CAR_Public/070123.mbx             C L A S S   A C T I O N   R E P O R T E R

            Tuesday, January 23, 2007, Vol. 9, No. 16

                            Headlines


APPLE COMPUTER: N.Y. Pension Fund is Stock Suit Lead Plaintiff
CALIFORNIA: DWP Faces Suit Over "Illegal" Telephone Recordings
CARDTRONICS INC: Still Faces ATM Accessibility Lawsuit in Mass.
CYBERSOURCE CORP: No Ruling Yet in PaylinX Share Options Suit
DIAMOND PET: Faces Litigation in S.C. Over Contaminated Dog Food

DIAMOND PET: Faces Suit in Tenn. Over Contaminated Dog Food
E-LOAN INC: Settles Mortgage Loan Consultants' Suit for $13.6M
EL POLLO: Calif. Court Mulls Arbitration Motion in Overtime Suit
EL POLLO: Calif. Managers' Suit Still Stayed Pending Arbitration
FIELDSTONE MORTGAGE: Plaintiffs Appeal Dismissal of "Hill" Case

FIELDSTONE MORTGAGE: Reaches Settlement in Ill. FCRA Litigation
GEOMETRIX INTERNATIONAL: Recalls Magnetic Construction Toys
GMH COMMUNITIES: No Lead Plaintiff Yet in Pa. Securities Suits
INFOSONICS CORP: Lead Plaintiff Named in Calif. Securities Suit
JACUZZI BRANDS: Settles Stockholder Lawsuits Over Appolo Merger

JOHNSON & JOHNSON: Ontario Court Certifies "Prepulsid" Lawsuit
KIDS II: Recalls Bright Starts Teethers Due to Choking Hazard
KRISPY KREME: Final Approval of $75M Settlement Expected in 2007
KRISPY KREME: N.C. Court Approves $4.75M ERISA Suit Settlement
MEDCO HEALTH: Files Motion to Stay Suit by Okla. Pharmacies

MEDCO HEALTH: Continues to Face Antitrust Lawsuit in California
MEDCO HEALTH: Continues to Face ERISA Complaints in N.Y. Court
MEDCO HEALTH: Pa. Court Consolidates Antitrust Litigations
MERCK-MEDCO: $42.5M Settlement of ERISA Lawsuit Under Appeal
MOTOROLA INC: Faces Va. Suit Over Bluetooth-related Hearing Loss

NORTEL NETWORKS: Ontario Court Approves $2.5B Stock Suit Deal
SAFEWAY INC: Calif. High Court to Hear Suit Over Salmon Labeling
STATE LINE: "Holdeman" Litigation Remanded to Ut. District Court
TARGET: Recalls Baby Rattles, Ornaments for Choking Hazard
WESTLAND DEVELOPMENT: Faces Litigation in N.Mex. Over Land Sale


                   New Securities Fraud Cases

CELESTICA INC: Schatz Nobel Files N.Y. Securities Fraud Suit
HORNBECK OFFSHORE: Schatz Nobel Files Securities Suit in La.
HORNBECK OFFSHORE: Paskowitz Announces Securities Suit Filing
HORNBECK OFFSHORE: Goldman Scarlato Files Securities Suit in La.


                            *********


APPLE COMPUTER: N.Y. Pension Fund is Stock Suit Lead Plaintiff
--------------------------------------------------------------
Judge Jeremy Fogel of the U.S. District Court for the Northern
District of California appointed the New York City Employees'
Retirement System as lead plaintiff in a shareholder lawsuit
against Apple Computer, ipodnn reports.

The New York City Retirement System holds roughly one million
shares of Apple stock valued at approximately $87 million based
on current stock values.

The purported class action, "Vogel v. Jobs et al.," was filed on
Aug. 24, 2006 against the company and certain of the company's
current and former officers and directors.  It alleges improper
backdating of stock option grants to maximize certain
defendants' profits, failing to properly account for those
grants and issuing false financial statements (Class Action
Reporter, Jan 4, 2007).

The lawsuit purports to be brought on behalf of all purchasers
of the company's stock from Dec. 1, 2005 through August 11,
2006, and asserts claims under Sections 10(b) and 14(a) of the
U.S. Securities Exchange Act as well as control person claims.

A motion for appointment of lead plaintiff and counsel was
originally scheduled to be heard on Dec. 4, 2006 but was taken
off calendar when the case was re-assigned to the Hon. Jeremy
Fogel.  

The suit is "Vogel et al v. Jobs et al., Case No. 5:06-cv-05208-
JF," filed in the U.S. District Court for the Northern District
of California under Judge Jeremy Fogel, with referral to Judge
Howard R. Lloyd.

Representing plaintiffs are:

     (1) Mary Sikra Thomas of Grant & Eisenhofer, P.A., 1201 N.
         Market St., Suite 2100, Wilmington, DE 19801, Phone:
         302-622-7000, E-mail: mthomas@gelaw.com;

     (2) Patrice L. Bishop of Stull, Stull & Brody, 10940
         Wilshire Boulevard, Suite 2300, Los Angeles, CA 90024,
         Phone: (310) 209-2468, Fax: (310) 209-2087, E-mail:
         service@ssbla.com;

     (3) Howard Theodore Longman of Stull, Stull & Brody, 6 East
         45th Street, New York, NY 10017, Phone: 212-687-7230,
         E-mail: tsvi@aol.com; and

     (4) Gary S. Graifman of Kantrowitz Goldhamer & Graifman PC,
         747 Chestnut Ridge Road, Chestnut Ridge, NY 10977,
         Phone: (845) 356-2570, Fax: (845) 356-4335.

Representing defendants are:

     (1) Yohance Claude Edwards, Luann Loraine Simmons and
         Jerome C. Roth all of Munger, Tolles & Olson LLP, 560
         Mission Street, 27th Floor, San Francisco, CA 94105,
         Phone: 415-512-4035 or 415-984-8700, Fax: 415-644-6935
         or 415-512-4077, E-mail: yohance.edwards@mto.com or
         lsimmons@omm.com or Jerome.Roth@mto.com;

     (2) John W. Spiegel and Carl Holliday Moor both of Munger
         Tolles & Olson LLP, 355 S. Grand Avenue, 35th Floor,
         Los Angeles, CA 90071-1560, Phone: 213-683-9100, Fax:
         213-683-3702, E-mail: spiegeljw@mto.com; and

     (3) David Malcolm Furbush of O'Melveny & Myers LLP, 2765
         Sand Hill Road, Menlo Park, CA 94025, Phone: (650) 473-
         2600, Fax: (650) 473-2601, E-mail: dfurbush@omm.com.


CALIFORNIA: DWP Faces Suit Over "Illegal" Telephone Recordings
--------------------------------------------------------------
The Los Angeles Department of Water and Power (DWP) is named
defendant in a purported class action that alleges illegal
recordings of thousands of customer's phone calls in violation
of state law, Tony Barboza of The Los Angeles Times reports.

The suit was filed by attorney Neal Fialkow on behalf of Lucille
Estes and other callers.  It specifically, contends that the
agency violated California privacy law that prohibits the
recording of telephone calls without the consent of both
parties.

According to the suit, on Aug. 23, 2006, a DWP employee who had
had personal phone conversations with Ms. Estes told her he had
learned they had been recorded.  However, the suit did not
clarify how the unidentified employee learned of the alleged
recording.

Mr. Fialkow said that he sought and obtained a copy of a compact
disc that holds recordings of Ms. Estes' conversations and many
others, indexed by date, time and office extension.  Currently,
he is looking into which departments of the agency might have
recorded calls without permission.

Kenneth Lipton, another attorney working for Ms. Estes estimates
that the illegal recordings affected thousands of people.  Under
the state penal code, callers who have been unknowingly recorded
are allowed to claim $5,000 in damages.

Operators working for the agency's call center confirmed that
all calls to and from the agency are recorded "to protect us and
to protect the customer."

For more details, contact:

     (1) Neal J. Fialkow, Phone: (626) 584-6060, Fax: (626) 584-
         2950; and

     (2) Kenneth M. Lipton, 5900 Sepulveda Blvd., # 400, Van
         Nuys, CA 91411, Phone: (818) 780-3562.


CARDTRONICS INC: Still Faces ATM Accessibility Lawsuit in Mass.
---------------------------------------------------------------
Cardtronics, Inc. remains a defendant in a purported class
action filed in the U.S. District Court for the District of
Massachusetts by the National Federation of the Blind in
relation to the accessibility of its automated teller machines,
according to the company's Nov. 14, 2006 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
Sept. 30, 2006.

In connection with the company's acquisition of the E*TRADE
Access, Inc. (ETA) ATM portfolio, the company assumed ETA's
interests and liability for a lawsuit instituted by the NFB, the
NFB's Massachusetts chapter, and several individual blind
persons as well as the Commonwealth of Massachusetts with
respect to claims relating to the alleged inaccessibility of
ATMs for those persons who are visually-impaired.  

After the acquisition of the ETA ATM portfolio, the Private
Plaintiffs named Cardtronics as a co-defendant with ETA and
ETA's parent, E*Trade Bank, and the scope of the lawsuit has
expanded to include both ETA's ATMs as well as the company's
pre-existing ATM portfolio.

In this lawsuit, the plaintiffs have sought to require ETA and
Cardtronics to make all of the ATMs "voice-enabled," or capable
of providing audible instructions to a visually impaired person
upon that person inserting a headset plug into an outlet at the
ATM.  

The court has ruled twice, in February 2005 and February 2006,
that the NFB is not entitled to a "voice-enabled" remedy.

Nonetheless, in response to an order to describe the relief they
seek, the Private Plaintiffs have subsequently stated that they
demand either:

      -- voice-guidance technology on each ATM;

      -- "Braille" instructions on each ATM that allow
         individuals who are blind to understand every screen
         (which, the company assumes, may imply a dynamic
         Braille pad); or

      -- a telephone on each ATM so the user could speak with a
         remote operator who can either see the screen on the
         ATM or can enter information for the user.

Cardtronics has asserted numerous defenses to the lawsuit.  One
defense is that, for ATMs owned by third parties, the company
arguably does not have the right to make changes to the ATMs
without the consent of the third parties.  

Another defense is that the Americans with Disabilities Act
arguably do not require the company to make changes to ATMs if
the changes are not feasible or achievable, or if the costs
outweigh the benefits.

The costs of retrofitting or replacing existing ATMs with voice
technology, dynamic Braille keypads, or telephones and
interactive data lines would be significant.  

Additionally, in situations in which third parties own the ATMs
and Cardtronics provides processing services, the costs are
extremely disproportionate to the company's interests in the
ATMs.

Cardtronics has also challenged the plaintiffs' standing to file
this lawsuit.  

In response to the company's challenge, the plaintiffs have
requested the court's permission to:

      -- amend their complaint to name additional individual
         plaintiffs; and

      -- certify the lawsuit as a class action under the Federal
         Rules of Civil Procedure.

Cardtronics expects to object to the plaintiffs' motion, on the
grounds that the plaintiffs who initially filed the lawsuit
lacked standing and amending the complaint arguably cannot cure
this deficiency.  A hearing on the standing issue has not yet
been set but is expected to occur in the first quarter of 2007.

The suit is "Commonwealth of Massachusetts et al. v. E*Trade
Access, Inc., et al., Case No. 1:03-cv-11206-MEL," filed in the
U.S. District Court for the District of Massachusetts under
Judge Morris E. Lasker.

Representing the plaintiffs are:

     (1) Anthony M. Doniger of Sugarman, Rogers, Barshak &
         Cohen, 9th Floor, 101 Merrimac Street, Boston, MA
         02114, Phone: 617-227-3030, Fax: 617-523-4001, E-mail:
         doniger@srbc.com;

     (2) Patricia Correa, Attorney General's Office, One
         Ashburton Place, Room 2019, Boston, MA 02108-1698,
         Phone: 617-727-2200 ext.2919, Fax: 617-727-5762, E-
         mail: patty.correa@ago.state.ma.us; and

     (3) Timothy P. Fox of Fox & Robertson, PC, 910 16th Street,
         Suite 610, Denver, CO 80202, US, Phone: 303-595-9700,
         Fax: 303-595-9705, E-mail: tfox@foxrob.com.

Representing the defendants is Jenny K. Cooper of Bingham
McCutchen, LLP, 150 Federal Street, Boston, MA 02110, Phone:
617-951-8000, Fax: 617-951-8736, E-mail:
jenny.cooper@bingham.com.


CYBERSOURCE CORP: No Ruling Yet in PaylinX Share Options Suit
-------------------------------------------------------------
Judge Daniel Stack of the Madison County Circuit Court has yet
to make a decision on a request by Cybersource Corp. for summary
judgment in a purported class action filed against it by a
former employee of PaylinX, The Madison Record reports.

In 2000, PaylinX agreed to merge into Cybersource, a public
company that helps businesses process payment transactions over
the Internet.  Under the merger, PaylinX share options would
turn into an option to buy shares of Cybersource (Class Action
Reporter, Oct. 16, 2006).  Half the Cybersource shares would
accelerate or vest when the merger closed.  It closed Sept. 18,
2000, with company stock at $10.75.  But, at the stock
conversion in November, it had dwindled to $1.85.

In 2002, attorney John Hoffman of Korein Tillery filed a lawsuit
on behalf of Brian Wilgus, a test engineer for PaylinX, claiming
that a delay in converting stock prevented Mr. Wilgus and others
from immediately exercising their options.  Also, Mr. Hoffman
claimed that the company failed to establish necessary E-trade
accounts.  The suit proposed a class action on behalf of about
75 former PaylinX employees at Cybersource.

Judge Phillip Kardis certified the suit in 2004.  He retired in
2005 and the case was assigned to Judge Stack in 2006.

Mr. Goldstein questions whether Mr. Wilgus did in fact exercise
his option, and if he did, he did not suffer from the share
price drop between Sept. 18 and Oct. 20, 2000 because a
"blackout" on that period to prevent illegal insider trading was
in place.

"Because of the blackout, no one at Cybersource who owned
company stock could sell shares, while the share price was
dropping from $10.75 to less than $6.50 between Sept. 18 and
Oct. 20, 2000," Mr. Goldstein wrote.

At a Dec. 7 hearing, CyberSource attorney Alan Goldstein asked
the judge to grant summary judgment for lack of any issue of
fact.  Judge Stack took it under advisement.  The judge has yet
to rule on the motion as of Jan. 17, the report said.

For more details, contact:

     (1) [Plaintiff] John Hoffman of Korein Tillery, LLC,
         Gateway on the Mall, 701 Market Street, Suite 300, St.
         Louis, MO 63101, Phone: (314) 241-4844, Fax: (314) 588-
         7036; and

     (2) [Defendant] Alan K. Goldstein of Goldstein and Price,
         L.C., One Memorial Drive, Suite 1000, St. Louis, MO
         63102-2449, Phone: (314) 421-0710, Fax: (314) 421-2832
         and (314) 421-6150.


DIAMOND PET: Faces Litigation in S.C. Over Contaminated Dog Food
----------------------------------------------------------------
Diamond Pet Foods, Inc. is named defendant in a purported
federal class action filed in South Carolina over the sale of
dog food allegedly contaminated with aflatoxin.

Rebecca Y. Galliher, who lost five dogs from aflatoxin poisoning
in late 2005, filed the suit in the Lexington County Court of
Common Pleas.  On May 10, 2006, the case was removed to the U.S.
District Court for the District of South Carolina.

The complaint alleges that defendant negligently manufactured
certain pet foods that were contaminated with a fungal toxin,
known as aflatoxin.  

Specifically, plaintiffs assert causes of action for negligence,
product liability, breach of implied warranties of
merchantability and fitness for a particular purpose, breach of
express warranty, breach of contract accompanied by a fraudulent
act, fraud, and violations of the South Carolina Unfair Trade
Practices Act.

A copy of the Notice of Removal is available free of charge at:

              http://researcharchives.com/t/s?18d1

The suit is "Galliher v. Schell&Kampeter Inc. et al., Case No.
3:06-cv-01432-JFA," filed in the U.S. District Court for the
District of South Carolina under Judge Joseph F. Anderson, Jr.

Representing the plaintiffs is Eugene Clark Covington, Jr. of
Covington Patrick Hagins Stern and Lewis, PO Box 2343,
Greenville, SC 29602, Phone: 864-242-9000, Fax: 864-233-9777, E-
mail: gcovington@covpatlaw.com.

Representing the defendants are John T. Lay and John J. Pringle,
Jr. of Ellis Lawhorne and Sims, P.O. Box 2285, Columbia, SC
29202, Phone: 803-254-4190, Fax: 803-779-4749, E-mail:
jlay@ellislawhorne.com and jpringle@ellislawhorne.com.


DIAMOND PET: Faces Suit in Tenn. Over Contaminated Dog Food
-----------------------------------------------------------
Diamond Pet Foods, Inc. is named defendant in a purported class
action over the sale of dog food that led to the deaths of more
than 100 dogs.

The suit, "Bass v. Schell and Kampeter, Inc. et al.," was filed
on Dec. 27, 2005 in the U.S. District Court for the Eastern
District of Tennessee.  

According to the complaint, the plaintiff, Nicole D. Bass,
individually and as representative of a class of similarly
situated persons, brings the lawsuit against the named
defendants for offering for sale and selling dog food
contaminated with a toxin, aflatoxin, for consumption by her
pet.   

The suit accuses the companies of negligence.  With regards to
Diamond Pet, it also claims breach of warranties and unfair
trade practices.

If a jury decides in plaintiffs' favor, it could allow them to
collect actual damages, such as the cost of buying a new pet or
veterinary bills.  

In addition, plaintiffs may collect triple actual damages if the
defendant is proven to have violated laws against unfair trade
practices.

A copy of the complaint is available free of charge at:

              http://researcharchives.com/t/s?18d0

The suit is "Bass v. Schell and Kampeter, Inc. et al., Case No.
3:05-cv-00586," filed in the U.S. District Court for the Eastern
District of Tennessee under Judge Thomas A. Varlan with referral
to Judge H. Bruce Guyton.

Representing the plaintiffs is A. James Andrews of A. James
Andrews, Attorney at Law, 905 Locust Street, Knoxville, TN
37902, Phone: 865-660-3993, Fax: 865-523-4623, E-mail:
andrewsesq@icx.net.

Representing the defendants are:

     (1) W. Kyle Carpenter of Woolf, McClane, Bright, Allen &
         Carpenter, P.O. Box 900, Knoxville, TN 37901-0900,
         Phone: 865-215-1000, Fax: 865-215-1001, E-mail:
         kylew@wmbac.com;

     (2) R. Brad Morgan of Lewis, King, Krieg, Waldrop & Catron,
         P.C. (Knox), P O Box 2425, Knoxville, TN 37901-2425,
         Phone: (865) 546-4646, Fax: (865) 523-6529, E-mail:
         bmorgan@lewisking.com; and

     (3) William A. Young of O'Neil, Parker & Williamson, P.O.
         Box 217, Knoxville, TN 37901-0217, Phone: 865-546-7190,
         Fax: 865-546-0789, E-mail: byoung@opw.com.


E-LOAN INC: Settles Mortgage Loan Consultants' Suit for $13.6M
--------------------------------------------------------------
Judge Susan Illston of the U.S. District Court for the Northern
District of California granted preliminary approval to a $13.6
million settlement of the class action "Mousai v. E-Loan, Inc.,
Case No. 3:06-cv-01993-SI," according to Bizjournals.com.

Under the settlement, E-Loan Inc. agreed to pay $13.6 million to
506 mortgage loan consultants in California to settle the
lawsuit filed against the provider of online financial services.

The loan consultants worked for E-Loan in Pleasanton and Dublin
-- selling loans, pre-qualifying borrowers and processing
applications -- during a period from December 2001 through June
2006.

The suit, filed in March 2006, claimed that the Pleasanton
company did not pay the workers overtime or provide them with
meal and rest breaks.

Plaintiffs are asking that the lead plaintiff, Behzad Mousai of
Brentwood, receive a payment of $20,000, and for 42 class
members signed up with the suit before November 2006 to get an
additional $1,000 each.

Lawyer fees would be 25 percent of the total settlement.

"While we strongly dispute the claims made in the action, we are
pleased that a resolution was reached which most benefits our
employees whom we truly value," Rosemarie Carbone, vice
president of people and leadership at E-Loan Inc, said in a
prepared statement.

The suit is "Mousai v. E-Loan, Inc., Case No. 3:06-cv-01993-SI,"
filed in the U.S. District Court for the Northern District of
California under Judge Susan Illston.

Representing plaintiffs are Laura L. Ho and Roberta L. Steele
both of Goldstein Demchak & Baller Borgen & Dardarian, 300
Lakeside Drive, Suite 1000, Oakland, CA 94612, Phone: 510-763-
9800, Fax: 510-835-1417, E-mail: laura@gdblegal.com or
RLS@gdblegal.com.

Representing defendants are Nina Kani, ESQ., Eileen R. Ridley
and Kevin F. Woodall all of Foley & Lardner, One Maritime Plaza,
Sixth Floor, San Francisco, CA 94111-3404, Phone: 415-984-9834
or 415-434-4484 or 415-984-9812, Fax: 415-434-4507, E-mail:
nkani@foley.com or eridley@foleylaw.com or kwoodall@foley.com.


EL POLLO: Calif. Court Mulls Arbitration Motion in Overtime Suit
----------------------------------------------------------------
The Superior Court of the State of California, County of Los
Angeles has yet to rule on a motion to compel arbitration in a
purported class action against El Pollo Loco, Inc., a wholly
owned subsidiary of EPL Intermediate, Inc.  The suit alleges
violations of California labor laws and the California Business
and Professions Code.

Plaintiff Salvador Amezcua filed the suit on Oct. 18, 2005 on
behalf of himself and all others similarly situated, based on,
among other things, failure to pay overtime compensation,
unlawful deductions from earnings and unfair competition by the
company.  

The suit requested remedies that include compensatory damages,
injunctive relief, disgorgement of profits and reasonable
attorneys' fees and costs.

The company was served with this complaint on Dec. 16, 2005.  
The court has ordered the case designated as "complex" and has
now been assigned to the complex litigation panel.  

The company is awaiting the court's decision on its motion to
compel the arbitration of Mr. Olvera and its request for a stay
of the class action, according to the company's form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended Sept. 27, 2006.

El Pollo Loco, Inc. on the Net: http://www.elpolloloco.com.


EL POLLO: Calif. Managers' Suit Still Stayed Pending Arbitration
----------------------------------------------------------------
The Superior Court of the state of California, County of Los
Angeles has yet to lift the stay on the proceedings in a
purported class action filed against El Pollo Loco, Inc., a
wholly owned subsidiary of EPL Intermediate, Inc.

On or about April 16, 2004, three former employees of the
company, Elias, Ramirez and Rivera, filed a class action in the
Superior against EPL on behalf of all putative class members
composed of former and current general managers and restaurant
managers from April 2000 to present.  The suit alleges certain
violations of California labor laws, including alleged improper
classification of general managers and restaurant managers as
exempt employees.

Plaintiffs' requested remedies include compensatory damages for
unpaid wages, interest, certain statutory penalties,
disgorgement of alleged profits, punitive damages and attorneys'
fees and costs as well as certain injunctive relief.

The complaint was served on EPL on April 19, 2004.  The court
has ordered the class action stayed pending the arbitration of
one of the named putative class plaintiffs as a result of his
execution of a mandatory arbitration agreement with EPL.  

The company reported no development on the case at its Nov. 13
form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Sept. 27, 2006.

El Pollo Loco, Inc. on the Net: http://www.elpolloloco.com.


FIELDSTONE MORTGAGE: Plaintiffs Appeal Dismissal of "Hill" Case
---------------------------------------------------------------
Plaintiffs are appealing the dismissal by the Circuit Court for
Baltimore City, Maryland of a purported class action, "Hill, et
al. v. Fieldstone Mortgage Co., et al."

The class action was filed on Jan. 16, 2002 by plaintiffs, who
are two individuals who obtained in 1998 a $28,000 second
mortgage loan from Fieldstone Mortgage secured by their
residential property.  It was brought against Fieldstone
Mortgage and 10 other mortgage lenders that plaintiffs contend
are or were the assignees of second mortgage loans in Maryland
made by Fieldstone Mortgage.

The lawsuit alleges, among other things, that:

      -- the defendants violated the Maryland Second Mortgage
         Loan Law, or SMLL, by failing to obtain the necessary
         license to provide a second mortgage loan and by
         charging fees unauthorized by the SMLL; and

      -- the defendants violated the Maryland Consumer
         Protection Act by engaging in conduct contrary to the
         provisions of the SMLL.

The suit seeks a declaratory judgment that their mortgage
contract is illegal and, therefore, that they do not need to
honor their obligation to repay the second mortgage loan.

Plaintiffs also seek monetary damages in the amount of $300,000.
Fieldstone Mortgage, and each of the other defendants, filed
motions to dismiss asserting that, among other things:

      -- the plaintiffs' claims are barred by the applicable
         three-year statute of limitations;

      -- the plaintiffs' failed to properly plead a claim under
         the Maryland Consumer Protection Act; and

      -- the plaintiffs' request for a judicial declaration that
         their mortgage contract is illegal is not a remedy
         available under either Maryland statutory or common
         law.

The circuit court heard oral arguments on the motions to dismiss
in January 2003.  To date, the court has not ruled on this
motion.  

The lawsuit was consolidated with 14 other class actions with
identical claims against other mortgage lenders.  No motion for
class certification was filed in this case.

On March 30, 2006, the court held a status conference with
regard to this matter.  The court requested supplemental
briefings on the outstanding issues from the parties.

On Aug. 25, 2006, the court dismissed this case as to all
lenders, claiming that plaintiff's arguments were timed-barred
by the Statute of Limitations.  

The plaintiffs have appealed the ruling, according to the
company's Nov. 14, 2006 10-Q filing with the U.S. Securities and
Exchange Commission for the period ended Sept. 30, 2006.

Fieldstone Investment Corp. on the Net:
http://www.fieldstonemortgage.com/.


FIELDSTONE MORTGAGE: Reaches Settlement in Ill. FCRA Litigation
---------------------------------------------------------------
A settlement was reached in a class action filed against
Fieldstone Mortgage Co. over alleged violations of the Fair
Credit Reporting Act, the company states at its Nov. 14, 2006
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended Sept. 30, 2006.

The suit is pending in the U.S. District Court for the Northern
District of Illinois.  It was filed on Jan. 9, 2006 under the
caption, "Rhodes v. Fieldstone Mortgage Co."

Plaintiff claims that the company violated the firm offer of
credit guidelines encapsulated in 15 U.S.C. Section 1681 et seq.
during its mail marketing campaign in or around April 2005.

Specifically, plaintiff alleges that the company did not comply
with the statutory guidelines in providing a firm offer of
credit to the potential consumer.  Pursuant to 15 U.S.C. Section
1681 et seq., statutory damages can range from $100 to $1,000
per mailing in the event that the violation is deemed willful.

In July 2006, plaintiff filed a motion for class certification.
In August 2006, the parties engaged in a mandatory settlement
conference and have agreed in principal to settlement terms.

The final terms of the settlement agreement are still the
subject of negotiation and are subject to final approval by the
trial court having jurisdiction over the matter.  A hearing for
final approval of the settlement agreement is scheduled for
March 2007.

The suit is "Rhodes v. Fieldstone Mortgage Co., Case No. 1:06-
cv-00108," filed in the U.S. District Court for the Northern
District of Illinois under Judge Mark Filip.

Representing the plaintiffs are Daniel A. Edelman and Jeremy
Patrick Monteiro of Edelman, Combs, Latturner & Goodwin, LLC,
120 South LaSalle Street, 18th Floor, Chicago, IL 60603, Phone:
(312) 739-4200, E-mail: courtecl@edcombs.com and
jmonteiro@edcombs.com.

Representing the defendants are:

     (1) Robert Jerald Emanuel of Burke, Warren, MacKay &
         Serritella, P.C., 330 North Wabash Avenue, 22nd Floor,
         Chicago, IL 60611-3607, Phone: (312) 840-7000, E-mail:
         remanuel@burkelaw.com; and

     (2) Sunny S. Huo of Severson & Werson, One Embarcadero
         Center, Suite 2600, San Francisco, CA, Phone: 415-677-
         5519.


GEOMETRIX INTERNATIONAL: Recalls Magnetic Construction Toys
-----------------------------------------------------------
Geometix International LLC, of Brookfield, Connecticut, in
cooperation with the U.S. Consumer Product Safety Commission, is
recalling about 40,000 sets of MagneBlocks Magnetic Construction
Toys.

The company said the tiny magnets inside the building pieces can
fall out.  Magnets found by young children can be swallowed or
aspirated.  If more than one magnet is swallowed, the magnets
can attract each other and cause intestinal perforation or
blockage, which can be fatal.

The firm is aware of one incident where a magnet became loose.  
No injuries have been reported.

All types of MagneBlocks construction sets are included in this
recall.  The sets contain six or more plastic building pieces
and six or more 1/2-inch diameter steel balls.  Some sets
include steel rods.  The building pieces are various colors and
are shaped in 1 1/2-inch cubes and three-, four-, and five-sided
pyramids.  The plastic building pieces have "MagneBlocks"
imprinted on them.

These recalled magnetic construction toys were manufactured in
China and are being sold in discount department and toy stores
and Web sites, and other toy and arts and crafts stores
nationwide.  The MagneBlocks magnetic building sets were sold
from January 2004 through November 2006 for between $20 and
$120, depending on the size of the set.  Sets currently for sale
have improved warning labels.

Pictures of the recalled magnetic construction toys:
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07085a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07085b.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07085c.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07085d.jpg

CPSC recommends children under 6 years of age not to play with
toys containing magnets.  If a magnet comes out of one of the
blocks in these sets, immediately remove the block from the set
and send it to Geometrix International for a free replacement
block.

For additional information, contact Geometix International at
(866) 775-0265 between 9 a.m. and 5 p.m. ET Monday through
Friday, or visit http://www.magneblocks.com.


GMH COMMUNITIES: No Lead Plaintiff Yet in Pa. Securities Suits
--------------------------------------------------------------
The U.S. District Court for the Eastern District of Pennsylvania
has yet to rule on motions filed by plaintiffs in several
purported securities fraud class actions pending against GMH
Communities Trust.

On April 5, 2006, the company, Gary M. Holloway Sr., company
chairman, president and chief executive officer; and Bradley W.
Harris, the company's former chief financial officer, were named
defendants in a class action complaint.

The complaint states that the plaintiff has filed a federal
class action on behalf of purchasers of the publicly traded
securities of the company between Oct. 28, 2004 and March 10,
2006.  The plaintiff seeks to pursue remedies under the U.S.
Securities Act of 1933 and the U.S. Securities Exchange Act of
1934.

Plaintiff alleges that defendants issued a series of false and
misleading financial results regarding the company to the market
during the class period, and more specifically, failed to
disclose:

      -- that the company's earnings, net income and revenues
         were materially inflated and expenses were materially
         understated;

      -- that the company's funds from operations were
         materially inflated;

      -- that the company lacked adequate internal controls;

      -- that the company's reported financial results were in
         violation of generally accepted accounting principles,
         or Generally Accepted Accounting Principles; and

      -- that as a result of the foregoing, the company's
         financial results were materially inflated at all
         relevant times.

Plaintiff alleges claims under Section 11 of the Securities Act
with respect to all of the defendants; Section 12(a)(2) of the
Securities Act with respect to the company; Section 15 of the
Securities Act with respect to Mr. Holloway and Mr. Harris;
Section 10(b) and Rule 10b-5 of the Exchange Act with respect to
all of the defendants; and Section 20(a) of the Exchange Act
with respect to Mr. Holloway and Mr. Harris.

On April 11, 2006, April 20, 2006, April 27, 2006 and May 15,
2006, four additional class action complaints were filed with
the court against the defendants by separate law firms, and
additional complaints may be filed in the near future until the
court has certified a class and a lead plaintiff has been named.

Each of these additional filed complaints alleges the same
claims against the defendants as described above with respect to
the complaint filed on April 5, 2006, except that the complaint
filed on April 20, 2006 restricts the class period to purchasers
of the publicly traded securities of the company to the time
period between May 5, 2005 and March 10, 2006.

On June 2, 2006 a motion for appointment of a lead plaintiff was
filed with the court, and two additional motions were filed on
June 5, 2006.  

The court has not ruled on these motions, and the defendants
have not yet responded to any of the filed complaints, according
to the company's form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended Sept. 30, 2006.

The first identified complaint is "Iris Martin, et al. v. GMH
Communities Trust, et al.," filed in the U.S. District Court for
the Eastern District of Pennsylvania.  

Plaintiff firms in this or similar case(s) are:

     (1) Berger & Montague, PC, 1622 Locust Street,
         Philadelphia, PA, 19103, Phone: 800.424.6690, Fax:
         215.875.4604, E-mail: investorprotect@bm.net;
  
     (2) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
         Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
         610.660.0450, E-mail: esmith@Brodsky-Smith.com;

     (3) Chitwood Harley Harnes, LLP, 2300 Promenade II, 1230
         Peachtree Street, N.E., Atlanta, GA, 30309, Phone:
         (888) 873-3999, Fax: (404) 876-4476, E-mail:
         attorney@chitwoodlaw.com;

     (4) Federman & Sherwood, 120 North Robinson, Suite 2720,
         Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
         wfederman@aol.com;

     (5) Finkelstein, Thompson & Loughran, 1050 30th Street, NW,
         Washington, DC, 20007, Phone: 202.337.8000, Fax:
         202.337.8090, E-mail: contact@ftllaw.com;

     (6) Kahn Gauthier Swick, LLC, 650 Poydras St. Suite 2150,
         New Orleans, LA, 70130, Phone: (504) 455-1400, E-mail:
         lewis.kahn@kglg.com;

     (7) Law Offices of Brian M. Felgoise, P.C., Esquire at 261
         Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
         215.886.1900, E-mail: securitiesfraud@comcast.net;

     (8) Law Offices of Charles J. Piven, P.A., World Trade
         Center-Baltimore, 401 East Pratt Suite 2525, Baltimore,
         MD, 21202, Phone: 410.332.0030, E-mail:
         pivenlaw@erols.com;

     (9) Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, 58
         South Service Road, Suite 200, Melville, NY, 11747,
         Phone: 631.367.7100, Fax: 631.367.1173;

    (10) Motley Rice, LLC, One Georgia Center, 600 West
         Peachtree Street, Suite 800, Atlanta, GA, 30308, Phone:
         1-800-768-4026, E-mail: webmaster@motleyrice.com;

    (11) Pomerantz Haudek Block Grossman & Gross, LLP, 100 Park
         Avenue, 26th Floor, New York, NY, 10017-5516, Phone:
         212.661.1100, Fax: 212.661.8665, E-mail:
         info@pomerantzlaw.com;

    (12) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
         06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
         sn06106@AOL.com; and

    (13) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
         PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
         mail: info@sbclasslaw.com.


INFOSONICS CORP: Lead Plaintiff Named in Calif. Securities Suit
---------------------------------------------------------------
InfoSonics Corp. remains a defendant in several purported
securities fraud class actions filed in the U.S. District Court
for the Southern District of California, according to the
company's Nov. 14, 2006 10-Q filing with the U.S. Securities and
Exchange Commission for the period ended Sept. 30, 2006.

Between June 13, 2006 and July 14, 2006, seven securities class
actions were filed against the company and certain of its
officers and directors.

One of these securities class actions was voluntarily dismissed,
and the remaining six lawsuits were consolidated before Judge
Barry Moskowitz of the U.S. District Court for the Southern
District of California.  

The longest class period alleged in the securities cases is from
May 8, 2006 to June 12, 2006.  

Each of the substantially similar consolidated lawsuits allege
that the defendants violated Sections 10(b), 20(a) and/or 20A of
the U.S. Exchange Act, as well as the associated Rule 10b-5, in
connection with the company's restatement announced on June 12,
2006.  

In the lawsuits, plaintiffs seek declarations that each action
is a proper class action, unspecified damages, interest,
attorneys' fees and other costs, equitable/injunctive relief,
and/or such other relief as is just and proper.  

On Oct. 23, 2006, the court appointed Robert Sibley as lead
plaintiff in the consolidated suits and appointed lead counsel.  
The company is waiting for plaintiffs to file a consolidated
complaint.  

When required to respond to a consolidated complaint, the
defendants anticipate filing a motion to dismiss on the grounds
that the plaintiffs have failed to adequately plead violations
of the securities laws.

The first identified complaint is "Peter Polizzi, et al. v.
InfoSonics Corp., et al., Case No. 06-CV-01233," filed in the
U.S. District Court for the Southern District of California.

Plaintiff firms in this or similar case:

     (1) Ann D. White Law Offices, P.C., Phone: 1.866.389.0274,
         E-mail: awhite@awhitelaw.com;

     (2) Berger & Montague, P.C., 1622 Locust Street,
         Philadelphia, PA 19103, Phone: 800.424.6690, Fax:
         215.875.4604, E-mail: investorprotect@bm.net;

     (3) Federman & Sherwood, 120 North Robinson, Suite 2720,
         Oklahoma City, OK 73102, Phone: 405-235-1560, E-mail:
         wfederman@aol.com;

     (4) Glancy Binkow & Goldberg, LLP, (LA), 1801 Ave. of the
         Stars, Suite 311, Los Angeles, CA 90067, Phone: (310)
         201-915, Fax: (310) 201-916, E-mail:
         info@glancylaw.com;

     (5) Howard G. Smith, Attorney at Law, 3070 Bristol Pike,
         Suite 112, Bensalem, PA 19020, Phone: (215) 638-4847,
         Fax: (215) 638-4867;

     (6) Kaplan Fox & Kilsheimer, LLP (New York, NY), 805 Third
         Avenue, 22nd Floor, New York, NY 10022, Phone:
         212.687.1980, Fax: 212.687.7714, E-mail:
         info@kaplanfox.com;

     (7) Kirby McInerney & Squire, LLP, 830 Third Avenue 10th
         Floor, New York Ave, NY, 10022, Phone: 212.317.2300;

     (8) Klafter & Olsen, LLP, 2121 K St., NW Suite 800,
         Washington, DC, 20037, Phone: 202.261.3553, Fax:
         202.261.3533, E-mail: info@klafterolsen.com;

     (9) Law Offices of Charles J. Piven, P.A., World Trade
         Center-Baltimore, 401 East Pratt Suite 2525, Baltimore,
         MD, 21202, Phone: 410.332.0030, E-mail:
         pivenlaw@erols.com;

    (10) Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San
         Diego), 655 West Broadway, Suite 1900, San Diego, CA,
         92101, Phone: 619.231.1058, Fax: 619.231.7423;

    (11) Murray, Frank & Sailer, LLP, 275 Madison Ave., 34th
         Flr., New York, NY, 10016, Phone: 212.682.1818, Fax:
         212.682.1892, E-mail: email@murrayfrank.com;

    (12) Sarraf Gentile, LLP, 485 Seventh Avenue, Suite 1005,
         New York, NY, 10018, Phone: 212.868.3610, Fax:
         212.918.7967;

    (13) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
         06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
         sn06106@AOL.com;

    (14) Scott & Scott, LLC, P.O. Box 192, 108 Norwich Avenue,
         Colchester, CT, 06415, Phone: 860.537.5537, Fax:
         860.537.4432, E-mail: scottlaw@scott-scott.com; and

    (15) Shalov Stone & Bonner, LLP, (New York), 485 Seventh
         Avenue, Suite 1000, New York, NY, 10018, Phone: (212)
         239-4340, Fax: (212) 239-4310, E-mail:
         lawyer@lawssb.com.


JACUZZI BRANDS: Settles Stockholder Lawsuits Over Appolo Merger
---------------------------------------------------------------
Jacuzzi Brands, Inc. reached an agreement in principle to settle
four putative stockholder class actions related to the company's
proposed merger with a wholly owned subsidiary of Apollo
Management L.P.

Under the terms of the agreement, which remains subject to
approval by the court, the parties have agreed to settle all
claims raised, or which could be raised, by the proposed
plaintiff class relating to the proposed merger.

Pursuant to the terms of the proposed settlement, the company
has agreed to amend the merger agreement such that:

     (1) the termination fee payable by the company on the
         occurrence of certain specified events, is reduced from
         $25 million to $22.5 million; and

     (2) the time period during which the company's entry into
         an alternative acquisition proposal would trigger
         payment of the termination fee under certain
         circumstances, is reduced from 12 months to 9 months.

The company also agreed to make certain additional disclosures
already reflected in the Definitive Proxy Statement filed with
the U.S. Securities and Exchange Commission on Jan. 5, 2007.

The parties also agreed that, in connection with a settlement,
counsel for plaintiffs may seek an award from the court of
attorneys' fees and expenses in an amount not to exceed $725,000
if the merger is consummated.

The company noted that there can be no assurance that the Court
will approve the proposed settlement or that any ultimate
settlement will be under the same terms as those contemplated by
the agreement.

The proposed settlement of these lawsuits will not affect the
amount of merger consideration to be paid in the merger or any
other terms of the merger.

Last year, Jacuzzi Brands and each of its directors were named
defendants in purported stockholder class actions filed in the
Chancery Court of the State of Delaware alleging that Jacuzzi
Brands directors breached their fiduciary duties in connection
with their actions in agreeing to the company's proposed merger
with a wholly owned subsidiary of Apollo Management L.P. (Class
Action Reporter, Oct. 20, 2006).

Under the terms of the merger agreement, Jacuzzi Brands'
shareholders will receive $12.50 per share in cash (Troubled
Company Reporter, Oct. 16, 2006).  The transaction will be
financed through a combination of equity contributed by Apollo
and debt financing.

The Board of Directors of Jacuzzi Brands has approved the merger
agreement and has recommended to Jacuzzi Brands' shareholders
that they vote in favor of the transaction.

In connection with the proposed transaction, Jacuzzi Brands will
make a cash tender offer for all of its outstanding 9.625%
Senior Secured Notes due 2010, which is essentially all of the
debt at JJZ.

The acquisition is subject to certain closing conditions,
including the approval of Jacuzzi Brands' shareholders,
regulatory approval, and the receipt by Apollo of all necessary
debt financing, and is expected to close in the first quarter of
2007.

West Palm Beach, Florida-based Jacuzzi Brands, Inc. (NYSE: JJZ),
-- http://www.jacuzzibrands.com/-- through its operating  
subsidiaries, is a global producer of branded bath and plumbing
products for the residential, commercial and institutional
markets.

For more information, contact:

     (1) Diana Burton Jacuzzi Brands, Inc. VP - Investor
         Relations, Phone: 561-514-3850;

     (2) Donna Ackerly of Georgeson Inc., Phone: 212-440-9800;  

     (3) Devin Sullivan of The Equity Group Inc., Phone: 212-
         836-9608; and

     (4) Joele Frank of Wilkinson Brimmer Katcher Matthew
         Sherman, Phone: 212-355-4449.


JOHNSON & JOHNSON: Ontario Court Certifies "Prepulsid" Lawsuit
--------------------------------------------------------------
Justice Ellen Macdonald of the Ontario Superior Court of Justice
certified as class action a lawsuit filed against Johnson &
Johnson Corp. and related companies on behalf of Canadians
(excluding those from Quebec) who ingested the drug, Prepulsid
(generic name cisapride).

In certifying the proceeding as a class action, Justice
Macdonald held that there were common issues related to the
drug's cardiotoxicity and efficacy whose resolution would move
the litigation forward for all class members.

Justice Macdonald rejected the defendants' argument that a class
action would be unmanageable.

In addition to claiming damages for cardiac-related injuries,
the lawsuit also advances a claim for damages arising from the
purchase of what is alleged to have been an ineffective drug.

In 2000, Prepulsid made headlines following the death of a 15-
year old Oakville teenager, Vanessa Young, who had been
prescribed the drug.

In April 2001 a Coroner's jury in Hamilton determined that
Vanessa died of a heart arrhythmia caused in part by cisapride
toxicity, and made 59 recommendations to prevent similar deaths
including clear safety warnings on drug labels and mandatory
adverse reaction reporting for health care professionals.

Terence Young, Vanessa's father and President of Drug Safety
Canada said, "Prepulsid victims and their families in Canada
have waited anxiously over six years for this decision."

He continued, "But this decision is one for the angels.  Vanessa
would be very pleased with this important victory for ordinary
Canadians because class actions are the only way ordinary people
can have access to justice."

In 2004, Johnson & Johnson agreed to provide up to $90 million
in payments to resolve parallel litigation in the U.S. (Class
Action Reporter, Nov. 9, 2004).

While the Canadian action has been tied up in motions, appeals
and tough opposition by Johnson & Johnson, some thousands of
victims in the U.S. have already settled their claims against
Johnson & Johnson.

Joel P. Rochon, one of the lead lawyers for the plaintiff class
stated, "After years of litigation, I am pleased that the case
can now proceed as a class action.  I look forward to moving the
case forward towards resolution to obtain compensation for class
members."

Gary Will, counsel for the Young family and co-lead counsel on
the class action added, "This decision will no doubt make
Canadians safer, as it will encourage pharmaceutical companies
to publish effective safety warnings and pull harmful drugs off
the market in a timely fashion."

The certification decision was not a ruling on the merits of the
lawsuit, and the allegations raised in the claim have not yet
been proven in court.

Members of the class are represented by the law firms of Rochon
Genova LLP, Will Barristers: Morin and Miller, and Girones &
Associates.

Case contact: Joel Rochon, Phone: 416-363-1867; Gary Will,
Phone: 905-337-9745; or Terence Young, Phone: 905-842-5910.


KIDS II: Recalls Bright Starts Teethers Due to Choking Hazard
-------------------------------------------------------------
Kids II Inc., of Alpharetta, Georgia, in cooperation with the
U.S. Consumer Product Safety Commission, is recalling about
375,000 units of Bright Starts Star Teether Beads and Bright
Starts Teether Beads.

The company said the flexible plastic ring that holds the
teether beads in place can crack or break, and the beads can
detach, posing a choking hazard to infants.

Kids II has received 24 reports of the plastic ring cracking or
breaking and the beads becoming detached from the ring.  No
injuries have been reported.

The Bright Starts Star Teether Beads (model 8483) has textured
soft plastic beads in bright colors and various shapes connected
to a flexible plastic ring.  The beads on this model are shaped
as stars, spirals and ovals.  The Bright Starts Teether Beads
(model 8549) has plastic beads in bright colors that are shaped
as an oval and are connected to a flexible plastic ring.

These recalled Bright Starts teethers were manufactured in China
and are being sold at Discount department and juvenile specialty
stores nationwide from June 2006 through January 2007 for
between $1 and $3.

Pictures of the recalled Bright Starts teethers:
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07081a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07081b.jpg

Consumers are advised to take this product away from children
immediately and contact Kids II for information on receiving a
free replacement.

For additional information, contact Kids II toll-free at (877)
325-7056 between 7:30 a.m. and 4:30 p.m. ET Monday through
Friday, or log on to: http://www.kidsii.com


KRISPY KREME: Final Approval of $75M Settlement Expected in 2007
----------------------------------------------------------------
Krispy Kreme Doughnuts, Inc. expects to receive final approval
for its $75 million settlement of a consolidated securities
fraud class action in the early part of 2007, the company stated
at a regulatory filing.

On May 12, 2004, a purported securities class action was filed
on behalf of persons who purchased the company's publicly traded
securities between Aug. 21, 2003 and May 7, 2004 against the
company and certain of its current and former officers in the
U.S. District Court for the Middle District of North Carolina.

Plaintiff alleged that defendants violated Sections 10(b) and
20(a) of the U.S. Exchange Act and Rule 10b-5 promulgated
thereunder in connection with various public statements made by
the company.  They sought damages in an unspecified amount.  

Thereafter, 14 substantially identical purported class actions
were filed in the same court.  On Nov. 8, 2004, all of these
cases were consolidated into one action.  

The court appointed lead plaintiffs in the consolidated action,
who filed a second amended complaint on May 23, 2005, alleging
claims under Sections 10(b) and 20(a) of the Exchange Act on
behalf of persons who purchased the company's publicly-traded
securities between March 8, 2001 and April 18, 2005.  The
company filed a motion to dismiss the second amended complaint
on Oct. 14, 2005 that is currently pending.

On Oct. 31, 2006, the company and the Special Committee entered
into a Stipulation and Settlement Agreement with the lead
plaintiffs in the securities class action, all defendants named
in the class action, except for Scott Livengood, the company's
former chairman and chief executive officer, providing for the
settlement of the securities class action.

The stipulation provides for the certification of a class
consisting of all persons who purchased Krispy Kreme's publicly
traded securities between March 8, 2001 and April 18, 2005,
inclusive.

The settlement class will receive total consideration of
approximately $75 million, consisting of:

     -- a cash payment of $34,967,000 to be made by the
        company's directors' and officers' insurers;

     -- a cash payment of $100,000 to be made by Mr. Tate;

     -- a cash payment of $100,000 to be made by Mr. Casstevens;

     -- a cash payment of $4,000,000 to be made by the company's
        independent registered public accounting firm and common
        stock and warrants to purchase common stock to be issued
        by the company having an aggregate value of $35,833,000
        (based on the market price of the company's common stock
        as of late October and early November 2006).

Claims against all defendants will be dismissed with prejudice;
however, claims that the company may have against Mr. Livengood
that may be asserted by the company in the derivative action for
contribution to the securities class action settlement or
otherwise under applicable law are expressly preserved.

The stipulation contains no admission of fault or wrongdoing by
the company or the other defendants.  On Nov. 16, 2006, the
court entered an order granting preliminary approval to the
settlement.  The settlement is subject to final approval of the
court.

The company anticipates final court approval of the stipulation
to occur in early 2007, according to its Jan. 19, 2006 Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarterly period ended Oct. 29, 2006.

The suit is "Eastside Investors v. Doughnuts, Inc., et al., Case
No. 1:04-cv-00416-WLO," filed in the U.S. District Court for the
Middle District of North Carolina under Judge William L. Osteen.  

Representing the plaintiffs are:

     (1) Richard B. Brualdi of The Brualdi Law Firm, 29
         Broadway, Ste. 2400, New York, NY 10006, US, Phone:
         212-952-0602, Fax: 212-952-0608, E-mail:
         rbrualdi@brualdilawfirm.com;

     (2) John Thurston O'Neal of O'Neal Law Office, 7
         Battleground Court, Suite 212, Greensboro, NC 27408,
         Phone: 336-510-7904, Fax: 336-510-7965, E-mail:
         oneallaw@triadbiz.rr.com; and  

     (3) Leslie Bruce McDaniel of McDaniel & Anderson, L.L.P.,
         P.O.B. 58186, Raleigh, NC 27658-8186, Phone: 919-872-
         3000, Fax: 919-790-9273, E-mail: mcdas@mcdas.com.

Representing the defendants are:

     (i) William Mark Conger of Kilpatrick Stockton, L.L.P.,
         1001 W. Fourth St., Winston-Salem, NC 27101, Phone:
         336-607-7309 and 336-607-7351, Fax: 336-734-2633 and
         336-734-2625, E-mail: mconger@kilpatrickstockton.com
         and jkelly@kilpatrickstockton.com; and

    (ii) Nicholas I. Porritt of Wilson Sonsini Goodrich &
         Rosati, P.C., Two Fountain Sq., Reston Town Ctr., 11921
         Freedom Dr., Ste. 600, Reston, VA 20190-5634, Phone:
         703-734-3107, Fax: 703-734-3199, E-mail:
         nporritt@wsgr.com.


KRISPY KREME: N.C. Court Approves $4.75M ERISA Suit Settlement
--------------------------------------------------------------
The U.S. District Court for the Middle District of North
Carolina gave final approval to a $4.75 million settlement of a
class action against Krispy Kreme Doughnut Corp. (KKDC) for
alleged violations of Employee Retirement Income Security Act.

On March 16, 2005, KKDC, a wholly owned subsidiary of Krispy
Kreme Doughnuts, Inc., was served with a purported class action
that asserted claims for breach of fiduciary duty under ERISA
against it and certain of its current and former officers and
employees.

Plaintiffs purport to represent a class of persons who were
participants in or beneficiaries of KKDC's retirement savings
plan or profit sharing stock ownership plan between Jan. 1, 2003
and the date of filing and whose accounts included investments
in the company's common stock.

They contended that defendants:

      -- failed to manage prudently and loyally the assets of
         the plans by continuing to offer the company's common
         stock as an investment option and to hold large
         percentages of the plans' assets in the company's
         common stock;

      -- failed to provide complete and accurate information
         about the risks of the company's common stock;

     -- failed to monitor the performance of fiduciary
        appointees; and

      -- breached duties and responsibilities as co-fiduciaries.

On May 15, 2006, the company announced that a proposed
settlement had been reached with respect to this matter.  The
settlement includes a one-time cash payment to be made to the
settlement class by the company's insurer in the amount of $4.75
million.

The company and the individual defendants deny any and all
wrongdoing and paid no money in the settlement, which was
granted final approval by the court on Jan. 10, 2007.

The suit is "Smith v. Krispy Kreme Doughnut Corp., et al., Case
No. 1:05-cv-00187-WLO," filed in the U.S. District Court for the
Middle District of North Carolina under Judge William L. Osteen.  

Representing the plaintiffs are:

     (1) T. David Copley of Keller Rohrback, L.L.P., 1201 3rd.
         Ave., Seattle, WA 98101, Phone: 206-623-1900, Fax: 206-
         623-3384, E-mail: dcopley@kellerrohrback.com; and

     (2) Gary V. Mauney of Lewis & Roberts, 5960 Fairview Rd.,
         Ste. 102, Charlotte, NC 28210-3102, US, Phone: 704-347-
         8990, Fax: 704-347-8929, E-mail:
         garymauney@lewis-roberts.com.

Representing the defendants are:

     (i) Adam H. Charnes of Kilpatrick Stockton, L.L.P., 1001 W.
         Fourth St., Winston-Salem, NC 27101, Phone: 336-607-
         7382, Fax: 336-734-2602, E-mail:
         acharnes@kilpatrickstockton.com;

    (ii) Stacey Cerrone of Proskauer Rose, LLP, 909 Poydras St.,
         Ste. 1100, New Orleans, LA 70112, US, Phone: 504-310-
         4089, Fax: 504-310-2022, E-mail:
         scerrone@proskauer.com; and

   (iii) Michael Scott Fox of Tuggle Duggins & Meschan, P.A.,
         P.O.B. 2888, Greensboro, NC 27402, Phone: 336-271-5244,
         Fax: 336-274-6590, E-mail: mfox@tuggleduggins.com.


MEDCO HEALTH: Files Motion to Stay Suit by Okla. Pharmacies
-----------------------------------------------------------  
The U.S. District Court for the Northern District of Oklahoma
has yet to rule on a motion filed by Medco Health Solutions,
Inc. to stay, pending arbitration, a purported class action
filed against the company by Chelsea Family Pharmacy, PLLC.

The suit was filed in February 2006, and seeks to represent a
class of Oklahoma pharmacies that have contracted with the
company within the last three years.  It alleges, among other
things, that the company has contracted with retail pharmacies
at rates that are less than the prevailing rates paid by
ordinary consumers and has denied consumers their choice of
pharmacy by placing restrictions on the plaintiff's ability to
dispense pharmaceutical goods and services.

The plaintiff asserts that the company's activities violate the
Oklahoma Third Party Prescription Act, and seeks, among other
things, compensatory damages, attorneys' fees, and injunctive
relief.  On April 12, 2006, the company filed a motion to
dismiss the complaint.

On June 12, 2006, the company filed a motion to stay the action
pending arbitration.  That motion is pending, according to the
company's form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Sept. 30, 2006.

The suit is "Chelsea Family Pharmacy, PLLC. v. Medco Health
Solutions, Inc., Case No. 4:06-cv-00118-TCK-SAJ," filed in the
U.S. District Court for the District of Oklahoma under Judge
Terence Kern with referral to Judge Sam A. Joyner.

Representing the plaintiffs are:

     (1) Bradford D. Barron of Gibbon Barron & Barron, PA, 2 W.
         6th St., Ste. 320, Tulsa, OK 74119-1215, Phone: 918-
         745-0687, Fax: 9180745-0821, E-mail:
         Bbarron@gbbfirm.com; and

     (2) Bobby Leon Latham, Jr. of Latham Stall Wagner Steele &
         Lehman, PC, 1800 S. Baltimore, Ste. 500, Tulsa, OK
         74119, Phone: 918-382-7523, Fax: 918-382-7541, E-mail:
         blatham@lswsl.com.

Representing the defendants are:

     (i) Mark Banner of Hall Estill Hardwick Gable Golden &
         Nelson (Tulsa), 320 S. Boston, Ste. 400, Tulsa, OK
         74103-3708, Phone: 918-594-0432, Fax: 918-594-0505, E-
         mail: mbanner@hallestill.com; and

    (ii) John Briggs of Howrey, LLP, 1299 Pennsylvania Ave., NW
         Washington, DC 20004-2402, Phone: 202-783-0800.


MEDCO HEALTH: Continues to Face Antitrust Lawsuit in California
---------------------------------------------------------------
Medco Health Solutions, Inc. remains a defendant in a purported
antitrust class action, "Alameda Drug Co., Inc., et al. v. Medco
Health Solutions, Inc., et al." that was filed against the
company and Merck & Co. in the Superior Court of California

In January 2004, a lawsuit captioned, "Alameda Drug Co., Inc.,
et al. v. Medco Health Solutions, Inc., et al." was filed
against the company and Merck in the Superior Court of
California.  

The plaintiffs, which seek to represent a class of all
California pharmacies that had contracted with the company and
that had indirectly purchased prescription drugs from Merck,
allege, among other things, that since the expiration of a 1995
consent injunction entered by the U.S. District Court for the
Northern District of California, if not earlier, the company
has:

     -- failed to maintain an Open Formulary (as defined in the
        consent injunction), and

     -- failed to prevent nonpublic information received from
        competitors of Merck and the company from being
        disclosed to each other.

The complaint also copies verbatim many of the allegations in
the amended complaint-in-intervention filed by the U.S. Attorney
for the Eastern District of Pennsylvania.

The matters relate to:

     -- a consolidated action pending in the Eastern District of
        Pennsylvania.  The consolidated action included a
        government complaint-in-intervention filed in September
        2003 and two pending qui tam, or whistleblower,
        complaints filed in 2000.

        The complaints alleged violations of the False Claims
        Act and various other state statutes.  Additional legal
        claims were added in an amended complaint-in-
        intervention filed in December 2003, including a count
        alleging a violation of the Public Contracts Anti-
        Kickback Act.  This Consolidated Action has been settled
        for $137.5 million.

     -- a qui tam that remains under seal in the Eastern
        District of Pennsylvania.  The U.S. Attorney's Office
        had informed the company that the Complaint alleges
        violations of the federal False Claims Act, that the
        company and other defendants inflated manufacturers'
        "best price" to Medicare and Medicaid, and that the
        company and other defendants offered and paid kickbacks
        to third parties to induce the placement on formularies
        and promotion of certain drugs.  This matter has been
        settled for $9.5 million.

     -- an investigation that began with a letter the company
        received from the U.S. Attorney's Office for the Eastern
        District of Pennsylvania in January 2005 requesting
        information and representations regarding the company's
        Medicare Part B coordination of benefits recovery
        program.  This matter was settled for $8.0 million.  

On Oct. 23, 2006, the company entered into settlement agreements
with the Department of Justice on these matters.

The plaintiffs further allege that, as a result of these alleged
practices, the company has been able to increase its market
share and artificially reduce the level of reimbursement to the
retail pharmacy class members, and that the prices of
prescription drugs from Merck and other pharmaceutical
manufacturers that do business with the company had been fixed
and raised above competitive levels.

The plaintiffs assert claims for violation of California
antitrust law and California law prohibiting unfair business
practices.  The plaintiffs demand, among other things,
compensatory damages, restitution, disgorgement of unlawfully
obtained profits, and injunctive relief.  In the complaint, the
plaintiff further alleges, among other things, that the company
acts as a purchasing agent for its plan sponsor customers,
resulting in a system that serves to suppress competition.

The company reported no development in the case at its form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended Sept. 30, 2006.

Franklin Lakes, New Jersey-based Medco Health Solutions, Inc.,
(NYSE: MHS) -- http://www.medco.com/-- is a pharmacy benefit  
manager with a mail order pharmacy operations based on
prescriptions dispensed.  The company's clients include private-
and public sector employers and healthcare organizations.  


MEDCO HEALTH: Continues to Face ERISA Complaints in N.Y. Court
--------------------------------------------------------------
Medco Health Solutions, Inc., which Merck & Co., Inc. acquired
in 1993, continues to face complaints of Employee Retirement
Income Security Act violations in the U.S. District Court for
the Southern District of New York.

Eight additional actions similar to:

     * "Gruer v. Merck-Medco Managed Care, L.L.C. pending in
       U.S. District Court for the Southern District of New
       York,"

were filed by Employee Retirement Income Security Act plan
participants against Merck & Co. and Medco Health, purportedly
on behalf of their plans, and, in some of the actions, similarly
situated self-funded plans.  

The ERISA plans themselves, which were not parties to these
lawsuits, had elected to participate in the $42.5 million
settlement of the Gruer suit and, accordingly, seven of these
actions had been dismissed pursuant to the final approval (which
is under appeal) of the settlement.

The plaintiff in another action, "Betty Jo Jones v. Merck-Medco
Managed Care, L.L.C., et al.," has filed a Second Amended
Complaint, in which she seeks to represent a class of all
participants and beneficiaries of ERISA plans that required such
participants to pay a percentage co-payment on prescription
drugs.  

In addition to these cases, a proposed class action complaint
against Merck and the company has been filed by trustees of
another benefit plan, the United Food and Commercial Workers
Local Union No. 1529 and Employers Health and Welfare Plan
Trust, in the U.S. District Court for the Northern District of
California.  This plan has elected to opt out of the settlement.

The United Food action has been transferred and consolidated in
the U.S. District Court for the Southern District of New York by
order of the Judicial Panel on Multidistrict Litigation.

The company reports no development in the case at its form 10-Q
filing with the U.S. Securities and Exchange Commission for the
year ended Sept. 30, 2006.

The suit is "In Re: Medco Health ERISA Litigation, case no.
7:03-md-01508-CLB," filed in the U.S. District Court for the
Southern District of New York under Judge Charles  
L. Brieant.  

Representing the plaintiffs are Linda J. Cahn and Mark Gardy of
Abbey, Gardy & Squitieri, LLP, 212 East 39th Street, New York,
NY 10016, Phone: (212) 889-3700; or Philippe Z. Selendy, Boies,
Schiller & Flexner, LLP, 570 Lexington Avenue 16th floor, New
York, NY 10022, Phone: (212) 446-2300.   

Representing the company are Bruce B. Kelson, Kenneth M. Kramer,  
James P. Tallon of Shearman & Sterling, 555 California Street,  
20th Floor, San Francisco, CA 94104, Phone: (415) 616-1100, E-
mail: jtallon@shearman.com.  


MEDCO HEALTH: Pa. Court Consolidates Antitrust Litigations
----------------------------------------------------------
Antitrust actions filed against Medco Health Solutions, Inc. and
Merck & Co. Inc., which acquired Medco in 1993, are now
consolidated for pretrial purposes in the U.S. District Court
for the Eastern District of Pennsylvania.  

                   Brady Enterprises Lawsuit

In August 2003, a lawsuit "Brady Enterprises, Inc., et al. v.
Medco Health Solutions, Inc., et al." was filed in the U.S.
District Court for the Eastern District of Pennsylvania against
the company and Merck.

The plaintiffs, who seek to represent a national class of retail
pharmacies that had contracted with the company, allege that the
company has conspired with, acted as the common agent for, and
used the combined bargaining power of plan sponsors to restrain
competition in the market for the dispensing and sale of
prescription drugs.

The plaintiffs allege that, through the alleged conspiracy, the
company has engaged in various forms of anticompetitive conduct,
including, among other things, setting artificially low
reimbursement rates to such pharmacies.

The plaintiffs assert claims for violation of the Sherman Act
and seek treble damages and injunctive relief.  The plaintiffs'
motion for class certification is currently pending, according
to the company's form 10-Q filing with the U.S. Securities and
Exchange Commission for the year ended Sept. 30, 2006.

                North Jackson Pharmacy Lawsuit

In October 2003, a lawsuit captioned "North Jackson Pharmacy,
Inc., et al. v. Medco Health Solutions, Inc., et al." was filed
in the U.S. District Court for the Northern District of Alabama
against Merck and the company.

In their Second Amended Complaint, the plaintiffs allege that:

     -- Merck and the company have engaged in price fixing and
        other unlawful concerted actions with others, including
        other Pharmacy Benefit Managers, to restrain trade in
        the dispensing and sale of prescription drugs to
        customers of retail pharmacies who participate in
        programs or plans that pay for all or part of the drugs
        dispensed; and

     -- have conspired with, acted as the common agent for, and
        used the combined bargaining power of plan sponsors to
        restrain competition in the market for the dispensing
        and sale of prescription drugs.

The plaintiffs allege that, through such concerted action, Merck
and the company have engaged in various forms of anticompetitive
conduct, including, among other things, setting reimbursement
rates to such pharmacies at unreasonably low levels.  The
plaintiffs assert claims for violation of the Sherman Act and
seek treble damages and injunctive relief.  The plaintiffs'
motion for class certification has been granted.

                 Mike's Medical Center Lawsuit

In December 2005, a lawsuit captioned "Mike's Medical Center
Pharmacy, et al. v. Medco Health Solutions, Inc., et al." was
filed against the company and Merck in the U.S. District Court
for the Northern District of California.  The plaintiffs seek to
represent a class of all pharmacies and pharmacists that had
contracted with the company and California pharmacies that had
indirectly purchased prescription drugs from Merck and make
factual allegations similar to those in the Alameda Drug Co.
action.

The plaintiffs assert claims for violation of the Sherman Act,
California antitrust law, and California law prohibiting unfair
business practices.  The plaintiffs demand, among other things,
treble damages, restitution, disgorgement of unlawfully obtained
profits, and injunctive relief.

In April 2006, the Brady plaintiffs filed a petition to transfer
and consolidate various antitrust actions against Pharmacy
Benefit Managers, including North Jackson, Brady, and Mike's
Medical Center before a single federal judge.  The motion was
granted on Aug. 24, 2006.

These actions are now consolidated for pretrial purposes in the
U.S. District Court for the Eastern District of Pennsylvania.  
The consolidated action is known as "In re Pharmacy Benefit
Managers Antitrust Litigation."


MERCK-MEDCO: $42.5M Settlement of ERISA Lawsuit Under Appeal
------------------------------------------------------------
Two appeals are pending against a $42.5 million agreement to
settle a lawsuit filed against Medco Health Solutions, Inc. over
alleged violations of the Employee Retirement Income Security
Act by the company.

In December 1997, a lawsuit "Gruer v. Merck-Medco Managed Care,
L.L.C." was filed in the U.S. District Court for the Southern
District of New York against the company and its owner Merck
Co., Inc.

The suit alleges that the company should be treated as a
"fiduciary" under the provisions of the ERISA of 1974 and that
the company has breached fiduciary obligations under ERISA in a
variety of ways.

After the Gruer case was filed, a number of other cases were
filed in the same court asserting similar claims.  In December
2002, Merck and the company agreed to settle the Gruer series of
lawsuits on a class action basis for $42.5 million, and agreed
to certain business practice changes, to avoid the significant
cost and distraction of protracted litigation.

The release of claims under the settlement applies to plans for
which the company has administered a pharmacy benefit at any
time between Dec. 17, 1994 and the date of final approval.  It
does not involve the release of any potential antitrust claims.

The plaintiff in "Blumenthal v. Merck-Medco Managed Care,
L.L.C., et al.," has elected to opt out of the settlement.  In
May 2004, the district court granted final approval to the
settlement and a Final Judgment was entered in June 2004.  The
settlement becomes final only after all appeals have been
exhausted.  Two appeals are pending, according to the company's
form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended Sept. 30, 2006.

The suit is "Gruer, et al. v. Merck-Medco Managed, et al, Case
No. 7:97-cv-09167-CLB," filed in the U.S. District Court for the
Southern District of New York, under Judge Charles L. Brieant.  
Representing the plaintiffs are:

     (1) Arthur N. Abbey, Mark C. Gardy and Linda J. Cahn of
         Abbey Gardy, LLP, 212 East 39th St., New York, NY
         10016, Phone: (212) 889-3700, E-mail:
         aabbey@abbeygardy.com and mgardy@abbeygardy.com;

     (2) Mary E. Alexander and Richard L. Akel of Mary A.
         Alexander & Associates, 44 Montgomery St., Suite 1303,
         San Francisco, CA 94104, Phone: (415) 433-4440;

     (3) Russell M. Herman of Herman, Mathis, Casey, Kitchens &
         Gerel, 820 O'Keefe Ave., New Orleans, LA 70113, Phone:
         (504) 581-4892;

     (4) Stephen J. Herman and David A. McKay of Herman, Mathis,
         Casey, Kitchens, & Gerel, 230 Peachtree St., N.W.,
         Suite 2260, Atlanta, GA 30303;

     (5) Christopher Adam Seeger of Seeger, Weiss, L.L.P., One
         William St., New York, NY 10004, Phone: (212) 584-0700;
         and

     (6) Philippe Z. Selendy of BOIES, SCHILLER & FLEXNER, LLP,
         570 Lexington Ave., 16th floor, New York, NY 10022,
         Phone: (212) 446-2300.

Representing the defendants are Bruce B. Kelson of Shearman &
Sterling, 555 California St., 20th Floor, San Francisco, CA
94104, Phone: (415) 616-1100; and Kenneth M. Kramer and James P.
Tallon of Shearman & Sterling, L.L.P., 599 Lexington Ave., New
York, NY 10022, Phone: (212) 848-4000, E-mail:
jtallon@shearman.com.


MOTOROLA INC: Faces Va. Suit Over Bluetooth-related Hearing Loss
----------------------------------------------------------------
Three Hampton Roads residents filed a lawsuit seeking class-
action status in the U.S. District Court for the Eastern
District of Virginia on behalf of Bluetooth users across the
country, The Virginian-Pilot reports.

Named defendants in the suits are:

     -- Motorola Inc.,      
     -- Plantronics Inc., and
     -- Jabra

The suits claim the companies have failed to warn consumers that
the Bluetooth headsets could cause permanent hearing loss.

According to the suits, tests by the American Speech-Language-
Hearing Association showed that exposure to high volumes from a
Bluetooth headset for even three or four minutes a day can cause
inner ear damage.  Prolonged use can cause irreversible hearing
loss.

Each lawsuit seeks unspecified monetary damages and an
injunction to stop the sale of the devices.

Motorola manufactures and distributes Bluetooth headsets, which
is attached to the ear and allow hands-free cell phone use.


NORTEL NETWORKS: Ontario Court Approves $2.5B Stock Suit Deal
-------------------------------------------------------------
Justice Warren K. Winkler of the Ontario Superior Court of
Justice approved an estimated US$2.5 billion settlement that
resolves seven lawsuits in the U.S., Ontario, Quebec and British
Columbia as to whether Nortel Networks Corp. misled investors
during two separate class periods.

Under the settlement, Nortel agreed to pay $575 million in cash
and issue common shares representing 14.5% of its current
equity, worth approximately $1.7 billion based on Nortel's
current share value.

The settlement also includes $228.5 million in payments from
Nortel's insurers.  Nortel further agreed to contribute one half
of any recovery in existing litigation by Nortel against former
senior officers who were terminated for cause in April 2004 and
to implement certain corporate governance enhancements and to
consider others.

The decision follows the approval of the $2.45 billion
settlement in the two U.S. class actions by U.S. District Court
Judges Richard Berman and Loretta Preska (Class Action Reporter,
Dec. 27, 2006).

In approving the settlement, Justice Winkler concluded that the
settlement was "fair, reasonable and in the best interests of
the class (of Nortel investors)" and provides "the maximum
available amount for satisfaction of the claims in total, short
of trial."

Last week, Justice Groberman of the Supreme Court of British
Columbia also approved the settlement on behalf of British
Columbia shareholders for the Nortel I class action.  The
settlement still requires approval by the Quebec Superior Court.

              Nortel Class Action Settlement Terms   

In 2005, the Ontario Teachers' Pension Plan Board (OTPP) and
several plaintiffs reached agreement in principle with Nortel
Networks Corp. to settle two major securities-related class
actions.  The conditional settlement is for approximately $2.4
billion in cash and Nortel common stock (Class Action Reporter,
July 5, 2006).

The settlement, which is subject to a number of conditions, is
part of a global settlement between Nortel, and certain of its
current and former directors, and the lead plaintiffs for two
separate securities fraud class actions -- Nortel I and Nortel
II.

In 2004, OTPP and the New Jersey Department of the Treasury were
appointed by a U.S. federal judge to head the prosecution of the
Nortel II case, the second of two major cases arising from the
disclosure of significant accounting improprieties at Nortel in
recent years.  The Nortel II case is being prosecuted on behalf
of persons who purchased Nortel common stock between April 24,
2003 and April 27, 2004.  Nortel I's class period is Oct. 24,
2000 through Feb. 15, 2001.

The total consideration Nortel is paying to the two investor
classes comprises $575 million in cash, plus 14.5% of the
company's current equity (approximately 628 million shares).  
Based on the $3.02 closing price of Nortel common stock on Feb.
7, 2006, the settlement equity would be worth approximately $1.9
billion.

The Nortel I settlement calls for certain investors to receive
US$438,667,428 in cash, minus legal fees, litigation expenses
and administration costs, plus 314,333,875 common shares.

The Nortel II settlement calls for certain investors to receive
CA$370,157,418 in cash, minus fees, expenses and administration
costs, plus 314,333,875 shares of common stock of Nortel.

Joel Rochon, co-lead counsel for the Ontario national class,
said, "This settlement represents the largest securities class
action settlement in Canadian history and will provide a measure
of protection for Canadian shareholders in the future."

He added, "We look forward to the rulings by the Quebec Superior
Court and to an efficient and timely distribution of cash and
shares to all class members thereafter."

Peter Jervis and George Glezos, co-counsel in the Ontario class
action, commented, "This decision confirms that Ontario courts
will protect both the investing public and the integrity of the
Canadian capital markets in Canadian securities class actions."

                        About Nortel

Headquartered in Ontario, Canada, Nortel Networks Corp.
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology  
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.  
Nortel does business in more than 150 countries.

For more information on the settlement, contact Joel Rochon of
Rochon Genova, Phone: (416) 363-1867; and Peter Jervis of
Lerners LLP, Phone: (416) 601-2356.


SAFEWAY INC: Calif. High Court to Hear Suit Over Salmon Labeling
----------------------------------------------------------------
The California state Supreme Court agreed to hear a suit filed
by Hagens Berman Sobol Shapiro LLP against Safeway Inc. grocery
stores, claiming that the food giant did not accurately label
farm-raised salmon.  The hearing is expected in the first half
of 2007, according to the law firm.

Hagens Berman Sobol Shapiro filed the suit on June 19, 2003.  
Specifically, the suit alleged that Safeway sold farm-raised
salmon fed special diet supplements that caused the fish to take
on a red color, masking the typical gray appearance of other
farm-raised salmon in efforts to mislead purchasers.

The defendants claimed that the suit was not a matter of state
law, but rather covered under Federal statute and motioned that
the case be dismissed.  The trial court agreed with the defense
motion, as did the court of appeals.

Hagens Berman Sobol Shapiro petitioned the State Supreme Court
to review the Court of Appeals decision, and was granted its
request on Dec. 13, 2006.

The suit claims that Safeway deceptively marketed farm-raised
salmon that has been artificially colored in order to appeal to
consumer taste, thus increasing its sales price and the
company's gross sales.

Defendant's nondisclosure of this fact allegedly constitutes
misrepresentation, unfair and deceptive business practices in
violation of California consumer protection laws and similar
statutes in other states.

The proposed class is defined as all persons, who during the
four years preceding the date when the complaint was filed,
purchased from defendant any salmon containing color additives,
when such salmon was not labeled or advertised as containing
color additives.

Plaintiffs also seek an injunction requiring defendants to
permanently halt their misbranding, concealment and non-
disclosure, and remedying such past acts with proper disclosures
and other measures.

The suit is "Jennifer Kanter v. Safeway Inc., d/b/a Safeway,
Case No. BC297730" filed in the Superior Court of the state of
California, County of Los Angeles.

The plaintiff seeks equitable and injunctive relief against
defendants Safeway Inc. d/b/a Safeway, Carrs, Genuardi's,
Pavillions, Tom Thumb, Dominick's Pak 'n Save Foods, Randall's,
and Vons and Does 1-100.

For more information contact Steve W. Berman at   
Hagens Berman Sobol Shapiro -- http://www.hbsslaw.com-- 1301  
5th Ave., Suite 2900 Seattle, WA 98101, Phone: (206) 623-7292,
Fax: (206) 623-0594.


STATE LINE: "Holdeman" Litigation Remanded to Ut. District Court
----------------------------------------------------------------
The U.S. Court of Appeals for the 10th Circuit remanded the
class action "Holdeman v. Devine, et al., Case No. 2:02-cv-
00365-PGC," back to the U.S. District Court for the District of
Utah, affirming and reversing in part the district court's
judgment, the CourtHouse News Service reports.

The ruling concerns Michael Devine, a hotel and casino executive
accused of breaching his fiduciary duty to State Line employees
by funding business expenses instead of paying off more than
$970,000 in medical bills under the company's health insurance
plan.

In 2002, employees of the State Line Hotel and Silver Smith
Casino in Wendover, Nevada, filed a class action against Mr.
Devine, claiming he violated laws in Utah and Nevada by
declaring dividends and distributing $1.2 million to his family
"at a time when the sponsoring entities were losing millions of
dollars each year."

When State Line filed for bankruptcy, the plaintiffs' unpaid
medical claims totaled nearly $1 million. They sued Mr. Devine
under the ERISA and racketeering act.

The district court dismissed the RICO claims and, on Dec. 15,
2003, certified the Employee Retirement Income Security Act
claims as a class action.  Mr. Holdeman and the class
subsequently filed an amended complaint asserting ERISA claims
against six State Line officers and directors, including Mr.
Devine.

After discovery, the parties filed cross-motions for summary
judgment.  The district court granted summary judgment in favor
of all defendants, except for Mr. Devine.

With respect to Mr. Devine, the district court concluded that
the "the undisputed evidence indicated that he was a fiduciary
of the Plan," but that "the following issues remained for
determination:

     (1) the extent of his fiduciary duties to the Plan; and
     (2) whether he breached his fiduciary duties to the Plan."

The district court conducted a bench trial on Sept. 6-8, 2005
and on Oct. 31, 2005, the district court issued written Findings
of Fact and Conclusions of Law.

Therein, the district court "concluded that Mr. Devine did not
breach his fiduciary duties to the plan or the plan participants
under ERISA."  Accordingly, the district court entered judgment
in favor of Mr. Devine.

Plaintiff Mr. Holdeman, on behalf of himself and the class,
filed a notice of appeal.

In their appeal, plaintiffs argue generally that the district
court "erred in ruling that Mr. Devine did not breach his
fiduciary duties."

More specifically, plaintiffs argue that Mr. Devine "breached
fiduciary duties owed to the Class in many ways," including

     1) failing to ensure that the Plan was fully funded;
     2) failing to act with complete loyalty to the Class;
     3) failing to act prudently in managing and administering
        the Plan; and
     4) with his fiduciary duty on, failing to act in any way to
        challenge or question the actions of Devine, acting with
        his chief executive duty, in authorizing distributions
        of over $1.2 million to the owners of the Sponsoring
        Entities.

Plaintiffs also argued that the district court erred in relying
on Mr. Devine's subjective belief that he was doing the best he
could to carry out his dual roles as both CEO and fiduciary, and
in ruling that all of Mr. Devine's decisions "were business
judgments that fall outside the scope of ERISA's fiduciary duty
requirements.

Earlier, the circuit found that Mr. Devine was "wearing his CEO
hat" when he made tough financial decisions that he thought
would save the company from bankruptcy.

The appeals court remanded to let the lower court consider
whether Mr. Devine should have resigned as fiduciary or informed
the plan beneficiaries to make other health-care arrangements.

A copy of the appeals' court decision is available free of
charge at: http://ResearchArchives.com/t/s?18cc

The suit is "Holdeman v. Devine, et al., Case No. No. 05-4302,"
filed in the U.S. Court of Appeals for the 10th Circuit.

Representing defendants are:

     (1) Michael W. Homer,Carl F. Huefner and Jesse C.
         Trentadue, all of Suitter Axland, 8 E Broadway Ste 200,
         Salt Lake City UT 84111, Phone: (801) 532-7300, E-mail:
         mhomer@sautah.com or chuefner@sautah.com or
         jesse32@sautah.com; and

     (2) John D. Luthy, 2401 Burns LN, Camden, SC 29020, Phone:
         (801) 842-3946, E-mail: johnluthy@hotmail.com.

Representing plaintiffs are Brian S. King, 336 S, 300 E Ste, 200
Salt Lake City, UT 84111, Phone: (801) 532-1739, E-mail:
brian@briansking.com; and Marcie E. Schaap, 1523 E Spring LN,
Salt Lake City, UT 84117, Phone: (801) 201-1642, Fax: (801) 272-
6350, E-mail: meschaap@3kingslaw.com.


TARGET: Recalls Baby Rattles, Ornaments for Choking Hazard
----------------------------------------------------------
Target, of Minneapolis, Minnesota, in cooperation with the U.S.
Consumer Product Safety Commission, is recalling 460,000 units
of plush baby rattles and photo frame ornaments.

The company said small parts on the plush rattles and frame
ornaments can break or detach, posing a choking hazard to young
children.  Additionally, the rattles' plastic ring can break and
expose sharp points.

Target has received 11 reports of the pompoms, eyes, nose and
bows detaching from rattles and frame ornaments, including one
report of a baby mouthing a detached part.  No injuries have
been reported.

This recall involves plush rattles and frame ornaments sold in
the "See. Spot. Save." department of Target stores.  The two
styles of rattles include a pink bear and a green moose.  The
plush animals either have a rattle inside or a plastic ring
attached.  The photo frame ornaments are a pink bear or green
moose holding either a square or heart-shaped frame.

These recalled plush baby rattles and photo frame ornaments were
manufactured in China and are being sold at Target stores
exclusively nationwide from November 2006 through December 2006
for $1.

Pictures of the recalled plush baby rattles and photo frame
ornaments:
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07083a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07083b.jpg

Consumers are advised to stop using the rattles and photo frames
immediately and return them to the nearest Target store for a
Target GiftCard worth the value of the returned item plus
applicable sales tax.

For more information, contact Target at (800) 440-0680 between 7
a.m. and 6 p.m. CT Monday through Friday, or visit:
http://www.Target.com


WESTLAND DEVELOPMENT: Faces Litigation in N.Mex. Over Land Sale
---------------------------------------------------------------
Shareholders of Westland Development Co. filed a purported class
action seeking to invalidate a November 2006 vote that approved
the sale of a 57,000-acre historic land grant in New Mexico to a
California developer.

The land was sold for $250 million to SunCal Companies following
a November shareholder voting, a report by The Albuquerque
Tribune indicated.

In a class action filed on behalf of about 2,500 shareholders
who are opposed to the sale, it was alleged that the voting was
tainted by a series of irregularities, including forged ballots.

According to a news release issued on behalf of several
shareholders, a hearing seeking an injunction is scheduled for
February in state District Court in Albuquerque.

Ricardo Chaves, who owned about 7,000 shares, pointed out that
the sale would be stopped since according to their numbers 66.6
percent of votes were not garnered during the voting.  That was
the percentage needed to sell the corporation, he explained.


                   New Securities Fraud Cases


CELESTICA INC: Schatz Nobel Files N.Y. Securities Fraud Suit
------------------------------------------------------------
The law firm of Schatz Nobel Izard, P.C. commenced a lawsuit,
seeking class-action status, in the U.S. District Court for the
Southern District of New York on behalf of all persons who
purchased or otherwise acquired the publicly traded securities
of Celestica, Inc. between July 27, 2006 and Dec. 12, 2006,
inclusive.

The Complaint alleges that Celestica and certain of its officers
and directors violated federal securities laws.

Specifically, defendants issued numerous statements describing
the company's financial performance and future prospects, which
they attributed, in part, to success of the Celestica's
restructuring activities and improvements in the Mexican and
European operations.

The complaint further alleges that these statements were
materially false and misleading when made because defendants
failed to disclose and/or misrepresented the following adverse
facts, among others:

     (i) that the company was experiencing declining demand in
         its Mexican operations and that division was carrying
         significant amounts of unneeded inventory which would
         have to be written off;

    (ii) that the company was experiencing declining demand in
         its Information Technology ("IT") and communications
         market segments as its larger customers scaled back
         purchases; and

   (iii) as a result of the foregoing, there was no reasonable
         basis to project adjusted earnings per share ranging
         from $0.12 to $0.20. When this undisclosed information
         later became public, shares of Celestica declined.

Interested parties may move the court no later than March 13,
2007 for lead plaintiff appointment.

For more information, contact Wayne T. Boulton or Nancy A.
Kulesa, both of Schatz Nobel Izard, P.C., Phone: (800) 797-5499,
E-mail: sn06106@aol.com, Website: http://www.snlaw.net.


HORNBECK OFFSHORE: Schatz Nobel Files Securities Suit in La.
------------------------------------------------------------
The law firm of Schatz Nobel Izard, P.C. filed a class action in
the U.S. District Court for the Eastern District of Louisiana on
behalf of purchasers of the common stock and other securities of
Hornbeck Offshore Services, Inc. who purchased during the period
from Nov. 1, 2006 through Jan. 10, 2007.

The complaint alleges that Hornbeck and certain of its officers
and directors violated Federal Securities laws by making false
and misleading statements.

On Nov. 1, 2006, the company reaffirmed its guidance for fiscal
2007 and specifically reaffirmed earnings before interest,
taxes, depreciation and amortization (EBITDA) for the fourth
quarter of 2006 to range of between $39.0 million and $41.0
million and earnings per share to range of between $0.69 and
$0.74.

On Nov. 6, 2006, the company announced an offering of $200.0
million in convertible senior notes with an over-allotment of
$30.0 million in principal amount of additional notes.

On Nov. 13, 2006, the company announced that it had closed the
note offering and received the offering proceeds.  These
aggressive projections were crucial to the completion of the
note offering, but have the effect of artificially inflating the
price of the stock.

On Jan. 10, 2007, the company shocked the market by announcing
that that it was revising its EBITDA and earnings per share
guidance for the fourth quarter of 2006 and for fiscal 2006,
materially reducing EBITDA for the fourth quarter of 2006 to
range between $33.0 million and $34.0 million, down from $39.0
million to $41.0 million.

The company announced it now expected that per share earnings
for the fourth quarter of 2006 to range between $0.61 and $0.63,
down from $0.72 to $0.77.  It also expected to reduce 2007
guidance by 15 to 20 percent.

The company was forced to admit that it had knowledge over the
previous several months that operating issues had negatively
impacted the company's financial performance, including
volatility in the offshore vessel day-rate, a lag in the
shipyard delivery schedules for new-builds and increased
turnaround time for regulatory dry-dockings, repairs and
maintenance, as well as increased costs for personnel and
insurance.

As a result of this unexpected news, the price Hornbeck shares
slumped to a 52-week low in early trading on Jan. 11, 2007 and
the stock was down $7.11, or 21.2%, on markedly increased
volume.

All motions for appointment as Lead Plaintiff must be filed with
the court by March 19, 2007.
For more information, contact Wayne T. Boulton or Nancy A.
Kulesa both of Schatz Nobel Izard, P.C., Phone: (800) 797-5499,
E-mail: sn06106@aol.com, Website: http://www.snlaw.net.


HORNBECK OFFSHORE: Paskowitz Announces Securities Suit Filing
-------------------------------------------------------------
Paskowitz & Associates filed a class action in the U.S. District
Court for the District of Louisiana on behalf of purchasers of
the common stock and other securities of Hornbeck Offshore
Services, Inc. who purchased during the period from Nov. 1, 2006
through Jan. 10, 2007.

The complaint alleges that Hornbeck and certain of its officers
and directors violated the federal securities laws by making
false and misleading statements and omissions concerning the
company's operations and expected earnings for the 4th Quarter
2006, and for fiscal 2007.

On Nov. 1, 2006, the company reaffirmed its guidance for fiscal
2007 and specifically reaffirmed earnings before interest,
taxes, depreciation and amortization ("EBITDA") for the fourth
quarter of 2006 to range of between $39.0 million and $41.0
million and earnings per share to range of between $0.69 and
$0.74. On Nov. 6, 2006, the company announced an offering of
$200.0 million in convertible senior notes with an over-
allotment of $30.0 million in principal amount of additional
notes.

On Nov. 13, 2006, the company announced that it had closed the
note offering and received the offering proceeds. These
aggressive projections were crucial to the completion of the
note offering, but have the effect of artificially inflating the
price of the stock.

On Jan. 10, 2007, the company shocked the market by announcing
that that it was revising its EBITDA and earnings per share
guidance for the fourth quarter of 2006 and for fiscal 2006,
materially reducing EBITDA for the fourth quarter of 2006 to
range between $33.0 million and $34.0 million, down from $39.0
million to $41.0 million.

The company announced it now expected that per share earnings
for the fourth quarter of 2006 to range between $0.61 and $0.63,
down from $0.72 to $0.77. It also expected to reduce 2007
guidance by 15 to 20 percent.

The company was forced to admit that it had knowledge over the
previous several months that operating issues had negatively
impacted the company's financial performance, including
volatility in the offshore vessel day-rate, a lag in the
shipyard delivery schedules for new-builds and increased
turnaround time for regulatory dry-dockings, repairs and
maintenance, as well as increased costs for personnel and
insurance.

As a result of this unexpected news, the price of Hornbeck
shares slumped to a 52-week low in early trading on Jan. 11,
2007 and the stock was down $7.11, or 21.2%, on markedly
increased volume.

Interested parties may move the court no later than March 19,
2007 for lead plaintiff appointment.

For more information on the suit, contact Laurence Paskowitz of
Paskowitz & Associates, Phone: 1-800-705-9529 (Toll free).


HORNBECK OFFSHORE: Goldman Scarlato Files Securities Suit in La.
---------------------------------------------------------------
Goldman Scarlato & Karon, P.C. filed a class action in the U.S.
District Court for the Eastern District of Louisiana on behalf
of purchasers of the common stock and other securities of
Hornbeck Offshore Services, Inc. during the period from Nov. 1,
2006 through Jan. 10, 2007.

The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.

Specifically, the complaint alleges that Defendants made certain
false and misleading statements and omissions concerning the
company's operations and expected earnings for the fourth
quarter of 2006.

On Nov. 1, 2006, the company reaffirmed its guidance for fiscal
2007 and specifically reaffirmed earnings before interest,
taxes, depreciation and amortization (EBITDA) for the fourth
quarter of 2006 to range of between $39.0 million and $41.0
million and earnings per share to range of between $0.69 and
$0.74.

On Nov. 6, 2006, the company announced an offering of $200.0
million in convertible senior notes with an over-allotment of
$30.0 million in principal amount of additional notes.

On Nov. 13, 2006, the company announced that it had closed the
note offering and received the offering proceeds.  These
aggressive projections were crucial to the completion of the
note offering, but have the effect of artificially inflating the
price of the stock.

On Jan. 10, 2007, the company shocked the market by announcing
that that it was revising its EBITDA and earnings per share
guidance for the fourth quarter of 2006 and for fiscal 2006,
materially reducing EBITDA for the fourth quarter of 2006 to
range between $33.0 million and $34.0 million, down from $39.0
million to $41.0 million.

The company announced it now expected that per share earnings
for the fourth quarter of 2006 to range between $0.61 and $0.63,
down from $0.72 to $0.77.  It also expected to reduce 2007
guidance by 15 to 20 percent.

The company was forced to admit that it had knowledge over the
previous several months that operating issues had negatively
impacted the company's financial performance, including
volatility in the offshore vessel day-rate, a lag in the
shipyard delivery schedules for new-builds and increased
turnaround time for regulatory dry-dockings, repairs and
maintenance, as well as increased costs for personnel and
insurance.

As a result of this unexpected news, the price Hornbeck shares
slumped to a 52-week low in early trading on Jan. 11, 2007 and
the stock was down $7.11, or 21.2%, on markedly increased
volume.

All motions for appointment as Lead Plaintiff must be filed with
the court by March 19, 2007.

For more information, contact Brian Penny of The Law Firm of
Goldman Scarlato & Karon, P.C., Esq., Phone: 888-668-4130.


                            *********


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.

                            *********


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Copyright 2007.  All rights reserved.  ISSN 1525-2272.

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