/raid1/www/Hosts/bankrupt/CAR_Public/991207.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Tuesday, December 7, 1999, Vol. 1, No. 215


ALLSTATE INSURANCE: To Reimburse Depreciation Re Roof Claims in Okla.
ASBESTOS LITIGATION: U.K. Ap Ct Dismisses South African Victims’ Claims
CERION TECHNOLOGIES: Ill. App. Ct. Revives Shareholder IPO Suit
CITY OF YONKERS: New Chance to Show Bias in Schools As 2nd Cir Remands
CONNECTICUT ENERGY: 2 Cases on Trade Practices Set for Trial in 2000

DYFS: Judge Will Hear If Teenager from Foster Care Can File Late Claim
GEORGIA GULF: Contractors’ Workers Sue in Loui. on EDC Pipeline Rupture
GEORGIA GULF: 5 Opt out of Settlement for Louisiana Water Contamination
HOLOCAUST VICTIMS: A List of WWII Compensation Discussions
HOLOCAUST VICTIMS: Veil Lifted On Holocaust Accounts In Swiss Banks

INSPIRE INSURANCE: Milberg Weiss Files Securities Suit in Texas
PARTY CITY: Faces Consolidated Securities Complaint in New Jersey
PARTY CITY: Settles Store Franchisees’ Lawsuit in New York
PSS WORLD: Securities Suit in Florida Has Been Voluntarily Dismissed
TEXAS ALCOHOL: 3 White Males Sue for Denial of Job – FNN Coverage

Y2K LIITGATION: A New Year's Eve Designated Vetter for Some Lawyers

* A Class Action Member Says Coupon Settlement Does’t Benefit Consumers
* The great assimilation of the Internet continues apace


ALLSTATE INSURANCE: To Reimburse Depreciation Re Roof Claims in Okla.
Allstate Insurance Company and Allstate Indemnity Company announced on
December 3 they have begun a process to reimburse some Oklahoma
policyholders for depreciated payments relating to roof replacement
claims from 1990 to 1999.

Allstate is sending notice of the proposed settlement to Oklahoma
homeowners customers who had policies in effect between January 1, 1990
and October 18, 1999, which provided for depreciation on roof
replacement and whose payments for roof replacement were reduced by
Allstate for depreciation of labor or tear off and not reimbursed.

The reimbursement process is part of a proposed settlement of a class
action lawsuit regarding the company's handling of roof replacement
claims. The proposed settlement is subject to final court approval. The
lawsuit challenged Allstate's methods regarding depreciation of labor
involved in replacing a roof and the cost of tearing off the roof being

"While Allstate denies all allegations in the lawsuit, we entered into a
settlement to spare our customers and the company additional costly and
lengthy litigation," said Allstate spokesman Peter Debreceny.

Allstate has begun mailing notices of the proposed settlement to
potential class members. Only present and former policyholders who
submit a claim form and who qualify will receive a payment, which will
be based on a percentage of the amount of depreciation taken for the
labor component of tear off and roof replacement.

Customers with questions regarding their eligibility for reimbursement
should call counsel for the class, John T. Edwards, Shannon L. Edwards
and Phillip A. Dickey of Monnet, Hayes, Bullis, Thompson & Edwards, in
Oklahoma City, 405-616-2977. The Allstate Corporation (NYSE: ALL) is the
nation's largest publicly held personal lines insurance company. Its
main business units include Allstate Personal Property and Casualty,
which provides insurance for more than 14 million households and has
approximately 15,500 agents in the U.S. and Canada, and Allstate Life
and Savings, which markets a number of life insurance and savings
products under a variety of brands through a number of channels and is
currently the nation's 17th largest life insurance business.

ASBESTOS LITIGATION: U.K. Ap Ct Dismisses South African Victims’ Claims
A landmark ruling has significantly reduced the risk to UK
multinationals that this country's legal aid system will encourage
people overseas to take class actions against them here.

The Court of Appeal has refused to give 3,000 South African asbestos
victims leave to pursue their case against Cape in the UK courts. Giving
its reasons last week, the court said the fact the victims would not
have access to legal aid in South Africa was relevant but not, on its
own, sufficient grounds to allow the case to go ahead here.

Citing the precedent of the Bhopal disaster, where the US courts
dismissed a claim against Union Carbide because the majority of
claimants were Indian residents, the court said the public interest lay
in the Cape action being fought in the South African courts.

But the decision may still be challenged - Leigh Day & Co, the solicitor
acting for the Cape claimants, said it would be seeking permission from
the House of Lords to appeal. (Financial Times (London) December 6,

CERION TECHNOLOGIES: Ill. App. Ct. Revives Shareholder IPO Suit
Nashua Corporation (NYSE: NSH) announced on December 2 that the
Appellate Court of Illinois has reversed the order of the Circuit Court
of Cook County, Illinois against the Company in connection with the
initial public offering of Cerion Technologies Inc.("Cerion").

The lawsuit was filed in November 1997 by three individual plaintiffs
who claimed to represent all persons who purchased Cerion's common stock
between May 24, 1996 and July 9, 1996, and was dismissed with prejudice
by the Circuit Court in May 1998. The lawsuit also named Cerion, certain
directors and officers of Cerion, and the underwriter of the offering.

Cerion, formerly headquartered in Champaign, Illinois, manufactured
precision-machined aluminum disk substrates. Cerion ceased operations in
November 1998. Cerion's assets and liabilities are held by Cerion
Liquidating Trust under a shareholder-approved plan of liquidation and
dissolution.  Nashua Corporation markets specialty imaging products and
services to industrial and commercial customers. The Company's products
include thermal papers, pressure-sensitive labels and specialty papers,
as well as copier, ink jet and laser printer supplies.

On September 15, 1998, Cerion Technologies Inc. ("Cerion"), a publicly
owned company of which Nashua owns 37.1 percent of the outstanding
common stock, announced its decision to cease operations in the fourth
quarter of 1998 and it is currently in the process of liquidation.
Nashua's latest annual report is posted at

CITY OF YONKERS: New Chance to Show Bias in Schools As 2nd Cir Remands
Desegregation advocates will get a new chance to show that vestiges of
discrimination persist in the Yonkers School District, a Second Circuit
panel decided. Rethinking a June opinion on the same appeal, the appeals
court stuck to its ruling that two vestiges claimed by the plaintiffs
were unsubstantiated and the remedy - a mandate that the state provide $
575 million to the district over nine years - was overbroad and
overstepped the trial court's powers.

What the panel did was abandon its position that there are no possible
vestiges of discrimination beyond the two it rejected in June.

As a result, the panel, led by Circuit Judge Dennis G. Jacobs, has
remanded the two-decades-long case to the southern District for a
hearing on whether elements of discrimination remain in the Yonkers
School District. "The remand will entail a prolongation of uncertainty
in this already protracted litigation, but we conclude that the delay is
worthwhile to ensure that we have the full benefit of the district
court's views," wrote Judge Jacobs in United States v. City of Yonkers,
97-6284, 97-6338, the seventh Second Circuit opinion in the case's

The litigation focuses on identification and remedying any residual
discrimination, despite the fact that the Yonkers school system is now
fully integrated. If there are such vestiges, minority students affected
are entitled to remedial measures. The desegregation advocates, led by
the Yonkers Branch of the NAACP, will be able to establish alternative
grounds for a remedy from the trial court.

Off the table as possible vestiges of discrimination are the two
rejected in June: that teachers have low expectations of minority
students, and that teaching techniques and curriculum are insufficiently
multicultural. In the 51-page majority opinion, Judge Jacobs reiterated
the court's reasons for rejecting the two vestiges approved by the trial

But in opening the door to proof of other remnants of discrimination,
the majority came over to the position taken by Circuit Judge Robert D.
Sack, a partial dissenter in June who wrote a short concurrence. The
appeals panel asked District Judge Leonard B. Sand "to make further
findings on the record and in light of this opinion as to whether - or
not - there are remaining vestiges of segregation in the Yonkers school
system, and if so what they are and what record evidence is relied on
for support."

The case was begun in 1980 when the federal government sued the city of
Yonkers and its school system alleging housing and school segregation.
The NAACP intervened in the case, which was later certified as a class

Assistant Attorney General Denise A. Hartman represents the State of New
York, which is a defendant in the case. Michael H. Sussman of Goshen is
representing the NAACP. Stephen J. Routh of Hogan & Hartson in
Washington represents the Yonkers Board of Education, a defendant that
has weighed in on the side of the NAACP. And Raymond P. Fitzpatrick Jr.,
of Fitzpatrick Cooper & Clark in Birmingham, Ala., is the attorney for
the City of Yonkers. (New York Law Journal November 18, 1999)

CONNECTICUT ENERGY: 2 Cases on Trade Practices Set for Trial in 2000
There are three lawsuits pending against The Southern Connecticut Gas
Company in the Complex Litigation Docket,

Connecticut Heating and Cooling Contractors Association, Inc., et al. v.
Connecticut Natural Gas Corporation, et al., alleging conspiracy to
violate antitrust laws against the three Connecticut LDCs;

Connecticut Cooling Total Air, Inc. v. Connecticut Natural Gas
Corporation, et al., alleging conspiracy to violate the Connecticut
Unfair Trade Practices Act against the three LDCs; and

Connecticut Cooling Total Air, Inc. v. Southern Connecticut Gas Company,
alleging violation of the Connecticut Unfair Trade Practices Act.

All of the suits relate to the LDCs' provision of service and
maintenance to heating, cooling and ventilating systems and appliances.
The plaintiffs are two trade associations and one plumbing and heating
contractor, purporting to sue on behalf of a class of other such
contractors. The cases have been brought as class actions, but class
certification has not been granted. One of the cases against Connecticut
Natural Gas alone was ordered to proceed to trial in August 1999 and
settled just prior to trial. While that case was moving toward trial,
discovery was stayed on the remaining cases. Yankee Gas has been
selected as the next case to proceed to trial, which has been scheduled
to commence on March 20, 2000. One of the cases against Southern is
scheduled for trial on December 4, 2000. The plaintiffs seek treble
damages in excess of $15,000, punitive damages, attorneys' fees and
equitable relief. Southern is defending itself vigorously in these
lawsuits, which management believes are without merit.

DYFS: Judge Will Hear If Teenager from Foster Care Can File Late Claim
In 1990, James Reele and his brother were placed in foster care because
of alleged abuse by their adoptive parents, but that only led to more
abuse, so he says, and he's determined to hold the state accountable.

On Nov. 19, he won a procedural victory, as Superior Court Judge Marlene
Lynch Ford in Toms River ruled that Reele could file a late claim
against the Division of Youth and Family Services -- on the condition
that he be evaluated by a psychiatrist.

DYFS had opposed Reele's motion because he failed to file his suit
within the required 90 days of his separation from the agency at age 18.
He didn't file until Aug. 10 of this year, a day before his 19th

Ford ordered that psychiatrist Robert Johnson of the University of
Medicine and Dentistry conduct his evaluation of Reele's "mental
emotional and physical state of health" and prepare a report by Dec. 17.
At that time, Ford will conduct a hearing on whether Reele can file his
claim. Johnson had evaluated Reele last month but has not yet reported
his findings.

Ford also ordered the Children's Home of Burlington County in Mount
Holly to turn over Reele's medical and other records to Ford for review
in camera.

Katrina Wright, an associate at Lowenstein Sandler in Roseland who is
representing Reele pro bono, says her client's records are vital to
showing that he was improperly cared for by DYFS and was unable to
understand the time limits on suing a state agency. "How could a
homeless kid, who has never been to a regular school, how could he
possibly know?" asks Wright. "He didn't know he could sue the state. He
doesn't have a parent. He didn't have anybody he could go to."

DYFS spokesman Andy Williams referred questions about the case to the
Attorney General's Office, which declined to comment.

Reele's story made news in 1992 when his adopted parents were convicted
on endangerment charges for allegedly forcing him and his brother to
sleep in dog kennels two years earlier. DYFS learned of the situation
through one of the Reeles' other adopted children and took custody of
James and his siblings.

Since 1990, Wright says, Reele has been in 24 foster homes, never
staying at one for more than three to six months.

Reele's suit against DYFS alleges that because he was abused as a child
and tortured, the agency should have recognized him as a child at risk.

Cases like Reele's prompted Lowenstein Sandler to join a class-action
suit filed in federal court in Trenton in August by Children's Rights, a
not-for-profit child advocacy group, alleging that the agency doesn't
adequately protect abused and neglected children. The suit, similar to
others the group has filed in 11 other cities or states, seeks to have a
panel of experts oversee DYFS. A state panel in February 1998 urged a
number of reforms for DYFS, including hiring additional caseworkers and
measures to reduce stays in foster care. (New Jersey Law Journal, 158
N.J.L.J. 744, Nov-29-1999)

GEORGIA GULF: Contractors’ Workers Sue in Loui. on EDC Pipeline Rupture
Georgia Gulf Corp. currently has numerous separate pending cases which
originated as a result of a 1994 rupture of the Conoco Ethylene
Dichloride (EDC) pipeline connecting Conoco's dock to the Vinyls Group's
VCM plant. Plaintiffs are seeking compensatory and punitive damages as a
result of alleged exposure to EDC while employed for contractors hired
by Conoco to clean up the EDC.

On October 13, 1997, a jury in the 14(th) Judicial District Court,
Calcasieu Parish, Louisiana, returned a verdict against the Company in
lawsuits brought by two of Conoco's contractor's employees who were not
working on the cleanup. The Company appealed the verdict and, along with
Conoco, settled with the plaintiffs for an undisclosed amount. The
Company does not believe that the rulings related to the two above cases
adversely affects the majority of the other cases. The remaining EDC
pipeline cases relate to workers specifically hired by Conoco to clean
up the spill. The Company has not completed discovery on these suits.

Also, the Company has filed a suit against Conoco for indemnification
for the pending and future cases related to the above EDC pipeline
cleanup, as well as declaratory judgement that the Company is not
responsible for the costs of the EDC pipeline spill. Conoco has since
filed a counter suit against the Company. Conoco has also filed suit
against the Company seeking recovery of cleanup costs incurred by Conoco
related to the rupture of the EDC pipeline. Pursuant to the contract
between the Company and Conoco, Conoco was responsible for operation and
maintenance of the pipeline and all liabilities resulting therefrom.

GEORGIA GULF: 5 Opt out of Settlement for Louisiana Water Contamination
In 1998, the Company settled a class action suit styled SALLY COMEAUX ET
AL. V. VISTA CHEMICAL COMPANY ET AL. ("COMEAUX). This class action was
brought by the residents of Mossville, Louisiana, a community adjacent
to the Vinyls' Group VCM Plant, alleging groundwater contamination
caused by EDC. As a result of the settlement, the litigation accrual was
adjusted resulting in a credit to earnings of $7,000,000 for the twelve
months ended June 30, 1999. Five plaintiffs have opted out of the
original settlement and are pursuing individual claims for unspecified
damages. The Company is currently in the discovery phase of the five

Conoco/DuPont filed suit against the Company alleging bad faith in its
dealings in the COMEAUX litigation discussed above. Conoco/DuPont are
seeking reimbursement of the settlement amount they paid to the COMEAUX
plaintiffs plus additional unspecified damages. Since the basis of the
COMEAUX class action is EDC groundwater contamination, which primarily
occurred prior to the Company's formation in 1984, Conoco/DuPont
retained liability for this contamination pursuant to an agreement
between the parties.

In addition to the above claims, the Company is a named defendant in
numerous other lawsuits and named parties in governmental proceedings
arising in the ordinary course of business. The Company does not believe
that the Vinyls Group will incur any additional material litigation
liability related to any of the above claims. Additionally, pursuant to
the Asset Purchase Agreement, the Company has indemnified the third
party purchaser of the Vinyls Group for any liabilities and obligations
relating to any litigation, action, suit, claim, investigation or
proceeding against the Vinyls Group pending on the closing date of the

HOLOCAUST VICTIMS: A List of WWII Compensation Discussions
A list of ongoing compensation discussions aiming to settle disputes
from World War II:

                           Slave Labor

Representatives of Nazi-era slave and forced laborers face a deadline
Wednesday to give their response to an $4.2 billion offer by German
firms and the government. The fund was proposed in February as a way of
resolving class-action lawsuits in the United States and elsewhere
fending off new ones. About 60 companies are now participating, although
only 20 have announced their involvement publicly. Lawyers for the
victims have said between $5.3 billion and $7.9 billion would be a fair
amount. No further meetings have yet been scheduled.

                            Nazi Gold

The U.S. government has established a fund to which all countries that
received Nazi gold can voluntarily contribute in order to benefit
Holocaust survivors. These negotiations are also taking place under the
office of Deputy U.S. Treasury Secretary Stuart Eizenstat, who is the
U.S. envoy to the Nazi labor talks.


European insurance companies have been involved in talks led by a
London-based claims commission to resolve unpaid insurance claims for
those who died in the Holocaust. So far, companies have set up a $100
million fund to cover the claims. The commission is expected to announce
details of the claims process after its next meeting, Dec. 15, although
a dispute with one company, Germany's Allianz, over the release of
Holocaust-era files may delay plans.

The Dutch insurer Aegon (which controls Trans-America in the United
States) has refused to turn over its client list, but because Aegon is a
relatively small player, this will not hold up the compensation process.
However, the commission may decide on a boycott at the Dec. 15 meeting
of Aegon and Trans-America if they do not change their position.

Negotiators at the Nazi labor talks have also discussed including unpaid
insurance claims from World War II as part of the compensation from that
industry fund which includes insurance companies.

                       Previous Compensation

The German government has already paid about $60 billion in payments,
pensions and other programs for Holocaust-related crimes. (AP Online
December 6, 1999)

HOLOCAUST VICTIMS: Veil Lifted On Holocaust Accounts In Swiss Banks
The Volcker Committee report issued December 6 on dormant accounts in
Swiss banks belonging to Holocaust victims highlights the campaign by
Jewish organisations to obtain justice on three fronts: unclaimed Jewish
accounts, Nazi gold, and unpaid insurance claims.

The Volcker report lists 53,886 accounts in Swiss banks as being
directly or indirectly related to the Holocaust period, of which more
than 10,000 belonged to known or probable Holocaust victims. The report
follows increasingly militant action by Holocaust survivors and victims'
families to force Swiss bankers to open up their records and come to
terms with the past.

Following are some key dates in the dispute.

* February 1996

The Swiss Bankers Association says it knows of only 775 bank accounts
opened by foreign clients before 1945 remaining untouched since, and
that the sums involved total 32 million dollars. The World Jewish
Congress disputes the figure, putting forward its own estimate of six
billion dollars, and urges the banks to investigate dormant accounts.

* May 2, 1996

Creation of the Volcker Committee, headed by former US Federal Reserve
chairman Paul Volcker, comprising representatives of Jewish
organisations and of the Swiss Bankers Association, charged with
investigating Swiss bank accounts that have been lying dormant since
World War II.

* December 13, 1996

The Swiss parliament commissions a team of historians and a lawyer under
Lausanne historian Jean-Francois Bergier to examine Switzerland's links
with the Third Reich, including the issue of Nazi gold and the treatment
of Jewish refugees.

* January 1997

Swiss bank employee Christoph Meili rescues Holocaust-era documents from
a shredder room at Union Bank of Switzerland in Zurich.

* March 1997

The Swiss central bank, in concert with private banks, sets up a
humanitarian fund worth 190 million dollars to be distributed by the
World Jewish Restitution Organisation among needy Holocaust survivors.

* July, October 1997

Swiss banks publish lists naming 5,200 foreign clients whose accounts
have remained dormant since the war. The accounts hold a total of 45
million dollars. The banks subsequently receive 12,000 claims, 7,500 of
them in reference to published names.

* May 25, 1998

The Bergier Commission issues a preliminary report concluding that Swiss
banks turned a blind eye to the origins of Nazi gold stored in their
vaults even after it became clear that the gold was illegally obtained.

* June 19, 1998

Jewish leaders reject an offer by Swiss banks to pay 600 million dollars
to settle their claims.

* August 13, 1998

Following an audit by the Volcker Committee, Swiss banks Credit Suisse
Group and UBS agree to pay out 1.25 billion dollars over three years in
settlement of three class-action suits representing 31,000 survivors and
their heirs. The agreement, which releases the banks from all
Holocaust-related claims, comes just weeks before sanctions announced by
a number of US cities and states against the Swiss were due to begin.

* May 6, 1999

European insurance giants Allianz of Germany, AXA of France, Generali of
Italy, and Switzerland's Winterthur and Zurich agree to pay the pre-war
value of life insurance policies taken out by Holocaust victims, taking
inflation and currency devaluation into account. Estimates of payouts
are as high as 11 billion dollars. The companies had previously insisted
there could be no payout without death certificates, an impossibility
for most Holocaust victims.

* December 6, 1999

The Volcker Commission issues its report on the Swiss banks' treatment
of Jewish Holocaust survivors. (Agence France Presse December 6, 1999)

INSPIRE INSURANCE: Milberg Weiss Files Securities Suit in Texas
Milberg Weiss (http://www.milberg.com)announced on December 3 that a
class action has been commenced in the United States District Court for
the Northern District of Texas on behalf of purchasers of INSpire
Insurance Solutions Inc. ("INSpire") (Nasdaq:NSPR) common stock during
the period between Jan. 28, 1998 and Oct. 14, 1999 (the "Class Period").

The complaint charges INSpire and certain of its officers and directors
and its parent company with violations of the Securities Exchange Act of
1934. INSpire is a provider of policy and claims administration
solutions to the property and casualty insurance industry and offers
comprehensive outsourcing services, software and software services. The
complaint alleges that INSpire made false and misleading statements,
issued false financial results and continually announced new contracts,
representing that the new contracts would provide significant
"recurring" revenue when, in fact, the contracts were generally
contingent on the profitability of its customers.

As a result, INSpire's stock traded at inflated levels during the Class
Period. Defendants took advantage of this inflation, completing a
secondary public offering of 3.9 million shares in 3/98, wherein INSpire
sold 2.7 million shares and Millers Mutual, INSpire's largest
shareholder (and largest customer), sold 975,000 shares for $20.5
million. INSpire's chief executive officer also sold 157,000 shares for
$3.3 million in the secondary offering.

INSpire used part of the proceeds from the secondary offering in which
it sold 2.7 million shares for $54 million to purchase another software
vendor, Paragon Interface Inc. ("Paragon"). Nonetheless, INSpire's
software business continued to deteriorate. In 11/98, INSpire entered
into a large outsourcing agreement with Arrowhead General Insurance
Agency Inc. ("Arrowhead"). Defendants told the market that this
transaction would generate $35 million in revenue in year one, that it
would allow INSpire to expand geographically into California, that it
would add $0.05 to 1999 earnings and was a "major leap forward" for

As a result of these statements, INSpire's stock immediately increased
to more than $30 per share. Several of the defendants immediately took
advantage of this inflation, selling 106,150 of their INSpire shares for
$3.2 million.

Finally on 10/15/99, INSpire revealed the horrible state of its
business, including the write-off of nearly all of its assets associated
with software and lower operating earnings from outsourcing. Analysts
now project INSpire will have EPS of only $0.32 in 1999 (before charges)
and only $0.17 in 2000 compared to Class Period forecasts of $.89 and
$1.20, respectively. Upon these disclosures, INSpire stock dropped to
less than $4 per share. While the Class has suffered millions in
damages, the defendants received substantial benefits from their
misdeeds. As the price of INSpire stock soared to as high as $35-3/8,
the defendants sold more than 1.5 million shares of their INSpire stock
for proceeds of more than $33.6 million. If you wish to discuss this
action or have any questions concerning this notice or your rights or
interests, please contact plaintiff's counsel, William Lerach or Darren
Robbins of Milberg Weiss at 800/449-4900 or via e-mail at wsl@mwbhl.com

PARTY CITY: Faces Consolidated Securities Complaint in New Jersey
Party City Corp. has been named as a defendant in the following twelve
class action complaints: Weber v. Party City Corp., Steven Mandell, and
David Lauber, Civ. Action No. 99-CV-1252; Opus GT Partners LP v. Party
City Corp. and Steven Mandell, Civ. Action No. 99-CV-1327; Klein and
Shiffrin v. Party City Corp., Steven Mandell and David Lauber, Civ.
Action No. 99-CV-1325; Flynn v. Party City Corp., David Lauber and
Steven Mandell, Civ. Action No. 99-CV-1328; Catanzarite v. Party City
Corp., Steven Mandell and David Lauber, Civ. Action No. 99-CV-1317;
Tabbert v. Party City Corp. and Steven Mandell, Civ. Action No.
99-CV-1353; Maietta v. Steven Mandell and Party City Corp., Civ. Action
No. 99-CV-1386; Barry v. Party City Corp., Steven Mandell and David
Lauber, Civ. Action No. 99-CV-1453; Kurzweil v. Party City Corp., Steven
Mandell and David Lauber, Civ. Action No. 99-CV-1396; Hormel v. Party
City Corp., Steven Mandell and David Lauber, Civ. Action No. 99-CV-1689;
Sacher v. Party City Corp., Steven Mandell and David Lauber, Civ. Action
No. 99-CV-2238: and Gross v. Party City Corp., Steven Mandell and David
Lauber, Civ. Action No. 99-CV-2355.

The Company's former Chief Executive Officer and former Chief Financial
Officer and Executive Vice President of Operations have also been named
as defendants. The complaints have all been filed in the United States
District Court for the District of New Jersey. The complaints were filed
as class actions on behalf of persons who purchased or acquired Party
City common stock during various time periods between February 1998 and
March 19, 1999.

The complaints allege, among other things, violations of sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, and seek unspecified damages. The plaintiffs
allege that defendants issued a series of false and misleading
statements and failed to disclose material facts concerning, among other
things, the Company's financial condition, adequacy of internal controls
and compliance with certain loan covenants. The plaintiffs further
allege that because of the issuance of a series of false and misleading
statements and/or failure to disclose material facts, the price of Party
City common stock was artificially inflated.

On September 13, 1999, the Court signed an Order appointing lead
plaintiffs and lead counsel to represent the classes alleged in the
complaints. The Order directed plaintiffs to file a consolidated and
amended complaint in October 1999, which the plaintiffs did and which
was served on the Company on or about October 18, 1999.

PARTY CITY: Settles Store Franchisees’ Lawsuit in New York
The Company was named as a defendant in a complaint filed with the
Supreme Court of the State of New York, County of New York, on January
16, 1998 (the "Complaint"), by each of Party City of Greenbrook, Inc.,
Party City of Watchung, Inc., Party City of 22, Inc., Party City of
Ralph Avenue and Party City of Jersey City, Inc., each a franchisee of
the Company. Four of the plaintiffs in the suit have existing Party City
franchise stores, with the remaining plaintiff possessing a right of
first refusal to develop a Party City store in Watchung, New Jersey.

The Complaint stated various causes of action, including unjust
enrichment, unfair competition, fraud and misrepresentation, breach of
contract, misappropriation of information and violations of the New
Jersey Franchise Practices Act and the New York State Franchise Sales
Act. The crux of the Complaint was that the Company undertook a course
of conduct intentionally designed to adversely impact the value of the
Plaintiffs' franchise stores in order to permit the Company to purchase
such stores at a substantially reduced value. The Company settled the
lawsuit on June 30, 1999, at no cost to the Company. In connection with
the settlement, the Company agreed to sell the plaintiff one store at
its fair value.

PSS WORLD: Securities Suit in Florida Has Been Voluntarily Dismissed
Kaplan Kilsheimer & Fox LLP issued the following on December 6:

A proposed class action that was filed on March 22, 1999 against PSS
WORLD MEDICAL, INC. ("PSSI") (Nasdaq: PSSI) and certain of its officers
and directors in the United States District Court for the Middle
District of Florida has been voluntarily dismissed without prejudice.
The suit was brought on behalf of all persons or entities who purchased
or otherwise acquired the common stock of PSSI between June 16, 1998 and
March 10, 1999, inclusive (the "Class Period"). The lawsuit charged PSSI
and certain of its officers and directors with violations of the
Securities and Exchange Act of 1934.

If you purchased PSSI common stock during the Class Period, this
dismissal does not affect your rights in any way. If you have any
questions about this Notice, the action, or your rights, please contact
an attorney of your choice or:
Frederic S. Fox, Esq.
Jonathan K. Levine, Esq.
Janine R. Azriliant, Esq.
Kaplan, Kilsheimer & Fox LLP
e-mail: mail@kkf-law.com

TEXAS ALCOHOL: 3 White Males Sue for Denial of Job – FNN Coverage
Broadcast on Fox News Network on December 1, 1999

GUESTS: William McCauley; Bob Popper; Lawrence Guyot

BYLINE: Sean Hannity; Alan Colmes

    HANNITY: Welcome back to HANNITY & COLMES. I'm Sean Hannity.

Coming up later, charges that Al Gore's campaign manager is a racist.
We'll bring you that information. And that debate is straight ahead.

But a class action lawsuit has been filed against the Texas Alcohol and
Beverage Commission that charging that three males were unfairly passed
over for employment. Why? Because they're white.

At issue is the commission's use of what they call workforce diversity
points. That's a euphemistic term that assigns a number value Now the
case is sure to cause an uproar in the state of Texas and around the

And joining us from Austin is William McCauley. He is a police
lieutenant who is a co-plaintiff in this case. His attorney Bob Popper,
he now joins us in New York. And in Washington, we have Lawrence Guyot,
who is a civil rights activist, strong supporter of affirmative -- oh,
I'm sorry. Glad you're with us.

All right, let me start. Mr. McCauley, tell us about these diversity
points that we have.

applied for a position as an agent trainee with the Alcoholic Beverage
Commission last year, went through their testing process, which was a
written test and interview process. They did a background check. And

    HANNITY: But you and I think one of your co-plaintiffs here also had
higher scores than other people. But because you weren't a minority or
because you weren't female, you did not get the opportunity.

    MCCAULEY: Exactly, sir. From what I understand, there were 13 people
that scored lower than I did that were hired. Until -- they scored lower
than I did until the diversity points were added.

    HANNITY: Lawrence, let's bring you in here. You know what, I could
tell this man, Mr. McCauley, doesn't seem -- you don't have a racist
bone in your body, Mr. McCauley, do you?

    MCCAULEY: No, sir.

    HANNITY: Never discriminated against anybody in your life?

    MCCAULEY: No, sir.

    HANNITY: You deplore racism?

    MCCAULEY: Yes, sir.

    HANNITY: You find it reprehensible as I do. OK, why should he have
to bear the burden of correcting past injustices and wrongs when he's
never discriminated against anybody? You're supporting state-

    LAWRENCE GUYOT, CIVIL RIGHTS ACTIVIST: No, no, I'm not supporting
state-sanctioned. I'm supporting a policy to eradicate racism. And they
wouldn't have affirmative action if a pattern of historic racism had not
been developed...

    HANNITY: Mr. Guyot, he's being discriminated against though.

    HANNITY: Mr. Guyot, you are discriminating against this man...

    GUYOT: No, no...

    HANNITY: ... If you support this -- wait a minute...

    GUYOT: ... I've never met this man...

    HANNITY: ... If you support this system...

    GUYOT: ... I've never met this man. I want him and every American to
have a job.

    HANNITY: ... All right, I stand corrected. I stand corrected.

    GUYOT: What I want because I want this country to remain viable and
I don't want it to explode on the question of race.

    HANNITY: But if you support what is happening to this man that other
people that he is competing with get extra points because of their

    GUYOT: It is not.

    HANNITY: ... His opportunities in America are being ripped away from

    GUYOT: As many times as you...

    HANNITY: ... And that's...

    GUYOT: ... As many times as you try to describe it as state
segregation, it's not...

    HANNITY: ... All right...

    GUYOT: ... discrimination.

    HANNITY: ... let's talk to Bob Popper. He's the attorney here. Look,
we got Adiran (ph). We have Piscataway. We have the Hotwood (ph) case in

trying to do is plainly unconstitutional. You cannot use a diversity-
based rationale to allow racial discrimination or racial preferences.

Mr. Guyot should support what we're doing. There will be black and
Hispanic members of the class in our class action lawsuit. This is a
very strange animal in Texas...

    HANNITY: And they're going to lose.

    POPPER: ... Oh, they're going to lose.

    HANNITY: It's clear in this case because actually it's written in
the policy...

    GUYOT: Oh, no, no, they're not going to lose...

    HANNITY: ... It's written in the policy.

    GUYOT: ... America is going to lose.

    HANNITY: But listen...

    GUYOT: No, no, but...


    POPPER: Not in this particular case.

    HANNITY: When they saw Piscataway -- they had the Piscataway case
... black, then blacks are selected against in the hiring process.

Now Mr. McCauley was selected against because he was white. But there
were also black applicants in the same pool who were selected in this
case was Hispanic women...

    COLMES: Let's...

    GUYOT: That makes sense to me.

    COLMES: ... Let me get Mr. Guyot back in here. Mr. Guyot, I want to
ask you...

    GUYOT: Of course.

    COLMES: ... This is Alan. I'm on your side. Why is this not state
sanctioned discrimination? Let's put this in the proper perspective.

    GUYOT: Look at its historical reason for existing. It exists to do
away with a past pattern of discrimination...

    POPPER: But in this case there was no finding of...


    COLMES: ... finish, then we'll go to you. Very fascinating. I'm very
proud to hear that at some instances it tips and blacks are not hired.
That makes it even more fair.

    COLMES: Bob Popper.

    POPPER: But what happens here is that there is an equal opportunity
discrimination that's happening. Any race may be discriminated against.

And the cause of all of this is the belief that Texas agencies should
look a particular way, should have so many black faces, white faces, and
Hispanic faces, regardless of the applicant pool, regardless of the
population at large. This is a bizarre system that discriminates

    COLMES: Mr. McCauley, is it your belief that the only reason you
didn't get this job is because you're white? Is that the only factor
that stopped you?

    MCCAULEY: I can tell you for a fact that that's true.

    COLMES: You think that's it. That's the only reason. On this,
according to what I've read -- you're going to disagree with me a little
bit here on this. The workforce diversity points make up what I've read
10 percent of the total grade. You're going to say 20 percent. But let's
say it's 20 percent...

    POPPER: I have an internal document saying it's 20 percent.

    COLMES: ... OK. But you've read 10 percent. That's what they've said
externally. But OK, let's say that it's 20 percent. That's still a small
percentage of all the other things they consider. Is that right?

    POPPER: But look, there were 18 applicants in the pool. And Mr.
McCauley scored better than 13 of them. And he was told, looked in the
eye and told, "We're sorry. You're the wrong race. You're the wrong sex.
We know that you scored better. You don't get the job."

    GUYOT: You know the weakest part of your case? The weakest part of
your case is this can be applied to both blacks and whites. You can't
prove discrimination like that.

    POPPER: You know what? That is absolutely the strongest part of my
case because...

    GUYOT: Not at all.

    POPPER: ... one cannot claim that this was designed to remediate any
particular discrimination in the past because this was designed in
effect to create a diverse workforce regardless of discrimination and
regardless of the current state (INAUDIBLE)...

    GUYOT: When you add Hispanics as a class...

    COLMES: Look...

    GUYOT: ... that's not discrimination.

    COLMES: ... I think it's horrible that Mr. McCauley was
discriminated against. I'm certainly against anything that discriminates
against anybody. But can you understand, Mr. Popper, why there are
certain structures in place to create diversity in the workplace because
of the past, because of the history, because of the fact that for years
people of color didn't have equal opportunity in the workplace?

   POPPER: Sure. I can understand that entirely. I can understand the
good intentions with which not only ordinary affirmative action plans
were implemented but this rather bizarre diversity-based affirmative
action plan was implemented.

But I'm telling you that the United States constitution includes an
equal protection clause which forbids discrimination based on race...

    COLMES: But this is only...

    POPPER: ... And a recent case has held that diversity in particular
is not an acceptable rationale.

    COLMES: ... But if race was the only thing they were taking into
consideration. But it's only 20 percent of what they're taking into
consideration. And 80 percent of what they're considering has to do with
other factors. You can't say this is purely or mostly a race-based

   POPPER: Look, if you look at a black man and you tell him that a
Hispanic woman scored lower but he's not getting the job because he's
the wrong race, doesn't that stink...

   HANNITY: All right, Mr. McCauley...


   HANNITY: ... Hang on a second. Hang on a second. Mr. McCauley, I want
to go to you because we don't have a lot of time. You know, Thurgood
Marshall said in Brown versus Board of Ed, "Distinctions by race are so
evil, so arbitrary, invidious, the state is bound to prevent against
this." You're a victim of this, Mr. McCauley. How does that

    MCCAULEY: Well, when I found out the reason that I wasn't hired, it
made me angry. I saw the scores. And I scored almost a perfect score on
my oral interview. I made I think close to a 90 on the written test. It
was weighted. It made me rather angry.

    HANNITY: Mr. McCauley, I hope you get your opportunity. I think in
America nobody should be discriminated against. You shouldn't have the
state discriminating against you. Wish you the best of luck in your

    MCCAULEY: Thanks.

    HANNITY: Mr. Popper, thank you for joining us also.

    POPPER: Thank you for having me.

    HANNITY: Mr. Guyot, thank you for being on board.

Y2K LIITGATION: A New Year's Eve Designated Vetter for Some Lawyers
You might still be scrounging for a party to crash, but Jack Strausman
has big plans for New Year's Eve. And he's hoping it's the most tedious
night of his life.

A lawyer for Potomac Electric Power Co., Strausman will be working when
the clock strikes midnight Dec. 31. Actually, he'll be busy well into
the wee hours, manning the company's command center at an undisclosed
location in Montgomery County and monitoring the electrical grid for
Y2K-related troubles. "I can't stress how much we're hoping for a dull
New Year's Eve," said Strausman, 38.

Plenty of businesses, as it happens, are keeping lawyers on hand for the
millennium countdown, particular those lawyers working for
telecommunications and electric power companies. Their jobs? To vet
public comments that might emanate from the company in case of a major
meltdown. None of these companies expects problems, mind you, but should
the worst happen, they'll have a legal mind ready to parse the language
of news releases.

This legal mobilization could be pointless if the Y2K problem turns out
be overhyped piffle. But keep in mind that a few hundred plaintiffs
lawyers are poised to sue the bejesus out of Corporate America over year
2000 computer snafus. That's giving corporations a recurring nightmare
that goes something like this: Company gets waylaid by a glitch. Riots
ensue. Damages happen. Some company official then hits the airwaves to
confess, "Man, we botched this one big time! I thought we'd tested all
this equipment out months ago. Major disaster. Our mistake."

Seems unlikely, doesn't it? Still, even if nothing happens, some on-call
lawyers are expecting a decent show. "In one sense, it's a lot of
potential boredom," said Jack Farris, an attorney for Bell Atlantic
Corp. who will be one of two lawyers working the phone company come New
Year's. "But there will be so much tension generated by the media that
even if things go fine, it won't be boring. Uneventful maybe, but not

On the other hand, Ronald Palenski, an attorney with GTE Corp. in
McLean, anticipates more yawns than alarms. "I'm stocking up on other
work," he said, getting ready to fly to the company's Irving, Tex.,
branch. "I was there for the 9/9/99 transition" -- another date that
generated some computer anxiety -- "and it was like watching the grass

As for Strausman, he won't see his family or get a sip of bubbly the
whole night. So if it's as tedious as he hopes, what will he do all
night? Maybe surf the Internet, he said. He has few other options. "They
took solitaire off our computers a while ago." (The Washington Post
December 6, 1999)

* A Class Action Member Says Coupon Settlement Does’t Benefit Consumers
For the past two decades I have been pretty much desensitized to news
stories and nothing seems to faze me anymore. That was, of course, until
the Nov. 21 article on lawyers and class-action suits.

Like many people, I too have "benefited" from these suits. I was
recently honored with a coupon from Delta Airlines that gives me a
discount on airfare. The problem is that the conditions for use are
longer than the legal document that I signed in the first place.

I have been reading articles such as this for the past few years, and
every single one has one theme in common. All lawyers involved in such
class-action suits state that their "first concern is for the rights of
their clients." If this was true, then they would do a majority of the
work pro bono, for the good of their clients, of course.

I do, however, have a simple solution to this complex problem. Since the
issuance of coupons is an acceptable form of settlement for these
righteous few, how about basing their fees on the number of coupons
redeemed? (Sun-Sentinel (Fort Lauderdale, FL) Dec-2-1999)

* The Great Assimilation Of The Internet Continues Apace
Once upon a time, the Net operated in some sort of magical bubble, apart
from the mainstream of society. Cops didn't know much about it. Scammers
and less reputable business types preyed on newbies. Virtual vigilantes
sought to stop them through things like e-mail bombing and other
technical tricks. Kids had no protection. Everyone made vast sweeping
statements about e-commerce as a virtual ''yellow brick road.'' The
courts had almost no predecents to draw from in groundbreaking decisions
about online property.

More changes are still to come, but it's all shaking out. The Internet
is developing a very discernable shape. The events like those below, and
those to come over the next year or two, will stay with us for years.
The Net's ''formative years'' if you will.

                    Sneaky Monitoring: Uncovered

At a time when there is a growing public distrust of the intrusive
corporate collection of data in our private lives, RealNetworks decides
to surreptitiously snoop on what the users of its software are doing
when online. RealNetworks makes multimedia software, best known for
RealAudio. RealAudio was collecting up details on user listening
preferences and sending them back to RealNetworks.

What bonehead came up with this idea? I sure wish I'd been at that
product development meeting: ''Hey, I have a great idea. Let's monitor
everything our customers do, build a big database, use that information
as a profit centre . . . and never tell anyone! It'll be our little

It's hard to believe an Internet company could believe anything can be
kept hushed up online for long. Not surprisingly, RealNetworks is now
being sued in three different instances. Each case wants ''class action
status'' - which means damages in the many millions, on behalf of all

With each revelation of privacy abuse like this, the U.S. government is
forced one step closer to the day when it will finally throw its hands
up and say, ''That's it! You Internet companies cannot self-regulate. So
we're going to have to do it for you.'' And once they decide to regulate
. . . who knows what they will do.

                      The Kids Are All Right

It was recently announced that, as of April 21, 2000, commercial Web
sites must have parental permission before they can collect data on kids
(under 13) for reselling. The U.S. Federal Trade Commission defines
permission as a direct phone call, fax, letter or e-mail (the latter
verified through use of a password or personal information number).

You think that's going to slow down the data mining on kids? You bet.
It's going to take a lot of enticing to get parents to give such formal
permission. If the Web site is only going to compile the data for
itself, a non-password protected e-mail will suffice.

The FTC got involved in the matter when a study discovered that 89 per
cent of big commercial kids sites routinely collected personal data -
name, address and what they'd like to buy - while a mere 1 per cent
sought parental permission.

                          Online Fraud

The California man who posted fake lots for auction on eBay was recently
sentenced to 14 months in prison. Real, not virtual, jail time. Robert
J. Guest, 31, took customers for over $37,000 U.S., pretending he had
the Sony digital cameras and IBM laptops he advertised. He cashed the
cheques and money orders and thought he could just ignore the matter,
undoubtedly because it's the Web and everyone ''is anonymous.''

                           War Online

The Pentagon has opened a cyberwar command in Colorado Springs. The
free-wheeling days are gone. You don't know who you are bumping into out
there. The Pentagon said it attacked Serbian computer networks during
the air strikes against Kosovo.

                     Realistic About Retail

It's Christmas. The usual polyanna predictions about e-ommerce are being
carted out by ''objective'' research companies like Forrester and
Jupiter. E-commerce is here to stay, we all know it, so put away the

But it's not necessarily wonderful everywhere. Business failures are
still rampant online - just like offline! Levi Strauss surprised
everyone and announced it was killing independent e-tail ventures
www.levi.com and www. docker.com right after the holiday season.
Instead, all that will be funneled through mega-retailer sites like J.C.

The jeans people says they can't pay for it. A spokesperson was quoted
on CNN: ''We've learned a lot over the last year. We've learned about
effectively marketing our products online. We also learned that the cost
of running a world-class e-commerce business is unaffordable for us
right now.''

                              Net Stocks

But one area that still operates outside reality is the publicly traded
Internet company. These stocks are so over-valued, something's
eventually got to give.

Since Netscape went public back in 1995, 133 other Internet companies
have launched initial public offerings (IPOs). Many have soared in stock
price - ignoring traditional methods for determining stock price
valuation. The founding editors of Red Herring magazine have a new book
out called ''The Internet Bubble.'' They predict a crash for that sector
in the near future. They calculate that those 133 companies are
collectively over-valued by $230 billion U.S.

And when the ''correction'' finally happens, they predict most holders
of these stocks will by hit by a 50 per cent meltdown - if not more. Of
the 133 companies, only 22 are making profit at all right now. And
revenues are probably over-stated because Net companies include
''barter'' Web banner advertising. That's where one site swaps ads with
another site, and books the transaction.

There's nothing technically illegal about it. But it can distort
investor impressions. For instance, the Sportsline Web site says it had
$24 million in revenue. But it turns out that a fifth of that was
cashless barter trading of ads. (The Toronto Star Dec-2-1999)


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.  Theresa Cheuk and Peter A. Chapman, editors.

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to be
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