/raid1/www/Hosts/bankrupt/CAR_Public/050920.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, September 20, 2005, Vol. 7, No. 186
Headlines
ALKERMES INC.: MA Court Hears Motion To Dismiss Securities Suit
BORLAND SOFTWARE: Discovery Continues in DE Shareholder Lawsuit
CANADA: Montreal Resident Launches Suit Over New Parking Meters
DYNEGY INC.: Asks CA Court To Dismiss Remaining Energy Lawsuits
DYNEGY INC.: TX Court Approves Securities Fraud Suit Settlement
ENTROPIN INC.: Supports Transfer of Esterom Lawsuits to C.D. CA
EXIDE TECHNOLOGIES: Shareholders Launch Securities Fraud Suits
HARVEST MEDICAL: Settles National-Origin Discrimination Suit
HOLLINGER INTERNATIONAL: Settles IL Circulation Inflation Suits
HURRICANE KATRINA: Scruggs Law to Launch Litigation V. Insurers
KENTUCKY: Several Thousand May Have Claims in Strip Search Suit
LEVEL 3: Review of Reversal of Suit Settlement Approval Refused
MBIA INC.: NY Court Orders Securities Fraud Suits Consolidated
MBNA CORPORATION: Continues To Face NY Currency Conversion Suit
MBNA CORPORATION: Shareholders Launch DE Securities Fraud Suits
MBNA CORPORATION: Faces Suit For ERISA Violations in DE Court
MBNA CORPORATION: Retail Merchants File Antitrust Lawsuit in CT
MERCK & CO.: Vioxx Lawsuit on Behalf of New Zealanders Launched
MURPHY OIL: LA Residents Launch Damages Suits Over Oil Leaks
NEW JERSEY: Ruling Lets More Residents to Sue For Flood Damages
OCWEN FINANCIAL: IL Court Grants Partial Suit Summary Judgment
POLYMEDICA CORPORATION: Discovery Proceeds in MA Securities Suit
PRINTCAFE SOFTWARE: Reaches Settlement For PA Securities Suit
RADIOSHACK CORPORATION: Violated FLSA, IL Court Rules in Suit
ROBERTSHAW CONTROL: Recalls 178T Control Valves For Fire Hazard
SEPRACOR INC.: Discovery Proceeds in MA Securities Fraud Lawsuit
SILICON STORAGE: Plaintiffs File Consolidated CA Securities Suit
SIZELER PROPERTY: Asks MD Court To Dismiss Investor Fraud Suit
THERMADYNE HOLDINGS: Faces Suits For Manganese-Induced Illness
VEGAS GRAND: Law Firms Provide Updates on Litigation's Status
WASHINGTON: Suit over NCAA Scholarship Limit Policy to be Tried
WELLMAN INC.: Continues To Face Polyester Fiber Antitrust Suits
WESTCORP: CA Court Preliminarily Approves Fraud Suit Settlement
WILLIAMS CONTROLS: Faces Product Liability Lawsuit in OK Court
XTO ENERGY: KS Court Mulls Certification of Gas Antitrust Suit
XTO ENERGY: KS Court Considers Certification For Antitrust Suit
XTO ENERGY: Reaches Settlement for CO Royalty Payments Lawsuit
ZIX CORPORATION: Plaintiffs To File Consolidated Suit in N.D. TX
New Securities Fraud Cases
DHB INDUSTRIES: Kaplan Fox Lodges Securities Fraud Suit in NY
HUTCHINSON TECHNOLOGY: Schiffrin & Barroway Lodges Suit in MN
MAJESCO ENTERTAINMENT: Barrack Rodos Files Securities Suit in NJ
MERCURY INTERACTIVE: Wechsler Harwood Lodges CA Securities Suit
UBS-AG: Stull Stull Lodges Securities Suit Over MFS Mutual Funds
*********
ALKERMES INC.: MA Court Hears Motion To Dismiss Securities Suit
---------------------------------------------------------------
The United States District Court for the District of
Massachusetts has yet to rule on Alkermes, Inc.'s motion to
dismiss the consolidated securities class action filed against
it and certain of its current and former officers and directors.
Beginning in October 2003, the Company and certain of its
current and former officers and directors were named as
defendants in six purported securities class action lawsuits,
styled:
(1) Bennett v. Alkermes, Inc., et. al., 1:03-CV-12091;
(2) Ragosta v. Alkermes, Inc., et. al., 1:03-CV-12184;
(3) Barry Family LP v. Alkermes, Inc., et. al., 1:03-CV-
12243;
(4) Waltzer v. Alkermes, Inc., et. al., 1:03-CV-12277;
(5) Folkerts v. Alkermes, Inc., et. al., 1:03-CV-12386 and
(6) Slavas v. Alkermes, Inc., et. al., 1:03-CV-12471
On May 14, 2004, the six actions were consolidated into a single
action captioned: "In re Alkermes Securities Litigation, Civil
Action No. 03-CV-12091-RCL (D. Mass.)." On July 12, 2004, a
single consolidated amended complaint was filed on behalf of
purchasers of the Company's common stock during the period April
22, 1999 to July 1, 2002.
The consolidated amended complaint generally alleges, among
other things, that during such period, the defendants made
misstatements to the investing public relating to the
manufacture and FDA approval of the Company's Risperdal Consta
product. The consolidated amended complaint seeks unspecified
damages.
On September 10, 2004, the Company and the individual defendants
filed a motion to dismiss all claims asserted against them in
the consolidated amended complaint in their entirety. The Court
heard oral argument on the motion on January 12, 2005, and the
Company is awaiting a decision on the motion.
BORLAND SOFTWARE: Discovery Continues in DE Shareholder Lawsuit
---------------------------------------------------------------
Discovery is still proceeding in the remaining stockholder class
action filed against Borland Software, Inc., styled "Dieterich
v. Harrer, et al., Case No. 024-N."
On November 27, 2002, a stockholder class action and derivative
lawsuit, styled "Dieterich v. Harrer, et al., Case No.
02CC00350," was filed against Starbase Corporation, or Starbase,
and five former directors of Starbase in the Superior Court of
the State of California for Orange County, claiming that the
former directors had breached fiduciary duties owed to Starbase
and stockholders of Starbase. The Company is paying the costs
of defending this litigation pursuant to indemnification
obligations under the merger agreement relating to its
acquisition of Starbase. Following a series of motions, the case
was dismissed without prejudice on August 20, 2003.
On October 28, 2003, a stockholder class action relating to the
same matter, Dieterich v. Harrer, et al, Case No. 024-N, was
filed against the former directors of Starbase in Chancery Court
of the State of Delaware, alleging breach of fiduciary duties by
the former directors of Starbase. The lawsuit also named as
defendants the Company, and four of its former executive
officers:
(1) Dale Fuller,
(2) Keith Gottfried,
(3) Frederick Ball, and
(4) Doug Barre
Defendants moved to dismiss and in August 2004, the Chancery
Court granted in part and denied in part the motion to dismiss.
Discovery has commenced and there is no date set for trial.
CANADA: Montreal Resident Launches Suit Over New Parking Meters
---------------------------------------------------------------
Attorneys for the Montreal resident, Jean Pierard, sought
permission from the courts to launch a class action against the
city and Stationnement de Montreal, over newly installed parking
meters, The Montreal Gazette reports.
Mr. Pierard, a computer consultant, says that he is among many
who feel cheated because when you add money to the meter to buy
more time, you start from scratch and lose any remaining time on
the meter. To avoid this, you must top up the meter at the exact
minute your time runs out, which many regard as an inconvenience
and in some cases impossible.
Attorneys for Mr. Pierard have asked for exemplary damages of
$50 for each of an estimated 225,000 users, a total of $11.25
million. The number of users is based on figures in
Stationnement de Montreal's annual report for 2004 that said 500
parking meters would be installed this summer. Lawyers estimated
that five people parked at each meter over 90 days.
As an experiment, Mr. Pierard said he put 75 cents into a meter
on Union St. this week at 3:35 p.m., and got a receipt saying he
could park for 30 minutes, until 4:05 p.m. Then, to buy
additional time, he put in a quarter at 3:38 p.m. and the ticket
said he could park until 3:48 p.m, meaning he'd paid a total of
$1 but lost 17 minutes on the deal. "It's a bad deal for anyone
who needs to park," he told The Montreal Gazette.
Drivers wishing to take part may register at
http://www.wanavenue.com/recours/recours.htm.
DYNEGY INC.: Asks CA Court To Dismiss Remaining Energy Lawsuits
---------------------------------------------------------------
Dynegy, Inc. asked California Superior Court to dismiss the
remaining class actions filed against it and numerous other
power generators and marketers, arising from their participation
in the western power markets during the California energy
crisis.
Several lawsuits, which primarily allege manipulation of the
California wholesale power markets and seek unspecified treble
damages, were consolidated before a single federal judge. The
suits are styled:
(1) Pamela R. Gordon v. Reliant Energy Inc., et al.;
(2) Ruth Hendricks v. Dynegy Power Marketing, et al.;
(3) The People of the State of California v. Dynegy Power
Marketing, et al.;
(4) Sweetwater Authority v. Dynegy Inc., et al.;
(5) People of the State of California ex rel. Bill Lockyer,
Attorney General v. Dynegy Inc., et al.;
(6) Public Utility District No. 1 of Snohomish County v.
Dynegy Power Marketing, et al.; and
(8) Bustamante [I] v. Dynegy Inc., et al.
That judge dismissed two of the cases (Snohomish and Lockyer) in
the first quarter 2003 on the grounds of Federal Energy
Regulation Commission (FERC) preemption and the filed rate
doctrine. The Ninth Circuit Court of Appeals affirmed these
dismissals in June 2004 and September 2004, respectively. An
appeal from the Ninth Circuit's affirmation of the September
2004 dismissal has been taken to the United States Supreme
Court, and the Company filed its response brief in January 2005.
In "Lockyer," plaintiffs' Petition for Writ of Certiorari to the
U.S. Supreme Court was denied in April 2005. Plaintiffs in
"Snohomish County" filed a Petition for Writ of Certiorari to
the U.S. Supreme Court in November 2004 that was denied in June
2005. The remaining coordinated cases were remanded to a
California state court, where the Company filed a motion to
dismiss in July 2005.
Regarding the remaining six consolidated cases, the Ninth
Circuit denied the Company's appeal of a prior decision to
remand those cases to state court and affirmed the remand in
December 2004.
In addition to the eight consolidated lawsuits discussed above,
nine other putative class actions and/or representative actions
were filed in state and federal court on behalf of business and
residential electricity consumers against the Company and
numerous other power generators and marketers between April and
October 2002. The complaints allege unfair, unlawful and
deceptive practices in violation of the California Unfair
Business Practices Act and seek an injunction, restitution and
unspecified damages.
While some of the allegations in these lawsuits are similar to
the allegations in the eight lawsuits described above, these
lawsuits include additional allegations relating to, among other
things, the validity of the contracts between these power
generators and the California Department of Water Resources
(CDWR). The court dismissed eight of these nine actions,
although the plaintiffs appealed, and the briefing on that
appeal was completed in October 2004. In February 2005, the
Ninth Circuit issued its decision affirming the denial of remand
and dismissal of these cases. The ninth case was remanded to
state court, where a newly added defendant filed a motion in
February 2004 to remove the case back to federal court. In
January 2005, following a hearing on the issue, the court denied
the removal and returned the case to state court. The company
intends to file expeditiously a motion to dismiss this case.
In December 2002, two additional actions were filed with similar
allegations on behalf of residents of Washington and Oregon. In
May 2003, the plaintiffs voluntarily dismissed these actions and
refiled them in California Superior Court as a class action
complaint. The complaint, which was brought on behalf of
consumers and businesses in Oregon, Washington, Utah, Nevada,
Idaho, New Mexico, Arizona and Montana that purchased energy
from the California market, alleges violations of the Cartwright
Act and unfair business practices. The Company has removed the
action from state court and consolidated it with existing
actions pending before the United States District Court for the
Northern District of California. The hearing on plaintiffs'
appeal to remand to state court occurred in February 2004. The
judge stayed his ruling on the appeal pending the Ninth
Circuit's ruling on the six consolidated cases referenced above.
DYNEGY INC.: TX Court Approves Securities Fraud Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
Texas approved the settlement of the consolidated securities
class action filed against Dynegy, Inc. on behalf of purchasers
of the Company's publicly traded securities from January 2000 to
July 2002 seeking unspecified compensatory damages and other
relief.
The lawsuit as filed principally alleged that the Company and
certain of its current and former officers and directors
violated the federal securities laws in connection with our
disclosures, including accounting disclosures, regarding Project
Alpha (a structured natural gas transaction entered into by the
Company in April 2001), round-trip trading, the submission of
false trade reports to publications that calculate natural gas
index prices, the alleged manipulation of the California power
market and the restatement of the Company's financial statements
for 1999-2001. The Regents of the University of California are
lead plaintiff and Lerach Coughlin Stoia & Robbins, LLP is class
counsel.
The plaintiff filed an amended complaint in January 2004 and, in
March 2004, the Company filed motions to dismiss. Briefing on
the Company's motions was completed in June 2004. The judge
entered an order on the Company's motion in October 2004
dismissing all claims brought by the plaintiff under the
Securities Act of 1933, except those relating to the Company's
March 2001 note offering and December 2001 common stock
offering, and the Securities Exchange Act of 1934, except those
dealing with Project Alpha and two alleged round-trip trades.
Further, the judge scheduled the trial to commence in May 2005.
Also in October 2004, the plaintiff voluntarily dismissed its
claim under the Securities Act of 1933 relating to our March
2001 note offering. The parties filed motions on the class
certification issue throughout the fourth quarter 2004.
In December 2004, the court issued an order identifying the
class period for the Exchange Act claims as June 21, 2001
through July 22, 2002, and the class period for the Securities
Act claims to begin December 20, 2001. The court is taking
discovery on the issue of the closing date for the Securities
Act class period. The Company has been, and will continue to
actively mediate this matter to reach a reasonable settlement if
possible. However, the Company will be fully prepared for the
trial scheduled for May 2005 in the event a settlement cannot be
reached with the plaintiff.
In addition, the Company is a nominal defendant in several
derivative lawsuits brought by shareholders on the Company's
behalf against certain of its former officers and current and
former directors whose claims are similar to those described
above. These lawsuits have been consolidated into two groups -
one pending in federal court and the other pending in state
court. A hearing on the Company's motion to dismiss the federal
derivative claim was held in February 2005, at which time the
judge indicated his intent to stay or dismiss this matter
pending the resolution of the shareholder litigation described
above. Subsequently, in February 2005, the plaintiffs
voluntarily dismissed this lawsuit. Discovery in the state
derivative matter is ongoing.
In April 2005, the Company settled the suit and in In July 2005,
the U.S. district court approved the comprehensive settlement
agreement of the parties in our shareholder class action
litigation. As part of the settlement, the Company agreed to
make an aggregate settlement payment of $468 million, comprised
of a $150 million cash payment funded by insurance proceeds, a
$250 million cash payment by DHI. The Company also agreed to
the issuance to the plaintiffs of $68 million in its Class A
common stock, consisting of 17,578,781 shares based on a
calculation using a volume weighted average stock price for the
20 trading days ending April 15, 2005. The company was also
required to make two payments totaling $250 million during 2005,
consisting of an initial payment of $175 million, which it paid
in May 2005, followed by a second payment of $75 million plus
interest upon court approval, which it paid in July 2005. As
required by the settlement, the Company intends to issue the
shares of Class A common stock promptly following expiration of
the appeal period which occurred on August 8, 2005. The
resignation of two members of the Dynegy board of directors who
are defendants in the litigation, with the vacancies resulting
from such resignations to be filled by two new directors from a
list of at least five qualified candidates submitted by the lead
plaintiff. The Company will also nominate such directors for
election at its next shareholders' meeting at which directors
are elected.
The suit is styled "The Regents of the University of California
v. Dynegy, Inc., et al, case no. 4:02-cv-02374," filed in the
United States District Court for the Southern District of Texas,
under Judge Sim Lake. Representing the plaintiffs is Lerach
Coughlin Stoia Geller et al, 9601 Wilshire Bld, Ste 510 Los
Angeles, CA 90210 Phone: 310-859-3100.
ENTROPIN INC.: Supports Transfer of Esterom Lawsuits to C.D. CA
---------------------------------------------------------------
Entropin, Inc. expressed support for the transfer of a class
action filed in the United States District Court for the
District Court in Colorado to the United States District Court
for the Central District of California.
The Company is currently a named defendant in three securities
lawsuits. The first lawsuit was filed in the Superior Court of
the State of California, (hereinafter, the "State Action"). The
second lawsuit was filed in the United States District Court for
the Central District of California (hereinafter, the "Federal
Action"). The third lawsuit was filed in the District Court for
the City and County of Denver, Colorado (hereinafter, the
"Colorado Action"). The allegations in each of the three
actions-e.g., the State Action, the Federal Action and the
Colorado Action, are virtually identical. Essentially, the
Company is accused of making false and misleading statements
regarding the clinical development of its developmental drug
Esterom.
The Superior Court formally dismissed the State Action and
entered judgment in favor of the Company and its two directors
on August 13, 2004. The plaintiffs, however, filed a notice of
appeal on August 24, 2004. The plaintiffs in the State Action
have filed their opening appellate brief and the Company has
filed its response. The plaintiffs' reply brief is due on August
11, 2005.
In the Federal Action, the Company's summary judgment motion was
denied on April 11, 2005. The parties appeared before the court
for a status conference on May 23, 2005, at which time the court
established mandatory mediation procedures, a discovery schedule
and set a trial date of June 20, 2006. Deposition discovery has
commenced and is ongoing.
On June 1, 2005, the Company removed the Colorado Action from
state court to federal court based upon the recently passed
Class Action Fairness Act. After accepting jurisdiction, the
federal court issued an order to show cause why the case should
not be transferred to the United States District Court for the
Central District of California so that it may be consolidated
with the Federal Action. The parties submitted their responses
to the order to show cause on July 15, 2005. In its response,
the Company supported a transfer to the Central District of
California; however, a co-defendant in the Colorado Action is a
Colorado corporation and has filed a brief in opposition to the
transfer. The Company is awaiting the court's ruling.
EXIDE TECHNOLOGIES: Shareholders Launch Securities Fraud Suits
--------------------------------------------------------------
Exide Technologies, Inc. and certain of its current and former
officers face two securities class actions filed in the United
States District Court for the District of New Jersey, by two of
its former shareholders, Aviva Partners LLC and Robert Jarman.
The suits allege violations of certain federal securities laws,
on behalf of those who purchased the Company's stock between
November 16, 2004 and May 17, 2005. The complaints allege that
the named officers violated Sections 10(b) and 20(a) of the
Securities Exchange Act and SEC Rule 10b-5 in connection with
certain allegedly false and misleading public statements made
during this period by the Company and its officers. The
complaints do not specify an amount of damages sought.
The first suit in this litigation is styled "Aviva Partners LLC,
et al. v. Exide Technologies, et al.," filed in the United
States District Court for the District of New Jersey. The
plaintiff firms in this litigation:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) 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
(3) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(4) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
HARVEST MEDICAL: Settles National-Origin Discrimination Suit
------------------------------------------------------------
Harvest Medical Clinic in Casa Grande agreed to pay $190,000 to
nine Hispanic former employees to resolve a national-origin
discrimination class action, according to the U.S. Equal
Employment Opportunity Commission, The Arizona Republic reports.
The suit alleged that in May 2003, the clinic created a rule
that English must be spoken at all times and fired several
Hispanic workers the same week. In addition, the EEOC charges
that the clinic did not lay off any non-Hispanics and soon began
replacing the terminated employees.
Mary Jo O'Neill of the EEOC Phoenix District Office told The
Arizona Republic, "Lawsuits like this one serve notice that
national-origin discrimination remains a persistent problem in
some of today's workplaces."
Dr. Henry Tomlinson and his wife, Leona, founded the board-
certified family practice in 1998. They delivered a brief
statement through a staff member: "Injustice comes in many
ways."
HOLLINGER INTERNATIONAL: Settles IL Circulation Inflation Suits
---------------------------------------------------------------
Hollinger International Inc. (NYSE: HLR) reached a tentative
global settlement of the consolidated class action lawsuits
brought as a result of the previously announced inflation of
circulation at the Chicago Sun-Times and two of its sister
publications.
Counsel for the Chicago Sun-Times and the attorneys for the
plaintiffs in the consolidated class actions have filed a joint
motion to approve the tentative settlement, which would resolve
nearly all remaining advertiser claims arising from the
newspaper's previously announced inflation of the paper's
audited circulation. The proposed settlement has been
preliminarily approved by the Court subject to a fairness
hearing in December 2005. The settlement was the result of a
six-month mediation effort, facilitated by the Honorable Abner
J. Mikva, who served as the Court-appointed mediator and
involved extensive discovery by class counsel.
Earlier, pursuant to Court order, the Chicago Sun-Times was
permitted to negotiate settlements with nearly 400 of its
largest advertisers that resolved approximately 58% of
advertiser claims for an aggregate consideration of
approximately $10 million of cash and $6.8 million of
advertising benefits to advertisers continuing to advertise with
the paper at specified levels.
The proposed settlement in the consolidated class action
lawsuits will provide the plaintiff class with aggregate
consideration of approximately $7.7 million in cash and up to
$7.3 million in free advertising or discounts. The Chicago Sun-
Times has agreed to pay the fees and expenses of the firms
representing the settlement class, as approved by the Court, up
to a total of $5.575 million. The Chicago Sun-Times will also
pay all the costs associated with the administration including
publication of notice, mailed notice and distributing the
benefits to class members. Neither the administration costs nor
the attorneys' fees will reduce the benefits to the class. The
settlement will not cover the claims of advertisers who are
plaintiffs in four separate lawsuits or the claims of four
advertisers with whom the Chicago Sun-Times has been in
settlement negotiations. The advertising expenditures of these
excluded claimants represent approximately 3.5% of the Chicago
Sun-Times' advertising revenue during the relevant settlement
period applicable to major advertisers.
The parties have requested a hearing on their motion for final
court approval of the settlement in December 2005. If the
settlement is approved without material delay, settlement
payments will be made in early 2006. The claims for commercial
advertisers in the consolidated class action proceedings will be
calculated using the same circulation estimates that were used
in the newspaper's settlements with its major advertisers. As
with major advertiser settlements, advertisers in the class
action settlements will also have the additional option to
accept all of their settlement consideration in the form of
additional free advertising. The settlements will be
administered by Rust Consulting, Inc. an independent, third-
party claims administrator agreed to by the parties.
Publisher John Cruickshank stated: "Since our voluntary
reporting of the problem, the Chicago Sun-Times has been
committed to make fair and equitable restitution to our
advertisers. The class action settlement is consistent with the
settlement principles announced in connection with our major
advertiser settlement program and is intended to treat all
advertisers fairly."
For more details, contact Molly Morse or Jeremy Fielding of
Kekst and Company, Phone: 212-521-4826 or 212-521-4825, E-mail:
molly-morse@kekst.com or jeremy-fielding@kekst.com.
HURRICANE KATRINA: Scruggs Law to Launch Litigation V. Insurers
---------------------------------------------------------------
Attorney Richard F. Scruggs of The Scruggs Law Frim stated that
he is launching major litigation against State Farm, Allstate,
Nationwide and other Property and Casualty Insurance Companies
on behalf of Mississippi and Alabama Gulf Coast residents who
have suffered catastrophic damage from Hurricane Katrina.
The litigation will seek to compel the insurance companies to
honor insurance obligations that the companies are seeking to
reduce or eliminate through loopholes and deceptively written
policy exclusions. These homeowner policies clearly provide for
comprehensive coverage for any and all hurricane damage. The
insurance companies are attempting to minimize their hurricane
coverage by intentionally misclassifying the hurricane's
destruction as mere flooding. The litigation led by Dick Scruggs
will be designed to recover the damages due to policyholders
under their policies. It is part of a coordinated legal effort
involving attorneys throughout the Louisiana, Mississippi,
Alabama region.
Mr. Scruggs said, "The intentional effort by these insurance
companies to avoid meeting their policy obligations is
devastation on top of devastation. What this means for these
communities is no ability to rebuild homes, further substantial
financial hardship and subversion of the area's economic
redevelopment. As a community member, neighbor and victim of the
hurricane, I simply cannot sit by and allow this needless
exploitation of those of us who live and work in the Gulf Coast
region."
The live press conference will begin at 12 pm CDST on Friday,
September 16, 2005 at 1025 Beach Boulevard (at the intersection
of Pascagoula Street) in Pascagoula, Mississippi. Following the
live press conference, a follow-up telephonically enabled press
conference will be held at 1 pm CDT at the Nelson House, 4836
Main Street in Moss Point, Mississippi (enter at back of the
building on Morris Street). Callers may dial-in to participate
on the conference call at (800) 946-0705. A replay of the press
conference will be available beginning at 4 pm CDT until
midnight on October 15th by calling (719) 457-0820 or
(888) 203-1112 for 30 days. The passcode is 8416307.
Homeowners that would like to join the litigation should call
The Scruggs Hurricane Katrina Hotline at 1-888-844-5055.
KENTUCKY: Several Thousand May Have Claims in Strip Search Suit
---------------------------------------------------------------
Approximately 7,000 individuals may have claims against the
Hopkins County Jail in Kentucky in a class action lawsuit over
alleged strip-searching of inmates, according to a local lawyer,
The Courier-Journal reports. The suit claims that people were
strip-searched upon entering the jail or just before release.
Gregory Belzley of Louisville told The Courier-Journal that he
reviewed records dating to January 2002 to come up with the
number. Notices were sent to those people, along with a
questionnaire, he added.
LEVEL 3: Review of Reversal of Suit Settlement Approval Refused
---------------------------------------------------------------
The United States Supreme Court refused to grant Level 3
Communications, Inc.'s petition for certiorari relating to an
appeals court ruling vacating approval for the settlement of the
class actions filed against the Company.
In May 2001, Level 3 Communications, Inc., and two of its
subsidiaries were named as a defendant in "Bauer, et. al. v.
Level 3 Communications, LLC, et al.," a purported multi-state
class action, filed in the U.S. District Court for the Southern
District of Illinois. In April 2002, the same plaintiffs filed
a second nearly identical purported multi-state class action in
state court in Madison County, Illinois. In July 2001, the
Company was named as a defendant in "Koyle, et. al. v. Level 3
Communications, Inc., et. al.," a purported multi-state class
action filed in the U.S. District Court for the District of
Idaho. In September 2002, Level 3 Communications, LLC was named
as a defendant in "Smith et al v. Sprint Communications Company,
L.P., et al.," a purported nationwide class action filed in the
United States District Court for the Northern District of
Illinois.
These actions involve the Company's right to install its fiber
optic cable network in easements and right-of-ways crossing the
plaintiffs' land. In general, the Company obtained the rights
to construct its network from railroads, utilities, and others,
and is installing its network along the rights-of-way so
granted. Plaintiffs in the purported class actions assert that
they are the owners of lands over which the Company's fiber
optic cable network passes, and that the railroads, utilities,
and others who granted the Company the right to construct and
maintain its network did not have the legal ability to do so.
The complaints seek damages on theories of trespass, unjust
enrichment and slander of title and property, as well as
punitive damages.
The Company has also received, and may in the future receive,
claims and demands related to rights-of-way issues similar to
the issues in these cases that may be based on similar or
different legal theories. To date, all attempts to have class
action status granted on complaints filed against the Company or
any of its subsidiaries involving claims and demands related to
rights-of-way issues have been denied.
On July 25, 2003, the Smith Court entered an Order preliminarily
approving a settlement agreement that will resolve all claims
against the Company arising out of the Company's location of
fiber optic cable and related telecommunications facilities that
the Company owns within railroad rights-of-way throughout the
United States. In connection with the Court's Order
preliminarily approving the settlement, the Court entered an
Order enjoining the parties in all pending federal and state
railroad rights-of-way class action litigation involving the
Company from further pursuing those pending actions at this
time.
Under the terms of the settlement agreement, landowners who own
property adjacent to the railroad rights- of-way in which the
Company placed its fiber optic cable and related facilities may
submit claims and receive specified compensation. The Company
is unable to quantify the ultimate amount of payments to be made
pursuant to the settlement until if and when (1) the settlement
receives final approval and all appeals have been exhausted and
(2) the claims process has been completed.
In September 2003, a petition for appeal was granted which seeks
a reversal of the Smith Court's decision to preliminarily
approve the settlement and certify a nationwide class for
settlement purposes. On October 19, 2004, the Seventh Circuit
Court of Appeals issued a 2-1 decision vacating the nationwide
certification which was a necessary element of the nationwide
settlement. The Court also vacated the injunction against
competing class actions and remanded the case to the district
court for further proceedings. The Company and the other
defendants in "Smith" filed a Petition for Certiorari with
the United States Supreme Court seeking review of the decision
of the Seventh Circuit Court of Appeals. On June 20, 2005, the
United States Supreme Court denied the Petition for Certiorari.
MBIA INC.: NY Court Orders Securities Fraud Suits Consolidated
--------------------------------------------------------------
The United States District Court for the Southern District of
New York ordered consolidated the securities class actions filed
against MBIA Inc. and certain of its officers and directors,
styled:
(1) Anthony Capone v. MBIA Inc., et al. (Case No. 05 CV
3514) (filed April 4, 2005);
(2) Thomas Cassady v. MBIA Inc., et al. (Case No. 05 CV
3730; S.D.N.Y.) (filed April 7, 2005);
(3) Todd Simon v. MBIA Inc., et al. (Case No. 05 CV 3636;
S.D.N.Y.) (filed April 8, 2005);
(4) Mariss Partners, LLP v. MBIA Inc., et al. (Case No. 05
CV 3709; S.D.N.Y) (filed April 11, 2005); and
(5) Alan D. Sadowsky and Barbara S. Katvin v. MBIA Inc., et
al.; (Case No. 05 CV 4150; S.D.N.Y.) (filed April 26,
2005)
The suit also names as defendants Joseph W. Brown, the Company's
Chairman and former Chief Executive Officer, Gary C. Dunton, the
Company's Chief Executive Officer, Nicholas Ferreri, the
Company's Chief Financial Officer, Neil G. Budnick, a Vice
President of the Company and the Company's former Chief
Financial Officer and Douglas C. Hamilton, the Company's
Controller.
The plaintiffs in these cases assert claims under Section 10(b)
of the Securities Exchange Act of 1934 (the "Exchange Act"),
Rule 10b-5 promulgated thereunder, and Section 20(a) of the
Exchange Act. The plaintiffs in these lawsuits seek to act as
representatives for a putative class consisting of purchasers of
the Company's stock during the period from August 5, 2003 to
March 30, 2005. Although the individual lawsuits vary, the
allegations include, among other things, violations of the
federal securities laws arising out of the Company's allegedly
false and misleading statements about its financial condition
and the defendant's failure "to disclose or indicate" these
alleged facts:
(i) that the Company, during the Class Period,
overleveraged itself, deeply under-reserved against
possible credit defaults, and overly exposed to
guaranteeing risky structured financings;
(ii) that MBIA accelerated its recognition of current income
by classifying many of its upfront guarantee fees as
advisory fees taken at closing, rather than accounted
for over the life of the bonds insured;
(iii) that MBIA improperly booked a $70 million payment
received from Converium Re (then called Zurich
Reinsurance North America) in 1998, which at the time
was depicted as a loss-reducing reinsurance recovery
for MBIA, but was, in substance, a loan;
(iv) that as result, MBIA financial statements were
materially overstated by $60 million;
(v) that MBIA artificially inflated premium income and
portfolio credit quality by insuring bonds in the
secondary market that were attracting prices lower than
their stale credit ratings would dictate;
(vi) that MBIA's low loss ratios resulted from the Company's
practice to defer recognizing problems rather than
providing layers of excess collateral, other
underwriting protection, and its self-proclaimed
prowess at restructurings;
(vii) that MBIA set forth an illegal scheme of covering the
loss, from the failed Allegheny Health, Education and
Research Foundation (Aherf) bond issuance, with a
retroactive reinsurance policy, giving it a reinsurance
recovery of $170 million to cover the present value of
the future Aherf interest and principal payments, which
resulted in MBIA showing a better than 40% jump in
pretax income that year - $565 million over what the
income figure would have been without resort to the
reinsurance;
(viii) that MBIA was dumping on Channel Reinsurance Ltd., a
Bermuda reinsurer where MBIA owns a 17.4% interest,
performing but troubled policies from its existing
portfolio, with the provision that it could make up any
quality problems later so that MBIA could buy time by
getting potential workout loans off its balance sheet
in order to make its financial results appear better;
and
(ix) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company.
The plaintiffs allege that, as a result of these misleading
statements or omissions, the Company's stock traded at
artificially inflated prices. These lawsuits seek unspecified
compensatory damages in connection with purchases by members of
the putative class of the Company's stock at such allegedly
inflated prices during the Class Period.
On July 25, 2005, the presiding judge issued an order
consolidating these five cases into one action under the caption
"In re MBIA Securities Litigation, Case No. 05 CV 3514;
S.D.N.Y." and named a lead plaintiff and lead counsel for the
class. The Company anticipates that it will be receiving an
amended complaint in respect of the consolidated action in
September 2005.
The suit is styled "In re MBIA Inc. Securities Litigation, case
no. 1:05-cv-03514-LLS," filed in the United States District
Court for the Southern District of New York, under Judge Louis
L. Stanton. Representing the plaintiffs are David Avi Rosenfeld
of Lerach, Coughlin, Stoia, Geller, Rudman & Robbins, LLP, 200
Broadhollow Road, Ste. 406, Melville, NY 11747, Phone:
631-367-7100, Fax: 631-367-1173, E-mail:
drosenfeld@lerachlaw.com; and Peter Edward Seidman, Milberg
Weiss Bershad & Schulman LLP (NYC), One Pennsylvania Plaza, New
York, NY 10119, Phone: (212) 613-5625, Fax: (212) 868-1229, E-
mail: pseidman@milberg.com.
MBNA CORPORATION: Continues To Face NY Currency Conversion Suit
---------------------------------------------------------------
MBNA Corporation and MBNA America Bank, N.A. continue to face
the consolidated class action filed in the United States
District Court for the Southern District of New York, relating
to foreign currency conversion fees to customers, styled "In Re
Currency Conversion Fee Antitrust Litigation."
Mastercard and Visa applied a currency conversion rate, equal to
a wholesale rate plus 1%, to credit card transactions in foreign
currencies for conversion of the foreign currency into U.S.
dollars. They required the Company's banking subsidiaries and
other member banks to disclose the 1% add-on to the wholesale
rate if the bank chose to pass it along to the credit
cardholder. The Company's banking subsidiaries disclosed this
information in their cardholder agreements.
In January 2002, the Company and MBNA America were added as
defendants in the matter. The plaintiffs claim that the
defendants conspired in violation of the antitrust laws to
charge foreign currency conversion fees and failed to properly
disclose the fees in solicitations and applications, in initial
disclosure statements and on cardholder statements, in violation
of the Truth-in-Lending Act. The plaintiffs also claim that the
bank defendants and MasterCard and Visa conspired to charge the
1% foreign currency conversion fee assessed by MasterCard and
Visa and an additional fee assessed by some issuers. Unlike most
other issuers, in the United States the Company's banking
subsidiaries did not charge the additional fee on consumer
credit cards in addition to the fee charged by MasterCard and
Visa, but did charge such an additional fee on business credit
cards. The plaintiffs are seeking unspecified monetary damages
and injunctive relief.
In July 2003, the court granted a motion to dismiss certain
Truth-in-Lending Act claims against the Company and other
defendants, but denied a motion to dismiss the antitrust claims
against the defendants. In October 2004, a class was certified
by the Court.
The suit is styled "In re: Currency Conversion Litigation, case
no. 1:01-md-01409-WHP," filed in the United States District
Court for the Southern District of New York, under Judge William
H. Pauley III. Representing the plaintiffs are Goldberg, Kohn,
Bell, Black, Rosenbloom & Moritz, Ltd., 55 East Monroe Street,
Suite 3700, Chicago, Illinois 60603 and Lerach Coughlin Stoia
Geller Rudman & Robbins LLP, 100 Pine Street, Suite 2600
San Francisco, CA 94111, Phone: (415) 288-4545, Fax:
(415) 288-4534.
MBNA CORPORATION: Shareholders Launch DE Securities Fraud Suits
---------------------------------------------------------------
MBNA Corporation and certain of its officers face several
shareholder fraud class actions filed in the United States
District Court for the District of Delaware, seeking unspecified
damages, interest and costs, including reasonable attorneys'
fees, stemming from alleged violations of the Securities
Exchange Act of 1934, as amended.
On April 21, 2005, the company announced in its first quarter
earnings release that management believed the Company's 2005
earnings would be "significantly below" its previously-stated
growth objective. The company's stock price dropped following
publication of that earnings release. The lawsuits allege that
the Corporation and certain of its officers violated federal
securities laws through material misstatements and omissions
regarding the Company's business, which the plaintiffs allege
had the effect of inflating the Company's stock price.
MBNA CORPORATION: Faces Suit For ERISA Violations in DE Court
-------------------------------------------------------------
MBNA Corporation, its pension and 401(k) plan committee face a
class action filed in the United States District Court for the
District of Delaware, alleging that the defendants violated
certain provisions of the Employee Retirement Income Security
Act of 1974 (ERISA) as a result of breaches of fiduciary duties
owed to the 401(k) plan participants and beneficiaries.
Specifically, the alleged breaches of fiduciary duties related
to, but are not limited to, offering MBNA Corporation common
stock as an investment option, purchasing MBNA Corporation stock
for the 401(k) plan, holding MBNA Corporation stock in the
401(k) plan, failing to monitor the 401(k) plan's investment in
MBNA Corporation stock and failing to communicate information
concerning the Company's financial performance to 401(k) plan
participants and beneficiaries.
MBNA CORPORATION: Retail Merchants File Antitrust Lawsuit in CT
---------------------------------------------------------------
MBNA Corporation faces a class action filed in the United States
District court for the District of Connecticut, alleging
violations of federal antitrust laws.
In June 2005, certain retail merchants filed the suit, alleging
that MasterCard and Visa and their member banks, including MBNA
America, conspired to charge retailers excessive interchange in
violation of federal antitrust laws. The Company is in the
process of reviewing and assessing the impact of the lawsuit.
The suit is styled "East Goshen Pharmacy Inc v. Visa USA Inc et
al, case no. 3:05-cv-01177-JBA," filed in the United States
District Court for the District of Connecticut under Judge Janet
Bond Arterton. Representing the plaintiffs are Patrick A.
Klingman and James E. Miller of Sheperd Finkelman Miller & Shah-
Chester, 65 Main St., Chester, CT 06412, Phone: 860-526-1100,
Fax: 860-526-1120, E-mail: pklingman@sfmslaw.com or
jmiller@sfmslaw.com. Representing the Company is Suzanne Ellen
Wachsstock of Wiggin & Dana, 400 Atlantic St., 7th Fl., PO Box
110325, Stamford, CT 06911-0325, Phone: 203-363-7601, E-mail:
swachsstock@wiggin.com.
MERCK & CO.: Vioxx Lawsuit on Behalf of New Zealanders Launched
---------------------------------------------------------------
The law firm of KENNETH B. MOLL & ASSOCIATES, LTD. filed the
first class action lawsuit on behalf of all citizens of New
Zealand who allegedly died or were seriously injured by the pain
medication Vioxx. The suit accuses United States pharmaceutical
giant Merck & Co. of failing to properly research the known
risks of Vioxx and warn New Zealand consumers of potentially
fatal side effects. "Vioxx should never have been marketed in
the first place," said Kenneth B. Moll, whose firm filed the
first worldwide class action regarding Vioxx last fall.
On September 30, 2004, Merck withdrew Vioxx from all worldwide
markets after studies showed a three-fold risk of heart attack
and stroke. "Merck's decision to withdraw Vioxx from the market
came years after the company first learned of the health risks,"
said Mr. Moll. "Countless individuals in New Zealand and around
the world have suffered severe and fatal injuries which could
have been avoided if Merck had acted responsibly." On August 19,
2005, a Texas jury awarded $253.5 million to a widow of a man
who died after taking Vioxx. "The verdict clearly shows Merck's
culpability in their decision to put profits ahead of the safety
of their consumers," said Mr. Moll.
For more details, contact Kenneth B. Moll & Associates, Ltd.,
Three First National Plaza, 50th Floor, Chicago, IL 60602,
Phone: 312-558-6444 or 888-882-3453, Fax: 312-558-1112, E-mail:
lawyers@kbmoll.com, Web site: http://www.kbmoll.com.
MURPHY OIL: LA Residents Launch Damages Suits Over Oil Leaks
------------------------------------------------------------
Residents of a hurricane-devastated Louisiana parish launched
two class action lawsuits against Murphy Oil, which seeks
unspecified damages for an oil leak at the company's Louisiana
refinery, The Associated Press reports.
Filed in Lafayette, Louisiana, the federal suits accuse the El
Dorado-based company and its Murphy Oil USA Inc. unit of
negligence when Hurricane Katrina hit August 29 and knocked out
the company's plant at Meraux.
A lawsuit filed by property owner Patrick Joseph Turner on
behalf of at least 500 property owners in St. Bernard Parish
states, "As a direct and proximate cause of the negligence of
the defendant, plaintiffs sustained damages that include
contamination of property, mental anguish, emotional distress,
inconvenience, loss of use, loss of property value, loss of
income, loss of profits, loss of business opportunity and fear
of cancer."
The second lawsuit filed by residents John and Theonise Maus,
Judith Maus, Charles August Maus, Marcel Wieners, Carla Valaske
and at least 5,000 other parish residents states that among the
issues to be considered is whether "Murphy's negligence is
ultimately found to prolong the time in which members cannot
return to their property and whether the class members' property
is permanently damaged so that their property's fair-market
value is diminished."
The Company claims that the leaks in the 85,000-barrel tank were
a result of hurricane-related damage to a crude oil storage
tank. According to Securities and Exchange Commission filings,
the company believes that insurance will cover the release of
oil and doesn't expect to incur significant costs associated
with the lawsuits. In addition, the company also said it does
not believe the lawsuits will have a material adverse effect on
its net income, financial condition or liquidity.
NEW JERSEY: Ruling Lets More Residents to Sue For Flood Damages
---------------------------------------------------------------
In a court ruling that would allow more property owners to sue
for flood damage suffered in a torrential rainstorm last year in
Burlington County, Superior Court Appellate Judge Harold Wells
consolidated three flood lawsuits into one class action, The
Courier-Post Online reports. The ruling essentially allows more
victims along Rancocas Creek to sue seven municipalities and
private dam owners.
Plaintiffs allege that dam failures or water spilling over the
dams caused flood damage on July 12-13, 2004, when up to 13
inches of rain fell in less than 24 hours.
The judge also ruled that more property owners may file for
damages if they live in the Rancocas Creek watershed, including
the northern and two southern branches of the creek. In
rejecting arguments by municipal government lawyers that not all
properties were affected by both rain and dam water, Judge Wells
wrote in his ruling, "This will give property owners who do not
have the economic means or financial wherewithal (the
opportunity) to pursue their claims."
Judge Wells added in his ruling that 400 families were displaced
by the storm and may be eligible to make claims. Thus, the judge
appointed three plaintiff lawyers, who had had sought class
action status for their cases, namely: Ed Petkevis, Carlo
Scaramella and Ron Heksch as co-counsels to handle the ongoing
lawsuit by home and business owners. The Judge also stated in
his ruling that he would decide on October 28 how potential
plaintiffs living in the watershed will be formally notified
about joining the suit if they suffered damages.
OCWEN FINANCIAL: IL Court Grants Partial Suit Summary Judgment
--------------------------------------------------------------
The United States District Court for the Northern District of
Illinois partially granted summary judgments in favor of Ocwen
Financial Corporation in the consolidated class action filed
against them, challenging Ocwen Federal Bank FSB's mortgage
servicing practices.
Several suits were initially filed against the Company and
certain of its affiliates, including the Bank. On April 13,
2004 the United States Judicial Panel on Multi-District
Litigation granted the Company's petition to transfer and
consolidate a number of the lawsuits into a single case to
proceed in the United States District Court for the Northern
District of Illinois under caption styled: "In re Ocwen Federal
Bank FSB Mortgage Servicing Litigation, MDL Docket No. 1604."
Additional similar lawsuits have been brought in other courts,
some of which have been or may be transferred and consolidated
in the MDL Proceeding. The MDL Proceeding currently includes
the following actions in which the Company and/or the Bank are
defendants:
(1) Patricia Antoine, et al v. Ocwen Federal Bank FSB, et
al., case No. C-03-5503 (N.D.Cal.)
(2) Deborah Bush v. Ocwen Federal Bank FSB, et al.,
Case No. 7:04-cv-02827 (N.D.Ala.)
(3) Carolyn P. Calhoun v. Ocwen Federal Bank FSB, et al.,
Case No. 4:04-cv-00293 (N.D.Miss.)
(4) Ralph Carreon Jr., et al. v. Ocwen Federal Bank FSB,
Case No. 5:03-5151 (Bankr. W.D.Tex.)
(5) Stevie Cooper, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 1:04-cv-00639 (S.D.Ala.)
(6) Mary Crosby v. Ocwen Federal Bank FSB, et al.,
Case No. 5:04-cv-02828 (N.D.Ala.)
(7) Billy M. Dockery, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 7:04-cv-02830 (N.D.Ala.)
(8) Thomas B. Doherty v. Ocwen Federal Bank FSB, et al.,
Case No. 04-cv-04880 (D.Minn.)
(9) Unnatiben Gandabhai, et al. v. Ocwen Federal Bank FSB,
et al., Case No. 3:04-2582 (N.D.Cal.)
(10) Lizzie Hannah, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 7:04-cv-02833 (N.D.Ala.)
(11) Kweku Hanson, et al v. Ocwen Federal Bank FSB, et al.,
Case No. 02-CV-860 (D.Conn.)
(12) William Hearn, et al v. Ocwen Federal Bank FSB, et al.,
Case No. C-04-0291 (E.D.Cal.)
(13) Stephanie Hunter, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 2:04-cv-02864 (N.D.Ala.)
(14) Lula M. Jackson, et al v. Ocwen Federal Bank FSB, et
al., Case No. C-03-0743 (N.D.Cal.)
(15) Freddie Jones v. Ocwen Federal Bank FSB, et al.,
Case No. 4:04-cv-00294 (N.D.Miss.)
(16) Marion Long v. Ocwen Federal Bank FSB, et al.,
Case No. 7:04-cv-02852 (N.D.Ala.)
(17) Allie M. Maddox, et al v. Ocwen Federal Bank FSB, et
al., Case No. CV-03-9515 (C.D.Cal.)
(18) Jeannette E. Martinez v. Ocwen Federal Savings Bank
FSB, Case No. 1:04-296 (D.N.M.)
(19) Michele McAuliffe, et al. v. U.S. Bank, N.A. as
Trustee., et al., Case No. 03-C-1103 (N.D. Ill.)
(20) George McDonald v. Ocwen Financial Corp., et al.,
Case No. 1:04-03673 (N.D.Cal.)
(21) Al McZeal v. Ocwen Federal Bank FSB, et al.,
Case No. 4:04-1576 (S.D.Tex.)
(22) Delores B. Moore v. Ocwen Federal Bank FSB, et al.,
Case No. 2:04-2612 (E.D. Pa.)
(23) Timothy Napier, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 2:03-174 (E.D.Wash.)
(24) William A. Soto, et al v. Ocwen Federal Bank FSB, et
al., Case No. 02-C-6818 (N.D.Ill.).
(25) Geneva Spires, et al v. Ocwen Financial Services, Inc.,
et al., Case No. C-03-5600 (N.D.Cal.)
(26) Maggie Williams, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 4:04-cv-02869 (N.D.Ala.)
(27) Thomas Wright, et al. v. Ocwen Federal Bank FSB, et
al., Case No. 1:04-cv-00638 (S.D.Ala.)
On August 23, 2004, plaintiffs filed a Consolidated Complaint,
setting forth claims contained in lawsuits consolidated in the
MDL Proceeding. Those claims variously involve alleged
violations of federal statutes, including the Real Estate
Settlement Procedures Act and Fair Debt Collection Practices
Act, and state deceptive trade practices statutes, and assert
common law claims. The claims are based on various allegations
of improper servicing practices, including:
(i) charging borrowers allegedly improper or unnecessary
fees such as breach letter fees, hazard insurance
premiums, foreclosure-related fees, late fees and
property inspection fees;
(ii) untimely posting and misapplication of borrower
payments; and
(iii) improperly treating borrowers as in default on their
loans.
While some of the individual lawsuits had set forth specific
damage allegations (e.g., the Gandabhai complaint (item 9 above)
claimed actual damages of $61; the Hanson complaint (item 11
above) claimed actual damages of $150,000 and punitive and
exemplary damages of $1,500,000; the various Alabama and
Mississippi cases generally alleged damages less than $75 (items
2, 3, 5, 6, 7, 10, 13, 15, 16, 26 and 27 above)), the
Consolidated Complaint in the MDL Proceeding does not set forth
any specific amounts of claimed damages. The absence of any
specification of damages in the Consolidated Complaint does not,
however, preclude plaintiffs in the MDL Proceeding from
requesting leave from the court to amend the Consolidated
Complaint or from otherwise seeking damages should the matter
proceed to trial.
On September 30, 2004, the Ocwen defendants filed various
motions to dismiss, for summary judgment, to strike class
allegations and to stay discovery. On April 25, 2005, the court
entered an Opinion and Order granting partial summary judgment
to defendants finding that, as a matter of law, the mortgage
loan contracts signed by plaintiffs authorize the imposition of
breach letter fees and other legitimate default or foreclosure
related expenses. The court explained that its ruling was in
favor of defendants to the specific and limited extent that
plaintiffs' claims challenge the propriety of the above-
mentioned fees. The court has not yet ruled on any other claims
presented in the MDL Proceeding.
POLYMEDICA CORPORATION: Discovery Proceeds in MA Securities Suit
----------------------------------------------------------------
Discovery is proceeding in the securities class action filed
against PolyMedica Corporation and Steven J. Lee, the Company's
former Chief Executive Officer and Chairman of the Board in the
United States District Court for the District of Massachusetts.
On November 27, 2000, Richard Bowe SEP-IRA filed a purported
class action lawsuit on behalf of himself and purchasers of
common stock. The lawsuit seeks an unspecified amount of
damages, attorneys' fees and costs and claims violations of
Sections 10(b), 10b-5, and 20(a) of the Securities Exchange Act
of 1934, alleging various statements were misleading with
respect to the Company's revenue and earnings based on an
alleged scheme to produce fictitious sales.
Several virtually identical lawsuits were subsequently filed in
the United States District Court for the District of
Massachusetts against the Company. On July 30, 2001, the Court
granted the plaintiffs' motion to consolidate the complaints
under the caption "In re: PolyMedica Corp. Securities
Litigation, Civ. Action No. 00-12426-REK."
Plaintiffs filed a consolidated amended complaint on October 9,
2001. The consolidated amended complaint extended the class
period to October 26, 1998 through August 21, 2001, and named as
defendants the Company, Liberty Medical Supply, Inc., and
certain of the Company's former officers. Defendants moved to
dismiss the consolidated amended complaint on December 10, 2001.
Plaintiffs filed their opposition to this motion on February 11,
2002, and defendants filed a reply memorandum on March 11, 2002.
The Court denied the motion without a hearing on May 10, 2002.
On June 20, 2002, defendants filed answers to the consolidated
amended complaint.
On January 28, 2004, plaintiffs filed a motion for class
certification to which defendants filed an opposition on
February 27, 2004. Plaintiffs filed a reply memorandum on April
12, 2004 followed by additional briefing by the parties. The
Court heard oral argument on the motion on June 2, 2004. On
September 8, 2004, the court allowed the plaintiffs' motion and
certified the class. On September 21, 2004, the defendants filed
a petition requesting that they be permitted to appeal the
decision to the First Circuit Court of Appeals. The plaintiffs
filed a response to the defendants' petition on October 7, 2004
opposing defendants' request to appeal the class certification.
Also on October 7, 2004, the Court stayed sending notice of the
class action pending a ruling on defendants' appeal of class
certification.
On February 15, 2005, the First Circuit Court of Appeals granted
defendants' petition for leave to appeal the class certification
decision. Defendants-appellants filed their brief on March 15,
2005, and plaintiffs-appellees filed an opposition on April 15,
2005. Defendants-appellants filed a reply brief on April 25,
2005. The First Circuit Court of Appeals heard oral argument on
May 4, 2005 and took the matter under advisement.
The suit is styled "Bowe et al v. Polymedica Corp., case no.
1:00-cv-12426-REK," filed in the United States District Court
for the District of Massachusetts under Judge Robert E. Keeton.
Law firm for the defendants is Wilmer Cutler Pickering Hale and
Dorr LLP, 60 State Street, Boston, MA 02109, Phone: 617-526-
6145, Fax: 617-526-5000. The plaintiff firms are Hale & Dorr,
60 State Street, Boston, MA, 2109, Phone: 617.526.6167 and
Moulton & Gans LLP, 133 Federal Street, Boston, MA, 2110, Phone:
617.369.7979.
PRINTCAFE SOFTWARE: Reaches Settlement For PA Securities Suit
-------------------------------------------------------------
Parties reached a settlement for the amended securities class
action filed against PrintCafe Software, Inc. in the United
States District Court for the Western District of Pennsylvania.
The suit also names as defendants certain of the Company's
directors.
The suit was initially filed in June 2003 against the Company,
now a wholly owned subsidiary of Electronics For Imaging, Inc.,
and certain of Printcafe's officers. The complaint alleges that
the defendants violated Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 due to allegedly false and misleading
statements in connection with Printcafe's initial public
offering and subsequent press releases.
While the Company believes this lawsuit is without merit, the
parties have reached an agreement in principle to fully and
finally resolve this litigation, subject to the Court's approval
of the proposed class action settlement. The Company
anticipates executing a written Stipulation and Settlement
Agreement and jointly moving for the Court's preliminary
approval of the settlement. If preliminarily approved by the
Court a final fairness hearing will be scheduled accordingly.
The suit is styled "CITILINE HOLDINGS v. PRINTCAFE SOFTWARE, et
al., case no. 2:03-cv-00959-DWA-ARH," filed in the United States
District Court for the Western District of Pennsylvania, under
Judge Donetta W. Ambrose. Representing the plaintiffs are:
(1) Jack G. Fruchter, Abraham, Fruchter & Twersky, One Penn
Plaza, Suite 2805, New York, NY 10119, Phone: (212)
279-5050
(2) David A. Rosenfield and Samuel H. Rudman, Lerach,
Coughlin, Stoia, Geller, Rudman & Robbins, 200
Broadhollow Road, Suite 406, Melville, NY 11747, Phone:
(631) 367-7100
(3) Gerald L. Rutledge and Alfred G. Yates, Law Offices of
Alfred G. Yates, Jr., 429 Forbes Avenue, 519 Allegheny
Building, Pittsburgh, PA 15219, Phone: (412) 391-5164,
E-mail: yateslaw@aol.com
(4) Marc A. Topaz, Schiffrin & Barroway, 280 King of
Prussia Road, Radnor, PA 19087, Phone: (215) 667-7706
Representing the Company are Roy W. Arnold and Traci Sands Rea
of Reed Smith, 435 Sixth Avenue, Pittsburgh, PA 15219-1886,
Phone: (412) 288-3131, E-mail: trea@reedsmith.com and
rarnold@reedsmith.com; and Douglas J. Clark, David L. Lansky,
and Nicholas I. Porritt of Wilson, Sonsini, Goodrich & Rosati,
650 Page Mill Road, Palo Alto, CA 94304-1050
RADIOSHACK CORPORATION: Violated FLSA, IL Court Rules in Suit
-------------------------------------------------------------
The law firm of Touhy & Touhy and Callahan, McCune & Willis
reports that a federal district court ruled that RadioShack
Corporation violated federal law when it failed to pay overtime
to its managers who worked more than 40 hours per week and did
not supervise two or more full time employees or their
equivalent on a regular basis.
The case, which includes over 3,200 opt-in store managers, was
brought under the Fair Labor Standards Act "FLSA" and filed on
October 31, 2002. Under the FLSA, employers are required to pay
time-and-a half compensation to employees who work more than 40
hours in a week, unless those employees satisfy one of the FLSA
exemptions.
Through the course of litigation, plaintiffs' counsel discovered
that hundreds of RadioShack managers automatically failed to
meet any FLSA exemptions because they did not supervise two or
more full time employees or their equivalent on a regular basis.
Accordingly, plaintiffs filed a motion for summary judgment
requesting immediate relief for these managers.
In response, RadioShack argued that there was no bright line
standard for determining whether an employee customarily and
regularly supervised two or more full time employees and that an
employee who supervises two or more full time employees at least
60% or more of the time does so regularly and customarily.
In a detailed 21 page ruling, the Court rejected all of
RadioShack's legal arguments and defenses and held that: 1) the
bright line test for two or more full time employees or their
equivalent is 80 hours actually worked per week; and, 2)
managers must supervise two or more full time employees at least
80% of the time. Specifically, the court stated that it was "...
unwilling to adopt (RadioShack's) implicit suggestion that an
employer can manipulate its employees' entitlement to FLSA
protection ...." The Court stated that it was "...not persuaded
by (RadioShack's) reasoning, for which no case law or regulatory
language is cited."
The Court's opinion also noted that RadioShack offered no
authority or legal support for its arguments that its
circumstances constituted "unusual circumstances" that would
excuse an employees meeting the FLSA's class action
requirements. The Court ruled that RadioShack's argument "... is
at odds with" that FLSA's class action provisions and found that
RadioShack's reading "...would render this class action process
untenable."
Finally, in rejecting RadioShack's arguments that if an employee
falls under a job category generally classified as exempt from
overtime, then the employee's individual circumstances must be
ignored, the Court stated "(a)t a minimum, such a result would
be troublesome where, as in this case, a substantial number of
employees within the job categories do not meet the (overtime)
exemption requirements. In this case, it appears that a number
of (RadioShack) store managers have been misclassified even
under the test RadioShack proposes."
It is also important to note that RadioShack may face additional
exposure at trial based on whether or not their misconduct was
willful. If there is a finding of willfulness against
RadioShack, the statute of limitations extends from two years to
three years and RadioShack will be liable not only for unpaid
overtime, but also an equal amount in liquidated damages -
essentially doubling plaintiffs' recovery.
The sum result is that the court's "80/80" ruling effectively
carves out hundreds of managers who are entitled to immediate
relief. Per the court's order both sides are required to
identify those managers who fail to meet the 80/80 test and
calculate damages for those individuals within the next 45 days.
Although specific damages have not yet been determined,
plaintiffs' counsel anticipates that total damages for these
individuals will exceed $10 million.
Despite being a publicly traded company, our research indicates
that, to date, RadioShack has not made any public announcement
of the ruling or provided investors with any indication of the
possible financial consequences to the expected financial
performance of the corporation resulting from RadioShack's
failure to pay the statutorily-required overtime to its
employees.
This ruling does not affect thousands of RadioShack managers who
did not join the Perez lawsuit. However, those individuals may
still join the Lloredo et al v. RadioShack case filed in Miami,
Florida on behalf of all managers who did not join the Perez
case. Currently, there are over 600 managers in the Lloredo
case. Plaintiffs' counsel in the Lloredo case plan to file a
similar motion for summary judgment in the upcoming months.
Plaintiffs' counsel in both the Chicago action and Miami action
will continue to aggressively pursue their cases on behalf of
all class members who are not affected by the Court's decision.
Trial in the Chicago action is currently scheduled to begin
February 6, 2006.
For more details, contact Daniel K. Touhy, Ryan F. Stephan or
James B. Zouras of Touhy & Touhy, Phone: 312-372-2209.
ROBERTSHAW CONTROL: Recalls 178T Control Valves For Fire Hazard
---------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Robertshaw Controls Co., of Long Beach, California is
voluntarily recalling about 178,000 units of Robertshaw R110
Series Gas Control Valves.
According to the company, screws on some water heater valves
could break. If this happens, gas could leak from the valve,
which poses a risk of gas explosion and fire.
The R110 Gas Control Valves being recalled are installed on
natural and liquid propane (LP) gas water heaters. The recalled
valves were manufactured between July 25, 2005 and August 14,
2005 with production date codes 5-31 through and including 5-33,
although not all valves with these date codes are affected. The
recalled valves were installed on the following water heater
brands: American Proline, Bradford White, GE, GSW, Hotpoint,
Jetglas, John Wood, Lochinvar, Premier Plus, Powerflex, Rheem,
Richmond, Ruud, Vanguard, Whirlpool, and U.S. Craftmaster. The
model and serial number can be found on the manufacturer's label
on the water heater. Electric water heaters are not included.
Manufactured in Mexico, the valves were installed on water
heaters by gas appliance distributors and retailers, including
Home Depot and Lowe's, as well as plumbers and plumbing/heating
equipment suppliers. The gas valves also were sold separately
through gas appliance service providers. Water heaters sold or
serviced prior to July 25, 2005 are not affected.
Consumers that believe they may have an affected water heater,
please click on http://www.robertshaw.com.Have the model and
serial numbers of your water heater ready. For further
assistance, please contact Robertshaw. The model and serial
numbers can be found on the manufacturer's label on the water
heater. Robertshaw will arrange for a free repair or
replacement, if necessary. If you smell gas near the appliance
or in the building, immediately leave the area and call your gas
company or a certified gas technician to investigate the cause.
Consumer Contact: Call Robertshaw at (888) 225-1071 between 8
a.m. and 8 p.m. ET, Monday through Saturday, or visit the firm's
Web site at http://www.robertshaw.comto review a list of the
appliances with recalled valves and to register for the recall.
SEPRACOR INC.: Discovery Proceeds in MA Securities Fraud Lawsuit
----------------------------------------------------------------
Discovery is proceeding in the consolidated securities class
actions filed against Sepracor, Inc. and certain of its current
and former officers and a current director in the United States
District Court for the District of Massachusetts.
Several suits were initially filed on behalf of certain persons
who purchased the Company's common stock and/or debt securities
during different time periods, beginning on various dates, the
earliest being May 17, 1999, and all ending on March 6, 2002.
These complaints allege violations of the Securities Exchange
Act of 1934, as amended, and the rules and regulations
promulgated thereunder by the Securities and Exchange
Commission. Primarily they allege that the defendants made
certain materially false and misleading statements relating to
the testing, safety and likelihood of approval of tecastemizole
(formerly SOLTARA) by the United States Food and Drug
Administration, or FDA.
On April 11, 2003, two consolidated amended complaints were
filed, one on behalf of the purchasers of the Company's common
stock and the other on behalf of the purchasers of its debt
securities. These consolidated amended complaints reiterate the
allegations contained in the previously filed complaints and
define the alleged class periods as May 17, 1999 through
March 6, 2002. The Company filed a motion to dismiss both
consolidated amended complaints on May 27, 2003. On March 11,
2004, the court, while granting in part the motion to dismiss,
did allow much of the case to proceed.
The suit is styled "In Re: Sepracor, Inc. Sec. v. , et al, Case
No. 1:02-cv-12338-MEL," filed in the United States District
Court for the District of Massachusetts, under Judge Morris E.
Lasker.
Lawyer for the defendants is Mary Jo Johnson of Wilmer Cutler
Pickering Hale and Dorr LLP, 60 State Street, Boston, MA 02109,
Phone: 617-526-6750, Fax: 617-526-5000 or E-mail:
maryjo.johnson@wilmerhale.com. Lawyers for the plaintiffs are:
(1) Theodore M. Hess-Mahan of Shapiro Haber & Urmy LLP, 53
State Street, Boston, MA 02108, Phone: 617-439-3939,
Fax: 617-439-0134 or E-mail: ted@shulaw.com
(2) Fred Taylor Isquith, Gregory M. Nespole or David L.
Wales of Wolf, Haldenstein, Adler, Freeman & Herz, 270
Madison Avenue, New York, NY 10016, Phone: 212-545-
4600, E-mail: nespole@whafh.com or wales@whafh.com
(3) David Pastor of Gilman and Pastor, LLP, Stonehill
Corporate Center, 999 Broadway, Suite 500, Saugus, MA
01906, Phone: 781-231-7850, Fax: 781-231-7840 e-mail:
dpastor@gilmanpastor.com
SILICON STORAGE: Plaintiffs File Consolidated CA Securities Suit
----------------------------------------------------------------
Plaintiff filed a consolidated amended securities class action
against Silicon Storage Technology, Inc. and certain of its
officers and directors in the United States District Court for
the Northern District of California, under the caption "In re
Silicon Storage Technology, Inc., Securities Litigation, Case
No. C 05 00295 PJH."
In January and February 2005, multiple putative shareholder
class action complaints were filed, following the Company's
announcement of anticipated financial results for the fourth
quarter of 2004. The suits were later consolidated.
On May 3, 2005, the Honorable Phyllis J. Hamilton appointed the
"Louisiana Funds Group," consisting of the Louisiana School
Employees' Retirement System and the Louisiana District
Attorneys' Retirement System, to serve as lead plaintiff and the
law firms of Pomeranz Haudek Block Grossman & Gross LLP and
Berman DeValerio Pease Tabacco Burt & Pucillo to serve as lead
counsel and liason counsel, respectively, for the class. The
lead plaintiff filed a Consolidated Amended Class Action
Complaint on July 15, 2005.
The complaint seeks unspecified damages on alleged violations of
federal securities laws during the period from April 21, 2004 to
December 20, 2004. Responses to the Consolidated Amended Class
Action Complaint are presently scheduled to be due on September
16, 2005.
The suit is styled "In re Silicon Storage Technology, Inc.
Securities Litigation, case no. 3:05-cv-00295-PJH," filed in the
United States District Court for the Northern District of
California, under Judge Phyllis J. Hamilton. Representing the
plaintiffs is Christopher T. Heffelfinger of Berman DeValerio
Pease & Tabacco, P.C., 425 California Street, Suite 2025, San
Francisco, CA 94104, Phone: 415/433-3200, Fax: 415-433-6382, E-
mail: cheffelfinger@bermanesq.com. Representing the Company are
Jonathan B. Gaskin and Robert P. Varian of Orrick Herrington &
Sutcliffe LLP, 405 Howard Street, San Francisco, CA 94105,
Phone: 415-773-5700, Fax: 415-773-5759, E-mail:
jgaskin@orrick.com or rvarian@orrick.com.
SIZELER PROPERTY: Asks MD Court To Dismiss Investor Fraud Suit
--------------------------------------------------------------
Sizeler Property Investors, Inc. and its directors asked the
United States District Court for the District of Maryland, to
dismiss the class action filed against them, styled "Jolly Roger
Fund LP and Jolly Roger Offshore Fund, Ltd. v. Sizeler Property
Investors, Inc., J. Terrell Brown, William Byrnes, Harold
Judell, Sidney W. Lassen, Thomas A. Masilla, Jr., James
McFarland, Richard Pearlstone, James R. Peltier and Theodore H.
Strauss, Case No. 1:05-cv-841-RDB."
The plaintiffs allege that the directors' approval of the Stock
Sale constituted a violation of the directors' fiduciary duties
as directors. The plaintiffs seek an order restoring the named
plaintiffs and the purported class to their respective
percentage ownership interests in the Company prior to the Stock
Sale. Plaintiffs also seek damages and interest in an
unspecified amount.
The Company and its directors have filed a motion to dismiss
this case, based upon the Company's position that this action
may be brought only as a derivative action, and thus, if at all,
only by the Company itself.
The suit is styled "Jolly Roger Fund LP et al v. Sizeler
Property Investors, Inc. et al., case no. 1:05-cv-00841-RDB,"
filed in the United States District Court for the District of
Maryland under Judge Richard D. Bennett. Representing the
plaintiffs is H. Russell Smouse of the Law Offices of Peter G.
Angelos, One Charles Center, 100 N Charles St 22nd Fl,
Baltimore, MD 21201, Phone: 14106492000, Fax: 14106492148, E-
mail: djmiller@lawpga.com. Representing the Company is Mark D.
Gately and Mark Spencer Saudek of Hogan and Hartson LLP, 111 S
Calvert St Ste 1600, Baltimore, MD 21202, Phone: 14106592700,
Fax: 14105396981, E-mail: mdgately@hhlaw.com or
mssaudek@hhlaw.com.
THERMADYNE HOLDINGS: Faces Suits For Manganese-Induced Illness
--------------------------------------------------------------
Thermadyne Holdings Corporation is named as a co-defendant in
cases alleging manganese-induced illness involving claims by
approximately 954 plaintiffs.
In each instance, the Company is one of a large number of
defendants. The claimants in cases alleging manganese-induced
illness seek compensatory and punitive damages, in most cases
for unspecified sums. The claimants allege that exposure to
manganese contained in welding consumables caused the plaintiffs
to develop adverse neurological conditions, including a
condition known as manganism. Many of the cases are single
plaintiff cases but some multi-claimant cases have been filed,
including alleged class actions in various states.
At June 30, 2005, cases involving 188 claimants were filed in or
transferred to federal court where the Judicial Panel on
MultiDistrict Litigation has consolidated these cases for
pretrial proceedings in the Northern District of Ohio (the "MDL
Court").
The Company has been a co-defendant in other similar cases that
have been resolved as follows: 26 of those claims were
dismissed. Plaintiffs have filed class actions seeking medical
monitoring in five state courts, three of which have been
removed to the MDL Court. In less than ten of the cases have
plaintiffs produced medical information showing claimed
injuries. In addition in only about 11% of these cases has the
plaintiff identified the Company as a manufacturer of the
products the plaintiff used.
VEGAS GRAND: Law Firms Provide Updates on Litigation's Status
-------------------------------------------------------------
On August 13, 2005 and August 27, 2005 Vegas Grand Purchaser
meetings were held in Los Angeles, California and Las Vegas,
Nevada. The meetings were productive and provided Purchasers an
update regarding the status of the litigation, the status of
construction, and status of ongoing mediation.
Currently, several motions are pending before the federal court.
There is a motion to consolidate several federal court actions
against Vegas Grand. Vegas Grand's motion for judgment on the
pleadings and a motion to dismiss certain is still pending.
Each of the motions has been vigorously opposed.
On September 6, 2005, Judge Roger L. Hunt of the federal court
ruled on an identical motion for judgment brought by Vegas Grand
in an individual case. The court denied Vegas Grand's motion
holding that the reservation agreements are enforceable
contracts and that the plaintiff in that case may pursue claims
for breach of contract and specific performance.
Discovery is ongoing. Class counsel in the Blinkensop putative
class action are exchanging documents and propounding written
discovery. On August 29, 2005 the Purchasers attorneys took the
deposition of Christopher DelGuidice, the designated person most
knowledgeable of defendant Vegas Grand, Ltd.
In addition to the litigation, Class counsel and the class
representatives in the Blinkensop putative class action are
participating in an ongoing mediation with a retired judge.
Mediation is a voluntary settlement process utilizing a neutral
third party as a mediator. The mediation discussions are
ongoing and are expected to reconvene during the last two weeks
of September.
Individuals who entered into Reservation Agreements with Vegas
Grand are advised NOT to cash checks from Vegas Grand or Nevada
Title without first seeking legal advice.
For details, contact Craig Anderson of Marquis & Aurbach, 10001
Park Run Drive, Las Vegas, NV 89145, Phone: (702) 382-0711, Fax:
(702) 382-5816; George O. West III of Law Offices of George O.
West III, 6787 West Tropicana Ave., Suite 263, Las Vegas, NV
89103, Phone: (702) 248-1076, Fax: (702) 288-6710; Richard E.
Donahoo of DONAHOO & ASSOCIATES, 505 N. Tustin Ave. Suite 160,
Santa Ana, CA 92705, Phone: (714) 953-1010, Fax: (714) 953-1777;
and Thomas G. Foley, FOLEY & BEZEK, LLP, 15 W. Carrillo St.,
Santa Barbara, CA, Phone: (805) 962-9495, Fax: (805) 962-0722.
WASHINGTON: Suit over NCAA Scholarship Limit Policy to be Tried
---------------------------------------------------------------
The national class action lawsuit filed against the NCAA on
behalf of a former NCAA Division I-A football player in May,
2004 will go to trial, according to a recent court ruling.
The complaint alleges that the NCAA's practice of limiting
athletic scholarships exploit walk-on players who make up nearly
a third of Division I-A college football rosters around the
nation.
The suit argues that, in a cartel-like practice, the NCAA
reduced the number of scholarships a school can offer to 85 as a
way to reduce expenses and maximize the profitability at the
detriment of the student athletes and in violation of antitrust
laws.
The complaint also alleges that the restraint has an impact on
poorer students, who may not be able to attend a Division I-A
school without scholarships available for walk-ons.
In his ruling denying the NCAA's motion to dismiss the case,
Judge Coughenour of the Western Washington District Court
rejected the NCAA claim that they are not subject to antitrust
laws as they are a non-commercial organization with armature
status.
"Judge Coughenour's ruling that the NCAA is subject to the
antitrust laws under Sherman Act is a significant step forward
in this case," said Steve Berman, the lead attorney representing
players denied scholarships.
Judge Coughenour wrote that the Plaintiffs have alleged
sufficient facts that the NCAA has a monopoly power over college
football and should have the opportunity to demonstrate that
this monopoly caused antitrust injury.
"We are very pleased with the ruling to move the case to trial,"
said Mr. Berman. "Walk-on players practice just as long and hard
as players with scholarships and often devote more time to
weight lifting and other activities that help the team and it's
time they receive the same recognition for their dedication and
service."
Division I-A college football generates hundreds of millions of
dollars in revenues for the NCAA and its participating
institutions. According to figures published by the NCAA,
postseason college football alone generated more than $227
million in total revenues in 2003, and distributed $181 million
to affiliated colleges. On average, every Division I-A school
received $10.92 million in NCAA revenue from its football
program, and typically received millions more from stadium
ticket sales, licensed merchandise, and other revenue streams
related to the football team.
"Stadiums don't sweat through two-a-day practices. Coaches with
million dollar salaries don't run hours of wind sprints," said
Mr. Berman. "We intend to prove that the NCAA and its affiliated
colleges exploit hardworking players while encouraging colleges
to spend on superficial adornments."
The average number of players on a roster of a typical Division
I-A football team is 117. The projected cost of adding an
additional 32 scholarships for all roster players in Division I-
A football would cost an estimated $600,000 per school, while
the average Division I-A football team earns nearly $5 million
in excess revenue, the suit states.
Andy Carroll, the named plaintiff in the suit, earned a position
on the University of Washington football roster for the 1996-
2000 seasons, playing wide receiver and a special teams
position, and graduating in 2000. Even though many smaller
schools recruited him, Carroll chose the University of
Washington because of its Division I-A status.
"When I began my football career at UW, I was also led to
believe that if I played hard and played during the regular
season in games, I had a shot at a scholarship," said Mr.
Carroll. "After my junior year when I had been playing in games
I asked about a scholarship and I was told none were available
due to the scholarship restrictions."
The suit seeks an end to the NCAA rule on number of scholarships
awarded in Division I-A football, and damages for football walk-
ons who were harmed by this policy.
For more details, contact Mark Firmani of Firmani + Associates,
Phone: +1-206-443-9357, E-mail: mark@firmani.com.
WELLMAN INC.: Continues To Face Polyester Fiber Antitrust Suits
---------------------------------------------------------------
Wellman, Inc. continues to face several lawsuits in various
courts nationwide, alleging violations of state unfair
competition and antitrust laws relating to its sale of polyester
staple fiber products.
The Company and certain other persons are named as defendants in
40 still pending purported class actions alleging violations of
state antitrust or unfair competition laws and certain state
consumer protection acts that have been filed in various state
courts on behalf of purported classes of indirect purchasers
of polyester staple fiber products. In each lawsuit, the
plaintiffs allege that the defendants engaged in a conspiracy to
fix prices of polyester staple fiber products.
In addition, certain of the actions claim restitution,
injunction against alleged illegal conduct and other equitable
relief. The indirect purchaser cases were filed in Arizona,
California, the District of Columbia, Florida, Kansas,
Massachusetts, Michigan, New Mexico, North Carolina, South
Dakota, Tennessee, West Virginia and Wisconsin. In all of these
cases, the plaintiffs seek damages of unspecified amounts,
attorneys' fees and costs and unspecified relief.
The Company and certain other persons are named as defendants in
actions filed in the Superior Court of Justice for Ontario, the
Supreme Court of British Columbia, and the Superior Court for
Quebec, Canada, by plaintiffs purporting to represent classes of
direct and indirect purchasers of polyester staple fiber. The
Company has entered into an agreement to resolve all of the
Canadian litigation by paying $500,000. The Company denies the
allegations in the Canadian litigation. The settlement has been
approved by the Ontario Court. It has been tentatively approved
by the Quebec Court and final approval is expected from the
Quebec Court in August 2005. It is still subject to Court
approval by the British Columbia Court. The Court approval
hearing in British Columbia is currently scheduled to occur in
September 2005. This settlement may be terminated under certain
circumstances.
WESTCORP: CA Court Preliminarily Approves Fraud Suit Settlement
---------------------------------------------------------------
The Orange County Superior Court in California granted
preliminary approval to the settlement of the consolidated
securities class action filed against Westcorp, styled "In re
WFS Financial Shareholder Litigation, case no. 04CC00559."
Beginning on May 24, 2004 and continuing thereafter, a total of
four separate purported class action lawsuits relating to the
announcement by the Company and WFS Financial, Inc. (WFS) that
they were commencing an exchange offer for WFS's outstanding
public shares. The suit also names as defendants WFS, thje
Company's individual board members, and individual board members
of WFS. On June 24, 2004, the actions were consolidated.
On July 16, 2004, the court granted a motion by plaintiff Alaska
Hotel & Restaurant Employees Pension Trust Fund, in Case No.
04CC00573, to amend the consolidation order to designate it the
lead plaintiff in the litigation. The lead plaintiff filed a
consolidated amended complaint on August 9, 2004, and then filed
the present "corrected" consolidated amended complaint on
September 15, 2004. All of the shareholder-related actions
allege, among other things, that the defendants breached their
respective fiduciary duties and seek to enjoin or rescind the
transaction and obtain an unspecified sum in damages and costs,
including attorneys' fees and expenses.
The parties have tentatively agreed to a full and final
resolution of the Action and, on January 19, 2005, the parties
entered into a Memorandum of Understanding, also known as the
MOU, concerning the terms of the tentative settlement. The
parties are in the process of preparing a formal settlement
agreement based on the terms of the MOU and will present it to
the Court for approval.
Pursuant to the terms of the MOU, the parties have agreed, among
other things, that additional disclosures will be made in our
Registration Statement on Form S-4 (as filed with the SEC on
July 16, 2004), the claims asserted in the Action will be fully
released, and the Action will be dismissed with prejudice.
Further, pursuant to the MOU, WFS has agreed to pay plaintiffs'
attorneys' fees and expenses in the amount of $675,000, or in
such lesser amount as the Court may order. The effectiveness of
the settlement agreement is contingent on the transaction
actually occurring. The parties prepared a formal settlement
agreement based on the terms of the MOU and obtained preliminary
approval for the settlement from the Court on June 17, 2005. The
parties have further agreed, with the Court's consent, that the
parties will not proceed with providing notice of the proposed
settlement to shareholders nor schedule a final hearing on
approval of the settlement unless and until the necessary
regulatory approvals for the transaction have been obtained.
WILLIAMS CONTROLS: Faces Product Liability Lawsuit in OK Court
--------------------------------------------------------------
Williams Controls, Inc. was named in a product liability case
filed in the District Court for Bryan, Oklahoma, styled "Cuesta
v. Ford, et al."
The complaint seeks an unspecified amount of damages on behalf
of the class. The Company believes the claims to be without
merit and intends to vigorously defend against this action.
There can be no assurance, however, that the outcome of the
lawsuit will be favorable to the Company or will not have a
material adverse effect on the Company's business, consolidated
financial condition and results of operations, the Company
stated in a disclosure to the Securities and Exchange
Commission.
The suit is styled "Braulio Cuesta M.D. v. Ford Motor Company,
CJ-04-00511," filed in the District Court for Bryan, Oklahoma.
Representing the plaintiff are The Burrage Law Firm, John E.
Dowdell, Bruns & Gibbs, and Greene Law Firm.
XTO ENERGY: KS Court Mulls Certification of Gas Antitrust Suit
--------------------------------------------------------------
The District Court of Stevens County, Kansas held evidentiary
hearing on the certification of the class action filed against
XTO Energy, Inc., one of its subsidiaries and over 200 natural
gas transmission companies, producers, gatherers and processors
of natural gas.
The suit, styled "Price, et al. v. Gas Pipelines, et al.
(formerly "Quinque" case)," was filed in June 2001, on behalf of
a class of plaintiffs consisting of all similarly situated gas
working interest owners, overriding royalty owners and royalty
owners either from whom the defendants had purchased natural gas
or who received economic benefit from the sale of such gas since
January 1, 1974.
The complaint alleges that the defendants have mismeasured both
the volume and heating content of natural gas delivered into
their pipelines, resulting in underpayments to the plaintiffs.
The plaintiffs assert a breach of contract claim, negligent or
intentional misrepresentation, civil conspiracy, common carrier
liability, conversion, violation of a variety of Kansas statutes
and other common law causes of action. The amount of damages
was not specified in the complaint.
In February 2002, the Company, along with one of its
subsidiaries, were dismissed from the suit and another
subsidiary of the Company was added. A hearing was held in
January 2003, and the court held that a class should not be
certified. The plaintiffs' counsel has filed an amended class
action petition, which reduces the proposed class to only
royalty owners, reduces the claims to mismeasurement of volume
only, conspiracy, unjust enrichment and accounting, and only
applies to gas measured in Kansas, Colorado and Wyoming. The
court held an evidentiary hearing in April 2005 to determine
whether the amended class should be certified, and the Company
is awaiting the decision of the court.
XTO ENERGY: KS Court Considers Certification For Antitrust Suit
---------------------------------------------------------------
The District Court of Stevens County, Kansas held an evidentiary
hearing on certification of a new class action filed against one
of XTO Energy, Inc.'s subsidiaries, styled "Price, et al. v. Gas
Pipelines, et al."
The action was filed in the District Court of Stevens County,
Kansas, against natural gas pipeline owners and operators. The
plaintiffs seek to represent a class of plaintiffs consisting of
all similarly situated gas royalty owners either from whom the
defendants had purchased natural gas or measured natural gas
since January 1, 1974 to the present. The new petition alleges
the same improper analysis of gas heating content that had
previously been alleged in the "Price" case discussed above
until it was removed from the case by the filing of the amended
class action petition. In all other respects, the new petition
appears to be identical to the amended class action petition in
that it has a proposed class of only royalty owners, alleges
conspiracy, unjust enrichment and accounting, and only applies
to gas measured in Kansas, Colorado and Wyoming.
The court held an evidentiary hearing in April 2005 to determine
whether the amended class should be certified, and the Company
is awaiting the decision of the court.
XTO ENERGY: Reaches Settlement for CO Royalty Payments Lawsuit
--------------------------------------------------------------
XTO Energy, Inc. reached a $5.1 million settlement for the class
action filed against it in the District Court of La Plata
County, Colorado, styled "Burkett, et al. v. J.M. Huber Corp.
and XTO Energy Inc." The suit also names as defendant J.M.
Huber Corporation.
The plaintiffs allege that the defendants have deducted in their
calculation of royalty payments expenses of compression,
gathering, treatment, dehydration, or other costs to place the
natural gas produced in a marketable condition at a marketable
location. The plaintiffs seek to represent a class consisting of
all lessors and their successors in interest who own or have
owned mineral interests located in La Plata County, Colorado and
that are leased to or operated by Huber or the Company, except
to the extent that the lessors or their successors have
expressly authorized deduction of post-production expenses from
royalties.
The Company acquired the interests of Huber in producing
properties in La Plata County effective October 1, 2002, and has
assumed the responsibility for certain liabilities of Huber
prior to the effective date, which may include liability for
post-production deductions made by Huber. On February 17, 2005,
we agreed to a settlement of $5.1 million, resulting in an
additional loss of approximately $2 million that has been
recorded in our consolidated income statement for the six months
ended June 30, 2005.
ZIX CORPORATION: Plaintiffs To File Consolidated Suit in N.D. TX
----------------------------------------------------------------
Plaintiffs intend to file a consolidated securities class action
against Zix Corporation and certain of its officers and
directors in the United States District Court for the Northern
District of Texas.
Beginning in early September 2004, several purported shareholder
class action lawsuits and one purported shareholder derivative
lawsuit were filed on behalf of purchasers of the Company's
common stock between October 30, 2003 and May 4, 2004. The
purported shareholder class action lawsuits allege that the
defendants made materially false and misleading statements
and/or omissions in violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 during this time period.
The various plaintiff groups have filed motions seeking
appointment of lead plaintiff and lead counsel in these class
action lawsuits. No timeframe has yet been established by the
court for appointing the lead plaintiff and lead counsel. The
lead counsel, once determined by the court, will file a
consolidated complaint.
The first identified complaint in the litigation is styled
"Brody, et al. v. Zix Corporation, et al.," filed in the United
States District Court for the Northern District of Texas. The
plaintiff firms in this litigation are:
(1) Brian Felgoise, 230 South Broad Street, Suite 404,
Philadelphia, PA, 19102 Phone: 215.735.6810, Fax:
215/735.5185,
(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) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102 Phone: 405-235-1560, E-mail:
wfederman@aol.com
(4) Lerach Coughlin Stoia Geller Rudman & Robbins (San
Diego) 401 B Street, Suite 1700, San Diego, CA, 92101
Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
info@lerachlaw.com
(5) 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
(6) Provost & Umphrey Law Firm, LLP, 3232 McKinney Avenue,
Suite 700, Dallas, TX, 75204 Phone: 214.744.3000, Fax:
214.744.3015, E-mail: info@provostumphrey.com
(7) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106 Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(8) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004 Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(9) Shepherd, Finkelman, Miller & Shah, LLC Phone:
877.891.9880, E-mail: jshah@classactioncounsel.com
(10) Wolf Popper, LLP 845 Third Avenue, New York, NY, 10022-
6689 Ave Phone: 877.370.7703, Fax: 212.486.2093, E-
mail: IRRep@wolfpopper.com
New Securities Fraud Cases
DHB INDUSTRIES: Kaplan Fox Lodges Securities Fraud Suit in NY
-------------------------------------------------------------
The law firm of Kaplan Fox & Kilsheimer, LLP, initiated a class
action suit in the United States District Court for the Eastern
District of New York against DHB Industries Inc. ("DHB" or the
"Company") (AMEX: DHB) and certain of its officers and
directors, on behalf of all persons or entities who purchased
DHB common stock between April 21, 2004 and August 29, 2005 (the
"Class Period").
The complaint alleges that during the Class Period, defendants
violated Sections 10(b) and 20(a) of the Securities and Exchange
Act of 1934 by publicly issuing a series of false and misleading
statements. More specifically, the complaint alleges that,
throughout the Class Period, defendants issued numerous positive
statements about the Company's performance and future prospects
that, in fact, were false and misleading. As alleged in the
Complaint, these statements were materially false and misleading
for the following reasons:
(1) the Company's body armor products containing Zylon were
potentially dangerous because they could fail to stop
bullets due to Zylon-fiber degradation;
(2) The Company's financial statements did not reflect the
true condition of the Company as they failed to reflect
the potential liability the Company would face as a
result of the failure of its body armor products
containing Zylon and failed to take appropriate
reserves for impairment of the value of its inventory;
(3) The Company was subject to potentially ruinous
liability from regulatory, criminal or civil actions
because its body armor products containing Zylon could
fail to stop bullets due to Zylon-fiber degradation;
(4) The Company's business was dependent, in material part,
on the sale of products whose safety was in serious
doubt, which, once such potential problems became
widely known, would cause a dramatic, if not total,
decline in demand; and
(5) The Company was at risk that the National Institute of
Justice would revoke its certification of DHB's Zylon
containing armor, which was required by many of DHB's
customers, and that the revocation would have a
materially negative impact on its business.
It is also alleged that during the Class Period that certain
Company insiders sold millions of their DHB shares, reaping
proceeds of more than $213 million.
On August 30, 2005, before the open of trading, DHB issued a
press release announcing that it had stopped using Zylon in its
body armor after the National Institute of Justice revoked its
certification of Zylon-containing body armor. In addition, the
Company announced that it would replace all Zylon vests in the
field at no cost to the user, and that this replacement program
would result in an estimated $60 million charge in the third
quarter of 2005. On August 30, 2005, the price of DHB common
stock declined $1.56 per share, or 23%, to close at $5.10 per
share, on unusually heavy trading volume.
For more details, contact Frederic S. Fox, Joel B. Strauss or
Jeffrey P. Campisi of KAPLAN FOX & KILSHEIMER, LLP, 805 Third
Ave., 22nd Floor, New York, NY 10022, Phone: (800) 290-1952 or
(212) 687-1980, Fax: (212) 687-7714 and Laurence D. King of
KAPLAN FOX & KILSHEIMER, LLP, 555 Montgomery St., Suite 1501,
San Francisco, CA 94111, Phone: (415) 772-4700, Fax:
(415) 772-4707, E-mail: mail@kaplanfox.com, Web site:
http://www.kaplanfox.com.
HUTCHINSON TECHNOLOGY: Schiffrin & Barroway Lodges Suit in MN
-------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP, initiated a class
action lawsuit in the United States District Court for the
District of Minnesota on behalf of all securities purchasers of
Hutchinson Technology, Inc. (Nasdaq: HTCH) ("Hutchinson" or the
"Company") between October 4, 2004 and August 29, 2005,
inclusive (the "Class Period").
The complaint charges Hutchinson, Wayne M. Fortun, John A.
Ingleman, and Jeffrey W. Green 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 contrary to the Company's assertions that demand
for it products was strong, the Company was actually
experiencing weak demand for its products;
(2) that the Company lost market share to competitors;
(3) that the Company was experiencing a shift in mix toward
advanced products that were produced at lower yields,
which negatively impacted its business;
(4) that the Company lacked adequate internal controls; and
(5) that as a result of the foregoing, defendants'
statements about the Company's progress lacked in any
reasonable basis.
On August 30, 2005, Hutchinson revised and lowered its fourth
quarter outlook. On this news, shares of Hutchinson fell $5.35
per share, or 16.98 percent, on August 30, 2005, to close at
$26.16 per share.
For more details, contact Darren J. Check, Esq. or Richard A.
Maniskas, Esq. of Schiffrin & Barroway, LLP, 280 King of Prussia
Road, Radnor, PA 19087, Phone: 1-888-299-7706 or 1-610-667-7706,
E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
MAJESCO ENTERTAINMENT: Barrack Rodos Files Securities Suit in NJ
----------------------------------------------------------------
The law firm of Barrack, Rodos & Bacine on behalf of the Denver
Employees Retirement Plan and all persons, other than
defendants, who purchased shares of Majesco Entertainment
Company ("Majesco" or the "Company") common stock issued
pursuant to the prospectus and registration statement
("Registration Statement") filed with the Securities and
Exchange Commission in connection with the Company's January 26,
2005 public offering of six million shares of common stock at a
price of $12.50 per share (the "Offering"), commenced a class
action in the United States District Court for the District of
New Jersey.
The complaint charges the Company, its directors, and certain
underwriter banks with violations of Sections 11, 12, and 15 of
the Securities Act of 1933, 15 U.S.C. Sections 77k, 77l, and
77o. The complaint alleges that defendants made materially false
and misleading statements in the Registration Statement about
the Company's financial results, operations and sales, including
its expected results for fiscal year 2005. Specifically, the
complaint alleges that the defendants falsely reported Majesco's
financial results for 2004 by inflating its capitalized software
costs, under-accruing for bad debt expense, and overstating
operating income thereby. Defendants also reported, without a
basis, that for 2005 Majesco would bring in $175-$185 million in
revenue and operating income of $16-$18 million. The
Registration Statement failed to disclose that Majesco reported
on its balance sheet capitalized costs associated with product
development at an inflated value. The Registration Statement
further failed to disclose that the Company failed to accrue
reserves for risky accounts receivables that were not likely to
be paid and that the Company could not factor with its normal
accounts receivable servicing vendor. The Registration Statement
further failed to adequately disclose that the Company would
need to substantially increase price protection and other
allowances offered to customers, and, therefore, the related
accruals, to create customer demand in 2005. The Registration
Statement also failed to disclose that Majesco had engaged in
huge channel stuffing initiatives to achieve 2004 goals and
that, as a result, defendants possessed information that the
Company would be facing weak sales across all product lines
throughout 2005. The complaint also sets forth additional
material misrepresentations in the Registration Statement,
including misstatements and omissions that were necessary to
make the statements that were contained in the Registration
Statement not misleading. The complaint seeks to recover damages
on behalf of all persons who purchased Majesco securities
pursuant to the Registration Statement for the Offering.
On July 12, 2005, Majesco drastically lowered its guidance for
its fiscal year 2005, cutting its expected results from $175 to
$185 million of net revenues and $16 to $18 million of operating
income downward to between $120 million and $125 million in net
revenues and an operating loss of $16 million to $19 million.
Additionally, the Company announced that its Chief Executive
Officer, Carl Yankowski, had resigned his position. This news
shocked the market. Shares of Majesco fell $3.33 per share, or
48.33 percent, on unusually high volume, on July 13, 2005, to
close at $3.56 per share. The stock has since dropped further
due to subsequent announcements.
For more details, contact Leslie Bornstein Molder, Esq. of
Barrack, Rodos & Bacine, 3300 Two Commerce Square, 2001 Market
Street, Philadelphia, PA 19103, Phone: +1-215-963-0600, Fax:
+1-215-963-0838, E-mail: lmolder@barrack.com, Web site:
http://www.barrack.com.
MERCURY INTERACTIVE: Wechsler Harwood Lodges CA Securities Suit
---------------------------------------------------------------
The law firm of Wechsler Harwood LLP filed a Federal Securities
fraud class action suit on behalf of all purchasers of the
common stock of Mercury Interactive Corporation ("Mercury
Interactive" or the "Company") (Nasdaq:MERQE) acquiring the
stock between October 22, 2003 and August 30, 2005, both dates
inclusive (the "Class Period").
The action, entitled, Singhal v. Mercury Interactive Corp., et
al., Case No. (not yet assigned), is pending in the United
States District Court for the Northern District of California,
and names as defendants, the Company, its Chief Executive
Officer and Chairman of the Board, Amnon Landan, its Executive
Vice President and Chief Financial Officer, Douglas P. Smith,
its Chief Operating Officer and a director, Anthony Zingale, its
Vice President, General Counsel and Secretary, Susan J. Skaer,
its Senior Vice President of Corporate Development, David James
Murphy III, its Senior Vice President of Products, Yuval
Scarlat, and its Vice President of Finance Bryan LeBlanc. A copy
of the complaint can be obtained from the Court or can be viewed
on Wechsler Harwood web site at: www.whesq.com.
The Complaint charges defendants with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. More specifically, the complaint
alleges that the Company failed to disclose and misrepresented
material adverse facts, which were known to defendants or
recklessly disregarded by them. In particular, the Complaint
alleges that during the Class Period, defendants' internal
controls and corporate compliance mechanisms were flawed and
deficient, causing their stock to trade at artificially inflated
levels. It further alleges that defendants concealed
extraordinary auditing expenses in connection with the "highly
likely" need to restate earnings for multiple quarters and
years.
By concealing the Company's deficient and defective internal
controls and corporate compliance mechanisms, as it is alleged,
defendants were able to ensure the successful resale of notes
received from selling holders in connection with the Company's
$500 million convertible notes offering pursuant to the
Company's registration statement/prospectus. The defendants also
were able to sell $6.3 million in Company stock at inflated
prices.
On July 5, 2005, defendants revealed the Company's previously
undisclosed accounting irregularities and its ongoing internal
investigation and auditing process, which already had incurred
as much as $1 million in undisclosed expenses. Finally, on
August 29, 2005, the Company announced it would restate its
earnings results for 2002, 2003, 2004 and the first quarter of
2005 causing the stock to bottom out from a class period high of
nearly $46.00 to a low of $36.74 on heavy trading volume.
For more details, contact Jeffrey M. Norton, Esq. of Wechsler
Harwood, LLP, Phone: (877) 935-7400, E-mail: jmn@whesq.com, Web
site: http://www.whesq.com.
UBS-AG: Stull Stull Lodges Securities Suit Over MFS Mutual Funds
----------------------------------------------------------------
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 against UBS-AG and its affiliated entities
("UBS"), on behalf of those who purchased MFS mutual funds from
UBS between May 1, 2000 and April 30, 2005, inclusive (the
"Class Period"), seeking to pursue remedies under the Securities
Act of 1933 (the "Securities Act") and the Securities Exchange
Act of 1934 (the "Exchange Act").
The MFS mutual funds and their respective symbols are as
follows:
MFS Capital Opportunities Fund (NASDAQ: MCOFX), (NASDAQ: MCOBX),
(NASDAQ: MCOCX), (NASDAQ: MFCRX), (NASDAQ: MCOTX), (NASDAQ:
EACOX), (NASDAQ: EBCOX), (NASDAQ: ECCOX), (NASDAQ: MCOIX)
MFS Core Growth Fund (NASDAQ: MFCAX), (NASDAQ: MFCBX), (NASDAQ:
MFCCX), (NASDAQ: MCFRX), (NASDAQ: MCRRX), (NASDAQ: MFCIX)
MFS Emerging Growth Fund (NASDAQ: MEGRX), (NASDAQ: MEGBX),
(NASDAQ: MFECX), (NASDAQ: MFERX), (NASDAQ: MEGRX), (NASDAQ:
EAGRX), (NASDAQ: EBEGX), (NASDAQ: ECEGX), (NASDAQ: MFEGX),
(NASDAQ: MFEIX)
MFS Growth Opportunities Fund (NASDAQ: MGOFX), (NASDAQ: MGOBX)
MFS Large Cap Growth Fund (NASDAQ: MCGAX), (NASDAQ: MCGBX)
MFS Managed Sectors Fund (NASDAQ: MMNSX), (NASDAQ: MSEBX),
(NASDAQ: MMNCX)
MFS Mid Cap Growth Fund (NASDAQ: OTCAX), (NASDAQ: OTCBX),
(NASDAQ: OTCCX), (NASDAQ: MMCRX), (NASDAQ: MCPRX), (NASDAQ:
EAMCX), (NASDAQ: EBCGX), (NASDAQ: ECGRX), (NASDAQ: OTCIX)
MFS New Discovery Fund (NASDAQ: MNDAX), (NASDAQ: MNDBX),
(NASDAQ: MNDCX), (NASDAQ: MFNRX), (NASDAQ: MNDRX), (NASDAQ:
EANDX), (NASDAQ: EBNDX), (NASDAQ: ECNDX), (NASDAQ: MNDIX)
MFS New Endeavor Fund (NASDAQ: MECAX), (NASDAQ: MECBX), (NASDAQ:
MECCX), (NASDAQ: MNERX), (NASDAQ: MENRX), (NASDAQ: MECIX)
MFS Research Fund (NASDAQ: MFRFX), (NASDAQ: MFRBX), (NASDAQ:
MFRCX), (NASDAQ: MFRRX), (NASDAQ: MSRRX), (NASDAQ: EARFX),
(NASDAQ: EBRFX), (NASDAQ: ECRFX)
MFS Strategic Growth Fund (NASDAQ: MFSGX), (NASDAQ: MSBGX),
(NASDAQ: MFGCX), (NASDAQ: MSGRX), (NASDAQ: MSTRX), (NASDAQ:
EASGX), (NASDAQ: EBSGX), (NASDAQ: ECSGX), (NASDAQ: MSGIX)
MFS Technology Fund (NASDAQ: MTCAX), (NASDAQ: MTCBX), (NASDAQ:
MTCCX), (NASDAQ: MTQRX), (NASDAQ: MTERX), (NASDAQ: MTCIX)
Massachusetts Investors Growth Stock (NASDAQ: MIGFX), (NASDAQ:
MIGBX), (NASDAQ: MIGDX), (NASDAQ: MIGRX), (NASDAQ: MIRGX),
(NASDAQ: EISTX), (NASDAQ: EMIVX), (NASDAQ: EMICX), (NASDAQ:
MGTIX)
MFS Mid Cap Value Fund (NASDAQ: MVCAX), (NASDAQ: MCBVX),
(NASDAQ: MVCCX), (NASDAQ: MMVRX), (NASDAQ: MCVRX), (NASDAQ:
EACVX), (NASDAQ: EBCVX), (NASDAQ: ECCVX), (NASDAQ: MCVIX)
MFS Research Growth and Income Fund (NASDAQ: MRGAX), (NASDAQ:
MRGBX), (NASDAQ: MRGCX), (NASDAQ: MGIRX), (NASDAQ: MRERX),
(NASDAQ: MRGRX)
MFS Strategic Value Fund (NASDAQ: MSVTX), (NASDAQ: MSVCX),
(NASDAQ: MQSVX), (NASDAQ: MSVRX), (NASDAQ: MVSRX), (NASDAQ:
EASVX), (NASDAQ: EBSVX), (NASDAQ: ECSVX), (NASDAQ: MSVLX),
(NASDAQ: MISVX)
MFS Total Return Fund (NASDAQ: MSFRX), (NASDAQ: MTRBX), (NASDAQ:
MTRCX), (NASDAQ: MFTRX), (NASDAQ: MTRRX), (NASDAQ: EATRX),
(NASDAQ: EBTRX), (NASDAQ: ECTRX), (NASDAQ: MTRIX)
MFS Union Standard Equity Fund (NASDAQ: MUEAX), (NASDAQ: MUSBX),
(NASDAQ: MUECX), (NASDAQ: MUSEX)
MFS Utilities Fund (NASDAQ: MMUFX), (NASDAQ: MMUBX), (NASDAQ:
MMUCX), (NASDAQ: MMURX), (NASDAQ: MURRX), (NASDAQ: MMUIX)
MFS Value Fund (NASDAQ: MEIAX), (NASDAQ: MFEBX), (NASDAQ:
MEICX), (NASDAQ: MFVRX), (NASDAQ: MVRRX), (NASDAQ: EAVLX),
(NASDAQ: EBVLX), (NASDAQ: ECVLX), (NASDAQ: MEIIX)
Massachusetts Investors Trust (NASDAQ: MITTX), (NASDAQ: MITBX),
(NASDAQ: MITCX), (NASDAQ: MITRX), (NASDAQ: MIRTX), (NASDAQ:
EAMTX), (NASDAQ: EBMTX), (NASDAQ: ECITX), (NASDAQ: MITIX)
MFS Aggressive Growth Allocation Fund (NASDAQ: MAAGX), (NASDAQ:
MBAGX), (NASDAQ: MCAGX), (NASDAQ: MAARX), (NASDAQ: MAWAX),
(NASDAQ: EAGTX), (NASDAQ: EBAAX), (NASDAQ: ECAAX), (NASDAQ:
MIAGX)
MFS Conservative Allocation Fund (NASDAQ: MACFX), (NASDAQ:
MACBX), (NASDAQ: MACVX), (NASDAQ: MACRX), (NASDAQ: MCARX),
(NASDAQ: ECLAX), (NASDAQ: EBCAX), (NASDAQ: ECACX), (NASDAQ:
MACIX)
MFS Growth Allocation Fund (NASDAQ: MAGWX), (NASDAQ: MBGWX),
(NASDAQ: MCGWX), (NASDAQ: MGARX), (NASDAQ: MGALX), (NASDAQ:
EAGWX), (NASDAQ: EBGWX), (NASDAQ: ECGWX), (NASDAQ: MGWIX)
MFS Moderate Allocation Fund (NASDAQ: MAMAX), (NASDAQ: MMABX),
(NASDAQ: MMACX), (NASDAQ: MAMRX), (NASDAQ: MARRX), (NASDAQ:
MAMDX), (NASDAQ: EBMDX), (NASDAQ: ECMAX), (NASDAQ: MMAIX)
MFS Bond Fund (NASDAQ: MFBFX), (NASDAQ: MFBBX), (NASDAQ: MFBCX),
(NASDAQ: MFBRX), (NASDAQ: MBRRX), (NASDAQ: EABDX), (NASDAQ:
EBBDX), (NASDAQ: ECBDX), (NASDAQ: MBDIX)
MFS Emerging Markets Debt Fund (NASDAQ: MEDAX), (NASDAQ: MEDBX),
(NASDAQ: MEDCX), (NASDAQ: MEDIX)
MFS Government Limited Maturity Fund (NASDAQ: MGLFX), (NASDAQ:
MGLBX), (NASDAQ: MGLCX)
MFS Government Mortgage Fund (NASDAQ: MGMTX), (NASDAQ: MGTBX),
(NASDAQ: MGMIX)
MFS Government Securities Fund (NASDAQ: MFGSX), (NASDAQ: MFGBX),
(NASDAQ: MFGDX), (NASDAQ: MGSRX), (NASDAQ: MGVSX), (NASDAQ:
EAGSX), (NASDAQ: EBGSX), (NASDAQ: ECGSX)
MFS High Income Fund (NASDAQ: MHITX), (NASDAQ: MHIBX), (NASDAQ:
MHICX), (NASDAQ: EAHIX), (NASDAQ: EMHBX), (NASDAQ: EMHCX),
(NASDAQ: MHIIX), (NASDAQ: MHIRX)
MFS High Yield Opportunities Fund (NASDAQ: MHOAX), (NASDAQ:
MHOBX), (NASDAQ: MHOCX), (NASDAQ: MHOIX)
MFS Intermediate Investment Grade Bond Fund (NASDAQ: MGBFX),
(NASDAQ: MGBVX), (NASDAQ: MGBCX), (NASDAQ: MGBEX), (NASDAQ:
MIBRX)
MFS Limited Maturity Fund (NASDAQ: MQLFX), (NASDAQ: MQLBX),
(NASDAQ: MQLCX), (NASDAQ: EALMX), (NASDAQ: EBLMX), (NASDAQ:
ELDCX), (NASDAQ: MLDRX)
MFS Research Bond Fund (NASDAQ: MRBFX), (NASDAQ: MRBBX),
(NASDAQ: MRBCX), (NASDAQ: EARBX), (NASDAQ: EBRBX), (NASDAQ:
ECRBX), (NASDAQ: MRBIX), (NASDAQ: MRBRX)
MFS Strategic Income Fund (NASDAQ: MFIOX), (NASDAQ: MIOBX),
(NASDAQ: MIOCX), (NASDAQ: MFIIX)
MFS Alabama Municipal Bond Fund (NASDAQ: MFALX), (NASDAQ: MBABX)
MFS Arkansas Municipal Bond Fund (NASDAQ: MFARX), (NASDAQ:
MBARX)
MFS California Municipal Bond Fund (NASDAQ: MCFTX), (NASDAQ:
MBCAX), (NASDAQ: MCCAX)
MFS Florida Municipal Bond Fund (NASDAQ: MFFLX), (NASDAQ: MBFLX)
MFS Georgia Municipal Bond Fund (NASDAQ: MMGAX), (NASDAQ: MBGAX)
MFS Maryland Municipal Bond Fund (NASDAQ: MFSMX), (NASDAQ:
MBMDX)
MFS Massachusetts Municipal Bond Fund (NASDAQ: MFSSX), (NASDAQ:
MBMAX)
MFS Mississippi Municipal Bond Fund (NASDAQ: MISSX), (NASDAQ:
MBMSX)
MFS Municipal Bond Fund (NASDAQ: MMBFX), (NASDAQ: MMBBX)
MFS Municipal Limited Maturity Fund (NASDAQ: MTLFX), (NASDAQ:
MTLBX), (NASDAQ: MTLCX)
MFS New York Municipal Bond Fund (NASDAQ: MSNYX), (NASDAQ:
MBNYX), (NASDAQ: MCNYX)
MFS North Carolina Municipal Bond Fund (NASDAQ: MSNCX), (NASDAQ:
MBNCX), (NASDAQ: MCNCX)
MFS Pennsylvania Municipal Bond Fund (NASDAQ: MFPAX), (NASDAQ:
MBPAX)
MFS South Carolina Municipal Bond Fund (NASDAQ: MFSCX), (NASDAQ:
MBSCX)
MFS Tennessee Municipal Bond Fund (NASDAQ: MSTNX), (NASDAQ:
MBTNX)
MFS Virginia Municipal Bond Fund (NASDAQ: MSVAX), (NASDAQ:
MBVAX), (NASDAQ: MVACX)
MFS West Virginia Municipal Bond Fund (NASDAQ: MFWVX), (NASDAQ:
MBWVX)
MFS Emerging Markets Equity Fund (NASDAQ: MEMAX), (NASDAQ:
MEMCX), (NASDAQ: MEMIX), (NASDAQ: MEMBX)
MFS Global Equity Fund (NASDAQ: MWEFX), (NASDAQ: MWEBX),
(NASDAQ: MWECX), (NASDAQ: MWEIX), (NASDAQ: MGERX)
MFS Global Growth Fund (NASDAQ: MWOFX),
(NASDAQ: MWOBX), (NASDAQ: MWOCX), (NASDAQ: MWOIX), (NASDAQ:
MGLRX)
MFS Global Total Return Fund (NASDAQ: MFWTX), (NASDAQ: MFWBX),
(NASDAQ: MFWCX), (NASDAQ: MFWIX), (NASDAQ: MGRRX)
MFS International Growth Fund (NASDAQ: MGRAX), (NASDAQ: MGRBX),
(NASDAQ: MGRCX), (NASDAQ: MQGIX)
MFS International New Discovery Fund (NASDAQ: MIDAX), (NASDAQ:
MIDBX), (NASDAQ: MIDCX), (NASDAQ: EAIDX), (NASDAQ: EBIDX),
(NASDAQ: ECIDX), (NASDAQ: MWNIX), (NASDAQ: MINRX)
MFS International Value Fund (NASDAQ: MGIAX), (NASDAQ: MGIBX),
(NASDAQ: MGICX), (NASDAQ: MINIX)
MFS Research International Fund (NASDAQ: MRSAX), (NASDAQ:
MRIBX), (NASDAQ: MRICX), (NASDAQ: EARSX), (NASDAQ: EBRIX),
(NASDAQ: ECRIX), (NASDAQ: MRSIX), (NASDAQ: MRIRX)
The action is pending in the United States District Court for
the Southern District of New York against defendant UBS and its
affiliated entities. The following mutual funds participated in
the UBS Revenue Sharing Program (the "UBS Tier I Funds"): AIM,
Alliance, American Funds, Columbia, Davis Funds, Dreyfus, Eaton
Vance, Federated, Fidelity, Franklin Templeton, John Hancock,
Hartford, Lord Abbett, MFS, Oppenheimer, PIMCO, Pioneer, Putnam,
Scudder, UBS Global Asset Management, and Van Kampen.
The complaint alleges that during the Class Period, defendants
served as financial advisors who purportedly provided unbiased
and honest investment advice to their clients. Unbeknownst to
investors, defendants, in clear contravention of their
disclosure obligations and fiduciary responsibilities, failed to
properly disclose that they had engaged in a scheme to
aggressively push UBS sales personnel to steer clients into
purchasing certain UBS Funds and UBS Tier I Funds (collectively,
"Shelf Space Funds") that provided financial incentives and
rewards to UBS and its personnel based on sales. The complaint
alleges that defendants' undisclosed sales practices created an
insurmountable conflict of interest by providing substantial
monetary incentives to sell Shelf-Space Funds to their clients,
even though such investments were not in the clients' best
interest. UBS' failure to disclose the incentives constituted
violations of federal securities laws.
The action also includes a subclass of people who held any
shares of UBS Mutual Funds. The complaint additionally alleges
that the investment advisor subsidiary of UBS, UBS Global Asset
Management created further undisclosed material conflicts of
interest by entering into revenue sharing agreements with UBS
financial Advisors to push investors into UBS proprietary funds,
regardless of whether such investments were in the investors'
best interests. The investment advisors financed these
arrangements by illegally charging excessive and improper fees
to the fund that should have been invested in the underlying
portfolio. In doing so, they breached their fiduciary duties to
investors under the Investment Company Act and state law and
decreased shareholders' investment returns.
The action includes a second subclass of persons who purchased a
UBS Financial Plan that held Tier I mutual funds. The UBS
Financial Plans include, but are not limited to UBS Personalized
Asset Consulting and Evaluation Plan, InsightOne accounts,
and/or a resource management accounts.
For more details, contact Tzivia Brody, Esq. of Stull, Stull &
Brody, Phone: 1-800-337-4983, Fax: 212-490-2022, E-mail:
SSBNY@aol.com, Web site: http://www.ssbny.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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