/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/990212.MBX C L A S S A C T I O N R E P O R T E R Friday, February 12, 1999, Vol. 1, No. 6 Headlines AMERICAN BANKNOTE: Liebenberg & White Files Complaint in New York AMERICAN BANKNOTE: Milberg Weiss Files Complaint in New York ASSISTED LIVING: Milberg Weiss Files Complaint in Oregon ASSISTED LIVING: Stoll Stoll Files Complaint in Oregon ASSISTED LIVING: Abbey Gardy Files Complaint in Oregon AVIS RENT-A-CAR: Jewish Customer Class Certified CEDENT CORP.: Takes $228.2MM 4th Quarter Charge from Lawsuit DNA PLANT: Milberg Weiss Files Complaint in California DTM CORPORATION: Consummates Settlement of Shareholder Litigation DURA PHARMACEUTICALS: Cauley Firm Files Complaint in California DURA PHARMACEUTICALS: Bernstein Litowitz Files Suit in California E*TRADE GROUP: Hit With Second Lawsuit After Outages FARMERS INSURANCE: Discriminatory Underwriting Practices Charged FORD MOTOR: Truck Owners with Defective Paint Jobs Seek Class GUN MANUFACTURERS: Georgia & Louisiana Block Suits by Cities INSO CORPORATION: Schubert & Reed Files Suit in Massachusetts LASER TECHNOLOGY: Hagens Berman Files Complaint in Colorado LERNOUT & HAUSPIE: Schubert & Reed File Complaint in New York LOEWEN GROUP: Wolf Popper Expands Scope of Shareholder Suit LOEWEN GROUP: Barrack Rodos Files Complaint in Pennsylvania PEOPLESOFT, INC.: Chitwood & Harley Files Complaint in California SERVICE CORORATION: Whittington Firm Files Complaint SERVICE CORPORATION: Johnson Firm Files Complaint in Texas SCHICK TECHNOLOGIES: Goodkind Labaton Files Complaint in New York TOBACCO LITIGATION: Helney Wins $50 Million in Punative Damages USA TALKS.COM: Wolf Haldenstein Files Complaint in California ********* AMERICAN BANKNOTE: Liebenberg & White Files Complaint in New York ----------------------------------------------------------------- Liebenberg & White and Hoffman & Edelson filed a securities class action lawsuit on February 10, 1999 in the United States District Court for the Southern District of New York against American Banknote Holographics, Inc. (NYSE:ABH) and certain of its key officers and directors on behalf of all persons who purchased the Company's common stock between July 14, 1998 through January 18, 1999. The complaint alleges that the defendants violated Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20 of the Securities Exchange Act of 1934 and other laws by issuing false and misleading statements regarding the Company's business operations, financial condition and performance. AMERICAN BANKNOTE: Milberg Weiss Files Complaint in New York ------------------------------------------------------------ Milberg Weiss Bershad Hynes & Lerach LLP announced that a class action lawsuit was filed on January 20, 1999, in the United States District Court for the Southern District of New York, on behalf of all persons who purchased the common stock of American Banknote Holographics, Inc. (NYSE: ABH), between July 15, 1998 and January 18, 1998, inclusive. The complaint charges ABH and certain officers or directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule 10b-5 promulgated thereunder. The complaint alleges that defendants issued a series of materially false and misleading statements concerning the Company's financial condition and results of operations. Because of the issuance of a series of false and misleading statements, the price of ABH common stock was artificially inflated during the Class Period. Class members may, not later than sixty days from January 19, 1999, move the Court to serve as lead plaintiff. ASSISTED LIVING: Milberg Weiss Files Complaint in Oregon -------------------------------------------------------- A class action lawsuit was filed in the United States District Court for the District of Oregon against Assisted Living Concepts, Inc. (Amex: ALF) and certain of its officers and directors for violations of the Securities Exchange Act of 1934 by Milberg Weiss Bershad Hynes & Lerach LLP. Purchasers of Assisted Living common stock between April 29, 1997 and February 1, 1999, may, no later than 60 days from February 2, 1999, move the court to serve as lead plaintiff. ASSISTED LIVING: Stoll Stoll Files Complaint in Oregon ------------------------------------------------------ Stoll Stoll Berne Lokting & Shlachter P.C. announced that a class action suit has been commenced in the United States District Court for the District of Oregon on behalf of all persons who purchased the securities of Assisted Living Concepts, Inc. (Amex: ALF) from April 29, 1997 through February 1, 1999, inclusive. Assisted Living is based in Portland, Oregon and owns, operated, leases and develops assisted living residences. The complaint charges the Company and William McBride III, Keren Brown Wilson, Stephen Gordon and Rhonda Marsh with violations of the Securities Exchange Act of 1934. After seven straight quarters of reporting allegedly increasing profitability, on February 1, 1999, the Company announced that is was restating its income for 1997 and the nine months ended September 31, 1998. As a result of the restatement, the Company's net income will be substantially less than previously reported. An official of American Retirement Corp. stated that ARC had dropped its plans to merge with the Company as a result of the restatement. The complaint alleges that defendants issued a series of false and misleading statements about Assisted Living's earnings, profitability and business condition and issued financial statements during the Class Period that were materially false and misleading and violated Generally Accepted Accounting Principles, thereby misleading investors regarding Assisted Living's true financial condition and then-current financial performance. As a result, the prices of Assisted Living's securities were artificially inflated during the Class Period to as high as $21 5/8 per share. Class members may, no later than 60 days from February 2, 1999, move the Court to serve as lead plaintiff. ASSISTED LIVING: Abbey Gardy Files Complaint in Oregon ------------------------------------------------------ The law firm of Abbey, Gardy Squitieri, LLP announced that a Class Action suit has been commenced in the United States District Court for the District of Oregon on behalf of all purchasers of Assisted Living Concepts, Inc. (Nasdaq: ALF) common stock between July 28, 1997 and February 1, 1999, inclusive. The Complaint charges ALF and certain of its officers and directors with violations of federal securities laws. Among other things, plaintiff claims that defendants issued a series of materially false and misleading statements regarding ALF's financial condition and results of operations. Since the second quarter of 1997, the Company improperly recognized reimbursements from its joint venture residences as other income in its financial statements. The Company will now treat such loss reimbursement as loans. Accordingly, the consolidated financial statements for the quarters ended June 30, 1997 and September 30, 1997, for the year ended December 31, 1997 and for each of the first three quarters of 1998 will be restated to reflect this accounting treatment. Class members may, not later than 60 days from February 2, 1999, move the court to serve as lead plaintiff. AVIS RENT-A-CAR: Jewish Customer Class Certified ------------------------------------------------ A lawsuit by Jewish customers who say Avis Rent-a-Car denied them the benefits of corporate accounts has received class-action status, a federal judge ruled. The suit, the Associated Press related earlier this week, was filed on behalf of a Fort Lauderdale man and a Chicago bookstore affiliated with a yeshiva, a Jewish school. The suit alleges that Avis denied corporate accounts to Jewish customers and labeled them with the code word "yeshiva." Some were given so-called "bogus" accounts that carried reduced discounts, the suit claims. The judge's ruling allows attorneys to represent the interests of the more than 10,000 Jewish customers who have been customers of Avis from 1993 to 1998, according to plaintiffs' attorney Tod Aronovitz. In a 27-page order signed Monday, U.S. District Judge Alan Gold said that testimony from former Avis employees showed that "thousands of potential customers" had been turned down after being identified with the code word. "It is undisputed that Avis employed a 'yeshiva' policy and the 'yeshiva' policy emanated from its World Reservations Center," the judge said in the order. "The allegations of discrimination here are based on a documented company policy written by upper management at Avis' World Reservations Center, distributed to its employees by upper management and monitored by upper management" at the center, Gold said. Avis said it was attempting to flag unqualified drivers who posed as representatives of Jewish schools and the word yeshiva wasn't used in a derogatory way. "It was used to talk about the problem we had become aware of," said Tony Fuller, a spokesman for Garden City, N.J.-based Avis. Fuller said Avis would appeal to the U.S. Circuit Court of Appeals in Atlanta. "We view it for our part as a procedural matter," Fuller said. "The judge didn't really address the merits of the case, and in fact, invited an early appeal on the ruling." Few complainants have stepped forward since the suit was filed in 1997, Fuller further said in talking to AP reporters. CEDENT CORP.: Takes $228.2MM 4th Quarter Charge from Lawsuit ------------------------------------------------------------ Franchising and marketing firm Cendant Corp. Wednesday reported wider net losses that included charges for abandoning some planned acquisitions and settling a suit related to the firm's huge accounting irregulatories revealed last April. The massive company, Reuters reports, whose franchised brands include Avis Rent-A-Car, Ramada, and Howard Johnson hotels, reported net losses from continuing operations of $302 million on quarterly revenues of $1.4 billion. Fourth quarter profits were lowered by an after-tax charge $281.7 million, including $228.2 million from a settlement of the class action lawsuit brought by shareholders. DNA PLANT: Milberg Weiss Files Complaint in California ------------------------------------------------------ Milberg Weiss announced that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of DNA Plant Technology Corp. (Nasdaq: DNAP) $2.25 Convertible Exchangeable Preferred Stock, whose stock was converted pursuant to a September 1996 merger, into common stock of DNAP Holding Corporation. Class members may, no later than 60 days from January 26, 1999, move the Court to serve as lead plaintiff. The complaint charges DNAP, DHC, Empresas La Moderna, SA de C.V. and certain of their officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint alleges that the August 13, 1996 Proxy Statement/Prospectus that DNAP and DHC disseminated to DNAP shareholders, recommending approval of the merger, improperly failed to disclose that the real reasons for the merger were (1) to realize value for a strain of high-nicotine tobacco that DNAP had illegally developed for tobacco company Brown & Williamson, and (2) to increase the indemnity coverage of DNAP's officers and directors to insulate them from financial liability for those illegal acts. The complaint further alleges that the conversion of the DNAP Preferred Stock into DHC Common Stock eliminated the rights and preferences of the DNAP Preferred Stockholders. After the DNAP-DHC merger was consummated, DNAP pleaded guilty in January 1998 to conspiracy to violate the Tobacco Seed Export Law. Plaintiff seeks to recover damages on behalf of all purchasers of DNAP $2.25 Convertible Exchangeable Preferred Stock converted into common stock of DHC pursuant to the September 1996 merger. DTM CORPORATION: Consummates Settlement of Shareholder Litigation ----------------------------------------------------------------- DTM Corporation (Nasdaq:DTMC) announced its net income for the fourth quarter of 1998 was $520,000 on revenues of $8.6 million. Revenues for the year ended December 31, 1998 were a record $27.8 million, generating a $2.2 million net loss. Explaining its results, Geoff Kreiger, DTM's Vice President and Controller, stated, "We took a charge for the litigation settlement in the second quarter of 1998. However, we funded the cash portion of these settlements in the fourth quarter of 1998. These and related payments amounted to approximately $1.5 million cash outflow during the fourth quarter of 1998 and accounted for the cash balance reduction during the quarter. In February 1999, we issued the required 334,485 shares of DTM common stock required in connection with the settlement of the shareholder class action. The $400,000 accrual related to the stock portion of the settlement will be reclassified to shareholders' equity in the first quarter of 1999." "We were pleased that our cash flow, before litigation expenditures, was positive in 1998 and that we were able to fund these expenditures without taking on any new debt. We will continue our focus on judicious investments in new product development, operating efficiency, customer payment terms, collections and production schedules. We are doing this as we strive to build more liquidity in our balance sheet."* In other news, DTM related that although it had not satisfied the $5.0 million market value of public float requirement for continued listing on the Nasdaq National Market System for ten consecutive trading days as of February 1, 1998, the Company has now been above such level for ten days. The Company announced that it has requested a hearing to appeal the delisting of its stock from the National Market System. The hearing is expected to occur in March 1999. During the pendancy of the appeal process, DTM's common stock will continue to trade on the National Market System. DURA PHARMACEUTICALS: Cauley Firm Files Complaint in California --------------------------------------------------------------- The Law Offices of Steven E. Cauley announced that on February 9, 1999, a securities fraud class action lawsuit was filed in the United States District Court for the Southern District of California on behalf of purchasers of Dura Pharmaceuticals, Inc. (Nasdaq:DURA) common stock during the period between April 15, 1997 through February 24, 1998. The complaint alleges that during the Class Period, Defendants engaged in a fraudulent scheme and course of business conduct that operated as a fraud and deceit on all persons who purchased or otherwise acquired Dura's stock. According to the complaint, Defendants' fraudulent scheme and course of business conduct included, but was not limited to, making materially false and/or misleading statements regarding sales of Dura's products and the growth of Dura's revenues and earnings. The lawsuit alleges that these materially false or misleading statements enabled many of the individual defendants to sell tens of thousands of shares of Dura common stock during the Class Period, resulting in proceeds of more than $16 million dollars by trading on undisclosed inside information. As a result of the defendants' violations of law, the market price of Dura stock during the Class Period was as high as $53 per share. Following Defendants' revelations on February 24, 1998, the price of Dura stock fell to as low as $20.75 per share. DURA PHARMACEUTICALS: Bernstein Litowitz Files Suit in California ----------------------------------------------------------------- Bernstein Litowitz Berger & Grossmann LLP announced that on February 8, 1999, a class action lawsuit was filed in the United States District Court for the Southern District of California on behalf of purchasers of securities of Dura Pharmaceuticals, Inc. (Nasdaq: DURA), from April 15, 1997 through February 24, 1998, inclusive. The complaint charges Dura, and certain of its officers and directors, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, the complaint alleges that, during the Class Period, defendants made false and misleading statements about Dura's sales, the development of its products and the likelihood of its achieving substantial earnings per share growth in 1998 and 1999. As a result, the stock rose to a class period high of $53 per share in October 1997. Certain Dura officers and directors sold stock during the class period reaping proceeds of $16.8 million. On Feb. 24, 1998, the company revealed that its results would be much worse than forecast due to weak sales of many of its products. Following this announcement, the stock dropped $18 3/8 per share, losing almost 46% of its value in one day. E*TRADE GROUP: Hit With Second Lawsuit After Outages ---------------------------------------------------- E*Trade Group Inc. got hit with a second lawsuit after outages at the Internet broker's Web site prevented investors from trading stocks on three separate occasions last week, reports Reuters. The suit, filed in the Santa Clara County Superior Court by the Alexander law firm of San Jose, Calif., is seeking unspecified damages for investors who claim they missed out on making money in the stock market because of the outage. The suit, which seeks class-action status, follows a similar November 1997 law suit filed by New York law firm Bernstein Litowitz Berger & Grossmann in the same court. FARMERS INSURANCE: Discriminatory Underwriting Practices Charged ---------------------------------------------------------------- The Journal of Commerce reports that a fair housing advocate has filed another lawsuit against an insurance company for allegedly engaging in unlawful discriminatory underwriting practices in minority communities. The Toledo Fair Housing Center is seeking class-action status for its latest insurance case against Los Angeles-based Farmers Insurance Group, a leading insurer in the United States.In its filing, the center stated that Farmers "refuses to offer replacement cost insurance policies for properties built before a certain year, typically 1950-1955." The case has been assigned to Judge William Skow in Lucas County Common Pleas Court, Toledo, Ohio. Michael Marsh, the center's development manager, told The Journal of Commerce last week that "we've discovered that Farmers' insurance practices have had a disparate effect on minority neighborhoods by failing to provide replacement cost insurance based on a dwelling's age. Urban communities with older homes tend to have a higher concentration of minority residents, and that's why this particular insurance company practice is so onerous." The Toledo Fair Housing Center said it had looked into complaints filed with the housing authority from some homeowners who were unable to obtain replacement coverage on their homes. Following a series of calls to Farmers' offices, the center said it discovered examples of "redlining," the unlawful practice of using race as a factor in declining to provide insurance protection in certain part of a community. Farmers' spokeswoman Diane Tasaka denied the charges, insisting that her company "does not practice and does not condone unlawful discriminatory underwriting practices." In defending her company's underwriting approach, Ms. Tasaka mentioned a Farmers' program that markets what she described as "comprehensive homeowners insurance specifically to urban homeowners," Farmers Action for Communities of Tomorrow (FACT). FACT got under way in California in 1995 and subsequently entered a few other states such as Michigan and Ohio and most recently in Pennsylvania. "We're looking at other urban markets around the country," said Ms. Tasaka. Mr. Marsh said this is his firm's fourth suit of its kind. Previously, the Journal of Commerce related, the Toledo Fair Housing Center achieved settlements in similar cases against Nationwide Insurance of Columbus, Ohio, $5.3 million in class- action litigation in 1998; Allstate of Northbrook, Ill., an undisclosed amount in 1997; and State Farm of Bloomington, Ill., $1.1 million in 1996. FORD MOTOR: Truck Owners with Defective Paint Jobs Seek Class ------------------------------------------------------------- A group of Ford truck owners whose vehicles have peeling paint asked the state Supreme Court yesterday to approve class-action status for a lawsuit against the motor company, according to a report publiched in the Forth Worth Star-Telegram. Seven individuals who bought Ford trucks in Texas between 1987 and 1990 say the problem stemmed from Ford not using primer when the cars were factory painted. All the vehicle owners reported noticing peeling and flaking problems between nine months and four years after purchase. Ford attorneys said the cases should be considered individually because there are too many potential differences between each to be certified as one class. Some of the owners may have damaged their trucks by repeatedly throwing cold water on the paint after a long day in the hot Texas sun, "something they're told not to do," Ford attorney John Beisner said. Another truck may have peeling paint because of repeated exposure to a nearby chemical plant, he said. And although some of the vehicles painted without primer have peeling exteriors, others do not, Beisner said. "You have to look at them individually," he said. "By granting class action, it's granting summary judgment, we just don't know which way yet. The jury will have to say they're all OK or they're all not." Steve McConnico, an attorney seeking the class-action status, said that trying each case individually would stifle them all. The cost of fixing the claimed problems typically ranges between $1,500 to $2,500 and is not worth the expense of a trial, McConnico said. "If they try them individually, they'll never be tried," he said, noting that copying costs in this case alone were about $20,000. According to the lawsuit, Ford knew there was a problem with its paint process but kept using it. McConnico said Ford has since started using spray primer in the factory painting process. If approved by the state Supreme Court, the lawsuit would include people who claim past or present paint peeling and flaking due to defective paint process on new Ford F-Series Trucks between 1987 and 1993; 1987-89 Broncos; 1987-92 Rangers; or 1987-89 Mustangs. Also included would be owners who bought 1984-88 F-Series Trucks, 1984-88 Broncos and Bronco IIs, 1984-88 Rangers or 1984-88 Mustangs and who paid Ford or a Ford dealer for paint repair. Already approved by two lower courts, the class would cover those vehicles bought in Texas. GUN MANUFACTURERS: Georgia & Louisiana Block Suits by Cities ------------------------------------------------------------ Following Georgia's lead in adopting legislation to protect gunmakers from product liability lawsuits by cities and counties, Governor Mike Foster announced his support this week for similar legislation in Louisiana. The proposed legislation would block the City of New Orleans from suing gun manufacturers for reimbursement of gun violence costs. Tuesday, Georgia Gov. Roy Barnes signed a bill intended to block a similar case by Atlanta. "Georgia had no problem with it," Foster said while speaking to a civic club in Baton Rouge. "And we, in Louisiana, believe in 2nd Amendment rights." New Orleans Mayor Marc Morial criticized Foster's decision, telling the Associated Press that the bill "is a sad sellout to the money and power of the gun lobby." Meanwhile, in a New York City class-action lawsuit against the nation's largest gun makers, a judge on Wednesday urged a wavering jury to try to overcome its differences and reach a verdict. Deliberations continued Thursday. The New York City case is considered a model for the lawsuits by cities. INSO CORPORATION: Schubert & Reed Files Suit in Massachusetts ------------------------------------------------------------- On February 10, 1999, Schubert & Reed LLP filed a class action lawsuit in the United States District Court for the District of Massachusetts, on behalf of a class of purchasers of Inso Corporation common stock (Nasdaq: INSO) during the period 4/23/98 through 1/29/99, inclusive. The suit names as defendants Inso Corporation, its President and CEO Stephen Vana-Paxhia, CFO Betty Savage and Controller Patricia Michaels for violations of the federal securities laws. On February 1, 1999, Inso Corporation revealed that it had improperly recognized approximately $7 million in revenues previously reported for the first three fiscal quarters of 1998, and that it would restate the first three quarters of fiscal 1998. The company announced that it would report the results of its initial investigation, conducted by the company, its auditors and outside legal counsel, to the Securities and Exchange Commission. At the same time, the company announced that, pursuant to guidance from the Securities and Exchange Commission, it was reducing a charge for in process research and development taken in connection with the acquisition of Synex and reported in the first fiscal quarter of 1998. INSO closed at $9.406 on February 1, 1999, down more than 62% from the prior day's close of $25. Class members may, not later than April 2, 1999, move the Court to serve as a lead plaintiff of the class. LASER TECHNOLOGY: Hagens Berman Files Complaint in Colorado ----------------------------------------------------------- A class action has been commenced by Hagens Berman, P.S. in the United States District Court for the District of Colorado on behalf of all purchasers of the common stock of Laser Technology, Inc. (AMEX:LSR) during the period from February 12, 1996 through December 23, 1998. The complaint charges that LSR and certain of its officers and directors with violations of the federal securities laws. Specifically, plaintiffs have brought claims sections 10(b) and 20 of the Securities Exchange Act of 1934. The complaint alleges that LSR and certain of its officers and directors participated in a fraudulent scheme by misstating its reported financial results during the Class Period. The complaint alleges that these misrepresentations caused LSR shares to trade at an artificially inflated price during the Class Period. The complaint further alleges that in October of 1998, a Special Committee of the board of directors was convened to look into financial misconduct by the Company. During the pendency of this investigation, the Company's independent auditors, BDO Seidman, LLP resigned as the Company's auditors and withdrew its previously issued audit opinions on LSR's fiscal 1993 through fiscal 1997 financial statements. When this resignation was announced on December 23, 1998, the American Stock Exchange halted trading in the Company's stock -- and trading has never resumed. The complaint also alleges that based upon their investigation, the Special Committee recommended the termination of the president, chief financial officer and secretary of the Company and other serious steps which the Special Committee felt "necessary and fundamental to restore the credibility of the Company." LSR refused to take such remedial action, and, as a result, the entire Special Committee resigned from the Company's board of directors on January 7, 1999. LERNOUT & HAUSPIE: Schubert & Reed File Complaint in New York ------------------------------------------------------------- On February 9, 1999, Schubert & Reed LLP filed a class action complaint in the United States District Court for the Eastern District of New York, on behalf of a class of purchasers of Lernout & Hauspie Speech Products N.V. common stock (Nasdaq: LHSPF) and call options during the period 2/3/98 through 12/1/98, inclusive. The suit names as defendants Lernout & Hauspie Speech Products N.V., its President and CEO Gaston Bastiaens and CFO Carl Dammekens for violations of the federal securities laws. On December 1, 1998, Lernout & Hauspie Speech Products N.V. admitted that the Securities and Exchange Commission had challenged write-offs for in-process research and development made in connection with Lernout & Hauspie's acquisitions of Kurzweil Education Systems, Inc. and Tiksoft LLC in September and October, 1998, respectively, and a series of other acquisitions dating back to November, 1996. Plaintiff alleges that during the Class Period Lernout & Hauspie inflated earnings and the price of its common stock, reducing the adverse impact of acquisitions on earnings in subsequent quarters, by improperly failing to properly amortize goodwill of its acquisitions by taking excessive write-offs for in-process research and development of the companies acquired. Plaintiff alleges that Lernout & Hauspie officers and directors reaped more than $23 million in illegal insider trading proceeds during the Class Period by trading while in possession of material adverse non- public information about Lermout & Hauspie's accounting practices. Between December 2-4, 1998, Lernout & Hauspie stock fell $7 to $33, losing 17.5% of its value in reaction to the news. Class members may, not later than March 20, 1999, move the Court to serve as a lead plaintiff of the class. LOEWEN GROUP: Wolf Popper Expands Scope of Shareholder Suit ----------------------------------------------------------- Wolf Popper LLP has expanded its securities fraud class action against Loewen Group Inc. (NYSE:LWN; Toronto) to include investors who purchased Loewen securities during the period March 5, 1997 through January 14, 1999. The Complaint charges that throughout the Class Period, Loewen and three of its senior officers and directors violated the U.S. securities laws by issuing materially false and misleading statements concerning the profitability of Loewen's rapid acquisition program, which defendants misrepresented to be "selective and disciplined." As subsequently reported by a research stock analyst, contrary to defendants' public statements, Loewen's acquisition strategy was "awfully, awfully wrong" and "was just spinning out of control." The belated disclosure of the true facts caused Loewen's stock price, which had traded as high as $35.75 per share during the Class Period, to close on January 14, 1999, at $5.125 per share. The class action was expanded after the Florida Department of Banking and Finance (DBF) announced on January 15, 1999 that it had issued an order suspending the license of two of Loewen's wholly owned subsidiaries and restricted them from taking on any new pre-need funeral business in Florida. The DBF further stated that in February 1997, Loewen's subsidiaries "had been placed on probation and [were] required to bring their books and records into compliance." The DBF's order asserts that the books and records were not brought into compliance, and that the businesses were operated incompetently, negligently, and in violation of numerous provisions of the Florida Funeral and Cemetery Services Act. LOEWEN GROUP: Barrack Rodos Files Complaint in Pennsylvania ----------------------------------------------------------- A class action has been commenced in the United States District Court for the Eastern District of Pennsylvania by Barrack, Rodos & Bacine on behalf of all persons who purchased 9.45% Cumulative Monthly Income Preferred Securities, Series A ("MIPS") of Loewen Group Capital, L.P. (NYSE: LWN+/LWN-/LWN_P) between March 5, 1997 and January 14, 1999, inclusive. The complaint alleges that the defendants, including Loewen Group Capital, L.P., Loewen Group International, Inc. and Loewen Group, Inc., violated Section 10(b) of the Securities Exchange Act of 1934 by misrepresenting or failing to disclose material information about Loewen Group, Inc.'s results of operations, financial condition and weaknesses in its internal financial controls that resulted from its failure to successfully integrate certain corporate acquisitions during the Class Period. As a result of defendants' false and misleading statements and omissions, the price of the MIPS was artificially inflated during the Class Period. At the end of the Class Period, Loewen Group, Inc. announced that after a 2-year investigation into its Florida operations, the Florida Department of Banking and Finance had suspended the licenses of two Loewen Group, Inc. subsidiaries for failing to comply with state regulations. Class members may, no later than February 26, 1999, move the Court to serve as lead plaintiff of the Class. PEOPLESOFT, INC.: Chitwood & Harley Files Complaint in California ----------------------------------------------------------------- Chitwood & Harley filed a securities class action on February 5, 1999 in the United States District Court for the Northern District of California, on behalf of all purchasers of PeopleSoft, Inc. (Nasdaq: PSFT) securities between February 4, 1997 and January 28, 1999, inclusive. The Complaint alleges that PeopleSoft and certain of its officers and directors violated the federal securities laws. Among other things, the complaint alleges that defendants issued a series of materially false and misleading statements regarding PeopleSoft's 1996, 1997 and 1998 financial results. Class members may, not later than 60 days from January 29, 1999, move the court to serve as a lead plaintiff of the class. SERVICE CORORATION: Whittington Firm Files Complaint ---------------------------------------------------- The law offices of Whittington, von Sternberg, Emerson & Wilsher, L.L.P. announced that it filed a class action suit on behalf of entities who purchased or otherwise acquired the common stock or securities of Service Corporation International (NYSE:SRV) between February 2, 1998 and January 26, 1999, or exchanged the common stock of Equity Corporation International (NYSE:EQU) for the shares of Service Corporation in the January 19, 1999 merger between the two companies. This lawsuit alleges that, during the Class Period, certain officers and directors of Service Corporation issued false statements which caused the price of Service Corporation common stock to trade at artificially inflated prices. Thereafter, Service Corporation issued $830 million of stock to acquire Equity Corporation International and certain officers and directors of Service Corporation sold, in the aggregate, over 2,470,000 shares of Service Corporation common stock between $39 and $42 per share, and reaped $96 million before it collapsed in price to $15.75 on January 26, 1999. SERVICE CORPORATION: Johnson Firm Files Complaint in Texas ---------------------------------------------------------- The Law Offices of Dennis J. Johnson has filed a Class Action Lawsuit in the United States District Court for the Southern District of Texas on behalf of all purchasers of Service Corp. (Nasdaq: SRV) securities between July 23, 1998 and January 26, 1999, including those who acquired SRV shares as a result of the January 19, 1999 stock for stock merger between SRV and Equity Corporation International, inclusive. The Complaint charges SRV and certain of its officers and directors with violations of the federal securities laws. Among other things, plaintiff claims that defendants misled the public with regard to adverse business trends and market conditions effecting SRV's business and thereby artificially inflated the market price of SRV's common stock during the Class Period. SCHICK TECHNOLOGIES: Goodkind Labaton Files Complaint in New York ----------------------------------------------------------------- A class action suit alleging securities fraud has been filed by Rudoff & Sucharow LLP in the United States District Court for the Eastern District of New York against Schick Technologies Inc. and certain of its officers and directors. The case was filed on behalf of all persons who purchased Schick common stock during the period Feb. 4, 1998 through Dec. 10, 1998. The complaint alleges that Schick issued a series of false and misleading statements concerning the Company's uncollectible accounts receivable causing the price of Schick common stock to be artificially inflated throughout the Class Period. On Dec. 10, 1998 the Company announced that it planned to take a one-time charge against earnings for the third quarter ending Dec. 31, 1998 in the amount of approximately $5 million of debt that had accumulated upon as accounts receivable. Immediately following the announcement, Schick common stock plummeted as much as $4 1/2 to $7 1/2 per share on daily trading volume of 1,894, 000 shares, more than 13 times its average trading volume. Class members may move the court to serve as lead plaintiff no later than Feb. 19, 1999. TOBACCO LITIGATION: Helney Wins $50 Million in Punative Damages --------------------------------------------------------------- >From San Francisco, the Associated Press reports that a jury awarded former three-pack-a-day smoker Patricia Henley $50 million in punitive damages Wednesday in her lawsuit against Philip Morris, bringing the total award to $51.5 million. As reported in yesterday's CAR, the jury ordered Philip Morris Cos. to pay $1.5 million in compensatory damages to Patricia Henley to cover medical expenses, pain and suffering. The total award is the largest to date in a tobacco liability lawsuit filed by an individual smoker. Three prior jury awards have been overturned on appeal. "I feel wonderful," Henley told the AP, reminding reporters that she will donate any money she receives to educate youngsters about the dangers of smoking. "This is a great day for the children." Henley, 52, of Los Angeles, was diagnosed last year with inoperable lung cancer. She alleged the tobacco company, which makes Marlboro and other brands, hooked her on cigarettes when she was 15 and misled her about the dangers. Her cancer is in remission after chemotherapy and radiation treatment. Before jurors deliberated for three hours Wednesday, Henley's attorney told them that punitive damages were the only way to get the attention of a $3.5 billion company. Madelyn Chaber, Esq., representing Ms. Henley, asked the jury to award her client $15 million in punitive damages. The jury awarded more than three times that amount. William Ohlemeyer, who represents Philip Morris, made it clear that the company would appeal. "The jurors unfortunately let their feelings of sympathy get in the way," Ohlemeyer told the AP. Two of the 12 jurors, including jury foreman George Loudis, reportedly voted against awarding the $50 million in punitive damages. Loudis supported punitive damages of $15 million. "Our decision was based on a lot of evidence, the suppression of known facts by Philip Morris," Loudis said. "They had a lot of information they just didn't give out." USA TALKS.COM: Wolf Haldenstein Files Complaint in California ------------------------------------------------------------- The law firm of Wolf Haldenstein Adler Freeman & Herz LLP announces that it is filing a class action lawsuit in the United States District Court for the Southern District of California on behalf of all persons who purchased common stock issued by USA Talks.com., Inc. (NYSE:USAT) during the period November 24, 1998, through January 29, 1999. The complaint charges that USAT and certain of its officers and directors violated the Securities Exchange Act of 1934. The Complaint alleges that Defendants caused the Company's stock price to rise from approximately $5.75 per share to a Class Period high of approximately $52.25 per share by misrepresenting USA Talks' publicly reported network installation and technology. On January 29, 1999, the SEC halted trading in the Company's common stock "citing questions about the accuracy of information released to the public by the company." Trading in the Company stock still remains halted. Purchasers of USAT stock during the period November 24, 1998, through January 29, 1998, may, not later than sixty days from January 29, 1999, move the court to serve as lead plaintiff. ********* ********* 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., Princeton, NJ, and Beard Group, Inc., Washington, DC. Peter A. Chapman, Editor. Copyright 1999. All rights reserved. ISSN XXXX-XXXX. 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 301/951-6400. * * * End of Transmission * * *