/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/091007.mbx C L A S S A C T I O N R E P O R T E R Wednesday, October 7, 2009, Vol. 11, No. 198 Headlines AIR FRANCE 447: Plane's Owner, Manufacturers & Designers Sued ALLIANCE HEALTHCARD: Remanded Physicians' Suit v. Unit Pending AWB LIMITED: Class Action RICO Lawsuit Dismissed in S.D.N.Y. CANO PETROLEUM: Bid to Nix Amended Securities Fraud Suit Pending CCO HOLDINGS: Charter and Charter Holdco Defend "Bodet" Lawsuit DYNEGY HOLDINGS: Natural Gas Prices Cases Still Pending in Nev. DYNEGY HOLDINGS: Junked Reconsideration Motion Subject to Appeal DYNEGY HOLDINGS: Remanded Gas Pricing Suit Ongoing in Tennessee EPL INTERMEDIATE: "Amezcua" Labor Violations Suit Still Pending EPL INTERMEDIATE: Finalizing Settlement Agreement in "Santana" EPL INTERMEDIATE: Defends Managers' Calif. Labor Violations Suit EPL INTERMEDIATE: Calif. Labor Breach Suit Settlement Pending EPL INTERMEDIATE: In Settlement Talks with "Penaloza" Plaintiffs FLORIDA: Class Certified in Pediatric Medicaid Lawsuit HALCYON MANUFACTURING: Diving Equipment Recalled LAURA HESS: Claims Top $50 Million in Debt-Relief Scam LEADIS TECHNOLOGY: Securities Suit Deal Gets Final OK in June MASSEY ENERGY: Derivative Suit Filing May Have Violated Rule 11 MICHAEL FOODS: Pursuing Dismissal of Consolidated Amended Suit NETLIST INC: Consolidated Securities Suit Ongoing in California NORTHWEST BIOTHERAPEUTICS: Securities Suit Dismissed on June 6 PLAYLOGIC ENTERTAINMENT: Copy Protection Software Suit Pending SONY COMPUTER: Suit Says PlayStation 3 Software Update is Faulty VESTIN REALTY: Contract Breach Suit v. VRM II Ongoing in Calif. VESTIN REALTY: Contract Breach Lawsuit v. VRM I Remains Pending WELLS FARGO: Removes "Ray" Overdraft Suit to N.D. Calif. WHITNEY INFORMATION: Bid to Nix "Friedman" Suit Remains Pending WHITNEY INFORMATION: Canadian Unit Defends Investments Lawsuit WILLIAM LYON: California Suit Over Tender Offer Remains Stayed WILLIAM LYON: Shareholder Case Still Ongoing in Delaware Court New Securities Fraud Cases DIREXION SHARES: Fraud Suit Against Financial Bear 3X Shares Fund ********* AIR FRANCE 447: Plane's Owner, Manufacturers & Designers Sued ------------------------------------------------------------- Cameron Langford at Courthouse News Service reports that inaccurate airspeed readings from defective equipment caused Air France Flight 447 to crash into the Atlantic on June 1 en route from Rio de Janeiro to Paris and kill the 228 people on board, the estates of two passengers claim in Federal Court. Michael and Anne Harris died in the crash due to the negligence of the plane's owners Societe Air France, its manufacturers Airbus SAS and several other companies that designed and built the plane's defective parts, according to the complaint. "The subject flight crashed into the Atlantic Ocean . . . approximately 680 miles northeast of Brazil in the middle of the ocean," according to the complaint. "All passengers on board the subject aircraft were killed." New Jersey-based Honeywell International also is named as a defendant, for its production of an allegedly faulty "Air Data and Inertial Reference Unit" in the plane. Rockwell Collins, a Cedar Rapids, Iowa, company, is accused of making a deficient radar system installed in the aircraft. The French company Thales SA designed faulty pitot tubes, pressure measuring instruments used to determine the airspeed of a plane, which led to the accident, the claimants say. The estates seek damages for emotional suffering, loss of inheritance and other survivor benefits. A copy of the 41-page Complaint in Harris, et al. v. Societe Aur France, et al., Case No. 09-cv-3155 (S.D. Tex.), is available at: http://www.courthousenews.com/2009/10/02/Airbus.pdf The Plaintiffs are represented by: Richard Warren Mithoff, Esq. Janie L. Jordan, Esq. Joseph A. Alexander, Esq. MITHOFF LAW FIRM 500 Dallas Street, Suite 3450 Houston, TX 77002 Telephone: 713-654-1122 - and - Russell Post, Esq. BECK, REDDEN & SECREST, LLP One Houston Center 1221 McKinney Street, Suite 4500 Houston, TX 77010-2010 Telephone: 713-951-3700 ALLIANCE HEALTHCARD: Remanded Physicians' Suit v. Unit Pending -------------------------------------------------------------- A remanded class-action suit against Alliance Healthcard, Inc.'s subsidiary, The Capella Group, Inc., on behalf of all similarly- situated physicians nationwide remains pending in the U.S. District Court for the Southern District of Georgia, Augusta Division. The lawsuit is entitled William Andrew Rivell, M.D. and Alan B. Whitehouse, M.D., individually and on behalf of all persons similarly situated, v. Private Health Care Systems and The Capella Group, Inc.; Civil Action File No: CV106-176. The plaintiffs in this case allege that the contracts entered into by medical providers with Capella through its relationship with the Private Health Care Systems network of providers did not allow for the use of the providers' names to market a discount medical plan whereby payment for services is made at the point of service by the consumer, and not by a third party payor such as an insurance company. The Plaintiffs are seeking certification of this case as a class action on behalf of all similarly-situated physicians nationwide. The case was originally instituted on Nov. 17, 2006, but was thereafter dismissed by the District Court. The U.S. Court of Appeals for the Eleventh Circuit vacated such dismissal and remanded the case to the District Court on March 24, 2008. On Oct. 30, 2008, The Harford Accident and Indemnity Co. assumed payment of defense costs pursuant to a reservation of rights letter issued on that date. The Hartford has since filed a declaratory judgment action against the Capella Group, Inc. asking the court to determine the respective rights of the parties, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. Alliance Healthcard, Inc. -- http://www.alliancehealthcard.com/ -- is a provider of discount medical plans with a focus on creating, marketing, and distributing membership savings programs. It offers savings in approximately 16 areas of health care, including physician visits, hospital stays, chiropractics, vision, dental, pharmacy, hearing, and patient advocacy, among others. In April 2009, Alliance HealthCard, Inc. completed the acquisition of Access Plans USA, Inc. AWB LIMITED: Class Action RICO Lawsuit Dismissed in S.D.N.Y. ------------------------------------------------------------ The Australian Business, with The Wall Street Journal, reports that AWB Limited says an appeal against a U.S. class action ruling in its favour, brought by persons representing a residents of the three northern governorates of Iraq, has been dismissed. AWB has been advised that the U.S. Court of Appeals has dismissed the appeal by Karim and others in Karim, et al v. AWB Limited, et al., Case No. 06-cv-15400 (S.D.N.Y.) (Lynch, J.). The plaintiffs had appealed the original verdict of the US District Court for the Southern District of New York, which had found in favour of AWB, AWB (USA), BNP Paribas and Commodity Specialists Company. CANO PETROLEUM: Bid to Nix Amended Securities Fraud Suit Pending ---------------------------------------------------------------- The motion to dismiss an amended purported securities fraud class-action lawsuit filed against Cano Petroleum, Inc., the company's outside directors and its underwriters is pending in New York. On Oct. 2, 2008, the following lawsuit (08 CV 8462) was filed in the U.S. District Court for the Southern District of New York against David W. Wehlmann; Gerald W. Haddock; Randall Boyd; Donald W. Niemiec; Robert L. Gaudin; William O. Powell, III, and the underwriters alleging violations of the federal securities laws. The plaintiff seeks to certify the suit as a class-action. The lawsuit alleges that the prospectus for the June 26, 2008 public offering of Cano common stock contained statements regarding Cano's proved reserve amounts and standards that were materially false and overstated Cano's proved reserves. Messrs. Wehlmann, Haddock, Boyd, Niemiec, Gaudin and Powell were outside directors of Cano on June 26, 2008. The lawsuit seeks an unspecified amount of damages for the class if the lawsuit is certified as a class action. On July 2, 2009, the plaintiffs filed an amended complaint that adds as defendants Cano, Cano's Chief Executive Officer and Chairman of the Board, Jeff Johnson, Cano's former Senior Vice President and Chief Financial Officer, Morris B. "Sam" Smith, Cano's current Senior Vice President and Chief Financial Officer, Ben Daitch, Cano's Vice President and Principal Accounting Officer, Michael Ricketts and Cano's Senior Vice President of Engineering and Operations, Patrick McKinney, and drops Gerald W. Haddock, a former director of Cano, as a defendant. The amended complaint alleges that the prospectus for the Secondary Offering contained statements regarding Cano's proved reserve amounts and standards that were materially false and overstated Cano's proved reserves. The plaintiff is seeking to certify the lawsuit as a class action lawsuit and is seeking an unspecified amount of damages. Cano is cooperating with its Directors and Officers Liability insurance carrier regarding the defense of the lawsuit. On July 27, 2009, the defendants moved to dismiss the lawsuit, according to the company's Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended June 30, 2009. Cano Petroleum, Inc. -- http://www.canopetro.com/-- is an independent oil and natural gas company that is primarily utilizing waterflooding and enhanced oil recovery (EOR) techniques to increase production and reserves at its existing properties. The Company's assets are located onshore United States in Texas, New Mexico and Oklahoma. Cano's proved oil and natural gas reserves as of June 30, 2008, were prepared by Miller and Lents, Ltd., international oil and gas consultants. As of September 10, 2008, it had 17 wells containing multiple completions. On September 10, 2008, the Company had total acreage of 74,200 gross acres and 70,805 net acres, all of which was considered developed acres. Cano sells its crude oil and natural gas production to several independent purchasers. CCO HOLDINGS: Charter and Charter Holdco Defend "Bodet" Lawsuit --------------------------------------------------------------- Charter Communications, Inc. and Charter Communications Holding Company, LLC, continue to defend a class action by Gerald Paul Bodet, Jr., according to CCO Holdings, LLC's Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. On or about March 16, 2009, Gerald Paul Bodet, Jr. filed, but did not appropriately serve, a class action against Charter and Charter Holdco. The suit is styled "Gerald Paul Bodet, Jr. v. Charter Communications, Inc. and Charter Communications Holding Company, LLC." The plaintiff alleges that the defendants violated the Sherman Act and Louisiana Unfair Trade Practices Act by tying the provision of premium cable programming to the purchase or rental of a set top box from the company. CCO Holdings, LLC -- http://www.charter.com/-- through its operating subsidiary, Charter Communications Operating, LLC, operates broadband communications businesses in the United States, with approximately 5.60 million customers at Dec. 31, 2007. CCO Holdings Capital Corp. is wholly owned subsidiary of CCO Holdings, and was established and exist solely as co-issuers of the public debt issued with their parent companies. Through its hybrid fiber and coaxial cable network, the Company offers traditional cable video programming (analog and digital, which it refers to as video service), high-speed Internet access, and telephone service, as well as, broadband services (such as Charter OnDemand video service (OnDemand), high definition television service, and digital video recorder (DVR) service). DYNEGY HOLDINGS: Natural Gas Prices Cases Still Pending in Nev. --------------------------------------------------------------- Six cases alleging that Dynegy Holdings, Inc. inflated natural gas prices remain pending in the U.S. District Court for the District of Nevada, according to the company's Form 8-K filing with the U.S. Securities and Exchange Commission dated Sept. 28, 2009. Of the six, three seek class certification. These cases are in the discovery phase. Five of the cases were transferred through the multi-district litigation management process from other states, including Kansas, Wisconsin, Missouri and Illinois. All of the cases similarly alleged that the Company is engaged in an illegal scheme to inflate natural gas prices by providing false information to natural gas index publications. The complaints rely heavily on prior FERC and CFTC investigations into and reports concerning index manipulation in the energy industry. Dynegy Inc., through its subsidiary, Dynegy Holdings, Inc., is engaged in the production and selling of electric energy, capacity and ancillary services from the fleet of 29 operating power plants in 13 states totaling nearly 20,000 megawatt of generating capacity. DYNEGY HOLDINGS: Junked Reconsideration Motion Subject to Appeal ---------------------------------------------------------------- The U.S. District Court in the District of Nevada's denial of the motion for reconsideration of a Colorado class-action lawsuit against Dynegy Holdings, Inc., and other defendants, is subject to appeal, according to the company's Form 8-K filing with the U.S. Securities and Exchange Commission dated Sept. 28, 2009. The lawsuit claims damages resulting from alleged price manipulation and false reporting of natural gas prices to various index publications in the 2000-2002 timeframe. The lawsuit had been transferred to Nevada through the multi- district litigation process, thus dismissing the case and all of the plaintiffs' claims. Thereafter, the plaintiffs moved for reconsideration and the Court orders additional briefing on plaintiffs' declaratory judgment claims. In February 2008, the U.S. District Court in Las Vegas, Nevada granted defendants' motion for summary judgment in a Colorado class action, which had been transferred to Nevada through the multi-district litigation management process, thereby dismissing the case and all of plaintiffs' claims. Plaintiffs moved for reconsideration and the court ordered additional briefing on plaintiffs' declaratory judgment claims. In January 2009, the court dismissed plaintiffs' remaining declaratory judgment claims. Dynegy Inc., through its subsidiary, Dynegy Holdings, Inc., is engaged in the production and selling of electric energy, capacity and ancillary services from the fleet of 29 operating power plants in 13 states totaling nearly 20,000 megawatt of generating capacity. DYNEGY HOLDINGS: Remanded Gas Pricing Suit Ongoing in Tennessee --------------------------------------------------------------- A remanded class-action lawsuit filed against Dynegy Holdings, Inc., and several of its affiliates is ongoing in Tennessee. The plaintiffs claimed damages resulting from alleged process manipulation and false reporting of natural gas prices to various index publications in the 2000-2002 timeframe. In February 2007, the Tennessee state court previously dismissed a class action on defendants' motion. Plaintiffs appealed and in November 2007, the case was argued to the appellate court. In October 2008, the appellate court reversed the dismissal and remanded the case for further proceedings. In December 2008, the defendants applied for leave to appeal the appellate court decision to the Tennessee Supreme Court. Dynegy Inc., through its subsidiary, Dynegy Holdings, Inc., is engaged in the production and selling of electric energy, capacity and ancillary services from the fleet of 29 operating power plants in 13 states totaling nearly 20,000 megawatt of generating capacity. EPL INTERMEDIATE: "Amezcua" Labor Violations Suit Still Pending --------------------------------------------------------------- Salvador Amezcua's purported class-action lawsuit against EPL Intermediate, Inc. is pending in the Superior Court of the State of California, County of Los Angeles. On Oct. 18, 2005, Salvador Amezcua, on behalf of himself and all others similarly situated, filed a purported class-action complaint against EPL. Carlos Olvera replaced Mr. Amezcua as the named class representative on Aug. 16, 2006. This action alleges certain violations of California labor laws and the California Business and Professions Code, based on, among other things, failure to pay overtime compensation, failure to provide meal periods, unlawful deductions from earnings and unfair competition. Plaintiffs' requested remedies include compensatory and punitive damages, injunctive relief, disgorgement of profits and reasonable attorneys' fees and costs. The court denied EPL's motion to compel arbitration, and the company has appealed that decision. The Court of Appeal issued its ruling on April 27, 2009, affirming the trial court ruling on the arbitration issue. This case is in a preliminary phase, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 1, 2009. Costa Mesa, Calif.-based EPL Intermediate, Inc., through its wholly owned subsidiary El Pollo Loco, Inc., operates a restaurant system specializing in flame-grilled chicken. As of Dec. 31, 2008, its restaurant system consisted of 165 company- operated and 248 franchised restaurants located primarily in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, Massachusetts, Nevada, Oregon, Texas, Utah, Virginia and Washington. In 2008, it opened 9 new company-operated restaurants and 21 franchised restaurants. EPL INTERMEDIATE: Finalizing Settlement Agreement in "Santana" -------------------------------------------------------------- The parties in a purported class-action suit filed on behalf of all assistant shift managers against EPL Holdings, Inc. are finalizing a settlement agreement. In April 2007, Dora Santana filed a purported class action in state court in Los Angeles County on behalf of all "Assistant Shift Managers." Plaintiff alleges wage and hour violations including working off the clock, failure to pay overtime, and meal break violations on behalf of the purported class, currently defined as all Assistant Managers from April 2003 to present. Written discovery is completed on the limited issue of class certification. The Court has ordered that plaintiffs file their motion for class certification no later than Aug. 15, 2009. The parties have reached an agreement in principle to settle this matter and are in the process of finalizing that agreement. The company has accrued the estimated settlement expense of $0.9 million, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 1, 2009. Costa Mesa, Calif.-based EPL Intermediate, Inc., through its wholly owned subsidiary El Pollo Loco, Inc., operates a restaurant system specializing in flame-grilled chicken. As of Dec. 31, 2008, its restaurant system consisted of 165 company- operated and 248 franchised restaurants located primarily in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, Massachusetts, Nevada, Oregon, Texas, Utah, Virginia and Washington. In 2008, it opened 9 new company-operated restaurants and 21 franchised restaurants. EPL INTERMEDIATE: Defends Managers' Calif. Labor Violations Suit ---------------------------------------------------------------- EPL Intermediate, Inc. continues to defend a purported class- action lawsuit against the company in the Superior Court of the State of California, County of Los Angeles. On April 16, 2004, former managers Haroldo Elias, Marco Ramirez and Javier Rivera filed the purported class action suit against EPL on behalf of all putative class members composed of former and current general managers and restaurant managers from April 2000 to present. The suit alleges certain violations of California labor laws, including alleged improper classification of general managers and restaurant managers as exempt employees. The requested remedies include compensatory damages for unpaid wages, interest, certain statutory penalties, disgorgement of alleged profits, punitive damages and attorneys' fees and costs as well as certain injunctive relief. The court has lifted the stay on the class action pursuant to a recent California Supreme Court decision. The matter is now proceeding in Superior Court, and the parties are conducting limited discovery on the issue of class certification. Plaintiffs' motion for class certification is expected to be filed in April 2009, and briefing completed. The hearing on Plaintiffs' motion for class certification was set for Sept. 18, 2009. No further updates on the matter were disclosed in the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 1, 2009. Costa Mesa, Calif.-based EPL Intermediate, Inc., through its wholly owned subsidiary El Pollo Loco, Inc., operates a restaurant system specializing in flame-grilled chicken. As of Dec. 31, 2008, its restaurant system consisted of 165 company- operated and 248 franchised restaurants located primarily in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, Massachusetts, Nevada, Oregon, Texas, Utah, Virginia and Washington. In 2008, it opened 9 new company-operated restaurants and 21 franchised restaurants. EPL INTERMEDIATE: Calif. Labor Breach Suit Settlement Pending ------------------------------------------------------------- The settlement of a purported class-action suit filed by a former assistant manager of EPL Intermediate, Inc., against the company is pending California court approval. On May 30, 2008, former assistant manager Jeannette Delgado filed a purported class-action lawsuit on behalf of all hourly (i.e. non-exempt) employees of EPL in state court in Los Angeles County alleging violations of certain California labor laws and the California Business and Professions Code including failure to pay overtime, failure to provide meal periods and rest periods and unfair business practices. By statute, the purported class extends back four years to May 30, 2004. The plaintiff's requested remedies include compensatory and punitive damages, injunctive relief, disgorgement of profits and reasonable attorneys' fees and costs. This lawsuit was served on the company in early September 2008. The parties have reached an agreement in principle to settle this matter and executed a Memorandum of Understanding in June 2009. The classwide settlement requires Court approval, and it is expected that administration of the settlement can be completed by year end. The company has accrued the estimated settlement expense of $1.5 million, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 1, 2009. Costa Mesa, Calif.-based EPL Intermediate, Inc., through its wholly owned subsidiary El Pollo Loco, Inc., operates a restaurant system specializing in flame-grilled chicken. As of Dec. 31, 2008, its restaurant system consisted of 165 company- operated and 248 franchised restaurants located primarily in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, Massachusetts, Nevada, Oregon, Texas, Utah, Virginia and Washington. In 2008, it opened 9 new company-operated restaurants and 21 franchised restaurants. EPL INTERMEDIATE: In Settlement Talks with "Penaloza" Plaintiffs ---------------------------------------------------------------- The parties in a purported class action filed on behalf of all non-exempt employees against EPL Intermediate, Inc., are engaged in settlement negotiations. On May 26, 2009, in Superior Court in Orange County, California, Martin Penaloza, a former Assistant Manager, filed the action on behalf of all non-exempt employees. The claims, requested remedies, and potential class in this case overlap those in the Delgado and Santana cases. The case is in a preliminary phase, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 1, 2009. Costa Mesa, Calif.-based EPL Intermediate, Inc., through its wholly owned subsidiary El Pollo Loco, Inc., operates a restaurant system specializing in flame-grilled chicken. As of Dec. 31, 2008, its restaurant system consisted of 165 company- operated and 248 franchised restaurants located primarily in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, Massachusetts, Nevada, Oregon, Texas, Utah, Virginia and Washington. In 2008, it opened 9 new company-operated restaurants and 21 franchised restaurants. FLORIDA: Class Certified in Pediatric Medicaid Lawsuit ------------------------------------------------------ The Jacksonville Observer reports that children's doctors and dentists have won a critical round in their four-year-old fight with state officials over Florida's Medicaid program, which they maintain fails to properly serve at least 1.7 million children. The Honorable Adalberto Jordan has certified class-action status and set a Dec. 7 trial in Florida Pediatric, et al. v. Seretary - AHCA, et al., Case No. 05-cv-23037 (S.D. Fla.), filed in 2005 by the Florida Pediatric Society and Florida Academy of Pediatric Dentistry, which claim the state has failed to meet federal requirements that low-income children receive periodic health screening and routine dental checkups. The medical groups maintain that 200,000 children eligible for the state-federal Medicaid program receive no benefits because Florida officials have failed to employ outreach programs. Another 1.5 million children enrolled don't receive the kind of coverage mandated by the federal government, the lawsuit contends. "This has been worth waiting for," attorney Stuart Singer said Friday. "Florida has failed miserably in meeting regulations requiring preventative care for Medicaid children," he added. "But without this ruling, we wouldn't be headed to trial." AHCA had sought to have the case dismissed and argued that class- action status should not be granted. Agency spokeswoman Tiffany Vause told the News Service of Florida that AHCA was still "determining how it will proceed," following Wednesday's court ruling. The Medical Groups are represented by: Stuart H. Singer, Esq. Boies, Schiller & Flexner LLP 401 East Las Olas Blvd., Suite 1200 Fort Lauderdale, FL 33301 Telephone: 954-356-0011 HALCYON MANUFACTURING: Diving Equipment Recalled ------------------------------------------------ The U.S. Consumer Product Safety Commission, in cooperation with Halcyon Manufacturing Inc., of High Springs, Fla., announced a voluntary recall of about 20,300 pieces of Halcyon diving equipment. Consumers should stop using recalled products immediately unless otherwise instructed. This recall involves Halcyon diving equipment including the Halcyon Explorer, Eclipse, CCR35, Evolve and Pioneer Buoyancy Compensator Devices (BCDs) and Halcyon Surface Marker Buoys (SMBs), Lift Bags, Diver Alert Markers (DAMs) Surf Shuttle and Diver Lift Raft Inflatable Devices. "Halcyon" is printed on the diving equipment. The over pressure valves (OPVs) in the diving equipment could fail allowing the buoyancy compensator devices (BCDs) and the diver lift inflatable devices to leak, posing a drowning hazard to divers No incidents or injuries have been reported. The products were sold at diving equipment retailers and distributors from January 2006 through December 2008 for between $350 and $450 for the buoyancy compensator devices (BCDs) and between $50 and $275 for the inflatable devices, and were manufactured in the United States. To see this recall on CPSC's Web site, including pictures of the recalled product, go to http://www.cpsc.gov/cpscpub/prerel/prhtml10/10002.html Consumers should immediately stop using recalled diving equipment and return it to an authorized Halcyon distributor or dealer for a free inspection and, if necessary, free replacement of the overpressure valve spring. For more information, contact Halcyon at (800) 425-2966 between 8:00 a.m. and 5:00 p.m., prevailing Eastern time, Monday through Friday, visit the firm's Web site at http://www.halcyon.net/opv-recall/or email the firm at techservices@halcyon.net LAURA HESS: Claims Top $50 Million in Debt-Relief Scam ------------------------------------------------------ Law.com reports that Jordana Mishory at the Daily Business Review reports that the Court approved nearly $54.7 million in claims in Office of Attorney General v. Laur L. Hess, Esq., Laura Hess & Associates, P.A., Hess Kennedy Chartered LLDC, and The Consumer Law Center, LLC., Case No. 08-007686 08 (Fla. Cir. Ct., 17th J. Dist., Broward Cty.), last week by people who were bilked out of their money by disbarred attorney Laura Hess in a debt settlement scam. The claims were by almost 20,000 consumers who turned to Hess and a series of companies she oversaw for help managing credit card and other debts. Hess, who has been disbarred for five years, promised to cancel debts for pennies on the dollar but instead was accused of pocketing the money. The DBR's full report is available at http://is.gd/3YBpP LEADIS TECHNOLOGY: Securities Suit Deal Gets Final OK in June ------------------------------------------------------------- The U.S. District Court for the Northern District of California grants final approval of the settlement of a consolidated securities class action suit against Leadis Technology, Inc., in June 2009. On March 2, 2005, a securities class-action suit was filed in the U.S. District Court for the Northern District of California against Leadis Technology, Inc., certain of its officers and its directors. The complaint alleges the defendants violated Sections 11 and 15 of the Securities Act of 1933 by making allegedly false and misleading statements in the company's registration statement and prospectus filed on June 16, 2004 for Leadis' initial public offering. A similar additional action was filed on March 11, 2005. On April 20, 2005, the court consolidated the two actions. In the fourth quarter of 2008, the parties to this litigation reached a tentative settlement of all claims. The District Court preliminarily approved the settlement in February 2009. The District Court issued its final approval of the settlement in June 2009, according to the company's Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. Leadis Technology, Inc. -- http://www.leadis.com/-- designs, develops and markets analog and mixed-signal semiconductor products that enable and enhance the features and capabilities of portable and other consumer electronic products. The company's product offerings include light-emitting diode (LED), drivers, power management, touch technology and consumer audio analog integrated circuits (ICs). MASSEY ENERGY: Derivative Suit Filing May Have Violated Rule 11 --------------------------------------------------------------- Law.com reports that Alison Frankel at The American Lawyer reports that a West Virginia federal judge's dismissal of a shareholders derivative suit against the board of Massey Energy was bad news for plaintiffs firm Barroway Topaz Kessler Meltzer & Check, but worse may be yet to come. The judge is set to decide a Rule 11 motion for sanctions filed by defense counsel, including Cravath, Swaine & Moore, who claim that Barroway's federal court complaint essentially copied a state court complaint that preceded the federal suit by a couple of weeks and added "trivial" new allegations. Ms. Frankel's full report is available at http://is.gd/3YGdJ The derivative action is Mercier v. Blankenship, et al., Case No. 07-cv-00555 (S.D. W.Va.) (Faber, J.). A copy of the Defendants' 20-page Memorandum of Law in Support of Joint Motion for Rule 11 Sanctions is available at: http://amlawdaily.typepad.com/merciersanctions.pdf The Defendants are represented by: Robald S. Rolfe, Esq. Julie A. North, Esq. CRAVATH, SWAINE & MOORE LLP Worldwide Plaza 825 Eighth Avenue New York, NY 10019 Telephone: 212-474-1000 - and - A.L. Emch, Esq. Jonathan L. Anderson, Esq. JACKSON KELLY PLLC 1600 Laidley Tower Post Office Box 553 Charleston, WV 25322 Telephone: 304-340-1000 - and - Tomas V. Flaherty, Esq. Jeffrey M. Wakefield, Esq. Tammy R. Harvey, Esq. Elizabeth L. Taylor, Esq. FLAHERTY, SENSABAUGH & BONASSO, PLLC 200 Capitol Street P.O. Box 3843 Charleston, WV 25301 Telephone: 304-345-0200 The Plaintiff is represented by: Lee D. Rudy, Esq. Robin Winchester, Esq. J. Daniel Albert, Esq. Eric L. Zagar, Esq. James A. Maro, Esq. Michael J. Hynes, Esq. BARROWAY, TOPAZ, KESSLER, MELTZER & CHECK LLP 280 King of Prussia Road Radnor, PA 19087 - and - Barry M. Hill, Esq. ANAPOL, SCHWARTZ, WEISS, COHAN, et al. 89 12th Street Wheeling, WV 26003 MICHAEL FOODS: Pursuing Dismissal of Consolidated Amended Suit -------------------------------------------------------------- Michael Foods, Inc. is pursuing the dismissal of a consolidated amended class-action complaint, according to the company's Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended July 4, 2009. In late 2008 and early 2009, some 22 class-action lawsuits were filed in various federal courts against the company and several other defendants (producers of shell eggs, manufacturers of processed egg products, and egg industry organizations) alleging violations of federal and state antitrust laws in connection with the production and sale of shell eggs and processed-egg products. Plaintiffs seek to represent nationwide classes of direct and indirect purchasers and allege that defendants conspired to reduce the supply of eggs by participating in animal husbandry, egg-export and other programs of various egg-industry associations. In December 2008, the Judicial Panel on Multidistrict Litigation ordered the transfer of all cases to the Eastern District of Pennsylvania for coordinated and/or consolidated pretrial proceedings. Subsequently, the direct-purchaser and indirect-purchaser plaintiffs each filed a Consolidated Amended Complaint. On April 30, 2009, the company filed motions to be dismissed from each CAC, and joined other defendants in motions for dismissal of both Consolidated Amended Complaints. Michael Foods, Inc. -- http://www.michaelfoods.com/-- is one of the leading US producers of shell eggs and value-added egg products (frozen, liquid, pre-cooked, dried). It has other operations, but eggs account for 70% of its sales. The spuds come in with its Northern Star subsidiary, which pre-shreds and mashes potatoes. The company's Crystal Farms subsidiary packages and distributes cheese, butter and other dairy products. Michael's customers include food processors, foodservice distributors, and retail grocery stores throughout North America, as well as in the Far East, South America, and Europe. Investment firm, Thomas H. Lee Partners, owns almost 90% of the company. NETLIST INC: Consolidated Securities Suit Ongoing in California --------------------------------------------------------------- The consolidated securities fraud class action lawsuit captioned Belodoff v. Netlist, Inc., Case No. SACV07-677 (C.D. Calif.) (Carter, J.), is ongoing. Initially, in May 2007, Netlist and certain of its officers and directors were named as defendants in four purported shareholder class-action suits, two of which were filed before the U.S. District Court for the Southern District of New York, and the other two filed before the U.S. District Court for the Central District of California. The New York suits are: 1. Tran v. Netlist, Inc., Case No. 07 CV 3754; and 2. Benjamin v. Netlist, Inc., Case No. 07 CV5518. The California suits are: A. Belodoff v. Netlist, Inc., Case No. SACV07-677 DOC (MLGx); and B. Swofford v. Netlist, Inc., Case No. CV07-04006 PSG (FMOx). These purported class-action suits were filed on behalf of persons and entities who purchased or otherwise acquired the company's common stock pursuant or traceable to the company's Nov. 30, 2006, Initial Public Offering. The complaints allege that the Registration Statement and Prospectus issued by the company in connection with the IPO contained untrue statements of material fact or omissions of material fact in violation of Sections 11, 12(a)(2) and 15 of Securities Act of 1933. They seek unspecified monetary damages and other relief. The lawsuits have been consolidated into a single action, under th caption, Belodoff v. Netlist, Inc., Lead Case No. SACV07-677 DOC (MLGx), which is pending with the U.S. District Court for the Central District of California. The lead plaintiff filed a consolidated complaint on Nov. 5, 2007, generally asserting the same claims. The defendants filed their motions to dismiss the consolidated complaint on Jan. 9, 2008. The motions to dismiss were taken under submission on April 28, 2008, and on May 30, 2008, the court granted the defendants' motions. However, the plaintiffs were granted the right to amend their complaint and subsequently filed their First Amended Consolidated Class Action Complaint on July 15, 2008. Generally, the Amended Complaint alleges that the Registration Statement issued by the Company in connection with the IPO contained untrue statements of material fact or omissions of material fact in violation of Sections 11 and 15 of Securities Act of 1933. The defendants filed motions to dismiss the Amended Complaint on Jan. 9, 2009, and on April 17, 2009, the Court granted defendants' motions to dismiss. However, plaintiffs were again granted the right to amend their complaint. Plaintiffs' second amended complaint is due on or before May 21, 2009. Defendants filed motions to dismiss the second amended complaint on June 22, 2009, and oral arguments on the motions to dismiss were scheduled for Aug. 31, 2009. No further updates on the case were disclosed in the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended July 4, 2009. Representing the plaintiffs are: Darren J. Robbins, Esq. Coughlin Stoia Geller Rudman and Robbins LLP 655 West Broadway Suite 1900 San Diego, CA 92101 Phone: 619-231-7423 E-mail: darrenr@csgrr.com - and - Curtis V. Trinko, Esq. Curtis V. Trinko Law Office 16 West 46th Street 7th Floor New York, NY 10036 Phone: 212-490-9550 E-mail: ctrinko@trinko.com Representing the defendants are: Sean T. Prosser, Esq. Morrison and Foerster LLP 12531 High Bluff Drive, Suite 100 San Diego, CA 92130-2040 Phone: 858-720-5100 E-mail: sprosser@mofo.com - and - Keith E. Eggleton, Esq. Wilson Sonsini Goodrich & Rosati 650 Page Mill Rd Palo Alto, CA 94304-1050 Phone: 650-493-9300 Fax: 650-565-5100 E-mail: keggleton@wsgr.com NORTHWEST BIOTHERAPEUTICS: Securities Suit Dismissed on June 6 -------------------------------------------------------------- The putative securities class-action lawsuit, In re Northwest Biotherapeutics, Inc. Securities Litigation, No. C-07-1254-RAJ, was dismissed with prejudice on June 16, 2009. On Aug. 13, 2007, a complaint was filed in the U.S. District Court for the Western District of Washington naming the company, the Chairperson of its Board of Directors, Linda F. Powers, and its Chief Executive Officer, Alton L. Boynton, as defendants in a class-action case for violation of federal securities laws. After this complaint was filed, five additional complaints were filed in other jurisdictions alleging similar claims. The complaints were filed on behalf of purchasers of the company's Common Stock between July 9, 2007 and July 18, 2007 and allege violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The complaints seek unspecified compensatory damages, costs and expenses. On Dec. 18, 2007, a consolidated complaint was filed in the U.S. District Court for the Western District of Washington consolidating the stockholder actions previously filed. The putative securities class-action lawsuit was settled with prejudice Jan. 8, 2009. The company has agreed to pay in settlement US$1 million. In accordance with the stipulation the insurance company has directly deposited the $1,000,000 in a court controlled escrow account. The settlement must be approved by the Court. Additional details about the settlement can be found in the formal settlement documents, which are available from the U.S. District Court for the Western District of Washington. The case alleged that the company misrepresented certain facts that resulted in the artificial inflation of the price of Northwest Biotherapeutics publicly-traded common stock between April 17, 2007 and July 18, 2007. The company disputes the allegations of the lawsuit, and denies that there was any such misrepresentation or that the shares of Northwest Biotherapeutics common stock were artificially inflated. Nevertheless, the company is settling the lawsuit to avoid potentially expensive and protracted litigation. The company settled the lawsuit with prejudice on Jan. 8, 2009. The Class Action Lawsuit final settlement was approved by the Court, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. Northwest Biotherapeutics, Inc. -- http://www.nwbio.com/-- is a development-stage biotechnology company focused on discovering, developing, and commercializing immunotherapy products that generate and enhance immune system responses to effectively treat cancer. PLAYLOGIC ENTERTAINMENT: Copy Protection Software Suit Pending -------------------------------------------------------------- Playlogic Entertainment, Inc., continues to face a purported class-action lawsuit filed in the U.S. District Court for the Southern District of New York. The lawsuit against Playlogic, filed on June 26, 2007, is in connection with alleged damages as a result of copy protection software included in Age of Pirates - Caribbean Tales. The company says that it does not foresee any liability in this matter, as plaintiffs have clearly sued the wrong company and the wrong entity. Playlogic acts only as a publisher of the game and therefore is not liable for possible faults in production or distribution. Moreover, as far as any claim could be brought against Playlogic, it would be the Dutch subsidiary Playlogic International NV, with its statutory seat in Amsterdam, The Netherlands, that would have to be sued. According to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009, as a consequence, the pending case should fail on both grounds and any new action against the Dutch subsidiary would have to be brought before the Dutch courts that are even more likely than the US courts to reject class actions like this. The suit is Gindling v. Playlogic Entertainment, Inc., Case No. 07-cv-05610 (S.D.N.Y.) (Rakoff, J.). Representing the plaintiffs are: Oren Giskan, Esq. Giskan, Solotaroff & Anderson, LLP 11 Broadway, Suite 2150 New York, NY 10004 Phone: 212-847-8315 Fax: 212-473-8096 E-mail: ogiskan@gslawny.com - and - Scott Adam Kamber, Esq. Kamber & Associates, LLC 11 Broadway, 22nd Floor New York, NY 10004 Phone: 212-920-3072 Fax: 212-202-6364 E-mail: skamber@kolaw.com SONY COMPUTER: Suit Says PlayStation 3 Software Update is Faulty ---------------------------------------------------------------- Maria Dinzeo at Courthouse News Service reports that thousands of Sony PlayStation 3 owners say they downloaded a mandatory software update that irreparably damaged their machines, causing the consoles to freeze and the controllers to stop working. In a federal class action against Sony Computer Entertainment America, disgruntled gamers say their PS3s crashed after they installed Firmware 3.0, which Sony claimed would add "a number of great new features" and "changes that improve navigation on your PS3." Sony allegedly released another software update several months later that not only failed to cure the problem, but also caused users' Blu-ray drives to malfunction. Lead plaintiff John Kennedy says Sony told him it would cost an extra $150 to repair his damaged console after he downloaded the software updates. Class members demand declaratory relief, compensation and restitution for breach of implied warranty, negligence and unjust enrichment. A copy of the Complaint in Kennedy v. Sony Computer Entertainment America Inc., Case No. 09-cv-4701 (N.D. Calif.), is available at: http://www.courthousenews.com/2009/10/05/Sony%20Computer.pdf The Plaintiff is represented by: Scott A. Kamber, Esq. David A. Stampley, Esq. KAMBEREDELSON, LLC 11 Broadway, 22nd Floor New York, NY 10004 Telephone: 212-920-3072 - and - Oren S. Giskan, Esq. GISKAN SOLOTAROFF ANDERSON & STEWART LLP 11 Broadway, Suite 2150 New York, NY 10004 Telephone: 212-847-8315 - and - David C. Parisi, Esq. Suzanne Havens Beckman, Esq. PARISI & HAVERS LLP 15233 Valleyheart Drive Sherman Oaks, CA 91403 Telephone: 818-990-1299 VESTIN REALTY: Contract Breach Suit v. VRM II Ongoing in Calif. --------------------------------------------------------------- A breach of contract class-action lawsuit is still pending against Vestin Realty Mortgage II, Inc. (VRM II) and Vestin Mortgage, Inc. VRM II and Vestin Mortgage are defendants in a breach of contract class action filed in San Diego Superior Court by certain plaintiffs who allege, among other things, that they were wrongfully denied appraisal rights in connection with the merger of Vestin Fund II, LLC, into VRM II. The court certified a class of all former Fund II unit holders who voted against the merger of Fund II into VRM II, and a subclass of all class members who were over the age of 60 and Nevada residents at the time of the merger. The trial was scheduled to begin on Sept. 25, 2009. The terms of VRM II's management agreement and Fund II's Operating Agreement contain indemnity provisions whereby, Vestin Mortgage and Michael V. Shustek may be eligible for indemnification by VRM II with respect to the action. Vestin Fund III, LLC, did not provide further updates on the case in its Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. Vestin Group, Inc. -- http://www.vestingroup.com/-- is investing in commercial real estate. Through subsidiaries, the firm originates, invests in, and services mortgages secured by commercial properties such as apartment complexes, office buildings, shopping centers, and assisted living facilities. Its Vestin Mortgage subsidiary manages two real estate investment trusts and a real estate investment fund that focus on mortgages and deeds of trust. VESTIN REALTY: Contract Breach Lawsuit v. VRM I Remains Pending ---------------------------------------------------------------- A contract breach class-action lawsuit against Vestin Realty Mortgage I, Inc., and Vestin Mortgage, Inc. remains pending. VRM I and Vestin Mortgage are defendants in a breach of contract class action filed in San Diego Superior Court by certain plaintiffs who allege, among other things, that they were wrongfully denied appraisal rights in connection with the merger of Vestin Fund I, LLC, into VRM I. The court certified a class of all former Fund I unit holders who voted against the merger of Fund I into Vestin Realty Mortgage I, Inc. Trial was set to begin on Sept. 25, 2009. The terms of VRM I's management agreement and Fund I's Operating Agreement contain indemnity provisions whereby Vestin Mortgage and Michael V. Shustek may be eligible for indemnification by VRM I with respect to the action. No further updates on the lawsuit were disclosed in Vestin Fund III, LLC's Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. Vestin Group, Inc. -- http://www.vestingroup.com/-- is investing in commercial real estate. Through subsidiaries, the firm originates, invests in, and services mortgages secured by commercial properties such as apartment complexes, office buildings, shopping centers, and assisted living facilities. Its Vestin Mortgage subsidiary manages two real estate investment trusts and a real estate investment fund that focus on mortgages and deeds of trust. WELLS FARGO: Removes "Ray" Overdraft Suit to N.D. Calif. -------------------------------------------------------- Wells Fargo & Company and Wells Fargo Bank, N.A., removed Ray. v. Wells Fargo, Case No. CGC-09-491649 (Calif. Super. Ct., San Francisco Cty., filed Aug. 20, 2009), which challenges how the bank levies overdraft fees on customer checking accounts, to federal court, Case No. 09-cv-04700 (N.D. Calif.), on Oct. 5, 2009. Wells Fargo is represented by: Sonya D. Winner, Esq. David M. Jolley, Esq. Steven D. Sassaman, Esq. COVINGTON & BURLING LLP One Front Street San Francisco, CA 94111 Telephone: 415-591-6000 The Plaintiff is represented by: Joe R. Whatley, Jr., Esq. WHATLEY DRAKE & KALLAS, LLC 1540 Broadway, 37th Floor New York, NY 10036 Telephone: 212-447-7070 - and - Howard Rubinstein, Esq. 914 Waters Ave., Suite 20 Aspen, CO 81611 Telephone: 832-715-2788 - and - Harold M. Hewell, Esq. HEWELL LAW FIRM 105 West "F" Street, Suite 213 San Diego, CA 92101 Telephone: 619-235-6854 - and - Jeff S. Kravitz, Esq. KRAVITZ LAW OFFICE 2310 J. Street, Suite A Sacramento, CA 95816 Telephone: (916) 553-4072 WHITNEY INFORMATION: Bid to Nix "Friedman" Suit Remains Pending --------------------------------------------------------------- Whitney Information Network, Inc. awaits a ruling by the U.S. District Court in the Middle District of Florida as to the motion to dismiss the consolidated amended class action complaint filed by Arnold Friedman individually and on behalf of all others similarly situated. By an order dated Nov. 17, 2008, the Court granted the defendants' motion to dismiss without prejudice the initial complaint styled, "Durham v. Whitney Information Network, Inc. et al.," filed by the plaintiffs on Dec. 28, 2006. On Dec. 8, 2008, the company was served a consolidated amended class action complaint filed by Arnold Friedman individually and on behalf of all others similarly situated alleging violations of the federal securities laws. Mr. Friedman seeks damages, injunctive relief, attorney costs and fees and other relief deemed appropriate by the Middle District Court. On Jan. 30, 2009, the company, along with defendants Whitney, Simon, Novas, Kane, and Maturo moved to dismiss the Second Amended Complaint, arguing that plaintiffs have not and cannot state claims against them as a matter of law and that the claims against them should be dismissed with prejudice. This case has not been certified as a class action and discovery is stayed. On July 9, 2009, a hearing was held on the company's motion to dismiss, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. Whitney Information Network, Inc. provides post-secondary educational and training courses for students throughout the United States, the United Kingdom and Canada, interested in learning about real estate and financial markets. The company's courses provide instruction in real estate investing, business strategies, stock market investment techniques, cash management, asset protection and other financially oriented subjects. WIN also develops and sells educational resource materials, which it prepares, to support its course offerings and for sale to the general public. WHITNEY INFORMATION: Canadian Unit Defends Investments Lawsuit -------------------------------------------------------------- Whitney Information Network, Inc. and wholly owned subsidiary, Whitney Canada, Inc., continue to face a class-action suit on behalf of all persons who have made various real estate investments in Quebec, Canada, according to the company's Aug. 14, 2009, Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. On Jan. 11, 2007, Whitney Canada, Inc. and Whitney Information Network, Inc. received notice of an Amended Motion for Authorization to Institute a Class Action in the Province of Quebec, Canada. A class-action suit was requested for all persons who have made various real estate investments, at the alleged inducement, or through, Marc Jemus, Francois Roy, Robert Primeau and/or their companies, and/or B2B Trust, and/or Whitney Canada, Inc., and/or Whitney Information Network, Inc. and/or Jean Lafreniere. The complaint seeks repayment of $39,235 to the Petitioner, unspecified payment to each member of the class of an amount corresponding to their lost investments, payment of $10,000 to each member of the class as general damages, recovery of costs and other litigation expenses, and unspecified equitable relief. Whitney Information Network, Inc. provides post-secondary educational and training courses for students throughout the United States, the United Kingdom and Canada, interested in learning about real estate and financial markets. The company's courses provide instruction in real estate investing, business strategies, stock market investment techniques, cash management, asset protection and other financially oriented subjects. WIN also develops and sells educational resource materials, which it prepares, to support its course offerings and for sale to the general public. WILLIAM LYON: California Suit Over Tender Offer Remains Stayed -------------------------------------------------------------- A purported class-action lawsuit that challenges a tender offer by one of William Lyon Homes, Inc.'s stockholders remains stayed. On March 17, 2006, the company's principal stockholder commenced a tender offer to purchase all outstanding shares of the company's common stock not already owned by the principal holder. Initially, the price offered in the tender was $93 per share, but it has since been increased to $109 per share. On that same day, the complaint, "Alaska Electrical Pension Fund v. William Lyon Homes, Inc., et al., Case No. 06-CC-00047," was filed before the Superior Court of the state of California, County of Orange. The complaint in the California Action names the company and certain of its directors as defendants and alleges, among other things, that the defendants have breached their fiduciary duties to the public stockholders. The plaintiff in the California Action also sought to enjoin the tender offer, and, among other things, to obtain attorneys' fees and expenses related to the litigation. On April 20, 2006, the California court denied the request of the plaintiff in the California Action to enjoin the Tender Offer. The plaintiff filed a motion to certify a class in the California Action, which was later taken off calendar, and the company filed a motion to stay the California Action. On July 5, 2006, the California Court granted the company's motion to stay the California Action. The company reported no further development in the matter in its Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. William Lyon Homes -- http://www.lyonhomes.com/-- is primarily engaged in the design, construction and sale of single-family detached and attached homes in California, Arizona and Nevada. The company offers a range of homes designed to meet the specific needs of each of its markets, although it primarily emphasizes sales to the entry-level and move-up homebuyer markets. WILLIAM LYON: Shareholder Case Still Ongoing in Delaware Court -------------------------------------------------------------- The remanded case captioned "In re: William Lyon Homes, Inc. Shareholder Litigation, Case No. 05-CC-00092" is proceeding in the Court of Chancery of the State of Delaware in and for New Castle County. Case Background On March 17, 2006, the company's principal stockholder commenced a tender offer to purchase all outstanding shares of the company's common stock not already owned by the principal holder. Initially, the price offered in the tender was $93 per share, but it has since been increased to $109 per share. Two purported class-action complaints were filed on behalf of the public stockholders of the company, challenging the tender offer and challenging related actions of the company and the directors of the company. The suits are: 1. Stephen L. Brown v. William Lyon Homes, et al., Civil Action No. 2015-N, filed on March 20, 2006, and 2. Michael Crady, et al. v. General William Lyon, et al., Civil Action No. 2017-N, filed on March 21, 2006. Both suits were filed in the Court of Chancery of the State of Delaware in and for New Castle County. The Delaware Complaints name the company and its directors as defendants. They allege, among other things, that the defendants have breached their fiduciary duties owed to the plaintiffs in connection with the tender offer and other related corporate activities. The plaintiffs sought to enjoin the tender offer and, among other things, to obtain attorneys' fees and expenses related to the litigation. On March 23, 2006, the company announced that its board had appointed a special committee of independent directors who are not members of the company's management or employed by the company to consider the tender offer. The members of the Special Committee are Harold H. Greene, Lawrence M. Higby, and Dr. Arthur Laffer. The company also announced that the Special Committee had retained Morgan Stanley & Co. as its financial advisor and Gibson, Dunn & Crutcher LLP as its legal counsel. Consolidation and Settlement On March 24, 2006, the Delaware Chancery Court consolidated the Delaware Complaints into a single case entitled, "In re: William Lyon Homes Shareholder Litigation, Civil Action No. 2015-N." On April 10, 2006, the parties to the Consolidated Delaware Action executed a Memorandum of Understanding, detailing a proposed settlement subject to the Delaware Chancery Court's approval. Pursuant to the MOU, General Lyon increased his offer of $93 per share to $100 per share, extended the closing date of the offer to April 21, 2006, and, on April 11, 2006, filed an amended Schedule Tender Offer. The plaintiffs in the Consolidated Delaware Action have determined that the settlement is "fair, reasonable, adequate, and in the best interests of plaintiffs and the putative Class." The Special Committee also determined that the price of $100 per share was fair to the shareholders, and recommended that the company's shareholders accept the revised tender offer and tender their shares. Thereafter, General Lyon also decided to further extend the closing date of the tender offer from April 21, 2006, to April 28, 2006. Certification & Dismissal On April 23, 2006, the Delaware Chancery Court conditionally certified a class in the Consolidated Delaware Action. The parties to the Consolidated Delaware Action agreed to a stipulation of settlement, and on Aug. 9, 2006, the Delaware Chancery Court certified a class in the Consolidated Delaware Action, approved the settlement, and dismissed the Consolidated Delaware Action with prejudice as to all defendants and the class. On Feb. 16, 2007, the fee award to the plaintiffs' counsel was appealed to the Supreme Court of the State of Delaware. On July 18, 2007, a three-judge panel of the Delaware Supreme Court heard oral argument, and later referred the matter for consideration by the Court en Banc. In December 2007, the Delaware Supreme Court remanded the matter to the Chancery Court for further proceedings regarding the fee award to the plaintiff's counsel. Under the appealed award, the company has no expected liability for the plaintiffs' counsel fees, which are expected to be paid by General Lyon. On Dec. 1, 2008, the Chancery Court heard oral argument and reserved decision regarding the fee award to Plaintiffs' counsel, which is expected to be paid by General Lyon, according to the company's Aug. 14, 2009, Form 10-Q filed with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2009. William Lyon Homes -- http://www.lyonhomes.com/-- is primarily engaged in the design, construction and sale of single-family detached and attached homes in California, Arizona and Nevada. The company offers a range of homes designed to meet the specific needs of each of its markets, although it primarily emphasizes sales to the entry-level and move-up homebuyer markets. New Securities Fraud Cases DIREXION SHARES: Fraud Suit Against Financial Bear 3X Shares Fund ----------------------------------------------------------------- Courthouse News Service reports that Direxion Shares conned investors into buying shares of Financial Bear 3X Shares Fund at artificially inflated prices, Milton Pfeiffer claims in a class action in New York Federal Court. The case is Pfeiffer v. Dirextion Shares EFT Trust, et al., Case No. 09-cv-08375 (S.D.N.Y.). The Plaintiff is represented by: Marc Ian Gross, Esq. Jeremy Alan Lieberman, Esq. POMERANTZ HAUDEK BLOCK GROSSMAN & GROSS LLP 100 Park Avenue, 26th Floor New York, NY 10017 Telephone: (212) 661-1100 Fax: (212) 661-8665 E-mail: migross@pomlaw.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Gracele D. Canilao, Leah Felisilda and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *