/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/990416.MBX C L A S S A C T I O N R E P O R T E R Friday, April 16, 1999, Vol. 1, No. 51 Headlines APAC TELESERVICES: Motion to Dismiss New York Suit Pending APRIA HEALTHCARE: Cases Consolidated, Class Not Yet Certified BP AMOCO: Shareholders Claim Merger Didn't Reveal Cancer Claims CARR GOTTSTEIN: Settlement Ends AKPIRG's Opposition to Merger COMPAQ COMPUTER: Bernstein Liebhard Expands Defrauded Investors COMPUTER CONCEPTS: Stull Stull Files Complaint in New York ERNST & YOUNG: Lockridge Grindal Files Complaint in Minnesota FVC.COM: Cohen Milstein Files Complaint in California FVC.COM: Milberg Weiss Files Complaint in California FVC.COM: Schubert & Reed File Complaint in California MILBERG WEISS: Lawyers Pay $50 Million to Settle Lexecon Suit NETWORK ASSOCIATES: Greenfield Firm Files Complaint NETWORK ASSOCIATES: Yates Firm Files Complaint in California OIL ROYALTIES: Companies Pay $200 Million to Settle Charges PENNSYLVANIA LIFE: Association Owes Policyholders $16.5 Million RITE AID: Hoffman & Edelson File Complaint in Pennsylvania SECURE COMPUTING: Stull Stull Files Complaint in California STEPHAN CO.: Weiss & Yourman File Complaint in Florida TOOTHBRUSH LITIGATION: Plaintiffs Need Labels to Avoid Abrasion TRIARC COMPANIES: Securities Litigation Continues and Commences ********* APAC TELESERVICES: Motion to Dismiss New York Suit Pending ---------------------------------------------------------- Apac Teleservices Inc. reports that the Company, certain of its officers and directors and the lead underwriters of certain public offerings of the Company's securities have been named as defendants in three purported class action lawsuits. The suits were filed in federal district court for the Southern District of New York on December 11, 1997, December 19, 1997 and January 5, 1998, respectively. The lawsuits were consolidated in April 1998 into one lawsuit. The lawsuit alleges violations of the federal securities laws in connection with the Company's November 1996 Prospectus and other public statements which are alleged to have omitted certain disclosures with respect to the Company's agreement with a large parcel delivery client. The complaint as amended seeks, among other things, unspecified damages and an award of attorney's fees, costs and expenses. The Company filed a motion to dismiss the lawsuit on September 10, 1998, which is pending. The Company denies all allegations of wrongdoing and continues to believe that it has meritorious defenses. APRIA HEALTHCARE: Cases Consolidated, Class Not Yet Certified ------------------------------------------------------------- Apria Healthcare Group Inc. reported that the company and certain of its present and former officers and directors are defendants in a class action lawsuit, In Re Apria Healthcare Group Securities Litigation, filed in the U.S. District Court for the Central District of California, Southern Division (Case No. SACV98-217 GLT). This case is a consolidation of three similar class actions filed in March and April, 1998. Pursuant to a court order dated May 27, 1998, the plaintiffs in the original three class actions filed a Consolidated Amended Class Action Complaint on August 6, 1998. The amended complaint purports to establish a class of plaintiff shareholders who purchased Apria's common stock between May 22, 1995 and January 20, 1998. No class has been certified at this time. The amended complaint alleges, among other things, that the defendants made false and/or misleading public statements regarding Apria and its financial condition in violation of federal securities laws. The amended complaint seeks compensatory and punitive damages as well as other relief. Two similar class actions were filed during July 1998 in Superior Court of California for the County of Orange: Schall v. Apria Healthcare Group Inc., et al. (Case No. 797060) and Thompson v. Apria Healthcare Group Inc., et al. (Case No. 797580). These two actions were consolidated by a court order dated October 22, 1998. The parties have agreed that a new and first amended complaint will be filed. Apria anticipates that allegations similar to those asserted in the amended complaint in the federal action will be asserted in the consolidated state action, although the claims will be founded on state law, as opposed to federal law. Apria believes that it has meritorious defenses to the plaintiffs' claims, and it intends to vigorously defend itself in both the federal and state cases. In the opinion of Apria's management, the ultimate disposition of these class actions will not have a material adverse effect on the company's financial condition or results of operations. Apria also reported on other legal issues: The company has received nine subpoenas from the U.S. Department of Justice requesting documents related to the company's billing practices. Apria is also named as a defendant in at least one whistleblower suit brought under the False Claims Act. BP AMOCO: Shareholders Claim Merger Didn't Reveal Cancer Claims --------------------------------------------------------------- The British publication Mail on Sunday reported that oil industry giant BP did not tell shareholders about a potential "multibillion pound legal liability" when it merged with Amoco last August. According to the story, BP left shareholders in the dark about an outbreak of rare brain tumors at Amoco's Naperville chemical research center near Chicago. The Mail on Sunday reports that about 8,000 people who worked the site in the Seventies and Eighties have been screened and about 20 cases of cancer identified, including seven of an extremely rare form of brain cancer called glioma. The incidence is eight times higher than in the general population, and 10 legal actions have already been filed. In the story, BP says it did not disclose details in the merger documents after deciding that the financial liabilities looked insignificant against the value of the 67 billion deal. But Grant Dixon, an Illinois lawyer representing the 10 people claiming damages from BP Amoco, said that there is a direct parallel to lung cancer and asbestosis cases that have created massive liabilities for US firms. Dixon added, "It would be conservative to say that BP Amoco is looking at hundreds of millions of dollars in compensation and damages. It could go into billions. This is a very big deal." By the time of last year's approach from BP, Amoco had invested millions in investigating the situation at the Naperville research center. According to the Mail on Sunday, it sealed off a laboratory identified as a common factor in a number of cases and built models of the site to look at airflows. It also drilled boreholes to test the ground and even used dummies with nose and mouth sensors to test vapors. A report is due this month after a two-year investigation by researchers from John Hopkins University in Baltimore, Maryland, and the University of Alabama at Birmingham. The story said that the Naperville center has earned Amoco billions of dollars with developments that include the raw material for making polyester, oil additives and plastics used in car lights. The Mail on Sunday quotes Jim Lowry, head of the BP Amoco taskforce investigating the brain tumors, as saying, "We have a very unusual pattern of brain cancer here." BP agreed that it was told of the situation at Naperville during merger talks. But a spokesman said that investigations had not found an explanation for the deaths and illnesses. "We are awaiting the outcome of the Alabama and John Hopkins studies," he said in the story. The spokesman added that if the company was found liable for the illnesses it would compensate victims or their families. "Our lawyers took the view it was not likely to be significant in terms of the merger - it is a judgment call. Amoco did not make any separate financial provision for such possibility nor has the merged group. It is quite common to have lots of legal cases and not mention them." The Mail on Sunday noted that the 10 cases already filed against BP Amoco were combined to be heard by a single judge - a vital step on the way preparing a class action. BP is also threatened by possible legal action from alleged victims of Amoco refinery pollution in the towns of Independence and Sugar Creek, Missouri. The story also cited a study issued last month by the Missouri Department of Health that found 15 cases of brain cancer areas allegedly affected by the refinery - more than double the number expected. Again, class action suits are threatened. According to the Mail on Sunday, BP's merger document reveals only that BP faces cases from the Exxon Valdez oil disaster and that Amoco is in a legal battle with US tax authorities. It adds: "Nor so far as the directors are aware, are any proceedings pending or threatened which may have a significant effect on BP's financial position." Lawyer Tim Stocks of Taylor Joynson Garrett said that the omission laid BP directors, including chairman Sir John Browne, open to "possible criminal and civil liabilities." He said, "If I was handling this, my instinct would be to disclose. Even if the company was insured, I would have set out the liability." Still, the Mail on Sunday noted that a US law professor who asked not to be named said the cancer victims might have problems proving liability. "There are examples of cancers appearing in clusters without explanation. Because of the uncertainty, claims will probably be settled out of court for substantial, but not crippling damages." CARR GOTTSTEIN: Settlement Ends AKPIRG's Opposition to Merger ------------------------------------------------------------- Carr Gottstein Foods Co. reported on a settlement of litigation arising from their Merger Agreement with Safeway. On August 6, 1998, the Company announced that it had signed a Merger Agreement with Safeway Inc. and ACG Merger Sub, Inc., a wholly- owned subsidiary of Safeway, pursuant to which Safeway would acquire by merger all outstanding shares of the Company's Common Stock at a purchase price of $12.50 per share. However, in late October 1998, an Alaska consumer group, Alaska Public Interest Research Group ("AKPIRG"), and five individuals filed a purported class action lawsuit in Alaska state court seeking an injunction to prevent the Merger. In February 1999, Safeway and the Company settled with AKPIRG and the individual plaintiffs. The settlement provided that AKPIRG and the individual plaintiffs no longer oppose the Merger or the Consent Decree and dismiss the lawsuit. COMPAQ COMPUTER: Bernstein Liebhard Expands Defrauded Investors --------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP, announced that they intend to amend the securities class action involving Compaq Computer Corporation (NYSE: CPQ) filed in March 1999 to include as plaintiffs all who purchased or otherwise acquired Compaq securities from January 27, 1999 through April 9, 1999. After the close of trading on Friday April 9, 1999, Compaq announced that it would post a first quarter profit of about $0.15 per share, less than half of what analysts expected from the Company. On Monday April 12, 1999, in response to this shocking disclosure, the price of Compaq stock plummeted more than 25% to as low as $23-1/8 per share from its previous close of $30-15/16. Additional information may be obtained from Sandy A. Liebhard, Esq., or Robert J. Berg, Esq., at 800-217-1522 or 212-779-1414 or write berg@bernlieb.com or liebhard@bernlieb.com via email. COMPUTER CONCEPTS: Stull Stull Files Complaint in New York ---------------------------------------------------------- Stull, Stull & Brody filed a securities class action lawsuit in the United States District Court for the Eastern District of New York against Computer Concepts Corp. (NASDAQ: CCEE) and certain of its officers and directors on behalf of all persons who acquired securities of Computer Concepts at artificially inflated prices between January 9, 1998, and August 19, 1998. 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 Computer Concepts' financial condition and operating performance. As a result of defendants' false and misleading statements and omissions, the price of Computer Concepts' securities was artificially inflated, such that persons who purchased or otherwise acquired securities were damaged by overpaying for their securities. Learn more by calling Tzivia Brody, Esq. at 1-800-337-4983, or write to SSBNY@aol.com by email. ERNST & YOUNG: Lockridge Grindal Files Complaint in Minnesota ------------------------------------------------------------- Lockridge Grindal Nauen & Holstein P.L.L.P. filed a class action complaint in the United States District Court for the District of Minnesota on behalf of persons who purchased shares of stock of Summit Medical Systems, Inc. pursuant to the Registration Statement and Prospectus (Nasdaq: SUMT) in Summit's initial public offering in August of 1995. The Company has since changed its name to Celeris Corporation (Nasdaq: CRSC - news) and now trades under the symbol "CRSC." The Complaint names as defendant Ernst & Young LLP and charges that E&Y violated Section 11 of the Securities Act of 1933, by misleading investors through the dissemination of materially false and misleading information to the investing public. Such dissemination overstated Summit's financial information contained in the Registration Statement and Prospectus issued in connection with Summit's initial public offering in August 1995. Specifically, the Complaint alleges that E&Y, identified as an "expert" in the Registration Statement and Prospectus, stated in the Report of Independent Auditors that it had audited and certified Summit's financial statements and opined that the Company's consolidated financial position presented fairly, in all material respects, the consolidated financial position of Summit. E&Y also opined that the Company's financial statements were prepared "in conformity with generally accepted accounting principles." On March 3, 1997, Summit issued a press release disclosing that it had materially overstated its reported revenues and earnings dating as far back as 1994. Summit sold approximately 2,500,000 shares of its common stock in its initial public offering at $9.00 per share. Upon news of the restatement of its financial statements on March 3, 1997, the price of Summit's common stock plummeted to $3.875 per share. For more details, call Gregg M. Fishbein at 612-339-6900 or write gmfishbein@locklaw.com via email. FVC.COM: Cohen Milstein Files Complaint in California ----------------------------------------------------- The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. on April 9, 1999 filed a lawsuit in the United States District Court for the Northern District of California on behalf of purchasers of the common stock of FVC.COM, Inc. (Nasdaq: FVCX) during the period between Jan. 21, 1999, and April 6, 1999. The complaint charges FVC.COM, Inc. and certain officers and directors of the company with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that defendants issued materially false and misleading statements concerning the company's financial results for the fourth quarter of 1998. On April 6, 1999, after the close of trading, the company issued a press release stating that the company was reducing its previously announced fourth quarter 1998 revenues of $12.3 million to approximately $4.7 - $5.2 million and previously announced fourth quarter earnings per share from a profit of $0.07 to a net loss of approximately $0.20 - $0.22. On April 7, 1999, the stock fell $10-7/16 to $6- 15/16 on volume of over 4.85 million shares. The complaint alleges that the Defendants were able to complete their scheme through engaging in improper accounting practices involving violations of the Generally Accepted Accounting Principles. For more information, contact Steven J. Toll or Emma Larson at 888-240-1238 or 206-521-0080 or write stoll@cmht.com or elarson@cmht.com via email. FVC.COM: Milberg Weiss Files Complaint in California ---------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP filed a class action in the United States District Court for the Northern District of California on behalf of purchasers of FVC.COM, Inc. (Nasdaq: FVCX) common stock between January 21, 1999 and April 6, 1999. The complaint charges FVC and certain officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that in order to inflate the price of FVC stock, the Company and the Individual Defendants falsely reported the Company's financial results for the fourth quarter of fiscal year 1998 through improper revenue recognition, thereby materially overstating FVC's revenue, income and earnings per share in the fourth quarter of 1998, in violation of GAAP. Furthermore, FVC's insiders sold 535,000 shares of their FVC stock for proceeds exceeding $7.3 million. However, on April 6, 1999, FVC disclosed that it was reducing its previously announced revenues for the fourth quarter of 1998 by approximately $7.0 to $7.5 million to defer revenue on inventory of the Company's products held by Nortel on December 31, 1998. Thus, sales for the fourth quarter of 1998 would only be approximately $4.7 to $5.2 million (as opposed to the $12.3 million in revenues previously reported) and earnings per share were being reduced from a profit of $.07 to a net loss per share of approximately $0.20 to $0.22. Contemporaneously, FVC announced that revenues for the first quarter of 1999 were expected to be significantly below analyst expectations with a significant loss for the quarter, revenues would be between $8.0 and $8.5 million, and the net loss per share between $0.20 and $0.22. Upon these disclosures, the price of FVC stock fell $10- 7/16 to $6-15/16, nearly 60%, in trading of 4.85 million shares, almost 18 times the three-month daily average. For additional details about the suit, call William Lerach, Alan Schulman or Darren Robbins at 800-449-4900 or write to them at wsl@mwbhl.com via email. FVC.COM: Schubert & Reed File Complaint in California ----------------------------------------------------- On April 12, 1999, Schubert & Reed LLP filed a class action in the United States District Court for the Northern District of California, on behalf of a class of purchasers of FVC.COM, Inc. common stock (Nasdaq: FVCX) during the period 1/21/99 through 4/6/99. The suit names as defendants FVC.COM, Inc., its President and CEO Richard M. Beyer, Chairman Ralph Ungermann, CFO James O. Mitchell and other officers and directors for violations of the federal securities laws. On April 6, 1999, after the close of trading, FVC.COM admitted that previously announced revenues for the quarter ended December 31, 1998 would be reduced by $7 - $7.5 million. The company previously announced "record" revenues of "$12.3 million, a 61 percent increase over revenues of $7.6 million in the fourth quarter of 1997." In fact, FVC.COM only had revenues of approximately $4.7 - $5.2 million for the quarter ended 12/31/98, for a net loss per share of $.20-$.22, instead of the previously announced $.07 net income per share. During the period after the "record" results were announced and the time the company admitted the truth about its quarterly earnings, officers and directors of the company sold 537,500 shares of the company's stock for proceeds in excess of $8,055,795. When the market learned the truth, FVC.COM's stock price fell from $17.375 on April 6, 1999, to $6.938 on April 7, 1999, losing 60% of its value in a single day's trading. For more details, call Robert C. Schubert or Juden Justice Reed at 415-788-4220 or write mail@schubert-reed.com via email. MILBERG WEISS: Lawyers Pay $50 Million to Settle Lexecon Suit ------------------------------------------------------------- The Associated Press (AP) reported that Daniel Fischel, the dean of the University of Chicago's law school, and his former partners won a $50 million settlement in their lawsuit accusing Milberg Weiss Bershad Hynes and Lerach, a top New York law firm, of trying to destroy their reputation by including them in a racketeering case. The settlement came a day after a U.S. District Court jury awarded Fischel and his partners $45 million in compensatory damages. If the lawsuit had not been settled, the jury would have been asked to award punitive damages on top of the $45 million. Milberg Weiss is known for filing shareholder class-action suits in which investors go against corporate management with big money at stake, according to the AP report. Fischel and Lexecon, which provided expert testimony on economics and the law, help to defend big corporations from such lawsuits. "Because he's the dean of the law school he just doesn't want to fan the flames," his attorney, Alan N. Salpeter, told reporters. "He's extremely pleased with the result; he thinks justice has been done," Salpeter said in the AP report. Under the agreement, Milberg Weiss Bershad Hynes and Lerach of New York wired $50 million to the plaintiffs Tuesday, Salpeter said. The law firm denied any wrongdoing, he said. The settlement allows no appeal and ends the bitter seven-year legal feud, Salpeter said. According to the Associated Press, Milberg Weiss included Lexecon as one of many defendants in a $1.2 billion racketeering lawsuit filed by shareholders in 1990 over the Lincoln Savings & Loan collapse. Lexecon prepared financial reports for Lincoln Saving and was dismissed from the racketeering lawsuit, which also named Charles Keating, lawyers and accountants. Salpeter said the only reason Milberg Weiss sued Lexecon was to try to taint the three men by tying them to the unpopular Lincoln Savings case. The motive, the lawsuit said, was revenge for Fischel's work in a 1988 case that cost Milberg Weiss a $200 million verdict. "We will destroy you," one Milberg Weiss partner was quoted as telling Fischel, according to the AP. Another allegedly boasted that "we're going to put that little ... out of business." The AP reported that Fischel smiled broadly and laughed with friends in the courtroom after the agreement was announced. Fishel and his partners sold Lexecon for $63 million in December. Salpeter said the $50 million was paid to Lexecon Enterprises, created by the ex-partners for the sake of pursuing the lawsuit. The Associated Press reported that attorney Jerold Solovy, who represented Milberg Weiss, left the courthouse without commenting but later said that he was shocked by the decision. A receptionist at Milberg Weiss said that no one was available to comment. Lawyers for Milberg Weiss contended Lexecon had been sued for a legitimate reason: It had once been a consultant and helped defraud investors of Lincoln Savings. NETWORK ASSOCIATES: Greenfield Firm Files Complaint --------------------------------------------------- The Law Firm of Harvey Greenfield has filed a class action lawsuit on behalf of purchasers of Network Associates, Inc. (NASDAQ: NETA) securities between Jan. 20, 1998 and April 6, 1999 for violations of federal securities laws. Defendants include Network Associates and certain officers and directors. The Complaint charges 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, misrepresenting the financial condition of Network Associates by issuing false and misleading financial statements for the 1997 and 1998 fiscal reporting periods. Because of the issuance of these false and misleading statements, the price of Network Associates common stock was artificially inflated. The complaint further alleges that on April 6, 1999 Network Associates shocked the market by announcing that first-quarter profits would fall short of estimates as a result of a slowdown in demand and concerns that it would have to reinstate fourth-quarter earnings downward after a review by the U.S. Securities and Exchange Commission. As a result of the SEC review, Network Associates decreased its write-offs for acquired in-process research and development by $169 million in 1998 and $13 million in 1997. For more information, contact Harvey Greenfield, Esq. at 212- 949-5500 or 877-949-5500 or write hgreenf@banet.com via email. NETWORK ASSOCIATES: Yates Firm Files Complaint in California ------------------------------------------------------------ The Law Office of Alfred G. Yates Jr filed a class action lawsuit in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of Network Associates, Inc. (Nasdaq: NETA) from January 20, 1998, through April 6, 1999. The complaint charges Network Associates and certain of its officers and directors with issuing a series of materially false and misleading statements of its financial results and business prospects in violation of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 as well as Rule 10b-5. To learn more, call Alfred G. Yates, Jr., Esq. at 800-391-5164 or 412-391-5164, or write to yateslaw@aol.com via email. OIL ROYALTIES: Companies Pay $200 Million to Settle Charges ----------------------------------------------------------- The Austin American-Statesman reported that a federal judge has completed approval of almost $200 million worth of settlements between oil companies and the royalty owners they were accused of short-changing. U.S. District Judge Janis Graham Jack approved seven settlements ranging from $350,000 to $11 million, plaintiffs' lawyer Lee Godfrey said in the story. The judge reportedly approved an agreement by several oil companies to pay $164.2 million to tens of thousands of royalty owners nationwide. Oil companies named as defendants in the cases included Exxon, Union Pacific Resources, Amoco BP, Chevron and Shell. According to the Austin American-Statesman, a central accusation in the lawsuits was that the oil companies paid royalty owners on posted prices rather than on higher spot- market prices. The class action grew from numerous lawsuits filed in various courts in several states. A judicial panel consolidated the lawsuits last year. PENNSYLVANIA LIFE: Association Owes Policyholders $16.5 Million --------------------------------------------------------------- On April 8, the Superior Court of the Commonwealth of Pennsylvania ruled that approximately 15 thousand Pennsylvania residents who held life and annuity policies issued by Executive Life Insurance Company of California are entitled to additional compensation from the Pennsylvania Life and Health Insurance Guaranty Association. The decision arose in a class action filed by Herbert A. Gersenson in April, 1994. The suit asserted that the Guaranty Association had failed to fulfill its statutory obligations to Pennsylvania residents in connection with Executive Life's 1991 insolvency. The Superior Court's decision affirmed a June, 1998, grant of summary judgment by the Honorable Stephen E. Levin of the Philadelphia Court of Common Pleas, who ruled that the Guaranty Association owed an additional 16.5 million dollars, with interest, to Mr. Gersenson and the class. To learn more, contact Eileen Rosenau at 215-735-5512 or James R. Malone, Jr., Esq. at 610-642-8500. RITE AID: Hoffman & Edelson File Complaint in Pennsylvania ---------------------------------------------------------- Hoffman & Edelson and Sheller, Ludwig & Badey, P.C. filed a class action in the United States District Court for the Eastern District of Pennsylvania on behalf of persons who purchased the common stock of Rite Aid Corporation (NYSE: RAD) between December 14, 1998 and March 11, 1999. The complaint alleges that Rite Aid and its Chairman and CEO, Martin L. Grass, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Complaint charges that Rite Aid issued a series of materially false and misleading statements concerning Rite Aid's operating results and business prospects. Because of the issuance of these false and misleading statements, the price of Rite Aid common stock was artificially inflated. The Complaint alleges defendants hid the fact that the costs of store openings and closings were far greater than Rite Aid led the investing public to expect, that there were software start up problems at its new distribution center, that the implementation of a revised merchandising strategy would lead to markdowns that would negatively impact earnings, and that the early closing of the PCS Health Systems acquisition would contribute to a fourth quarter earning shortfall. On March 12, 1999, Rite Aid shocked the market by announcing its true operating results and business prospects, and that earnings for the fourth quarter ended February 28, 1999 would be approximately $.30 to $.32 per share, well below Wall Street expectations of $.52 per share. This revelation caused the price of Rite Aid common stock to plummet $14-7/16 per share to $22- 9/16 per share - a plunge of more than 39% - on an enormous volume of 47 million shares. For additional details, contact Marc H. Edelson at 877-537-6532 or via email at Hofedlaw@aol.com or call Jonathan Shub, Esquire at 800-883-2299 or write jshub@sheller.com via email. SECURE COMPUTING: Stull Stull Files Complaint in California ----------------------------------------------------------- The law firm of Stull, Stull & Brody filed a class action lawsuit in the U.S. District Court for the Northern District of California on behalf of purchasers of Secure Computing Corp. (Nasdaq: SCUR) common stock between November 10, 1998 and March 31, 1999. The defendants include Secure Computing and certain of its officers and directors. The complaint charges 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 representing that demand was strong, that backlog had never been better and it was on track to report growing revenues. Defendants' false and misleading statements were issued in an effort to artificially inflate Secure Computing's stock price, allowing insiders to sell stock valued at more than $6 million. On April 1, 1999, just weeks after reiterating that the Company was on target to report is usual revenue and earnings growth, the defendants disclosed Secure Computing's terrible operating results and diminishing prospects. Secure Computing designs, develops, and sells network security solutions, including web filters, authentication and firewalls. To learn more about the lawsuit, call Patrice Bishop at 888-388- 4605 or write plbatssb@aol.com via email. STEPHAN CO.: Weiss & Yourman File Complaint in Florida ------------------------------------------------------ A class action lawsuit against The Stephan Co. (AMEX: TSC) and certain individuals associated with the Company was filed by Weiss & Yourman in the United States District Court for the Southern District of Florida on behalf of investors who purchased Stephan shares during the period August 4, 1998 through April 1, 1999. The complaint charges Stephan 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. The complaint alleges that defendants issued a series of materially false and misleading statements concerning the Company's financial condition and results of operations, artificially inflating the price of Stephan common stock. TOOTHBRUSH LITIGATION: Plaintiffs Need Labels to Avoid Abrasion --------------------------------------------------------------- The United Press International (UPI) reported that a Chicago man is "bristled" over toothbrushes and says toothbrush manufacturers need to post labels, much like those appearing on alcohol and tobacco products, to warn consumers of the potential hazards. In a lawsuit filed in Cook County Circuit Court, the Park Ridge man claims "toothbrush abrasion" is a disease and distinct clinical entity, and is a leading cause of receding gums and can lead to sensitive teeth. UPI says toothbrush makers Colgate-Palmolive Co., John O. Butler Co. of Chicago and Walgreen Co., which sells toothbrushes, are among the corporate defendants named in the suit. The class- action suit reportedly seeks unspecified damages on behalf of anyone who suffers from toothbrush abrasion. The American Dental Association is also named in Mark Trimarco's suit. According to the UPI story, the trade group, which represents about 72 percent of U.S. dentists, is accused of endorsing allegedly hazardous toothbrushes and dental products and failing to require warning labels as a condition of granting its Seal of Acceptance to toothbrush manufacturers. Dr. Michael Applebaum, a radiologist who's also a lawyer representing Trimarco, tells the Chicago Tribune that people need instructions on how to properly use the toothbrush. Applebaum said in the UPI report, "(Toothbrush abrasion) is a preventative (sic) problem that had people known about it, they may have behaved differently. People injure themselves using toothbrushes and there should be warnings and there should be instructions." The Chicago-based American Dental Association denies the allegations, according to UPI. A spokesman says the toothbrushes that pass its "seal of acceptance program" are safe and consumers are "responsible for correctly using the brush." According to Dr. Applebaum, more information about the lawsuit is available at www.toothbrushlawsuit.com on the web. TRIARC COMPANIES: Securities Litigation Continues and Commences --------------------------------------------------------------- Triarc Companies, Inc., reported that on June 25, 1997, Kamran Malekan and Daniel Mannion, allegedly stockholders of the Company, commenced an action in the Delaware Court of Chancery, New Castle County against the directors and certain former directors of the Company, and naming the Company as a nominal defendant. The action purports to assert claims on behalf of the Company and a class of all persons who held stock of the Company on April 25, 1994. In an amended complaint, the plaintiffs allege that the defendants violated their fiduciary duties and duties of good faith to the Company and its stockholders and violated representations in the Company's 1994 Proxy Statement by granting certain compensation to Nelson Peltz and Peter May in 1994- 1997, including special bonuses to Messrs. Peltz and May in 1996. The plaintiffs further allege that the 1994 Proxy Statement contained false and misleading statements concerning the Company's compensation plans. The amended complaint seeks, among other remedies, rescission of all option grants to Messrs. Peltz and May that allegedly contravene the representations in the 1994 Proxy Statement, an order directing Messrs. Peltz and May to repay to the Company their 1996 special bonuses, an order enjoining the defendants from awarding compensation to Messrs. Peltz and May in violation of the representations in the 1994 Proxy Statement and damages. Discovery has commenced in the action. On August 13, 1997, Ruth LeWinter and Calvin Shapiro, both allegedly Company stockholders, commenced a purported class and derivative action against certain current and former directors of the Company, and naming the Company as a nominal defendant, in the United States District Court for the Southern District of New York. The complaint asserts substantially the same claims, and seeks substantially the same relief, as the amended complaint in the Malekan action discussed above. The Company, its current directors, and certain of its former directors have moved to dismiss or stay the LeWinter action pending the resolution of the Malekan action. That motion is pending. On October 2, 1997, five former directors of the Company, including the three former court-appointed directors, filed cross-claims in the LeWinter action against the Company and Nelson Peltz. The cross-claims alleged that Mr. Peltz violated an undertaking given to a federal court in February 1993 by failing to vote his shares to keep the former directors on the Company's Board, and that he conspired with Steven Posner to violate a court order prohibiting Mr. Posner from serving as an officer or director of the Company. The former directors seek indemnification in connection with the LeWinter action; damages in an unspecified amount in excess of $75,000; and costs and attorney's fees. The Company and Mr. Peltz have moved to dismiss the cross-claims, and the former directors have moved for specific enforcement of their claim for indemnification. By order dated October 8, 1998, the court denied the motion for specific enforcement as to the three former court appointed directors, and granted the motion as to the other two former directors. The Company's motion to dismiss the remaining cross- claims is pending. There has been no discovery in the action to date. In connection with the Proposed Going Private Transaction, various class actions had been brought on behalf of Triarc's stockholders in the Court of Chancery of the State of Delaware challenging the offer by Messrs. Peltz and May. These class actions name Triarc, Messrs. Peltz and May and directors of Triarc as defendants. The class actions allege that consummation of the offer by Messrs. Peltz and May would constitute a breach of the fiduciary duties of Triarc's directors, that the proposed consideration to be paid for the Triarc common stock in the Proposed Going Private Transaction was unfair, and demand, in addition to damages and costs, that consummation of the offer by Messrs. Peltz and May be enjoined. On March 26, 1999, four of the plaintiffs in the foregoing actions filed an amended complaint alleging that the defendants violated fiduciary duties owed to the Company's stockholders by failing to disclose, in connection with the Company's Dutch Auction self-tender offer, that the Special Committee had allegedly determined that the Proposed Going Private Transaction was unfair. The amended complaint seeks an injunction enjoining consummation of the self-tender offer unless the alleged disclosure violations are cured, and requiring the Company to provide additional disclosure, together with damages in an unspecified amount. On March 23, 1999, Norman Salsitz, allegedly a stockholder of the Company, filed a complaint in the United States District Court for the Southern District of New York against the Company, Nelson Peltz, and Peter May. The complaint purports to assert a claim for alleged violation of Section 14(e) of the Securities Exchange Act of 1934, as amended, on behalf of all persons who held stock in the Company as of March 10, 1999. The complaint alleges that the Company's tender offer statement filed with the Securities and Exchange Commission in connection with the proposed Dutch Auction self-tender offer was materially false and misleading in that, among other things, it failed to disclose alleged recent valuations of the Company, which the complaint alleges showed that the self-tender price was unfair to the Company's stockholders. The complaint seeks damages in an amount to be determined, together with prejudgment interest, the costs of suit, including attorneys' fees, and unspecified other relief. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Peter A. Chapman, Editor. Copyright 1999. All rights reserved. ISSN XXXX-XXXX. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *