/raid1/www/Hosts/bankrupt/CAR_Public/990216.MBX
C L A S S A C T I O N R E P O R T E R
Tuesday, February 16, 1999, Vol. 1, No. 8
Headlines
AGENT ORANGE: Veterans Admin. Must Review Denied Claims
AGRIBIOTECH, INC.: Lockridge Grindal Filed Complaint in New York
AGRIBIOTECH, INC.: Cauley Firm Files Complaint in New Mexico
ASSISTED LIVING: Stoll Stoll Files Complaint in Oregon
BREAST IMPLANTS: Canadian Court Approved $25MM Settlement Pact
CELL PATHWAYS: Milberg Weiss Files Complaint in Pennsylvania
GENCOR INDUSTRIES: Abbey Gardy Filed Complaint in Florida
GENCOR INDUSTRIES: Bashian Firm Files Complaint in Florida
INSO CORP.: Stull Stull Filed Complaint in Massachusetts
JDA SOFTWARE: Cauley Firm Files Complaint in Arizona
LERNOUT & HAUSPIE: Bernstein Liebhard Files Complaint in New York
LEVEL 8: Stull Stull Files Complaint in New York
LOCKHEED MARTIN: Wolf Haldenstein Files Complaint in California
PACIFIC GAS: Business Assert Utility Outage Claim for Lost Income
PEOPLESOFT, INC.: Abbey Gardy File Complaint in California
PEOPLESOFT, INC.: Spector & Roseman File Complaint in California
PEOPLESOFT, INC.: Wechsler Harwood Files Complaint in California
SERVICE CORPORATION: Cauley Firm Files Compaint in Texas
SERVICE CORPORATION: Berger & Montague File Complaint in Texas
SERVICE CORPORATION: Wolf Haldenstein Files Complaint in Texas
SERVICE CORPORATION: Kirby McInerney Files Complaint in Texas
SERVICE CORPORATION: Weiss & Yourman Files Complaint in Texas
STATE FARM: Judge Approves $238MM Life Insurance Settlement Pact
TATE FARM: Six Plaintiffs Appeal Life Insurance Settlement Pact
SUNCRUZ: Editorial re Ex-Employees' Suit for Overtime Pay
TRITEAL CORPORATION: Takes $500MM Charge on Securities Settlement
USA NETS: Shareholder Suit Alleges Disclosure Failure
WORLD ACCESS: Wolf Popper Files Complaint in Georgia
WORLD ACCESS: Abbey Gardy Files Complaint in Georgia
ZILA, INC.: Cauley Firm Files Complaint in Arizona
ZILA, INC.: Milberg Weiss Suit Expands Class Period
*********
AGENT ORANGE: Veterans Admin. Must Review Denied Claims
-------------------------------------------------------
The Veterans Administration must review all benefit claims denied
to hundreds of Vietnam veterans who failed to say their illnesses
resulted from exposure to Agent Orange, a federal judge ruled
Thursday, according to a report from San Francisco by reporter
Jordan Lite, writing for the Associated Press. An estimated
1,000 veterans were denied back payments under strict language
that required applicants to state that Agent Orange or herbicides
were linked to the cause of the disability or death, a hurdle
ruled illegal Thursday in the class-action lawsuit.
Under VA regulations, veterans do not have to prove they were
exposed to Agent Orange or other herbicides containing the toxic
substance dioxin. In fact, anyone who served in the war is
automatically presumed to have been exposed to it. A 1989 court
ruling in the case voided all VA benefit decisions it had made
based on the agency's assertion that only the skin disease
chloracne was linked to Agent Orange. Although the VA has since
recognized that a variety of cancers are connected to the
defoliant, it has failed to review claims made prior to the 1989
ruling and continued to insist that benefit applicants state that
their disability resulted from exposure to Agent Orange, the
court found.
"We agree with plaintiffs that the VA's approach is inconsistent
with both the spirit and intent of this court's decision, as well
as the liberal nature of the VA's own claims process," U.S.
District Judge Thelton Henderson wrote. "The court expected that
the VA would revisit those benefit decisions that had been
erroneously decided under the invalidated regulations."
The plaintiffs wanted the VA ordered to pay the benefits, but
Henderson ruled that the agency should revisit the denied claims.
With benefits denied as far back as 1985, retroactive payments
would average $70,000 per person, plaintiffs' attorney Bart
Stichman said. No one knows how many people suffer from the
effects of Agent Orange, which was sprayed over wide swaths of
jungle by U.S. planes during a 10-year period to strip away cover
from enemy troops and their convoys.
AGRIBIOTECH, INC.: Lockridge Grindal Filed Complaint in New York
----------------------------------------------------------------
Lockridge Grindal Nauen & Holstein P.L.L.P. of Minneapolis,
Minnesota, on behalf of certain investors of AgriBio Tech, Inc.
(NASDAQ:ABTX), on February 11, 1999, filed a securities fraud
class action lawsuit in the United States District Court for the
Southern District of New York against AgriBio Tech, Inc. and
certain of its officers and directors (collectively the
"Defendants"). The lawsuit has been brought on behalf of all
persons who purchased AgriBio Tech, Inc. common stock during the
period October 8, 1998 through January 22, 1999.
The Complaint alleges that Defendants violated the federal
securities laws, Section 10(b) and 20(a) of the Securities
Exchange Act of 1934, by misrepresenting or failing to disclose
material information about the status of AgriBio Tech's efforts
to find a buyer for the company, including the possible price
range and time frame.
As a result of Defendants' false and misleading statements and
omissions, the price of AgriBio Tech's stock was artificially
inflated during the Class Period. On January 22, 1999, after the
close of trading, the Company announced that it had abandoned its
efforts to find a buyer and would only continue to make
acquisitions on an "opportunistic basis."
AGRIBIOTECH, INC.: Cauley Firm Files Complaint in New Mexico
------------------------------------------------------------
The Law Offices of Steven E. Cauley, P.A. announced that a
securities fraud class action lawsuit has been filed in
United States District Court in Albuquerque, New Mexico on
behalf of all purchasers of all securities of AgriBioTech Inc.
(Nasdaq: ABTX) between September 24, 1997 and August 26, 1998.
The complaint alleges that during Fiscal Years 1997-1998,
AgriBioTech reported favorable financial results with strong
revenue growth and profitability causing the Company's stock to
trade at artificially inflated levels, and as high as $29-1/2.
According to the complaint, AgriBioTech's reported revenues were,
as a result of the manipulations, overstated by 20% in Fiscal
Years 1997-1998 and the loss it had actually incurred for Fiscal
Years 1997-1998 was converted into a profit. Ultimately,
AgriBioTech was forced by the SEC to change its accounting
practices with regard to acquisitions and to disclose the extent
of its accounting manipulations in prior quarters. Upon these
startling revelations, AgriBioTech's stock price declined to
$8-1/8 per share, a more than 71% reduction from its Class
Period high of $29-1/2. Investors who purchased shares of
AgriBioTech during the Class Period paid too much and may be able
to recover for their losses, according to the complaint.
ASSISTED LIVING: Stoll Stoll Files Complaint in Oregon
------------------------------------------------------
The law firm of Stoll Stoll Berne Lokting & Shlachter P.C. filed
a class action 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; Amex: ALF6K02) from April 29, 1997 through February 1, 1999,
inclusive. Assisted Living is based in Portland, Oregon.
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.
Assisted Living owns, operated, leases and develops assisted
living residences. 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. On February 1,
1999, the date of the Company's announcement, the prices of
Assisted Living's securities plummeted.
BREAST IMPLANTS: Canadian Court Approved $25MM Settlement Pact
--------------------------------------------------------------
A Canadian court has approved a $25 million settlement in a class
action suit involving several thousand women who say they
suffered injury from silicone breast implants made by the Dow
Corning Corp. The Vancouver Sun newspaper reports that details
of the settlement will be mailed to an estimated 3,700 to 4,100
Canadians outside of Quebec and Ontario, where separate cases
were filed. The settlement requires approval in U.S. courts
because Dow Corning is in bankruptcy.
Those filing claims in the case may each reportedly receive a
$1,200 expedited settlement if there was no disease or injury and
up to $250, 000 for total disability.
Helen Harrington, the case's representative plaintiff, told the
newspaper that individual compensation would depend on proof of
recognized medical conditions, the number of eligible claimants,
level of disability and age when the symptoms occurred.
CELL PATHWAYS: Milberg Weiss Files Complaint in Pennsylvania
------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP announced that it filed
a class action lawsuit on February 12, 1999 in the United States
District Court for the Eastern District of Pennsylvania, on
behalf of all persons who purchased the common stock of Cell
Pathways, Inc (Nasdaq: CLPA), between November 11, 1998 and
February 2, 1999, inclusive.
The complaint charges CPI and certain officers of the Company
during the relevant time period with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934. The complaint
alleges that defendants issued a series of materially false and
misleading statements regarding the efficacy and near-term
commercialization of the Company's cancer treatment drug,
PREVATAC(TM)(exisulind). Because of the issuance of a series of
false and misleading statements, the price of CPI common stock
was artificially inflated during the Class Period.
GENCOR INDUSTRIES: Abbey Gardy Filed Complaint in Florida
---------------------------------------------------------
The law firm of Abbey, Gardy & Squitieri, LLP filed a class
action lawsuit in the United States District Court for the Middle
District of Florida on behalf of purchasers of Gencor Industries,
Inc. (Amex:GX) common stock between February 5, 1998 and January
28, 1999.
The complaint charges Gencor Industries, Inc. and certain of its
officers and directors with violations of Sections 10(b), 20(a)
of the Securities Exchange Act of 1934, as amended, and Rule 10b-
5 promulgated thereunder. Among other things, plaintiff claims
that the defendants issued materially false and misleading
statements regarding the company's true financial condition and
operating performance. On January 29, 1999, it was reported that
Gencor Industries, Inc.'s "fiscal 1998 earnings per share of
$1.52 may be reduced by as much as $0.35 to $0.50 per share" as a
result of "accounting irregularities and other improprieties[.]"
GENCOR INDUSTRIES: Bashian Firm Files Complaint in Florida
----------------------------------------------------------
The Law Offices of James V. Bashian, P.C. announced that a class
action lawsuit was filed in the United States District Court for
the Middle District of Florida on behalf of purchasers of Gencor
Industries, Inc. (Amex:GX) common stock between February 5, 1998
and January 28, 1999.
The complaint charges Gencor Industries, Inc. and certain of its
officers and directors with violations of Sections 10(b), 20(a)
of the Securities Exchange Act of 1934, as amended, and Rule 10b-
5 promulgated thereunder. Among other things, plaintiff claims
that the defendants issued materially false and misleading
statements regarding the company's true financial condition and
operating performance. On January 29, 1999, it was reported that
Gencor Industries, Inc.'s "fiscal 1998 earnings per share of
$1.52 may be reduced by as much as $0.35 to $0.50 per share" as a
result of "accounting irregularities and other improprieties[.]"
INSO CORP.: Stull Stull Filed Complaint in Massachusetts
----------------------------------------------------------------
On February 3, 1999, a securities class action lawsuit was filed
in the U.S. District Court for the District of Massachusetts
against Inso Corp. (Nasdaq: INSO) and certain of its officers on
behalf of all persons who purchased or otherwise acquired shares
of Inso Corp. common stock (the "Class") between April 22, 1998
and Jan. 28, 1999, inclusive.
The complaint alleges that Inso and certain of its officers
and/or directors, disseminated materially false and misleading
statements concerning the Company's financial results for the
first three quarters of fiscal 1998, thereby causing the price of
the Company's common stock to be artificially inflated throughout
the Class Period. After Inso announced that its financial
results had been overstated by approximately $7 million for the
first three quarters of 1998, the price of its common stock
declined by 64%.
JDA SOFTWARE: Cauley Firm Files Complaint in Arizona
----------------------------------------------------
The Law Offices of Steven E. Cauley announced that a securities
fraud class action lawsuit has been filed in the United States
District Court for the District of Arizona on behalf of
purchasers of JDA Software Group, Inc. (Nasdaq: JDAS) common
stock during the period between January 29, 1998 and January 5,
1999.
The complaint charges that certain of JDA's officers and
directors caused JDA to report that JDA was experiencing strong
demand for its software products and services and that JDA would
post strong revenue and earnings growth throughout 1998 and 1999.
The complaint alleges that these statements caused the Company's
stock to trade at artificially inflated levels, and permitted
JDA's insiders to sell $43 million of their own JDA stock and JDA
to issue and sell $90+ million of stock via a public offering.
However, when JDA finally admitted that its sales force was in
disarray, that its previously reported financial results were
false and would have to be restated and that JDA would be
reporting huge 4Q98 losses, JDA stock plummeted to just $6-1/16
per share, 80% lower than the levels where defendants had sold
more than $140 million of JDA stock.
LERNOUT & HAUSPIE: Bernstein Liebhard Files Complaint in New York
-----------------------------------------------------------------
A securities class action lawsuit was commenced by Bernstein
Liebhard & Lifshitz, LLP on behalf of purchasers of the common
stock and call options of Lernout & Hauspie Speech Products, N.V.
(Nasdaq: LHSPF) ("Lernout & Hauspie" or the "Company"), between
April 28, 1997 and December 4, 1998, inclusive, (the "Class
Period"), in the United States District Court for the Eastern
District of New York. The lawsuit alleges violations of the
federal securities laws and names as defendants the Company and
certain of its officers and directors.
The complaint charges Lernout & Hauspie and certain of its
officers and directors with violations of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint
alleges that the defendants issued materially false and
misleading statements and failed to disclose material facts
throughout the Class Period in the Company's public filings
related to the merger with Equity International Corporation.
As a result of these misrepresentations and omissions, the price
of Lernout & Hauspie's common stock was artificially inflated
throughout the Class Period.
LEVEL 8: Stull Stull Files Complaint in New York
------------------------------------------------
Stull, Stull & Brody announced that a class action lawsuit will
be filed in U.S. District Court on behalf of purchasers of Level
8 Systems Inc. (Nasdaq:LVEL). Level 8 Systems Inc. is a computer
software developer. The company is a premier provider of message-
oriented middleware (MOM) products and consulting services. The
company provides "any-to-any" connectivity between enterprise
applications.
Defendants include Level 8 Systems Inc. and certain of its
officers and directors. The complaint will charge that defendants
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule 10-b(5) by, among other things: issuing false
and misleading statements regarding Level 8's financial condition
as well as its present and future business prospects. Because of
the issuance of a series of false and misleading statements, the
price of Level 8's common stock was artificially inflated.
LOCKHEED MARTIN: Wolf Haldenstein Files Complaint in California
---------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP announced that it filed
a class action lawsuit in the United States District Court for
the Central District of California on behalf of all persons who
purchased common stock of Lockheed Martin Corp. (NYSE: LMT) at
artificially inflated prices during the period August 13, 1998
and December 23, 1998 and who were damaged thereby.
The Complaint alleges that Lockheed violated the securities laws
by misrepresenting how the Company had reached its 3rd Q 1998 EPS
targets. The complaint alleges that the Company failed to reveal
that it only reached its', and analysts', EPS targets by
utilizing a secret accounting adjustment and that in the absence
of this adjustment the EPS targets could not be met. Based on
Lockheed's strong 3rd Q results and its forecasts of continued
strong 4th Q 1998 EPS and further growth in 1999, the Company's
stock rose to as high as $113-1/8 by November 2, 1998.
Insiders at the Company took advantage of the stocks' artificial
inflation to sell significant amounts of their own holdings at
prices as high as $109.97 to reap personal proceeds of over $28
million.
On December 23, 1998 the Company stunned the market by announcing
that shortfalls in aircraft deliveries and satellite launches and
higher than earlier disclosed write offs, Lockheeds 4th Q 1998
and 1998 results would be far below the levels previously
forecast. Upon the release of these revelations the stock dropped
from $95-3/4 to $82 on enormous volume of over 3.5 million
shares.
PACIFIC GAS: Business Assert Utility Outage Claim for Lost Income
-----------------------------------------------------------------
The San Francisco Examiner relates that two small San Francisco
businesses filed a lawsuit last Thursday against PG&E seeking
damages stemming from a December 8, 1999, power failure that
brought much of commerce and transportation to a halt in The City
and San Mateo County. The law firm of Jenkins, Goodman & Neuman
represents the owners in the complaint filed in San Francisco
Superior Court. The complaint asks the court to declare the
matter a class-action suit so that other plaintiffs may join and,
if they prevail, share in any potential damages.
Immediately following the six-hour power failure, PG&E
established a system in which business owners could file claims
to recover blackout-related expenses. The two plaintiffs did not
file claims, said their lawyer, Farley Neuman. "They, like a lot
of people, do not quite know what their rights are and how to
calculate the damages resulting from the power outage," said
Neuman. "It is not all that simple to calculate the damages." He
added his firm would hire "an economist and possibly more than
one and possibly a certified public accountant to help calculate
the damages."
The two plaintiffs are Sung & Leung, a partnership doing business
as Better Choice Printing, providing copying and printing
services, and Kaiser Leung, whose company Good Choice Services
provides dry cleaning, laundry and alterations. Better Choice
Printing "could not be operated since there was no source of
electrical power to run the machines," the complaint read. Good
Choice Services "suffered economic damages because of the power
outage which brought (the) business to a virtual halt," the
complaint asserted.
Neuman said the suit is necessary, despite the availability of a
claims process, "because there is no assurance as to how PG&E is
going to handle these claims, how quickly they are going to do it
and whether they are going to pay full value for these claims or
not." Excluded from the class-action suit -- if a judge
certifies the case as one -- would be business operators who
filed claims or who have settled their claims with PG&E.
Leonard Anderson, a PG&E spokesman, said the utility had no
comment on the suit because no one there had seen it. He said,
however, that "the claim form is the place to start the process
of being reimbursed and, in fact, it is running smoothly and
thousands of PG&E customers appear to have no trouble
understanding the process." He said forms are available by
telephoning PGE-5000 or at http://www.pge.comon the Internet. He
said the utility has, to date, received more than 3,500 completed
forms seeking payment. PG&E has processed more than 1,600 of
them and paid claims on more than 1,500, said Anderson. Some have
been sent back to individuals requesting more information, he
said. "Small business owners, residential folks who have
businesses at home -- they know how to document their losses and
send those in," said Anderson.
PEOPLESOFT, INC.: Abbey Gardy File Complaint in California
----------------------------------------------------------
Abbey, Gardy & Squitieri, LLP announced that a Class Action suit
has been commenced 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 charges PeopleSoft and certain of its officers and
directors with violations of the federal securities laws. Among
other things, plaintiff claims that defendants issued a series of
materially false and misleading statements regarding PeopleSoft's
1996, 1997 and 1998 financial results.
PEOPLESOFT, INC.: Spector & Roseman File Complaint in California
----------------------------------------------------------------
A class action lawsuit was filed in the United States District
Court Northern District of California on behalf of all purchasers
of PeopleSoft, Inc. (NASDAQ:PSFT) common stock during the period
of Feb. 5, 1997 through Jan. 29, 1999 by the law firm of Spector
& Roseman, P.C..
PEOPLESOFT, INC.: Wechsler Harwood Files Complaint in California
----------------------------------------------------------------
On February 11, 1999, a securities class action lawsuit was filed
in the United States District Court for the Northern District of
California against Peoplesoft (NASDAQ: PSFT) and certain of its
officers and directors by Wechsler Harwood Halebian & Feffer LLP
on behalf of all persons who purchased or otherwise acquired
shares of Peoplesoft common stock at artificially inflated prices
between February 5, 1997 and January 29, 1999, inclusive.
The complaint alleges that defendants violated the federal
securities laws (Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934) by misrepresenting or failing to disclose
material information about Peoplesoft's results of operations,
and financial condition.
The Complaint also alleges that the individual defendants reaped
tens of millions of dollars in proceeds from stock sales while in
the possession of material adverse non-public information.
Through an announcement on early January 28, 1999, it was
reported that the SEC was investigating two acquisitions made by
Peoplesoft in 1996 and 1998 for improper acquisition accounting
and that Peoplesoft may be required to restate its financial
statements.
SERVICE CORPORATION: Cauley Firm Files Compaint in Texas
--------------------------------------------------------
The Law Offices of Steven E. Cauley, P.A. announce that a
securities fraud class action lawsuit has been filed in United
States District Court in Houston, Texas on behalf of all
purchasers of all securities of Service Corporation International
(NYSE:SRV) between February 2, 1998 and January 26, 1999,
including those persons who acquired SRV stock in exchange for
Equity Corporation International (NYSE:EQU) in a merger
consummated on or about January 19, 1999. The lawsuit alleges
that the following senior officers and/or directors of SRV sold
the following amounts of SRV stock, totaling over $96 million,
before it collapsed in price on January 26, 1999:
% of
Name Shares Sold Holdings Proceeds
---- ----------- -------- --------
Robert L. Waltrip 1,000,000 48% $39,010,000
L. William Heiligbrodt 650,000 19% 25,356,500
William B. Waltrip 450,000 52% 17,554,500
John W. Morrow, Jr. 250,000 58% 9,752,500
Glenn McMillen 39,260 46% 1,560,585
George R. Champagne 54,000 41% 2,268,000
Vincent L. Visosky 30,026 40% 1,261,092
After these sales were made, however, SRV issued a press release
published on PR Newswire on January 26, 1999 that it expected
"diluted earnings per share for the fourth quarter of 1998 to be
lower than current analyst expectations," causing its stock price
to collapse, according to the complaint.
SERVICE CORPORATION: Berger & Montague File Complaint in Texas
--------------------------------------------------------------
Service Corporation International (NYSE:SRV) and certain of its
officers and directors engaged in securities fraud, according to
a class action complaint filed in the United States District
Court for the Southern District of Texas, Houston Division, by
Berger & Montague, P.C.
The lawsuit, filed on February 8, 1999, is brought on behalf of
former shareholders of Equity Corporation International
(NYSE:EQU), who acquired the shares of Service Corp. as a result
of the January 19, 1999, stock-for-stock merger, and on behalf of
persons who purchased or otherwise acquired Service Corp.
(NYSE:SRV) common stock during the period July 23, 1998, to
January 26, 1999, inclusive.
The Complaint alleges that defendants made false and misleading
statements during the Class Period. Specifically, the Complaint
alleges that defendants misled the public with regard to the
effects of adverse trends, market conditions and demographics on
Service Corp.'s business and operations.
The Complaint further alleges that defendants' misleading
positive statements artificially inflated the price of Service
Corp.'s common stock during the Class Period.
On January 26, 1999, only six days after completing the merger
with Equity Corp., Service Corp. announced disappointing fourth
quarter and year-end 1998 financial results.
The market reacted sharply to the announcement, with Service
Corp. stock falling $15.19, or 44%, to $19.25 per share, after
touching $18.38, the lowest price in 3 1/2 years. Service Corp.
common stock had traded above $35 per share for much of the Class
Period.
SERVICE CORPORATION: Wolf Haldenstein Files Complaint in Texas
----------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz, LLP announces that it has
filed a class action lawsuit in the United States District Court
for the Southern District of Texas on behalf of all persons who
purchased common stock issued by Service Corporation
International (NYSE:SRV) ("Service") at artificially inflated
prices during the period July 23, 1998 through February 8, 1999
(the "Class Period"); and former shareholders of Equity
Corporation International ("Equity") who exchanged their shares
of Equity common stock for shares of stock in Service through a
stock-for-stock merger transaction consummated on January 19,
1999, pursuant to a false and misleading Proxy Statement and
Prospectus, and who were damaged thereby.
The complaint charges Service and certain of its directors and
officers with violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, and SEC Rule 10b-5 for, among
other things, concealing material adverse non-public information
from the public by failing to disclose that declining
productivity and efficiency, combined with increasing costs,
would adversely affect earnings in the fourth quarter and year of
1998. When Service preliminarily disclosed a severe earnings
shortfall for the fourth quarter of 1998 on January 26, 1999, the
price of Service stock fell 44% from $34-7/16 per share at the
close of trading on January 25, 1999 to $19-1/8 at the close of
trading on January 26, 1999. On February 9, 1999, the end of the
Class Period, Service disclosed that the real reason for the
earnings shortfall announced on January 26, 1999, was not revenue
declines, but rather productivity, efficiency and cost problems.
At the end of the trading day on February 9, 1999, Service stock
had fallen another 15% to $16 3/16.
SERVICE CORPORATION: Kirby McInerney Files Complaint in Texas
-------------------------------------------------------------
On February 11, 1999, Kirby McInerney & Squire, LLP and Claxton &
Hill, P.L.L.C. filed a class action lawsuit in the United States
District Court for the Southern District of Texas against Service
Corporation International, Inc. (NYSE:SRV) and certain of its
officers and directors. The lawsuit was filed on behalf of all
purchasers of Service Corp. securities between July 23,
1998 and January 26, 1999, inclusive, including former
shareholders of Equity Corp. International (NYSE: EQU), who
acquired Service Corp. securities in the January 1999 merger
between the two companies.
The Complaint asserts that defendants violated Section 10(b) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5. The
lawsuit alleges that defendants' material misrepresentations and
omissions caused the Company's stock to trade at artificially
inflated levels during the Class Period. Throughout the Class
Period, defendants misled the public by downplaying the effect
that certain industry-wide conditions were having upon the
Company (an operator of funeral homes). Just days prior to the
disclosing the Company's true financial and operating condition,
Service Corp. completed the merger with Equity Corp.
International, using $576 million worth of its artificially
inflated common stock as currency. When the Company finally
announced "revised earnings estimates" on January 26, 1999, the
price of its common stock plunged from $34 7/16 per share to
$19 1/8 per share in a single day, a decline of 44%.
SERVICE CORPORATION: Weiss & Yourman Files Complaint in Texas
-------------------------------------------------------------
The law firm of Weiss & Yourman announced that Service Corp.
International (NYSE: SRV)and its Chief Executive and Chief
Operating Officers were named defendants in a class action
lawsuit commenced last week in the United States District Court
for the Southern District of Texas, Houston Division, Civil
Action No. H990494, on behalf of investors who either
surrendered their Equity Corporation stock for Service Corp.
shares (as a result of their merger) or who purchased Service
Corp. securities in the period between July 23, 1998 and
January 26, 1999.
The complaint alleges that defendants violated the federal
securities laws (Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933) by, among other things, engaging in
aggressive and improper accounting practices that inflated
earnings and Service Corp.'s stock price during the Class Period.
STATE FARM: Judge Approves $238MM Life Insurance Settlement Pact
----------------------------------------------------------------
>From Bloomington, Illinois, the Associated Press reports that a
McLean County judge approved a settlement last week in which
State Farm Insurance Cos. expects to pay $238 million to
customers who sued the company accusing it of fraudulent
practices in selling life insurance. Some 4 million State Farm
customers were represented under the class-action lawsuit. A
tentative settlement was announced in August, and McLean County
Judge Ronald Dozier approved it Thursday, although he said it
wasn't perfect.
Judge Dozier suggested some minor changes but said he didn't feel
he could legally make them. "We all can say it could be better,"
he said Thursday following two days of hearings on the
settlement. "This settlement is fair, reasonable and adequate.
It's not great, but it's good."
State Farm expects to pay more than $26 million in attorney fees
and case expenses. The Bloomington-based company denied any
wrongdoing but said it agreed to settle the class-action lawsuit
to avoid a protracted court battle.
The settlement involves current and former owners of whole life
and universal life policies issued between January 1982 and
December 1997. The lawsuit accused the company of several
fraudulent practices:
* Encouraging policyholders to switch to a new policy, in
which they lost value but were led to believe it was in
their best interest;
* Promising returns based on assumptions the company knew to
be unrealistic, such as double-digit interest rates;
* Soliciting sales by referring to life insurance policies as
"investments" and "retirement plans"; and
* Artificially inflating dividend projections.
STATE FARM: Six Plaintiffs Appeal Life Insurance Settlement Pact
----------------------------------------------------------------
Within hours of its approval, six plaintiffs in the class-action
lawsuit accusing State Farm Insurance Co. of fraudulent sales
practices said they will appeal a $238 million settlement
agreement.
Attorney Kenneth Nelson, of Kansas City, Mo., said he would fight
the settlement because the process of making a claim is too
confusing and cumbersome. Under the agreement, the Associated
Press related, State Farm would make varying payments --
averaging about $1,300 -- to every one of the 3 million customers
represented by the class action. Nelson says those entitled to a
larger award must undergo what a very confusing claim process.
"We believe that will have the effect of discriminating against
policy holders who are poor, disabled, elderly, unsophisticated
in other words, the easiest targets for fraud," said Nelson, of
Kansas City, Mo. Any appeal would only serve to stall State
Farm's payments, said Tom Schneider, a State Farm lawyer.
SUNCRUZ: Editorial re Ex-Employees' Suit for Overtime Pay
---------------------------------------------------------
The following letter to the Editor appeared in the February 12,
1999, edition of the St. Petersburg Times:
Re: "Ex-employee sues SunCruz for overtime pay," Jan. 28.
I am the wife of a former SunCruz employee who has been
fighting for the past two years to recoup my husband's back
overtime pay from this company.
SunCruz has known for over two years that it must pay
overtime. It has known that it must pay back overtime to former
employees. It has stalled. The statute of limitations runs out
after two years.
The Florida Department of Labor's wage and hour division is
responsible for this. We made our claim against SunCruz to the
department just days after my husband left the job.
Now that Fred Miller has initiated a federal lawsuit against
the company, it is ready to pay us.
The catch is this: Miller thinks that having had to wait two
years to recoup his money, which SunCruz knew it had to pay,
entitles him to punitive damages.
He is 100 percent correct. Who does this company think it
is? It has been told that it has to pay overtime. It never
refused to comply, it just stalled.
Now the company is afraid that Miller will win his lawsuit.
In an effort to avoid a class action suit, it has agreed to pay
certain employees an unspecified amount.
This company is sneaky. Port Richey does not need this kind
of element. We have enough problems finding decent jobs for our
residents. We cannot tolerate this.
So, to everyone who has ever worked for SunCruz, do not
settle. Find Fred Miller, and make this company pay for what it
has put us through.
Vanessa Blais, Holiday
TRITEAL CORPORATION: Takes $500MM Charge on Securities Settlement
----------------------------------------------------------------
TriTeal Corporation, announcing a $2.6 million third quarter loss
on $335,000 of sales for the period ending December 31, 1998,
disclosed that the posted loss included a $500,000 charge
pursuant to the revised terms of a preliminary settlement
(subject to court approval) of the securities class action
litigation pending against the Company. That third quarter
charge brought total costs of the original and revised
preliminary settlement of the securities class action litigation
pending against the Company to $10 million.
USA NETS: Shareholder Suit Alleges Disclosure Failure
-----------------------------------------------------
Cablefax Daily reports that USA Nets [USAI] shareholder Pauline
Lalondriz is seeking class- action status for a lawsuit against
the company for allegedly failing to disclose that Italian law
bars foreign ownership of programming, including USA Nets' joint
Home Shopping Net venture with Luxembourg's SBS Broadcasting.
WORLD ACCESS: Wolf Popper Files Complaint in Georgia
----------------------------------------------------
Recalling that investors have filed a class action lawsuit in
federal court in Atlanta against World Access Inc. (Nasdaq:WAXS).
The lawsuit was filed in the wake of World Access's announcement
on February 11, 1999, that for the quarter ended December 31,
1998, World Access had income, after special charges, of only
$2.2 million, or $.08 per share. This announcement comes after
World Access announced, on January 5, 1999, that the Company's
earnings after special charges would only be approximately $.15
per share compared with analysts consensus estimates of $.31 per
share.
The law firm Wolf Popper LLP filed the lawsuit against World
Access on behalf of three groups of persons:
(1) those who purchased World Access securities in the open
market during the period October 7, 1998, through
February 11, 1999;
(2) those who exchanged securities issued by Telco Systems
Inc. for World Access securities in the recent merger of
those two companies; and
(3) those who exchanged securities issued by NACT
Telecommunications Inc. for World Access securities in the
recent merger of those two companies.
The Complaint charges that defendants violated the U.S.
securities laws by issuing materially false and misleading
statements and by omitting to disclose material facts required to
be disclosed, in order to make the statements issued not
materially false and misleading throughout the Class Period and
in World Access's public filings related to the Telco and NACT
mergers.
WORLD ACCESS: Abbey Gardy Files Complaint in Georgia
----------------------------------------------------
Abbey, Gardy & Squitieri, LLP announced that a class action
lawsuit with an expanded class period was filed in the United
States District Court for the Northern District of Georgia on
behalf of purchasers of World Access, Inc. (NASDAQ:WAXS) common
stock between October 7, 1998 and February 11, 1999.
The complaint charges World Access, Inc. and certain of its
officers and directors with violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, as amended, and
Rule 10b-5 promulgated thereunder. Among other things, plaintiff
claims that the defendants issued materially false and misleading
statements regarding the company's true financial condition and
operating performance.
ZILA, INC.: Cauley Firm Files Complaint in Arizona
--------------------------------------------------
The Law Offices of Steven E. Cauley announce that a securities
fraud class action lawsuit has been filed in the United States
District Court for the District of Arizona on behalf of all
persons who purchased common stock issued by Zila, Inc.
(NYSE:ZILA) at artificially inflated prices during the period
June 15, 1998 through January 13, 1999 and who were damaged
thereby.
The complaint alleges that the defendants misrepresented and/or
failed to disclose material information about Zila's product
OraTest(R) and the status of the clinical trials during its
efforts to obtain FDA approval to sell OraTest(R) in the United
States. The Company stated during the Class Period, absent
supporting data and in the face of information obtained during
the clinical trials to the contrary (which the Company withheld
from the market place), that it expected to receive FDA approval
to sell and market OraTest(R). As was later revealed following
the FDA's rejection of the Company's application, the Company
knew, but failed to disclose, that the FDA would not approve
OraTest(R) premised on the Company's insufficient and poorly
analyzed data.
As a result of defendants' false and misleading statements and
omissions concerning OraTest(R), the price of Zila's stock was
artificially inflated during the Class Period. At the end of the
Class Period, the FDA announced that it would not approve
OraTest(R) due to the serious flaws in the efficacy studies and
the Company's failure to supply the FDA with data justifying
approval and the Company's common stock plummeted. Upon this
announcement, the price of Zila collapsed, falling from $9-5/8 to
$5-3/8, a one-day decline of 44%.
ZILA, INC.: Milberg Weiss Suit Expands Class Period
---------------------------------------------------
Milberg Weiss announced that the class period proposed in its
lawsuit filed in the United States District Court for the
District of Arizona against Zila, Inc. (Nasdaq: ZILA) and certain
of its officers and directors for violations of the Securities
Exchange Act of 1934, has been expanded to include purchases of
Zila, Inc. publicly traded securities during the period between
March 11, 1998 and January 13, 1999.
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S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published
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Group, Inc., Washington, DC. Peter A. Chapman, Editor.
Copyright 1999. All rights reserved. ISSN XXXX-XXXX.
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