hazard
--------------------------------------------------------------
American Suzuki Motor Corporation, of Brea, California, and
Montgomery Motors Ltd., of Honolulu, Hawaii is cooperating with
the United States Consumer Product Safety Commission (CPSC) by
voluntarily recalling about 1,540 Suzuki 2005 Eiger and Vinson
all terrain vehicles (ATV).
The fuel petcock inserts were made with incorrect material that
does not correctly bond the fuel tank and petcock insert, which
could allow fuel leakage. If this occurs, a fire hazard with the
possibility of injury and property damage could result. There
have been no reported incidents of fire or injury.
The recall includes Suzuki 2005 model year Eiger and Vinson
ATVs. Only Model LT-A400FK5 ATVs with ending VIN from 57104462
through 57105157, Model LT-F400FK5 ATVs with ending VIN from
57103131 through 57103730, and Model LT-A500FK5 ATVs with ending
VIN from 57105616 through 57106276 are included in the recall.
(Note: not all VINs within the above ranges are affected.) The
VIN is stamped on the ATV frame and can be seen by looking
between the left rear tire and fender.
These ATVs were sold at Suzuki dealerships nationwide from
December 2004 through April 2005 for between $5,199 and $6,699.
Consumers should stop using these ATVs immediately. Registered
owners have been notified about this recall by mail. Consumers
with a recalled ATV should contact their local Suzuki ATV dealer
to schedule the free repair. If consumers are unsure if their
ATV is affected, they should contact Suzuki. Consumers should
have the vehicle identification number (VIN) of the ATV
available when they call. Call the firm toll-free at (800) 444-
5077 between 8:30 a.m. and 5 p.m. PT Monday through Friday, or
go to the firm's Web site at www.suzukicycles.com
ANCHOR GLASS: Shareholders Launch Securities Lawsuits in M.D. FL
----------------------------------------------------------------
Anchor Glass Container Corporation faces several securities
class actions filed in the United States District Court for the
Middle District of Florida, Tampa Division, namely:
(1) Todd Fener, individually and on behalf of all others
similarly situated v. Anchor Glass Container
Corporation, Richard M. Deneau, Darrin J. Campbell,
Alan H. Schumacher and Peter T. Reno
(2) Robert Conte individually and on behalf of all others
similarly situated v. Anchor Glass Container
Corporation, Darrin Campbell, Richard M. Deneau, Joel
A. Asen, James N. Chapman, Jonathan Gallen, George
Hamilton, Timothy F. Price, Alan H. Schumacher, Lenard
B. Tessler, Credit Suisse First Boston, Merrill Lynch &
Co. and Lehman Brothers. Lenard B. Tessler is a member
of the Board. Credit Suisse First Boston, Merrill Lynch
& Co. and Lehman Brothers were underwriters of the
Company's initial public offering of common stock.
(3) Matthew Bellefeuille individually and on behalf of all
others similarly situated v. Anchor Glass Container
Corporation, Darrin Campbell, Richard M. Deneau, Joel
A. Asen, James N. Chapman, Jonathan Gallen, George
Hamilton, Timothy F. Price, Alan H. Schumacher, Lenard
B. Tessler, Credit Suisse First Boston, Merrill Lynch &
Co. and Lehman Brothers
(4) Davidco Investors, LLC individually and on behalf of
all others similarly situated v. Anchor Glass Container
Corporation, Darrin J. Campbell and Richard M. Deneau
The suits were filed on behalf of all persons who purchased the
Company's securities between September 25, 2003 and November 4,
2004 and allege 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 and Rule 10b-5 thereunder. The
complaints seek an unspecified amount of damages.
ASCENDANT SOLUTIONS: Appeal of Suit Certification Denial Briefed
----------------------------------------------------------------
The United States Fifth Circuit Court of Appeals has briefed
plaintiffs' appeal of a lower court ruling refusing to grant
class certification to the consolidated lawsuit filed against
Ascendant Solutions, Inc., certain of its directors and a
limited partnership of which a director is a partner.
Between January 23, 2001 and February 21, 2001, five putative
class action lawsuits were filed in the United States District
Court for the Northern District of Texas. The five lawsuits
assert causes of action under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, for an unspecified
amount of damages on behalf of a putative class of individuals
who purchased our common stock between various periods ranging
from November 11, 1999 to January 24, 2000. The lawsuits claim
that the Company and the individual defendants made
misstatements and omissions concerning its products and
customers.
In April 2001, the Court consolidated the lawsuits, and on
July 26, 2002, plaintiffs filed a Consolidated Amended Complaint
(CAC). The Company filed a motion to dismiss the suit on or
about September 9, 2002. On July 22, 2003, the Court granted in
part and denied in part defendants' motion to dismiss. On
September 2, 2003, defendants filed an answer to the suit.
Plaintiffs then commenced discovery. On September 12, 2003,
plaintiffs filed a motion for class certification, and on
February 17, 2004, the Company filed its opposition. On July 1,
2004, the Court denied plaintiffs' motion for certification. On
September 8, 2004, the Fifth Circuit granted plaintiffs'
petition for permission to appeal the denial of class
certification. Briefing on the appeal is complete but the Fifth
Circuit has not yet ruled on plaintiff's s appeal.
ATICO INTERNATIONAL: Recalls 1.5M Folding Chairs For Injury Risk
----------------------------------------------------------------
Atico International USA, Inc. is cooperating with the U.S.
Consumer Product Safety Commission by voluntarily recalling
about 1.5 million children's folding chairs.
The recalled children's folding chairs are made of metal tubing
with a padded seat. They were sold in red, blue, yellow and
green colors either individually or as part of a set consisting
of a table and four chairs. Each chair is about 22-inches high,
10-inches wide, and about 11-inches deep. "IMPORTED BY: ATICO
INTERNATIONAL USA, INC." is written on a label located
underneath the seat of some of the chairs.
The chair's safety lock can fail, allowing the chair to collapse
or fold unexpectedly. Children's fingers can become caught or
entrapped in the hinge and slot areas of the chair, posing a
pinch or cut hazard. This can cause severe lacerations and
fingertip amputations to children's fingers. The firm has
received four reports of fingertip amputations and seven reports
of lacerations to children's fingers.
The chairs were sold at hardware, discount department, toy,
grocery and drug stores nationwide from September 2002 through
April 2005 for about $10 individually and for about $30 for a
set.
For more details, contact the Company by Phone: (877) 546-4835
between 9 a.m. and 5 p.m. ET Monday through Friday, or visit the
company's Website: http://www.aticousa.com.
CALLIDUS SOFTWARE: Plaintiffs File Amended Securities Suit in CA
----------------------------------------------------------------
Callidus Software, Inc. asked the United States District Court
for the Northern District of California to dismiss the
consolidated securities class action filed against it, certain
of its present and former executives and directors.
The suit originally alleged that the Company and the executives
and directors made materially false or misleading statements or
omissions in violation of federal securities laws. The suit
seeks damages on behalf of a purported class of individuals who
purchased Company stock during the period from November 19, 2003
through June 23, 2004.
In October 2004, the court appointed a lead plaintiff. In
November 2004, the lead plaintiff filed an amended complaint
naming the Company, Ronald J. Fior, its vice president for
finance and chief financial officer and Reed D. Taussig, our
former Chairman and Chief Executive Officer as defendants and
amending the purported class to include individuals who
purchased Company stock during the period from January 22, 2004
through June 23, 2004.
The suit is styled "In Re: Callidus Software, Inc. Securities
Litigation, case no. 04-CV-2707," filed in the United States
District Court for the Northern District of California. Lead
counsel for the plaintiffs are Robert S. Green of Green Welling
LLP, 235 Pine Street, 15th Floor, San Francisco, CA, 94104
Phone: 415.477.6700, Fax: 415.477.6710, E-mail:
gw@classcounsel.com; and David Kessler, Michael K. Yarnoff and
Christopher Nelson of Schiffrin & Barroway, LLP, 3 Bala Plaza E,
Bala Cynwyd, PA, 19004 Phone: 610.667.7706, Fax: 610.667.7056,
E-mail: info@sbclasslaw.com. Representing the Company is James
N. Kramer, William F. Alderman, M. Todd Scott of Orrick,
Herrington and Sutcliffe, LLP, 405 Howard St., San Francisco CA
94105, Phone: 415-773-5992 and Fax: 415-773-5759.
CHEMED CORPORATION: Reaches Settlement For IL Consumer Lawsuit
--------------------------------------------------------------
Chemed Corporation reached a settlement for the class action
filed against it in the Third Judicial Circuit Court of Madison
County, Illinois, alleging certain Roto-Rooter plumbing was
performed by unlicensed employees.
Customer Robert Harris filed the suit on behalf of a class of
customers in 32 states who allegedly paid for plumbing work
performed by unlicensed employees. Plaintiff also moved for
partial summary judgment on grounds the licensed apprentice
plumber who installed his faucet did not work under the direct
personal supervision of a licensed master plumber.
On June 19, 2002, the trial judge certified an Illinois-only
plaintiffs class and granted summary judgment for the named
party plaintiff on the issue of liability, finding violation of
the Illinois Plumbing License Act and the Illinois Consumer
Fraud Act, through Roto-Rooter's representation of the licensed
apprentice as a plumber. The court has not yet ruled on
certification of a class in the remaining 31 states.
In December 2004, the Company reached a tentative resolution of
this matter with the plaintiff. This proposed settlement has
not yet been finalized by the parties nor approved by the court.
Nonetheless, the Company, in anticipation of such approval,
accrued $3.1 million as the anticipated cost of settling this
litigation.
CHEMED CORPORATION: Plaintiffs Dismiss OH Unfair Practices Suit
---------------------------------------------------------------
Plaintiffs dismissed the class action filed against Chemed
Corporation in the Court of Common Pleas, Cuyahoga County, Ohio
after the Ohio Supreme Court's denial of review of the Eighth
District Court of Appeals decertification of this class action.
On April 5, 2002 Michael Linn, an attorney, filed the suit,
alleging that Roto-Rooter Services Company's miscellaneous parts
charge, ranging from $4.95 to $12.95 per job, violated the Ohio
Consumer Sales Practices Act. The Company contended that the
charge, which is included within the estimate approved by its
customers, is a fully disclosed component of its pricing.
CHI-CHI'S INC.: Pays $800T To Settle Suit Over Hepatitis Shots
--------------------------------------------------------------
Bankrupt Chi-Chi's Inc. and its subsidiaries tentatively agreed
to pay $800,000 to compensate nearly 9,500 people who got
inoculated because of a hepatitis outbreak linked to a western
Pennsylvania restaurant, The Associated Press reports.
AP obtained a copy of the class action settlement agreement,
which must still be filed in federal bankruptcy court in
Delaware, from William Marler, a Seattle attorney who represents
the plaintiffs' class.
According to Mr. Marler, the victims will split $800,000, but
how much each gets will be determined by how many of them
eventually file claims with the court. He also told AP that his
firm will get a fee of $150,000 on top of that amount, though he
did reiterate that $100,000 of that money would be donated to
charity after his firm pays $50,000 in expenses spelled out in
the deal. "With class actions what's bothered me in the past is
that everybody (the plaintiffs) gets a coupon and the lawyers
get a million dollars," Mr. Marler adds.
Court documents revealed that four people had died and more than
650 people were sickened by tainted green onions served at the
restaurant at Beaver Valley Mall in western Pennsylvania. The
court documents also show that 9,489 people got immune globulin
shots from the Pennsylvania Department of Health after the
outbreak was publicized in early November 2003. Health officials
urged shots for family members of those sickened, as well as
those who ate in the restaurant in the weeks leading up to the
outbreak.
Under the settlement, Mr. Marler's firm will pay about $40,000
to publicize the settlement in various media and in addition it
will also pay the Health Department about $10,000 to notify all
those who got a shot. The letters will advise them of a deadline
that has yet to be determined.
For its part, Health Department spokesman Troy Thompson
confirmed that the department has agreed to work with Mr.
Marler's firm to contact those who got shots. Mr. Thompson also
told AP that Chi-Chi's has previously reimbursed the state for
the shots themselves, which cost about $90,000.
CHORDIANT SOFTWARE: NY Court Preliminarily OKs Suit Settlement
--------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Chordiant
Software, Inc., and certain of its officers and directors,
styled "In re Chordiant Software, Inc. Initial Public Offering
Securities Litigation, Case No. 01-CV-6222."
In the amended complaint, the plaintiffs allege that the
Company, certain of its officers and directors and the
underwriters of its initial public offering (IPO) violated
Section 11 of the Securities Act of 1933 based on allegations
that the Company's registration statement and prospectus failed
to disclose material facts regarding the compensation to be
received by, and the stock allocation practices of, the IPO
underwriters. The complaint also contains a claim for violation
of Section 10(b) of the Securities Exchange Act of 1934 based on
allegations that this omission constituted a deceit on
investors. The plaintiffs seek unspecified monetary damages and
other relief.
Similar complaints were filed in the same court against hundreds
of other public companies that conducted IPOs of their common
stock in the late 1990s. In June 2004, the Company and almost
all of the other issuers entered into a formal settlement
agreement with the plaintiffs. On February 15, 2005, the Court
issued a decision certifying a class action for settlement
purposes, and granting preliminary approval of the settlement
subject to modification of certain bar orders contemplated by
the settlement. In addition, the settlement is still subject to
statutory notice requirements as well as final judicial
approval.
The suit is styled "In re Chordiant Software, Inc. Initial
Public Offering Securities Litigation, Case No. 01-CV-6222,"
filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES
LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New
York, under Judge Shira N. Scheindlin. The plaintiff firms in
this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(3) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
CIGNA HEALTHCARE: FL Judge OKs $11.55M Settlement With Providers
----------------------------------------------------------------
Judge Federico Moreno of the United States District Court for
the Southern District of Florida approved a class action
settlement between CIGNA HealthCare and specialty health care
providers that will require the company to pay them $11.55
million, The Hartford Courant reports.
The approval, which affirms a nationwide agreement announced in
December, covers chiropractors, psychologists, podiatrists,
optometrists, nurse practitioners and other specialties. The
$11.55 million fund will compensate them based on the volume of
claims they submitted to CIGNA since 1990. The December
announcement stated that CIGNA would also have to pay up to $7.5
million in plaintiffs' attorneys' fees.
As previously reported in the December 21, 2004 edition of the
Class Action Reporter, the settlement includes significant
changes in CIGNA payment policies as well as $11.55 million in
direct payments to class members, including podiatrists and all
other non-MD and non-DO health professionals. The class includes
health care professionals who provided services during a period
of nearly 15 years to patients insured by CIGNA and other
managed care companies named in the suit. As part of the
settlement, CIGNA will make its claims editing process more
transparent, reducing confusion and disagreement over payments
to podiatric physicians and other health care providers.
Practitioners will have many more tools to understand and, if
necessary, challenge CIGNA payment decisions. CIGNA will make
crucial information available online, implement independent
external review to resolve billing disputes, and create a
specialty provider advisory committee, including a podiatric
physician representative, to improve communication between CIGNA
and practitioners. The reduced administrative burden on
practicing podiatrists is worth millions of dollars indirectly
to APMA members. CIGNA currently covers medical costs for more
than 13 million people with plans in all 50 states.
Also, as previously reported in the December 15, 2004 edition of
the Class Action Reporter, CIGNA HealthCare, under the
settlement agreement will, among other things:
(1) Establish a fund of $11.55 million from which class
members can obtain compensation in an amount based on
the volume of claims they submitted to CIGNA HealthCare
over a period of nearly 15 years;
(2) Further enhance its specialty health care provider
claims processing and adjudication systems and
processes;
(3) Continue to expand and improve its on-line referral,
certification and claims management capabilities for
specialty health care providers;
(4) Provide via the Internet detailed information about
CIGNA HealthCare's specialty health care provider claim
coding policies, fee schedules and related payment
guidelines;
(5) Refrain from reducing its fee specialty health care
provider schedules for participating providers more
than once in a calendar year, in most circumstances;
(6) Implement an independent, external review process to
resolve billing disputes fairly and expeditiously; and
(7) Establish a specialty health care provider advisory
committee to maintain open and frequent communication
between CIGNA HealthCare and the providers and to
address relevant issues and concerns.
In the suit, providers had alleged CIGNA improperly denied and
reduced claim payments, but the company did not admit any
wrongdoing in the settlement.
DUQUESNE LIGHT: Reaches Settlement for PA Securities Fraud Suit
---------------------------------------------------------------
Duquesne Light Holdings, Inc. reached a settlement for the
consolidated securities class action filed against it and David
Marshall, its former chairman, chief executive officer and
president, in the United States District Court for the Western
District of Pennsylvania, styled "In re DQE, Inc. Securities
Litigation, Master File No. 01-1851 (W.D. Pa.)."
The plaintiffs filed a second consolidated amended complaint on
April 15, 2002. The complaint alleges violations of Section
10(b) of the Securities Exchange Act of 1934 (Exchange Act) and
Rule 10b-5 promulgated thereunder, and Section 12(a)(2) of the
Securities Act of 1933 (Securities Act). The complaint also
alleges controlling person liability under Section 20(a) of the
Exchange Act and Section 15 of the Securities Act.
The complaint alleges that between December 6, 2000 and April
30, 2001, the defendants issued a number of materially false and
misleading statements concerning investments made by the
Company's subsidiary, DQE Enterprises, Inc., and the impact that
these investments would have on its current and future financial
results.
On May 20, 2003, the court certified a class to include
purchasers of the Company's common stock during the period from
December 6, 2000 through April 30, 2001, and a sub-class to
include purchasers of the Company's common stock through its
dividend reinvestment and stock purchase plan during the same
period. In March 2005, the Company reached an oral agreement in
principle with counsel for the plaintiffs to settle all claims
of the class and sub-class. The proposed settlement is
contingent on execution of a definitive settlement agreement and
court approval.
FOREST AND BROOK: Recalls Sandwiches For Listeria Contamination
---------------------------------------------------------------
Forest and Brook Food Corporation, a Hauppauge, New York,
establishment, is voluntarily recalling approximately 385 pounds
of chicken breast wrap sandwiches that may be contaminated with
Listeria monocytogenes, the U.S. Department of Agriculture's
Food Safety and Inspection Service (FSIS) announced.
Products subject to recall include 8.3 oz. packages of "7
Eleven, BIG EATS, Deluxe, CHICKEN BREAST WRAP, Handmade On
Wednesday 04/20/05, Freshest Before Friday 11:59 p.m. 04/22/05."
Each package bears the establishment code "P-18342" inside the
USDA mark of inspection.
The products were produced on April 20 and were distributed to
retail establishments in New York, New Jersey and eastern
Pennsylvania. The problem was discovered through company
testing. FSIS has received no reports of illnesses associated
with consumption of these products.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. However, listeriosis
can cause high fever, severe headache, neck stiffness and
nausea. Listeriosis can also cause miscarriages and stillbirths,
as well as serious and sometimes fatal infections in those with
weakened immune systems including infants, the elderly and
persons with chronic disease, such as HIV infection or
undergoing chemotherapy.
Consumers with questions about the recall should contact company
Manager of Consumer Communications Jaime Carpenter at
(214) 841-6585. Media with questions about the recall should
contact 7 Eleven, Inc. Director of Marketing and Communications
Kevin Gardner at (214) 828-7694. Consumers with food safety
questions can phone the toll-free USDA Meat and Poultry Hotline
at 1-888-MPHotline (1-888-674-6854). The hotline is available in
English and Spanish and can be reached from l0 a.m. to 4 p.m.
(Eastern Time) Monday through Friday. Recorded food safety
messages are available 24 hours a day.
LAERDAL MEDICAL: Adapter Cables Recalled For Breaking Easily
------------------------------------------------------------
Laerdal Medical Corporation, Wappingers Falls, New York, a
subsidiary of Laerdal Medical AS, Stavanger, Norway, is
voluntarily recalling all lots of CM 100-Heartstart Adapter
Cable, Cat. No. 920650 (Adapter Cable). Wires within the
defibrillator adapter cables are susceptible to breakage.
The Company has received reports regarding incidents of wire
breakage in the Adapter Cable that prevented delivery of
defibrillation shocks. The test method described in the
defibrillator instructions for use will not detect internal
breaks in the adapter cables. Use of these Adapter Cables should
be discontinued.
The Adapter Cable allows Laerdal Heartstart brand defibrillation
electrodes with snap connecter to be used with
HP/Agilent/Philips CodeMaster 100 and CodeMaster SL+/XL/XE
defibrillators, Laerdal Heartstart 4000 defibrillators, and
Philips HeartStart XLT, HeartStart XL, HeartStart MRx
defibrillators. The Adapter Cable was supplied as a standard
accessory with most CodeMaster 100 defibrillators that Laerdal
distributed, and was sold as an optional accessory for use with
the Laerdal Heartstart 4000 automated external defibrillator
(AED).
A 26" long black-colored "Y" configuration cable assembly with
one cylindrical white two-pole connecter at its base, and a
patient electrode snap connector on each of the two remaining
leads, one red and one white. The number 281-132-00 appears on
a white label band affixed to one of the leads. Over 3,000
Adapter Cables have been sold throughout the U.S. since 1996.
Replacement cables from Laerdal are not available. Compatible
alternative cabled electrodes that do not require adapters are
available from Philips Medical Systems.
This recall is being conducted with the full knowledge of the US
Food and Drug Administration (FDA), and is being facilitated for
Laerdal by the National Notification Center (NNC), a
professional recall contractor. Consumers with questions about
the recall should contact NNC at 1-800-668-4391. Other inquiries
should be addressed to Laerdal at 1-877-523-7325, or
customerservice@laerdal.com.
LEAPFROG ENTERPRISES: Expects CA Fraud Suits To Be Consolidated
---------------------------------------------------------------
Leapfrog Enterprises, Inc. anticipates that the securities class
actions filed against it and certain of its current and former
officers and directors in the United States Dsitrict Court for
the Northern District of California to be consolidated.
On December 2, 2003, a class action complaint entitled "Miller
v. LeapFrog Enterprises, Inc., et al., No. 03-5421 RMW," was
filed alleging violations of the Securities Exchange Act of
1934, or 1934 Act. Subsequently, three similar actions were
filed in the same court:
(1) Weil v. LeapFrog Enterprises, Inc., et al., No. 03-5481
MJJ;
(2) Abrams v. LeapFrog Enterprises Inc., et al., No. 03-
5486 MJJ; and
(3) Ornelas v. LeapFrog Enterprises, Inc., et al., No. 03-
5593 SBA.
Each of those complaints purports to be a class action lawsuit
brought on behalf of persons who acquired the Company's Class A
common stock during the period of July 24, 2003 through October
21, 2003. On February 18, 2004, the plaintiff in the Weil action
amended her complaint and now seeks to maintain a class action
on behalf of persons who acquired the Company's Class A common
stock during the period of July 24, 2003 through February 10,
2004.
All of the complaints allege that the defendants caused the
Company to make false and misleading statements about its
business and forecasts about its financial performance, and that
certain of its individual officers and directors sold portions
of their stock holdings while in the possession of adverse,
non-public information. The Weil complaint also alleges that
our financial statements were false and misleading. The
complaints do not specify the amount of damages sought.
The court has not yet appointed a lead class plaintiff, and a
consolidated complaint has not been filed. Discovery has not
commenced and no trial date has been set. The Company
anticipates that all of the actions will ultimately be
consolidated into one action and that a consolidated amended
complaint will be filed after the appointment of a lead
plaintiff.
MCGRAW DAVIDSON: Files Motion To Dismiss RESPA Class Action Suit
----------------------------------------------------------------
Claiming the court lacks subject matter jurisdiction, McGraw
Davisson Stewart, a Tulsa, an Oklahoma real estate brokerage hit
with a class action lawsuit for alleged RESPA violations filed a
motion to dismiss the case, The Inman News reports.
The Tulsa, Oklahoma-based real estate brokerage, and several
other Oklahoma-based entities, are the target of a class-action
lawsuit brought under the Real Estate Settlement Procedures Act,
known as RESPA.
Led by Eric Bohne, the class action suit alleges that the
defendants violated Section 8(a) and (b) of RESPA by paying,
receiving or exchanging unearned fees for rendering settlement
services. Making claims similar to those in a Housing and Urban
Development (HUD) investigation settled in March, the suit also
asserts four state law claims.
In its motion to dismiss the case, McGraw Davisson claimed that
the court lacks subject matter jurisdiction for three reasons:
the plaintiff, Eric Bohne, didn't allege an "injury in fact";
the claim, which deals with a home sale made in 2002, is barred
by RESPA's one-year statute of limitations; and the transaction
is outside RESPA's coverage.
William Grimm, an attorney with Barrow & Grimm, which is
representing McGraw Davisson, Residential Sales Associates, 2003
Builders Services and four individuals in the class action suit,
told Inman News "Mr. Bohne complained about a violation that
happened in January 2002. RESPA has a one-year statute for
private party actions."
In addition, Mr. Grimm explained that RESPA covers transactions
where a federally related mortgage loan is involved. However,
Mr. Bohne paid $300,000 cash for the house, and hence no federal
entities, such as Fannie Mae or Freddie Mac, which often
purchase loans from mortgage companies, were involved, Mr. Grimm
claimed. He also added, "RESPA also requires for a private party
action there be some injury. Mr. Bohne has not claimed an injury
in fact - in other words, an overcharge."
The suit was filed in the wake of two settlements the companies
made in March with HUD. Combined, the companies agreed to pay
$450,000 and cease the practices that triggered the
investigation. After a sixth-month investigation, HUD had
alleged that McGraw Davisson Stewart encouraged its agents to
establish an organization, called Residential Sales Associates.
The organization then allegedly purchased an interest in
Closings of Tulsa, an affiliated title company partially owned
by McGraw Davisson Stewart. In its findings HUD stated that
Residential Sales Associates collected a portion of Closings of
Tulsa's profits, and then allegedly redistributed the profits
back to real estate agents based on the sale prices of the
transactions that the agents referred to Closings of Tulsa. HUD
alleged that the agents paid a below market price for their
ownership interests. The HUD investigation claimed that this
violated Section 8 of RESPA, which prohibits giving or accepting
kickbacks in exchange for referrals of settlement service
business. This is similar to the charges in the class-action
suit.
The next step in the litigation, Mr. Grimm told the Inman News,
Mr. Bohne will respond to the motion for dismissal, and the
court will set a hearing or rule on the papers. "Probably in the
next two to three months there will be some sort of definitive
answer on this motion," he adds.
NATIONAL STUDENT: Held In Contempt For Violating FTC Order Terms
----------------------------------------------------------------
A U.S. district court judge has held Integrated Capital, doing
business as National Student Financial Aid (NSFA), and its
principal, Alan Wilson, in contempt for violating terms of an
August 2003 stipulated final order requiring them to make
certain disclosures in connection with the marketing and sale of
academic goods or services.
In a ruling from the U.S. District Court for the District of
Nevada, Judge David Hagen ordered NSFA and Wilson to offer full
refunds to all consumers who purchased NSFA's services between
August 6, 2003 and July 17, 2004.
In August 2003, the Federal Trade Commission filed a complaint
and stipulated order settling charges that NSFA misrepresented
its college financial aid services. The order, approved by the
court, required the defendants to make certain affirmative
disclosures in their oral sales presentations, including that:
(1) purchasing NSFA's services did not guarantee that a
consumer will get financial aid or get more financial
aid than the consumer otherwise could have obtained
without purchasing NSFA's services;
(2) purchasing NSFA's services did not guarantee that a
consumer's child will be accepted by any college or
university;
(3) NSFA provided no services until it received a completed
questionnaire, that certain services had to be
specifically requested, and that failure to utilize any
services did not entitle consumers to a refund;
(4) consumers might not realize the full benefit of NSFA's
services if their children were within six months of
graduating from high school, had not made reasonable
efforts to complete necessary paperwork for admissions
and financial aid, or were only considering attending
community college; and
(5) consumers who were not U.S. citizens might not be
eligible for federal or state financial aid.
In its order finding the defendants in contempt, the court found
that they "failed miserably" to make the affirmative disclosures
during NSFA's sales presentation. The court stated that the
affirmative disclosures were included in the stipulated final
order because they related to the core areas of the defendants'
business practices that attracted the FTC's attention in the
first place. The court found that the defendants' contention
that the placement of the affirmative disclosures at the
conclusion of the individual "table talk" meetings satisfied the
stipulated final order was without merit. The disclosures must
be made during the sales presentation, not after consumers have
already decided to purchase defendants' services, the court
ruled.
As a sanction for the defendants' contemptuous behavior, the
court ordered them to contact all consumers who purchased their
services between August 6, 2003 (the date of entry of the
stipulated final order), and July 17, 2004, and offer a full
refund to those consumers dissatisfied with NSFA's services. The
FTC estimates these refunds will total over $2 million. The
court, however, did not grant the Commission's motion to modify
the stipulated final order to ban the defendants from selling
academic goods or services in the future, stating that the
defendants' behavior did not warrant a ban, "at least not yet,"
according to Judge Hagen.
The FTC has set up a consumer hotline number, 202-326-2880, for
consumers with questions about the court's order or the refund
program. Copies of the order imposing final civil contempt
remedies are available from the FTC's Web site at
http://www.ftc.govand also from the FTC's Consumer Response
Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580.
The FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them. To
file a complaint in English or Spanish (bilingual counselors are
available to take complaints), or to get free information on any
of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1-877-382-4357), or use the complaint form at
http://www.ftc.gov. The FTC enters Internet, telemarketing,
identity theft, and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of
civil and criminal law enforcement agencies in the U.S. and
abroad.
O'CHARLEY'S INC.: Reaches Agreement To Settle 18 Hep A Lawsuits
---------------------------------------------------------------
O'Charley's, Inc. has reached settlement for 18 cases in the
litigation filed against it relating to an outbreak of the
Hepatitis A virus traced to its Knoxville, Tennessee restaurants
in September 2003.
In September 2003, customers and employees at one of the
Company's O'Charley's restaurants located in Knoxville,
Tennessee were exposed to the Hepatitis A virus, which resulted
in a number of the Company's employees and customers becoming
infected. The Company worked closely with the Knox County
Health Department and the Centers for Disease Control and
Prevention when it became aware of this incident and cooperated
fully with their directives and recommendations. The Company
was aware of 81 individuals who have contracted the Hepatitis A
virus, most of whom have been linked to its Knoxville restaurant
during the time of the outbreak. Each of the Knox County Health
Department, the Centers for Disease Control and Prevention and
the Food and Drug Administration have tentatively associated the
outbreak of the Hepatitis A virus to eating green onions
(scallions).
56 lawsuits were initially filed against the Company, all but
one of which have been filed in the Circuit Court for Knox
County, Tennessee. The suits allege injuries or fear of
injuries from the Hepatitis A incident. A number of these suits
seek substantial damages, including treble damages under
Tennessee consumer protection laws and punitive damages, and
some of which seek to be certified as class actions. One of the
lawsuits was filed by an individual who contracted Hepatitis A
and died following the filing of his lawsuit. This suit has
been amended to seek compensatory damages not to exceed $7.5
million and punitive damages not to exceed $10.0 million
alleging wrongful death. Other plaintiffs have alleged
significant health concerns, including ailments requiring
hospitalization. As of March 24, 2005, the Company has
agreements to settle 18 of these cases.
SKECHERS USA: CA Federal Court Dismisses Securities Fraud Suit
--------------------------------------------------------------
The United States District Court for the Central District of
California dismissed several a shareholder securities class
action lawsuit filed against Footwear maker Skechers USA, Inc.
(NYSE: SKX) and entered a final judgment in its favor, The
Associated Press reports. According to the company, the
plaintiffs have 30 days from April 26 to appeal the judgment.
As reported in previous 2003 editions of the Class Action
Reporter, several law firms launched securities class action
suits in California federal court on behalf of all persons who
purchased securities of Skechers USA, Inc. (NYSE: SKX) between
April 3, 2002 and December 9, 2002, inclusive.
The suits charged Skechers and certain of its executive officers
with violations of federal securities laws. Among other things,
plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements
concerning Skechers' revenue and earnings caused Skechers' stock
price to become artificially inflated, inflicting damages on
investors.
The complaint alleges that starting in 2002, Skechers began
assuming the role of distributor of its products in several
international markets including Spain, Italy, Portugal, the
Benelux region and Austria. Unencumbered by a third-party
distributor, Sketchers was able to increase its profit margin on
sales without moving any additional inventory. Although
temporarily enjoying increased profits, Skechers' overall
merchandise sales ultimately began to slow and the Company was
forced to significantly reduce earnings accordingly.
The market, unprepared for the temporary effect Skechers'
distributor role would have on its earnings, was stunned when
the Company, after having posted record revenue in first- and
second-quarter 2002, began revising its earnings and ultimately
recorded a loss. Moreover, while Skechers stock was soaring as
a result of the market's favorable reaction to the increased
profits, individual defendants who knew the truth about the
Company's long-term outlook sold substantial personal holdings
in the Company and reaped more than $42 million of profits from
stock sales during the class period.
TRIPLE-S MANAGEMENT: PR Court Allows Repleading of Lawsuit Claim
----------------------------------------------------------------
The United States District Court for the District of Puerto Rico
allowed plaintiffs to replead a claim in the class action filed
against Triple-S Management Corporation, certain present and
former directors of the Company and Triple-S, Inc. (TSI), and
others.
On September 4, 2003, Jose Sanchez and others filed a putative
class action complaint, alleging violations under the Racketeer
Influenced and Corrupt Organizations Act, better known as the
RICO Act. The suit, among other allegations, alleges a scheme
to defraud the plaintiffs by acquiring control of TSI through
illegally capitalizing TSI and later converting it to a for-
profit corporation and depriving the stockholders of their
ownership rights. The plaintiffs base their later allegations on
the supposed decisions of TSI's board of directors and
stockholders, allegedly made in 1979, to operate with certain
restrictions in order to turn TSI into a charitable corporation,
basically forever.
While this case is still in the very early preliminary stages
and has not been certified as a class action, a Motion to
Dismiss was filed by defendants. On March 15, 2004, plaintiffs
filed a response to this motion. On April 30, 2004 defendants
filed a reply in support of the Motion to Dismiss. On March 4,
2005 the Court issued an Opinion and Order. In this Opinion and
Order, of the twelve counts included in the complaint, eight
counts were dismissed for failing to assert an actionable
injury; six for lack of standing and two for failing to plead
with sufficient particularity in compliance with the Rules. All
shareholder allegations, including those described above, were
dismissed in the Opinion and Order. The remaining four counts
were found standing, in a limited way, in the Opinion and Order.
Finally, the Court ordered that by March 24, 2005 one of the
counts left standing be replead to conform to the Rules and that
by March 28, 2005 a proposed schedule for discovery and other
submissions be filed.
VISHAY INTERTECHNOLOGY: Settles DE Lawsuit Over Siliconix Offer
---------------------------------------------------------------
Vishay Intertechnology executed a memorandum of understanding
(MOU) with plaintiffs in a consolidated class action litigation
pertaining to Vishay's pending exchange offer for the
outstanding shares of Siliconix Inc., the EE Times reports.
According to the company, the MOU establishes undisclosed terms
and conditions under which the plaintiffs, Vishay and Siliconix
have agreed to settle the action. The settlement is subject to
the approval of the Delaware Chancery Court.
A separate plaintiff who filed a class action suit in California
Superior Court challenging the exchange is not a party to the
MOU. As reported in April 28, 2005 edition of the Class Action
Reporter, the California Superior Court granted Vishay's motion
to stop that pending suit.
As reported in previous editions of the Class Action Reporter,
several law firms initiated a class action lawsuit on behalf of
Siliconix Incorporated ("Siliconix") public shareholders
(NASDAQ: SILI) in the Delaware Court of Chancery, New Castle
County. It had sought to enjoin a tender offer made by Vishay to
acquire the publicly held shares of Siliconix common stock on
grounds that the proposed transaction is grossly unfair to
Siliconix's shareholders.
WILLIAMS TECHNOLOGIES: Prisoners Launch Wage, Fraud Suit in SC
--------------------------------------------------------------
Williams Technologies, Inc. faces a class action filed on behalf
of all prisoners who worked in a South Carolina Department of
Corrections (SCDC) Services Training Program at Lieber
Correctional Institute in South Carolina state court.
The plaintiffs claim they should have been paid industry
prevailing wage under a South Carolina prison industries
authorization statute, that the SCDC and the Company violated
the Payment of Wages Act and that the SCDC and the Company
committed at tort under the South Carolina Tort Claims Act.
WYETH PHARMACEUTICALS: Settles UT Woman's Fen-Phen Suit in PA
-------------------------------------------------------------
Wyeth Pharmaceuticals reached a settlement with a Utah resident
Chris Ann Jenson, who used its weight-loss medicine as part of
the fen-phen combination, after a jury awarded her $50,000 for
medical expenses, The Bloomberg News reports.
Jurors in the Philadelphia Court of Common Pleas ruled that
Wyeth's Pondimin diet drug caused Ms. Jenson's heart-valve
leakage and that she should receive compensation for her
injuries.
Sean Jez, one of Ms. Jenson's lawyers told Bloomberg News, "We
believe the jury was correct" in linking the drug to the heart
damage, "But we don't believe the $50,000 awarded will
reasonably compensate her." Mr. Jez though added that Wyeth
agreed to settle the case after the jury returned its verdict,
however he declined to give the size of the accord.
In a press statement, Lawrence Stein, Wyeth's general counsel,
explained that after the damage award both sides agreed not to
go to the next phase of the case, which would have determined if
Wyeth should be held financially responsible for paying Mr.
Jenson's compensation. He also said that the company disagreed
with the jury's conclusion that Jenson should be compensated for
her heart problems. However, the size of the award "indicates
that the jury rejected the plaintiff's evaluation of Ms.
Jenson's long-term medical needs," Mr. Stein adds.
Mr. Jez also told Bloomberg News that his client had been
seeking at least $100,000 in damages to cover the cost of future
surgeries to repair her damaged heart valves.
Court documents show that Ms. Jenson, 44, contended that she
suffered moderate mitral-valve damage after taking Pondimin for
about 3 1/2 months.
The award was the first among the Philadelphia trials to a
former fen-phen user who could only show moderate heart damage.
The weeklong trial itself was the latest in Philadelphia to
focus on claims concerning Wyeth's now-withdrawn diet drugs.
As reported in previous editions of the Class Action Reporter,
over the past 10 months, other Philadelphia juries have rejected
claims by former users or said individuals who once used the
appetite suppressant deserved as much as $560,000.
However, even with the settlement and the dismissal in some
cases, the New Jersey-based drugmaker still faces thousands more
fen-phen claims in the same court. Wyeth has set aside more than
$21 billion to resolve fen-phen liability. Fen-phen, a diet-drug
cocktail, included the company's Pondimin or Redux medicines
plus the generic phentermine.
The Philadelphia cases involve former fen-phen users who
declined to be part of the company's $3.75 billion class-action
settlement and chose to go to trial separately.
The case that was recently settled is styled, Jenson v. Wyeth,
02-3783, Philadelphia Court of Common Pleas.
VITAS HEALTHCARE: California Nurses Launch Overtime Wage Lawsuit
----------------------------------------------------------------
Vitas Healthcare Corporation faces a class action filed in the
Superior Court of California, Los Angeles County, by Ann Marie
Costa, Ana Jimenez, Mariea Ruteaya and Gracetta Wilson alleging
failure to pay overtime wages and to provide meal and break
periods to California nurses, home health aides and licensed
clinical social workers.
The Company stated in a disclosure to the Securities and
Exchange Commission that it contests these allegations and
believes they are without merit. Due to the complex legal and
other issues involved, it is not presently possible to estimate
the amount of liability, if any, related to this case.
Management cannot provide assurance the Company will ultimately
prevail in it.
New Securities Fraud Cases
AVAYA INC.: Lerach Coughlin Lodges Securities Fraud Suit in NJ
--------------------------------------------------------------
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 District of New Jersey on behalf
of purchasers of Avaya, Inc. ("Avaya") (NYSE:AV) common stock
during the period between October 5, 2004 and April 19, 2005
(the "Class Period").
The complaint charges Avaya and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Avaya provides communication systems, applications and
services for enterprises, including businesses, government
agencies and other organizations.
The complaint alleges that during the Class Period defendants
made materially false and misleading statements regarding the
Company's business and prospects. Specifically, the complaint
alleges that defendants failed to disclose and/or misrepresented
the following adverse facts, which were known to defendants, or
recklessly disregarded by them, at all relevant times:
(1) the cost of the integration of Tenovis, a company Avaya
had acquired at the start of the Class Period, was much
greater than represented and rather than being
"accretive" to fiscal 2005 earnings or having a
positive financial impact within a short period of
time, the acquisition would, in fact, reduce Avaya's
earnings by at least $.06 per share during fiscal 2005;
(2) Avaya's changes in its delivery methods of products to
market was creating severe disruptions in sales;
(3) Avaya was experiencing a dramatic reduction of demand
in its U.S. market; and
(4) based on the foregoing, Avaya had no reasonable basis
to project an increase in profits or an increase in
revenues of 25-27% for fiscal 2005.
On April 19, 2005, Avaya released its financial and operational
results for the second quarter of fiscal 2005 and reported
revenues and earnings far short of previous guidance and analyst
expectations of earnings of $0.17 a share on revenue of $1.29
billion. The investing public's reaction was swift and negative.
One analyst at J.P. Morgan called the results "horrid" and cut
its rating on the stock to "neutral" from "overweight." The
stock fell more than 25% on April 20, 2005, the single biggest
loser on the NYSE, on extremely heavy trading volume.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
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/avaya/.
AVAYA INC.: Schatz & Nobel Lodges Securities Fraud Lawsuit in NJ
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
District of New Jersey on behalf of all persons who purchased
the publicly traded securities of Avaya, Inc. (NYSE: AV)
("Avaya" or "the Company") between October 5, 2004 and April 19,
2005, inclusive (the "Class Period"). Also included are all
those who acquired Avaya through its acquisitions of Tenovis and
RouteScience.
The Complaint alleges that Avaya violated federal securities
laws. Specifically, defendants failed to disclose the following:
(1) the cost of the integration of Tenovis, a company Avaya
had acquired, was much greater than represented and
rather than being "accretive" to fiscal 2005 earnings
or having a positive financial impact within a short
period of time, the acquisition would, in fact, reduce
Avaya's earnings by at least $.06 per share during
fiscal 2005;
(2) Avaya's changes in its delivery methods of products to
market was creating severe disruptions in sales;
(3) Avaya was experiencing a dramatic reduction of demand
in its U.S. market; and
(4) and as a result, Avaya had no reasonable basis to
project an increase in profits or an increase in
revenues of 25-27% for fiscal 2005.
On April 19, 2005, Avaya released its financial and operational
results for the second quarter of fiscal 2005 and reported
revenues and earnings far short of previous guidance and analyst
expectations of earnings of $0.17 a share on revenue of $1.29
billion. One analyst at J.P. Morgan called the results "horrid"
and cut its rating on the stock to "neutral" from "overweight."
On this news, the stock fell more than 25% on April 20, 2005.
For more details, contact Wayne T. Boulton or Nancy Kulesa by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net.
BEARINGPOINT INC.: Christopher J. Gray Lodges Stock Suit in VA
--------------------------------------------------------------
The Law Office of Christopher J. Gray, P.C. initiated a class
action lawsuit on in the United States District Court for the
Eastern District of Virginia, on behalf of persons who purchased
or otherwise acquired the publicly traded securities of
BearingPoint, Inc. ("BearingPoint" or the "Company") (NYSE:BE)
between August 14, 2003 and April 21, 2005, inclusive (the
"Class Period").
The lawsuit asserts claims against BearingPoint, Randolph C.
Blazer, Robert S. Falcone and PricewaterhouseCoopers, LLP
("defendants"). The lawsuit asserts claims under Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated by the SEC thereunder and seeks to recover damages.
Any member of the class may move the Court to be named lead
plaintiff. If you wish to serve as lead plaintiff, you must move
the Court no later than June 24, 2005.
The complaint alleges that defendants violated the federal
securities laws and defrauded investors by issuing materially
false and misleading statements throughout the Class Period
regarding the Company's financial performance. The complaint
alleges that defendants failed to disclose that
(1) BearingPoint's reported financial results were
inaccurate and could not be relied upon;
(2) BearingPoint's internal controls were inadequate to
ensure the reliability of its publicly reported
financial results;
(3) BearingPoint had materially overstated (and failed to
write down) the value of the goodwill associated with
certain of its foreign acquisitions in its publicly
reported financial statements long after it had become
apparent that the value of such assets was impaired;
and
(4) as a result of failing to timely write down the value
of BearingPoint's goodwill, BearingPoint had reported
artificially high earnings in its publicly reported
financial results.
On April 20, 2005, BearingPoint announced that it had determined
that it would have to take a mammoth write down of an estimated
$250 million to $400 million worth of the goodwill listed on its
balance sheet. BearingPoint also stated that its previously-
issued 10-Q quarterly reports for each of the first three
quarters of fiscal year 2004, its Form 10-K report for the six-
month transition period ended December 31, 2003, and its Form
10-K annual report for the fiscal year ended June 30, 2003
should not be relied upon and would have to be restated.
Additionally, the Company announced that it would miss the
deadline for filing its 2004 annual report. On this news, shares
of BearingPoint plummeted from a close of $7.77 per share on
April 20 to close at $5.28 on April 21, constituting a drop of
over 32% in a single day.
The class action lawsuit seeks to recover investors' losses
resulting from defendants' alleged misrepresentations concerning
BearingPoint's financial results and the value of its assets.
For more details, contact the Law Office of Christopher J. Gray,
P.C. by Phone: (212) 838-3221 or by E-mail:
newcases@cjgraylaw.com.
BEARINGPOINT INC.: Donovan Searles Lodges Securities Suit in VA
---------------------------------------------------------------
The law firm of Donovan Searles, LLC, initiated a class action
lawsuit in the United States District Court for the Eastern
District of Virginia on behalf of all purchasers of
BearingPoint, Inc. securities between August 14, 2003 and April
20, 2005, inclusive (the "Class Period"). The lawsuit was filed
against BearingPoint, Inc. ("BearingPoint" or "the Company")
(NYSE:BE), certain former officers, and BearingPoint's outside
auditor, PricewaterhouseCoopers, LLP. The Complaint, entitled
Sutton v. Bearing Point, Inc. et al., asserts claims for
violations of the federal securities laws, as described below.
The Complaint alleges that defendants violated the federal
securities laws by issuing quarterly and yearly financial
statements for BearingPoint which materially misrepresented the
Company's financial performance and profitability in violation
of Generally Accepted Accounting Principles ("GAAP"). Plaintiff
specifically alleges that defendants violated GAAP by materially
overstating the value of (and failing to write down the value
of) the goodwill associated with certain foreign acquisitions
long after it had become apparent that the value of such assets
was impaired and materially overstating earnings as a result of
its failure to properly write down the value of these impaired
assets.
On April 20, 2005, it was revealed that the Company's previously
filed annual financial statements for 2003 and quarterly
financial statements for 2004 were materially false, should not
be relied upon, and would have to be restated to accurately
reflect the Company's true performance. It was also revealed
that BearingPoint's prior earnings reports were false, that
earnings would be materially reduced upon the restatement, and
that the Company would be forced to write-down between $250
million and $400 million in assets.
In reaction to these revelations, BearingPoint's share price
fell $2.49 on April 21, 2005, down 32 percent from its prior
closing price, thereby damaging plaintiff and the Class.
For more details, contact Michael D. Donovan of Donovan Searles,
LLC by Mail: 1845 Walnut Street, Suite 1100, Philadelphia, PA
19103 by Phone: (800) 619-1677 or (215) 732-6067 or by E-mail:
mdonovan@donovansearles.com.
DORAL FINANCIAL: Berger & Montague Lodges Securities Suit in NY
---------------------------------------------------------------
The law firm of Berger & Montague, P.C. initiated a lawsuit on
behalf of purchasers of the common stock of Doral Financial
Corp. (NYSE: DRL) between March 15, 2004, and April 18, 2005.
This Federal Securities fraud class action is pending in the
United States District Court for the Southern District of New
York.
The complaint charges that Doral's management overstated income
and revenue and understated liabilities in violation of U.S.
GAAP. This enabled certain insiders to reap more than $10
million in insider trading profits.
On April 19, 2005, Doral announced that it was restating its
financial results for 2000 through 2004. According to Doral, the
restatements are necessary to correct the accounting treatment
for valuing Doral's Interest-Only Strip portfolio. Doral
admitted that eventually it would be required to take a charge
of between $290 million and $435 million.
For more details, contact Berger & Montague by Phone:
888-891-2289 or by E-mail: InvestorProtect@bm.net.
DORAL FINANCIAL: Schoengold Sporn Lodges Securities Suit in NY
--------------------------------------------------------------
The law firm of Schoengold Sporn Laitman & Lometti, P.C.
initiated a class action lawsuit against Doral Financial Corp.
("DRL" or the "Company") (NYSE: DRL) and certain key officers
and directors in the United States District Court for the
Southern District of New York on behalf of all purchasers of DRL
securities during the period between January 17, 2001 and April
19, 2005 (the "Class Period").
The complaint alleges that during the Class Period, defendants
made materially false and misleading statements regarding the
Company's business and prospects. On March 15, 2005, Doral filed
its Annual Report on Form 10-K with the Securities and Exchange
Commission ("SEC"). In its 2004 Annual Report, the Company
disclosed for the first time its use of overly aggressive
assumptions in valuing its derivatives portfolio of IO Strips.
In a matter of days, Doral stock plummeted from $38.29 per share
to $21.50 per share in extremely heavy volume.
Then on April 19, 2005, the Company announced that "after
consulting with various financial institutions and other firms
with experience in valuation issues, the Company has determined
that it is appropriate to correct the methodology used to
calculate the fair value of its portfolio of floating rate
interest only strips ("IOs"). The Company's preliminary estimate
is that this correction will result in a decrease in the fair
value of its floating rate IOs of between $400 million to $600
million as of December 31, 2004." As a result of these false
statements, Doral's stock price traded at inflated levels during
the Class Period; however, after the truth was revealed in
Doral's press release on April 19, 2005, the Company's shares
fell to below $16 per share.
According to the complaint, the true facts, which were known by
each of the defendants but concealed from the investing public
during the Class Period, were as follows:
(1) the Company was using overly aggressive and unrealistic
assumptions to value its derivative portfolio of IO
Strips used to hedge its mortgage portfolio against
interest rate fluctuations;
(2) the Company was using fraudulent accounting practices
and materially overstated its net income, net gain on
mortgage loan sales and net capital; and
(3) the Company was using ineffective risk management and
hedging strategies against the increasing risk of
rising interest rates.
For more details, contact Schoengold Sporn Laitman & Lometti by
Phone: (866) 348-7700 by E-mail:
shareholderrelations@spornlaw.com or http://www.spornlaw.com.
IMERGENT INC.: Wolf Haldenstein Lodges Securities Lawsuit in UT
---------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP filed
a class action lawsuit in the United States District Court for
the District of Utah, on behalf of all persons who purchased the
securities of iMergent, Inc. ("iMergent" or the "Company")
(Amex: IIG) between October 26, 2004 and February 25, 2005,
inclusive, (the "Class Period") against defendants iMergent and
certain officers and directors of the Company. On April 28th,
the Company issued a press release stating, "iMergent Reports
Record Fiscal Third Quarter Revenue, Pre-Tax Earnings and Cash
Flows." Our class action lawsuit is continuing and the last day
to join is Monday, May 9, 2005.
The case name is Enuganti v. iMergent, Inc., 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.
The complaint alleges that defendants were aware of but
concealed from the investing public during the Class Period,
were as follows:
(1) the Company's storefront software was defective;
(2) iMergent was extorting from its customers thousands of
dollars in additional fees for technical support,
characterized as "executive mentoring," above and
beyond what customers contracted to pay as part of
their service packages when they purchased the
storefront software;
(3) since at least 2000, numerous customers had lodged
complaints with various state agencies concerning
defects with the storefront software and the exorbitant
"executive mentoring" fees charged;
(4) the Company's storefront software and service packages
were being illegally marketed as "franchises" or
"business opportunities" because iMergent was not
registered to engage in this type of business in the
states in which it was operating and was not following
the statutes applicable to companies that market
franchises and business opportunities in those states;
(5) the Company was extending credit to customers with
subprime credit without disclosing that the Company
did not require these customers to meet the Company's
credit criteria;
(6) the Company was entering into installment sale
contracts for defective storefront software packages,
with the knowledge that the defects in the software,
the difficulty of its use, and the refusal of some
customers to purchase so-called "executive mentoring"
(needed to operate the software) would lead to higher
customer dissatisfaction, product rejections, refusals
to pay for product packages being financed by the
Company, and complaints to and legal action by federal
and state authorities; and
(7) defendants had concealed that iMergent had been
subjected to a lawsuit and a cease and desist order by
the State of Washington in early 2004 concerning
misconduct similar to that alleged by the State of
Texas in its February 2005 lawsuit.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Christopher S. Hinton, Esq. or Derek Behnke by
Phone: 1-800-575-0735 or by E-mail: classmember@whafh.com.
LEAPFROG ENTERPRISES: Charles J. Piven Lodges Stock Suit in CA
--------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of LeapFrog
Enterprises, Inc. (NYSE: LF) between February 11, 2004, and
October 18, 2004, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California against defendant LeapFrog and
one or more of its officers and/or directors. The action charges
that defendants violated federal securities laws by issuing a
series of materially false and misleading statements to the
market throughout the Class Period, which statements had the
effect of artificially inflating the market price of the
Company's securities. No class has yet been certified in the
above action.
For more details, contact The Law Offices Of Charles J. Piven,
P.A. by Mail: The World Trade Center - Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202 by Phone:
410/986-0036 or by E-mail: hoffman@pivenlaw.com.
LEAPFROG ENTERPRISES: Schatz & Nobel Files Securities Suit in CA
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., which has significant
experience representing investors in prosecuting claims of
securities fraud, announces that a lawsuit seeking class action
status has been filed in the United States District Court for
the Northern District of California on behalf of all persons who
purchased the publicly traded securities of LeapFrog
Enterprises, Inc. (NYSE: LF) ("LeapFrog" or the "Company")
between February 11, 2004, and October 18, 2004 (the "Class
Period").
The Complaint alleges that LeapFrog violated federal securities
laws by issuing false or misleading public statements.
Specifically, the Complaint alleges that LeapFrog assured
investors that it had corrected problems in its IT systems and
supply chain infrastructure when in fact these issues were
continuing to have a materially negative effect on its business
and on its ability to accurately forecast results and meet
analysts' sales and earnings expectations. On October 18, 2004,
LeapFrog announced that its 2004 earnings would miss estimates
by more than 60% due, in large part, to its failure to correct
IT and supply chain problems. On this news, LeapFrog shares fell
from a close of $18.20 per share on October 18, 2004, to close
at $11.99 on October 19, 2004.
For more details, contact Wayne T. Boulton or Nancy Kulesa by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net.
R&G FINANCIAL: Brian M. Felgoise Lodges Securities Suit in NY
-------------------------------------------------------------
The Law Offices of Brian M. Felgoise, P.C. filed a securities
class action on behalf of shareholders who acquired R&G
Financial Corp. (NYSE: RGF) securities between April 21, 2003
and April 25, 2005, inclusive (the Class Period).
The case is pending in the United States District Court for the
Southern District of New York, against the company and certain
key officers and directors.
The action charges that defendants violated the federal
securities laws by issuing a series of materially false and
misleading statements to the market throughout the Class Period
which statements had the effect of artificially inflating the
market price of the Company's securities. No class has yet been
certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261
Old York Road, Suite 423, Jenkintown, Pennsylvania, 19046 by
Phone: (215) 886-1900 by E-mail: FelgoiseLaw@aol.com.
R&G FINANCIAL: Goldman Scarlato Lodges Securities Lawsuit in NY
---------------------------------------------------------------
The law firm of Goldman Scarlato & Karon, P.C., initiated a
lawsuit in the United States District Court for the Southern
District of New York, on behalf of persons who purchased or
otherwise acquired publicly traded securities of R&G Financial
Corporation ("R&G Financial" or the "Company") (NYSE: RGF)
between April 21, 2003 and April 25, 2005, inclusive, (the
"Class Period"). The lawsuit was filed against R&G Financial,
Victor J. Galan and Joseph R. Sandoval ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
the Company failed to disclose or misrepresented that R&G
Financial's earnings quality was poor due to the use of overly
aggressive assumptions to generate gain-on-sale income, as well
as to the value it retained in its interest-only residuals in
securitization transactions, that the methodology used to
calculate the fair value of the residual retained interests was
incorrect and caused the Company to overstate its financial
results by at least $50 million and as such its financial
results were not prepared in accordance with Generally Accepted
Accounting Principles.
On April 25, 2005, after the market closed, R&G Financial
announced that it would restate its financial results for the
fiscal years 2003 and 2004. Shares of R&G Financial fell
dramatically in reaction to the news, shedding $8.14 per share,
or 35.1% to close at $15.04 on very heavy trading volume. On
that date the Company also announced that the SEC had launched
an informal probe of the Company.
For more details, contact Goldman Scarlato & Karon, P.C. by
Phone: (888) 753-2796 or by E-mail: goldman@gsk-law.com.
R&G FINANCIAL: Wechsler Harwood Lodges Securities Lawsuit in NY
---------------------------------------------------------------
The law firm of Wechsler Harwood LLP filed a Federal Securities
fraud class action suit on behalf of all purchasers of the
common stock of R&G Financial Corp. ("R&G Financial" or the
"Company") (NYSE:RGF) between April 21, 2003 and April 26, 2005,
both dates inclusive (the "Class Period").
The action, entitled Reikes v. R&G Financial Corp., Case No. 05
CV 4265, is pending in the United States District Court for the
Southern District of New York, and names as defendants, the
Company, Chairman, Chief Executive Officer, and director, Victor
J. Galan, its Vice Chairman and President, Ramon Prats, and its
Executive Vice President, and Chief Financial Officer, Joseph
Sandoval. A copy of the Complaint can be obtained from the Court
or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The Complaint charges defendants with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. Specifically, the Complaint
alleges that defendants issued a series of materially false and
misleading statements contained in press releases and filings
with the Securities and Exchange Commission during the Class
Period, including:
(1) that R&G Financial's earnings quality had been
significantly weakened by the Company's use of overly
aggressive assumptions to generate gain on sale income,
as well as to boost the value it retained in its
interest only ("IO") residuals in securitization
transactions;
(2) that R&G Financial's methodology used to calculate the
fair value of its IO residual interests retained in
securitization transactions was incorrect and caused
the Company to overstate its financial results by at
least $50 million;
(3) that the Company's financial statements were not
prepared in accordance with Generally Accepted
Accounting Principles ("GAAP");
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(5) that as a result, the value of the Company's net
income and financial results were materially overstated
during the Class Period.
On March 25, 2005, after the market closed, R&G Financial
announced that it would restate its financial results for fiscal
years 2003 and 2004. News of this shocked the market. Shares of
R&G Financial, on April 26, 2005, fell $8.14 per share, or 35.12
percent, to close at $15.04 on unusually heaving trading volume.
After the market closed on April 26, 2005, R&G Financial issued
a press release announcing that it was also now subject to an
informal SEC probe relating to its restatement announcement.
For more details, contact Craig Lowther Wechsler Harwood LLP,
Shareholder Relations Department by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: (877) 935-7400 or
by E-mail: clowther@whesq.com.
TYCO INTERNATIONAL: Adam H. Smith Lodges Securities Suit in FL
--------------------------------------------------------------
The law firm of Adam H. Smith, P.A., initiated a class action
lawsuit in the United States District Court for the Southern
District of Florida on behalf of all persons or entities (the
"Class") who sold the common stock of Tyco International, LTD.
("Tyco") (NYSE: TYC) between June 15, 2002 and December 31,
2004, inclusive (the "Class Period").
The complaint alleges that defendants, including CEO Edward
Breen, violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations during the Class
Period, thereby artificially deflating the price of Tyco common
stock. Specifically, the complaint alleges that defendants
overstated and misrepresented material adverse facts that were
known to, or recklessly disregarded, by them and:
(1) conspired to encourage the initiation of criminal
actions against Dennis Kozlowski, Mark H. Swartz, and
Mark A. Belnick in an effort to protect the former
members of the Board of Directors from liability;
(2) employed a strategy that included, in part, leaking
information to the media in an effort to artificially
deflate share prices for the benefit of new management;
and
(3) recklessly disregarded the likelihood of significant
dilution of Tyco equity resulting from inefficiencies
and additional expenses in implementing this strategy.
For more details, contact Adam H. Smith, Esq. or Mark D. Hunter,
Esq. by Phone: +1-866-925-3538 or by E-mail:
seclawyer@bellsouth.net.
WATCHGUARD TECHNOLOGIES: Zwerling Schachter Lodges Suit in WA
-------------------------------------------------------------
The law firm of Zwerling, Schachter & Zwerling, LLP ("Zwerling
Schachter") initiated a class action lawsuit in the United
States District Court for the Western District of Washington on
behalf of all persons or entities who purchased the common stock
of WatchGuard Technologies, Inc. ("WatchGuard" or the "Company")
(Nasdaq: WGRD) between February 12, 2004 and March 15, 2005
inclusive (the "Class Period").
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations during the Class Period thereby artificially
inflating the price of WatchGuard common stock. Specifically,
the complaint alleges that the defendants concealed from the
investing public the fact that WatchGuard's reported financial
results for the first three quarters of 2004 were materially
false and misleading due to
(1) inaccurate income statement classification of early pay
incentive discounts taken by customers;
(2) under-accrual of customer rebate obligations; and
(3) timing of revenue recognition associated with specific
products and services, which resulted in an
overstatement of product revenue and understatement of
deferred revenue.
Moreover, the complaint alleges that the Company's February 12,
2004 projections were materially false and misleading, and that
the functionality and value of the Company's "Firebox X" product
was grossly overstated.
On March 16, 2005, WatchGuard disclosed that
(i) certain errors were discovered in its audit process and
that it would need to reclassify certain early pay
incentive discounts and reduce its revenue for its
previous financial results for 2002, 2003 and the first
three quarters of 2004;
(ii) an error was discovered in the Company's handling of
lease incentives; and
(iii) the errors reflected a material weakness in the
Company's internal controls over financial reporting.
On this news, the Company's stock price fell to a closing price
of $3.17 on March 16, 2005.
For more details, contact Shaye J. Fuchs, Esq. or Donald Lanier,
or Jayne Nykolyn of Zwerling, Schachter & Zwerling, LLP by
Phone: 1-800-721-3900 or by E-mail: sfuchs@zsz.com,
dlanier@zsz.com or jnykolyn@zsz.com.
WILLIAM LYON: Chimicles & Tikellis Lodges Suit Over Stocks in DE
----------------------------------------------------------------
The law firm of Chimicles & Tikellis LLP filed a class action
lawsuit against William Lyon Homes and its directors in the
Delaware Court of Chancery.
The lawsuit seeks to enjoin William Lyon Homes' Chairman and
Chief Executive Officer, William Lyon, from acquiring the stock
of the public stockholders for inadequate consideration.
For more details, contact Pamela S. Tikellis, Esquire of
CHIMICLES & TIKELLIS LLP by Mail: One Rodney Square, P.O. Box
1035, Wilmington, DE 19899 by Phone: (302) 656-2500 by Fax:
(302) 656-9053 by E-mail: pamelatikellis@chimicles.com.
*********
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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.
*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
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