/raid1/www/Hosts/bankrupt/CAR_Public/991006.MBX                 C L A S S   A C T I O N   R E P O R T E R

               Wednesday, October 6, 1999, Vol. 1, No. 171


AUTO INSURANCE: State Farm Says Verdict Bad for Consumers; Plans Appeal
BOEING CO: Ct Oks $ 15 Mil Settlement For Racial Discrimination Lawsuit
CENTURY LOAN: CA Sp Ct Asked To Review On 2 Banks In Fraud Investment
CHICAGO: Ap Ct Oks Maritime Claims For Loop Flood
DEUTSCHE BANK: Jewish Organization Sues In N.Y. Over Nazi Financing

ESCALON MEDICAL: Proposed Settlement For Securities Suit In New York
FEN-PHEN: AHP Out-Of-Court Settlements Head Off 4 Separate Suits
FEN-PHEN: Judge Dismisses Jury, Raising Expectation Of Settlement
HMO: Cohen, Milstein Files Suit Against Humana In Miami
HMO: Delays in Payments to Doctors Prompt New Jersey Suit Against Aetna

HMO: Humana Issues Statement of Response to Class Suit Filed In Miami
HMO: Humana Targetted For 'Substantial' Damages; Suit Filed In Miami
HMO: Judge Dismisses Civil RICO Suit Against Aetna U.S. Healthcare
HOLOCAUST VICTIMS: Child Slave Laborers Sue In N.Y. For Compensation
HOLOCAUST VICTIMS: German Firms Offer To Pay $3.8 Bil. To Settle Claims

HOLOCAUST VICTIMS: German Govt 'Cautiously Optimistic' About Talks
ONAN CORP: Cash-Balance Pension Plans Of Minn Co. Face Tax Court Review
PEOPLE'S BANK: Settles Shareholders' Suit When $7.7 Million Looks Cheap
PVF CAPITAL: Faces Securities Suits In Ohio 1 Of Which Is Class Action
REVLON INC: Finkelstein & Krinsk File Securities Suit In New York

SOUTHWEST SECURITIES: Decries Merit Of TX Suit Over IPO & Other Suits
SYMMETRICOM INC: Discovery Goes On For Securities Suit In CA
TOBACCO LITIGATION: Data May Cast Doubt On Harm Of Secondhand Smoking


AUTO INSURANCE: State Farm Says Verdict Bad for Consumers; Plans Appeal
The nation's largest auto insurer says a southern Illinois jury verdict
could jeopardize its use of aftermarket parts to repair damaged cars and
could lead to higher auto insurance rates for everyone.

After six weeks of testimony in a national class-action suit filed in
Marion, Ill., a jury today awarded nearly $456 million to some State
Farm policyholders because aftermarket parts -- outer-shell body parts
manufactured by companies other than the original carmaker -- were
specified on many repair estimates. State Farm awaits further rulings
from Williamson County, Ill., Associate Judge John Speroni. State Farm
has already indicated it plans an appeal.

"We are disappointed in this verdict," said Jack North, senior vice
president State Farm Mutual Automobile Insurance Company. "Even the
plaintiffs' own witnesses said some of these parts are as good as -- or
even better than -- the originals. We believe only good parts have gone
on State Farm-insured vehicles. We believe our procedures assure that.
Those are the parts we have used and then guaranteed for as long as the
policyholder owns the vehicle."

North said if the verdict is allowed to stand, the parts industry could
once again become monopolistic, leading to higher parts costs and higher
auto insurance prices for everyone. North noted that at least seven
other auto insurance companies face similar suits. "We're a mutual
insurance company owned by our policyholder group," he said. "State Farm
saved its policyholders almost $234 million in 1997 alone by specifying
the use of aftermarket parts. In addition, when claims costs have been
significantly less than expected, we have returned premium dollars to
policyholders. In the past two years, we've returned more than $1.5
billion to them." North also noted that State Farm has reduced insurance
rates more than $2 billion in the past two years.

BOEING CO: Ct Oks $ 15 Mil Settlement For Racial Discrimination Lawsuit
A federal judge on Thursday approved a $ 15 million settlement of a
racial discrimination lawsuit brought against Boeing Co., saying it was
the best way to encourage racial cooperation at the company.

A group of black employees at the world's leading maker of commercial
airplanes had argued before U.S. District Judge John Coughenour last
week that the settlement was inadequate.

''This settlement has a greater chance of fostering a cooperative
relationship between Boeing and its African-American employees than
would a series of protracted individual disputes,'' Coughenour wrote in
his opinion. ''This last point must be a crucial consideration for
anyone who is primarily interested in future race relations within the
company, as both the plaintiffs and the objectors maintain they are

The settlement affecting about 13,000 past and present employees had
been announced in January by Boeing's chairman, Philip M. Condit, and
civil rights leader the Rev. Jesse Jackson.

It covered lawsuits filed last year on behalf of black Boeing workers
who alleged discrimination against blacks was common at Boeing plants,
especially in selecting people for promotion. The lawsuits also alleged
that blacks were harassed and faced retaliation when they complained.

Boeing admitted no wrongdoing but agreed to spend $ 15 million to
compensate the workers, pay their legal fees and set up programs to
fight discrimination.

''Some people weren't happy with terms,'' Oscar Desper III, lead
attorney for the plaintiffs in the class-action lawsuit, said Thursday.
''Some will benefit monetarily and some will not, but all will benefit
from the changes we're going to make at the company.''

Some workers complained that the settlement failed to provide enough
money and wouldn't do enough to prevent further bias. (The Atlanta
Journal and Constitution 10-1-1999)

CENTURY LOAN: CA Sp Ct Asked To Review On 2 Banks In Fraud Investment
The California Supreme Court has been asked to review a decision in
favor of two banks, which class action plaintiffs assert aided and
abetted a fraudulent investment scheme offering interests in nonexistent
mortgages to investors. William Kaffer, Robert N. Greco, and Gertrude E.
Saynor, on behalf of Themselves and All Others Similarly Situated v.
Charles A. Herpick et al., No. SO81223 (CA Sup. Ct., petition for review
filed Aug. 6, 1999).

>From 1976 through 1994 Century Loan Corporation (Century) held itself
out to investors as a successful mortgage broker. However, the company,
which was run by Charles A. Herpick, James Herpick, and Richard J. Bauer
(collectively the defendants), was a Ponzi scheme which purported to
extend second mortgage loans to homeowners. The defendants would sell
interests in nonexistent mortgages to investors, using fraudulent
documents representative of deeds of trust. The defendants paid
investors interest and principal, using funds gained from new investors.
Eventually bank loans were necessary to fund the scheme, and Century
later succumbed to a federal criminal investigation.

A class action suit was commenced by a group of defrauded investors in
California's Santa Clara County Superior Court. The suit was brought
against Century, the defendants, a title company and two banks, which
were alleged to have been instrumental in Century's ability to
perpetuate the fraud. The banks, Pacific Western Bank (PWB) and San Jose
National Bank (SJNB) were charged with aiding and abetting and
conspiracy to defraud, aiding and abetting and conspiracy to commit
negligent misrepresentation, aiding and abetting violations of the state
Corporations Code and aiding and abetting and conspiracy to breach
fiduciary duty. The trial court granted summary judgment to the banks on
the grounds that the banks had no duty to the plaintiffs and because the
plaintiffs failed to offer evidence sufficient to raise triable issues
of fact.

After the California Court of Appeal, Sixth Appellate District,
affirmed, the plaintiffs filed a petition for review with the California
Supreme Court on Aug. 6, 1999. In the petition the plaintiffs claim that
the investment scam succeeded due to the assistance of the banks'
employees. The plaintiffs allege that bank staff at PWB knew that
Century was overdrawn on its accounts and shuttled funds between
accounts to cover the problems. SJNB is asserted to have issued lines of
credit to Century even though it knew the company had overdrafts on its
accounts, and the plaintiffs assert that the bank failed to investigate
the collateral for the loans. If SJNB had used due diligence, it would
have known that the deeds of trust put up as collateral were
nonexistent, the plaintiffs contend.

The petition also argues that following their criminal convictions, the
defendants offered declarations proving that the banks knew of and
cooperated in the scheme. The declarations contradict statements given
by bank employees wherein knowledge was denied, the petition states.

The plaintiffs argue that the court of appeal improperly held that the
cause of action of aiding and abetting and conspiracy had to proven by
direct evidence. This ruling imposed a new requirement on the plaintiffs
that is contrary to case law, the petition states. Circumstantial
evidence is all that is needed under California law, the plaintiffs
argue, and high court review is necessary to resolve the problem.

The appeals court also erred when it denied the plaintiffs' request for
a new trial, the petition states. In doing so, the appellate court
excluded the testimony of the defendants, who had agreed to cooperate
after judgment was entered for the banks, the petition claims. The
plaintiffs were previously prevented from obtaining this new evidence
because the defendants refused to waive their privilege against
self-incrimination, the petition continues. Plaintiffs argue that the
newly discovered evidence puts the credibility of the banks' witnesses
into question, and the motion for a new trial should not have been

The plaintiff class is represented by Frank M. Pitre and Nancy L.
Fineman of Cotchett, Pitre & Simon, Burlingame, CA, and Ronald R. Rossi
and Susan R. Reischl of Liccardo, Rossi, Sturges & McNeil, San Jose, CA.
(Bank & Lender Liability Litigation Reporter 9-1-1999)

CHICAGO: Ap Ct Oks Maritime Claims For Loop Flood
More than 25 insurance companies and a class of more than 120 property
owners seeking damages for the 1992 Loop flood can sue the city under
principles of admiralty law, a state appeals court ruled, clearing the
way for a potential recovery of at least $ 12 million.

A panel of the 1st District Appellate Court reversed and remanded
rulings by Cook County Circuit Judge Donald J. O'Brien Jr. that
admiralty law was beyond the reach of actions brought by Commercial
Union Assurance Co. and more than 25 other insurers of Great Lakes
Dredge & Dock Co., the company whose work allegedly caused the flooding.

"We conclude that, by allowing Commercial Union to sue the city and
recover damages in accordance with long-standing admiralty principles,
Commercial Union and the city will only be responsible for their own
proportionate share of liability," Justice Thomas R. Rakowski wrote for
the panel in a 22-page opinion.

The appeals court also reversed O'Brien on another issue. The panel held
that the property owners' assignment of damage claims to Great Lakes and
their insurers are valid under admiralty law. The insurers paid 36
plaintiffs $ 12 million to settle their claims against Great Lakes.

The decision returns the matter to the Circuit Court for trial to
determine the city's share of liability for the flood, said Hugh C.
Griffin, a Lord, Bissell & Brook partner representing the insurers.

"We are at least allowed to seek recovery of the $ 12 million from the
city based on their proportionate share of liability," Griffin added.

The three-judge appellate panel also held that the city's defense based
on the Local Governmental and Governmental Employees Tort Immunity Act
is preempted.

"For the class plaintiffs, this is a real plus because tort immunity
doesn't apply," William J. Harte said of the ruling. "So, we're able to
sue the city under maritime law," said the attorney for a class of at
least 120 property owners.

A spokeswoman for the city's Law Department said officials were
disappointed by the decision and are contemplating an appeal to the
Illinois Supreme Court.

The city hired Great Lakes for a project to protect bridges across the
Chicago River by driving pilings near each span. The pilings at the
Kinzie Street bridge, however, allegedly were sunk too close to a
freight tunnel that wall. A breach in the tunnel wall allowed water to
flow through the tunnel system in April 1992, resulting in flooded
basements and power outages throughout the Loop.

Numerous lawsuits were filed by property owners against Great Lakes and
the city based on flood. Great Lakes settled with 36 of the original
plaintiffs for $ 12 million, with Commercial Union and other insurers
funding the settlement.

As part of the agreement, the original plaintiffs released Great Lakes
from liability, assigning the company all of their rights, interests and
claims against the city. Great Lakes then assigned to the insurers all
of its claims against the city.

The insurers then filed suit against the city seeking to hold it liable
under admiralty law. The insurers maintained that the city failed to
notify Great Lakes of the existence and location of the tunnel once the
company was hired to drive the pilings.

The plaintiffs in the case on appeal are Commercial Union and the other
insurers for Great Lakes, maintaining claims as assignees, a class of
plaintiffs who alleged property damage and Mary Sims, who suffered
personal injuries.

On Jan. 13, 1998, O'Brien denied with prejudice the insurers' motion to
file an amended complaint. Five months later, the judge dismissed
Commercial Union's original complaint with prejudice. O'Brien then
dismissed with prejudice all of the admiralty claims the class asserted
in its second amended complaint, as well as Sims' admiralty claims.

O'Brien found that admiralty law did not apply because the city's
alleged negligence and resulting damages occurred on land -- not on a
navigable waterway and that the city's alleged negligence was unrelated
to traditional maritime activity.

The insurers then appealed to the 1st District.

The appeals court panel said it disagreed with O'Brien's conclusions of
law. First, we believe the fact that the city's alleged negligent acts
and resulting damage occurred on land does not prevent application of
admiralty law where a vessel that caused the damage on land and the
city's alleged negligence took effect on navigable water," the panel
said. We also believe the activity the city was engaged in at the time
of the incident was substantially connected to traditional maritime
activity. As such, we conclude that the alleged causes of actions are
governed by admiralty law," the opinion continued. Accordingly, any
state law that would interfere with the uniform application of admiralty
law is preempted."

Justices Joseph Gordon and Jill K. McNulty concurred in the decision.
The case is In re Chicago Flood Litigation (Commercial Union, et al. v.
City of Chicago), Nos. 1-98-0593, 1-98-2326, 1-98-2364, 1-98-2589 and
1-98-2664, consolidated. (Chicago Daily Law Bulletin 9-30-1999)

DEUTSCHE BANK: Jewish Organization Sues In N.Y. Over Nazi Financing
The World Council of Orthodox Jewish Communities said Tuesday it has
filed a class action lawsuit in Federal Court in New York against
Deutsche Bank AG, charging that the bank financed the Auschwitz death
camp in Poland and other Nazi projects. The organization said it is
seeking damages from the bank stemming from its participation in, and
profits from, the theft and destruction of religious and cultural
property of Eastern European Jewish comunities by the Nazis during World
War II. (United Press International 10-5-1999)

ESCALON MEDICAL: Proposed Settlement For Securities Suit In New York
On or about June 8, 1995, a purported class action complaint captioned
George Kozloski v. Intelligent Surgical Lasers, Inc., et al., 95 Civ.
4299, was filed in the U.S. District Court for the Southern District of
New York as a "related action" to In Re Blech Securities Litigation (a
litigation matter which the Company is no longer a party to). The
plaintiff purports to represent a class of all purchasers of the
Company's stock from November 17, 1993, to and including September 21,

The complaint alleges that the Company, together with certain of its
officers and directors, David Blech and D. Blech & Co., Inc., issued a
false and misleading prospectus in November 1993 in violation of
Sections 11, 12 and 15 of the Securities Act of 1933. The complaint also
asserts claims under Section 10(b) of the Securities Exchange Act of
1934 and common law. Actual and punitive damages in an unspecified
amount are sought, as well as a constructive trust over the proceeds
from the sale of stock pursuant to the offering.

On June 6, 1996, the court denied a motion by the Company and the named
officers and directors to dismiss the Kozloski complaint and, on July
22, 1996, the Company Defendants filed an answer to the complaint
denying all allegations of wrongdoing and asserting various affirmative

In an effort to curtail its legal expenses related to this litigation,
while continuing to deny any wrongdoing, the Company has reached an
agreement, subject to final court approval, to settle this action on its
behalf and on behalf of its former and present officers and directors,
for $500,000. The Company's directors and officers insurance carrier has
agreed to fund a significant portion of the settlement amount. Both the
Company and their insurance carrier have deposited such funds in an
escrow account.

FEN-PHEN: AHP Out-Of-Court Settlements Head Off 4 Separate Suits
Out-of-court settlements have been reached with American Home Products
over alleged effects of the diet drug combination fen-phen. The
settlements headed off four separate suits that were to have gone to
trial. Now that's according to a lawyer who is reprepresenting hundreds
of other plaintiffs. The company isn't commenting. A new study revealed
no evidence of increased heart disease among those who had taken
fen-phen. (CNBC News Transcripts 10-1-1999)

FEN-PHEN: Judge Dismisses Jury, Raising Expectation Of Settlement
A judge dismissed the jury in a class-action lawsuit against the maker
of the fen-phen diet drug, raising expectations of a possible
out-of-court settlement.

In sending jurors home, Superior Court Judge Marina Corodemus said she
would hear the case without a jury starting Oct. 12 if a settlement is
not reached before then, plaintiffs' attorney Steven Sheller said. The
jury had been hearing testimony intermittently since Aug. 11.

Sheller said he thought the case would be settled. Officials with
American Home Products, the drug company, declined to comment.

The case pits the Madison-based company against millions of patients who
used its diet pills, which were taken off the market two years ago after
being linked to serious heart and lung damage in users.

Plaintiffs want American Home Products to cover the cost of future
medical checkups for people who used the drug. The company reportedly
has offered to pay $1.2 billion for the examinations, and an additional
$2.8 billion to settle individual suits over the drugs.

More than 4,100 lawsuits have been filed in state and federal courts
against American Home Products over fen-phen.

Plaintiffs' attorneys claim the company hid information from doctors,
patients and regulators about possible links to heart valve disease and
an often fatal lung condition called primary pulmonary hypertension.

The company denies hiding information, and says it acted properly in
marketing the drugs. (AP Online 10-5-1999)

HMO: Cohen, Milstein Files Suit Against Humana In Miami
The law firms of Cohen, Milstein, Hausfeld & Toll, PLLC and Boies &
Schiller, LLP filed a national class action lawsuit against Humana,
Inc., one of the nation's largest managed healthcare companies.

"The case sets forth specific and detailed examples of how a managed
healthcare company, in this case Humana, concealed from its subscribers
the way it actually decides whether to approve treatment and pay
claims," said Stephen Neuwirth, a partner in the law firm of Boies &

"Humana subscribers were told these decisions would be based on the
medical needs of patients. In fact, as detailed in the complaint filed,
Humana instead used undisclosed criteria that were unrelated to
patients' medical needs," said Joseph Sellers, a partner in the law firm
of Cohen, Milstein, Hausfeld & Toll.

Humana also established a set of undisclosed financial incentives,
including direct cash bonuses to claim reviewers and financial
arrangements with doctors that were clearly designed to reduce the
number of patient claims that would be approved.

Following more than one year of investigation by Boies & Schiller and
Cohen, Milstein, Hausfeld & Toll, the lawsuit was filed in federal court
in Miami, Fla., as a national class action.

Copies of the complaint are available upon request. SOURCE Cohen,
Milstein, Hausfeld & Toll, PLLC CONTACT: Stephen R. Neuwirth, Esq., of
Boies & Schiller, LLP, 914-273-9800; or Joseph M. Sellers, Esq., of
Cohen, Milstein, Hausfeld & Toll, PLLC, 202-408-4600

HMO: Delays in Payments to Doctors Prompt New Jersey Suit Against Aetna
A Somers Point physician has filed a class action against Aetna U.S.
Healthcare for compensation and interest, alleging that the HMO took
advantage of its position by failing to pay doctors on time and, in some
cases, failing to pay at all.

The case, Courtney v. Aetna U.S. Healthcare, L-6648-99, argues that Dr.
Robert Courtney and thousands of other health care providers in New
Jersey have lost thousands of dollars in the past 11 years because the
health maintenance organization did not reimburse them properly.

The complaint, filed Sept. 16 in Camden County Superior Court, alleges
that the HMO violated N.J.A.C. 8:38-16.1, which requires that HMOs pay
physicians within 60 days after a claim is submitted. After that, the
HMO must pay interest, according to N.J.A.C. 8:38-16.4.

The plaintiffs allege that in addition to compensation, they also are
entitled to punitive damages because the Blue Bell, Pa.- based HMO
allegedly violated the New Jersey Unfair Trade Practices Act, N.J.S.A.
56:8-1 et seq. Under the statute, intentional failure to pay claims in a
timely manner and intentional withholding of interest constitutes
unconscionable commercial practices which entitles the health care
providers to damages.

Courtney's attorney, Harris Pogust, a partner with Pennsauken's Sherman
Silverstein Kohl Rose & Podolsky, says that HMOs such as Aetna U.S.
Healthcare believe they have doctors under their thumb since most
physicians, like Courtney, are under contract with the organizations.

Pogust says Courtney and the rest of the class were not reimbursed on
time and did not receive interest.  The HMOs are taking over like a bad
disease and really they need to be reined in," Pogust says. "But the
bigger they become the harder it becomes to sue them because doctors are
afraid to step on any toes. The HMOs need to be held accountable."

Betsy Sel, a spokeswoman for Aetna U.S. Healthcare, did not return
telephone calls last week seeking comment.

The case is not unique. New Jersey is the third state in which a class
action has been filed on behalf of health care providers. Similar suits
have been filed in Philadelphia and California.

The Philadelphia case, Solomon v. Aetna U.S. Healthcare, 99- 1288, was
filed in the Philadelphia County Court of Common Pleas in March. The
suit alleges that Aetna U.S. Healthcare failed to reimburse a class of
Pennsylvania doctors in a timely fashion and refused to pay doctors for
certain agreed-upon procedures.

Jonathan Shub, an associate with Philadelphia's Sheller, Ludwig & Badey
who is representing the class of plaintiffs in Philadelphia, says Aetna
U.S. Healthcare's decision not to reimburse the doctors cost them

"We certainly hope *HMOs* change their standards of practice," Shub
says. "But until they do, the best means of achieving an equitable
result is to file suit or join a class."

Burt Rublin, a partner with Ballard Spahr Andrews & Ingersoll in
Philadelphia, who is representing Aetna U.S. Healthcare in the
Philadelphia case, declines to comment.

Twenty-eight other states have laws to ensure that health plans pay
providers in a timely fashion. In New York and Pennsylvania, HMOs have
30 days to make the payments before interest is assessed.

And fines have been imposed. Oxford Health Plans of Norwalk, Conn., has
paid $71,000 in fines this year to the New York Insurance Department for
failing to pay doctors promptly. Oxford spokeswoman Francesca Trainer
says the company had problems paying bills in New York and New Jersey,
but because of fines in New York and the threat of fines in New Jersey,
physicians are being paid promptly now.

Nonetheless, doctors and hospital executives say fines generally have
been too small to have any impact.

"Getting fined $1,000, what's that do to a large corporation?" asks
Sarah Smith, a spokeswoman for the Greater New York Hospital
Association. Smith says class-action suits might give the problem the
attention it deserves and punitive damages might push the HMOs to

Pogust says he found out about the problem last December when he was
representing Courtney in a Year 2000 compliance class action, Courtney
v. Medical Manager Corp., 98-CV-3347. During the federal case -- which
eventually settled for $30.5 million in free software upgrades --
Courtney told Pogust that computer compliance was only the tip of the
iceberg when it came to legal problems involving New Jersey doctors.
(New Jersey Law Journal 10-4-1999)

HMO: Humana Issues Statement of Response to Class Suit Filed In Miami
The following is a statement from Humana Inc. (NYSE: HUM) in response to
a class action lawsuit filed in U.S. District Court in Miami.

"We have not been served with a copy of the lawsuit and therefore cannot
respond to its specific allegations. However, we will vigorously defend
ourselves on behalf of our 6.1 million health plan members and the
thousands of doctors who care for our members.

"More than 85 percent of our members routinely tell us they are
satisfied with the coverage they receive through their Humana health
plan. Humana has been recognized nationally for its disease management
initiatives, notably in the areas of congestive heart failure, breast
cancer and diabetes.

"Humana has long supported an external review process by independent
physicians with no connection to a health plan to determine whether a
requested service is appropriate. That is a better approach to meeting
the needs of members than costly, protracted litigation that may provide
huge verdicts for a few people, and enormous fees for plaintiffs'
attorneys, at the expense of the many who depend on affordable health
insurance coverage for themselves and their families."

Humana Inc., headquartered in Louisville, Ky., is one of the nation's
largest publicly traded managed health care companies with approximately
6.1 million medical members located primarily in 15 states and Puerto
Rico. Humana offers coordinated health care through a variety of plans
-- health maintenance organizations, preferred provider organizations,
point-of-service plans, and administrative services products -- to
employer groups, government- sponsored plans, and individuals.

HMO: Humana Targetted For 'Substantial' Damages; Suit Filed In Miami
A class action lawsuit was filed in the District Court in Miami against
Humana Inc claiming 'very substantial' damages for the company's
widespread failure to disclose to participants that costs were the
overwhelming factor behind decisions on claims rather than medical need,
lawyers here said.

"Humana has based its decision to provide coverage on secret criteria
unrelated to the medical need of subsribers," said Joseph Sellers of law
firm Cohen, Milstein, Hausfeld & Toll, PLLC. Lawyers would not make a
specific estimate on the amount they are seeking in damages, however,
Sellers noted, that the case covers "millions of subscribers over 4
years" which he said amounted to "very substantial damages."

The lawyers said the case was filed after a year of investigation into
Humana's practices between Oct 4 1995 to date. They claim that Humana
gave direct finanacial incentives including cash bonuses to encourage
claim reviewers within the company to deny claims.

Lawyers said Humana's claim reviewers did not have appropiate medical
training to make healthcare decisions.

The case also states that Humana made undisclosed financial arrangements
with physicians participating in their plans to limit care to
individuals covered by Humana's health plans.

In addition to monetary damages the plantiffs are seeking disclosure
from Humana of the real basis on which medical treatment was provided.

The suit was filed under the Racketeer-Influenced and Corrupt
Organisations Act, RICO. The suit covers all health maintenance
organisations (HMOs), preferred rovider organisations, (PPOs) and point
of service plans, POS' run by Humana. (AFX News 10-4-1999)

HMO: Judge Dismisses Civil RICO Suit Against Aetna U.S. Healthcare
A federal judge has dismissed a class-action civil RICO suit against
Aetna U.S. Healthcare, brought by a group of consumers who say it lured
them in with false promises of high-quality care while secretly
pressuring doctors to cut costs and provide only minimum care.

"A vague allegation that 'quality of care' may suffer in the future is
too hypothetical an injury to confer standing," Senior U.S. District
Judge John P. Fullam wrote in a tersely worded six-page memorandum and
order in Maio v. Aetna Inc. To establish standing in federal court,
Fullam said, a plaintiff must show an "injury in fact" that is "concrete
and particularized" as well as "actual or imminent" as opposed to
"conjectural or hypothetical."

The Maio plaintiffs failed that test, Fullam said, because granting them
standing "would require this court to assume that in every case,
individual physicians and IPAs (independent physician associations) will
be moved to put their own economic interests ahead of their patients'
welfare. "Even if that assumption were correct, Fullam said, Aetna
"would not be the proximate cause of the providers' ethical lapses."

Although that ruling was enough to dispose of the case, Fullam said he
also found that the Maio complaint suffers from other "fatal defects."
"It is highly doubtful that advertising one's commitment to 'quality of
care' can serve as a predicate for a fraud claim," Fullam wrote. "Such
general assertions as to quality are puffery, and do not constitute a
fraudulent inducement to membership in defendants' HMO plans,
particularly where the complained-of cost containment provisions are
disclosed to prospective members."

Fullam said he also agreed with Aetna's argument that the plaintiffs had
failed to plead a proper RICO enterprise. "An enterprise which consists
of an association-in-fact of Aetna with its various plans i.e. a parent
and its subsidiary corporations cannot be a valid RICO enterprise where
the defendants are not distinct from the enterprise." And the
plaintiffs' second theory for a RICO enterprise an association-in-fact
of Aetna and its subsidiaries with the doctors and IPAs was equally
flawed, Fullam said. "Plaintiffs have not alleged that the providers
share any common purpose with defendants, instead citing numerous
instances where the two groups are at odds."

In dicta in his final paragraph, Fullam suggested that the courts are
not the appropriate forum for the plaintiffs to wage their battle.
"Plaintiffs' expression of dissatisfaction with defendants' plans
indeed, with HMOs in general is more appropriately directed to the
legislatures and regulatory bodies of the several states," Fullam wrote.

The ruling is a major victory for Aetna and its lawyers, Michael M.
Baylson, Michael M. Mustokoff, Teresa N. Cavenagh, Sandra A. Jeskie and
Jonathan Swichar of Duane Morris & Heckscher. Plaintiffs attorney
Jeffrey L. Kodroff of Spector & Roseman said he and the other lawyers on
his team will be "studying all of our options," but would not comment
further. The team of plaintiffs' lawyers also includes Eugene A. Spector
of Spector & Roseman; sole practitioner James J. Binns; David J.
Bershad, Edith M. Kallas, Anita B. Kartalopoulos, Joseph P. Guglielmo
and Charles S. Hellman of Milberg Weiss Bershad Hynes & Lerach in New
York; and Harvey Rosenfield and Edward P. Howard of the Foundation for
Taxpayer and Consumer Rights.

The suit, filed in U.S. District Court in Philadelphia, alleged that
Aetna marketed its HMO with false promises that its "primary commitment"
was to maintain and improve the quality of care. In reality, the suit
alleged, Aetna is "primarily driven by fiscal and administrative
considerations implemented through defendants' undisclosed systematic
internal policies which result in the reduction of the quality of the
healthcare services provided to plaintiffs and the class."

According to the suit, Aetna has become the nation's biggest HMO with
its purchase of Prudential Health Care. Aetna and U.S. Healthcare had
about 16 million members after their $ 8.9 billion merger in July 1996.
With its July 1998 acquisition of NYLCare for $ 1.05 billion, the
company added another 2.3 million members. With the Prudential
acquisition, the suit said, Aetna has about 22 million members, or 10
percent of the total U.S. population. About 50,000 doctors are currently
in Aetna's network, accounting for about half of all licensed

The suit alleged that Aetna's rapid increase of market share was part of
a strategy to "force doctors to accept the unreasonable terms contained
in their provider agreements. "At the same time, the suit said, Aetna
engaged in a false advertising campaign designed to induce millions to
enroll based on a series of claims about Aetna's commitment to quality
care and physician independence. In its marketing, the suit said, Aetna
represents that its members receive high-quality healthcare services
from physicians who are solely responsible for providing medical care
and maintaining a physician-patient relationship." In reality, however,
Aetna's internal systematic fiscal and administrative policies severely
intrude upon the physician-patient relationship and seriously restrict
the ability of Aetna physicians to provide plaintiffs ... the high
quality healthcare they have been promised," the suit alleged. Aetna and
its affiliates "have gone so far," the suit alleged, as to claim that
physicians are paid incentives based on the quality of care provided,
when, in fact, Aetna's contracts with physicians provide "financial
incentives to withhold medical services and reduce the quality of care
given to HMO members."

                         Motion to Dismiss

But the Duane Morris lawyers argued that the racketeering and fraud
claims were "based on one non-actionable hypothesis: participating
physicians in Defendants' HMO plans might disregard their hippocratic
oath, duties to their patients, and violate the law by limiting or
refusing to treat patients covered under [Aetna's] Health Maintenance
Organization plans due to [Aetna's] policies and contracts." But they
said the plaintiffs "have not alleged a single instance in which a
physician rendered inappropriate or inadequate care to any plaintiff.
"Instead, they said, the plaintiffs "merely speculate this could occur."
In their motion to dismiss, they argued that the suit was an "attempt to
drag the judicial system into a scattershot attack on the concepts of
managed care." But the "blunderbuss language" of the complaint, they
said, "ignores the plain English of the HMO plan documents and widely
available public information." The theory of the suit, they said, also
"ignores the comprehensive and complex state and federal statutory and
regulatory framework which regulates virtually every practice and policy
about which plaintiffs complain. These statutes and regulations reflect
a public policy that recognizes the great strides which HMOs have made
in containing health care costs while providing coverage for quality
care to patients and reasonable compensation to physicians." By suing
under RICO, they said, the plaintiffs "seek to sidestep this complex
regulatory framework and ask this court and a jury to referee the
contractual relationships between an HMO and plan sponsors (employers),
members and providers on trumped-up charges." But the courts are the
wrong forum for such complaints, they said, because if the daily
operations of Aetna U.S. Healthcare are the issue, "there are dozens of
state and federal agencies which have the responsibility for that
supervision." (The Legal Intelligencer 10-1-1999)

HOLOCAUST VICTIMS: Child Slave Laborers Sue In N.Y. For Compensation
Israelis who toiled as child slave laborers for German and Austrian
companies during the Nazi Holocaust filed a class action suit in the
United States Monday demanding compensation for "deprivation of

Their American attorney, Edward Fagan, announced the suit at a news
conference in Israel, saying he wanted to put the claims of up to 50,000
Israelis on the table ahead of U.S.-German talks in Washington this week
on overall slave labor compensation.

"There has never been a claim for deprivation of childhood," he said
about litigation brought in the past several years by victims of the
Holocaust in which six million Jews were killed.

German and U.S. government officials, as well as representatives of
major German companies and victims' lawyers are to discuss in Washington
a compensation figure for slave laborers in general.

U.S. lawyers for former slaves have demanded $20 billion for the
victims. German sources said last week the companies were willing to
offer a figure below $5 billion.

In the class action suit, filed in U.S. District Court in New York,
Fagan is demanding $75,000 per victim, separate from what they may
receive in the overall slave labor settlement.

He said Siemens AG, Volkswagen AG, BMW AG, DaimlerChrysler AG and
several banks, which he did not name, were among companies listed in the


Efraim Reichenberg, whose vocal cords were destroyed in experiments he
and his twin brother endured at the hands of Dr Josef Mengele at
Auschwitz death camp, pleaded his case at the news conference through an
electronic voice box. In 1945, when I was 18 years old, I was in the
Auschwitz death march. We walked three days in the snow and then we were
in trains for 10 days...until we got to Sachsenhausen concentration camp
in Berlin," he said. "The next day I was taken to the Heinkel factory
near Berlin where I made V-1 and V-2 rockets...We were willing to do any
work for a scrap of bread or a spoon of soup -- and for that, we deserve
proper compensation," Reichenberg said.

Yossi Mor, a member of the Children and Orphan Holocaust Survivors
advocacy group spearheading the legal action, said at the news
conference no sum of money could compensate him for his loss. "What is a
demand for my parents, my brother and my sister," he said about his
family, which perished in the Holocaust. "There is no answer. What is
their price? No one knows. And for the deprivation of my childhood? Who
knows?" (REUTERS)

One victim, Hana Bar-Yesha, said she lost her family at the notorious
Auschwitz concentration camp in 1944 and was then moved to a labor camp
near Leipzig and Dresden where she endured daily marches to an arms
factory. "For me, as a 12-year-old girl, it was very difficult walking
in the snow and the cold ... I was all skin and bones. The SS soldiers
who guarded us shot every one who couldn't stand the pace," she said in
a written testimony made available to AFP.

Fagan said. "If the German proposal fails the test of even token
acknowledgement of German industry's profitable business of
systematically exploiting slave labor, stealing our children and
violating our human rights, then it's a non-starter," said Avraham
Velvart, founder of Yonah, or Children and Orphan Holocaust Survivors.

Fagan said the suit represented the first time child survivors have
taken legal action in their own right, as slave labour survivors and as
heirs to parents who were slave laborers. (Agence France Presse

HOLOCAUST VICTIMS: German Firms Offer To Pay $3.8 Bil. To Settle Claims
After months of painstaking negotiations, a group of German
corporations is set to offer as much as $3.8 billion (U.S.) to settle a
spate of Holocaust-related legal claims, including those brought by
slave labourers, according to lawyers familiar with the talks.

The offer comes on the eve of a two-day conference, scheduled to start
tomorrow at the State Department, to resolve the question of how to
compensate as many as 2.4 million survivors who toiled against their
will - often at gunpoint and without pay - to stoke the war machine of
the Third Reich.

Also at issue: how much German insurance and banking interests will pay
for their alleged role in appropriating assets from Holocaust victims.

But a swift end to this bitter and enormously convoluted dispute seems
unlikely. Plaintiffs' lawyers, who have filed more than two dozen class-
action lawsuits on behalf of survivors, yesterday denounced the German
offer as inadequate.

Under terms of the expected proposal, they said, each victim could end
up with a lump sum of roughly $200. Calculated in 1940-era dollars, the
lawyers said, that payment could work out to about $20 per victim for an
average of two years of hard labour. ''If they present this number as
their first and final number, I don't think anyone believes this will
produce anything other than the end of the negotiations and a huge
worldwide backlash at the arrogance of such a position,'' said one
lawyer. ''If, however, this is a good-faith opening offer that has
flexibility to become a reasonable number, there is hope that this could
finally be resolved.''

A State Department official said it was premature to comment on any
anticipated offers. ''We expect the German companies to live up to their
moral commitment and make a presentation at this meeting,'' said James
Bindenagel, the State Department's special envoy for Holocaust issues.

'There is hope this could finally be resolved' The conference will bring
together representatives from countries where former victims reside,
such as Poland, Russia, Ukraine and Israel, as well as leaders of Jewish
groups and plaintiffs' lawyers. German participants, which include top
government officials and executives from DaimlerChrysler AG and
Volkswagen AG, hope the talks settle the forced-labour issue for good
and lead to the voluntary dismissal of all related litigation.

The lawyers have asked for as much as $30 billion to settle the cases,
but they made those demands when their claims stood on sturdier legs. In
September, a pair of federal judges dismissed five of the class actions,
arguing U.S. courts are not the proper place to resolve this matter.
(The Toronto Star 10-5-1999)

HOLOCAUST VICTIMS: German Govt 'Cautiously Optimistic' About Talks
A year after announcing plans to create an industry-financed fund to
compensate Nazi-era slave laborers, Chancellor Gerhard Schroeder is
hoping for an agreement this week so that payments could begin next
year, a government spokesman said.

German envoy Otto Lambsdorff has said he would be bringing a final offer
to Washington when the talks resume Wednesday. Government spokesman
Uwe-Karsten Heye declined to give any details on Monday, saying only
that Lambsdorff was ''well-prepared.''

Noting the advancing age of those affected, Heye said the government was
''cautiously optimistic'' enough progress could be made in Washington
this week ''so that it can finally begin payments next year.''

Schroeder proposed the fund after his September 1998 election as a way
to resolve wage claims from former forced laborers and protect German
firms from the threat of lawsuits.

While Germany has paid more than dlrs 60 billion in reparations to Nazi
victims, it traditionally has refused to honor wage claims from slave
laborers, who were technically working for private companies.

Talks so far have been stalled over money; while some class-action
lawyers have demanded up to dlrs 20 billion, German firms initially
offered less than dlrs 1.7 billion.

Participants in the talks include the German and U.S. governments,
German industry, Jewish groups, attorneys for former slave laborers and
several east European countries. (AP Worldstream 10-4-1999)

ONAN CORP: Cash-Balance Pension Plans Of Minn Co. Face Tax Court Review
A Minnesota company is trying to keep its pension plan in the face of
two court challenges. The cases could provide the first rulings on the
tax ramifications of converting a traditional pension plan to the
increasingly popular, but controversial, cash balance plan.

In August, the Internal Revenue Service asked the U.S. Tax Court to
invalidate the pension plan of Fridley, Minn.-based Onan Corp. The IRS
request came after the company's employees sued the agency in tax court
in January, alleging that benefits under the plan accrue too steeply as
employees gain seniority, in violation of the Internal Revenue Code's
"backloading" provision. Seidlitz v. Commissioner, No. 334-99.

At the time the workers filed the suit, the IRS had yet to decide
whether Onan's cash balance plan, which replaced the company's prior
defined benefit plan, could receive tax-exempt status. According to the
suit, the IRS, after more than three years, had not resolved the issue.
Onan workers also sued the company in a class action in federal court in
Indiana, charging that the company's cash balance plan discriminated
against older workers and violated the Employee Retirement Income
Security Act. Eaton v. Onan Corp., IP 97-814-C-H/G.

Age discrimination is the most common criticism leveled against these
plans. Traditional defined benefit plans base benefits on years of
service and final pay, which tend to favor older employees. But benefits
in cash balance plans generally accumulate evenly each year, which
younger workers like.

Many Democrats in Congress believe that the tax code empowers the IRS to
disqualify cash balance plans based on age discrimination. But the
agency has not done so largely because of a misplaced sentence in a
preamble to a 1991 IRS regulation, according to Representative Bernard
Sanders, I-Vt. He and 39 House Democrats are pressing the agency, as
well as the Department of Labor and the Equal Employment Opportunity
Commission, to issue final regulations implementing pension
discrimination laws. The lawmakers also want the IRS to stop issuing
tax-qualified determination letters for cash balance plans until the
agencies have investigated complaints against the plans.

Last month, Mr. Sanders released a September 1998 letter from the IRS
district director in Cincinnati, who suggested that a company's
conversion to a cash-balance plan violates the tax code. Although the
company is not identified, it is widely thought to be Onan.

Congressional Republicans also have stepped into the fray. Their tax-cut
bill would require companies to provide more disclosure when cash
balance plans replace traditional ones. The Clinton administration is
also seeking more stringent disclosure requirements.

Although the IRS' apparent move against Onan marks a turning point for
the agency on cash balance plans, it can't be assumed that all such
plans will be targets.

The Onan cash balance plan is an anomaly, lawyers argue, because it
consists of three different benefit formulas that, taken together,
violate the tax code. The plan credits the accounts of former workers
with a lower rate of interest than it does those of active workers, uses
the company profit-sharing plan to offset pension benefits and provides
special benefits to workers with 30 years of service, says Mark Lofgren,
of Washington, D.C.'s Groom Law Group, a firm that specializes in
employee benefits.

"If you have a number of different benefit formulas, you should
carefully consider how they act in combination to satisfy the
backloading rules," he says. (The National Law Journal 9-27-1999)

PEOPLE'S BANK: Settles Shareholders' Suit When $7.7 Million Looks Cheap
It took New York class-action maverick Harvey Greenfield nine years to
get his shareholder suit against People's Bank to trial.

Seven days after the trial began, largely due to U.S. District Court
Judge Alfred V. Covello's efforts, the long-running case settled for
$7.7 million.

In it, lead plaintiff Herbert Silverberg, of Queens, N.Y., claimed that
his purchase of 100 shares of $7 stock in 1990 was based on fraudulently
inadequate disclosure. He claims People's hid its true loan picture,
starting in 1988, when it converted from a mutual company to a stock
corporation. The class covers shareholders from July 6, 1988, to Nov.
29, 1990. The bank's bad loans increased during the 1990-1991 recession,
and the plaintiffs contend disclosure came too slowly.

The trial had gone from Aug. 9 to Aug. 16 when Covello finally prevailed
on the parties to strike the compromise. The deal is expected to have a
public hearing in November.

"The bank wanted to fight this -- we thought we had a very good case,"
says James F. Stapleton, of the Stamford office of Day, Berry & Howard,
which is headquartered in Hartford. During trial, Greenfield's expert
set damages at $54 million. Prejudgment interest raised the potential
risk to more than $100 million, Stapleton says in an interview. While
unpalatable, settling was "the better course of valor," says Stapleton,
who contends the bank deserved to prevail.

People's general counsel, William T. Kosturko, says in a statement that
People's admitted no liability, and that the payout would result in a
one- time charge of $250,000 to the bank, because of insurance coverage.

Ironically, the very fact that People's was worth suing is an indirect
testament to its strength. Dozens of other banks caught in the deadly
real estate undertow of the early 1990s have vanished, been absorbed by
out-of-state institutions or shut down by regulators. By contrast,
People's is now the largest Connecticut-based bank.

The '90s crash triggered multiple class actions similar to the People's
case. Day, Berry lawyers have prevailed before trial in other class
actions, such as those against Aetna Corp. and Union Trust Bank, notes
Stapleton. Today Silverberg's 1990 stock is worth six times his cost,
says Stapleton, asking "where's the actual damage here?"

On a more visceral level, the Greenfield-Stapleton match is a dramatic
clash of style and personalities. Stapleton is competitive yet courtly,
and regards Greenfield's antic feistiness as beyond the pale.
Greenfield, 70, can be so abrasive with office staff and secretaries
that some refuse to take his calls, says Stapleton. In the People's
trial, Greenfield referred to a trial colleague as an "underling."

In interviews, Greenfield alternately snaps and giggles. He can be
excitable, impatient and almost childishly gleeful.

His financial success since graduating from Harvard Law School 48 years
ago is substantial -- a string of multimillion-dollar shareholder
settlements racked up during a singleminded solo career. (His next
target is $25.9 million from Berlin-based Northeast Utilities.)

"Stapleton could have settled this years ago," Greenfield contends. "He
really drove us to the wall making endless motions in connection with
the trial idiotic nonsense, frankly -- most of which Covello rejected.
"The case got settled," Greenfield concludes, "because they were fearful
of what the jury verdict would be." (The Connecticut Law Tribune

PVF CAPITAL: Faces Securities Suits In Ohio 1 Of Which Is Class Action
Various subsidiaries of PVF Capital Corp. are parties to lawsuits
related to the Company's efforts, which have since been suspended, to
develop a business offering financial planning advice and the sale of
mutual funds and insurance products on any agency basis. The entities
named in the lawsuits are the Bank and two other entities, PVF Financial
Planning Inc.("PVFFP") and Emissary Financial Group, Inc.("Emissary"),
which are majority-owned subsidiaries of the Company's wholly owned
subsidiary, PVF Holdings, Inc.

The Company's proposed business plan called for PVFFP to establish
offices in certain of the Bank's locations, from which offices PVFFP
would provide financial planning advice to customers and sell insurance
and mutual fund products to those customers on an agency basis. Emissary
was proposed to act as a broker dealer that would execute any trades
directed by PVFFP and by entities unrelated to PVFFP or the Company.
Through PVF Holdings, Inc., the Company invested a total of $300,000 in
PVFFP and Emissary, virtually all of which was invested in Emissary. The
other investor in PVFFP and Emissary was to be an individual named
Gregory Shefchuk. Mr. Shefchuk owned a financial planning service that
traded through Money Concepts Capital Corp., a broker dealer based in
Chicago, Illinois. Mr. Shefchuk intended to utilize Emissary as the
broker dealer for his proposed activities with PVFFP.

Shortly after PVFFP and Emissary commenced operations, officers of the
Bank learned of alleged improprieties regarding other businesses
operated by Mr. Shefchuk, including allegations that his other business
entities misappropriated funds. Several days later, Mr. Shefchuk
committed suicide, and it was determined to cease all activities of
Emissary and PVFFP. Since that time, PVFFP and Emissary have not resumed
operations and have determined to permanently cease operations and
liquidate as expeditiously as possible.

PVFFP and Emissary have been named as defendants in two lawsuits pending
in the Court of Common Pleas in Lake County, Ohio. One suit was filed
April 14, 1998 by Gary Toth and the Gary A. Toth Trust, and the second
suit was filed on May 22, 1998 by Ashtabula County Residential Services
Corp. Both plaintiffs alleged causes of action premised on breach of
fiduciary duty, fraud and misrepresentation, negligence, breach of
contract, accounting, conversion and constructive trust against the
defendants, which also include Mr. Shefchuk, various entities that he
controlled and Money Concepts. The plaintiffs claim generally that
certain monies they invested through Mr. Shefchuk, or an organization
controlled by him or PVFFP, were misappropriated. Mr. Toth seeks
compensatory damages and punitive damages in excess of $2 million, and
Ashtabula seeks $80,000 in compensatory damages and $1 million in
punitive damages. Neither of these plaintiffs, however, had established
an account with PVFFP. The Toth suit against PVFFP and Emissary has been
dismissed without prejudice. In the Ashtabula suit, a notice of
automatic stay was filed in August 1998 in connection with the
bankruptcy of one of the parties controlled by Schefchuk, and the case
has been largely inactive since that time.

A total of nine additional cases have been filed against some
combination of PVFFP, Emissary, the Company and/or the Bank. Five of
these cases are arbitration proceedings with the NASD, two were filed in
the Court of Common Pleas in Lake and Cuyahoga Counties in Ohio, and two
were filed in the United States District Court for the Northern District
of Ohio, Eastern Division. The plaintiffs in these cases alleged causes
of action premised on breach of fiduciary duty, fraud and
misrepresentation, negligence, breach of contract, accounting,
conversion and constructive trust against the defendants, which also
include Mr. Schefchuk, various entities that he controlled and Money
Concepts. The plaintiffs claim generally that certain monies they
allegedly invested through Mr. Schefchuk, or an organization controlled
by him or PVFFP, were misappropriated. Where the damages sought have
been specified, the plaintiffs seek compensatory damages ranging from
$25,000 to $1.5 million and punitive damages of up to $1.0 million. One
case filed in the United States District Court is a putative class
action suit. None of these plaintiffs, however, had established an
account with PVFFP. In five of these cases, the lawsuit either has been
dismissed against PVFFP, Emissary, the Company and/or the Bank without
prejudice or the plaintiff has agreed to dismiss the suit without
prejudice. The remaining four cases, including the putative class action
claim, are still pending.

In two other lawsuits, one filed against Emissary, Shefchuk and others
in an arbitration proceeding with the NASD, and the other filed against
the Bank in the United States District Court for the Northern District
of Ohio, Eastern Division, Money Concepts claims that the defendants
damaged Money Concepts by inducing registered representatives of Money
Concepts to leave their positions to affiliate with Emissary. In the
arbitration proceeding, Money Concepts alleged causes of action premised
on breach of contract, conversion, intentional interference with
contract and unfair competition/raiding against Emissary. That case has
been settled with no material adverse consequence to the Company. In the
proceeding in the United States District Court, Money Concepts alleged
causes of action premised on interference with contract and business
relationships, misappropriation of trade secrets and confidential
business information, conversion, unfair competition and civil
conspiracy. That case has been dismissed.

In addition, on May 5, 1998, the Securities and Exchange Commission
("SEC") sued Mr. Shefchuk and entities affiliated with him, as well as
Emissary, in the United States District Court, Northern District of
Ohio. The SEC alleged causes of action premised on the Securities Act of
1933, the Securities Exchange Act of 1934 and regulations promulgated
thereunder, contending that it is entitled to injunctive relief and
civil and criminal penalties as a result of the defendants'
misappropriation of funds of clients an entity affiliated with Shefchuk.
The entity alleged to have misappropriated funds was not affiliated with
the Company, the Bank, PVFFP or Emissary. The court entered a
preliminary injunction requiring Emissary not to violate certain
provisions of the securities laws. Emissary had already ceased
operations and determined to liquidate its business, and as a result the
Company does not consider this ruling to be material. The SEC has moved
for an order dismissing the case and dissolving the preliminary

REVLON INC: Finkelstein & Krinsk File Securities Suit In New York
News from Finkelstein & Krinsk: Finkelstein & Krinsk announced that a
class action has been commenced in the United States District Court for
the Southern District of New York on behalf of purchasers of Revlon,
Inc. (NYSE:REV) securities during the period between October 29, 1997
and October 2, 1998.

The complaint charges Revlon and certain of its officers and directors
with violations of the Securities Exchange Act of 1934 by misleading the
investing public and artificially inflating the value of Revlon stock
during the Class Period. Specifically, the complaint alleges that in
1986, defendant Ronald O. Perelman, Revlon's Chairman, acquired Revlon
in one of the most hotly contested takeovers of that era through a
leveraged buy-out that saddled the Company with huge amounts of debt and
debt service.

In 1998 an opportunity presented itself to refinance a large portion of
that debt at favorable interest rates over a further extended time
provided that Revlon could be made to appear to have ever increasing
revenues and to be generating profits, despite the crushing debt load.
Accordingly, Perelman along with other Revlon insiders, concocted a
scheme to defraud the investing public by recognizing revenue in
violation of Generally Accepted Accounting Principles (GAAP) by, among
other things, deliberately shipping excessive amounts of Revlon products
and improperly recognizing revenues on such shipments without booking
sufficient reserves and by acquiring The Cosmetic Center, Inc. to merge
with Revlon's Prestige Fragrance & Cosmetics, Inc. retail store
operation to hold excess and overvalued inventory before disposing of
the combined operation and taking charges against income after the end
of the Class Period.

As a result, the Complaint alleges that on February 2, 1998, during the
Class Period, Revlon was able to issue and sell $ 900 million in senior
notes at 8 5/8 percent and 8 1/8 percent interest to redeem $ 815
million in senior notes at 10 1/2 percent and 9 3/8 percent interest and
to extend by five years the maturity date on both sets of notes. As
alleged in the complaint, the scheme collapsed at the end of the third
quarter of 1998 when Revlon disclosed on October 2, 1998 that it would
miss its expected quarterly sales figure by almost $ 100 million and its
expected earnings per share by 90 percent. The price of Revlon's stock
plunged 44 percent from $ 27 13/16 to $ 15 7/16 per share on volume of
2,322,100 shares that day, causing substantial injury to Class members.
Plaintiff seeks to recover damages on behalf of all purchasers of Revlon
Securities during the Class Period.

The plaintiff is represented by the law firm of Finkelstein & Krinsk. If
you are a member of the Class described above, you may, no later than 60
days from October 1, 1999, move the Court to serve as lead plaintiff of
the Class, if you so choose. In order to serve as lead plaintiff,
however, you must meet certain legal requirements. Contact plaintiff's
counsel, Jeffrey R. Krinsk, Esq., of Finkelstein & Krinsk toll free at
877/493-5366 or via e-mail at fk@class-action-law.com TICKERS: NYSE:REV

SOUTHWEST SECURITIES: Decries Merit Of TX Suit Over IPO & Other Suits
On May 22, 1998, a class action claim was filed in the United States
District Court for the Northern District of Texas against Southwest
Securities Group Inc. and ViaGraphix Corporation alleging that material
misrepresentations were made in the registration statement and
prospectus that was filed with the SEC and distributed to investors in
connection with the initial public offering of stock of ViaGraphix,
which was managed and underwritten by us. The Company believes that it
has meritorious defenses to the allegations of the lawsuit.

In the general course of its brokerage business and the business of
clearing for other brokerage firms, the Company has been named as
defendant in various pending lawsuits and arbitration proceedings. These
claims allege violation of Federal and state securities laws.

SYMMETRICOM INC: Discovery Goes On For Securities Suit In CA
In January 1994, a securities class action complaint was filed against
the Company and certain of its present or former officers or directors
in the United States District Court, Northern District of California.
The action was filed on behalf of a putative class of purchasers of the
Company's stock during the period April 6, 1993 through November 10,
1993. The complaint seeks unspecified money damages and alleges that the
Company and certain of its present or former officers or directors
violated federal securities laws in connection with various public
statements made during the putative class period.

The Court dismissed the first and second amended complaints with leave
to amend. The plaintiff filed a third amended corrected complaint in
August 1997. The Company filed a motion to dismiss this third amended
complaint, which was denied in January 1998. Discovery is proceeding.
The trial is scheduled to begin on July 10, 2000.

The Company and its officers believe that the complaint is entirely
without merit, and intend to continue to defend the action vigorously.

TOBACCO LITIGATION: Data May Cast Doubt On Harm Of Secondhand Smoking
Mobilizing against smoking bans and lawsuits that could cost them
billions, tobacco companies are engaged in a far-reaching campaign to
discredit evidence that secondhand smoke is harmful to human health.

Nowhere is the strategy more evident than in a legal battle over the
evidence that has occupied at least 10 courts, including U.S. District
Court in Los Angeles, where it appears likely to be resolved in the
industry's favor.

In the latest phase of the discovery battle, Philip Morris is fighting
USC researchers to get access to a single computer disk containing raw
data from an influential five-city study, known as the Fontham study,
that found a causal link between lung cancer and secondhand smoke. The
company wants to scrutinize the data in hopes of casting doubt on the
evidence, which is weaker for secondhand smoke than for some other
environmental hazards.

Fontham and similar studies have provided the scientific bedrock for a
small but growing wave of secondhand smoke litigation that the industry
aims to head off. At the same time, cigarette makers are determined to
slow the spread of California-style smoking bans to less-regulated areas
of the United States and to foreign markets where smokers still light up
wherever they choose. Research suggests that smoking restrictions reduce
cigarette sales by inducing many smokers to cut down or even quit.

Researchers from USC and other institutions involved in the Fontham
study say the industry's relentless pursuit of the data could have a
chilling effect on future health research. Citing promises of
confidentiality to subjects in the study, they have resisted demands to
hand over the data, which cigarette makers say they need to defend
themselves in court.

The industry has been largely thwarted in this long-running game of cat
and mouse, obtaining but a sliver of the data. But its five-year quest
may be about to pay off. In Los Angeles, U.S. District Judge Richard A.
Paez will decide if USC must honor an industry subpoena, and he has
already ruled for the industry once.

Although tobacco companies have their hands full with litigation over
primary smoking--such as the huge case filed last month by the Justice
Department--secondhand smoke is an emerging threat, in part because the
industry's standard defense that victims accepted the risk is not

Cigarette makers won the only two secondhand smoke cases to be decided
by juries, but in 1997 they agreed to settle a class action by airline
flight attendants for $ 349 million. The money was for health research
and legal costs, not damages, but the agreement gave flight attendants a
one-year window in which to sue once the settlement was final.

It became final last month, when lawyers opposed to the deal withdrew
their challenge. As a result, a flurry of suits by flight attendants is
expected over the next 12 months. A few secondhand smoke cases are
pending, including class actions on behalf of casino workers.

The industry counterattack produced a big victory last year when a
federal judge in North Carolina ruled that the Environmental Protection
Agency had made procedural and substantive errors in a landmark report
in January 1993 that concluded that secondhand smoke is a significant
cause of lung cancer in nonsmokers. Federal officials have appealed the

In fighting to secure the Fontham data, the industry is taking aim at a
major piece of research that helped persuade the EPA and other health
organizations to declare secondhand smoke a significant hazard.

Named for Elizabeth Fontham, a principal investigator and lead author,
the project teamed researchers from Louisiana State University, Emory
University, the University of Texas and the California Department of
Health Services, along with USC, in a study of nearly 2,000 nonsmoking
women in Los Angeles, San Francisco, Houston, New Orleans and
Atlanta--including 1,253 subjects who were healthy and 653 with lung
cancer. Their conclusion: Exposure to secondhand smoke raised the lung
cancer risk about 30%.

The data sought by cigarette makers include medical records and personal
information on study subjects, such as work and marital histories,
dietary habits and exposure to other toxic substances. But the
researchers say that they promised never to divulge that information,
and that it will be hard to gain cooperation in future studies if they
go back on their word.

"We have to be able to make promises we can keep, and to me that's
really the essence of the litigation over this," said Peggy Reynolds,
chief environmental epidemiologist for the state health department and
one of the Fontham investigators.

Tobacco critics such as Stanton Glantz of UC San Francisco medical
school maintain that the industry effort amounts to harassment of the

But tobacco lawyers say it's perfectly natural that they would want to
examine the data. The Fontham study is "the No. 1 piece of evidence
against us in any secondhand smoke lung cancer case," said Barry
Davidson, a lawyer for Philip Morris.

Davidson called the confidentiality issue "a total red herring," noting
that Philip Morris has sought a redacted copy of the data, with names,
addresses and phone numbers deleted. "Methinks," said Davidson, "they
researchers doth protest too much."

Patricia Buffler, one of the Fontham researchers, acknowledged some
anxiety over the industry's intent to discredit the study. "If you know
anything about statistics," she said, "adjustments can be made to
produce conflicting results."

Indeed, secondhand smoke research may be uniquely vulnerable to the kind
of test the industry would like to apply to the Fontham data. The reason
is that even in the most incriminating studies, although the impact of
secondhand smoke across the whole population may be substantial, the
risk for each exposed person is low.

For a toxic agent to be deemed a proven risk to health, researchers
typically insist that the rate of illness at least double, or increase
100%, for those who are exposed. Otherwise, other environmental factors
or errors in classifying data might explain the difference.

The Fontham study, typical of research indicting secondhand smoke, found
an added cancer risk of about 30%, well below the traditional threshold.
By comparison, longtime smokers face a roughly twentyfold, or 2,000%,
greater lung cancer risk than nonsmokers. Lifetime smokers have about
one chance in eight of dying of lung cancer, compared with a risk of one
in 200 for those who never smoked.

The industry's quest for the Fontham data began in 1994, when cigarette
makers subpoenaed it from Louisiana State University as part of their
defense of a secondhand smoke case in Texas. But Louisiana law provides
sweeping protections against disclosure of confidential data in health
studies, and the industry was turned down by three different state and
federal judges when it tried to enforce its subpoenas.

Tobacco lawyers made two trips to state court in Georgia and finally got
data from Emory University, but only for the Atlanta portion of the

In California, the first industry subpoena was quashed in 1997 by a San
Francisco Superior Court judge. In Los Angeles, cigarette makers also
subpoenaed the data from USC, first for defense of the flight
attendants' class action, and then in the secondhand smoke case of a
Florida woman named Roselyn Wolpin.

In September 1998, a U.S. magistrate in Los Angeles ruled that the
university must honor the subpoena. That ruling was upheld by Judge Paez
earlier this year.

Then the researchers won a temporary reprieve when the Wolpin case was
dismissed. The industry immediately subpoenaed the data in the case of
Robert Murphy, a former Nevada casino worker with lung cancer.

Now USC is fighting the Murphy subpoena. The dispute will go back to
Paez after a ruling by the magistrate later this year.

Davidson, the Philip Morris lawyer, said he's taken part in other
protracted discovery battles, but has "never seen anything to approach
this. . . . This has almost become a legend in its time." (Los Angeles
Times 10-4-1999)


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