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               Thursday, May 27, 1999, Vol. 1, No. 80


ALLMERICA FINANCIAL: Court Gives Final Approval to Settlement
BOEING CO.: Settlement Payments Delayed Pending Sept. 23 Hearing
CUMBERLAND: Residents Balk at Unfair Fees & Subsidizing Sewers
GENERAL MOTORS: Court Says Functioning Brakes are Not Defective
HOLOCAUST SURVIVORS: Pharmaceutical Firms Linked to Nazi Tests

HOLOCAUST SURVIVORS: Bank Austria's Restitution Offer Criticized
INFORMIX CORP.: Deal May Settle Insider Suit for $143 Million
IRIDIUM WORLD: Chitwood & Harley File District of Columbia Suit
MCKESSON HBOC: Reinhardt & Anderson File Suit in California
MCKESSON HBOC: Restating Earnings Again, Firms Keep Suing

MICHIGAN PRISONS: New Boss Takes on Female-Offender Issues
NEW ORLEANS: Sheriff Investigated for Pregnant Inmates' Abuse
QUALMED: Federal Judge Seeks Order for Additional Viagra Doses
SOFTWARE AG: Bernstein Liebhard Files Complaint in Virginia
SUNRISE HEALTHCARE: Skilled Nurses Sue for Unpaid Overtime

TEXACO: Amazonians Accuse Oil Company of Dumping Toxic Wastes
TOYS R US: Toy Makers Give Toys to U.S. Marines for Price Fixing
TTC: Transit System's Contempt Motion Fails, Costs $96,000
WWII REPARATIONS: Polish Slave Labor Promised Equal Compensation


ALLMERICA FINANCIAL: Court Gives Final Approval to Settlement
Allmerica Financial Corporation (NYSE: AFC) announced that a
settlement agreement in a class action lawsuit against the
company and three of its subsidiaries received final approval in
U.S. District Court in Worcester, Mass. The class action related
to the sale of approximately 400,000 policies from 1978 to May
31, 1998. Final approval of the settlement follows a preliminary
approval by the court on December 4, 1998.

Allmerica Financial is a diversified group of insurance and
financial services companies headquartered in Worcester, Mass.
The Allmerica companies rank among the country's 20 leading
providers of variable life insurance products and the 30 largest
providers of property and casualty insurance coverage. The lead
company in the group, Allmerica Financial Corporation, is a
Fortune 500 company.

BOEING CO.: Settlement Payments Delayed Pending Sept. 23 Hearing
The Associated Press reports that a federal court judge delayed
the distribution of money in the settlement of a discrimination
lawsuit against Boeing Co. so that a group objecting to the deal
can state its case. U.S. District Judge John Coughenour
scheduled another hearing in the matter Sept. 23 after attorneys
take depositions. Attorney Alan B. Epstein of Philadelphia, who
represents dozens of Boeing workers, challenges the settlement.
saying that the settlement doesn't provide enough money or a
means of enforcement to prevent future discrimination.

According to AP, Boeing chairman Phil Condit and the Rev. Jesse
Jackson announced the $15 million settlement of the class-action
lawsuit on Jan. 22. The deal covers about 12,900 past and
present black Boeing workers.

In court papers, Boeing lawyers have called Epstein's challenge
"sour grapes" from a lawyer who was less effective in the case
"and therefore is not getting as much money in attorney fees."
AP explained that the suit was filed by 41 Boeing workers who
sought at least $82 million in damages. Court documents indicate
they later were told by their lawyers that each would get at
least $300,000. The maximum award under the settlement is

However, the Associated Press notes that Oscar Desper III and
Bruce Harrell of Seattle, the lawyers who brought the first case
on March 17, 1998, would get $3.85 million under the settlement.

According to AP, Epstein, who filed a separate class-action
discrimination suit last summer on behalf of seven Boeing
Helicopters workers in Ridley Township, Pa., would receive

CUMBERLAND: Residents Balk at Unfair Fees & Subsidizing Sewers
A group of 75 families who object to the amount that they are
being billed for sewers have raised $3,000 to hire a lawyer who
plans to file a class action lawsuit against the town. According
to a story in the Providence Journal, Michael Horan, a
Cumberland lawyer, notified the town about the planned suit,
which the group intends to file in Superior Court before June 1.

The residents' complaints include:

  * Cumberland is applying the proceeds from a $550 sewer tie-in
fee established for 476 property owners affected by a 1999 sewer
bond to pay the obligations of a 1991 sewer bond, in effect
using one class of taxpayers to subsidize another.

  * A $500,000 expenditure to pay for Cumberland's share of
sewers in Highland Park II Industrial Park is coming from the
1999 sewer bond, effectively placing the burden for an
improvement that benefits the entire town on a small group of
sewer users.

  * The town should conduct another audit of its sewer fund
based on observations stemming from a previous audit that money
earmarked for the sewer fund may have been allocated to the
town's general operating budget.

  * The property owners' assessments involving the 1991 sewer
bond were never properly set. As a consequence, town taxpayers,
whether they have sewer connections or not, are subsidizing that
bond in the amount of $1.7 million.

Sean McCaffrey, a spokesman for the group of families, said its
members have two other goals in filing the lawsuit. We want
equitable assessments throughout the town, McCaffrey told the
Providence Journal. And we want a clearly established
maintenance program and a clearly identified fund for that
program, so that when repairs are needed there is a fund to pay
for them. McCaffrey said that the families have attended
numerous meetings at Town Hall over the last five years, and see
no alternative to a lawsuit at this time.

At issue are the sewer bills for 476 property owners.

In the fall of 1997, the Town Council was on the brink of
setting sewer assessment rates for the last two sewer
installation projects - Amherst Street and Crestwood Court -
completed under the 1992 and 1994 sewer bonds. Town councilors
then became aware that the sewer-assessment rate - $49 a linear
foot of property frontage - that the town had been charging
property owners for sewers installed with the 1992 and 1994
bonds was calculated improperly. Rather than taking into account
the actual costs of the sewer projects, the rate was set at a
flat $49 a foot rate. Also, the rate was never approved by the
Town Council and therefore it was deemed illegal.

Last year, the Town Council struggled over how to resolve the
problem. In the meantime, no sewer bills were sent to the 476
affected property owners, and the town's sewer fund dropped
deeper into the red. In January, after 112 years of defeated
motions, town councilors finally approved an ordinance to remedy
the situation. The ordinance sets the sewer assessment rate at
$79 a linear foot of property frontage, payable over 20 years.
The rate was calculated by dividing the total cost of installing
all the sewers by the total frontage of the properties on the
affected streets, according to town officials. The bills give
all property owners credit for any payments they may have
already made.

The affected property owners say they are being singled out and
are being forced to pay for town officials' errors. (Providence
Journal; 05/24/99)

GENERAL MOTORS: Court Says Functioning Brakes are Not Defective
A panel of the Eighth Circuit U.S. Court of Appeals affirmed the
dismissal of a class action against General Motors Corp. and
Kelsey-Hayes Co. because the plaintiffs failed to show their
vehicles' anti-lock brakes, which they admitted were fully
functioning, caused them damage. According to a story in the
Automotive Litigation Reporter, The plaintiffs alleged the anti-
lock brakes manufactured by GM and KH were defective because
they might lead drivers to perceive brake failure where no
failure existed.

The plaintiffs also claimed that as a driver applies pressure to
the brake pedal, the pedal falls rapidly to the floor and might
lead a driver to misapply the brakes in emergencies. The suit
also sought damages for lost resale value and overpayment for
the vehicle at the time of purchase. The case was Briehl et al.
v. General Motors Corp. et al., No. 97-3506 (8th Cir., April 14,

According to the Automotive Litigation Reporter, the U.S.
District Court for the Eastern District of Missouri dismissed
the complaint for failure to allege manifestation of a defect
and failure to adequately allege damages. The trial judge said
the defect must manifest itself before damages can be claimed.
The plaintiffs then moved to amend the complaint, but the
district court agreed with the defendants' objections that the
second complaint still contained fundamental flaws. The judge
said the motion to file an amended complaint was without merit
because no new evidence was submitted.

Affirming, the Eighth Circuit panel found that no cause of
action existed because the anti-lock brakes did not malfunction
or exhibit any defects. The plaintiffs did not seek damages as a
result of actual injury or property damage, but claimed harm as
a result of reduced resale value. The panel found the damage
claims too speculative and said the original complaint did not
show that any member of the class had sold a vehicle at a
reduced resale price.

The appeals court noted that the plaintiffs failed to calculate
an amount of damages, an essential element on claims for implied
and express warranty, fraudulent misrepresentation, fraudulent
concealment and fraud.

The Eighth Circuit also affirmed the denial of the motion to
amend, finding that the amended complaint merely added
allegations that certain class members suffered accidents or
traded in their vehicles at a loss, and still failed to allege
any manifested defects. (Automotive Litigation Reporter; May 18,

HOLOCAUST SURVIVORS: Pharmaceutical Firms Linked to Nazi Tests
The Associated Press reports that survivors of hideous Holocaust
medical "experiments," some conducted by the infamous Dr. Joseph
Mengele, are charging in lawsuits that German pharmaceutical
companies participated in the tests and profited from their
pain. The survivors include twins who say that, a half-century
later, they clearly remember Mengele, Auschwitz's "Angel of
Death," scrutinizing their naked, tortured bodies.

The two federal class-action lawsuits filed in Newark, New
Jersey, this month against Bayer AG, Hoechst AG and Schering AG
are among the first in the nation linking German companies to
Nazi medical experiments. According to AP, a similar class-
action lawsuit against Bayer was filed in Indiana in February.
The three class-action lawsuits filed May 13 are the latest
filings in a recent wave of litigation by survivors of Nazi
death camps or slave labor factories aimed at European banks,
insurance companies and industrial firms.

Of the Newark suits, AP explained that one is filed on behalf of
U.S. citizens, the other for citizens of other nations. Each
seeks unspecified damages for survivors it estimates number in
the hundreds. They accuse the companies of providing toxic
chemicals to the Nazis for the "experiments." Company personnel
supervised the work and used information from those experiments
to market products sold during and after the war, the lawsuits
said. Schering also participated in these experiments, but also
supported experimental sterilization procedures on camp inmates,
the lawsuit said.

The allegations stem from "various documents that have become
available for researching that were not available before," said
Joseph D. Ament, a Chicago lawyer representing plaintiffs in the
Newark cases.

All of the survivor lawsuits, many filed in U.S. District Court
here, have been made possible by a 1991 international agreement
settling German reparations to other nations, and thus allowing
individuals to sue, said Burt Neuborne, a professor at New York
University Law School who is among the lawyers pressing the
Newark lawsuits.

Hoechst issued a statement that did not address the medical
experimentation claims, but cited the company's support of
"various organizations and projects dedicated to preserving the
memory of the atrocities of the Nazi regime." Bayer spokesman
Thomas Reinert in Leverkusen, Germany, told the Associated Press
the company would not comment on the lawsuits at this time.
Schering spokesman Gert Wlasich told AP the company would
examine the claims before commenting.

HOLOCAUST SURVIVORS: Bank Austria's Restitution Offer Criticized
The Washington Post reported that a major Austrian bank's $40
million offer to resolve claims of Holocaust victims and their
families is being criticized severely by the World Jewish
Congress, opening a dispute that could lead to a court fight
between the influential congress and lawyers favoring the
settlement. At issue is a proposed agreement by Bank Austria and
its subsidiary, Creditanstalt, to make restitution of funds lost
by Jewish depositors beginning in 1938, when Austria came under
the control of Nazi Germany, which confiscated the accounts of
depositors it regarded as non-Aryan.

Bank Austria's offer is intended to resolve a class action suit
brought by four groups of litigants in federal district court in
New York. The Post said the settlement calls for $ 30 million to
compensate those found to have legitimate claims and $ 10
million for administration, lawyers' fees and settlement of
pending claims. The court must approve the settlement.

Most of the attorneys pursuing the class action suit favor
accepting the bank's offer. The Washington Post noted that the
World Jewish Congress is not a party to the suit. But it heads
the negotiating committee of the world Jewish community's
Conference on Material Claims against Germany and Austria. In
that capacity, it has been involved actively in negotiations
with Bank Austria.

Elan Steinberg, the World Jewish Congress's executive director,
told the Post the organization's opposition stems primarily from
questions of when in 1938 control of Bank Austria's operations
was assumed by the Nazi-controlled Deutsche Bank. Bank Austria
contends that most non-Aryan accounts were confiscated after
Deutsche Bank took over.

However, Steinberg told the Post, documents show that most of
the so-called "Aryanization" of accounts took place during the
six-month period before Deutsche Bank took charge. He said:
"Bank Austria's strategy has been to shift most of the liability
to the Deutsche Bank. But its own records show it is unable to
sustain that claim."

On the other side, those attorneys who favor the settlement
charge that the congress is endangering the claims of many
elderly and needy victims by pursuing vague new demands. They
also say that the documents on which the congress bases its
objections have been available for years and were never before
raised as an issue. Finally, they question whether the World
Jewish Congress speaks for a majority of world Jewry in opposing
the settlement. According to the Washington Post story, some
noted that Moshe Sanbar, chairman of the Center of Organizations
of Holocaust Survivors in Israel and a member of the claims
conference, has endorsed the settlement on behalf of his
organization. (The Washington Post; May 25, 1999)

INFORMIX CORP.: Deal May Settle Insider Suit for $143 Million
In one of the largest securities-fraud cases ever to strike
Silicon Valley, Informix Corp. of Menlo Park and its former
auditors and executives have tentatively agreed to pay $143
million for allegedly lying about company revenues and trading
on inside information, according to a report in The San
Francisco Chronicle. Although the company denies settling the
case, sources close to the litigation say the troubled maker of
database software last week reached a handshake deal to
compensate investors who were stockholders from early 1995 to
late 1997, when Informix allegedly padded revenues with hundreds
of millions of dollars of phantom sales.

Several top executives, including former Chief Executive Officer
Phillip E. White, and the accounting firm Ernst & Young owe
unspecified shares of the settlement that sources told The San
Francisco Chronicle will be payable in cash and company stock.
The settlement is a significant blow for Informix, which earned
$57.7 million on sales of $735 million last year. It is also a
staggering amount in an industry that is accustomed to settling
securities-fraud class actions for an average of about $10

"Bad facts make for big settlements," said Professor Joseph
Grundfest, a securities-law expert at Stanford Law School. "It
would certainly be one of the most significant settlements ever,
because of its size and the underlying allegations." The San
Francisco Chronicle says the allegations first emerged in dozens
of lawsuits filed after the company announced in April 1997 that
it would lose money in the first quarter of that year.
Executives blamed the losses on unexpectedly slow sales of its
touted new technology, a database that could store any kind of
information, notably graphics, rather than just text and

But plaintiffs' lawyers contended that top executives had been
lying about revenues for years by claiming to have sold software
that was merely shipped to customers temporarily and returned to
Informix the next financial quarter. The effect of the allegedly
phony sales, the attorneys argued, was to increase Informix's
stock price so that the executives could sell their shares at an
exorbitant profit before the truth became public. Federal
securities laws bar "insiders" from selling stock without
telling the public about important information, such as the fact
that revenues have been falsified. White and former Informix
Chief Financial Officer Howard Graham sold more than $15 million
worth of stock before the company announced it was losing money.
Several months later, the federal Securities and Exchange
Commission questioned Informix about recording revenue for
unshipped products and other accounting irregularities. Finally,
in November 1997, the company was forced to restate its
financial results for the previous 14 quarters. The restatements
wiped out almost $240 million in profits, sent the company's
stock price plummeting and attracted even more lawsuits from

The lawsuits, which were eventually combined into a federal case
and a state case, contended that Informix had entered into side
agreements in which it promised customers that they would not
have to pay for products the company shipped to them or could
return the products that the company was booking as sold. The
suits also claimed that Informix shipped products during one
financial quarter but booked the shipments as revenue for the
previous quarter. Company employees routinely called these
transactions "Phil deals" -- referring to company president
White -- and closing the last fiscal quarter on "December the

"Due to this fraudulent accounting," said the federal complaint,
"Informix was able to report the revenue growth necessary to
support its stock price, even though actual demand for
Informix's products was not growing as represented to the
market." While these accounting practices were taking place,
several top executives sold almost all of their stock, the suits
claim. The complaints contended that White sold 97 percent of
his shares, Graham sold 98 percent of his shares and former Vice
President Ronald Alvarez sold 100 percent of his shares.

However, an Informix spokesman told The San Francisco Chronicle,
"No settlement has been reached. Settlement negotiations are

The complaints also claimed that Ernst & Young, the company's
auditors at the time, knew of the accounting irregularities but
certified that the company's fiscal practices conformed to
generally accepted accounting standards. The auditors also
failed to force the company to disclose the irregularities
publicly, the complaints charge.

Ernst & Young did not return calls yesterday seeking comment on
the case or the tentative settlement. Attorneys for the
individual defendants declined to comment. (The San Francisco
Chronicle; May 26, 1999)

IRIDIUM WORLD: Chitwood & Harley File District of Columbia Suit
Chitwood & Harley has filed a securities class action in the
United States District Court for the District of Columbia on
behalf of all persons who purchased or otherwise acquired
securities (such as stocks, bonds, debentures, warrants, and
call options) issued by Iridium World Communications, Ltd.,
Iridium, LLC, or Iridium Operating, LLC between September 9,
1998 and March 29, 1999.

The complaint alleges that Iridium, certain of its top officers,
and Motorola, Inc. violated the federal securities laws by
issuing false and misleading statements that caused Iridium
securities to trade at artificially high prices. When the true
facts surrounding Iridium's troubled operations began to
surface, the Company's securities collapsed, resulting in
millions of dollars in losses for investors. The complaint
further alleges that insiders at the Company sold over $1.5
million worth of stock and that the Company itself sold $250
million worth of stock shortly before the bad news was

To learn more, contact Corey D. Holzer, Esq. at 888-873-3999.

MCKESSON HBOC: Reinhardt & Anderson File Suit in California
Reinhardt & Anderson filed a class action in the United States
District Court for the Northern District of California on behalf
of those who purchased or otherwise acquired the common stock of
McKesson HBOC, Inc. (NYSE:MCK) during the period between October
19, 1998 and April 27, 1999.

The complaint charges McKesson and certain of its officers and
directors with violations of the federal securities laws by
making misrepresentations about McKesson's business, earnings
growth and financial statements and its ability to continue to
achieve profitable growth. By issuing these allegedly false and
misleading statements, defendants artificially inflated
McKesson's stock price to a high of $89-3/4 in January 1999,
before the true facts about McKesson's troubled operations,
diminished profitability and false financial statements were
revealed and McKesson's stock collapsed to as low as $32 per

To learn more, call Randall H. Steinmeyer at 888-253-5139 or
651-227-9990 or write to A.Hogan@ralawfirm.com via email.

MCKESSON HBOC: Restating Earnings Again, Firms Keep Suing
For the second time in two months, medical supplies distributor
McKesson HBOC Inc. is revising its fiscal 1999 earnings downward
after discovering more accounting problems in its recently
acquired health information company HBO, according to an
Associated Press report. AP wrote that the news sent the
company's stock down more than 12 percent. McKesson did not
offer specific revisions, other than to say the restatement may
also affect previous years' earnings reports.

"I recognize that this is creating uncertainties for investors,
but we thought it proper that we should disclose this at this
time," McKesson spokesman Larry Kurtz reportedly told AP. "The
previous release had identified there could be additional
downward revisions, and we now know that for a fact, so we
thought it proper to disclose that."

McKesson shares closed down $4.68 3/4 a share, at $33.50 on the
New York Stock Exchange. McKesson's shares plummeted nearly 50
percent, to $34.50, after it first acknowledged the first
problem on April 28. The stock's 52-week high had been $89.75.

According to the AP report, the company blamed "improper revenue
recognition matters" involving software sales at HBO, which
provides computer solutions to help health care providers manage
their businesses. McKesson said it's still to early to project
another revision of its earnings figures. "It's an ongoing
process. When we have the final answer, we'll communicate
fully," Kurtz was quoted by AP as saying, adding that the review
could take as long as July to complete. At least four law firms
have been retained by investors to consider a class-action suit
alleging that false statements artificially inflated the profits
of McKesson HBOC.

For example, Bernstein Liebhard & Lifshitz, LLP which commenced
a securities class action lawsuit on behalf of securities
holders of McKesson HBOC, Inc. (NYSE: MCK) intends to expand the
class period in an amended complaint. The expanded class period
will include all persons, other than HBO & Company (NYSE: HBOC)
shareholders, who purchased McKesson securities between October
19, 1998 and May 25, 1999. Similarly, The Law Offices of Steven
E. Cauley, P.A. will modify its complaint to include purchasers
of the common stock of McKesson HBOC Inc. between January 12,
1999 and May 25, 1999.

AP described McKesson as the nation's largest pharmaceutical
supply management and health care information technology
company. It bought HBOC in January. On April 28, McKesson
restated its fourth-quarter operating income to 56 cents a
share, down from 62 cents, and its full-year operating income to
$1.97 a share, down from $2.06. The fourth-quarter net loss was
revised to 27 cents a share from 22 cents, and the full-year net
income was revised to 75 cents a share from 84 cents.

The Associated Press wrote that on April 22, McKesson reported a
net loss of $60.4 million for the fourth quarter ended March 31,
and net income of $237.1 million for the full year. The company
said it also reduced its earnings goal for its fiscal year
ending March 2000, because it expects its software revenue to

MICHIGAN PRISONS: New Boss Takes on Female-Offender Issues
The Detroit News reports that the Michigan Department of
Corrections settled a federal lawsuit alleging abuse by male
guards of female prisoners and agreed to a six-month moratorium
on pat-down searches of women by male guards. Under the 19-page
settlement agreement with the U.S. Justice Department, the
Corrections Department will hire a special administrator who
will be responsible for addressing female-offender issues,
including sexual misconduct and invasions of privacy, and who
will conduct random interviews with inmates. The administrator
will report to the corrections department director.

The Detroit News reports that the state also will:

  * Prohibit male staff from being alone with female inmates in
settings that are not clearly visible to other staff or inmates.

  * Require male officers to announce their presence in any
areas where inmates could be in a state of undress.

  * Strengthen its pre-employment screening of correctional
staff to include a search for a history of domestic violence and
stiffen security screens for noncorrectional staff. They also
will conduct background checks every five years.

Matt Davis, a spokesman for the state Department of Corrections,
called the settlement a victory for the state. "They've
essentially told us to keep doing what we're doing and found no
widespread pattern of abuse as they claimed," Davis told The
Detroit News. "Has there been abuse in the past? Of course there
has, and we've prosecuted offenders accordingly."

Mellie Nelson, the deputy section chief of the U.S. Department
of Justice's civil rights division, strongly disagreed. "We have
found widespread, systematic sexual misconduct, including rapes
and sexual assault in Michigan. That certainly was proved over
and over again during the course of discovery," Nelson told The
Detroit News. "We're very pleased and proud with the outcome of
the agreement."

Michigan has two prisons for women, the Scott Correctional
Facility in Plymouth and the Crane Correctional Facility in
Coldwater. The agreement doesn't affect ongoing class-action
sexual harassment lawsuits by 32 female prison inmates against
the Department of Corrections and several prison officials. (The
Detroit News; May 26, 1999)

NEW ORLEANS: Sheriff Investigated for Pregnant Inmates' Abuse
A court will examine how pregnant women are treated in the
Orleans Parish Prison amid allegations that some are shackled
during labor and are denied doctor visits when they are bleeding
and in pain. According to the Advocate (Baton Rouge LA), the
American Civil Liberties Union is bringing the allegations in
its ongoing lawsuit against Sheriff Charles Foti Jr. over
conditions inside the 7,000-bed jail complex. Foti already is
under legal and public pressure over last month's death of a
diabetic inmate.

A federal magistrate has set a July 13 hearing to examine the
treatment of pregnant inmates, said Joe Cook, executive director
of the ACLU of Louisiana. Cook said the group may request
sanctions at the hearing. He said interviews with 100 women
revealed violations of previous consent agreements.

"It's important to us because he's blatantly violating a lawful
order of the court," Cook told the Advocate. "When the sheriff
is not obeying the law, how can he expect citizens to obey the
law? It's hypocritical, and it's putting women's lives in
danger." Cook said his staff interviewed female inmates late
last year, then followed up by hiring a doctor as an expert
witness to conduct follow-up interviews and review medical
records. He described the findings as "unconscionable." In a
statement issued Monday, the Sheriff's Office said: "We are
accredited by the National Commission on Correctional Health
Care and have been for the past six years. In addition, our
medical program is monitored by the federal court and their
medical experts. We routinely provide quality medical care for
all of our inmates, including pregnant females." The issue of
medical care in the prison was thrust into the spotlight after
the April 6 death of JoAnn Johnson, a 21-year-old diabetic who
died when her blood sugar skyrocketed while she was jailed on
drug possession charges. Foti said that, although Johnson
received insulin during her three-day incarceration, he is
conducting a thorough investigation.

According to the Advocate story, the ACLU lawsuit originated in
1969 as a prisoner complaint, but later mushroomed into a class-
action suit covering a wide range of civil rights issues. While
many issues have been resolved through consent decrees, medical
care at the prison remains unsettled, with the ACLU's National
Prison Project pursuing litigation. (Advocate Baton Rouge LA;

QUALMED: Federal Judge Seeks Order for Additional Viagra Doses
The Guidepost reports that federal bankruptcy judge David Scholl
says he plans to file a class action suit in an attempt to force
his health care provider, QualMed, to cover the cost of more
than four Viagra pills each month under a health benefits
program for federal employees. Scholl was recently reported to
say by the Washington Post that he thinks eight Viagra pills per
month "is fair," though he conceded that the number deemed
necessary "is a value judgment really."

Attorney Stephen Madra, who represents QualMed, is quoted in the
same article as saying that if the HMO agreed to pay for
additional pills, "everyone in the plan is going to pay more for
their premiums [because] these costs are always passed through
to consumers." (Guidepost; June, 1999)

SOFTWARE AG: Bernstein Liebhard Files Complaint in Virginia
A securities class action lawsuit was commenced by the law firm
of Bernstein Liebhard & Lifshitz, LLP on behalf of purchasers of
the common stock of Software AG Systems, Inc. (NYSE:AGS) between
November 17, 1997 and April 5, 1999 in the United States
District Court for the Eastern District of Virginia. The
complaint charges Software AG and certain of its officers and
directors with violations of the Securities Exchange Act of 1934
and Rule 10b-5.

The complaint alleges that the defendants issued materially
false and misleading financial statements in the Company's press
releases and filings with the U.S. Securities and Exchange
Commission. During this time defendants sold their own shares of
Software AG at artificially inflated prices for millions of
dollars in illicit personal profits.

To learn more, contact Sandy A. Liebhard, Esq., or Michael S.
Egan, Esq., at 800-217-1522 or 212-779-1414 or write to them at
softwareag@bernlieb.com via email.

SUNRISE HEALTHCARE: Skilled Nurses Sue for Unpaid Overtime
SunRise Healthcare Corporation, a subsidiary of Sun Healthcare
Group (NYSE:SHG) is the target of a national class action
lawsuit filed on behalf of the company's skilled nursing and
long-term care facility employees, claiming SunRise
systematically compelled caregivers to work undocumented,
uncompensated overtime to boost profits. If certified, the class
action will represent all current and former employees of
SunRise Healthcare Corporation who were not paid appropriate
wages under federal and state laws.

The suit, filed May 24 in US District Court in Seattle, states
that SunRise gave registered nurses and other employees
assignments that it knew they could not complete within their
scheduled work hours. In order to meet even minimum levels of
care for patients in their charge, the lawsuit claims that
caregivers often worked several hours outside their shifts.

The lawsuit claims violations of the federal Fair Labor
Standards Act, which sets minimum wage and maximum hour
standards for all employers. All 28 states in which SunRise
operates have state wage and overtime protection statutes that
Berman claims were violated when SunRise failed to pay the
plaintiff and proposed class appropriately for all the hours
they worked.

The suit also claims supervisors required employees to clock in
and out at regular shift times even if they worked overtime, and
reprimanded employees harshly for recording any overtime on
their official time sheets.

"The caregivers found themselves in a horrible position," said
Steve Berman, attorney for plaintiff Karen Minor, RN, and the
proposed class. "SunRise employees knew that if they worked
overtime, they would be punished, but they also had a moral and
professional obligation to give their patients a humane level of
care. Sun Healthcare forced this dilemma on caregivers and
exploited it mercilessly." In addition to skilled nursing care
for the elderly, SunRise provides postacute care for patients
recovering from hospitalization for accidents and surgery.
According to Berman, if plaintiffs had not worked off the clock,
patients would have been left unattended or without medication.
SunRise refused to reduce workloads or hire more employees when
caregivers raised patient safety concerns with supervisors, he

According to documents from parent company Sun Healthcare Group,
labor costs at its facilities are cause for internal concern.
These documents point out that under tightened insurance
regulations, increased labor costs are no longer `pass-through'
items but are affecting the company's bottom line.

Minor is a registered nurse who worked for SunRise Healthcare
Corp. for five years. She claims that she informed SunRise
management many times that there was not enough time in a
regular shift to adequately care for her patients. SunRise
assigns an average of 25 patients per nurse -- a high patient
load, and Minor says she worked an average of two to four extra
hours each day just to cover their basic needs. On a few
occasions, Minor did record her overtime work. She says she was
paid, but reprimanded both personally and in meetings by
managers who would only repeat a company mantra that "overtime
work was not permissible."

SunRise operates 392 facilities in 28 states with more than
44,000 beds. SunRise Healthcare is a subsidiary of the publicly
held Sun Healthcare Group, with offices in Albuquerque, New

TEXACO: Amazonians Accuse Oil Company of Dumping Toxic Wastes
A landmark legal battle over massive oil pollution of South
American Amazon rainforests spilled onto Wall Street today,
challenging the proposed takeover of Texaco Oil by Chevron. The
takeover faces new hurdles due to a potential multi-billion
dollar liability facing Texaco.

A group representing more than 30,000 Ecuadoran litigants began
an ad campaign in today's New York Times. Under the headline, "A
Word of Warning to Chevron Shareholders," the ad charges that
Texaco dumped "toxics-laden water produced by oil drilling onto
the ground, in nearby rivers and streams, and in ponds,
destroying the surrounding environment" of the Ecuador

Texaco dumped some 4.3 million gallons per day of toxic oil
waste water over a period of 20 years, or the equivalent of
three Exxon Valdez oil disasters. Texaco also left behind more
than 300 open waste pits contaminated with heavy metals and
other carcinogenic hydrocarbon compounds.

Lawyers for the plaintiffs estimate that Texaco saved $3 to $4
per barrel -- close to $6 billion over 20 years in additional
profits -- by dumping the waste water rather than pumping it
back beneath the earth's surface, as was the industry practice
at the time. In addition, oil spills along the company's Trans-
Ecuadoran Pipeline totaled an estimated 16.8 million gallons.

Damages caused by Texaco's practices are estimated to be in
excess of $1 billion. If the case goes to trial in the state of
New York, punitive damages against Texaco could increase that
amount significantly. A jury imposed a $5 billion damage penalty
on Exxon for it's one-time, unintentional Valdez spill, which
was much smaller than the amount of dumping by Texaco in

"This is an environmental crime that never would have been
allowed to happen in the United States," said Luis Yanza, the
president of the Committee for the Defense of the Amazon, an
environmental group based in Lago Agria, Ecuador. "Texaco was
operating as a rogue corporation, beyond the bounds of all
decency and far outside the industry's own announced policies
for waste disposal."

In a letter sent today to Chevron's CEO and Chairman of the
Board, Kenneth Derr, Yanza invited Chevron's directors to visit
the Amazon region to see the devastation caused by Texaco's
actions firsthand.

The 30,000 Ecuadorans are plaintiffs in a class-action suit
against Texaco in U.S. Federal District Court in New York (the
company is headquartered in White Plains). The plaintiffs cite a
wave of deadly cancers, skin lesions, birth defects and other
abnormalities among the area's indigenous peoples, and massive
die-offs of plants, crops and animals from air and groundwater
pollution as well as poisonous "black rain."

Six years of pre-trial maneuverings in the case are expected to
come to a head any day in the courtroom of Judge Jed Rakoff.
Texaco has been fighting to either have the lawsuit dismissed
entirely or to have the lawsuit heard in Ecuadoran, rather than
U.S. courts. An initial ruling favoring U.S. jurisdiction was
reversed when the judge who issued it died and Judge Rakoff took
over the case and dismissed it.

The U.S. Court of Appeals, however, reversed Rakoff's dismissal
last October and sent the case back to him, declaring
unanimously that the suit could be transferred to Ecuador only
if there was a suitable judicial forum in that country.

"Such a forum simply does not exist in Ecuador," said Paulina
Garzon of the Center for Economic and Social Rights, with
offices in Quito, Ecuador and New York. "Ecuadoran courts have
proven they cannot provide any remedy for the devastation that
Texaco has caused." The new Ecuadoran government prefers that
the case be tried in the United States, and has said that it
would likely send the case back to the U.S. if the federal court
dismisses it to Ecuador.

Meanwhile, Luis Yanza of the Committee for the Defense of the
Amazon, which placed today's New York Times ad said, "We will
continue to play an active role in educating the American public
about the facts of this case and the eventual liability that
Texaco and Chevron shareholders will bear for the irresponsible
actions of Texaco's top executives."

The Committee for the Defense of the Amazon was formed in 1994
and represents all the indigenous tribes and other residents who
live in and around the Ecuadoran rainforest region where Texaco
operated. (U.S. Newswire; May 25, 1999)

TOYS R US: Toy Makers Give Toys to U.S. Marines for Price Fixing
The San Francisco Chronicle quoted California Attorney General,
Bill Lockyer, who announced that the $50 million settlement of
an antitrust suit against three toy marketing giants, including
Toys R Us, will be used to provide toys for needy children in
California and other states. Under the agreement, toys will be
distributed by the U.S. Marine Corps' "Toys For Tots" program
over the next three holiday seasons. "This settlement with the
toy companies allows us to brighten the holidays for thousands
of needy California children, Lockyer said. California children
are expected to receive $3.89 million worth of playthings as the
state's share of the overall settlement.

The San Francisco Chronicle reports that the settlement stems
from a class action lawsuit filed in 1997 by attorneys general
for California, 43 other states, the District of Columbia and
Puerto Rico. The complaint alleged that Toys R Us and three
large toy manufacturing companies had violated federal antitrust
laws by conspiring to fix prices for playthings marketed through
the 1,400-plus stores Toys R Us operates in the United States
and abroad. The antitrust actions were filed after an
administrative law judge for the Federal Trade Commission issued
a decision against Toys R Us and several other toy companies in
September 1997 that found they engaged in unfair business
practices that violated a section of the Federal Trade
Commission Act.

Toys R Us will pay most of the $50 million tab with $27 million
worth of toys and an additional $13.5 million in cash that will
be used to provide children with toys, books and other
educational materials. In addition to the toys and cash from
Toys R Us, the settlement provides for a $8.2 million payment
from Mattel Toy Company of El Segundo, California, and an
additional $1.3 million payment from the Little Tykes Company of
South Carolina. Another defendant in the suit, Hasbro, Inc., had
earlier agreed to pay $5.9 million in cash and toys. Last year
the company began meeting the terms of its own settlement
program by contributing $475,000 worth of toys to children in
California. (The San Francisco Chronicle; May 26, 1999)

TTC: Transit System's Contempt Motion Fails, Costs $96,000
The Toronto Sun reports that a failed contempt of court motion
by the TTC will end up costing the transit system about $96,000
in legal costs. The TTC filed the contempt motion against
McGowan and Associates after the law firm issued a press release
about a class action suit stemming from a TTC fire in August

The Toronto Sun said the TTC lost the class action suit on Dec.
2, 1998. The next day McGowan and Associates issued a press
release inviting passengers exposed to the fire to contact the
firm about compensation. The TTC filed the contempt motion
because it believed the release might encourage exaggerated or
fabricated claims. Justice Robert Sharpe found the contempt
motion was a "considered and deliberate move by the TTC to raise
the stakes" and ordered it to pay McGowan's $46,000 legal costs.
The TTC's costs were about $50,000.

TTC lawyer Brian Leck said the case dealt with a new area
dealing with "notice" under the Class Proceedings Act. "It was a
new area of the law and it was a necessity to be addressed,"
said Leck. "It wasn't something where somebody took a shot in
the dark." (The Toronto Sun; May 26, 1999)

WWII REPARATIONS: Polish Slave Labor Promised Equal Compensation
Germany has agreed that Nazi-era slave laborers from Poland
should get the same compensation as those living in other
countries, a Polish official told the Associated Press. Polish
government Chief of Staff Jerzy Widzyk said German officials he
met with no longer questioned whether Poles who performed forced
labor for the Nazis during World War II would get the same
compensation as citizens of other countries. "Both sides agreed
that the way the compensation issue is solved is of chief
importance for the shape of Polish-German relations," Widzyk was
quoted as saying by the PAP state news agency.

The Associated Press wrote that German Chancellor Gerhard
Schroeder's chief of staff, Bodo Hombach, who led the German
delegation, provided no details on the meeting, simply saying it
was important for maintaining bilateral relations on the

AP described the suit, saying that more than 400,000 Poles are
seeking a total of more than $2 billion in compensation for
their slave labor. Equal compensation for Poles has been at
issue in a series of talks involving the United States, Germany,
Poland and other nations. AP explained that Poland and other
East and Central European countries feared their slave laborers
would receive less money than those currently living in the
United States and Israel. With the equal-compensation agreement
by Germany, the chief remaining obstacle was believed to be
class-action lawsuits pending against German industry.

Faced with the lawsuits filed in the United States by former
slave laborers, 12 of Germany's largest companies pledged in
March to set up an industry fund by September to pay
reparations. In return, the German companies want the lawsuits

U.S. Undersecretary of State Stuart Eizenstat and German
officials have scheduled further meetings beginning in June to
resolve related issues. Also participating in discussions on how
to set up the fund are Israel, Poland, Russia, Belarus, Ukraine
and the Czech Republic, as well as Jewish and industry groups.


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. Kent L.
Mannis, Project Editor.

Copyright 1999. All rights reserved. ISSN 1525-2272.

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