/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/990412.MBX C L A S S A C T I O N R E P O R T E R Monday, April 12, 1999, Vol. 1, No. 47 Headlines 1-800 CONTACTS: Company Files Answer to First Amended Complaint AHT CORP.: Consolidated Shareholder Suit Proceeds in New York AQUA ALLIANCE: Shareholders Challenge Stock Buy-Back Plan CIENA CORP.: Kimberlin Shareholder Litigation Dismissed CIENA CORP.: Shareholder Cases Consolidated in Maryland COMPAQ COMPUTER: Morris and Morris File Complaint in Texas DEAN WITTER: Moves to Dismiss Amended Commodity Pool Complaint DIGITAL LIGHTWAVE: Fighting, Settling & Being Investigated EMERGING MEXICO: Court Approves Settlement of Lawsuits GALAXY ENTERPRISES: Escapes California Court's Jurisdiction J.H. HEAFNER: Continues to Deny Liability for Employee Overtime LATEX GLOVES: Safeskin Battling 213 Suits at Year-End LINCOLN INTERNATIONAL: Feinberg & Shelton Files Suit in Kentucky MONTGOMERY WARD: Bankruptcy Court will Resolve Commission Suits MONTGOMERY WARD: Off the Hook for Reaffirmation Impropriety NUMBER NINE: Minimal Progress Reported in 1996 Shareholder Suits ORTHOLOGIC CORP.: Company Dismissed From Arizona Lawsuit PARTY CITY: Milberg Weiss Files Complaint in New Jersey PATHOGENESIS CORP.: Berger & Montague File Suit in Washington PATHOGENESIS CORP.: Spector & Roseman File Suit in Washington QUAKER FABRIC: Denies Allegations & Continues Defense ROYAL CARIBBEAN: Cruise Line Settles Port Charges Litigation SAFESKIN CORP.: Indicates Intent to Contest 15 Shareholder Suits SLOAN'S SUPERMARKETS: RMED Continues 1994 Shareholder Litigation STAGE STORES: Strongly Denies Alleged Securities Violations USA CLASSIC: Orbit Pays $1,000,000 to Settle Shareholder Claims ********* 1-800 CONTACTS: Company Files Answer to First Amended Complaint --------------------------------------------------------------- On July 14, 1998, Craig S. Steinberg, O.D., a professional corporation d.b.a. City Eyes Optometry Center, filed a purported class action on behalf of all optometrists licensed to practice in California against 1-800 CONTACTS, INC., and its directors in Los Angeles County Superior Court. The complaint alleges three separate causes of action for unfair competition: (i) selling contact lenses to California residents without being registered, (ii) selling contact lenses to California residents without verifying the prescription, and (iii) failing to disclose in its advertising that it sells "sample" lenses not intended for sale to the public. The complaint requests various forms of relief, including damages of an unspecified amount, attorney's fees and a permanent injunction to prevent the Company from selling contact lenses to California residents without being registered and without verifying the prescription as well as from selling sample contact lenses to California residents. In addition, the plaintiff has filed a motion for preliminary injunction seeking the injunctive relief requested in the complaint. On August 11, 1998, the Company removed the action to the United States District Court for the Central District of California based on diversity jurisdiction. In response to motions by the Company, plaintiff and another California optometrist, Ellis Miles filed a First Amended Complaint against the Company and its directors on or about September 3, 1998 purporting to sue on behalf of the public under California's unfair competition statute rather than as a class action on behalf of optometrists. Although the substantive claims for unfair competition remain the same, the First Amended Complaint seeks restitutionary relief rather than damages. Plaintiffs also stipulated to dismiss the Company's directors as defendants rather than oppose the Company's motion to dismiss them, leaving the Company as the only remaining defendant. On October 2, 1998, plaintiffs re-filed their motion for preliminary injunction in federal court. The Company likewise filed a motion to strike plaintiffs' claims for monetary relief. Plaintiffs withdrew their motion for preliminary injunction on October 19, 1998, after the Company filed its opposition to the motion indicating, inter alia, that the Company had been registered as a Nonresident Contact Lens Seller in California. The Court denied the Company's motion to strike plaintiffs' claims for monetary relief on February 26, 1999. The Company filed its Answer to the First Amended Complaint on March 11, 1999. AHT CORP.: Consolidated Shareholder Suit Proceeds in New York ------------------------------------------------------------- >From July 1 through August 17, 1998, eleven putative class actions were filed in the United States District Court for the Southern District of New York, all of which have been consolidated under the caption In re Advanced Health Corporation [n/k/a AHT Corp.] Securities Litigation. The consolidated complaint, filed in February 1999, seeks, among other remedies, certification as a class action and unspecified damages resulting from defendants' alleged violations of federal securities laws. The consolidated complaint alleges that the Company and its current or former officers or directors, Jonathan Edelson, M.D., Steven Hochberg, Alan B. Masarek, Robert Alger and Michael W. Rogers are liable for certain misrepresentations and omissions regarding, among other matters, the Company's operations, performance, and financial condition. The litigation is still in the preliminary stages, and the Company believes that the plaintiffs' claims are without merit and intends to defend against the action vigorously. AQUA ALLIANCE: Shareholders Challenge Stock Buy-Back Plan --------------------------------------------------------- Aqua Alliance Inc. announced that on April 2, 1999, three purported class action complaints were filed in the Delaware Court of Chancery against Vivendi, a wholly-owned United States subsidiary of Vivendi, AAI and each of the members of AAI's Board of Directors. On April 1, 1999, AAI announced that Vivendi, its largest stockholder, had submitted to members of a Special Committee of AAI's Board of Directors a proposal to take AAI private for $2.00 per share in cash for each outstanding share of Class A Common Stock. The complaints allege, among other things, that the consideration to be paid for the shares of Class A Common Stock is grossly inadequate and that the terms of the proposed transaction are unfair to AAI's public stockholders. The complaints seek preliminary and permanent injunctive relief, rescission in the event that the transaction is consummated and compensatory damages. The Special Committee is in the process of reviewing the going private proposal from Vivendi. AAI believes that the claims are meritless and intends to defend them vigorously. AAI provides a comprehensive range of services and technologies for the engineering, design and construction of water and wastewater facilities; the remediation of hazardous waste; and the operation, maintenance and management of water and wastewater treatment systems. These services are provided to a full range of government and industrial clients. AAI is an affiliate of Vivendi, the world's largest water company. CIENA CORP.: Kimberlin Shareholder Litigation Dismissed ------------------------------------------------------- On September 9, 1998 the U.S. District Court for the Southern District of New York granted summary judgment with respect to federal securities law claims brought against the Company and certain of its individual directors by investor Kevin Kimberlin and related parties, finding "no violations" of federal securities laws in the Company's or directors' conduct. The Court also dismissed all related state law claims without prejudice, declining to exercise jurisdiction over these claims. The remaining state law claims, as well as the Company's counterclaim against the Kimberlin-related parties, were fully and finally resolved in October 1998 by agreement of the parties. CIENA CORP.: Shareholder Cases Consolidated in Maryland ------------------------------------------------------- A class action complaint was filed on August 26, 1998 in U.S. District Court for the District of Maryland entitled Witkin et.al v. CIENA Corporation et. al (Case No. Y-98-2946). Several other complaints, substantially similar in content, have been filed. These cases were consolidated by court order on November 30, 1998. The complaint alleges that CIENA and certain officers and directors violated certain provisions of the federal securities laws, including Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934, by making false statements, failing to disclose material information and taking other actions intending to artificially inflate and maintain the market price of CIENA's common stock during the Class Period of May 21, 1998 to September 14, 1998, inclusive. The plaintiffs seek designation of the suit as a class action on behalf of all persons who purchased shares of CIENA's common stock during the Class Period and the awarding of compensatory damages in an amount to be determined at trial and attorneys' fees. The proceedings are at an early stage. No discovery has been taken, and no prediction can be made as to its outcome. The Company believes the suit is without merit and intends to defend itself vigorously. COMPAQ COMPUTER: Morris and Morris File Complaint in Texas ---------------------------------------------------------- Morris and Morris filed a class action lawsuit in the United States District Court for the Southern District of Texas on April 5, 1999, on behalf of all persons who purchased the common stock of Compaq Computer Corp. (NYSE: CPQ) between January 27, 1999, and February 25, 1999. The complaint charges Compaq and certain officers with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule 10b-5. The complaint alleges that defendants issued a series of false and misleading statements and failed to disclose material facts regarding a slow down in demand for and sales of Compaq's products in the first two months of the first quarter of 1999. As a result, the price of Compaq common stock was artificially inflated. Additionally, prior to the disclosure of these adverse facts, Compaq insiders sold hundreds of thousands of shares of Compaq common stock, earning millions of dollars. For more information, contact Patrick F. Morris or Jacqueline L. Green at 800-296-0410, or email: Morrisandmorris@compuserve.com. DEAN WITTER: Moves to Dismiss Amended Commodity Pool Complaint -------------------------------------------------------------- On September 6, 10, and 20, 1996, and on March 13, 1997, similar purported class actions were filed in the Superior Court of the State of California, County of Los Angeles, on behalf of all purchasers of interests in limited partnership commodity pools sold by Dean Witter Reynolds Inc. Named defendants include DWRI, Demeter Management Corporation, Dean Witter Futures & Currency Management Inc., Morgan Stanley Dean Witter & Co., certain other limited partnership commodity pools of which Demeter is the general partner, and certain trading advisors to those pools. On June 16, 1997, the plaintiffs in the above actions filed a consolidated amended complaint, alleging, among other things, that the defendants committed fraud, deceit, negligent misrepresentation, various violations of the California Corporations Code, intentional and negligent breach of fiduciary duty, fraudulent and unfair business practices, unjust enrichment, and conversion in the sale and operation of the various limited partnership commodity pools. Similar purported class actions were also filed on September 18 and 20, 1996, in the Supreme Court of the State of New York, New York County, and on November 14, 1996 in the Superior Court of the State of Delaware, New Castle County, against the Dean Witter Parties and certain trading advisors on behalf of all purchasers of interests in various limited partnership commodity pools sold by DWR. A consolidated and amended complaint in the action pending in the Supreme Court of the State of New York was filed on August 13, 1997, alleging that the defendants committed fraud, breach of fiduciary duty, and negligent misrepresentation in the sale and operation of the various limited partnership commodity pools. On December 16, 1997, upon motion of the plaintiffs, the action pending in the Superior Court of the State of Delaware was voluntarily dismissed without prejudice. The New York Supreme Court dismissed the New York action in November 1998, but granted plaintiffs leave to file an amended complaint, which they did in early December 1998. The defendants have filed a motion to dismiss the amended complaint with prejudice on February 1, 1999. The complaints seek unspecified amounts of compensatory and punitive damages and other relief. It is possible that additional similar actions may be filed and that, in the course of these actions, other parties could be added as defendants. The Dean Witter Parties believe that they have strong defenses to, and they will vigorously contest, the actions. DIGITAL LIGHTWAVE: Fighting, Settling & Being Investigated ---------------------------------------------------------- In its latest annual report, DIGITAL LIGHTWAVE, INC., relays the following statement concerning pending litigation to investors: As of April 9, 1998, 23 class action complaints (which were subsequently consolidated into a single action) for violations of the federal securities laws during certain periods in 1997 and 1998 had been filed in the United States District Court for the Middle District of Florida, on behalf of purchasers of our Common Stock. The complaints named as defendants Digital Lightwave, Bryan J. Zwan, our Chairman, Steven H. Grant, our Executive Vice President, Finance, Chief Financial Officer and Secretary, and other former corporate officers. The complaints allege that Digital Lightwave and certain officers during the relevant time period violated Sections 10(b) and 20(a) of the Securities Exchange Act by, among other things, issuing to the investing public false and misleading financial statements and press releases concerning our revenues, income and earnings, which artificially inflated the price of our Common Stock. On July 23, 1998, we entered into a memorandum of understanding for the settlement of these class action complaints. In late October 1998, a Stipulation of Settlement was filed with the court and on December 21, 1998, the court preliminarily approved the settlement. On March 12, 1999, the court indicated that it would grant final approval of the settlement. The settlement is subject to appeal. The settlement consists of $4.25 million in cash, to be paid to plaintiffs primarily by a claim on the Company's directors and officers liability insurance policy, and the issuance of up to 1.8 million shares of Common Stock. We recorded a charge of $8.5 million during 1998 as a result of the settlement. In addition, the Company is aware of a related informal investigation by the Securities and Exchange Commission, which was commenced in March 1998. The Company believes that the investigation relates to the circumstances underlying the restatement of its financial results. The investigation is ongoing. The Company is unable to predict the outcome of the investigation. There can be no assurance that such investigation will not have a material adverse effect on the business, financial condition or results of operations of the Company. EMERGING MEXICO: Court Approves Settlement of Lawsuits ------------------------------------------------------ The Emerging Mexico Fund, Inc. (NYSE: MEF) announced that a federal judge of the United States District Court for the Southern District of New York approved the settlement of two class action lawsuits pending against the Fund and its Board of Directors. The Fund's stockholders previously had approved the proposed liquidation and dissolution of the Fund. The Fund's shares of common stock will cease to trade on the New York Stock Exchange. It is anticipated that a liquidating distribution to stockholders representing substantially all of the assets of the Fund will occur within 30 to 90 days. GALAXY ENTERPRISES: Escapes California Court's Jurisdiction ----------------------------------------------------------- In December, 1998 Galaxy Enterprises, Inc., was served as a defendant in a purported class action filed in the Superior Court of Orange County, State of California, in a case entitled Pamela Chang vs. Busting Out, Inc., De'Nae Walker, New Body, Inc., Steven Olschwanger, Natural Curves LLC, New Woman, Ltd, Galaxy Enterprises, Inc., Galaxy Mall, Inc., The Barnstead Trust, East Bay Products, LLC, Rick Raynford, et al., in which the plaintiff claims to have been damaged in that she was offered the opportunity to purchase a certain product from various web sites on the Internet operated by defendants. Plaintiff alleges the product was offered for sale through unfair, deceptive, untrue or misleading advertising intended to result in the sale of the product, in violation of applicable California law. Plaintiff seeks to enjoin the use of such alleged deceptive practices, an accounting of all money received and all profits acquired as a result of such practices, an order of restitution to all persons of funds acquired by such alleged practices, a distribution of any moneys recovered, unspecified actual damages, unspecified punitive damages, attorney's fees and costs. The Company has denied all allegations and has asserted numerous affirmative defenses. The Company also filed a motion to quash service of the summons for lack of jurisdiction. On March 17, 1999 the Superior Court granted the motion to quash. Consequently, the Superior Court currently has no jurisdiction over the Company. J.H. HEAFNER: Continues to Deny Liability for Employee Overtime --------------------------------------------------------------- J.H. Heafner Co., Inc.'s Winston subsidiary was named as a defendant in a class action lawsuit filed on June 10, 1998 in Los Angeles County Superior Court by plaintiffs Mike Riggs and Edmundo Feria on behalf of themselves and all other Winston store managers similarly situated. The lawsuit alleges that Winston violated certain California wage regulations and unfair business practices statutes by requiring Messrs. Riggs and Feria and the putative class of Winston store managers to work in excess of 40 hours per work week without receiving properly calculated overtime compensation. The plaintiffs seek overtime compensation due and owing, prejudgment interest, certain penalties and attorneys' fees and costs. Heafner believes that Winston's operations, including its wage practices, fully comply with applicable California and federal legal requirements and that the plaintiffs' claims are without merit. Heafner is vigorously defending the matter. LATEX GLOVES: Safeskin Battling 213 Suits at Year-End ----------------------------------------------------- As of December 31, 1998, approximately 213 product liability lawsuits seeking monetary damages, in most cases of an unspecified amount, were pending in federal and state courts against SAFESKIN CORP. and other manufacturers of latex gloves. These lawsuits allege injuries ranging from dermatitis to severe allergic reactions caused by the residual chemicals or latex proteins in gloves worn by medical workers while performing their duties. On February 26, 1997, the Judicial Panel on Multi-District Litigation entered an order transferring all latex allergy lawsuits brought on behalf of healthcare workers against Safeskin and other latex glove manufacturers in the Federal courts to the United States District Court for the Eastern District of Pennsylvania, consolidating those cases for discovery management and other pre-trial proceedings. Safeskin indicates in its latest annual report that it has referred the defense of these lawsuits to its insurance carriers. LINCOLN INTERNATIONAL: Feinberg & Shelton Files Suit in Kentucky ---------------------------------------------------------------- Feinberg & Shelton, P.S.C. filed a class action complaint in the United States District Court for the Western District of Kentucky on behalf of all who were shareholders of Lincoln International Corporation until May of 1997 and who sold their Lincoln stock in response to LTG's tender offer, or shareholders that were forced out of their Lincoln International stock due to the reverse stock split effected by Lincoln in December of 1997. The complaint alleges that Lincoln International Corporation and its directors and officers violated federal security laws (10(b), 13(e) and 20(a) of the Securities Exchange Act of 1934) by misrepresenting or failing to disclose material information about the status of Lincoln International Corporation's assets. As a result of defendants' false and misleading statements and omissions, the defendants were able to purchase stock in Lincoln International for less than its fair value. For more information contact John R. Shelton at 502-589-6060 or email fands@ntr.net. MONTGOMERY WARD: Bankruptcy Court will Resolve Commission Suits --------------------------------------------------------------- In 1997, a suit entitled "Trent v. Montgomery Ward," was initiated by Karen Trent and four other plaintiffs alleging, on behalf of themselves and a class of other commissioned sales employees, fraud and breach of contract in the calculation of their sales commissions. This class action currently is being heard in the Federal District Court for the District of Wyoming. The suit claims that from 1992 to the present, Wards devised a commission sales plan that was designed to underpay commissions promised to employees and that Wards in fact paid employees less than the commissions they were supposed to have earned. Plaintiffs seek certification of the class and actual and punitive damages. Wards has denied the allegations and intends to aggressively defend this matter. The case currently is in the early stage of class discovery, and damage exposure cannot be determined at this time. A limited lifting of the bankruptcy automatic stay has been granted so that the class certification issue can be resolved. The court has determined that it does not have jurisdiction of the case and has remanded the case to the Wyoming State court. The plaintiffs have filed a motion for reconsideration. The plaintiffs have now filed a class claim in the Bankruptcy Court in Delaware and it is expected that their claim will be resolved in the Bankruptcy Court. MONTGOMERY WARD: Off the Hook for Reaffirmation Impropriety ----------------------------------------------------------- On April 29, 1997, Montgomery Ward Holding Corp., Wards and Lechmere were served with a complaint, purporting to represent a nationwide class, filed by certain bankrupt credit card holders of Wards and Lechmere credit cards. The complaint alleged that MW Holding, Wards and Lechmere, benefited from the actions taken by Hurley, Lechmere's previous credit card provider, and MWCC and Monogram (both of which are affiliates of GE Capital), Wards' and Lechmere's current credit card providers, in that the recoveries received from the bankrupt credit card holders, allegedly were in violation of the bankruptcy laws dealing with reaffirmation, and ultimately reduced Wards' and Lechmere's loss sharing obligations. Hurley, MWCC and Monogram took all actions related to bankruptcy reaffirmation. A final settlement has been executed by Monogram and MWCC with the plaintiffs, which releases MW Holding, Wards and Lechmere of any liability. The plaintiffs have withdrawn their proofs of claim filed in Montgomery Ward's bankruptcy proceeding. NUMBER NINE: Minimal Progress Reported in 1996 Shareholder Suits ---------------------------------------------------------------- Number Nine Visual Technology Corp. reminds investors in its latest annual report that it was served notice of three lawsuits seeking class action status on or about June 11, 1996, July 16, 1996 and October 16, 1996, respectively, filed in the United States District Court for the District of Massachusetts naming as defendants the Company, the members of the Board of Directors during the period in question, the former Chief Financial Officer and Treasurer, and the Selling Shareholders and Managing Underwriters of Number Nine's 1995 initial public offering. The alleged class of plaintiffs consists of all persons who purchased shares of Common Stock on the open market between and including May 26, 1995 through January 31, 1996. The plaintiffs, who seek unspecified damages, interest, costs and fees, allege, among other things, that the Registration Statement and Prospectus in the initial public offering and other public statements and reports filed with the Securities and Exchange Commission during the class period in question contained false and materially misleading statements. The defendants deny liability, believe they have meritorious defenses and intend to vigorously defend against these and any similar lawsuits that may be filed, although the ultimate outcome of these matters cannot yet be determined. The only progress reported by Number Nine is that, by order of the District Court, these actions have been consolidated into a single action. ORTHOLOGIC CORP.: Company Dismissed From Arizona Lawsuit -------------------------------------------------------- OrthoLogic Corp. (Nasdaq:OLGC) announced that the Federal District Court has entered an order dismissing all claims against the company in a consolidated class-action lawsuit that has been pending in the District of Arizona since 1996. However, certain claims against current and former officers and directors are still pending. "The company is glad to have this part of the case behind it and looks forward to being vindicated completely in the future," said Thomas R. Trotter, OrthoLogic's president and chief executive officer. PARTY CITY: Milberg Weiss Files Complaint in New Jersey ------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach have filed a class action lawsuit in the United States District Court for the District of New Jersey, on behalf of all purchasers of the common stock of Party City Corporation (Nasdaq: PCTYE) between August 24, 1998, and March 18, 1999. The complaint alleges that defendants issued a series of false statements and failed to disclose material facts. In particular, the complaint charges that defendants misled the investing public concerning the Company's inventory control systems, financial condition and ability to comply with certain loan covenants. For more information, contact Steven G. Schulman, Samuel H. Rudman or Michael A. Swick, by telephone 1-800-320-5081 or via email: endfraud@mwbhlny.com. PATHOGENESIS CORP.: Berger & Montague File Suit in Washington ------------------------------------------------------------- A class action lawsuit was filed in the United States District Court for the Western District of Washington against PathoGenesis Corp. (Nasdaq: PGNS) and certain officers and directors of the company. The lawsuit was filed by Berger & Montague, P.C., on behalf of all purchasers of PGNS securities between January 26, 1999 and March 22, 1999. The complaint asserts that defendants violated Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by making material misrepresentations and omissions that caused the Company's stock to trade at artificially inflated levels. In summary, the complaint states that defendants made materially false and misleading statements about the market for its most important product, trobramycin solution for inhalation (TOBI). On March 22, 1999, the Company announced that its first quarter results would be far below consensus estimates. They announced sales of only $10 million, a net loss of $0.30 per share versus estimates of a $0.20 per share profit, and anticipated yearly sales only in the range of $62-63 million, dramatically less than the $90-100 million expected before the announcement. As a result of this announcement, PathoGenesis stock plummeted from $34 a share to close at $12 per share on March 23, 1999, a drop of approximately 66 percent. To learn more, contact Sherrie R. Savett, Esq., Merrill G. Davidoff, Esq., or Jill E. Sterbakov, Esq., at 888-891-2289, or via email at investorprotect@bm.net. PATHOGENESIS CORP.: Spector & Roseman File Suit in Washington ------------------------------------------------------------- Spector & Roseman, P.C. filed a class action lawsuit in the United States District Court for the Western District of Washington on behalf of purchasers of the common stock of PathoGenesis Corp. (NASDAQ: PGNS) from January 26, 1999 through March 22, 1999. The Complaint charges PathoGenesis and certain officers 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 market for its principal product tobramycin solution for inhalation (TOBI). On March 22, 1999, the Company announced that sales for the first quarter would only be about $10 million, and that it expected to report a net loss of $0.30 per share versus consensus estimates of a $0.20 profit. In addition, the Company said sales for the year would likely be in the $62-$63 million range as opposed to $90-$100 million. As a result of this announcement, the stock price fell on March 23rd by over 22 points, from approximately $34 per share to $12 per share on volume of over 22 million shares. Additional details may be obtained from plaintiff's counsel Robert M. Roseman at 888-844-5862 or via email at classaction@spectorandroseman.com. QUAKER FABRIC: Denies Allegations & Continues Defense ----------------------------------------------------- Quaker Fabric Corp. and certain of its officers and directors have been named as defendants in two putative class actions filed during September 1998 relating to the Company's public offering of 3.2 million shares of common stock that was completed on August 4, 1998. The actions are: * Bruno de Luca, On Behalf of Himself and All others Similarly Situated v. Quaker Fabric Corp. et al. filed in the United States District Court for the Eastern District of New York, and * Heng Yang, On Behalf of Himself and All Others Similarly Situated v. Quaker Fabric Corporation et al. filed in the United States District Court for the District of Massachusetts. The plaintiffs seek unspecified damages and rescission as a result of alleged material misrepresentations and omissions in the registration statement and prospectus for the Offering. The Company believes the suits to be without merit and plans to defend them vigorously. The cases are in their initial stages and the Company is not able to predict the outcome of the litigation at this time. ROYAL CARIBBEAN: Cruise Line Settles Port Charges Litigation ------------------------------------------------------------ Royal Caribbean International announced that there is a proposed settlement of a class action lawsuit brought against the cruise line on behalf of certain passengers. The lawsuit alleged that Royal Caribbean Cruises Ltd. misrepresented the true nature and purpose of the "port charges" it collected from passengers. Although Royal Caribbean denies this allegation, there has been a settlement agreement entered into by the parties, which has been preliminarily approved by the Court as fair and reasonable. This action was commenced on April 19, 1996 against Royal Caribbean for allegedly misrepresenting the nature and purpose of the "port charges" it advertised and collected from its cruise passengers. The complaint alleges Royal Caribbean's advertising and other promotional materials implied "port charges" represented monies paid by Royal Caribbean to governmental authorities, that Royal Caribbean paid less to those governmental authorities than it collected from passengers and that Royal Caribbean's passengers are due the difference between the amount collected from them and the amount paid to governmental authorities. Plaintiffs' claims are, at present, only allegations since no trial on the merits has occurred in the Action. Royal Caribbean denies all of plaintiffs' allegations of wrongdoing and liability and maintains that all Settlement Class members are not entitled to damages or any other relief. Royal Caribbean denies that it ever represented that "port charges" reflect only reimbursement for payments made to governmental authorities. In Royal Caribbean's view, passengers were not misled or harmed. On February 19, 1999, the Court conditionally certified a nationwide class for purposes of settlement only, and granted preliminary approval of the Settlement Agreement. The class is composed of all residents of the U.S. who (1) traveled on a Royal Caribbean cruise, (2) paid "port charges" to Royal Caribbean, and (3) departed on their cruise during the period between April 19, 1992 to April 1, 1997. The settlement excludes from participation: (a) Royal Caribbean's employees and their immediate family members, any reduced fare passengers who traveled on a discounted fare that was not offered to the general public (such as travel agents, journalists, etc.); and (b) all persons who, in accordance with the terms of the Settlement Agreement, execute a timely request for exclusion. On February 19, 1999, the Court granted preliminary approval of this Settlement subject to final approval after a Settlement Hearing to be held on June 3, 1999. Members of the settlement class will receive a Voucher for every qualifying Royal Caribbean cruise taken between April 19, 1992 and April 1, 1997 depending on the date and the length of the cruise as follows: 4/19/92-12/31/94 Cruise Length Voucher Amount 3 or 4 Night Cruises $8.00 5 to 7 Night Cruises $12.50 Over 7 Night Cruises $17.00 1/1/95-4/1/97 Cruise Length Voucher Amount 3 or 4 Night Cruises $12.00 5 to 7 Night Cruises $20.00 Over 7 Night Cruises $30.00 Vouchers can only be used to reduce the cruise fare on Royal Caribbean cruises and may not be used for on-board expenses. Vouchers may be used (1) by participants in the settlement only for bookings made within 120 days of departure or (2) by someone who obtains a Voucher which was initially distributed to a participant in the settlement only for bookings made within 45 days of departure. In exchange for the ability to participate in the Settlement, participants in the settlement will be deemed to have released any and all claims against Royal Caribbean arising out of, or relating to its "port charges." Royal Caribbean has also agreed as part of the Settlement to take all reasonable steps to comply with the Assurance of Voluntary Compliance entered into by Royal Caribbean and the Florida Attorney General in all of its United States advertising until the earlier of (a) two years from the date of Final Approval of the Settlement; (b) such time as a significant competitor of Royal Caribbean, including, but not limited to, Princess Cruises, Norwegian Cruise Line, Carnival Cruises, and Holland America begin advertising in the U.S. in a manner that is inconsistent with the Assurance of Voluntary Compliance entered into by Royal Caribbean and the Florida Attorney General; or (c) the termination of the Settlement Agreement by its own terms. Royal Caribbean will pay the necessary and reasonable costs of notice and administration of the Settlement. In addition, Royal Caribbean has agreed to pay fees and expenses to Plaintiffs' Counsel in the amount awarded by the Court not to exceed $1,000,000. Class members who do not want to participate in the Settlement and "opt out" of this action must personally prepare, sign and return an exclusion request to Royal Caribbean Port Charges Litigation, P.O. Box 527543, Miami, Florida 33152, postmarked no later than May 10, 1999. The exclusion request must reference this case, In re Royal Caribbean Cruise Lines Port Charges Litigation, Case No. 96-8075, and must include the following statement: "I am opting out of participation in In re Royal Caribbean Cruise Lines Port Charges Litigation, Case No. 96- 8075, and I hereby exclude myself from participation in the Settlement." Current information is available by calling 1-877-202-1520, or contact Robert S. Schachter of Zwerling, Schachter & Zwerling, LLP, or Robert C. Gilbert, of Robert C. Gilbert, P.A. SAFESKIN CORP.: Indicates Intent to Contest 15 Shareholder Suits ---------------------------------------------------------------- Since March 11, 1999, approximately fifteen lawsuits have been filed in the U.S. District Court for the Southern District of California against Safeskin and certain officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5. The Securities Actions were brought by plaintiffs in their individual capacity and on behalf of purported class of persons who purchased or otherwise acquired Safeskin publicly traded securities during various periods occurring between October 23, 1997 and March 11, 1999. They allege that plaintiffs purchased Safeskin securities at prices artificially inflated by defendants' misrepresentations and omissions concerning Safeskin's financial condition and prospects and seek an unspecified amount of damages. In addition, a shareholder derivative action has been filed against certain of Safeskin's directors, and Safeskin as a nominal defendant, in the Supreme Court of the State of California, San Diego County. The Derivative Action alleges breach of fiduciary duty, waste of corporate assets and gross negligence in connection with Safeskin's stock buy back program and seeks an unspecified amount of damages. Defendants' time to respond to the allegations made in the Securities Actions and the Derivative Action has not yet expired, however, Safeskin believes that these claims are without merit and intends to contest the claims vigorously. SLOAN'S SUPERMARKETS: RMED Continues 1994 Shareholder Litigation ---------------------------------------------------------------- RMED International, Inc., reminds investors in its latest annual report that, in August 1994, RMED commenced an action in the United States District Court of the Southern District of New York against Sloan's Supermarkets, Inc. and John A. Catsimatidis to recover damages based on the defendants' failure to disclose, in its public filings and otherwise, the existence of an investigation by the Federal Trade Commission ("FTC") regarding the concentration of supermarkets by entities owned or controlled by the defendants. RMED purchased approximately 226,000 shares of Sloan's common stock in November and December 1993 in open market transactions on the American Stock Exchange, without knowledge of the FTC investigation, and sold a portion of these shares at a loss after June 2, 1994, when the Company learned of the FTC investigation. The legal action has been certified as a "class action" with RMED as the class action representative. STAGE STORES: Strongly Denies Alleged Securities Violations ----------------------------------------------------------- Stage Stores, Inc. (NYSE: SGE) issued a strong denial of allegations of securities laws violations contained in a class action lawsuit filed on March 30, 1999 in the United States District Court for the Southern District of Texas. The complaint against Stage and certain of its officers, directors, underwriters and controlling shareholders seeks class action certification on behalf of persons who purchased StageStores, Inc. common stock during a certain period of time. The suit alleges generally that the defendants made false or misleading statements or omissions relating to Stage's acquisition of C.R. Anthony Company as well as Stage's business and prospects and seeks unspecified damages. Carl E. Tooker, Chairman, President and Chief Executive Officer, stated, "The claims contained within the suit are completely without merit and have no basis in law or fact. Stage will vigorously contest all allegations contained in the complaint and we categorically deny that any securities laws were violated by the Company or any of its officers or directors." Stage Stores, Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small towns and communities throughout the United States. The company operated 679 stores in 34 states at the end of the fourth quarter, primarily under the Stage, Bealls and Palais Royal trade names. USA CLASSIC: Orbit Pays $1,000,000 to Settle Shareholder Claims --------------------------------------------------------------- On September 23, 1993, a class action was commenced by an alleged shareholder against USA Classic, Inc., (a wholly-owned subsidiary of ORBIT INTERNATIONAL CORP.) and certain of its directors in the United States District Court for the Southern District of New York. The action was commenced on behalf of shareholders, other than the defendants, who acquired their shares from November 20, 1992, the date of the initial public offering of common stock of USA Classic, through September 22, 1993, and alleged violations of the Securities Act of 1933, as amended in connection with the Offering as well as violations of Section 10(b) of the Securities Exchange Act of 1934. Specifically, the complaint alleged that false and misleading statements were made in the registration statement (including the prospectus and the financial statements therein) filed in connection with the Offering and in certain financial statements of USA Classic filed subsequent to the Offering in violation of Sections 11 and 12 (2) of the Securities Act. The complaint further alleged "control person" liability under Section 15 of the Securities Act. The plaintiffs were seeking compensatory damages as well as fees and expenses. On February 1, 1994, a First Amended and Consolidated Complaint was filed in the Class Action. The First Amended and Consolidated Complaint added the Company as a defendant and alleged that the Company is a "controlling person" of USA Classic and an "aider and abettor" of the alleged violations of the securities laws. The Company answered the First Amended and Consolidated Complaint on March 21, 1994. The Class Action was stayed as against USA Classic as a result of USA Classic's filing of a petition for reorganization under Chapter 11 of the United States Bankruptcy Code. On October 4, 1994, a Second Amended and Consolidated Complaint was filed in the Class Action. The Second Amended and Consolidated Complaint restated the allegations against the Company and added PaineWebber Incorporated and Ladenburg Thalmann & Co. Inc., the lead underwriters in the Offering, as additional defendants. On July 2, 1998, an agreement to settle this dispute was reached among all of the parties. A written settlement agreement was executed on August 21, 1998. On January 15, 1999, the Honorable John S. Martin Jr. entered a final order and judgment certifying the class, accepting the terms of the settlement as reasonable, and dismissing the action. Pursuant to the terms of the settlement agreement, and in complete satisfaction of its obligations thereunder, the Company paid $1,000,000 to the plaintiffs. ********* 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. 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