/raid1/www/Hosts/bankrupt/CAR_Public/990219.MBX
C L A S S A C T I O N R E P O R T E R
Friday, February 19, 1999, Vol. 1, No. 11
Headlines
AMERICAN BANKNOTE: Wolf Popper Files Complaint in New York
AMERITECH: Illinois Customer Suit Expanded to Class Action
AVIATION DISTRIBUTORS: Fairness Hearing on Shareholder Litigation
BOSTON HOUSING: HUD Secretary Files Discrimination Charges
DNA PLANT: Milberg Weiss Files Complaint in California
GULF WAR: U.N. Fund Pays $814 Million to Gulf War Victims
HONG KONG: Tokyo Court to Rule on War Reparation Claim in June
INSO CORP.: Pomerantz Haudek Filed Complaint in Massachusetts
JONES COMMUNICATIONS: Limited Partners Challenge Littlerock Sale
LERNOUT & HAUSPIE: Rabin & Peckel Files Complaint in New York
PAN AM 103: Annan Letter to Libya Aims to Speed Lockerbie Trial
PEDIATRIX: Milberg Weiss Files Complaint in Florida
PEOPLESOFT: Schoengold & Sporn File Complaint in California
PEOPLESOFT: SEC Acquisition Review Yields No Earnings Restatement
THERAGENICS CORP.: Rabin & Peckel File Complaint in Georgia
TOBACCO LITIGATION: Avalanche of Paper Buries Florida Trial
TOBACCO LITIGATION: RJR Chairman Says Sales Growth Top Priority
TOBACCO LITIGATION: Liggett Settles Ohio Labor Union Litigation
VIBRATOR BAN: Women Sue State of Alabama Over Vibrator Ban
*********
AMERICAN BANKNOTE: Wolf Popper Files Complaint in New York
----------------------------------------------------------
Wolf Popper LLP filed a class action complaint has been filed in
the United States District Court for the Southern District of New
York on behalf of a Class of persons who purchased securities
issued by American Banknote Holographics, Inc. (NYSE: ABH) in the
Company's initial public offering, or in the open market at
artificially inflated prices during the period July 15, 1998
through January 15, 1999 and who were damaged thereby.
The Complaint charges that throughout the Class Period, ABH,
Joshua C. Cantor, and Richard P. Macchiarulo, violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing
materially false and misleading statements concerning the
Company's reported sales and net income for the second and third
quarters of 1998. At the time defendants issued these
statements, they were aware that the strong growth and positive
results reported for those periods were due to the defendants'
improper recognition of revenue in violation of generally
accepted accounting principles (FASB Statement of Concepts No. 5,
Paragraph 83) and ABH's stated revenue recognition policy.
On January 19, 1999, the Company announced that its financial
results for the second and third quarters of fiscal 1998 will be
restated. The Company also announced that, "its Audit Committee
had retained Kramer Levin Naftalis & Frankel, LP as special legal
counsel, and Deloitte & Touche LP, its auditors, to investigate
certain transactions during the second and third quarters of
1998 which resulted in the inappropriate recognition of revenue
during such quarters." The release further stated, "based upon
currently available information resulting from the in-progress
1998 audit of the Company's financial statements, sales and net
income of the Company have been over-stated for the second and
third quarters of 1998. These overstatements may be material and
will require re-statements of the Company's financial statements
for such periods."
When trading in ABH shares resumed on January 20, 1999, the
market price of ABH plunged nearly 70% to $4-9/16 per share,
evidencing the extent of defendants' fraud.
AMERITECH: Illinois Customer Suit Expanded to Class Action
----------------------------------------------------------
A lawsuit that claims Ameritech Mobile Communications Inc.'s
cellular phone customers are paying too much has been granted
class-action status. The lawsuit, filed by attorney Steve
Tillery in Edwardsville, Illinois, challenges Ameritech's
practice of rounding the per-minute charge up to the nearest
minute. Tillery says that costs the average customer $12 to $15
monthly. This month, Circuit Judge Randall Bono granted class-
action status to the lawsuit, which could affect 2 million
people.
AVIATION DISTRIBUTORS: Fairness Hearing on Shareholder Litigation
-----------------------------------------------------------------
Pursuant to an Order of the United States District Court for the
Central District of California, dated January 29, 1998, a hearing
will be held on January 11, 1999, at 10:00 a.m., before the
Honorable Gary L. Taylor in Santa Ana for the purpose of
determining:
(1) whether the proposed settlement of the Litigation in the
amount of $740,000 plus 210,000 shares of Aviation
Distributors, Inc.'s common stock, plus interest, should
be approved by the Court as fair, reasonable and
adequate;
(2) whether this Litigation should be dismissed on the merits
with prejudice as set forth in the Stipulation of
Settlement dated as of August 1, 1998, on file with the
Court;
(3) whether the proposed Plan of Allocation of settlement
proceeds should be approved;
(4) the reasonableness of the application of plaintiffs'
counsel for the payment of attorneys' fees and
reimbursement of costs and expenses incurred in
connection with this Litigation; and
(5) whether the class should be finally certified.
This affects purchasers of the common stock of Aviation
Distributors, Inc. during the Class Period between March 3, 1997,
and September 3, 1997, inclusive.
BOSTON HOUSING: HUD Secretary Files Discrimination Charges
----------------------------------------------------------
Housing and Urban Development Secretary Andrew Cuomo announced
housing discrimination charges against the Boston Housing
Authority dealing with racial and ethnic harassment from 1992 to
1996.
HUD charges the Boston Housing Authority with failing to take
action to protect nine minority families in the Bunker Hill and
Old Colony public housing developments from racial and ethnic
harassment, failing to stop the harassment, and failing to
transfer the victims of the harassment to safe housing
environments between 1992 and 1996. Both public housing
developments were virtually all white as recently as the late
1980s, but many minorities have moved in since then as a result
of desegregation efforts.
The discrimination charges HUD brought on behalf of the nine
families will be heard by a HUD Administrative Law Judge unless
any of the parties involved choose to have the case heard by a
U.S. District Court Judge. Those involved in the case could also
reach a negotiated settlement. The Boston Lawyers Committee is
representing the women and their families and is seeking damages
and other relief on their behalf.
The nine families, including 25 children, complained to the BHA
that they were repeatedly harassed by white people who did not
want minorities living in the two public housing developments.
The complaints by the women accused the BHA of failing to take
action on their behalf to address a broad range of actions
against the minority families, including: beatings of minority
children; firing a BB gun into a 7-year-old boy's bedroom in one
case; breaking car windows and slashing tires; setting fires
outside a woman's apartment; writing racial and ethnic slurs
(including "nigger," "spic" and swastikas) on apartment doors and
other areas in the developments; repeatedly confronting
minorities with verbal racial and ethnic slurs; and depositing
human waste outside the front doors of minority apartments.
Some of the women said they were forced to abandon their
apartments and some said they feared letting their children play
outside. Six of the women filing the complaints are black and
three are Hispanic. Seven lived in Old Colony and two lived in
Bunker Hill. All moved out of the developments where the
harassment took place by 1997.
The charges filed against the Boston Housing Authority are the
first HUD has ever filed involving "systemic discrimination" --
discrimination that is not limited to isolated or individual
families, but represents a failure of an institution to implement
policies and practices against housing discrimination.
DNA PLANT: Milberg Weiss Files Complaint in California
------------------------------------------------------
Milberg Weiss announced that a class action suit 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.
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.
GULF WAR: U.N. Fund Pays $814 Million to Gulf War Victims
----------------------------------------------------------------
>From Geneva, Reuters reports that the United Nations Gulf War
reparations body said on Thursday it had paid out another $814
million to individuals in 62 countries forced to leave Kuwait or
Iraq during the conflict or who had proven property losses. In a
statement, the U.N. Compensation Commission (UNCC) said the sum
included $84.39 million to be shared by 223,817 Egyptian workers
in Iraq who lost remittances at the start of the war. It brought
the total amount of compensation paid out by the Geneva-based
body, funded from a 30 percent share of revenue derived from an
"oil-for-food" deal with Iraq, to $2.7 billion.
"Payments are made when income from the sale of oil has
accumulated to a level sufficient to pay the amounts due," the
statement said. The Governing Council of the UNCC, composed of
the same 15 member countries as the Security Council, had already
approved the latest awards, but funds were lacking until this
week, Reuters said.
Egypt, Reuters related, had filed a claim against Iraq with an
asserted value of $491 million on behalf of 1.24 million Egyptian
workers, but independent legal experts who reviewed it
recommended far lower payment of $84 million. The award was
announced in October 1997. Some $542.7 million was paid on
Thursday to 217,102 claimants in 59 countries, or $2,500 each,
who were forced to pack up after Iraqi troops invaded Kuwait in
August 1990. Bangladeshis, Egyptians, Indians, Sri Lankans and
Sudanese were the largest groups in the latest batch of forced
departure claims, with more than 10,000 people each, the UNCC
said. The remaining $187 million went to 76,720 people in 42
countries who proved property losses of up to $100,000. They are
each to receive an initial $2,500 in compensation. The largest
group, 25,487 people, were Kuwaitis, followed by Egyptians
(13,274), Syrians (10,062), Jordanians (9,988) and Indians
(9,753), according to the statement.
The UNCC has received claims from individuals, companies and
governments with an asserted value of more than $250 billion,
Reuters indicated, adding that, in all, $7 billion in awards have
been approved for payment.
HONG KONG: Tokyo Court to Rule on War Reparation Claim in June
--------------------------------------------------------------
The Tokyo District Court ended hearings yesterday on a suit filed
by Hong Kong residents against the Japanese government seeking
760 million yen in compensation for damages incurred by the use
of notes issued during World War II. The court is scheduled to
make a ruling June 17. The issue of the six-year trial has been
whether the use of war currency was forced on residents by
Japanese military authorities during Japan's occupation of Hong
Kong from December 1941 to August 1945.
Ng Yat-hing, leader of the 17 plaintiffs, reiterated his appeal
at the final hearing for the Japanese government to reconvert the
war notes into Hong Kong currency at legal rates. He described
how Hong Kong residents were forced to exchange their Hong Kong
dollars, gold and other valuables into Japanese war currency
during Japan's occupation of the former British territory.
"People who concealed their money were killed by the Japanese
army," the 62-year-old Ng said, adding that many residents became
bankrupt overnight after the Imperial Japanese Army's withdrawal.
The Japanese government has refused to reconvert the war notes on
the basis that the supreme commander of the Allied forces
occupying Japan after the war and the Finance Ministry declared
the notes worthless and invalid in September 1945.
The plaintiffs' lawyers argued that declarations applied only to
war notes circulated within Japan. Japanese forces issued some
1.9 billion yen worth of military coupons to support
transportation of goods and management of the areas that the
Japanese occupied during the war. Japan, as a practice, refuses
all individual compensation claims, saying all war reparation
issues were settled under the 1952 San Francisco peace treaty,
according to Kyodo News.
INSO CORP.: Pomerantz Haudek Filed Complaint in Massachusetts
-------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP has filed suit
against Inso Corp. (Nasdaq: INSO) and certain corporate insiders
in the United States District Court for the District of
Massachusetts on behalf of all purchasers of Inso securities
during the period February 3, 1998 through and including January
29, 1999.
The price of Inso's common stock fell dramatically after the
Company announced on February 1, 1999 that it would have to
restate its financial results for the first three quarters of
1998, to reverse approximately $7 million in improperly
recognized revenues. The complaint alleges that, by issuing
false and misleading statements to the public, Inso and certain
corporate executives violated the federal securities laws and
thereby artificially inflated the value of the Company's
securities. In addition, the complaint alleges that certain
insiders sold more than 1.5 million shares of Inso common stock
during the Class Period at the artificially inflated prices,
yielding proceeds of nearly $4 million.
JONES COMMUNICATIONS: Limited Partners Challenge Littlerock Sale
----------------------------------------------------------------
On January 29, 1999, Cable TV Fund 14-B, Ltd. (the
"Partnership"), a Colorado limited partnership, sold the cable
television system serving areas in and around the community of
Littlerock, California (the "Littlerock System") to Jones
Communications of California, Inc., an indirect subsidiary of
Jones Intercable, Inc., the general partner of the Partnership
(the "General Partner"), for a sales price of $10,720,400,
subject to customary closing adjustments. The sales price
represents the average of three separate independent appraisals
of the fair market value of the Littlerock System. The sale was
approved by the holders of a majority of the limited partnership
interests of the Partnership.
In January 1999, City Partnership Co. ("Plaintiff"), a limited
partner of the Partnership, filed a class action complaint in the
District Court, Arapahoe County, State of Colorado (Case No.
99CV0150) naming the General Partner as defendant. Plaintiff, on
its behalf and on behalf of all other persons who are limited
partners of the Partnership, is challenging the terms of
sale of the Littlerock System to an affiliate of the General
Partner. This case is in a very preliminary stage, but the
General Partner believes that the terms of the sale were in
accordance with the requirements of relevant limited partnership
agreement provisions. The General Partner intends to defend this
lawsuit vigorously.
LERNOUT & HAUSPIE: Rabin & Peckel Files Complaint in New York
-------------------------------------------------------------
A putative class action suit has been filed in the United States
District Court for the Eastern District of New York, on behalf of
all those who purchased Lernout & Hauspie Speech Products, N.V.
common stock between Feb. 3, 1998 and Dec. 4, 1998, inclusive.
The Complaint alleges that Lernout and certain of its officers
violated the Securities Exchange Act of 1934 by making a series
of materially false and misleading statements concerning
Lernout's reported financial results. In particular, it is
alleged that in connection with a number of acquisitions
during the Class Period, the Company improperly wrote-off certain
acquisition costs as "in process research and development"
charges in violation of generally accepted accounting principles.
The Complaint alleges that as a result of these false and
misleading statements the price of Lernout common stock was
artificially inflated throughout the Class Period causing
plaintiff and the other members of the Class to suffer damages.
PAN AM 103: Annan Letter to Libya Aims to Speed Lockerbie Trial
---------------------------------------------------------------
Secretary-General Kofi Annan sent a letter to Libya on Wednesday
with clarifications about arrangements for the trial of two
suspects in the 1988 bombing of a Pan Am jet over Lockerbie,
Scotland. His spokesman Fred Eckhard told Reuters yesterday that
the letter had been "signed by him and picked up" by Libya's U.N.
ambassador Abuzed Dorda. Annan, in answer to queries earlier
said, "We have offered clarifications and answered some of their
(the Libyans') questions and I hope that the understandings
contained in the letter will be sufficient for us to move
forward."
At issue, Reuters explains, is the handing over by Libya for
trial before a Scottish court sitting at Camp Zeist, a former
military base in the Netherlands, of two suspects in the December
1988 bombing of Pan Am flight 103 over the Scottish village of
Lockerbie in which 270 people were killed, including 11 on
the ground.
Libya confirmed over the weekend that it was willing to extradite
the two alleged intelligence agents for trial but it first
requested certain written assurances.
Diplomats told Reuters on Tuesday Annan was proposing, with U.S.
and British agreement, that Scottish prosecutors should not
attempt to undermine the Libyan government. "The prosecution
team cannot have as its objective to get at the Libyan regime,"
said one envoy close to the talks, but added the trial would
still need to delve into the motives behind the bombing. Annan
was also expected to tell Libya U.N. monitors could ensure the
suspects -- Abdel Basset Ali Mohamed al-Megrahi and Lamen Khalifa
Fhimah -- would not be interrogated by British or American
security services.
If convicted, they would have the right to appeal to a similar
Scottish court sitting in the Netherlands and, if they lost their
appeal, would have regular access to Libyan consular services
while serving their sentence at Barlinnie jail, near Glasgow.
Asked whether the United States would agree to any solution that
would ensure the Libyan government was not investigated, Foley
replied: "We want to see a trial of the two suspects . . . I
cannot predict how such a trial might unfold. It's impossible to
predict. That is a matter for the Scottish court." It was "up
to the prosecutors to determine how they proceed in the trial,
and we'll let the chips fall where they may," he added.
PEDIATRIX: Milberg Weiss Files Complaint in Florida
---------------------------------------------------
Milberg Weiss commenced a class action lawsuit on February 17,
1999, in the United States District Court for the Southern
District of Florida, West Palm Beach Division, on behalf of all
persons who purchased the common stock of Pediatrix Medical Group
Inc. (NYSE: PDX), between April 28, 1998 and February 12, 1999,
inclusive.
The complaint charges Pediatrix and certain officers 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 false
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 Pediatrix common
stock was artificially inflated during the Class Period.
PEOPLESOFT: Schoengold & Sporn File Complaint in California
-----------------------------------------------------------
Schoengold & Sporn, P.C. announced that a class action lawsuit
has been commenced in the United States District Court for the
Northern District of California on behalf of purchasers of
PeopleSoft, Inc. (Nasdaq: PSFT) common stock during the period
between February 5, 1997 and January 28, 1999.
The complaint alleges that PeopleSoft and certain of its key
officers and directors violated federal securities laws. During
the Class Period, defendants represented, by way of company
announcements and press releases, that PeopleSoft was still
enjoying strong growth in orders and was on track to continue
45%-65% revenue growth through 1999. As a result, PeopleSoft's
common stock price was artificially inflated to a Class Period
high of $55.9375 per share. When PeopleSoft ultimately admitted
that its revenue growth had slowed and that it might restate its
1996-1998 financial statements, its stock declined to as low as
$18.125 on volume of 20.5 million shares. While some defrauded
investors were paying in excess of $55 per share for PeopleSoft
common stock, the top officers and directors of PeopleSoft were
in the process of selling 8.2 million shares for proceeds of $232
million before the bad news was disclosed.
PEOPLESOFT: SEC Acquisition Review Yields No Earnings Restatement
-----------------------------------------------------------------
PeopleSoft, Inc. announced that the Securities and Exchange
Commission (SEC) has completed its review of PeopleSoft's
accounting for the In-Process Research & Development charges
taken in connection with the acquisitions of PeopleSoft
Manufacturing, Inc in 1996 and Intrepid Systems, Inc. in 1998.
As a result, PeopleSoft will not be required to, and will not
restate any financial statements for the 1996, 1997 and 1998
reporting periods related to these acquisitions.
"PeopleSoft received good news this week. The SEC's review is
complete, and PeopleSoft will not have to restate any financial
results," said Al Castino, senior vice president and chief
financial officer for PeopleSoft. "The conclusion of this process
highlights our continued belief that allegations in recently
filed class action shareholder lawsuits relating to our
accounting treatment for these acquisitions are meritless.
PeopleSoft believes the balance of the lawsuit allegations are
equally groundless and will vigorously defend itself against
them."
THERAGENICS CORP.: Rabin & Peckel File Complaint in Georgia
-----------------------------------------------------------
A putative class action has been filed in the United States
District Court for the Northern District of Georgia by Rabin &
Peckel LLP on behalf of all those who purchased or otherwise
acquired Theragenics Corp. (NYSE: TGX) common stock between
January 29, 1998 and January 11, 1999, inclusive, and who were
damaged thereby.
The Complaint alleges that Theragenics and certain of its
officers and directors violated the Securities Exchange Act of
1934 (Sections 10(b) and 20(a)) by intentionally or recklessly
making a series of materially false and misleading statements
concerning Theragenics' financial results and business.
In particular, it is alleged that defendants misrepresented
Theragenics' declining sales and the failure of its sales and
marketing contract with Indigo Medical, a subsidiary of Johnson &
Johnson. As a result of these material misstatements, the price
of Theragenics common stock was artificially inflated throughout
the Class Period causing plaintiff and the other members of the
Class to suffer damages. Moreover, the Complaint further alleges
that while defendants were issuing false and misleading
statements concerning the Company, certain defendants sold
significant amounts of their own stock of the Company for
proceeds of over $2,70,000 [sic.].
TOBACCO LITIGATION: Avalanche of Paper Buries Florida Trial
-----------------------------------------------------------
Tracy Fields, writing for the Associated Press, relates her
observations from the on-going suit against tobacco companies:
First, there were the witnesses, dramatic cross-examinations
and depositions. Now, an avalanche of paperwork has stalled the
nation's first class-action lawsuit by smokers to reach trial.
Stanley Rosenblatt, along with his wife and law partner,
Susan, want thousands of documents admitted into evidence to show
what they say is a pattern of deception by cigarette makers.
The Rosenblatts represent an estimated half-million Florida
residents who blame smoking for their illnesses and want at least
$200 billion in damages.
Lawyers for tobacco companies and industry groups who say
smokers knew the habit was risky when they started and could quit
if they tried don't want to start their presentation until they
know exactly what evidence the plaintiffs will make available to
jurors.
But the process of examining and arguing about each memo,
letter, report or speech, some dating back to the 1940s, seems to
be taking a toll.
"I look at these documents and say why so many?" Circuit Judge
Robert Kaye said Wednesday, the fifth day devoted to reviewing
documents. "Nobody's going to read all this stuff. I don't even
think an appellate court would read it.
"You say, well, the evidence is overwhelming," he said to the
Rosenblatts. "There's three tons of paper here. That's
overwhelming."
The jury has not been in the courtroom for more than a week.
Rosenblatt told the judge that jurors in other tobacco cases
consistently said the documents were crucial to their decisions
in favor of plaintiffs.
In addition to Philip Morris and R.J. Reynolds Tobacco Co.,
the Florida defendants are Brown & Williamson Tobacco Corp.,
Lorillard Tobacco Co., Liggett Group Inc., and Miami's Dosal
Tobacco Corp., as well as the Council for Tobacco Research and
the Tobacco Institute.
Years of tobacco litigation have revealed millions of pages of
industry documents being made public. Many came from a Minnesota
case, which went to closing arguments before the industry settled
for $6.6 billion last May.
"There are literally millions of documents in the Minnesota
case," said Dick Daynard, a Northeastern University law professor
and anti-tobacco activist.
"They cover what the industry knew and when it knew it," he
said.
Last week, Mrs. Rosenblatt introduced a memo in which a
tobacco company attorney reported asking a scientist whose rats
had developed emphysema during a tobacco experiment to interpret
his data differently.
"They wanted to do that?" Kaye asked.
"They did it," replied Mrs. Rosenblatt. "And they did not
succeed."
"It's in," said the judge.
TOBACCO LITIGATION: RJR Chairman Says Sales Growth Top Priority
---------------------------------------------------------------
Skip Wollenberg, writing for the Associated Press reports that
that Steven Goldstone, the chairman and chief executive of the
No. 2 U.S. tobacco company, RJR Nabisco Holdings Corp., says
finding a way to make its international tobacco business bigger
and more competitive is the company's top priority for the first
half of this year. But Goldstone declined in a private meeting
with analysts on Wednesday to say whether a joint venture,
selling the business or some other transaction was the most
likely course.
Jason Wright, a spokesman for the New York-based conglomerate
that makes Winston and Camel cigarettes, added that Goldstone
also indicated no spinoff was imminent of RJR's 80.6% stake in
Nabisco Holdings Corp., maker of Oreo cookies and Planters nuts.
Goldstone's appearance before a securities analysts' group in
Naples, Fla., came, the AP reported, as financier Carl Icahn is
again pressing RJR to proceed with spinning off the remaining
Nabisco stake to RJR shareholders. Icahn disclosed in a filing
this week with the Securities and Exchange Commission that he
boosted his stake in RJR to 7.7 percent from 5.6 percent late
last year, buying 3.6 million shares between Jan. 26 and Feb. 12.
He is considering filing a slate of nominees for the board and
has until March 12 to do so. Icahn failed three years ago in a
similar proxy fight, the AP recalls.
Wright said Goldstone told the analysts he was not managing the
company based on the possibility of a proxy fight for control
from Icahn or anyone else. Goldstone has previously indicated
that RJR's international tobacco business isn't big enough to
compete on its own and is looking for a transaction that would
"enhance the scale" of the operation.
Wright said Goldstone told the analysts he has been talking with
a number of companies and interested parties about the
international tobacco business and that the discussions have
given him "a sense of comfort" that something can be done within
six months. Goldstone also told the analysts that last fall's
agreement, under which the major tobacco makers agreed to pay
$206 billion over 25 years to settle 46 states' claims for the
costs of treating sick smokers, gave him more flexibility to
pursue ways to enhance the value of RJR. Wright said Goldstone
indicated he didn't think a spinoff of the food business stake
was imminent. The company has said the legal environment isn't
right for a spinoff. A spinoff could draw suits by people who
feel it would improperly diminish the remaining company's ability
to pay health claims involving smoking.
TOBACCO LITIGATION: Liggett Settles Ohio Labor Union Litigation
---------------------------------------------------------------
Liggett Group Inc., a subsidiary of Brooke Group Ltd. (NYSE:
BGL), disclosed that it has become the first company to settle a
smoking-related lawsuit brought against the tobacco industry by
labor union health and welfare insurance trust funds.
Liggett and the Union-plaintiffs have agreed to settle the class
action entitled Iron Workers Local Union No. 17 Insurance Fund,
et al. v. Philip Morris Inc., et al. This case has been brought
on behalf of all health & welfare union funds in Ohio in order
to recover monies allegedly expended to treat members' smoking
related illnesses. The trial in the Iron Workers case is
scheduled to begin on February 22 in the United States District
Court in Akron, Ohio.
The Iron Workers agreement was reached in mid-January and was
preliminarily approved by District Judge James S. Gwin on
February 8, 1999. Under the terms of the Iron Workers agreement,
Liggett will release internal industry documents and make
available its employees and other witnesses to testify at
the upcoming trial. The Iron Workers settlement comes as
Liggett continues to notify smokers and other allegedly injured
by cigarettes of a national class action settlement agreement.
That settlement, in Fletcher, et al. v. Brooke Group Ltd., et
al., has gained preliminary approval from the Circuit Court of
Mobile County, Alabama. The Fletcher settlement provides for,
among other things, cooperation of the same type that Liggett is
providing in the Iron Workers case.
Brooke Group CEO Bennett S. LeBow, who is expected to testify in
the Iron Workers case, says the Iron Workers settlement continues
the company's pledge to resolve smoking-related claims. "Liggett
will continue to help smokers and others in their fight against
the tobacco industry," LeBow said. "Upon final approval of the
Fletcher settlement, Liggett has agreed to contribute a portion
of its profits for the next 25 years into a settlement fund, to
provide internal documents and cooperation in lawsuits against
the tobacco industry, and to comply with significant youth
advertising marketing restrictions."
The Fletcher settlement agreement and the court-approved notice
can be accessed at http://www.liggett.net/html/1799fletcher.html
via the Internet. Comments from Brooke Group CEO Bennett S.
LeBow and Jim Pearson, the attorney for the plaintiffs are
available at http://www.newstream.com/r99-40.shtmlin streaming
audio format.
VIBRATOR BAN: Women Sue State of Alabama Over Vibrator Ban
----------------------------------------------------------
In Huntsville, Alabama, Reuters reports that a lawyer asked a
federal judge on Wednesday to strike down an Alabama law banning
the sale of vibrators, saying the statute was a government
invasion into the bedrooms of people pursuing "perfectly normal"
activities.
"We just think this demonstrates a bias toward conduct that is
perfectly normal," lawyer Mark Lopez, of the American Civil
Liberties Union, told U.S. District Judge Lynwood Smith.
Smith heard arguments in a lawsuit filed by a group of women who
oppose a law enacted last year that bans the sale of vibrators
and other sex toys. He took the case under advisement but did
not indicate when he would rule on the matter, Reuters said.
The suit names several women as plaintiffs, including B.J.
Bailey, who sells sexual aids and novelties at parties, and
Sherri Williams, who owns romance boutiques in Huntsville and
Decatur, Alabama.
"It's a $10,000 fine and a year of hard labor if you get caught
selling vibrators," Williams told Reuters. "This is not a
stereotypical sex shop," Williams said of her business,
Loving Enterprises Inc. "We do candles and chocolates and
lingerie, all the ingredients for a romantic evening. It just so
happens that sex toys are one of those ingredients."
Last year, the Alabama Legislature passed an anti-obscenity
statute that outlawed strip clubs and barred the sale of items to
enhance sex, including vibrators and certain kinds of condoms.
"They set out to eliminate strip clubs, but along the way they
snuck in sex toys," Williams said. "Not only did they take away
your entertainment, but when they were done they also took away
your right to entertain yourself."
Courtney Tarver, representing the state, pointed out that the law
banned only the sale -- not the use -- of vibrators. "We see the
legislature acting within its powers," he said.
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