/raid1/www/Hosts/bankrupt/CAR_Public/080204.mbx
C L A S S A C T I O N R E P O R T E R
Monday, February 4, 2008, Vol. 10, No. 24
Headlines
ACI WORLDWIDE: Court Still to Rule on $24.5M Settlement Appeal
AJBLUE LLC: Recalls Girls' Hoodies Due to Strangulation Hazard
BEAR STEARNS: Court Approves Settlement of McKesson HBOC Action
COLORADO: Suit Over Medicaid Eligibility of Disabled Certified
ELEGANT BABY: Recalls Silver Teethers Due to Choking Hazard
ENERLUME ENERGY: CT Securities Suit Settlement Granted Final OK
FIDELITY NATIONAL: Faces Lawsuit Over Bankruptcy Kickbacks
GOLDMAN SACHS: Added as Defendant in D.C. Fannie Mae Lawsuit
GOLDMAN SACHS: Still Faces Montana Power Co. Shareholders' Suit
LEHMAN COMMERCIAL: California Court Still to Approve Settlement
LEHMAN BROTHERS: Second Circuit Reverses Ruling in N.Y. IPO Case
LEHMAN BROTHERS: Motions Pending in Mirant Securities Litigation
LEHMAN BROTHERS: Nixing of Short Sale Antitrust Lawsuit Appealed
LOUISIANA: Jefferson Parish Sued Over Red Light Cameras
LOUISIANA CITIZENS: Policyholders' Lawsuit Gets Certification
MAJESCO ENTERTAINMENT: Court Still to Approve $2.5M Settlement
MORGAN STANLEY: Class Certification Sought in N.Y. IPO Lawsuits
MORGAN STANLEY: Faces Multiple ERISA Violations Lawsuits in N.Y.
MORGAN STANLEY: MDL Orders Centralization of Wage, Hour Lawsuits
MORGAN STANLEY: Settles Calif., D.C. Gender Discrimination Suits
NATIONAL CITY: Dreier LLP Sues Alleging Securities Laws Breach
SCRIPPS HEALTH: Settles Uninsured Pricing Lawsuit in California
SLM CORP: Girard Gibbs Retained in NY Securities Fraud Lawsuit
THE GEO GROUP: DUI Suspect Files Suit Over Prison Strip-Searches
US SUGAR: Fla. Suit Alleges Deprivation of Shareholders' Rights
VERIFONE HOLDINGS: Erroneous Fin'l. Reports Prompts $691M Suit
WCI COMMUNITIES: Faces Fla. Suit Over Sale of Condominium Units
WENZEL CO: Recalls Car Charging Units Due To Injury Hazard
WOODBURY COUNTY: Woman Files Suit Over Jail Strip Search Policy
XCELERA.COM INC: Mass. Securities Lawsuit Granted Certification
New Securities Fraud Cases
AMERICAN DENTAL: Roy Jacobs Files Securities Fraud Suit in MA
CENTERLINE HOLDING: Schiffrin Barroway Files NY Securities Suit
SLM CORP: Coughlin Stoia Files Securities Fraud Suit in N.Y.
*********
ACI WORLDWIDE: Court Still to Rule on $24.5M Settlement Appeal
--------------------------------------------------------------
The United States Court of Appeals for the Eighth Circuit has
yet to rule on an appeal against a US$24.5-million settlement of
a securities fraud class action against ACI Worldwide, Inc.,
f/k/a Transaction Systems Architects, Inc.
In November 2002, two class actions were filed with the United
States District Court for the District of Nebraska against the
company and certain individuals alleging violations of Sections
10(b) and 20(a) of the United States Securities Exchange Act of
1934 and Rule 10b-5 thereunder.
Pursuant to a Court order, the two complaints were consolidated
as "Desert Orchid Partners v. Transaction Systems Architects,
Inc., et al.," with Genesee County Employees' Retirement System
designated as lead plaintiff.
Second Complaint
The Second Amended Consolidated Class Action Complaint
previously alleged that during the purported class period, the
company and the named defendants misrepresented the company's
historical financial condition, results of operations and our
future prospects, and failed to disclose facts that could have
indicated an impending decline in the company's revenues.
That Complaint also alleged that, prior to August 2002, the
purported truth regarding the company's financial condition had
not been disclosed to the market.
The company and the individual defendants initially filed a
motion to dismiss the lawsuit. In response, on Dec. 15, 2003,
the Court dismissed, without prejudice, Gregory Derkacht, the
company's former president and chief executive officer, as a
defendant, but denied a motion to dismiss with respect to the
remaining defendants, including the company.
On July 1, 2004, the lead plaintiff filed a motion for class
certification wherein, for the first time, lead plaintiff sought
to add an additional class representative, Roger M. Wally.
On Aug. 20, 2004, defendants filed their opposition to the
motion. On March 22, 2005, the Court issued an order certifying
the class of persons that purchased the company's common stock
from Jan. 21, 1999, through Nov. 18, 2002.
On Jan. 27, 2006, the company and the individual defendants
filed a motion for judgment on the pleadings, seeking a
dismissal of the lead plaintiff and certain other class members,
as well as a limitation on damages based upon plaintiffs'
inability to establish loss causation with respect to a large
portion of their claims.
On Feb. 6, 2006, additional class representative Roger M. Wally
filed a motion to withdraw as a class representative and class
member.
On April 21, 2006, and based upon the pending motion for
judgment, a motion to intervene as a class representative was
filed by the Louisiana District Attorneys Retirement System.
LDARS previously attempted to be named as lead plaintiff in the
case.
On July 5, 2006, the Magistrate denied LDARS' motion to
intervene, which LDARS appealed to the District Judge. That
appeal has not yet been decided.
On May 17, 2006, the Court denied the motion for judgment on the
pleadings as being moot based upon the Court's granting lead
plaintiff leave to file a Third Amended Complaint, which it did
on May 31, 2006.
Third Complaint
The Third Complaint alleges the same misrepresentations as
described above, while simultaneously alleging that the
purported truth about our financial condition was being
disclosed throughout that time, commencing in April 1999. It
seeks unspecified damages, interest, fees, and costs.
On June 14, 2006, the company and the individual defendants
filed a motion to dismiss the Third Complaint pursuant to Rules
8 and 12 of the Federal Rules of Civil Procedure. Lead
Plaintiff opposed the motion.
Settlement
Prior to any ruling on the motion to dismiss, on Nov. 7, 2006,
the parties entered into a Stipulation of Settlement for
purposes of settling all of the claims in the Class Action
Litigation, with no admissions of wrongdoing by the company or
any individual defendant.
The settlement provides for an aggregate cash payment of
US$24.5 million of which, net of insurance, the company
contributed approximately US$8.5 million.
The Court approved the settlement on March 2, 2007, and it
ordered the case dismissed with prejudice against the company
and the individual defendants.
Settlement Objection
On March 27, 2007, James J. Hayes, a class member, filed a
notice of appeal with the U.S. Court of Appeals for the Eighth
Circuit appealing the Court's order. The company responded to
this appeal in accordance with the Court of Appeals' orders and
procedures. The appeal has not yet been decided.
The company reported no development in the matter in its
Jan. 30, 2008 Form 10-K Filing with the SEC for the fiscal year
ended Sept. 30, 2007.
The suit is "Desert Orchid Partners, LLC, et al. v. Transaction
Systems Architects, Inc., et al., Case No. 02-CV-0553," filed
with the United States District Court for the District of
Nebraska, Judge Joseph F. Bataillon presiding.
Representing the plaintiffs are:
Joel H. Bernstein, Esq.
Labaton Sucharow LLP
140 Broadway
New York, NY 10005
Phone: (212) 907-0869
Fax: (212) 883-7069
e-mail: jbernstein@labaton.com
- and -
J. Allen Carney, Esq.
Cauley Bowman Carney & Williams, P.L.L.C.
11311 Arcade Drive, Suite 200
Little Rock, AR 72212
Phone: (501) 312-8500
Fax: (501) 312-8505
e-mail: acarney@cauleybowman.com
Web site: http://www.cauleybowman.com
Representing the defendants are:
William G. Dittrick, Esq.
Baird Holm LLP
1500 Woodmen Tower
Omaha, NE 68102-2068
Phone: (402) 344-0500
Fax: (402) 344-0588
e-mail: wdittrick@bairdholm.com
- and -
Joel Held, Esq.
Baker & McKenzie, LLP
2001 Ross Avenue, Suite 2300
Dallas, TX 75201
Phone: (214) 978-3090
Fax: (214) 978-3099
e-mail: joel.held@bakernet.com
AJBLUE LLC: Recalls Girls' Hoodies Due to Strangulation Hazard
--------------------------------------------------------------
AJBlue LLC, dba Apollo Jeans, of New York, N.Y., in cooperation
with the U.S. Consumer Product Safety Commission, is recalling
about 14,000 girls' hooded jackets.
The company said the jackets have a drawstring through the hood
which poses a strangulation hazard to children. No injuries
have been reported, though.
The recalled velour jackets specifically have a drawstring at
the neck portion. The jackets zip up the front and have a front
pocket, and were sold with matching velour pants. The word
"DIVA" with rhinestones is displayed across the front of the
jackets. They were sold in children's sizes small, medium,
large, extra-large and 4, 5, 6, and 6X and came in red, blue and
beige colors. "Apollo Active Wear" and either style number
5033gk or 5033gg are printed on the jackets' neck tag.
These recalled hoodies were manufactured in Korea and were being
sold exclusively at Marshalls Stores nationwide from August 2007
through November 2007 for about US$15.
Consumers are advised to immediately remove the drawstring from
the jacket's hood to eliminate the hazard, or return it for a
full refund to either the place of purchase or Apollo Jeans.
For additional information, call Apollo Jeans collect at:
(212) 398-6585 (9:00 a.m. - 5:00 p.m ET, Monday-Friday).
Note: CPSC was notified about these garments by the Wisconsin
Department of Consumer Protection.
BEAR STEARNS: Court Approves Settlement of McKesson HBOC Action
---------------------------------------------------------------
The United States District Court for the Northern District of
California, on Jan. 18, 2008, gave final approval of a
settlement among Bear Stearns & Co. Inc. and the parties in a
class action titled "In re McKesson HBOC, Inc. Securities
Litigation, Master File No. 99-CV-20743 RMV (PVT)."
The Federal Class Action and Bear Stearns
The suit -- which arose out of a merger between McKesson
Corporation and HBO & Company that resulted in an entity called
McKesson HBOC, Inc. -- was filed in April 1999 against McKesson,
HBOC, McKesson HBOC, Bear Stearns & Co. Inc., Arthur Andersen,
LLP, and certain officers or directors of McKesson or HBOC.
The class consists of all persons or entities who:
-- purchased or otherwise acquired publicly traded
securities of HBOC during the period from Jan. 20,
1997, through and including Jan. 12, 1999, and all
persons or entities who purchased or otherwise acquired
call options or sold put options of HBOC during the
period from Jan. 20, 1997, through and including
April 27, 1999;
-- purchased or otherwise acquired publicly traded
securities or call options, or who sold put options, of
McKesson or of McKesson HBOC during the period from
Oct. 18, 1998, through and including April 27, 1999;
and
-- held McKesson common stock on Nov. 27, 1998, and
still held those shares on Jan. 12, 1999, and who
were injured thereby.
The litigation alleges that HBOC and, after the merger with
McKesson, McKesson HBOC, reported fraudulent revenues, income
and assets, which caused members of the class to suffer losses.
Moreover, the plaintiffs, in a third amendment to their
complaint, allege that Bear Stearns violated Sections 10(b) and
14(a) of the Exchange Act in connection with allegedly false and
misleading disclosures contained in a joint proxy
statement/prospectus that was issued with respect to the
McKesson/HBOC merger.
The lead plaintiff for the class action is the New York State
Common Retirement Fund.
On Jan. 6, 2003, the court granted Bear Stearns' motion to
dismiss the Section 10(b) claim asserted in the third amended
complaint, but denied Bear Stearns' request to have the Section
14(a) claim dismissed. In March 2003, Bear Stearns filed an
answer to the third amended complaint denying all allegations
of wrongdoing and asserting affirmative defenses.
The McKesson HBOC Settlement
On Jan. 12, 2005, McKesson HBOC announced that it had reached a
settlement with the plaintiff class, which settlement
required court approval. Yet, Bear Stearns' engagement letter
with McKesson in connection with the McKesson/HBOC merger
provided that McKesson cannot settle any litigation without Bear
Stearns' written consent, unless McKesson obtains an
unconditional written release for Bear Stearns and, under
certain circumstances, is required to provide indemnification to
Bear Stearns. Thus, by an order dated May 23, 2005, the Court
denied preliminary approval of the proposed settlement between
McKesson HBOC and the plaintiff class.
On July 12, 2005, the plaintiff class and McKesson HBOC
submitted a revised proposed settlement, purporting to address
the issues identified by the Court in its order denying
preliminary approval. The revised proposed settlement provides,
among other things, that Bear Stearns' rights under its
engagement letter are preserved for future resolution. McKesson
HBOC's claims in connection with the letter are also preserved.
On Feb. 24, 2006, the Court granted final approval of the
revised proposed settlement. Bear Stearns appealed the final
approval order to the United States Circuit Court of Appeals for
the Ninth Circuit. Bear Stearn's appeal sought to reverse the
final approval on the ground that consummation of the settlement
may deprive Bear Stearns of certain rights and remedies provided
for in its engagement letter.
Bear Stearns' New York Action
On Dec. 8, 2005, Bear Stearns initiated a separate action with
the New York State Supreme Court, New York County, titled "Bear
Stearns v. McKesson Corp.," asserting breach of contracts and
other claims against McKesson based on the engagement letter and
seeking, among other things, declaratory relief and damages.
On April 24, 2006, McKesson moved to dismiss certain causes
of action asserted in the New York Action. On Oct. 25, 2006,
the New York Supreme Court issued an opinion denying McKesson's
motion to dismiss in part and allowing Bear Stearns to proceed
with certain of its claims.
The Final Settlement
On Sept. 24, 2007, the parties in the Federal Class Action
entered into a stipulation of settlement. The stipulation of
settlement provides that, subject to final approval by the
District Court, the claims asserted on behalf of the class
against Bear Stearns will be dismissed with prejudice and that
Bear Stearns denies any wrongdoing in connection with the claims
asserted against it in the Federal Class Action. Under the
stipulation of settlement, promptly following preliminary
approval of the settlement by the District Court, Bear Stearns
will withdraw its appeal of the District Court's final approval
of the McKesson HBOC Settlement of the Federal Class Action.
The District Court granted preliminary approval of the
settlement on Sept. 28, 2007. Pursuant to a stipulation of
settlement among the parties, on Oct. 9, 2007, Bear Stearns
withdrew its appeal of the District Court's final approval of
the McKesson HBOC Settlement of the Federal Class Action.
On Jan. 18, 2008, the District Court gave final approval to the
settlement of the Federal Class Action and entered a judgment
for dismissal. Bear Stearns has agreed to dismiss
its claims against McKesson in the New York Action and Bear
Stearns and McKesson have agreed to exchange mutual releases.
Bear Stearns will make no payment in connection with the
Settlement.
McKesson HBOC Inc. Securities Litigation on the net:
http://www.mckessonhbocsettlement.com/
The suit is "In re McKesson HBOC, Inc. Securities Litigation,
Master File No. 99-CV-20743 RMV (PVT)," filed with the U.S.
District Court for the Northern District of California under
Judge Ronald M. Whyte with referral to Judge Patricia V.
Trumbull.
Class counsels are:
David Stickney, Esq.
Timothy A. DeLange, Esq.
Bernstein Litowitz Berger & Grossmann LLP.
12481 High Bluff Drive, Suite 300
San Diego, CA 92130
Phone: (858) 793-0070
Fax: (858) 793-0323
e-mail: davids@blbglaw.com
timothyd@blbglaw.com
Leonard Barrack, Esq.
M. Richard Komins, Esq.
Barrack, Rodos & Bacine
3300 Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania 19103
Representing defendants are:
Lyn Robyn Agre, Esq.
Topel & Goodman
832 Sansome St. 4th Flr.
San Francisco, CA 94111
Phone: (415) 421-6140
Fax: 415-398-5030
e-mail: lra@topelgoodmanc.com
Sima Saran Ahuja, Esq.
Fried Frank Harris Shriver & Jacobson
One New York Plaza
New York, NY 10004
Phone: (212) 820-8000
- and -
William F. Alderman, Esq.
Orrick Herrington & Sutcliffe
405 Howard St.
San Francisco, CA 94105
Phone: 415/773-5944
Fax: 415/773-5700
e-mail: walderman@orrick.com
COLORADO: Suit Over Medicaid Eligibility of Disabled Certified
--------------------------------------------------------------
The Denver District Court greatly expanded the state's
responsibility to provide an opportunity to appeal decisions
denying eligibility for services for people with developmental
disabilities, ruling that all persons denied services or whose
services were terminated between July 10, 2004, and the date of
the court's future entry of judgment should be so entitled.
Two weeks ago, the Court found the Colorado Departments of Human
Services and Health Care Policy and Financing liable to three
named plaintiffs for those services. In this ruling, the Court
expanded the State's responsibility to many more persons
similarly situated.
On July 10, 2006, the Legal Center for People with Disabilities
and Older People and the law firm of Fox & Robertson, PC, filed
a class action on behalf of the three plaintiffs and other
similarly situated individuals with developmental disabilities
(Class Action Reporter, July 14, 2006).
The three initial plaintiffs are:
1. Ann Rossart, a 50-year-old-woman with developmental
disabilities whose application for Medicaid services was
denied by Developmental Pathways, Inc., the Community
Centered Board responsible for determining eligibility,
and administering Medicaid programs in the city of
Aurora as well as Adams, Arapahoe and Douglas counties.
2. Robert Swift, and
3. Matthew Rice, who were both denied a state-level fair
hearing when their Medicaid eligibility for
developmental disabilities services was terminated by
the Defendants.
Upon denial of her application, Ms. Rossart contends that she
should have been given notice that she had the right to appeal
to a state-level evidentiary hearing before an administrative
law judge. As stated in the lawsuit, Ms. Rossart was only
offered a dispute resolution conference with Developmental
Pathways and a paper appeal to Marva Livingston Hammons,
Executive Director, Colorado Department of Human Services.
The complaint alleges that the plaintiffs were denied
eligibility for Medicaid services or were terminated without
being afforded notice and an opportunity to appeal the adverse
decisions through a state-level hearing.
The suit also brings claims on behalf of all individuals with
developmental disabilities who applied for Medicaid-funded
developmental disabilities services and were found ineligible
and those who were eligible for Medicaid services and
subsequently had their eligibility terminated by the state
system in place to provide developmental disabilities services.
In the recent ruling, the court agreed that the problem involved
more people than could be individually named. The court then
required the parties to draft the language of a permanent
injunction directing the defendants to cease the conduct it had
found illegal and also a plan to rectify the problem in the
future.
Defendants in this case are:
-- John Meeker, Executive Director for Developmental
Pathways, and Developmental Pathways, Inc. -- a
community centered board charged with providing services
and support to persons with developmental disabilities;
-- Marva Livingston Hammons, Executive Director of the
Colorado Department of Human Services; and
-- Stephen Tool, Executive Director of the Colorado
Department of Health Care Policy and Financing.
The Legal Center for People with Disabilities and Older People -
http://www.thelegalcenter.org-- is a nonprofit organization
established in 1976. The Legal Center uses the legal system to
protect and promote the rights of individuals with disabilities
and older people through direct legal representation, protection
and advocacy, education and legislative analysis.
Representing the plaintiffs are:
Andrea Faley
Liz Fuselier
Mark Ivandick
The Legal Center for People with Disabilities and
Older People
Phone: 303-722-0300 ext. 241 or 303-722-0300 ext. 229
or 303-722-0300, ext. 231
e-mail: afaley@thelegalcenter.org or
fuselier@thelegalcenter.org or
Ivandick@thelegalcenter.org
- and -
Tim Fox
Fox & Robertson, P.C.
910-16th Street, Suite 610
Denver, CO 80202
Phone: 303.595.9700
Fax: 303.595.9705
e-Mail: mail@foxrob.com
Web site: http://www.foxrob.com/attorneys.htm
ELEGANT BABY: Recalls Silver Teethers Due to Choking Hazard
-----------------------------------------------------------
Elegant Baby and Baby Needs Inc., of Burlington, N.C., in
cooperation with the U.S. Consumer Product Safety Commission,
recalls 200 Heart and Car Sterling Silver Teethers.
The company said the hearts and cars on the teethers can break
off, posing a choking hazard to infants.
Elegant Baby has received one report of a baby mouthing the
heart when it broke off the teether and became lodged in his
mouth.
The sterling silver teethers are circle-shaped with either a
heart or car in the center. The teethers have beads inside.
The teethers measure two inches in diameter.
These recalled teethers were manufactured by Angel Ortiz and
Fracionamiento Lomas De Taxco S/N, of Mexico and were being sold
at independent infant clothing boutiques nationwide from
February 2005 through September 2006 for about US$50.
Pictures of the recalled sterling silver teethers can be found
at:
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08178a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08178b.jpg
Consumers are advised to immediately take the recalled teethers
away from infants and contact the firm for instructions on
returning the teethers for a full refund.
For additional information, contact Elegant Baby at:
Phone: (800) 334-5321 (Monday-Friday, 8:00 a.m.-5:00 p.m. ET)
Web site: http://www.elegantbaby.com
ENERLUME ENERGY: CT Securities Suit Settlement Granted Final OK
---------------------------------------------------------------
On January 28, 2008, the Honorable Vanessa L. Bryant of the
United States District Court for the District of Connecticut
granted final approval to the settlement of the purported
securities fraud and derivative lawsuits against EnerLume Energy
Management Corp., formerly Host America Corp.
The consolidated federal securities class action arose out of
allegations stemming from a press release issued by EnerLume
Energy on July 12, 2005.
As previously described in the Company's current report on Form
8-K filed on Oct. 19, 2007, with the United States Securities
and Exchange Commission, the class action settlement provides
that all claims against the Company and its past and present
officers and directors named as defendants are dismissed with
prejudice, in exchange for payment to the Class of US$2,450,000
-- US$1,700,000 of which has been paid by insurance. In
addition to the insurance proceeds, the Company has contributed
US$200,000 and has entered into an unsecured term note for the
balance at a rate of 7.5% per annum which will be due and
payable in full on April 18, 2008.
Separately, the Court took under advisement the settlement of
the related stockholders derivative action, pursuant to which
Host America Securities Litigation's (now EnerLume's) Board of
Directors has agreed to implement certain specified therapeutic
corporate governance policies and procedures and to provide for
payment of US$140,000 for the shareholder plaintiffs' attorney
fees and costs, which is funded by the Company's insurance
proceeds.
"We are very pleased that the distraction from the class action
suit from 2005 has come to an end," said David J. Murphy,
President and CEO of EnerLume Energy Management Corp. "The
Company will now be able to devote more time and resources to
implementing its business plan."
The Company has not settled two other cases pending in state
court concerning the July 2005 press release. The Company and
the other EnerLume defendants have steadfastly maintained that
the claims raised in the litigation are without merit, and have
vigorously contested those claims. As part of the settlement,
the settling defendants continue to deny any liability or
wrongdoing.
Securities Fraud Litigation
In August 2005 and September 2005, 12 putative class action
complaints were filed with the U.S. District Court for the
District of Connecticut, naming as defendants the Company,
Geoffrey W. Ramsey, and David J. Murphy.
One or more of the complaints also named Gilbert Rossomando,
Peter Sarmanian,Roger D. Lockhart and EnergyNsync, Inc.
On Sept. 21, 2005, as amended on Sept. 26, 2005, the Court
issued a Consolidation and Scheduling Order, consolidating the
actions under the caption, "In re Host America Securities
Litigation, Civil Action No. 05-cv-1250 (VLB)."
On Feb. 12, 2007, the lead plaintiffs filed an amended
Consolidated Complaint for Violations of the Securities Laws,
which named as defendants Host, Geoffrey W. Ramsey, David J.
Murphy, Peter Sarmanian and Roger D. Lockhart, and purported to
be brought on behalf of all persons who purchased the publicly
traded securities of the Company from July 12, 2005 to Sept. 1,
2005.
In general, the plaintiffs alleged that the Company's July 12,
2005 press release contained materially false and misleading
statements regarding Host's commercial relationship with Wal-
Mart.
The complaint alleged that the statements harmed the purported
class by artificially inflating the price of Host's securities
through close of trading on July 22, 2005, and that certain
defendants personally benefited from the inflated price by
selling stock during the alleged class period.
The Plaintiffs sought unspecified damages based on alleged
violations of Sections 10(b) and 20(a) of the U.S. Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and
under Section 20A.
On March 27, 2007, all defendants filed motions to dismiss the
Class Action.
Derivative Actions
The Company was also named as a nominal defendant in two
shareholder derivative actions filed in the U.S. District Court
for the District of Connecticut.
The captions of those actions were:
-- "Michael Freede v. Geoffrey Ramsey, et al., Civil
Action No. 05-01326 (JBA)" (filed Aug. 19, 2005); and
-- "Joella W. Cheek v. Geoffrey Ramsey, et al., Civil
Action No. 05-01326 (JBA)" (filed Sept. 13, 2005).
The plaintiffs did not make a pre-suit demand on the Board of
Directors. By order dated Oct. 20, 2005, the court consolidated
the derivative actions (hereinafter, the "Federal Derivative
Action"), and administratively consolidated that action with the
Class Action under the caption, "In re Host America Securities
Litigation, Civil Action No. 05-cv-1250 (VLB)."
On June 22, 2006, the plaintiffs filed a Verified Amended
Derivative Complaint, which named as defendants Geoffrey Ramsey,
David Murphy, Anne Ramsey, Peter Sarmanian, Gilbert Rossomando,
Roger Lockhart, Host directors C. Michael Horton, Nicholas M.
Troiano, Patrick J. Healy, and John D'Antona, and Host itself as
a nominal defendant.
The Verified Amended Derivative Complaint was based on
substantially the same allegations as the Class Action
Consolidated Complaint.
It asserted causes of action for breach of fiduciary duty, gross
negligence, abuse of control, gross mismanagement, breach of
contract, unjust enrichment, and insider trading. The complaint
sought an unspecified amount of damages and other relief
purportedly on behalf of Host. On March 27, 2007, all
defendants filed motions to dismiss the Federal Derivative
Action.
Settlement
On May 22 and 23, 2007, the Company and its past and present
directors and officers named as defendants in the Class and
Derivative Actions, and the plaintiffs filed agreements to
settle and fully resolve all claims against the Host America
defendants in both actions.
The Class Action settlement calls for a gross payment of
US$2.45 million, of which US$1.7 million will be funded by
defendants' insurer, to the class in exchange for a release of
all claims against the Host America defendants based on the
July 12, 2005 press release.
Under the Derivative Action settlement, the Company has agreed
to adopt certain therapeutic corporate governance policies and
to payment of plaintiffs' attorneys fees and costs of
US$140,000.
On Oct. 18 and 19, 2007, the District Court granted preliminary
approval of the Class and Derivative settlements. The Court has
scheduled fairness hearings on the settlements for Jan. 28,
2008.
The suit is "In Re: Host America Corporation Securities
Litigation, Case No. 05-CV-01250," filed with the United States
District Court for the District of Connecticut under Judge Janet
Bond Arterton.
Representing the plaintiffs:
Kaplan Fox & Kilsheimer, LLP
805 Third Avenue, 22nd Floor
New York, NY, 10022
Phone: 212.687.1980
Fax: 212.687.7714
e-mail: info@kaplanfox.com
Kirby McInerney & Squire LLP
830 Third Avenue 10th Floor
New York, NY, 10022
Phone: 212.317.2300
Sarraf Gentile LLP
485 Seventh Avenue, Suite 1005
New York, NY, 10018
Phone: 212.868.3610
Fax: 212.918.7967
Schatz & Nobel, P.C.
330 Main Street
Hartford, CT, 06106
Phone: 800.797.5499
Fax: 860.493.6290
e-mail: sn06106@AOL.com
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
Shepherd, Finkelman, Miller & Shah, LLC
35 East State Street
Media, PA 19063
Phone: 877.891.9880
e-mail: jshah@classactioncounsel.com
- and -
Wofsey Rosen Kweskin & Kuriansky LLP
600 Summer Street
Stamford, CT, 06901-1490
Phone: (203) 327-2300
Fax: (203) 967-9273
e-mail: info@wrkk.com
FIDELITY NATIONAL: Faces Lawsuit Over Bankruptcy Kickbacks
----------------------------------------------------------
Fidelity National Information Services has been named defendant
in a lawsuit filed with the United States Bankruptcy Court for
the Southern District of Texas (Houston) by homeowners who claim
that the company took improper kickbacks from fees charged in
consumer bankruptcies, Bloomberg News reports.
According to DS News, the plaintiffs, led by Chapter 13 debtors
Ernest and Mattie Harris, allege that Fidelity National tacked
on "hidden legal fees" while serving as a middle-man between the
debtors' mortgage servicing companies and the law firms
appearing in court on the creditors' behalf.
The Houston Lawsuit, DS News points out, alleges that Fidelity
National charged the Harrises and other Chapter 13 debtors
"hidden fees" by using its own network of attorneys and hiding
its role as a secret intermediary between the law firms handling
the cases and the creditors sending Fidelity National's network
of attorneys to court on their behalf.
The Houston Lawsuit asserts that the firms charge consumers
inflated, undisclosed fees, which they split with Fidelity
National, in violation of legal-ethics and bankruptcy-court
rules, Bloomberg says. DS News cites the suit as claiming that
Fidelity National's network of law firms are charging fees
inflated by 25% to 50% when dealing with Chapter 13 cases.
Furthermore, DS News relates, the plaintiffs contend that the
relationship became a complex web of who's who and which fees
were tacked onto the debtors' payments, with Fidelity National's
role as the legal fee decision-maker not becoming known to the
courts in the process.
DS News cites the Harrises' case as an instance, wherein the law
firm -- Mann & Stevens, P.C. -- collected its fees by tendering
its bills through Fidelity National and then on to the mortgage
servicer -— Woodbury CountySaxon -- which then charged the
debtors without ever obtaining the court's approval.
The Houston Lawsuit states that Fidelity National, through
clients like the Harrises' mortgage servicer Saxon Mortgage
Services Inc., violates statutes banning certain pre-arranged
legal fees, as well as mandates that prohibit the splitting of
legal fees with entities that cannot serve in the capacity of
legal counsel, DS News notes.
The Lawsuit elaborates further that Saxon Mortgage "either
obtains cash payments of these fees or adds the indebtedness to
debtor accounts. The debtors often only become aware of this
years later, typically when they sell their home or refinance,
only to discover an extra few hundred or thousand dollars
required to release this lien."
"This lawsuit is without merit, and appears to be an attempt to
profit from the current wave of anti-lender sentiment created by
the increase in sub-prime mortgage foreclosures," Bloomberg
cites Fidelity National spokeswoman Michelle Kersch as saying in
an e-mailed statement.
"This attack on FIS' technology, which reduces fees and costs
ultimately borne by borrowers, is misguided," the statement
adds.
According to Bloomberg, the Harrises seek to have the case
certified as a class action on behalf of other consumers who
filed Chapter 13 bankruptcies.
The suit is titled: "Harris v. Fidelity National Information
Services Inc., Case No: 08-AP-3014," filed with the United
States Bankruptcy Court for the Southern District of Texas
(Houston), Judge Jeff Bohm, presiding.
Representing the plaintiffs are:
David K. Bissinger, Esq.
Siegmyer, Oshman & Bissinger LLP
Tenth Floor, Riviana Building
2777 Allen Parkway
Houston, TX 77019
Phone: 713-524-8811
- and -
Miriam Trubek Goott, Esq.
Walker Patterson PC
P.O. Box 61301
Houston, TX 77208
Phone: 713-956-5577
Fax: 713-956-5570
e-mail: mgoott@walkerandpatterson.com
GOLDMAN SACHS: Added as Defendant in D.C. Fannie Mae Lawsuit
------------------------------------------------------------
Goldman, Sachs & Co. was added as a defendant in a consolidated
class action pending with the United States District Court for
the District of Columbia, according to its Jan. 28, 2008 Form
10-K Filing with the United States Securities and Exchange
Commission for the fiscal year ended Nov. 30, 2007.
The company was added as a defendant in an amended complaint
filed on Aug. 14, 2006, in a purported class action titled "In
Re: Fannie Mae Securities Litigation, Case No. 04-CV-01639."
The complaint's allegations generally arise from allegations
concerning Fannie Mae's accounting practices and, insofar as
they relate to the Goldman Sachs defendants, assert violations
of the federal securities laws and common law in connection with
certain Fannie Mae-sponsored REMIC transactions that were
allegedly arranged by Goldman, Sachs & Co.
The other defendants include Fannie Mae, certain of its past and
present officers and directors, accountants and other financial
services firms.
The suit is "In Re: Fannie Mae Securities Litigation, Case No.
04-CV-01639," filed with the United States District Court for
the District of Columbia, Judge Richard J. Leon presiding.
Representing the plaintiffs are:
James R. Cummins, Esq.
Waite, Schneider, Bayless & Chesley Co., L.P.A.
One West Fourth Street
1513 Fourth & Vine Tower
Cincinnati, OH 45202
Phone: (513) 621-0267
Fax: (513) 381-2375
e-mail: jcummins@wsbclaw.com
- and -
Stuart Grant, Esq.
Grant & Eisenhofer, P.A.
1201 North Market Street, Suite 2100
Wilmington, DE 19801
Phone: (302) 722-7070
Fax: 302-622-7100
e-mail: sgrant@gelaw.com
Representing the defendants are:
Daryl Andrew Libow, Esq.
Sullivan & Cromwell, LLP
1701 Pennsylvania Avenue, NW Suite 800
Washington, DC 20006-5866
Phone: (202) 956-7500
e-mail: libowd@sullcrom.com
- and -
Jerome Louis Epstein, Esq.
Jenner & Block
601 13th Street, NW Suite 1200
Washington, DC 20005
Phone: (202) 639-6062
Fax: 202-639-6066
e-mail: jepstein@jenner.com
GOLDMAN SACHS: Still Faces Montana Power Co. Shareholders' Suit
---------------------------------------------------------------
Goldman, Sachs & Co. and The Goldman Sachs Group, Inc., continue
to face a purported class action filed with the United States
District Court for the District of Montana that was brought on
behalf of former shareholders of Montana Power Co.
Initially, Goldman, Sachs & Co. and The Goldman Sachs Group
were named as defendants in the purported class action commenced
on Oct. 1, 2001, with the Montana District Court, Second
Judicial District, on behalf of former shareholders of Montana
Power Co.
The complaint generally alleges that Montana Power Co. violated
Montana law by failing to procure shareholder approval of
certain corporate strategies and transactions, that the
company's board breached its fiduciary duties in pursuing those
strategies and transactions, and that Goldman, Sachs & Co. aided
and abetted the board's breaches and rendered negligent advice
in its role as financial advisor to the company.
The complaint seeks, among other things, compensatory damages.
In addition to Goldman, Sachs & Co. and The Goldman Sachs Group,
the defendants include Montana Power, certain of its officers
and directors, an outside law firm for Montana Power, and
certain companies that purchased assets from Montana Power and
its affiliates.
The Montana state court denied the Goldman Sachs defendants'
motions to dismiss.
Following the bankruptcies of certain defendants in the action,
defendants removed the action to the United States District
Court for the District of Montana.
Goldman Sachs Group reported no development in the matter in its
Jan. 28, 2008 Form 10-K Filing with the SEC for the fiscal year
ended Nov. 30, 2007.
The Goldman Sachs Group, Inc. -- http://www2.goldmansachs.com/
-- is a global investment banking, securities and investment
management firm that provides a range of services worldwide to a
client base that includes corporations, financial institutions,
governments and high-net-worth individuals. Its activities are
divided into three segments: Investment Banking, Trading and
Principal Investments, and Asset Management and Securities
Services.
LEHMAN COMMERCIAL: California Court Still to Approve Settlement
---------------------------------------------------------------
The United States District Court for the Central District of
California has yet to grant preliminary approval to a settlement
of a case over a warehouse line of credit provided to First
Alliance Mortgage Co. by Lehman Commercial Paper, Inc. -- an
indirect wholly owned subsidiary of Lehman Brothers Holdings,
Inc.
In 1999 and during the first quarter of 2000, LCPI provided a
warehouse line of credit to First Alliance, a subprime mortgage
lender, and LBI underwrote the securitizations of mortgages
originated by First Alliance.
In March 2000, First Alliance filed for bankruptcy protection
with the U.S. Bankruptcy Court for the Central District of
California.
In August 2001, a class action was filed with the California
Bankruptcy Court on behalf of a class of First Alliance
borrowers seeking equitable subordination of LCPI's (among other
creditors) liens and claims.
In October 2001, the complaint was amended to add LBI as a
defendant and to add claims for aiding and abetting fraudulent
lending activities by First Alliance and for unfair competition
under the California Business and Professions Code.
In August 2002, a Second Amended Complaint was filed which added
a claim for punitive damages and extended the class period from
May 1, 1996, until First Alliance's bankruptcy filing.
The complaint sought actual and punitive damages, the imposition
of a constructive trust on all proceeds paid by First Alliance
to LCPI and LBI, disgorgement of profits and attorneys fees and
costs.
The U.S. District Court for the Central District of California
withdrew the reference to the California Bankruptcy Court.
A class was certified in November 2002, and subsequently
amended, to certify the Class Action as being brought on behalf
of a class of all persons who acquired mortgage loans from First
Alliance from 1999 through March 31, 2000, which were used as
collateral for First Alliance's warehouse credit line with LCPI
or were securitized in transactions underwritten by LBI. The
trial began in February 2003.
In June 2003, the California District Court dismissed plaintiffs
claim for punitive damages.
Also in June 2003, the jury rendered its verdict, finding LBI
and LCPI liable for aiding and abetting First Alliance's fraud.
The jury found damages of US$50.9 million and held the Lehman
defendants responsible for 10% of those damages.
In July 2003, the California District Court entered findings of
fact and conclusions of law relating to all claims still pending
and holding that any transfers to LCPI were not fraudulent and
its liens were not avoidable, nor was equitable subordination of
amounts owed by FAMCO to LCPI at the time of the Chapter 11
filing warranted. Judgment was entered in November 2003 on the
jury verdict.
On Dec. 8, 2006, the U.S. Court of Appeals for the Ninth Circuit
issued a decision on the appeals of all parties, affirming the
jury verdict on liability, rejecting all plaintiffs claims for
further relief, vacating the damages verdict and remanding the
matter for further proceedings on the proper calculation of out
of pocket damages rather than the higher benefit of the bargain
damages upon which the jury based its verdict.
The parties to the Class Action have entered into a settlement
agreement, which was presented to the California District Court
for preliminary approval on Jan. 28, 2008, according to the
company's Jan. 29, 2008 Form 10-K Filing with the SEC for the
fiscal year ended Nov. 30, 2007.
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is
primarily engaged in providing financial services. It provides
an array of equity and fixed income sales, trading and research,
investment banking services, and investment management and
advisory services. It serves the financial needs of
corporations, governments and municipalities, institutional
clients and high-net-worth individuals worldwide.
LEHMAN BROTHERS: Second Circuit Reverses Ruling in N.Y. IPO Case
----------------------------------------------------------------
The United States Court of Appeals for the Second Circuit
reversed the U.S. District Court for the Southern District of
New York's denial of class certification to the matter, "In re
Issuer Plaintiff Initial Public Offering Fee Antitrust
Litigation," which names Lehman Brothers, Inc., as a defendant.
In April 2001, the U.S. District Court for the Southern District
of New York consolidated four actions pending before the court
brought by bankrupt issuers of IPO securities against more than
20 underwriter defendants, including LBI.
In July 2001, the plaintiffs filed a consolidated class-action
complaint seeking unspecified compensatory damages and
injunctive relief for alleged violations of the antitrust laws
based on the theory that the defendant underwriters fixed and
maintained fees for underwriting certain IPO securities at
supra-competitive levels.
Two of the four original plaintiffs subsequently withdrew their
claims.
The remaining plaintiffs filed a motion for class certification,
which the the U.S. District Court for the Southern District of
New York denied in an order, dated April 19, 2006.
On Sept. 11, 2007, the U.S. Court of Appeals for the Second
Circuit reversed the U.S. District Court for the Southern
District of New York's denial of class certification and
remanded the case to the district court for further proceedings
to determine if the case may proceed as a class action,
according to the company's Jan. 29, 2008 Form 10-K Filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Nov. 30, 2007.
Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is
primarily engaged in providing financial services. It provides
an array of equity and fixed income sales, trading and research,
investment banking services, and investment management and
advisory services. It serves the financial needs of
corporations, governments and municipalities, institutional
clients and high-net-worth individuals worldwide.
LEHMAN BROTHERS: Motions Pending in Mirant Securities Litigation
----------------------------------------------------------------
Partially dispositive motions are pending in the class action,
"In Re Mirant Corp. Securities Litigation, Case No. 1:02-cv-
01467-RWS," which was filed in the United States District Court
for the Northern District of Georgia, and names Lehman Brothers,
Inc.
In November 2002, an amended complaint was filed in the U.S.
District Court for the Northern District of Georgia, and
captioned, "In re Mirant Corporation Securities Litigation."
The action is brought on behalf of a purported class of
investors who purchased the securities of Mirant Corp. during
the period from Sept. 26, 2000 and Sept. 5, 2002.
Plaintiffs name Mirant, various officers and directors, Mirant's
former parent, The Southern Company, along with its officers and
directors, LBI, as a member of the underwriting syndicate, and
eleven other underwriters of Mirant's IPO of common stock in
September 2000.
The underwriters are contractually entitled to customary
indemnification from Mirant, but Mirant filed for bankruptcy
protection in July 2003.
The IPO raised approximately US$1.467 billion, of which Lehman
Brothers underwriting share was 9%.
Against the underwriters, plaintiffs allege violations of
Section 11 of the Securities Act.
The complaint alleges that the prospectus and registration
statement for the offering contained false and misleading
statements or failed to disclose material facts concerning,
among other things, Mirant's alleged misconduct in energy
markets in the State of California, the accounting for Mirant's
interest in a United Kingdom-based company, Western Power
Distribution, and other accounting issues.
The complaint seeks class action certification, unspecified
damages and costs. Partially dispositive motions are pending,
according to the company's Jan. 29, 2008 Form 10-K Filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Nov. 30, 2007.
The suit is "In Re Mirant Corp. Securities Litigation, Case No.
1:02-cv-01467-RWS," filed in the U.S. District Court for the
Northern District of Georgia under Judge Richard W. Story.
Representing the plaintiffs are:
Robert Abrams, Esq.
Gustavo Bruckner, Esq.
Fred Taylor Isquith, Esq.
Wolf Haldenstein Adler Freeman & Herz
270 Madison Avenue
New York, NY 10016
Phone: 212-545-4600
e-mail: isquith@whafh.com
- and -
David Andrew Bain, Esq.
Martin D. Chitwood, Esq.
Chitwood & Harley
1230 Peachtree Street, N.E. 2300 Promenade II
Atlanta, GA 30309
Phone: 404-873-3900
e-mail: dab@classlaw.com
mdc@classlaw.com
Representing the defendants are:
Kirk Quillian, Esq.
Thomas Edward Reilly, Esq.
Jaime L. Theriort, Esq.
Troutman Sanders, LLP
Bank of America Plaza
600 Peachtree Street, N.E., Suite 5200
Atlanta, GA 30308-2216
Phone: 404-885-3000
e-mail: kirk.quillian@troutmansanders.com
thomas.reilly@troutmansanders.com
jaime.theriot@troutmansanders.com
LEHMAN BROTHERS: Nixing of Short Sale Antitrust Lawsuit Appealed
----------------------------------------------------------------
Plaintiffs in the purported class action, "In re Short Sale
Antitrust Litigation, Case No. 1:06-cv-02859-VM," are appealing
the dismissal of the case, which names Lehman Brothers, Inc.
Commencing in April 2006, LBI was named as a defendant in
putative class actions relating to short selling filed in the
New York District Court.
In December 2006, the court ordered that the actions be
consolidated and renamed the "In re Short Sale Antitrust
Litigation."
By January 2007, only one plaintiff, Electronic Trading Group,
remained in the case (after earlier-named plaintiffs dropped
out).
A second amended complaint was filed, purportedly on behalf of
those who had paid certain fees to broker dealers in connection
with borrowing securities against 17 broker-dealers and other
unnamed defendants, including LBI.
The complaint asserted four causes of action:
-- violations of Section 1 of the Sherman Act,
-- breach of fiduciary duty,
-- aiding and abetting breaches of fiduciary duty, and
-- unjust enrichment.
Plaintiff sought injunctive relief and unspecified trebled
compensatory and punitive damages.
On Dec. 20, 2007, the New York District Court granted defendants
motion to dismiss the second amended complaint.
On Jan. 18, 2008, plaintiffs filed a notice of appeal of the
court decision with the U.S. Court of Appeals for the Second
Circuit, according to the company's Jan. 29, 2008 Form 10-K
Filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Nov. 30, 2007.
The suit is "In re Short Sale Antitrust Litigation, Case No.
1:06-cv-02859-VM," filed in the U.S. District Court for the
Southern District of New York, Judge Victor Marrero presiding.
Representing the plaintiffs are:
Vincent R. Cappucci, Esq.
Entwistle & Cappucci LLP
280 Park Avenue, 26 Floor West
New York, NY 10017
Phone: (212) 894-7200
Fax: (212) 894-7272
e-mail: http://www.entwistle-law.com
Representing the defendants are:
William Joseph Fenrich, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Phone: (212)-450-4000
Fax: (212)-450-3800
e-mail: william.fenrich@dpw.com
LOUISIANA: Jefferson Parish Sued Over Red Light Cameras
-------------------------------------------------------
Jefferson Parish, Louisiana, is facing a class-action complaint
over traffic cameras that take pictures of cars that run red
lights and send out tickets for fines, WWLTV.com reports.
According to WWLTV.com, the suit alleges that the enforcement of
the traffic camera ordinance violates the due process rights of
vehicle owners because it assumes that the car's owner actually
ran the light and it puts the burden of proving innocence on the
vehicle's owner, even if they weren't driving the car.
The report writes that the suit was filed on behalf of several
plaintiffs who said they had received violation notices. It is
filed against Jefferson Parish and REDFLEX Traffic Systems, the
company that installs and maintains the cameras.
Close to 60,000 tickets were issued in the first three months,
though the number of violators has almost been cut in half,
WWLTV.com says.
LOUISIANA CITIZENS: Policyholders' Lawsuit Gets Certification
-------------------------------------------------------------
Judge Robert A. Buckley of the 34th Judicial District Court in
St. Bernard Parish granted class certification to a Louisiana
Citizens Property Insurance Corp. case about the timeliness of
settlement offers on hurricane claims, Rebecca Mowbray of the
New Orleans Times-Picayune reports.
The report says that Judge Buckley ruled that the parties in
"Adrian P. Chalona Sr. et al. v. Louisiana Citizens" could stand
as representatives for the 76,000 Citizens policyholders with
claims from Hurricanes Katrina and Rita.
According to the New Orleans Times, the case could bring
millions of dollars of additional relief to policyholders who
were left stranded and waiting for payment after the 2005
storms.
However, according to the report, lawyers for Citizens say that
if it loses these cases, it will have to do another emergency
bond issue to raise more money to cover the legal obligations,
essentially creating a tax on every owner of insured property in
the state.
"No matter how much the politicians who created Citizens ignored
this, it's not going to go away. There has to be some closure,"
the New Orleans Times quotes plaintiffs' attorney Madro
Bandaries as saying. "There are thousands of people who have
given up on Citizens. We're immediately going to notify the
potential class members and get this moving forward."
In his opinion, Judge Buckley said that a class action is the
most efficient way for the courts to handle the legal questions
created by Citizens and to help "the large number of projected
claimants along with the unfortunate financial position" caused
by the hurricanes, the report adds.
"The effect of certifying a class action is a more fair,
consistent adjudication of the matter," Judge Buckley wrote.
According to the New Orleans Times, John Wortman, chief
executive officer of Citizens, said that class actions could
create "substantial" additional financial liability for Citizens
and the people of the state, and his company will fight the
ruling.
"We don't think it's right. We will probably file an appeal
pretty quickly," Mr. Wortman said.
MAJESCO ENTERTAINMENT: Court Still to Approve $2.5M Settlement
--------------------------------------------------------------
The United States District Court for the District of New Jersey
has yet to give final approval to the US$2.5-million settlement
of a purported securities fraud class action filed against
Majesco Entertainment Co., according to the company's Jan. 29,
2008 Form 10-K Filing with the United States Securities and
Exchange Commission for the fiscal year ended Oct. 31, 2007.
In July 2005, four purported class action complaints were filed
against the Company and several of its current and former
directors and officers with the United States District Court for
the District of New Jersey. The suits were brought on behalf of
a class of purchasers of the company's securities.
On Sept. 12, 2005, a fifth purported class action complaint was
filed with the same court on behalf of a class of individuals
who purchased shares of common stock in the Company, in a
Jan. 26, 2005 offering, with six million shares of common stock
available. The complaint named as defendants the Company, its
current and former officers, and certain financial institutions
who served as underwriters with respect to the Offering.
On Oct. 11, 2005, the Court consolidated the five cases and
appointed a Lead Plaintiff. On Dec. 14, 2005, the Lead
Plaintiff filed an Amended Consolidated Complaint, which is now
the operative complaint.
The Complaint names the following as defendants:
-- the Company,
-- Carl Yankowski,
-- Jan E. Chason,
-- Jesse Sutton,
-- Joseph Sutton,
-- Morris Sutton,
-- Laurence Aronson,
-- F. Peter Cuneo,
-- James Halpin,
-- Louis Lipschitz,
-- Marc Weisman,
-- RBC Capital Markets Corp.,
-- JMP Securities LLC,
-- Harris Nesbitt & Corp.,
-- Wedbush Morgan Securities Inc., and
-- Goldstein Golub Kessler LLP.
The Complaint alleges that the Registration Statement and
Prospectus filed with the SEC in connection with the Company
Offering and certain of the Company press releases and other
public filings contained material misstatements and omissions
about the Company financial condition and prospects as well as
its products.
The lead Plaintiff asserts a claim under Section 11 of the
United States Securities Act against all the defendants on
behalf of investors who purchased in the Offering.
It asserts a Section 12(a)(2) claim against the Company and the
financial institutions who served as underwriters in connection
with the Offering, and a Section 15 control person claim against
defendants Carl Yankowski, Jan Chason, Jesse Sutton, Joseph
Sutton, and Morris Sutton (the Defendants).
Lead Plaintiff also asserts a claim under Section 10(b) of the
Exchange Act and Rule 10b-5 promulgated there under against the
Company and the Defendants and a claim under Section 20(a) of
the Exchange Act against the Defendants.
The Complaint seeks damages in an unspecified amount. The
proposed class period for the Exchange Act claims is Dec. 8,
2004, through Sept. 12, 2005.
On Sept. 27, 2007, the Company entered into settlement
agreements to settle the securities class action.
Under the terms of the settlement agreement in the securities
class action, which is subject to notice to the shareholder
class and court approval, the Company insurance carrier will
make a cash payment and the Company will contribute shares of
its common stock with a market value of US$2.5 million.
The shares being contributed to the settlement will be
distributed to the settlement class if and when the court grants
final approval to the settlement and the settlement becomes
effective.
The suit is "In Re: Majesco Securities Litigation, Case No.
2:05-cv-03557-FSH-PS," filed with the United States District
Court for the District of New Jersey, Judge Faith S. Hochberg
presiding.
Representing the plaintiff is:
Patrick Louis Rocco, Esq.
Shalov Stone & Bonner, LLP
163 Madison Ave.
P.O. BOX 1277
Morristown, NJ 07962-1277
Phone: (973) 775-8997
e-mail: procco@lawssb.com
Representing the defendants is:
Joseph Domenick Giacoia, Esq.
Capuder Fazio Giacoia
90 Broad Street
New York, NY 10004
Phone: 212-509-9595
e-mail: jgiacoia@cfgny.com
MORGAN STANLEY: Class Certification Sought in N.Y. IPO Lawsuits
---------------------------------------------------------------
Plaintiffs in the lawsuits titled, "In re Initial Public
Offering Antitrust Litigation, Case No. 1:01-cv-02014-WHP," and
"In re Issuer Plaintiff Initial Public Offering Antitrust
Litigation," both naming Morgan Stanley as defendant, are
seeking class-action status.
Starting in late 1998, purported class actions, later captioned,
"In re Public Offering Fee Antitrust Litigation" (purchaser
actions) and "In re Issuer Plaintiff Initial Public Offering Fee
Antitrust Litigation" (issuer actions), were initiated with the
United States District Court for the Southern District of New
York against Morgan Stanley and numerous other underwriters.
The consolidated proceedings, one on behalf of purchasers and
the other on behalf of issuers of certain shares in initial
public offerings, allege that defendants conspired to fix the
underwriters spread at 7% in IPOs of U.S. companies in the
US$20 million to US$80 million range in violation of Section 1
of the Sherman Act.
The complaints seek treble damages and injunctive relief.
The Plaintiffs' claim for payment of damages in the purchaser
actions have been dismissed, but the claims for payment of
damages and injunctive relief in the issuer actions remain.
The Plaintiffs sought class certification in both actions, but
the defendants opposed the motion in May 2005. In October 2005,
the Plaintiffs sought a summary judgment, which the defendants
also opposed.
In May 2006, the Plaintiffs filed a petition pursuant to Federal
Rule of Civil Procedure 23(f) for leave to appeal the court's
denial of class certification and in September 2007, the U.S.
Court of Appeals for the Second Circuit reversed the decision
and remanded the case back to the district court for further
consideration of class certification issues.
On remand, the Plaintiffs filed a motion for class certification
on Oct. 17, 2007, according to its Jan. 28, 2008 Form 10-K
Filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Nov. 30, 2007.
Morgan Stanley -- http://www.morganstanley.com-- is a global
financial services firm that, through its subsidiaries and
affiliates, provides its products and services to a group of
clients and customers, including corporations, governments,
financial institutions and individuals.
MORGAN STANLEY: Faces Multiple ERISA Violations Lawsuits in N.Y.
----------------------------------------------------------------
Morgan Stanley faces several purported class actions with the
United States District Court for the Southern District of New
York, alleging violations of the Employee Retirement Income
Security Act of 1974, according to its Jan. 28, 2008 Form 10-K
Filing with the United States Securities and Exchange Commission
for the fiscal year ended Nov. 30, 2007.
In December 2007, several purported class action complaints were
filed with the U.S. District Court for the Southern District of
New York, asserting claims on behalf of participants in Morgan
Stanley's 401(k) plan and employee stock ownership plan against
Morgan Stanley and other parties, including certain present and
former directors and officers, under the Employee Retirement
Income Security Act of 1974.
The complaints relate in large part to subprime-related losses,
and allege, among other things, that Morgan Stanley stock was
not a prudent investment and that risks associated with Morgan
Stanley stock and Morgan Stanley's financial condition were not
adequately disclosed.
That suit named as defendants Morgan Stanley, Morgan Stanley &
Co. Inc., certain officers and directors of Morgan Stanley & Co.
Inc., the Global Director of Human Resources of Morgan Stanley,
and the Investment Committee of the Morgan Stanley 401(K) Plan.
Morgan Stanley -- http://www.morganstanley.com-- is a global
financial services firm that, through its subsidiaries and
affiliates, provides its products and services to a group of
clients and customers, including corporations, governments,
financial institutions and individuals.
MORGAN STANLEY: MDL Orders Centralization of Wage, Hour Lawsuits
----------------------------------------------------------------
The Judicial Panel on Multi-District Litigation issued an order
that centralizes various wage and hour matters against Morgan
Stanley to the U.S. District Court for the Southern District of
California.
Complaints raising allegations of unpaid overtime and unlawful
wage deductions were filed against Morgan Stanley in New Jersey,
New York, Connecticut, Texas, Florida, Illinois, California and
Ohio seeking damages on behalf of certain current and former
employees.
In October 2006, Morgan Stanley reached agreement to resolve
these claims on behalf of the individual claimants as well as
other potential class members nationwide.
In November 2006, for purposes of executing the settlement, a
consolidated amended complaint captioned, “Steinberg, et al. v.
Morgan Stanley, Case No. 3:2006cv02628,” was filed in the U.S.
District Court for the Southern District of California (SDC).
In December 2006, the Judicial Panel on Multi-District
Litigation issued an order centralizing the various matters
pending across the country in the U.S. District Court for the
Southern District of California, according to its Jan. 28, 2008
Form 10-K Filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Nov. 30, 2007.
Morgan Stanley -- http://www.morganstanley.com-- is a global
financial services firm that, through its subsidiaries and
affiliates, provides its products and services to a group of
clients and customers, including corporations, governments,
financial institutions and individuals.
MORGAN STANLEY: Settles Calif., D.C. Gender Discrimination Suits
----------------------------------------------------------------
Morgan Stanley settled two purported class action in the
District of Columbia and California that had alleged gender
discrimination under state and federal law, according to its
Jan. 28, 2008 Form 10-K Filing with the United States Securities
and Exchange Commission for the fiscal year ended Nov. 30, 2007.
On June 22, 2006, Morgan Stanley was named in two purported
class actions alleging gender discrimination under various state
and federal statutes.
On Oct. 24, 2007, the United States District Court for the
District of Columbia granted final approval to the settlement
reached in “Joanne Augst-Johnson v. Morgan Stanley, Case No. 06-
01142.”
The approved settlement resolved all of the class-wide and
individual plaintiffs claims and included, among other things, a
payment to the settlement fund and certain programmatic relief.
All similar class wide claims raised in the second purported
gender class action captioned, "Jaffe, et al. v. Morgan Stanley
DW, Inc., Case No. 3:06-cv-03903-TEH," which was filed with the
United States District Court for the Northern District of
California, were subsumed by the Augst-Johnson settlement.
Morgan Stanley -- http://www.morganstanley.com-- is a global
financial services firm that, through its subsidiaries and
affiliates, provides its products and services to a group of
clients and customers, including corporations, governments,
financial institutions and individuals.
NATIONAL CITY: Dreier LLP Sues Alleging Securities Laws Breach
--------------------------------------------------------------
Dreier LLP filed a class action with the United States District
Court for the Northern District of Ohio against National City
Corp., alleging that the bank violated securities laws as it
took a massive hit from mortgage lending woes in 2007,
bizjournals.com reports.
Dreier alleges that the Cleveland-based National City (NYSE:NCC
- News) did not tell shareholders of the risk to its performance
by holding subprime mortgages on its books, the report says.
The company is also accusing the bank of failing to set aside
adequate loan-loss reserves, artificially inflating its
financial results and making optimistic statements about its
dividend before it was slashed to 21 cents a share.
According to the report, in the months between April 30, 2007,
and Jan. 2, 2008, about 2,500 jobs were eliminated at National
City, the bank's home equity business was merged into its
mortgage sector, and it removed for-sale home loans from the
secondary market.
In response to the lawsuit, National City spokeswoman Kelly
Wagner Amen told bizjournals.com that it reflects the fact that
"a number of plaintiffs' law firms are attempting to take
advantage of the unprecedented disruption in the mortgage,
housing and credit markets."
"National City has always run our company in an open and honest
manner and will continue to do so," Ms. Wagner contended.
Dreier is asking shareholders to join the suit by March 24, the
report notes.
National City Corporation is headquartered in Cleveland, and as
of Sept. 30, 2007, its reported assets were US$154 billion.
To contact Dreier LLP:
Dreier LLP
499 Park Avenue
New York, New York 10022
Phone: 212-328-6100
Fax: 212-328-6101
e-Mail: info@dreierllp.com
SCRIPPS HEALTH: Settles Uninsured Pricing Lawsuit in California
---------------------------------------------------------------
Parties to a class action filed against Scripps Health
regarding pricing and collection practices for uninsured
patients at its affiliate hospitals have settled the suit.
The settlement, which was considered for preliminary approval
before San Diego County Superior Court Judge Steven R. Denton on
Feb. 1, 2008, resolves the Class Representative's and Class
members' claims against Scripps and its affiliated hospitals.
Case Background
This class action originated on July 19, 2006, when uninsured
patient, Phillip Franklin, filed a class action cross-complaint
against Scripps Health, a self-proclaimed non-profit hospital
system based in San Diego, after Scripps sued Mr. Franklin
through a collection agency. Mr. Franklin was uninsured at the
time of treatment.
Mr. Franklin alleged that he, like all other uninsured patients
at Scripps, was charged unreasonable, unconscionable and
excessive rates for his treatment. Mr. Franklin asked the Court
to grant the case class action status, allowing him to lead a
class of uninsured patients at Scripps' hospitals who were also
overcharged for treatment.
Mr. Franklin put forward evidence that Scripps has routinely
overcharged uninsured patients back to 2002. For example,
Mr. Franklin's expert, healthcare economist Robb Cohen,
testified that in 2004 Scripps charged its uninsured patients,
on average, more than four times what Medicare paid for the same
treatment at Scripps. Scripps also charged, on average, more
than what approximately 90% of other hospitals nationwide
charged for treatments.
In 2004, Scripps charged prices to uninsureds that were, on
average, also 330% higher than Scripps' own costs for providing
the treatment. Throughout the period 2002 - 2005, Scripps
similarly applied high and unreasonable mark-ups over its costs
to uninsured patients. By contrast, Scripps charged its
other patients with private or government insurance only a
fraction of its charges to uninsureds, offering average
automatic discounts to those other patients of between 55% to
80% off billed charges.
This means that Scripps charged uninsured patients, on average,
between two to five times more than it charged other patients
for the very same treatment. Uninsured patients account for
less than 10% of all of the patients seen at Scripps' hospitals.
In June 2007, San Diego County Superior Court Judge Steven
Denton entered an order granting class certification to claims
by Phillip Franklin that Scripps Health charges its uninsured
patients unreasonable and unconscionable prices (Class Action
Reporter, June 29, 2007).
In the class certification order, the Court ordered that
Mr. Franklin could represent all individuals (or their guardians
or representatives) residing in the United States who, from
July 19, 2002, through the date of judgment:
(a) received any form of medical treatment as a result of
initially presenting at the Emergency Department of a
Scripps hospital or affiliate;
(b) were uninsured at the time of treatment; and
(c) were charged the amount set forth on the applicable
Charge Description Master, and did not receive any
discount or waiver of the charges.
The Court also appointed Lieff Cabraser Heimann & Bernstein, LLP
to serve as Class Counsel.
Settlement Terms
As part of the settlement, Class members will be entitled to
make a claim for 35% refunds or deductions from their prior
hospital bills for treatment occurring between July 19, 2002 and
the date of preliminary settlement approval. Low-income
uninsureds may also seek to qualify their past bills for free or
reduced care beyond the 35% discount.
Scripps has also agreed to maintain compassionate pricing and
collections policies going forward, including:
-- across-the-board discounts for all uninsured patients,
regardless of income;
-- enhanced charity discounts to enable moderate-income
uninsureds to receive even greater discounts;
-- financial counseling to uninsured patients to help them
qualify for discounted pricing or receive extended
payment plans;
-- increased communications to uninsureds about Scripps
pricing policies; and
-- limits on collections practices and collections
lawsuits.
In addition, Scripps has agreed to maintain its uninsured
pricing and collections policies going forward for at least four
years, among other things. Scripps denies wrongdoing and
liability in the case.
Settlement Class
The proposed Settlement Class includes any patient who:
(1) from July 19, 2002 to the date of the Court's
preliminary approval order;
(2) received any form of medical treatment as a result of
initially presenting at the Emergency Department of a
Scripps hospital or affiliate;
(3) were uninsured at the time of treatment; and
(4) did not receive any discount or waiver of the charges
for treatment.
Scripps Health operates the following hospitals in the San Diego
area: Scripps Memorial Hospital Encinitas, Scripps Mercy
Hospital Chula Vista, Scripps Memorial Hospital La Jolla,
Scripps Mercy Hospital, and Scripps Green Hospital. Scripps
Mercy Hospital Chula Vista became a campus of Scripps Mercy
Hospital in October 2004.
For more information, contact:
Jahan C. Sagafi, Esq.
Kelly M. Dermody, Esq.
Lieff Cabraser Heimann & Bernstein, LLP
Phone: 415-956-1000 or 415-956-1000
Web site: http://www.lieffcabraser.com
SLM CORP: Girard Gibbs Retained in NY Securities Fraud Lawsuit
--------------------------------------------------------------
The law firm of Girard Gibbs LLP has been retained to represent
a consortium of investors in a class action lawsuit on behalf of
persons who purchased or otherwise acquired the common stock of
SLM Corporation (Sallie Mae) between Jan. 18, 2007, and Jan. 3,
2008.
A class action filed on Jan. 31, 2008, with the United States
District Court for the Southern District of New York, alleges
that Sallie Mae and certain of its officers violated the
Securities Exchange Act of 1934.
The complaint alleges that Defendants violated the federal
securities laws by issuing a series of material
misrepresentations in its filings with the Securities and
Exchange Commission and press releases about the company's
business and financial results.
According to the complaint, Sallie Mae failed to reserve
adequately for losses in its portfolio of student loans to sub-
prime borrowers attending non-traditional schools, such as for-
profit colleges and vocational or technical programs, where
graduation and loan-repayment rates are known to be low.
According to the complaint, on January 3, 2008, Sallie Mae
disclosed that it would reduce its core business by being "more
selective" in making student loans as a result of:
(1) turbulence in the credit markets and
(2) recently-enacted federal legislation that substantially
reduces subsides Sallie Mae received from the federal
government.
In reaction to this news, Sallie Mae's share price fell by 15%
-- or US$2.49 per share -- on four times its average three-month
trading volume. Sallie Mae's shares closed at US$16.67, down by
71% from a class period high of US$57.98 on July 9, 2007.
According to the complaint, Defendants failed to disclose the
following material facts during the class period:
(1) Sallie Mae failed to conduct proper due diligence in
originating student loans to sub-prime borrowers
including students attending non-traditional schools;
(2) Sallie Mae materially misstated its financial results,
by inadequately reserving for uncollectible loans in
its non-traditional portfolio in violation of generally
accepted accounting principles;
(3) Sallie Mae's exposure to losses and defaults from loans
in its non-traditional portfolio were far greater than
the company had previously informed investors; and
(4) Sallie Mae would have to impose stricter lending
standards in light of the turmoil in the credit markets
and reductions in federal lending subsidies, resulting
in a material negative impact on future loan
originations.
Interested parties may move the court no later than March 31,
2008 for lead plaintiff appointment.
For more information, contact:
Aaron M. Sheanin
Girard Gibbs LLP
601 California Street, 14th Floor
San Francisco, CA 94108
Phone number: (866) 981-4800
e-mail: ams@girardgibbs.com
Web site: http://www.girardgibbs.com
THE GEO GROUP: DUI Suspect Files Suit Over Prison Strip-Searches
----------------------------------------------------------------
The Geo Group is facing a potential class action for strip-
searching new inmates, the Associated Press reports.
AP points out that the complaint, filed with the United States
District Court for the Eastern District of Pennsylvania, stated
that although court rulings prohibit routine strip searches of
minor offenders, the privately run prison conducts them on all
new inmates.
According to AP, lead plaintiff Stephen D. Bussy claimed that he
was strip-searched during intake last summer at the Delaware
County Prison, which is managed by The Geo Group. He said that
a second full-body search was conducted, in a shower littered
with feces, during his four-month stay. Mr. Bussy, the report
explains, was unable to post bail.
According to the report, Mr. Bussy's lawyers are seeking to have
his lawsuit apply to possibly thousands of minor offenders who
were stripped-searched at Geo Group-run prisons nationwide. A
judge, however, must first grant class-action status to the
complaint.
The company, AP relates, manages 49 corrections and immigration
facilities in the United States, many of them in Texas and
California. The firm, based in Boca Raton, Florida, also
operates a half-dozen sites overseas.
The Geo Group, previously known as Wackenhut Corrections Corp.,
does not comment on pending litigation, AP cites the firm's
spokesman, Pablo Paez, as saying.
AP writes that civil rights lawyers said federal courts,
including the Supreme Court, have already issued guidelines
stating that authorities must have reason to think that a minor
offender is hiding drugs or other contraband to search them.
The suit is titled: "Bussy v. The Geo Group, Inc. et al, Case
No. 2:08-cv-00467-JD," filed with the United States District
Court for the Eastern District Pennsylvania, Judge Jan E.
Dubois, presiding.
Representing the Plaintiff are:
Christopher G. Hayes, Esq.
Law Offices of Christopher G. Hayes
225 South Church Street
West Chester, PA 19382
Phone: 610-431-9505
Fax: 610-431-1269
e-mail: chris@chayeslaw.com
Benjamin F. Johns, Esq.
Chimicles & Tikellis LLP
361 W. Lancaster Ave.
Haverford, PA 19041
Phone: 610-642-8200
e-mail: bfj@chimicles.com
- and -
David Rudovsky
Kairys Rudovsky Messing & Feinberg
The Cast Iron Building Suite 501 South
718 Arch Street
Philadelphia, PA 19106
Phone: 215-925-4400
Fax: 215-925-5365
e-mail: drudovsky@krlawphila.com
US SUGAR: Fla. Suit Alleges Deprivation of Shareholders' Rights
---------------------------------------------------------------
U.S. Sugar Corporation is facing a class-action complaint filed
with the United States District Court in West Palm Beach,
Florida, on behalf of its employee shareholders and other
shareholders.
U.S. Sugar, headquartered in Clewiston, Florida, a major
producer of sugar and orange juice, has always been associated
with the powerful Mott family, the heirs of the Company's
founder, industrialist C.S. Mott. A large percentage of U.S.
Sugar is owned by its own employees, farm field workers, union
mill workers, administrative staff and others, who own their
shares through an Employee Stock Ownership Plan.
The lawsuit alleges that U.S. Sugar's Chairman William S. White,
along with his wife, Claire Mott, their son Ridgway White, CEO
Robert Buker and the Board of Directors of U.S. Sugar, took
wrongful steps to deprive the many shareholders of U.S. Sugar of
the chance to sell their shares when the Company received a very
valuable outside offer to purchase the Company for
US$575 million or US$293 per share. This offer was 51% higher
than the price per share the Company was paying its own
employees for shares. Specifically, the lawsuit alleges that
the prior CEO of U.S. Sugar struck a deal to sell the Company at
this price back in August 2005. But, within days after reaching
this deal, the CEO was promptly terminated by William White and
wired US$10 million. This was money, the lawsuit alleges, that
was intended to keep the former CEO quiet about the deal.
Mssrs. White and Buker then took control of the deal. Accepting
the offer, the lawsuit alleges, would have taken U.S. Sugar away
from the Mott family and from the control of Claire Mott White
and William S. White. Instead of giving the shareholders the
chance to sell their shares in response to the valuable offer,
the lawsuit claims, the Defendants kept the offer from them.
This would have been the only opportunity in decades for the
shareholders of U.S. Sugar to sell their shares to a third
party. The resulting damages to the employees and other
shareholders is alleged to be over US$150 million.
Diallo Johnson, one of the lead plaintiffs in the action,
stated, "I was never told about the offer. I would have
definitely sold my shares in U.S. Sugar. I am now stuck with
the shares and they are going down in value. But what really
bothers me is that all of the good people that I used to work
with at U.S. Sugar were never told about it either and were
never given the chance to sell their shares."
What is worse, the lawsuit alleges, is that not only were the
employee shareholders kept in the dark about the outside offer,
but the Company continued to tell them that their shares were
worth far less than the amount of the offer and continued to buy
back and redeem shares from the employees at prices that were
almost US$100 less per share. Every time the company did this,
the lawsuit alleges, William White, Claire Mott White and their
family benefited because the size and value of their own stake
in U.S. Sugar increased at the expense of the employee
shareholders. Meanwhile, the employee shareholders, whose
shares in U.S. Sugar are their source of retirement income, were
harmed.
One of the shareholders harmed by the Defendants' conduct, the
lawsuit alleges, was the Mott Children's Health Center, a
charitable organization that provides medical services to
children living below the poverty level in Flint, Michigan.
Flint has more than 27,000 children living below the poverty
level. If the Children's Health Center had sold its shares in
response to the offer, it would have received US$125,000,000 to
be used in carrying out its charitable mission. Instead, it
continues to hold almost 40% of its assets in U.S. Sugar shares
that cannot be sold on any market.
"This lawsuit alleges an egregious case of abuse of control by
the powerful family that controls and dominates U.S. Sugar. The
employee shareholders have no representation on the Board of
Directors, have no way to sell their shares except back to the
Company, and have been paid a price far, far lower than what
they would have received in an offer they were never even told
about," says Plaintiffs' attorney Mike Eidson, a senior partner
in the law firm of Colson Hicks Eidson, who filed the case along
with his law partners Roberto Martinez and Curtis Miner.
Mr. Eidson is the immediate past president of the American
Association for Justice, the world's largest trial lawyers' bar
with 60,000 members worldwide.
For more information, contact:
Colson Hicks Eidson
255 Aragon Avenue, Second Floor
Coral Gables, Florida 33134
Tel: 305.476.7400
Fax: 305.476.7444
VERIFONE HOLDINGS: Erroneous Fin'l. Reports Prompts $691M Suit
--------------------------------------------------------------
VeriFone Holdings, a leading electronic payment equipment
supplier is facing a US$691-million lawsuit, with a motion that
it be recognized as a class action, in Central Region District
Court (Israel), Nurit Roth writes for the Haaretz Daily.
The suit -- filed by attorneys Gil Ron and Jacob Aviad on behalf
of David Stern -- claims that an error in VeriFone's financial
reports from March, May and September 2007, which the company
announced in December 2007, caused shareholders losses of
US$685 million.
According to Mr. Roth, VeriFone explained, in an announcement,
that correction of the error would affect the company's
financial results. The changes reduced pre-tax profits for the
nine months covered by the reports to US$7.4 million, as opposed
to the originally reported US$37.1 million.
The suit notes that immediately after this announcement, the
company's share price tumbled.
Mr. Stern claims that in light of VeriFone's announcement, the
company's share was trading for about eight months at too high a
price, and share purchasers, himself included, overpaid by a
sum.
Mr. Stern contends that VeriFone should therefore compensate
every person who purchased the company's shares between March
and December 2007 for the damage caused by the erroneous figures
in the financial reports.
Headquartered in San Jose, Calif., VeriFone Holdings Inc. (NYSE:
PAY) -- http://www.verifone.com/-- provides secure electronic
payment solutions. VeriFone provides expertise, solutions and
services that add value to the point of sale with merchant-
operated, consumer-facing and self-service payment systems for
the financial, retail, hospitality, petroleum, government and
healthcare vertical markets.
WCI COMMUNITIES: Faces Fla. Suit Over Sale of Condominium Units
---------------------------------------------------------------
The law firms of Beasley Hauser Kramer Leonard & Galardi, P.A.
and Berger & Montague, P.C., disclose that on Jan. 23, 2008, a
securities class action lawsuit was filed against WCI
Communities, Inc., and The Resort at Singer Island Properties,
Inc.
The lawsuit was filed on behalf of all persons who purchased one
or more of the 239 hotel condominium units in the Singer Island
Resort. The Singer Island Resort is located in Palm Beach,
Florida.
The complaint alleges that the Defendants violated Section
12(a)(1) of the Securities Act of 1933, 15 U.S.C. Section
77(l)(a)(1), by failing to register with the Securities and
Exchange Commission the public offering of the Hotel Units.
The complaint also alleges that defendant WCI violated Section
15 of the Securities Act, 15 U.S.C. Section 77o, by controlling
the operations of its wholly owned subsidiary, defendant Singer
Island Resort, in offering the Hotel Units for sale without
registering them with the SEC.
The plaintiffs seek to rescind their acquisition of the Hotel
Units and rescissory or other damages in an amount to be proven
at trial.
The Company and RSI believe that the charges are without merit
and intend to vigorously defend themselves.
The suit is "Mastrella et al v. WCI Communities, Inc. et al.,
Case Number: 9:2008cv80055," filed with the United States
District Court for the Southern District of Florida, Judge
Daniel T. K. Hurley, presiding, with referral to Magistrate
Judge James M. Hopkins.
WENZEL CO: Recalls Car Charging Units Due To Injury Hazard
----------------------------------------------------------
The Wenzel Co., of St. Louis, Miss., in cooperation with the
U.S. Consumer Product Safety Commission, is recalling about
3,900 car charging units included with LL Bean Airbeds.
The company said the batteries in the car charging unit can
overheat when the car engine is running, causing the battery
charging unit to burst. This can pose an injury hazard to
consumers.
The Wenzel Company has received one report of the batteries in
the car charging unit overheating and the unit bursting. No
injuries or property damage have been reported.
This recall involves the car charging units included with L.L.
Bean Raised Insta-Beds with Wenzel model numbers 822628 and
822629. These model numbers correspond to LL Bean catalog
number 55780. The model number can be found on the product
packaging. The car charging units are connected to the
cigarette lighter outlet found in most cars.
These recalled charging units were manufactured in China and
were being sold at L.L. Bean stores nationwide and catalog from
June 2007 through August 2007 for about $150.
Pictures of the recalled car charging units are found at:
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08179a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08179b.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml08/08179c.jpg
Consumers are advised to stop using the car charging unit
immediately and contact L.L. Bean for instructions on how to
obtain a free replacement car charging unit. Only the charger
units supplied with this product should be used. Using an
alternative charger could result in physical injury and/or
product damage.
For additional information, consumers should contact L.L. Bean
at (800) 555-9717 anytime or visit the company's Web site:
http://www.llbean.com
WOODBURY COUNTY: Woman Files Suit Over Jail Strip Search Policy
---------------------------------------------------------------
Lisa Lambert, of Sedalia, Missouri, filed a lawsuit with the
United States District Court against Woodbury County, in Iowa,
claiming that her constitutional rights were violated when she
was strip searched at the Woodbury County jail on March 17,
2007, after she was arrested on a simple misdemeanor domestic
abuse charge, the WCF Courier reports.
According to the report, Ms. Lambert asserted that the search,
which was conducted by a female jailer, was demeaning,
dehumanizing and humiliating. She claims that it violated her
Fourth Amendment rights, which protect her from unlawful search
and seizure.
The Courier writes that the lawsuit against Woodbury County
seeks to include thousands of people who were subjected to
similar strip searches in the Woodbury Country Jail.
The jail's policy provides that anyone arrested on a charge
greater than simple misdemeanor would be subject to a strip
search, The Courier explains. The policy, however, was changed
on Oct. 15, 2007, and now states that anyone arrested on a
simple misdemeanor shall not be strip searched unless they are
suspected of carrying a weapon or contraband.
The lawsuit, the report writes, seeks unspecified damages for
Ms. Lambert and others who may be party to the purported class
action.
Ms. Lambert's attorney, Jean Pendleton, Esq., contends that the
policy is now constitutional, the report relates.
The Courier points out that Ms. Pendleton also represents
Maureen Rattray, who filed a similar lawsuit against Woodbury
County in February 2007, claiming that she was subjected to a
strip search after being arrested for drunken driving in 2006.
Trial in Ms. Rattray's case is scheduled for February 2009.
Ms. Pendleton has asked that Ms. Rattray's case be granted class
action status. The lawyer also intends to seek to consolidate
the two cases.
Ms. Pendleton can be reached at:
Jean Pendleton, Esq.
Pendleton Law Firm, P.C.
1501 42nd Street, Suite 445
West Des Moines, IA 50266
e-mail: jpendleton@pendletonlawfirm.com
Representing Woodbury County is:
Douglas L. Phillips
Klass Law Firm, L.L.P.
Mayfair Center, Upper Level
4280 Sergeant Road, Suite 290
Sioux City, IA 51106
Phone: (712) 252-1866
Fax: (712) 252-5822
e-mail: phillips@klasslaw.com
XCELERA.COM INC: Mass. Securities Lawsuit Granted Certification
---------------------------------------------------------------
The U.S. District Court for the District of Massachusetts
certified as a class action the securities fraud lawsuit filed
against Xcelera.com, Inc.
The class includes all persons or entities who purchased
Xcelera, Inc. common stock during the period from April 1, 1999,
through and including August 8, 2000, and who suffered damages.
Deadline for exclusion is on April 7, 2008.
Case Background
On Aug. 23, 2000, a class action was filed against Xcelera.com,
seeking damages for violations of the federal securities laws on
behalf of all investors who purchased Xcelera common stock
between April 1, 1999, and Aug. 8, 2000.
The complaint charges Xcelera and certain of its officers with
violations of the U.S. Securities & Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder.
On April 1, 1999, defendants issued a press release announcing
that Xcelera had acquired Mirror Image, Co., and made positive
statements in this and subsequent press releases regarding the
acquisition without disclosing that Xcelera shareholders could
have their interests significantly diluted.
The complaint further alleges that Xcelera misled investors by
failing to inform them that another corporate transaction
involving Mirror Image could cause them to incur significant tax
liabilities.
These materially misleading statements caused Xcelera's common
stock to be artificially inflated throughout the class period.
Meanwhile, Xcelera insiders took advantage of the inflated price
to sell approximately 1.6 million of their own shares.
When the truth was revealed, the price of Xcelera's stock
collapsed to US$11.75 per share, dramatically below its class
period high of US$112.50.
Cases were originally filed against Xcelera in four different
federal district courts. The parties are awaiting a decision by
the Judicial Panel on Multidistrict Litigation ordering the
transfer of all cases for pretrial coordination and
consolidation to one jurisdiction.
On Oct. 10, 2000, certain plaintiffs filed a motion for
appointment of Lead Plaintiffs and for approval of their
selection of Lead Counsel.
On Jan. 31, 2001, the court appointed lead plaintiffs and
approved their selection of lead counsel, including Berman
DeValerio Pease Tabacco Burt & Pucillo
(http://www.bermanesq.com/)
On April 2, 2001, the lead plaintiffs filed their consolidated
amended class action complaint, which Xcelera moved to dismiss
on May 31, 2001 and plaintiffs opposed on July 16, 2001.
On Oct. 3, 2001, the court held a hearing on defendants' motion
to dismiss, and Judge Rya Zobel issued an order granting in part
and denying in part defendants' motion on March 8, 2002.
Defendants filed their answer to the amended complaint on April
9, 2002.
Judge Rya Zobel issued an order granting class certification on
Sept. 30, 2004. In early March of 2005 the defendants sought to
appeal the class certification order.
On Dec. 13, 2005 the First Circuit Court of Appeals affirmed
Judge Zobel's September order certifying the class and the
insider trading subclass (Class Action Reporter, Oct. 27, 2006).
The suit is "In re Xcelera.com Securities Litigation, Case No.
1:00cv11649," filed in the U.S. District Court for the District
of Massachusetts, Judge Rya W. Zobel, presiding.
Plaintiffs' Co-Lead Counsel:
Peter A. Pease
Patrick T. Egan
Berman DeValerio Pease Tabacco Burt & Pucillo
One Liberty Square
Boston, MA 02109
Telephone: (617) 542-8300
- and -
Christopher S. Polaszek
Leigh Smith
Milberg Weiss LLP
One Pennsylvania Plaza
New York, NY 10119-0165
Telephone: (212) 594-5300
For more information, contact:
In re Xcelera.com Securities Litigation
c/o Analytics Incorporated
Notice Administrator
P.O. Box 2003
Chanhassen, MN 55317-2003
Phone: (866) 233-0113
Web site: http://www.xcelerasecuritieslitigation.com
New Securities Fraud Cases
AMERICAN DENTAL: Roy Jacobs Files Securities Fraud Suit in MA
-------------------------------------------------------------
Roy Jacobs & Associates commenced a Class Action lawsuit in the
United States District Court for the District of Massachusetts
on behalf of a class of all persons who purchased or acquired
securities of American Dental Partners, Inc. from August 10,
2005 through December 13, 2007.
ADPI is a leading provider of business services to dental group
practices throughout the United States. Park Dental Group
located in Minneapolis-St. Paul area, was one of the dental
groups which had a long-term contract agreement with ADPI, and
provided ADPI with significant revenue. Indeed, PDG accounted
for 29 percent of ADPI's consolidated net revenue in 2006.
The business relationship between ADPI and PDG worked well for a
number of years, but disputes arose in 2004. In February 2006,
PDG sued ADPI and its subsidiary. On Dec. 12, 2007, in
connection with the lawsuit, a jury found ADPI and its
subsidiary liable for breach of contract, breach of implied
covenants of good faith and fair dealing, breach of fiduciary
duty, and tortious interference with contract and prospective
advantage. The jury awarded PDG US$88 million to compensate it
for the injuries caused it by ADPI and its subsidiary and
punitive damages of US$42 million.
After the announcement of the jury verdict, ADPI's stock
plummeted from US$19.70 a share on Dec. 11, 2007, to US$14.34 on
Dec. 12, 2007, and then to US$4.62 on Dec. 13, 2007, after the
announcement of the punitive damage award.
The complaint charges ADPI and certain of its officers and
directors with violations of the federal securities laws by
issuing a series of material misrepresentations to the market
during the Class Period thereby artificially inflating the price
of ADPI shares. More specifically, the complaint alleges that
ADPI financial statements throughout the Class Period were
materially false and misleading because defendants knew that a
substantial amount of ADPI's revenue and earnings were obtained
by conduct, which was wrongful and tortious as, found by a jury
on Dec. 12, 2007.
Interested parties may move the court no later than March 31,
2008, for lead plaintiff appointment.
For more information, contact:
Roy L. Jacobs, Esq.
Roy Jacobs & Associates
60 East 42nd Street, 46th Floor
New York, NY 10165
Phone: 1-888-884-4490
e-mail: rjacobs@jacobsclasslaw.com
Web site: http://www.jacobsclasslaw.com
CENTERLINE HOLDING: Schiffrin Barroway Files NY Securities Suit
---------------------------------------------------------------
The law firm of Schiffrin Barroway Topaz & Kessler, LLP, filed a
class action with the United States District Court for the
Southern District of New York on behalf of all purchasers of
securities of Centerline Holding Company between March 12, 2007,
through Dec. 28, 2007.
The Complaint charges Centerline and certain of its officers and
directors with violations of the Securities Exchange Act of
1934.
Centerline (formerly "CharterMac") is the parent company of
Centerline Capital Group, Inc., a diversified real estate fund
manager. Centerline Capital Group lends, invests and manages
capital for the commercial real estate and affordable housing
industries.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded
by them:
(1) that defendants were negotiating to sell the Company's
tax-exempt revenue bond portfolio to Freddie Mac and
that this portfolio was responsible for the majority of
the Company's revenue;
(2) that defendants knew that investors would reasonably
expect the Company to maintain its tax-exempt mortgage
revenue bond portfolio;
(3) that without the tax-exempt mortgage revenue bond
portfolio, the Company would be unable to pay the
substantial dividends that investors had become
accustomed to receiving (and which had often formed the
basis for investors deciding to purchase and hold
Centerline shares);
(4) that by selling the tax-exempt mortgage bond portfolio
to Freddie Mac, Centerline would become a pure asset
management company, as opposed to a tax-exempt bond
fund, thus making Centerline securities a far riskier
investment than previously;
(5) that the Company was attempting to divert a large
portion of future income to insiders through a related-
party transaction with The Related Companies, L.P.,
an entity owned by Defendants Stephen M. Ross and Jeff
T. Blau;
(6) caused the Company to lack adequate internal and
financial controls;
(7) that, as a result of the foregoing, the Company's
statements about its financial well-being and future
business prospects were lacking in any reasonable basis
when made.
On Dec. 28, 2007, the Company shocked investors when it
announced that it had sold its US$2.8 billion tax-exempt
affordable housing bond portfolio to Freddie Mac, thus
dramatically changing the Company's business model into a pure
asset management firm. At the same time, the Company stated
that it was cutting annual dividends from US$1.68 per share to
US$0.60 per share. Additionally, the Company announced that
TRCLP, owned by Defendants Ross and Blau, would provide
US$131 million in financing to Centerline in exchange for
12.2 million shares of newly-issued convertible preferred stock,
which would pay Defendants Ross and Blau a dividend of 11%.
Upon the release of this news, the Company's shares fell
US$2.57 per share, or over 25 percent, to close on Dec. 28,
2007, at US$7.70 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members.
Interested parties may move the court no later than March 18,
2008, for lead plaintiff appointment.
For more information, contact:
Darren J. Check, Esq.
Richard A. Maniskas, Esq.
Schiffrin Barroway Topaz & Kessler, LLP
280 King of Prussia Road
Radnor, PA 19087
Toll Free: 1-888-299-7706
Phone: 1-610-667-7706
SLM CORP: Coughlin Stoia Files Securities Fraud Suit in N.Y.
------------------------------------------------------------
Coughlin Stoia Geller Rudman & Robbins LLP announced that a
class action has been commenced with the United States District
Court for the Southern District of New York on behalf of
purchasers of SLM Corporation ("Sallie Mae") common stock during
the period between Jan. 18, 2007, and Jan. 3, 2008.
The complaint charges Sallie Mae and certain of its officers and
directors with violations of the Securities Exchange Act of
1934.
Sallie Mae, through its subsidiaries, provides education finance
in the United States.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's business and financial results and, despite evidence
that Sallie Mae's loan loss provisions for its subprime
borrowers attending non-traditional schools were inadequate both
prior to and at the start of the Class Period, defendants failed
to adequately reserve for losses in Sallie Mae's non-traditional
portfolio. As a result of defendants' false statements, Sallie
Mae's stock traded at artificially inflated prices during the
Class Period, reaching a Class Period high of US$57.98 per share
in July 2007.
On Jan. 3, 2008, the Company disclosed in an SEC filing that it
would be cutting back on its core business of lending to
students by being "more selective" in making students loans due
to turmoil in the credit markets and a new federal law that
slashed subsidies to the private companies that make government-
backed student loans. On this news, Sallie Mae's stock dropped
US$2.49 per share to close at US$16.67 per share, a one-day
decline of 15%.
According to the complaint, the true facts, which were known by
the defendants but concealed from the investing public during
the Class Period, were as follows:
(a) the Company failed to engage in proper due diligence in
originating student loans to subprime borrowers,
particularly those attending non-traditional
institutions;
(b) the Company was not adequately reserving for
uncollectible loans in its non-traditional portfolio in
violation of generally accepted accounting principles,
causing its financial results to be materially
misstated;
(c) the Company had far greater exposure to anticipated
losses and defaults related to its non-traditional loan
portfolio than it had previously disclosed; and
(d) given the deterioration and the increased volatility in
the subprime market and reductions in federal
subsidies, the Company would be forced to tighten its
lending standards on both its federal loans and private
education loans which would have a direct material
negative impact on its loan originations going forward.
The Investor-Plaintiffs seek to recover damages.
For more information, contact:
Darren Robbins
Coughlin Stoia Geller Rudman & Robbins LLP
Phone: 800-449-4900 or 619-231-1058
e-mail: djr@csgrr.com
Web site: http://www.csgrr.com
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S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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Copyright 2008. All rights reserved. ISSN 1525-2272.
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