/raid1/www/Hosts/bankrupt/CAR_Public/050531.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, May 31, 2005, Vol. 7, No. 106
Headlines
AMERUS GROUP: Faces National RICO Violations Lawsuit in CA Court
ASSOCIATED ESTATES: Court Mulls Summary Judgment in Ohio Lawsuit
BJs RESTAURANTS: Pays CA Overtime Wage Suit Settlement in Full
BJs RESTAURANTS: Plaintiff Agrees To Arbitration in CA Wage Suit
CREDIT BUREAUS: CA Court Refuses To Dismiss Antitrust Lawsuit
CALIFORNIA SPECIALTY: Recalls Tomatoes For Salmonella Corruption
CANADA: Court Approval Sought For Ponderal, Redux Settlements
DILLARD'S INC.: AL Woman Launches Race Discrimination Complaint
EXTREME NETWORKS: NY Court Preliminarily OKs Lawsuit Settlement
FIRST COMMUNITY: Plaintiffs Launch Amended Consumer Suit in CA
H&R BLOCK: IL Judge Blocks Tax Refund Litigation Settlement
IDACORP INC.: Asks ID Court To Dismiss Securities Fraud Lawsuit
LANDAMERICA FINANCIAL: Subsidiaries Reach $10.3M Suit Settlement
OWENS CORNING: Status Conference Held For MA Securities Lawsuit
OWENS CORNING: OH Court Junks Lawsuit V. Current, Former Execs
PACKAGING CORPORATION: Discovery Proceeds in Linerboard Lawsuit
PHARMOS CORPORATION: Shareholders Launch Stock Fraud Suits in NJ
PRESSLER & PRESSLER: Debtor Files Suit Over Collection Tactics
QUOVADX INC.: NY Court Preliminarily Approves Suit Settlement
QUOVADX INC.: CO Court Grants Certification To Securities Suit
QUOVADX INC.: Shareholders Launch Securities Fraud Lawsuit in CO
SCHWAN'S BAKERY: Recalls Turtle Pies Due to Undeclared Eggs
SHARPER IMAGE: Shareholders Launch Stock Fraud Suits in N.D. CA
SMART & FINAL: Trial in CA Overtime Wage Suit Set March 6,2006
SPX CORPORATION: Asks NC Court To Dismiss Securities Fraud Suit
WEST CORPORATION: CA Court Grants Demurrer For Consumer Lawsuit
WEST CORPORATION: Consumer Lawsuit Moved To NV Bankruptcy Court
New Securities Fraud Cases
COLLINS & AIKMAN: Stull Stull Lodges Securities Fraud Suit in NY
CORN PRODUCTS: Ademi & O'Reilly Lodges Securities Lawsuit in IL
CORN PRODUCTS: Schiffrin & Barroway Lodges Securities Suit in IL
CRAY INC.: Charles J. Piven Lodges Securities Fraud Suit in WA
CRAY INC.: Smith & Smith Lodges Securities Fraud Suit in W.D. WA
GRAVITY CO.: Glancy Binkow Lodges Securities Fraud Lawsuit in NY
HARLEY-DAVIDSON: Ademi & O'Reilly Lodges Securities Suit in WI
HARLEY-DAVIDSON: Schiffrin & Barroway Lodges Stock Lawsuit in WI
MAYTAG CORPORATION: Bull & Lifshitz Lodges Securities Suit in DE
R&G FINANCIAL: Ademi & O'Reilly Lodges Securities Lawsuit in NY
RHODIA S.A.: Murray Frank Lodges Securities Fraud Lawsuit in NJ
STOCKERYALE INC.: Rosen Law Lodges Securities Fraud Suit in NH
TIBCO SOFTWARE: Charles J. Piven Lodges Securities Lawsuit in CA
TIBCO SOFTWARE: Schatz & Nobel Files Securities Fraud Suit in CA
UNITED HEALTHCARE: Rosen Law Lodges Securities Fraud Suit in MI
WILLBROS GROUP: Lerach Coughlin Lodges Securities Lawsuit in TX
WILLBROS GROUP: Schwartz Junell Lodges Securities Lawsuit in TX
WILLBROS GROUP: Smith & Smith Lodges Securities Fraud Suit in TX
*********
AMERUS GROUP: Faces National RICO Violations Lawsuit in CA Court
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Amerus Group, Inc. and certain of its subsidiaries face a
national class action filed in the United States District Court
for the Central District of California, alleging conduct and
causes of action.
Edward A. Inferrera and his wife Gloria A. Inferrera filed the
suit on behalf of themselves and all other senior citizens
sixty-five and older against AmerUs Group Co., AmerUs Life
Insurance Company, American Investor Life Insurance Company
Inc., and their affiliates AmerUs Annuity Group and Family First
Insurance Services, according to an earlier Class Action
Reporter story (April 13,2005).
The class action complaint alleges that AmerUs Group Co., a
publicly traded company on the New York Stock exchange
(NYSE:AMH), AmerUs Life and its affiliates' sales practices are
in violation of the federal Racketeering Influence Corrupt
Organizations Act or RICO, and California's elder abuse laws.
According to the complaint, the companies designed a scheme to
exploit senior citizens by the deceptive marketing of estate
planning services, commonly call "trust mills," to obtain the
financial information of seniors in order to target them as
purchasers of deferred annuities. The complaint further alleges
that in many cases the annuities have maturity dates well beyond
the seniors' life expectancy and have significant surrender
charges, even on death benefits -- which most seniors did not
understand. The annuities had huge up-front premiums, in some
cases over $100,000, which in many cases represented significant
portions of the seniors' life savings.
On April 25, 2005, a similar national class action complaint was
filed in the U.S. District Court for the District of Kansas
against a subsidiary of the Company. These class actions were
brought on behalf of purchasers of annuity products claiming
that the products and manner in which they were sold were
inappropriate for the senior citizen market.
ASSOCIATED ESTATES: Court Mulls Summary Judgment in Ohio Lawsuit
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The Franklin County, Ohio Court of Common Pleas has yet to rule
on Associated Estates Realty Corporation's motion seeking
summary judgment in the class action filed against it, related
to its Suredeposit program.
On April 14, 2002, Melanie and Kyle Kopp commenced an action
against the Company seeking undetermined damages, injunctive
relief and class action certification. The Suredeposit program
allows cash short prospective residents to purchase a bond in
lieu of paying a security deposit. The bond serves as a fund to
pay those resident obligations that would otherwise have been
funded by the security deposit. Plaintiffs allege that the non-
refundable premium paid for the bond is a disguised form of
security deposit, which is otherwise required to be refundable
in accordance with Ohio's Landlord-Tenant Act. Plaintiffs
further allege that certain pet deposits and other nonrefundable
deposits required by the Company are similarly security deposits
that must be refundable in accordance with Ohio's Landlord-
Tenant Act.
On January 15, 2004, the plaintiffs filed a motion for class
certification. The Company subsequently filed a motion for
summary judgment. Both motions are pending before the Court.
BJs RESTAURANTS: Pays CA Overtime Wage Suit Settlement in Full
--------------------------------------------------------------
BJs Restaurants, Inc. (formerly Chicago Pizza and Brewery, Inc.)
has paid in full the settlement of the class action filed
against it in the Superior Court of California for the County of
Orange.
On March 10, 2003, a former employee, on behalf of himself and
other employees and former employees similarly situated and
working in California, filed the suit, alleging that the Company
violated provisions of the California Labor Code covering meal
and rest beaks for employees, along with associated acts of
unfair competition and seeks payment of wages for all meal and
rest breaks allegedly denied to our California employees for the
period from October 1, 2000 to the present.
The Company reached an agreement with the class counsel to
settle the meal and rest break class action case pending in
California, and the court approved the settlement. The amount
of the settlement was developed from mediation, which was
concluded in December 2003. Accordingly, the Company recorded
$950,000 in other expense during the fourth quarter of 2003 to
reflect this liability at December 28, 2003. The amount of the
settlement was reduced to $900,000 based upon subsequent court
determination and the $50,000 reversal was reflected in the
second quarter ended June 27, 2004. On January 3, 2005, the
settlement was paid in full.
BJs RESTAURANTS: Plaintiff Agrees To Arbitration in CA Wage Suit
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Plaintiff agreed to enter arbitration for the class action filed
against BJs Restaurants (formerly Chicago Pizza and Brewery,
Inc.) in the Los Angeles County Superior Court in California,
alleging causes of action for:
(1) failure to pay reporting time minimum pay;
(2) failure to allow meal breaks;
(3) failure to allow rest breaks;
(4) waiting time penalties;
(5) civil penalties;
(6) reimbursement for fraud and deceit;
(7) punitive damages for fraud and deceit; and
(8) disgorgement of illicit profits.
On June 28, 2004, the Plaintiff stipulated to dismiss her
second, third, fourth, and fifth causes of action. During
September 2004, the Plaintiff stipulated to arbitration of the
action. No further court action has been taken since that date.
CREDIT BUREAUS: CA Court Refuses To Dismiss Antitrust Lawsuit
-------------------------------------------------------------
A federal court in California turned down a request by the three
dominant credit bureaus Equifax, Experian and TransUnion to
dismiss class action suits charging them with anticompetitive
and predatory pricing practices in violation of federal
antitrust and state fair-trade laws, The Baltimore Sun reports.
The suits were brought by two-dozen small, independent credit
agencies that specialize in "rapid rescoring" for homebuyers and
other mortgage applicants against the national bureaus last
year. Rapid rescoring often can get erroneous negative
information removed from the national bureaus' files within 48
to 72 hours - fast enough for the loan applicants to raise their
credit scores and qualify for a lower interest rate and fees.
According to an expert familiar with the matter, when consumers
try to correct misinformation directly with the bureaus, by
contrast, the process can range from 30 days to several months.
That is far too long for lenders to hold open an application, or
for home sellers to wait for a would-be buyer to obtain a needed
loan.
In their respective legal actions the independent credit
agencies alleged that the three firms conspired to put them out
of business by sharply raising prices for rescoring and credit
data, and by prohibiting the independent agencies from directly
charging consumers for rescoring services. In some cases,
according to the independents, the national bureaus charged them
prices five times higher for wholesale credit file data than
they charged the independents' own lender customers directly on
a retail basis.
As a result of the firm's actions, the lender customers
abandoned the independents in droves, forcing many of them to
close or be purchased. Based on industry estimates, since the
early 1990s, the number of independent credit reporting agencies
has plummeted from about 1,000 nationwide to about 200 today.
The independents claim that by forcing them out of business or
acquiring them, the three big bureaus could essentially control
virtually all phases of consumer credit information, especially
the critically important specialty of getting erroneous data in
their files corrected quickly enough for home mortgage
applications.
The U.S. District Court ruling, which could have far-reaching
effects on consumers nationwide that discover errors in their
credit reports while applying for a home mortgage, was handed
down on May 12 in Santa Ana. It did not decide on the merits of
the independents' charges, but it did move the litigation either
to a trial or a settlement. Preliminary discussions on a
possible settlement have begun already, according to one
participant.
Paul Wohkittel, president of the independents' trade group, the
National Credit Reporting Association, was ecstatic over the
court's action. Mr. Wohkittel, who is also CEO of a Baltimore-
based independent credit agency, Lenders' Credit Services Inc.
told the Baltimore Sun, "This is David against Goliath. We think
it is a huge victory."
A plaintiff in one of the class-action suits, Mr. Wohkittel also
told the Baltimore Sun that the rapid rescoring is inherently a
hands-on, staff-intensive activity - dealing directly with
consumers who can't understand how or why their national credit
bureau files contain outdated, incorrect and incomplete
information. Independent firms such as his employ staffs of
trained personnel, who can ferret out score-depressing bad
information, then help speed the process of getting it corrected
or deleted.
The three big bureaus "are just not interested" in doing that,
according to him, but instead are highly automated information
fortresses taking in billions of bits of electronic data daily.
Person-to-person service is not their forte. He also told the
Baltimore Sun, "Call up any one of the [national bureaus] to get
something in your file corrected and see what happens. See if
you can get a live person on the phone. You won't" unless you
claim identity theft. He further states, "If the bureaus succeed
in getting rid of us [small independents], you're going to hang
the consumer out on a branch. No one else will be looking out
for them" if the national bureaus run the entire industry.
CALIFORNIA SPECIALTY: Recalls Tomatoes For Salmonella Corruption
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California Specialty Produce, Inc. of Vista, Ca is recalling Red
Pear Tomatoes, because they have the potential of being
contaminated with Salmonella, an organism that can cause serious
and sometimes fatal infections in young children, frail or
elderly people, and others with weakened immune systems. Healthy
persons infected with Salmonella often experience fever,
diarrhea (which may be bloody), nausea, vomiting and abdominal
pain. In rare circumstances, infection with Salmonella can
result in the organism getting into the bloodstream and
producing more severe illnesses such as arterial infections
(i.e., infected aneurysms), endocarditis and arthritis.
Red Pear Tomatoes were shipped to wholesalers who are restaurant
suppliers in New York, California, and Colorado, in the cities
of: Bronx, Yonkers, Los Angeles and Denver.
Red Pear Tomatoes are small pear-shaped tomatoes about « inch
long, and were distributed in white cardboard California
Specialty Produce boxes with green print. Inside they were
packaged in 12 clear plastic clamshell containers without labels
measuring approx. 5in X 4in and 2 and 1/2 inches deep.
No illnesses have been reported to date.
The recall was as the result of a routine sampling program by
the FDA, which revealed that the products contained the
bacteria. The company has ceased distribution of this product
from this producer as the FDA and the Company continue their
testing to assure the problem has been resolved.
Customers who have purchased Red Pear Tomatos from this company
are urged to return them for a full refund. Consumers with
questions may contact the company at 1-760-599-5155.
CANADA: Court Approval Sought For Ponderal, Redux Settlements
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Attorneys representing Qu‚bec residents, who ingested the diet
drugs Ponderal and Redux, report that the Court Approval was
sought on May 26, 2005 of a settlement with the Defendants
Servier Canada Inc. and Biofarma S.A. in two Qu‚bec class
actions.
If the settlement is approved, settlement funds of $8,333,333.00
would be made available for the payment of benefits to all
eligible Claimants, health services costs to the R‚gie de
l'assurance maladie du Qu‚bec and legal fees and costs to Class
Counsel. An additional amount of up to $5,000,000 would be made
available should the initial fund be insufficient.
The settlement, if approved, will pay benefits to individuals
who took these drugs and suffered from Valvular Heart Disease
("VHD") or Primary Pulmonary Hypertension ("PPH"), both of which
have allegedly been associated with ingestion of the drugs. A
parallel settlement was reached in proceedings brought on behalf
of Canadians (excluding those residing in Qu‚bec) where Court
Approval has been granted.
Ponderal and Redux were withdrawn from the Canadian market in
September 1997.
The Ponderal class is represented by Mtre. H‚lŠne Guay and Mtre.
Janick Perreault, from the law firm Lacoste Langevin, and the
Redux class is represented by the law firms of Unterberg Labelle
Lebeau and Sylvestre Charbonneau Fafard.
The settlement, which is subject to court approval, was reached
under the supervision of Mr. Justice Warren K. Winkler of the
Ontario Superior Court of Justice and was made without admission
of liability on the part of the Defendants. A hearing will be
held in Montr‚al before Mr. Justice Robert Mongeon of the Qu‚bec
Superior Court on June 29, 2005 to determine whether the Qu‚bec
Class Action's settlement should receive approval.
For more details, contact Class Counsel; For the Ponderal class:
Mtre. H‚lŠne Guay by Mail: 200, Laurier Avenue West, Suite 475,
Montr‚al, Qu‚bec, H2T 2N8 by Phone: (514) 272-1164 OR Mtre.
Janick Perreault of LACOSTE LANGEVIN by Mail: 2000, Mansfield
Street, Suite 910, Montr‚al, Qu‚bec, H3A 2Z6 by Phone:
(514) 284-0426 or visit http://www.janickperreault.comOR For
the Redux class: Mtre. Lise Labelle of UNTERBERG LABELLE LEBEAU,
by Mail: 1980, Sherbrooke Street West, Suite 700, Montr‚al,
Qu‚bec, H3H 1E8 by Phone: (514) 934-0841 or visit
http://www.ullnet.comOR Mtre. Pierre Sylvestre of SYLVESTRE
CHARBONNEAU FAFARD by Mail: 937, Atwater Avenue, Montr‚al,
Qu‚bec, H4C 2G9 by Phone: (514) 937-2881 or visit
http://www.scf.qc.ca.
DILLARD'S INC.: AL Woman Launches Race Discrimination Complaint
---------------------------------------------------------------
Debbie Deavers Sturvisant, an Alabama resident is seeking class
action status for a lawsuit against a Dillard's Inc. hair salon
for allegedly charging black women more than white women, The
Associated Press reports. In her suit, Ms. Sturvisant alleges
that a hair salon in a Tuscaloosa Dillard's department store
charged $35 to wash and set her hair, while white women paid $20
for the same service.
According to Patrick C. Cooper, a Birmingham lawyer who plans to
represent thousands of affected customers, "The stereotype is
that all black hair is the same. But that's erroneous, just as
all hair for Caucasians is not the same." Mr. Cooper told AP
that the department store's "policy completely ignores hair
length, which should be the real determining factor in how much
they charge. Pricing ought to be based on reality, not
stereotypes, and Dillard's needs to stop what they're doing."
According to Little Rock-based Dillard's, that's an
oversimplification that distorts its policy. In a press
statement, the company even said, "Dillard's does not charge
different prices based upon the race of the customer. Prices for
salon services are based upon the level of experience of the
stylist, degree of service, amount of time required and the cost
of materials provided to the customer."
Tom McArthur, an instructor and manager of ABC Barber College in
Hot Springs, Arkansas, told AP that different charges based on
race and sex are typical. He further said that training manuals
routinely note major differences between "black hair" and other
ethnic groups' hair. He also adds that additional skills must be
taught to cut the coarse, tightly curled hair commonly called
"black hair." He explains, "It's a whole new way of cutting. Not
everyone can do it. I cut both and I do it pretty fast, but I
grew up in this business."
The more a stylist has to do with the hair, the more the
customer can be charged. Mr. McArthur told AP that explains why
women are generally charged about twice as much as men.
Still, civil-rights law expert Robert Belton argues that
Dillard's could be in trouble if the pricing is determined
solely on race, and not on other factors, like amount or style
of hair. Mr. Belton, a professor at Vanderbilt University Law
School also said, "If they're saying that because of a person's
color that it takes more time, then it's obvious that it's
race." He even adds that Dillard's could be hurt by past race
discrimination cases, including a 2002 U.S. Supreme Court
ruling, which awarded $1.2 million to a black woman who alleged
she was not allowed to sample cologne at a Kansas store.
EXTREME NETWORKS: NY Court Preliminarily OKs Lawsuit 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 Extreme
Networks, Inc. on behalf of all persons who purchased the
Company's common stock from April 8, 1999 through December 6,
2000. It also names as defendants six of the Company's present
and former officers and/or directors, including its CEO and
several investment banking firms that served as underwriters of
its initial public offering and October 1999 secondary offering.
Subsequently, plaintiffs and one of the individual defendants
stipulated to a dismissal of that defendant without prejudice.
The complaint alleges liability under Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, on the grounds that the
registration statement for the offerings did not disclose that
the underwriters had agreed to allow certain customers to
purchase shares in the offerings in exchange for excess
commissions paid to the underwriters; and the underwriters had
arranged for certain customers to purchase additional shares in
the aftermarket at predetermined prices. The Securities Act
allegations against the Extreme Networks Defendants are made as
to the secondary offering only. The amended complaint also
alleges that false analyst reports were issued. No specific
damages are claimed.
Similar allegations were made in other lawsuits challenging over
300 other initial public offerings and follow-on offerings
conducted in 1999 and 2000. The cases were consolidated for
pretrial purposes. On February 19, 2003, the Court ruled on all
defendants' motions to dismiss. The Court denied the motions to
dismiss the claims in the Company's case under the Securities
Act of 1933. The Court denied the motion to dismiss the claim
under Section 10(a) of the Securities Exchange Act of 1934
against the Company and 184 other issuer defendants, on the
basis that the complaints alleged that the respective issuers
had acquired companies or conducted follow-on offerings after
their initial public offerings. The Court denied the motion to
dismiss the claims under Section 10(a) and 20(a) of the
Securities Exchange Act of 1934 against the remaining Extreme
Networks Defendants and 59 other individual defendants, on the
basis that the respective amended complaints alleged that the
individuals sold stock.
The Company executed a settlement agreement presented to all
issuer defendants. In this settlement, plaintiffs will dismiss
and release all claims against the Extreme Network Defendants,
in exchange for a contingent payment by the insurance companies
collectively responsible for insuring the issuers in all of the
IPO cases, and for the assignment or surrender of control of
certain claims the Company may have against the underwriters.
The Extreme Networks Defendants will not be required to make any
cash payments in the settlement, unless the pro rata amount paid
by the insurers in the settlement exceeds the amount of the
insurance coverage, a circumstance which the Company does not
believe will occur. The settlement will require approval of the
Court, which cannot be assured. On February 15, 2005, the Court
issued an order providing preliminary approval of the
settlement, except insofar as the settlement would have cut off
contractual indemnification claims that underwriters may have
against securities issuers, such as the Company. The Court has
scheduled a hearing for January 9, 2006 to consider final
approval of the settlement.
FIRST COMMUNITY: Plaintiffs Launch Amended Consumer Suit in CA
--------------------------------------------------------------
Plaintiffs filed an amended class action against First Community
Bancorp and Pacific Western National Bank in Los Angeles
Superior Court in California. The Company is named as
defendants in its capacity as alleged successors to First
Charter Bank, N.A., which the Company acquired in October 2001.
A former officer of First Charter Bank, who left First Charter
in May 1997, is also named as a defendant.
The suit was initially filed on June 8, 2004, pending as Case
No. BC310846. On April 18, 2005, the plaintiffs filed the
second amended class action complaint. The second amended
complaint alleges that a former officer of First Charter Bank
who later became a principal of Four Star Financial Services,
LLC ("Four Star"), an affiliate of 900 Capital Services, Inc.
("900 Capital"), improperly induced several First Charter
customers to invest in 900 Capital or affiliates of 900 Capital
and further alleged that Four Star, 900 Capital and some of
their affiliated entities perpetuated their fraud upon investors
through various First Charter accounts with First Charter's
purported knowing participation in and/or willful ignorance of
the scheme. The key allegations against First Charter in the
second amended complaint date back to the mid-1990s and the
second amended complaint alleges several counts for relief
including aiding and abetting, conspiracy, fraud, breach of
fiduciary duty, relief pursuant to the California Business and
Professions Code, negligence and relief under the California
Securities Act stemming from an alleged fraudulent scheme and
sale of securities issued by 900 Capital and Four Star.
In disclosures provided to the parties, plaintiffs have asserted
that the named plaintiffs have suffered losses well in excess of
$3.85 million, and plaintiffs have asserted that "losses to the
class total many tens of millions of dollars."
H&R BLOCK: IL Judge Blocks Tax Refund Litigation Settlement
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U.S. District Judge Elaine Bucklo blocked a settlement that
would have concluded litigation over H&R Block Inc.'s tax refund
loans, The Kansas City Star reports.
"Obviously we're disappointed, because we thought it was an
offer to settle that provided true value" to participants in a
class action lawsuit, said Linda McDougall, a spokeswoman for
H&R Block, which decided to terminate the agreement as a result
of the ruling.
Observers familiar with the matter told the Star that unless
Block makes another settlement offer, the long-running case
heads for trial in Chicago in October.
As previously reported in the May 11, 2005 edition of the Class
Action Reporter, HSBC Taxpayer Financial Services Inc. and H&R
Block (NYSE: HRB) had reached an agreement with the plaintiff
class representative and class counsel Kirby, McInerney and
Squire, LLP and Levy, Angstreich, Finney, Baldante, Rubenstein &
Coren, P.C. that would settle a 1998 Chicago class action
lawsuit related to refund anticipation loans, as well as end all
current RAL-related class action litigation against the
companies.
The proposed settlement was filed in an action that has been
pending in the U.S. District Court for the Northern District of
Illinois, under the caption Lynne A. Carnegie v. Household
International, Inc., et al. The proposed settlement would cover
all refund anticipation loans that had been funded by various
lenders through H&R Block as well as many refund anticipation
loans that were funded by Beneficial National Bank, Household
Bank f.s.b., and various lenders with which HSBC Taxpayer
Financial Services had agreements through other tax preparers
from 1987, when such loans first were offered, through the end
of the 2005 tax season. Overall, the proposed nationwide
settlement class would include more than 28 million consumers
and cover more than 55 million individual refund anticipation
loan transactions.
The proposed settlement provides for $110 million cash and a
total of $250 million in freely transferable redeemable coupons.
The cash would be distributed to class members who submit a
timely proof of claim, based on the number of RALs they had
obtained. The coupons would have a face value of $6 and be
distributed to all class members, subject to certain exceptions,
also based primarily on the number of RALs they had obtained.
The coupons, which have a three-year tax season life and can be
aggregated up to four coupons per tax season, can be used in
connection with any retail tax preparation services at any H&R
Block retail location, or for online H&R Block tax preparation-
related services and tax preparation software, over the next
three annual tax seasons.
The proposed settlement would also require that H&R Block
continue to use a six-step disclosure process to assure that H&R
Block offers the "best-in-class" practices available for future
refund anticipation loans to consumers. These practices would
outline all tax filing options and costs, and the time required
to receive refunds with each option, for refund anticipation
loan clients at H&R Block offices. The goal is to ensure that
consumers have all the information necessary to make smart
choices that meet their financial needs.
It's not clear why U.S. District Judge Elaine Bucklo blocked the
settlement. In a docket entry dated May 25, Judge Bucklo merely
said the parties' motion for preliminary approval of the
settlement "in its present form" was denied. That entry then
said that if the parties wanted "to explore further the
possibility of settlement with an independent mediator, the
court will refer them to a mediator familiar with the law in
this circuit."
Legal experts point out that typically courts are required to
ensure that class action settlements are fair, reasonable and
not based on collusion. It's not known though whether Judge
Bucklo determined that the settlement did not meet one or more
of those factors.
Ms. McDougall, told the Star that Judge Bucklo last year
dismissed seven of the plaintiffs' eight claims and that the
remaining one would be difficult for them to prove because it
requires a showing of intent to defraud. "Knowing how highly
regulated refund anticipations are, and how careful the company
is to follow those regulations, we believe that we're very
prepared to take this to court and to prove our case," she adds.
IDACORP INC.: Asks ID Court To Dismiss Securities Fraud Lawsuit
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IDACORP, Inc. asked the United States District Court for the
District of Idaho to dismiss the consolidated securities class
action filed against it and certain of its directors and
officers.
On May 26, 2004 and June 22, 2004, respectively, two shareholder
lawsuits were filed, captioned "Powell, et al. v. IDACORP, Inc.,
et al." and "Shorthouse, et al. v. IDACORP, Inc., et al.,"
raising largely similar allegations. The lawsuits are putative
class actions brought on behalf of purchasers of IDACORP stock
between February 1, 2002 and June 4, 2002. The named defendants
in each suit, in addition to the Company, are:
(1) Jon H. Miller,
(2) Jan B. Packwood,
(3) J. LaMont Keen and
(4) Darrel T. Anderson
The complaints alleged that, during the purported class period,
the Company and/or certain of its officers and/or directors made
materially false and misleading statements or omissions about
the company's financial outlook in violation of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended,
and Rule 10b-5, thereby causing investors to purchase IDACORP's
common stock at artificially inflated prices.
More specifically, the complaints alleged that the Company
failed to disclose and misrepresented the following material
adverse facts which were known to defendants or recklessly
disregarded by them:
(i) IDACORP failed to appreciate the negative impact that
lower volatility and reduced pricing spreads in the
western wholesale energy market would have on its
marketing subsidiary, IDACORP Energy (IE);
(ii) IDACORP would be forced to limit its origination
activities to shorter-term transactions due to
increasing regulatory uncertainty and continued
deterioration of creditworthy counterparties;
(iii) IDACORP failed to discount for the fact that IPC may
not recover from the lingering effects of the prior
year's regional drought and
(iv) as a result of the foregoing, defendants lacked a
reasonable basis for their positive statements about
IDACORP and their earnings projections.
The Powell complaint also alleged that the defendants' conduct
artificially inflated the price of IDACORP's common stock. The
actions seek an unspecified amount of damages, as well as other
forms of relief.
By order dated August 31, 2004, the court consolidated the
Powell and Shorthouse cases for pretrial purposes, and ordered
the plaintiffs to file a consolidated complaint within 60 days.
On November 1, 2004, the Company and the directors and officers
named above were served with a purported consolidated complaint
captioned "Powell, et al. v. IDACORP, Inc., et al.," which was
filed in the U.S. District Court for the District of Idaho.
The new complaint alleges that during the class period, the
Company and/or certain of its officers and/or directors made
materially false and misleading statements or omissions about
its business operations, and specifically the IE financial
outlook, in violation of Rule 10b-5, thereby causing investors
to purchase IDACORP's common stock at artificially inflated
prices. The new complaint alleges that IDACORP failed to
disclose and misrepresented the following material adverse facts
known to it or recklessly disregarded by it:
(a) IDACORP falsely inflated the value of energy contracts
held by IE in order to report higher revenues and
profits;
(b) IDACORP permitted Idaho Power Company to
inappropriately grant native load priority for certain
energy transactions to IE;
(c) IDACORP failed to file 13 ancillary service agreements
involving the sale of power for resale in interstate
commerce that it was required to file under Section 205
of the Federal Power Act;
(d) IDACORP failed to file 1,182 contracts that IPC
assigned to IE for the sale of power for resale in
interstate commerce that IPC was required to file under
Section 203 of the Federal Power Act;
(e) IDACORP failed to ensure that IE provided appropriate
compensation from IE to IPC for certain affiliated
energy transactions; and
(f) IDACORP permitted inappropriate sharing of certain
energy pricing and transmission information between IPC
and IE.
These activities allegedly allowed IE to maintain a false
perception of continued growth that inflated its earnings. In
addition, the new complaint alleges that those earnings press
releases, earnings release conference calls, analyst reports and
revised earnings guidance releases issued during the class
period were false and misleading. The action seeks an
unspecified amount of damages, as well as other forms of relief.
The Company and the other defendants filed a consolidated motion
to dismiss on February 9, 2005, and the plaintiffs filed their
opposition to the consolidated motion to dismiss on March 28,
2005. The Company and the other defendants filed their response
to the plaintiff's opposition on April 29, 2005 and oral
argument on the motion is scheduled for May 19, 2005.
LANDAMERICA FINANCIAL: Subsidiaries Reach $10.3M Suit Settlement
----------------------------------------------------------------
Two of Landamerica Financial Group, Inc.'s subsidiaries agreed
to settle the consolidated class action filed against them for
$10.3 million, after entering non-binding mediation, which was
scheduled on May 3-4, 2005 in the United States District Court
for the Eastern District of Michigan, Southern Division.
On May 9, 2000, Romeo Jergess filed a putative class action suit
against Transnation Title Insurance Company, one of the
Company's subsidiaries, alleging that its rate for an owner's
title insurance policy, charged in accordance with rates for new
construction filed with the Insurance Bureau of the State of
Michigan, are less than the rate paid by the lender for a
simultaneously issued lender's title insurance policy, and that
the lower rate paid by the builder/developer for the owner's
policy involves an illegal kickback for a referral and an
illegal splitting of fees in violation of the Real Estate
Settlement Procedures Act (RESPA).
On April 27, 2001, Elaine Miller filed a similar suit in the
same court (Case No. 01-71647) against Lawyers Title Insurance
Corporation, a subsidiary of the Company. The plaintiffs in both
suits seek an unspecified amount of damages equal to three times
the amount of the charge for each simultaneously issued lender's
title insurance policy in connection with a new home purchase
commencing with the period one year before the filing of each
complaint, plus costs, interest and attorneys' fees.
Transnation and Lawyers Title have engaged a forensic accountant
to review plaintiffs' estimate that the charges collected for
such policies by Transnation and Lawyers Title from the class as
originally defined is approximately $15 million. The Jergess
Suit and the Miller Suit were consolidated on July 18, 2002 with
cases pending against First American Title Insurance Company and
Chicago Title Insurance Company. On December 5, 2002, the court
certified a class defined as all individuals who, during the
period commencing prior to one year of the filing of the
applicable suit and ending on October 30, 2002, purchased a
newly constructed one to four family dwelling or condominium and
were charged for a lender's title insurance policy allegedly in
violation of RESPA.
On February 12, 2003, the United States Court of Appeals for the
Sixth Circuit denied Transnation's and Lawyers Title's petitions
for an interlocutory appeal of the class certification order. On
October 30, 2003, the judge ordered that individuals otherwise
meeting the class definition, but who closed transactions
involving relevant policies between October 31, 2002 through
October 30, 2003, would not be subject to a statute of
limitations defense raised by Transnation Title or Lawyers Title
between October 30, 2003 and October 31, 2004. On October 28,
2004, Transnation and Lawyers Title stipulated to an order that
individuals otherwise meeting the class definition, but who
closed transactions involving relevant policies between October
31, 2002 through October 30, 2004, would not be subject to a
statute of limitations defense raised by Transnation or Lawyers
Title between October 30, 2004 and October 31, 2005.
The court reserved decision on a Motion to proceed to trial with
the certified class as originally defined. On January 13, 2005,
the court denied Transnation's and Lawyers Title's motion to
dismiss the case for lack of standing. On February 7, 2005, the
court dismissed without prejudice Transnation's and Lawyers
Title's Motion for Partial Summary Judgment with respect to
those members of the class covered by the affiliated business
exception under RESPA with the court indicating that the parties
could resubmit the motion with additional information. The court
has not yet ruled on the parties' cross Motions for Summary
Judgment on Count II of plaintiffs' complaint alleging an
illegal splitting of fees under RESPA. On April 21, 2005,
Transnation and Lawyers Title filed various Motions for Summary
Judgment and Limine with respect to multiple issues. A trial
date has been set for July 18, 2005.
OWENS CORNING: Status Conference Held For MA Securities Lawsuit
---------------------------------------------------------------
Status conference for the securities class action filed against
Owens Corning's current and former directors and officers,
styled "John Hancock Life Insurance Company, et al. v. Goldman,
Sachs & Co., et al.," was held on May 17,2005 in the United
States District Court for the District of Massachusetts.
The suit was filed on April 30, 2001 and amended on July 5,
2001. The Company is not named in the lawsuit. The suit
purports to be a securities class action on behalf of purchasers
of certain of the Company's unsecured debt securities occurring
on or about April 30, 1998 and July 23, 1998. The complaint
alleges that the registration statements pursuant to which the
offerings were made contained untrue and misleading statements
of material fact and omitted to state material facts which were
required to be stated therein and which were necessary to make
the statements therein not misleading, in violation of sections
11, 12(a)(2) and 15 of the Securities Act of 1933. The amended
complaint seeks an unspecified amount of damages or, where
appropriate, rescission of the plaintiffs' purchases.
The defendants filed a motion to dismiss the action on November
20, 2001. A hearing was held on this motion on April 11, 2002,
and the Court issued a decision denying the motion on August 26,
2002. On March 9, 2004, the Court granted class certification as
to those claims relating to written representations but denied
certification as to claims relating to alleged oral
representations. A status conference on this matter is set for
May 17, 2005.
OWENS CORNING: OH Court Junks Lawsuit V. Current, Former Execs
--------------------------------------------------------------
The United States District Court for the Northern District of
Ohio, Western Division dismissed the consolidated securities
class action filed against certain of Owens Corning's current
and former officers and directors, alleging violations of
federal securities laws.
On or about January 27, 2003, certain of the Company's current
and former directors and officers were named as defendants in a
lawsuit captioned "Robert Greenburg, et al. v. Glen Hiner, et
al." Subsequent to January 27, 2003, three substantially
similar actions, with named plaintiffs Nicholas Radosevich,
Howard E. Leppla, and William Benanchietti, respectively, were
filed against the same defendants in the same court. On July
30, 2003, the court consolidated the four cases under the
caption "Robert Greenburg, et al. v. Glen Hiner, et al.," and
appointed lead plaintiffs JKF Investment Co., Icarus Trading,
Inc. and HGK Asset Management. An amended complaint was filed
by the plaintiffs on September 8, 2003. The Company was not
named in the lawsuit.
The suit purported to be a class action for securities fraud
under sections 10(b) and 20(a) of the Securities Exchange Act of
1934, on behalf of a class comprised of persons who purchased
stock of Owens Corning during the period from September 20,
1999, through October 4, 2000. The complaint sought an
unspecified amount of damages and/or, where appropriate,
rescission.
On March 3, 2005, the court granted the defendants' motion to
dismiss the action, on the grounds that the plaintiffs' claims
are time-barred under the applicable statute of limitations. The
plaintiffs have filed a notice of appeal of the dismissal.
The suit is styled "Greenburg et al v. Hiner et al, case no.
3:03-cv-07036-DAK," filed in the United States District Court
for the Northern District of Ohio, under Judge David A. Katz.
Representing the defendants is Chad W. Pekron, Sidley, Austin,
Brown & Wood, Bank One Plaza, 10 South Dearborn Street, Chicago,
IL 60603 Phone: 312-853-7000, Fax: 312-853-7036, E-mail:
cpekron@sidley.com. Representing the plaintiffs are:
(1) Andrew Zivitz of Schiffrin & Barroway, 280 King of
Prussia Road, Radnor, PA 19087, Phone: 610-667-7706,
Fax: 61-667-7056
(2) Christopher Lometti, Joel P. Lometti, Samuel P. Sporn,
Schoengold Sporn Laitman & Lometti, Ste. 406 19 Fulton
Street, New York, NY 10038, Phone: 212-964-0046, Fax:
212-267-8137, E-mail: chris@spornlaw.com,
jplaitman@aol.com, sporn@spornlaw.com
(3) James P. Silk, Jr., Spengler Nathanson, Ste. 1000 608
Madison Avenue Toledo, OH 43604 Phone: 419-252-6210
Fax: 419-241-8599 E-mail: JSilk@SpenglerNathanson.com
PACKAGING CORPORATION: Discovery Proceeds in Linerboard Lawsuit
---------------------------------------------------------------
Fact discovery is proceeding in the consolidated opt-out direct
antitrust lawsuit filed against Packaging Corporation of America
in the United States District Court for the Eastern District of
Pennsylvania.
On May 14, 1999, the Company was named as a defendant in two
Consolidated Class Action Complaints alleging a civil violation
of Section 1 of the Sherman Antitrust Act. The suits, then
captioned "Winoff Industries, Inc. v. Stone Container
Corporation, MDL No. 1261" (E.D. Pa.) and "General Refractories
Co. v. Gaylord Container Corporation, MDL No. 1261," (E.D. Pa.),
name PCAthe Company as a defendant based solely on the
allegation that it is successor to the interests of Tenneco
Packaging Inc. and Tenneco Inc., both of which were also named
as defendants in the suits, along with nine other linerboard and
corrugated sheet manufacturers. The complaints allege that the
defendants, during the period October 1, 1993 through November
30, 1995, conspired to limit the supply of linerboard, and that
the purpose and effect of the alleged conspiracy was to
artificially increase prices of corrugated containers and
corrugated sheets, respectively.
On November 3, 2003, Pactiv Corporation (formerly known as
Tenneco Packaging), Tenneco and the Company entered into an
agreement to settle the class action lawsuits. The settlement
agreement provides for a full release of all claims against the
Company as a result of the class action lawsuits and was
approved by the Court in an opinion issued on April 21, 2004.
Approximately 160 plaintiffs opted out of the class and together
filed about ten direct action complaints in various courts
across the country. All of the opt-out complaints make
allegations against the defendants, including the Company,
substantially similar to those made in the class actions.
The settlement agreement does not cover these direct action
cases. These actions have all been consolidated as "In re
Linerboard, MDL 1261 (E.D. Pa.)" for pretrial purposes. Fact
discovery is proceeding and is currently set to close June 30,
2005.
The litigation is styled "In re Linerboard Antitrust Litigation,
case no. 2:10-md-01261-JD," filed in the United States District
Court for the Eastern District of Pennsylvania under Judge Jan
E. Dubois.
PHARMOS CORPORATION: Shareholders Launch Stock Fraud Suits in NJ
----------------------------------------------------------------
Pharmos Corporation and three current officers face several
purported shareholder class action lawsuits alleging violations
of federal securities laws, filed in January 2005 in the United
States District Court for the District of New Jersey.
These lawsuits assert claims under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder on
behalf of a class of purchasers of the Company's common stock
during the period from February 10, 2000 through and including
December 17, 2004. The complaints allege generally that the
defendants knowingly or recklessly made false or misleading
statements during the Class Period regarding the effectiveness
of dexanabinol in treating traumatic brain injury (TBI),
effectively artificially inflating the price of the Company's
shares. The complaints seek unspecified damages.
The first identified complaint in the litigation is styled
"Shlomi Cohen, Israel Manela, Eli More, et al. v. Pharmos Corp.,
et al." The plaintiff firms in this litigation are:
(1) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (MA),
One Liberty Square, Boston, MA, 2109, Phone:
617.542.8300, Fax: 617.230.0903, E-mail:
info@bermanesq.com
(2) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(3) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (New York,
NY), 825 Third Avenue - 30th Floor, New York, NY,
10022, Phone: 212.838.7797, Fax: 212.838.7745, E-mail:
lawinfo@cmht.com
(4) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(5) Kirby, McInerney & Squire LLP, 830 Third Avenue 10th
Floor, New York Ave, NY, 10022, Phone: 212.317.2300,
(6) Law Offices of Brian M. Felgoise, P.C., Esquire, 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net
(7) Milberg Weiss Bershad & Schulman LLP (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com
(8) Murray, Frank & Sailer LLP, 275 Madison Ave 34th Flr,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(9) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(10) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(11) 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
(12) 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
(13) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114,
PRESSLER & PRESSLER: Debtor Files Suit Over Collection Tactics
--------------------------------------------------------------
Debtor Robert A. Jones is claiming that Pressler & Pressler, a
law firm that specializes in debt collection, improperly
discovered and seized his bank account because of information
stolen by a ring accused of trafficking in hundreds of thousands
of stolen names and Social Security numbers, The Inside Bay Area
reports.
Mr. Jones believes that the agency probably learned of his
account at Commerce Bank from information allegedly purchased
from Orazio Lembo Jr., the accused ringleader, according to the
lawsuit he had filed in U.S. District Court in Camden.
Hackensack police, who broke the case, have heard from other
debtors seeking information and documents, but not Mr. Jones,
Capt. Frank Lomia told AP. He said, "Certainly, no good can come
from this criminal conspiracy. I just see these cases
multiplying."
Attorneys for some debtors, and people who have had their pay
garnished, are seeking to subpoena police records, Capt. Lomia
said. Those records, however, will not be released while the
investigation continues, he adds.
Capt. Lomia also reiterated that banks have not reported any
money missing from accounts of thousands of customers whose
financial information may have been stolen by bank employees
allegedly paid by Mr. Lembo. He also adds that authorities have
not yet determined how many of the 676,000 people whose names
and Social Security numbers were found on computer discs seized
from Mr. Lembo and his company had accounts at four major banks.
According to police authorities Mr. Lembo is accused of
compiling lists of names of people who are being pursued by
collection agencies and sending them to the bank workers to see
if any were customers. The bank workers were paid $10 for each
account they turned over to Mr. Lembo, the police said.
Mr. Jones had the Commerce Bank account for several years, but
it was only seized in February, said his lawyer, Philip Stephen
Fuoco. The lawyers adds that Mr. Jones received a letter in the
past week from Commerce Bank alerting him that he was among
account holders whose names werefound on Mr. Lembo's computers.
The Jones account, holding about $2,000, went toward satisfying
a judgment from 2003 for consumer debt, Mr. Fuoco said.
The lawsuit charges that Pressler & Pressler violated the Fair
Debt Collection Practices Act by using unlawfully obtained
information. It also seeks class action status on behalf of all
people in the United States whose accounts allegedly were
obtained by Lembo or his Hackensack-based business, DRL
Associates.
On April 28, Mr. Lembo, seven bank employees and a state worker
were charged in a plot to steal financial records after evidence
was found on computers during a February search of Mr. Lembo's
apartment during a separate investigation, police said.
QUOVADX INC.: NY Court Preliminarily Approves 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 Quovadx,
Inc., certain of its officers and directors and the underwriters
of the Company's initial public offering.
The amended complaint asserts that the prospectus from the
Company's February 10, 2000 initial public offering (IPO) failed
to disclose certain alleged improper actions by various
underwriters for the offering in the allocation of the IPO
shares. The amended complaint alleges claims against certain
underwriters, the Company and certain officers and directors
under the Securities Act of 1933 and the Securities Exchange Act
of 1934. The suit is styled "Bartula v. XCare.net, Inc., et
al., Case No. 01-CV-10075."
Similar complaints have been filed concerning more than 300
other IPOs; all of these cases have been coordinated as In re
Initial Public Offering Securities Litigation, 21 MC 92. In a
negotiated agreement, individual defendants, including all of
the individuals named in the complaint filed against the
Company, were dismissed without prejudice, subject to a tolling
agreement. Issuer and underwriter defendants in these cases
filed motions to dismiss and, on February 19, 2003, the Court
issued an opinion and order on those motions that dismissed
selected claims against certain defendants, including the Rule
10b-5 fraud claims against the Company, leaving only the Section
11 strict liability claims under the Securities Act of 1933
against the Company.
A committee of the Company's Board of Directors has approved a
settlement proposal made by the plaintiffs. On February 15,
2005, the Court issued an order granting conditional preliminary
approval of the settlement.
QUOVADX INC.: CO Court Grants Certification To Securities Suit
--------------------------------------------------------------
The United States District Court for the District of Colorado
granted class certification to a securities lawsuit filed
against Quovadx, Inc., its now-former Chief Executive Officer
and its now-former Chief Financial Officer.
On March 18, 2004, a purported class action complaint was filed
entitled "Smith v. Quovadx, Inc. et al, Case No. 04-M-0509,"
alleging violations of Section 10(b) and Section 20(a) of the
Securities Exchange Act of 1934, as amended, purportedly on
behalf of all persons who purchased Company common stock from
October 22, 2003 through March 15, 2004. The claims are based
upon allegations the Company:
(1) purportedly overstated its net income and earnings per
share during the class period,
(2) purportedly recognized revenue from contracts between
the Company and Infotech Networks Group prematurely,
and
(3) purportedly lacked adequate internal controls and was
therefore unable to ascertain the financial condition
of the Company.
Eight additional, nearly identical class action complaints were
filed in the same Court based on the same facts and allegations.
The actions seek damages against the defendants in an
unspecified amount. On May 17 and 18, 2004, the Company filed
motions to dismiss each of the complaints. Since then, all but
one of the actions, entitled "Heller v. Quovadx, Inc., et al.,
Case No. 04-M-0665 (OES)," have been dismissed.
Thereafter, the plaintiff in Heller filed a first amended
complaint, which asserts the same claims as those asserted in
the original complaint, and includes allegations regarding the
Company's accounting for certain additional transactions. On
September 8, 2004, the Court approved the appointment of David
Heller as lead plaintiff. On September 29, 2004, the Court
denied defendants' motions to dismiss the first amended
complaint and approved the appointment of Mr. Heller's counsel
as lead plaintiff's counsel. On October 14, 2004, the
Company and the other defendants filed answers to the first
amended complaint, denying allegations of wrongdoing and
asserting various affirmative defenses. On January 13,
2005, the Court approved a scheduling order that, inter alia,
requires fact discovery, which has commenced, to conclude eight
months after the Court issues an order certifying a class. The
Court issued its order certifying the class action on April 12,
2005. The deadline for completing fact discovery is December 12,
2005.
QUOVADX INC.: Shareholders Launch Securities Fraud Lawsuit in CO
----------------------------------------------------------------
Quovadx, Inc. faces a purported class action complaint filed in
the United States District Court for the District of Colorado,
entitled "Henderson v. Quovadx, Inc. et al, Case No. 04-M-1006
(OES)." The suit also names as defendants its now-former Chief
Executive Officer, its now-former Chief Financial Officer and
its Board of Directors.
The complaint alleged violations of Section 11 and Section 15 of
the Securities Act of 1933, as amended, purportedly on behalf of
all former shareholders of Rogue Wave Software, Inc. who
acquired Quovadx common stock in connection with the Company's
exchange offer effective December 19, 2003.
The Court denied plaintiff's motion to consolidate this Section
11 action with the Section 10(b) cases and authorized the two
competing lead plaintiff candidates to take discovery of each
other in advance of a hearing on the appointment of lead
plaintiff. On July 14, 2004, the Company and outside director
defendants filed an answer to the complaint, denying allegations
of wrongdoing and asserting various affirmative defenses. On
September 8, 2004, the Court directed the plaintiff to publish
new notice of pendency of this action inviting potential class
members to submit motions for appointment as lead plaintiff.
Two putative class members filed competing motions for
appointment as lead plaintiff, and their motions are scheduled
for a hearing on June 24, 2005. The Court stayed all discovery
related to the merits of the litigation pending the appointment
of a lead plaintiff. On October 4, 2004, the Company's former
CEO and CFO filed an answer to the complaint, denying
allegations of wrongdoing and asserting various affirmative
defenses.
SCHWAN'S BAKERY: Recalls Turtle Pies Due to Undeclared Eggs
-----------------------------------------------------------
Schwan's Bakery, Inc., of Suwanee, GA, is recalling its Edwardsr
Turtle Pie Single 2-pack of frozen pie slices that carry a date
code of Y85071 as they may contain undeclared eggs. Pecan Pie
slices may be contained in Turtle Pie packaging. The Pecan Pie
slices contain eggs that would not be declared on the Edwards
Turtle Pie packaging. People who have allergies to eggs run the
risk of serious or life-threatening allergic reaction if they
consume these products.
The recalled frozen pie slices were distributed throughout the
United States in retail stores. This recall does not include any
product carried by Schwan's Home Delivery Service or food
service distribution.
The frozen product comes in a yellow box with a picture of a
slice of turtle pie on it and is labeled Edwards Turtle Pie
Single 2-pack pie slices.
The recall was initiated after it was discovered that the egg-
containing product was distributed in packaging that does not
label eggs in the ingredients. Subsequent investigation
indicates the problem was caused by a temporary breakdown in the
company's production and packaging processes. The problem has
been corrected.
There are no food safety concerns for consumers who do not have
allergies to eggs. No illnesses have been reported to date in
connection with this problem.
Consumers who have purchased Edwards Turtle Pie Single 2-pack
frozen pie slices with a date code of Y85071 are urged to return
them to the place of purchase for a full refund. Consumers with
questions may contact Schwan's Bakery at 1-800-437-2064.
SHARPER IMAGE: Shareholders Launch Stock Fraud Suits in N.D. CA
---------------------------------------------------------------
Sharper Image Corporation faces a number of purported
stockholder class action lawsuits filed in the United States
District Court for the Northern District of California on behalf
of purchasers of the Company's common stock during the period of
February 5, 2004 and August 4, 2004.
The complaints charge the Company and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. The complaints allege that during the Class Period, the
Company and certain of its officers and employee-directors made
false and misleading statements regarding the Company's business
and business prospects.
As a result of these false statements, Company stock traded at
inflated levels during the Class Period, whereby the Company's
top officers and directors sold more than $18 million worth of
their own shares, an earlier Class Action Reporter story (April
20,2005) states. According to the complaints, 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 businesses, including wholesale, Internet
and catalog, were cannibalizing the Company's retail
and infomercial sales;
(2) the Company's profitability was being adversely
affected by a drastic slow down in the Company's key
product, the Ionic Breeze family of air purifiers;
(3) when defendants attempted to acquire infomercial blocks
of time in early 2004, they learned that these extra
blocks of time had already been acquired as a result of
the Olympics and the Presidential election, and the
additional costs associated with infomercial time were
seriously impacting the Company's margins associated
with the Ionic Breeze family of products; and
(4) as a result, the Company's Q2 2004 projections of
earnings per share of $0.09-$0.11 were grossly
overstated.
The first identified complaint in the litigation is "Rosenbaum
Capital, LLC, et al. v. Sharper Image Corporation, et al.,"
filed in the United States District Court for the Northern
District of California. The plaintiff firms in this litigation
are:
(i) Baron & Budd, P.C., 3102 Oak Lawn Avenue, Suite 1100,
Dallas, TX, 75219, Phone: 800-946-9646, E-mail:
info@baronbudd.com
(ii) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(iii) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(iv) Lerach Coughlin Stoia Geller Rudman & Robbin (San
Francisco), 100 Pine Street, Suite 2600, San Francisco,
CA, 94111, Phone: 415.288.4545 Fax: 415.288.4534, E-
mail: info@lerachlaw.com
(v) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(vi) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
SMART & FINAL: Trial in CA Overtime Wage Suit Set March 6,2006
--------------------------------------------------------------
The Orange County Superior Court of the State of California set
for March 6,2006 the trial in the class action filed against
Smart & Final, Inc., styled "Olivas vs. Smart & Final Inc."
The plaintiff and another former hourly store employee, filed
the suit, on their behalf and on behalf of all hourly store
employees in California, alleging that the Company failed to pay
proper overtime, failed to pay for all hours worked, failed to
pay for certain meal and rest periods, and failed to pay for
other compensation. The action seeks to be classified as a
"class action" and seeks unspecified monetary damages and
statutory penalties thereon.
On August 9, 2001, the Company filed a general denial to these
claims and asserted numerous defenses. A hearing on plaintiff's
motion for class certification was heard and certification as to
nine sub-classes was granted on January 22, 2004. The class
consists of approximately 13,200 current and former hourly store
employees in California and the suit covers the period May 1997
through the present period. Discovery is now underway in the
case.
In February 2005, the court ordered the parties to commence
mediation. A first mediation was held on April 27, 2005 and the
parties have mutually agreed to conduct a second mediation on
June 6, 2005.
SPX CORPORATION: Asks NC Court To Dismiss Securities Fraud Suit
---------------------------------------------------------------
SPX Corporation asked the United States District Court for the
Western District of North Carolina to dismiss the consolidated
securities class action filed against it and certain of its
current and former executive officers.
Beginning in March 2004, multiple class action complaints
seeking unspecified monetary damages were filed or announced by
certain law firms representing or seeking to represent
purchasers of the Company's common stock during a specified
period. The suits alleged violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934. The plaintiffs
generally allege that the Company made false and misleading
statements regarding the forecast of its 2003 fiscal year
business and operating results in order to artificially inflate
the price of the Company's stock. These complaints have been
consolidated into a single amended complaint against the company
and its former Chairman, CEO and President.
Additionally, on April 23, 2004, an additional class action
complaint was filed in the same court, alleging breaches of the
Employee Retirement Income Security Act of 1974 (ERISA) by the
Company, its then general counsel and the Administrative
Committee regarding one of its 401(k) defined contribution
benefit plans arising from the plan's holding of Company stock.
The litigation is styled "Belafey et al v. SPX Corporation, et
al, case no. 3:04cv99," filed in the United States District
Court for the Western District of North Carolina, under Judge H.
Brent McKnight. Representing the Company are David C Wright,
III and Julian H. Wright of Robinson, Bradshaw & Hinson, PA,
Mail: 101 No Tryon St Suite 1900, Charlotte, NC 28246 USA,
Phone: 704-377-2536; and Ross B. Bricker, Anton R. Valukas and
Ronald L. Malmer of Jenner & Block, One IBM Plaza, Chicago, IL
60611-3608 Phone: 312/ 923-4524. The plaintiff firms in this
litigation are:
(1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(2) Cauley Geller Bowman Coates & Rudman, LLP (New York),
200 Broadhollow, Suite 406, Melville, NY, 11747, Phone:
631.367.7100, Fax: 631.367.1173,
(3) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(4) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington,
DC), 1100 New York Avenue, N.W., Suite 500, West Tower,
Washington, DC, 20005, Phone: 202.408.4600, Fax:
202.408.4699, E-mail: lawinfo@cmht.com
(5) Faruqi & Faruqi LLP, 320 East 39th Street, New York,
NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E-
mail: Nfaruqi@faruqilaw.com
(6) Law Offices of Brian M. Felgoise, P.C., Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net
(7) Milberg Weiss Bershad Hynes & Lerach, LLP (Boca Raton,
FL), 5355 Town Center Road - Suite 900, Boca Raton, FL,
33486, Phone: 561.361.5000, Fax: 561.367.8400,
(8) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(9) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(10) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New
York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com
(11) 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
WEST CORPORATION: CA Court Grants Demurrer For Consumer Lawsuit
---------------------------------------------------------------
The San Diego County, California Superior Court granted West
Corporation's demurrer on all claims in the class action filed
against it, styled "Sanford v. West Corporation et al., case No.
GIC 805541."
The original complaint alleged violations of the California
Consumer Legal Remedies Act, Cal. Civ. Code Section 1750 et
seq., unlawful, fraudulent and unfair business practices in
violation of Cal. Bus. & Prof. Code Section 17200 et seq.,
untrue or misleading advertising in violation of Cal. Bus. &
Prof. Code Section 17500 et seq., and common law claims for
conversion, unjust enrichment, fraud and deceit, and negligent
misrepresentation, and sought monetary damages, including
punitive damages, as well as restitution, injunctive relief and
attorneys fees and costs. The complaint was brought on behalf
of a purported class of persons in California who were sent a
Memberworks, Inc. (MWI) membership kit in the mail, were charged
for an MWI membership program, and were allegedly either
customers of what the complaint contended was a joint venture
between MWI and the Company or West Telemarketing Corporation
(WTC) or wholesale customers of West or WTC.
WTC and the Company filed a demurrer in the trial court on July
7, 2004. The court sustained the demurrer as to all causes of
action in plaintiff's complaint, with leave to amend. WTC and
the Company received an amended complaint and filed a renewed
demurrer. The Court on January 24, 2005 entered an order
sustaining the Company's and WTC's demurrer with respect to five
of the seven causes of action, including all causes of action
that allow punitive damages. WTC and the Company on February
14, 2005 filed a motion for judgment on the pleadings seeking a
judgment as to the remaining claims. A hearing on that motion
was held on April 22, 2005. On April 26, the Court granted
judgment on the pleadings without leave to amend. The plaintiff
will have 60 days from the date Notice of Entry of Judgment is
issued in which to appeal.
WEST CORPORATION: Consumer Lawsuit Moved To NV Bankruptcy Court
---------------------------------------------------------------
The lawsuit filed against West Corporation, styled "Brandy L.
Ritt, et al. v. Billy Blanks Enterprises, et al.," has been
referred to the Bankruptcy Court for the District of Nevada.
The suit was originally filed in January 2001 in the Court of
Common Pleas in Cuyahoga County, Ohio, against two of the
Company's clients. The suit, a purported class action, was
amended for the third time in July 2001 and the Company was
added as a defendant at that time. The suit, which seeks
statutory, compensatory, and punitive damages as well as
injunctive and other relief, alleges violations of various
provisions of Ohio's consumer protection laws, negligent
misrepresentation, fraud, breach of contract, unjust enrichment
and civil conspiracy in connection with the marketing of certain
membership programs offered by the Company's clients.
On February 6, 2002, the court denied the plaintiffs' motion for
class certification. On July 21, 2003, the Ohio Court of Appeals
reversed and remanded the case to the trial court for further
proceedings. The plaintiffs have filed a Fourth Amended
Complaint naming West Telemarketing Corporation as an additional
defendant and a renewed motion for class certification.
One of the defendants, NCP Marketing Group, filed bankruptcy and
on July 12, 2004 removed the case to federal court. Plaintiffs
have filed a motion to remand the case back to state court. All
defendants opposed that motion. In addition, one of the
defendants moved to transfer the case from the United States
District Court for the Northern District of Ohio to the federal
Bankruptcy Court in Nevada. Plaintiffs objected to the
transfer. On October 29, 2004, the district court referred the
case to the Bankruptcy Court for the Northern District of Ohio.
On February 22, 2005, the Bankruptcy Court for the Northern
District of Ohio referred the case to the Bankruptcy Court for
the District of Nevada. It is uncertain when the motion for
class certification will be ruled on and when the case will be
tried.
New Securities Fraud Cases
COLLINS & AIKMAN: 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
securities of Collins & Aikman Corporation ("Collins & Aikman")
(NYSE:CKC) between May 6, 2004 and March 17, 2005, inclusive
(the "Class Period").
The Complaint alleges that defendants violated the federal
securities laws by issuing false or misleading statements
throughout the Class period that had the effect of artificially
inflating the market price of the Company's securities. The
complaint further alleges that during the Class Period,
statements made by the defendants were materially false and
misleading when made because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company improperly accounted for certain
supplier rebates;
(2) that the Company's financial statements required net
adjustments or approximately $10-$12 million;
(3) that the Company's financial statements were not
prepared in accordance with 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 the consequence of the foregoing, the Company's
net income and financial results were materially
overstated.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 by Fax: 212/490-2022 by E-mail: SSBNY@aol.com or
visit their Web site: http://www.ssbny.com.
CORN PRODUCTS: Ademi & O'Reilly Lodges Securities Lawsuit in IL
---------------------------------------------------------------
The law firm of Ademi & O'Reilly, LLP announced that it has
filed a class action lawsuit in the United States District Court
for the Northern District of Illinois on behalf of purchasers of
Corn Products International, Inc. ("Corn Products") (NYSE:CPO)
securities during the period between January 25, 2005 and April
4, 2005 (the "Class Period").
The complaint charges Corn Products and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. Corn Products manufactures and sells starches, liquid
sweeteners and other ingredients to food and industrial
customers in over 60 industries around the world.
The Complaint alleges that, during the Class Period, defendants
issued materially false and misleading statements concerning the
Company's future prospects. Specifically, the complaint alleges
that these statements were materially false and misleading
because, at the time that these statements were made, defendants
knew, but failed to disclose and/or misrepresented:
(1) that the Company was experiencing manufacturing
problems at certain of its facilities that were causing
its expenses to rise dramatically above internally
forecasted levels. These problems caused certain of the
Company's processing facilities to close and/or
slowdown production thereby raising expenses;
(2) that the Company had contracted for corn in Canada in
the late Fall of 2004 at prices higher than present
prevailing prices, thereby forcing the Company to
purchase corn at above-market prices and further
eroding the Company's profit margins. In other words,
the Company's hedging strategy related to its Canadian
corn purchases was then negatively impacting its
financial results and would continue to do so for the
next year; and
(3) given the foregoing, Defendants lacked a reasonable
basis for their positive statements concerning the
Company and its earnings and prospects.
On April 5, 2005, before the market opened, Corn Products issued
a press release announcing that it expected first quarter
earnings to decline by 35 to 40 percent from the first quarter
of 2004, due primarily to the timing of corn purchases,
increased expenses, and manufacturing expense problems. In
response to this announcement, the price of Corn Products common
stock declined precipitously, falling from $25.86 per share to
$20.98 per share, on extremely heavy trading volume.
For more details, contact Guri Ademi of Ademi & O'Reilly, LLP by
Phone: (866) 264-3995 by E-mail: gademi@ademilaw.com or visit
their Web site: http://www.ademilaw.com/cases/Corn.php.
CORN PRODUCTS: Schiffrin & Barroway Lodges Securities Suit in IL
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of Illinois on behalf of all securities
purchasers of Corn Products International, Inc. (NYSE: CPO)
("Corn Products" or the "Company") between January 25, 2005, and
April 4, 2005, inclusive (the "Class Period").
The complaint charges Corn Products, Samuel Scott and Cheryl
Beebe with violations of the Securities Exchange Act of 1934.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that the Company was experiencing manufacturing
problems at some of its facilities, which resulted in
increased manufacturing expenses;
(2) that the Company's net corn costs were significantly
higher due to the Company's speculative hedging of
Canadian corn;
(3) that US sweetener price increase, contrary to the
Company's representations, failed to offset higher
energy costs; and
(4) that as a result of the foregoing, defendants lacked
any reasonable basis for their positive statements
concerning the Company and its earnings and prospects.
On April 5, 2005, Corn Products said that it expected first-
quarter diluted earnings per share to decline 35 percent to 40
percent from the first quarter of 2004. News of this shocked the
market. Shares of Corn Products fell $4.88 per share or 18.87
percent, on April 5, 2005, to close at $20.98 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com.
CRAY INC.: Charles J. Piven Lodges Securities Fraud Suit in WA
--------------------------------------------------------------
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 Cray, Inc.
(NASDAQ: CRAYE) between July 31, 2003, and May 12, 2005,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Western District of Washington against defendant Cray 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. of 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.
CRAY INC.: Smith & Smith Lodges Securities Fraud Suit in W.D. WA
----------------------------------------------------------------
The law firm of Smith & Smith LLP initiated a securities class
action lawsuit on behalf of shareholders who purchased
securities of Cray, Inc. ("Cray" or the "Company')
(Nasdaq:CRAYE), between July 31, 2003 and May 12, 2005,
inclusive (the "Class Period'). The class action lawsuit was
filed in the United States District Court for the Western
District of Washington.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period
concerning the Company's operations and prospects, thereby
artificially inflating the price of Cray securities. No class
has yet been certified in the above action.
For more details, contact Howard Smith, Esq. of Smith & Smith
LLP by Mail: 3070 Bristol Pike, Suite 112, Bensalem,
Pennsylvania 19020 by Phone: 866-759-2275 or by E-mail:
howardsmithlaw@hotmail.com.
GRAVITY CO.: Glancy Binkow Lodges Securities Fraud Lawsuit in NY
----------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP initiated a Class
Action lawsuit in the United States District Court for the
Southern District of New York on behalf of a class (the "Class")
consisting of all persons or entities who purchased American
Depository Shares (ADSs) of Gravity Co., Ltd. ("Gravity" or the
"Company") (Nasdaq:GRVY) pursuant and/or traceable to the
Company's false and misleading Registration Statement
/Prospectus issued in connection with the initial public
offering of Gravity ADSs (the "IPO"), together with those who
purchased their shares in the open market between February 7,
2005 and May 12, 2005 inclusive (the "Class Period").
The Complaint charges Gravity and certain of the Company's
executive officers with violations of federal securities laws.
Plaintiff claims defendants' omissions and material
misrepresentations artificially inflated the Company's stock
price, inflicting damages on investors. Gravity is a Korean
corporation headquartered in Seoul, South Korea, that develops
and distributes online games and related businesses within Korea
and other countries within Asia, the United States and Europe.
The Company's principal product, Ragnarok Online, is
commercially available in 19 markets. Historically, revenues
from Ragnarok Online have accounted for the majority of the
Company's revenue, with 95% of the Company's revenue prior to
the IPO attributable to that product.
The Complaint alleges defendants failed to disclose and
misrepresented material adverse facts, including that:
(1) Ragnarok Online was experiencing a material decline in
customer demand and increased competition in the
marketplace, which caused Ragnarok Online's revenues to
precipitously decline;
(2) Gravity's mobile animation business was in such a dire
state that it was no longer capable of producing a
viable revenue stream for the Company; and
(3) the Company's statements about massive growth potential
for online gaming were lacking in any reasonable basis
when made because Gravity's royalties and license fees
(for online gaming) were negatively impacted by adverse
trends in China which caused, among other things, a
decline of Ragnarok Online revenues.
On May 12, 2005, the Company announced disappointing financial
results for first-quarter 2005, which shocked the market,
causing Gravity's share price to plummet $3.64 per share - more
than 39% - to close at $5.60 per share on May 13, 2005.
Plaintiff seeks to recover damages on behalf of Class members
and is represented by Glancy Binkow & Goldberg LLP, a law firm
with significant experience in prosecuting class actions, and
substantial expertise in actions involving corporate fraud.
For more details, contact Michael Goldberg, Esq., of Glancy
Binkow & Goldberg LLP by Mail: 1801 Avenue of the Stars, Suite
311, Los Angeles, California 90067 by Phone: (310) 201-9150 or
(888) 773-9224 by E-mail: info@glancylaw.com or visit
http://www.glancylaw.com.
HARLEY-DAVIDSON: Ademi & O'Reilly Lodges Securities Suit in WI
--------------------------------------------------------------
The law firm of Ademi & O'Reilly, LLP initiated a securities
class action in the United States District Court for the Eastern
District of Wisconsin, Milwaukee Division against Harley-
Davidson, Inc. (NYSE:HDI) and individual defendants Jeffrey L.
Bleustein and James L. Zeimer on behalf of purchasers of Harley-
Davidson securities (the "Class") between January 21, 2004, and
through April 14, 2005, inclusive (the "Class Period").
Plaintiff alleges that during the Class Period, defendants used
false and misleading accounting measures designed to conceal its
practice of stuffing of the distribution channels for the
Company's motorcycle products. Defendants' scheme caused the
price of Harley-Davidson stock to become and remain inflated,
allowing defendants to sell nearly 740,000 shares of the stock
at inflated prices for proceeds of approximately $45.9 million.
On April 13, 2005, following the Company's shocking announcement
of plans to reduce motorcycle production and product inventory
levels, the Company's share price plummeted from its previous
close of $58.77, for a two-day loss of $11.57, losing 19.6% of
its value to close on April 14, 2005, at $47.20 on volume of
over 51 million shares.
It is alleged that during the Class Period, defendants knew and
concealed that:
(1) quarterly and annual motorcycle shipment numbers to
dealerships stated by the Company were "padded," in
that the quantity of motorcycles shipped often exceeded
retail demand;
(2) quarterly and annual product shipment numbers stated by
the Company represented a false and misleading measure
of accounting for motorcycle sales and the Company's
future prospects;
(3) annual shipment numbers significantly overstated the
Company's progress and prospects when compared against
the Company's 2007 retail sales goal;
(4) motorcycle shipments to the Company's dealerships had
actually exceeded retail demand by tens of thousands of
units in 2003 and 2004;
(5) Company claims of 16,000 retail sales in excess of
wholesale shipments during the first half of 2004 would
not correct the Company's inventory problems; and
(6) the planned 20% increase in wholesale shipments for
2004 could only worsen the Company's inventory
problems;
(7) despite claims of a "gap" between supply and demand,
requiring a further increase in 2005 inventory levels,
continued stuffing of the Company's distribution
channels had already caused them to become saturated;
and
(8) the profitability of Company's finance division could
no longer be counted on to offset the financial impact
of continued growth of excess retail inventories, owing
to the steep rise in the Company's 1Q 2005 credit
losses.
For more details, contact Guri Ademi of Ademi & O'Reilly, LLP by
Phone: (866) 264-3995 by E-mail: gademi@ademilaw.com or visit
their Web site: http://www.ademilaw.com/cases/Harley.pdf.
HARLEY-DAVIDSON: Schiffrin & Barroway Lodges Stock Lawsuit in WI
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit was filed in the United States District Court for
the Eastern District of Wisconsin on behalf of all securities
purchasers of Harley-Davidson, Inc. (NYSE: HDI) ("Harley" or the
"Company") between January 21, 2004 and April 12, 2005,
inclusive (the "Class Period").
The complaint charges Harley, Jeffrey Bleustein, James Ziemer
and James M. Brostowitz with violations of the Securities
Exchange Act of 1934. More specifically, the Complaint alleges
that the Company failed to disclose and misrepresented the
following material adverse facts known to defendants or
recklessly disregarded by them:
(1) that the much-touted gap between the consumer demand
for Harley's products and the available supply had
disappeared;
(2) that the Company, in an effort to mask the decline in
demand, shipped excess inventory to dealers;
(3) that the profitability of the Company's Financial
Services Division was being negatively impacted by
interest rate fluctuations;
(4) as a result, the Company's financial results were
materially inflated at all relevant times; and
(5) that the Company's projections regarding future growth
lacked in any reasonable basis when made.
On April 13, 2005, Harley announced that they felt it prudent to
limit short-term production growth. This action would result in
negative change to Harley's previous guidance for both shipments
and earnings growth for 2005. News of this shocked the market.
Shares of Harley fell $9.84 per share or 16.74 percent, on April
13, 2005, to close at $48.93 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com.
MAYTAG CORPORATION: Bull & Lifshitz Lodges Securities Suit in DE
----------------------------------------------------------------
The law firm of Bull & Lifshitz, LLP initiated a securities
class action in the Delaware Court of Chancery, New Castle
County on behalf of owners of the common stock of Maytag
Corporation ("Maytag" or the "Company") (NYSE:MYG).
Plaintiff is seeking to enjoin the proposed transaction based on
the proposed transaction being grossly unfair to Maytag's public
shareholders.
For more details, contact Joshua M. Lifshitz, Esq. of Bull &
Lifshitz, LLP by Phone: (212) 213-6222 by E-mail:
counsel@nyclasslaw.com or visit their Web site:
http://www.nyclasslaw.com/infopackage.html.
R&G FINANCIAL: Ademi & O'Reilly Lodges Securities Lawsuit in NY
---------------------------------------------------------------
The law firm of Ademi & O'Reilly, LLP initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of purchasers of R&G Financial
Corporation ("R&G") (NYSE:RGF) securities during the period
between April 21, 2003 through and including April 25, 2005 (the
"Class Period").
The complaint charges Corn Products and certain of its officers
and directors with violations of the Securities Exchange Act of
1934. According to the complaint, R&G's financial statements
were materially false and misleading when made because
defendants failed to disclose the following:
(1) that the Company's earnings quality had been
significantly weakened by the Company's use of more
aggressive assumptions to generate gain on sale income,
as well as to the value it retained in its interest
only ("IO") residuals in securitization transactions;
(2) that R&G's methodology used to calculate the fair value
of its IO residual interests 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 at all
relevant times.
On April 25, 2005, after the close of trading, R&G shocked the
investing public when it announced that it would restate its
earnings for 2003 and 2004.
For more details, contact Guri Ademi of Ademi & O'Reilly, LLP by
Phone: (866) 264-3995 by E-mail: gademi@ademilaw.com or visit
their Web site: http://www.ademilaw.com/cases/R&G.php.
RHODIA S.A.: Murray Frank Lodges Securities Fraud Lawsuit in NJ
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
District of New Jersey on behalf of shareholders who purchased
or otherwise acquired the securities of Rhodia S.A. ("Rhodia" or
the "Company") (NYSE:RHA) (Paris:RHA) (Munich:RHD) between April
26, 2001 and March 23, 2004, inclusive (the "Class Period").
The complaint alleges that throughout the Class Period,
defendants issued materially false and misleading financial
statements to the investing public. During the Class Period, the
Company made numerous positive statements concerning its
operating units' performance and its financial condition.
However, defendants failed to disclose or materially
misrepresented the following adverse facts in an effort to
overstate the Company's financial results:
(1) defendants failed to provide appropriate measures that
would permit an investor to interpret the trends of
ChiRex's operations and business performance;
(2) ChiRex was being carried on the Company's books at an
inappropriately high value given the turnover of
ChiRex's business;
(3) the Company failed to timely write down the value of
its ChiRex subsidiary;
(4) the Company failed to depreciate its deferred taxes
assets in fiscal year 2002 and in the 1st half of 2003;
and
(5) Rhodia failed to adequately disclose the components
comprising its debt and potential liabilities that
acted to misrepresent the Company's liquidity,
including off balance sheets items and the coverage of
its environmental risks.
By failing to disclose, or misrepresent, material information,
defendants caused the price of the securities of Rhodia to be
inflated which acted to enhance each of their executive
positions and substantial compensation and permitted the Company
to raise EUR1 billion in Notes in a private placement on May 28,
2003, as well as EUR290 million in a private placement of Notes
with American investors in 2001 at terms favorable to the
Company that it would have not otherwise received had the truth
been known.
On March 23, 2004, Rhodia revealed in filings with the
Securities and Exchange Commission ("SEC") that its auditor had
expressed concerns about Rhodia's cash position and that French
regulators had commenced an investigation into the financial
statements and reports previously issued by the Company. On
March 25, 2005, French regulators issued a report that found
that the Company had failed to disclose the material information
discussed above in a timely fashion beginning in 2001.
For more details, contact Eric J. Belfi or Christopher Hinton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 by E-mail:
info@murrayfrank.com or visit their Web site:
http://www.murrayfrank.com/CM/NewCases/NewCases.asp.
STOCKERYALE INC.: Rosen Law Lodges Securities Fraud Suit in NH
--------------------------------------------------------------
The Rosen Law Firm initiated a securities class action on behalf
of purchasers of StockerYale Inc. (Nasdaq:STKR) publicly traded
common stock during the period between April 19, 2004 and
November 9, 2004.
The case, Libert v. Blodgett et al, 05-cv-00177-JM, is pending
in the United States District Court for the District of New
Hampshire, Warren B. Rudman U.S. Courthouse, 55 Pleasant Street,
Room 110, Concord, NH.
The complaint charges that StockerYale and certain of its
officers and directors violated Sections 10(b) and 20(a) of the
Securities and Exchange Act by issuing false and misleading
press releases on April 19 and April 21, 2004 in which the
Company falsely announced that StockerYale had entered into a
contract with BAE Systems to develop a laser for a missile
countermeasure system to protect commercial planes.
Additionally, the press releases misrepresented that StockerYale
was supplying the lasers as part of a Department of Homeland
Security project. In fact, StockerYale was not involved in any
Department of Homeland Security project and was not developing a
laser missile countermeasure system for commercial planes.
For more details, contact Laurence Rosen, Esq. of The Rosen Law
Firm P.A. by Phone: (212) 686-1060 or 1-866-767-3653 by Fax:
(212) 202-3827 by E-mail: lrosen@rosenlegal.com or visit their
Web site: http://www.rosenlegal.com.
TIBCO SOFTWARE: Charles J. Piven Lodges Securities Lawsuit in CA
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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 TIBCO
Software, Inc. (NASDAQ: TIBX) between September 21, 2004, and
March 1, 2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California against defendant TIBCO and one
or more of its officers. 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. of 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.
TIBCO SOFTWARE: Schatz & Nobel Files Securities Fraud Suit in CA
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The law firm of Schatz & Nobel, P.C. initiated 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 TIBCO
Software, Inc. (Nasdaq: TIBX) ("TIBCO" or the "Company") between
September 21, 2004 and March 1, 2005, inclusive (the "Class
Period"). Also included are those who acquired TIBCO's shares
through its acquisition of General Interface.
The Complaint alleges that TIBCO and certain of its officers and
directors violated federal securities laws. Specifically,
defendants failed to disclose the following adverse information:
(1) TIBCO's integration of the Staffware PLC acquisition
was not proceeding as defendants had represented;
(2) Staffware was performing well below expectations; and
(3) TIBCO did not maintain an adequate system of internal
financial, operational or disclosure controls so as to
reasonably assure the accuracy, completeness and
veracity of TIBCO's public statements.
On March 1, 2005, defendants announced that TIBCO's results for
1Q:F05 were well below guidance. In fact, shares of TIBCO were
halted in after- market trading after TIBCO revealed that
preliminary data showed that Q1:F05 revenues would reach well
below the FirstCall consensus mean estimates. While defendants
had previously stated that the Staffware acquisition was
substantially completed and that the integration was proceeding
according to plan, defendants now revealed that this was untrue
and that weakness in Europe and delays in closing deals would
result in non-GAAP earnings per share well below consensus mean
estimates. During TIBCO's 1Q:F05 conference call, defendant
Ranadive revealed that Staffware not only remained unintegrated,
but because of integration-related problems, European sales had
been paralyzed.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Web site: http://www.snlaw.net.
UNITED HEALTHCARE: Rosen Law Lodges Securities Fraud Suit in MI
---------------------------------------------------------------
The Rosen Law Firm initiated a securities class action against
United American Healthcare Corporation and certain of its
officers and directors on behalf of purchasers of United
American Healthcare Corporation (NASDAQ: UAHC) publicly traded
common stock during the period between from May 26, 2000,
through April 22, 2004, inclusive (the ``Class Period').
The case Zaluski v. United American Healthcare Corporation, Civ.
No. 05-72112 is pending in the U.S. District Court for the
Eastern District of Michigan before the Hon. Lawrence Zatkoff.
The complaint charges that United American Healthcare and
certain of its officers and directors violated Sections 10(b)
and 20(a) of the Securities and Exchange Act by failing to
disclose the Company's improper business and financial
relationship with a legislator having oversight of UAHC's
Healthplan. According to the complaint, this relationship was in
violation of the Company's contract with Tennessee and has
caused the State of Tennessee to place UAHC's Healthplan under
administrative supervision. The complaint alleges that as a
result, investors could not understand or accurately assess the
extent to which UAHC's ongoing operations, reported revenue, and
income were dependent upon the improper political payments
scheme.
For more details, contact Laurence Rosen, Esq. of The Rosen Law
Firm P.A. by Phone: (212) 686-1060 or 1-866-767-3653 by Fax:
(212) 202-3827 by E-mail: lrosen@rosenlegal.com or visit their
Web site: http://www.rosenlegal.com.
WILLBROS GROUP: Lerach Coughlin Lodges Securities Lawsuit in TX
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit in the
United States District Court for the Southern District of Texas
on behalf of purchasers of Willbros Group Inc. ("Willbros" or
the "Company") (NYSE:WG) common stock during the period between
October 6, 2003 and May 16, 2005 (the "Class Period").
The complaint charges Willbros and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Willbros describes itself as an "independent contractor
serving the oil, gas and power industries, providing engineering
and construction, and facilities development and operations
services to industry and government entities worldwide."
As alleged in the Complaint, the Company's International
operations were engaging in bribery and tax evasion, among other
things, and the Company would have to restate its financial
statements for fiscal years 2002 to the present, as the Company
had materially overstated its financial condition by failing to
account for the bribes it was paying or the taxes it was
evading. In addition, Willbros has announced that it likely
violated the Foreign Corrupt Practices Act ("FCPA"), which
prohibits bribery of foreign officials to obtain business.
Then, on May 16, 2005, Willbros revealed the true extent of the
problems at Willbros International. On that date, the Company
issued a press release announcing the completion of its Audit
Committee investigation into the activities of defendant James
K. Tillery and other employees and consultants of Willbros
International and its subsidiaries. The investigation revealed,
among other things, that:
(1) Willbros International was bribing foreign officials in
order to obtain business in at least Bolivia, Nigeria
and Ecuador. These payments were not being properly
accounted for on the Company's financial statements and
exposed the Company to the risk that should the
payments be subjected to regulatory scrutiny the
Company could face large fines and penalties;
(2) Willbros International was evading the payment of taxes
in various locales, thereby materially overstating the
Company's financial results and exposing the Company to
potential fines and penalties;
(3) the Company was engaging in substantial undisclosed
related party transactions; and
(4) the Company's financial statements were not prepared in
conformity with Generally Accepted Accounting
Principles ("GAAP") and were materially false when
issued.
Willbros has now admitted that its financial statements were
materially false when issued as it has acknowledged that it will
be restating its financial statements for fiscal years 2002
through 2004 and that the total amount of reductions to net
income range between $7.2 and $9.2 million.
In response to the announcement of the findings of the Audit
Committee, the price of Willbros stock fell $4.92 per share or
more than 30% to close at $11.00 per share, on unusually heavy
trading volume.
During the Class Period, prior to the disclosure of the problems
at Willbros International and the Company's false financial
statements, the Company:
(i) completed an offering of $70 million of its 2.75%
Convertible Senior Notes;
(ii) entered into an expanded credit agreement for a new
$150 million three-year senior secured credit facility;
and
(iii) enabled insiders to sell 462,354 shares of their
personally held Willbros common stock thereby reaping
more than $7 million in gross proceeds.
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/willbros/.
WILLBROS GROUP: Schwartz Junell Lodges Securities Lawsuit in TX
---------------------------------------------------------------
The law firm of Schwartz, Junell, Greenberg & Oathout, LLP
announces that on May 18, 2005 it filed a class action lawsuit
on behalf of purchasers of the securities of Willbros Group,
Inc. ("Willbros" or the "Company") (NYSE: WG) between May 6,
2002 and May 16, 2005 inclusive, (the "Class Period"), seeking
to pursue remedies under the Securities Exchange Act of 1934
(the "Exchange Act"). A copy of the complaint filed in this
action is available from the Court.
This action, C.A. No. 4:05-cv-1778, is pending before Judge
Keith P. Ellison in the United States District Court for the
Southern District of Texas, Houston Division, against defendants
Willbros, Michael F. Curran, Warren L. Williams, Larry J. Bump
and James K. Tillery.
The Complaint alleges that Defendants issued, or caused to be
issued, false and misleading statements during the Class Period
to artificially inflate the value of Willbros stock. Willbros is
the target of numerous governmental investigations, in the
United States by the Securities & Exchange Commission and
Department of Justice, and abroad, because the Company is
alleged to have engaged in a campaign of illegal and illicit
bribery of foreign government officials in Bolivia, Nigeria and
Ecuador to successfully obtain construction projects. As a
result of these illegal actions, the Company has delayed filing
its Form 10-K for 2004; announced a restatement of its financial
results for 2002, 2003 and the first nine months of 2004;
instituted a series of modifications to rectify material
weaknesses in its internal controls; provided an estimate of its
possible exposure for violating the Foreign Corrupt Practices
Act ("FCPA") (which could be as much as $650,000 per violation,
not including criminal penalties of more than $2 million per
violation); and withdrew its 2005 guidance. The Company
estimates an astonishing 35% to 44% reduction in previously
reported net income when the restatement is completed for the
collective period of 2002, 2003 and the first nine months of
2004. This means that the Company overstated net income during
that period by an incredible 53% to 80%. In addition, the
Company also disclosed a number of previously unreported related
party transactions from 2002, 2003 and 2004 that materially
impacted financial results. As a result of the above
restatement, the Company stands in default of its debt covenants
because of its substantial reduction in net income. Because of
its violations of FCPA, the Company could be prohibited from
bidding for future U.S. government contracts. The Company
disclosed this information on May 16, 2005 after the market had
closed. The market responded immediately and the stock lost 31%
on usually high volume of 6.9 million shares, trading as low as
$10.15 per share on May 17, 2005, down $5.77 from its previous
close of $15.92.
For more details, contact Roger B. Greenberg of Schwartz,
Junell, Greenberg & Oathout L.L.P. by Mail: Two Houston Center
909 Fannin, Suite 2000, Houston, Texas 77002 by Phone:
(713) 752-0017 by Fax: (713) 752-0327 by E-mail:
rgreenberg@schwartz-junell.com or visit their Web site:
http://schwartz-junell.lawoffice.com.
WILLBROS GROUP: Smith & Smith Lodges Securities Fraud Suit in TX
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The law firm of Smith & Smith LLP initiated a securities class
action lawsuit on behalf of shareholders who purchased
securities of Willbros Group, Inc. ("Willbros" or the "Company")
(NYSE:WG), between October May 6, 2002 and May 16, 2005,
inclusive (the "Class Period"). The class action lawsuit was
filed in the United States District Court for the Southern
District of Texas.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period
concerning the Company's financial performance, thereby
artificially inflating the price of Willbros securities. No
class has yet been certified in the above action
For more details, contact Howard Smith, Esq. of Smith & Smith
LLP by Mail: 3070 Bristol Pike, Suite 112, Bensalem,
Pennsylvania 19020 by Phone: 866-759-2275 or by E-mail:
howardsmithlaw@hotmail.com.
*********
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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