CAR_Public/000128.MBX               C L A S S   A C T I O N   R E P O R T E R

               Friday, January 28, 2000, Vol. 2, No. 20

                             Headlines

AHT CORP: Reaches Agreement to Settle Shareholder Class Action in N.Y.
BANK ONE: Kahn & Associates Files Securities Lawsuit in IL
BOCA MEN: Accused Of Bilking Investors with Fraudulent Investment Offer
CAMPBELL SOUP: Milberg Weiss Files Securities Lawsuit in NJ
CAMPBELL SOUP: Schiffrin & Barroway Files Securities Action in NJ

COCA-COLA: Slims Down & Asks Workers to Agree Not to Join Bias Suit
FARMERS INSURANCE: Agrees to Pay $5M to Simi Valley Condominium Owners
FRANCIS HOWELL: Homeowners Overtaxed; Prosecutor Prefers No Litigation
HASTINGS MANUFACTURING: Responds to MI Suit over Retirees’ Healthcare
HOLOCAUST VICTIMS: German Cabinet Okays Slave-Labor Bill

INMATES LITIGATION: 9th Cir Rules against Fast-Track Death Sentence
INTERGOLD CORP: Shareholders Are Commencing Suit over Issues Re Gold
JUSTICE SYNDER: Gang Members' Claim Against Judge Rejected by App. Div.
LEGATO SYSTEMS: Wolf Haldenstein Files Securities Lawsuit in CA
LIBERATE TECHNOLOGIES: Ct Dismisses All but 1 Employees’ Claims in CA

LIFE FINANCIAL: Rabin & Peckel Files Securities Complaint in NY
MCDERMOTT INTERNATIONAL: Stull, Stull Files Securities Lawsuit in LA
MOBIL OIL: Howls Of Protest Will Greet Any Backdown on Hardship Money
QUANTAS: To Announce Compensation For Victim Fans in Ticket Bungle
RACIAL PROFILING: Defense Lawyers Fume over AG’s Consolidation Request

SHOPCO REGIONAL: Intends to Defend Vigorously Unitholders’ Suit in DE
SKECHERS U.S.A.: Shepherd & Geller Files Securities Lawsuit in CA
SUNTERRA CORP: Burt & Pucillo Files Securities Lawsuit in FL
SUNTERRA CORP: Cohen, Milstein Files Securities Suit in FL
SUNTERRA CORP: Schatz & Nobel Files Securities Complaint in FL

* Federal Courts Deeply Divided Over Securities Fraud Intent Standard
* New Megan's Law Guidelines Ordered

                            *********

AHT CORP: Reaches Agreement to Settle Shareholder Class Action in N.Y.
----------------------------------------------------------------------
AHT Corporation (Nasdaq: AHTC) announced on January 27 that it has
reached an agreement to settle the consolidated shareholder class action
filed against the Company in the U.S. District Court for the Southern
District of New York. Under the agreement, AHT would issue 886,437
shares of its Common Stock to the class members. The Company will also
deposit $300,000 in escrow to cover the costs of notice to the class,
administration of the settlement and plaintiff attorneys' expenses. The
consolidated class action, which resulted from eleven putative class
actions filed against AHT from July 1 through August 17, 1998 following
a decline in the Company's stock price, alleges that the Company had
made certain misrepresentations and omissions regarding its operations,
performance and financial condition. The proposed settlement provides
for dismissal of the pending class action without any admission of
wrongdoing on the part of the Company. The proposed settlement is
subject to the District Court's approval. Class members will receive
Court-approved notification shortly regarding the proposed settlement.


BANK ONE: Kahn & Associates Files Securities Lawsuit in IL
----------------------------------------------------------
Kahn & Associates, Ltd. filed a class action lawsuit in the United
States District Court for the Northern District of Illinois on behalf of
purchasers of the publicly traded securities of Bank One Corp. during
the period October 22, 1998 to November 10, 1999.

The complaint charges that Bank One, its senior management and certain
of its directors violated the Securities Exchange Act of 1934 by issuing
false and misleading statements and omissions concerning Bank One's
financial condition. Throughout the Class Period, the complaint alleges
that, among other things, Bank One knew or were reckless in not knowing
that much of Bank One's subsidiary, First USA's, purported success came
from its practice of collecting late fees and penalties by failing to
post credit card payments on time and that this was a violation of the
Truth in Lending Act and that therefore Bank One was recognizing illegal
revenue in violation of Generally Accepted Accounting Principles.

For more details on the above mentioned suit, please contact plaintiff's
counsel, David B. Kahn or Mark E. King of Kahn & Associates at
800-536-0499 or e-mail at DBKLAW@FLASH.NET


BOCA MEN: Accused Of Bilking Investors with Fraudulent Investment Offer
-----------------------------------------------------------------------
Two Boca Raton men were arrested, accused of convincing investors to
contribute nearly $ 270,000 to a fraudulent investment offering and,
among other things, spending the money on unrelated personal expenses,
said state investigators. They told investors the money would buy
foreclosed properties in Florida and New York. No property was ever
purchased, investigators say. (Miami Daily Business Review, January 21,
2000)


CAMPBELL SOUP: Milberg Weiss Files Securities Lawsuit in NJ
-----------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP filed a class action lawsuit on
January 26, 2000, in the United States District Court for the District
of New Jersey, on behalf of all persons who purchased, the common stock
of Campbell Soup Company between November 18, 1997, and January 8, 1999,
inclusive.

The complaint charges Campbell and certain of its senior officers and
directors with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
complaint alleges that defendants issued a series of materially false
and misleading statements concerning the Company's improper recording of
revenue from its condensed soup sales. In particular, the complaint
alleges that Campbell claimed to have "sold" product to major
distributors or resellers when in actuality Campbell never shipped the
product to its customers. Campbell improperly claimed these sales in
order to meet analysts' earnings estimates for the Company. Because of
the issuance of a series of materially false and misleading statements
the price of Campbell common stock was artificially inflated during the
Class Period.

For details concerning the above mentioned lawsuit, please contact, at
Milberg Weiss Bershad Hynes & Lerach, Steven G. Schulman or Samuel H.
Rudman at One Pennsylvania Plaza, 49th Floor, New York, New York
10119-0165, by telephone 1-800-320-5081 or via e-mail:
endfraud@mwbhlny.com or visit the website at http://www.milberg.com


CAMPBELL SOUP: Schiffrin & Barroway Files Securities Action in NJ
-----------------------------------------------------------------
Schiffrin & Barroway, LLP filed a class action lawsuit in the United
States District Court for the District of New Jersey on behalf of all
purchasers of the common stock of Campbell Soup Company from November
18, 1997 through January 8, 1999, inclusive.

The complaint charges Campbell Soup Company and certain of its officers
and directors with issuing false and misleading statements concerning
its business. Plaintiff alleges that the Company claims to have sold
product to major distributors or resellers when in fact it had not.
These "phantom sales" artificially inflated the price of the Company's
stock and, when Campbell disclosed declining earnings as a result of
lower sales, the price of its stock dropped approximately 15% and has
never recovered.

For more details concerning this action, please contact Stuart L.
Berman, Esq. of Schiffrin & Barroway, LLP by telephone (toll free)
888/299-7706 or 610/667-7706, or via e-mail at info@sbclasslaw.com


COCA-COLA: Slims Down & Asks Workers to Agree Not to Join Bias Suit
-------------------------------------------------------------------
Coca-Cola Co. is asking employees who will be laid off and given
severance packages to sign a waiver agreeing not to join a race
discrimination lawsuit currently pending against the company. As is
standard in most severance packages, Coca-Cola employees will be asked
to sign waivers agreeing not to take legal action against the company.

But the company's severance package being offered to employees affected
by January 26’s realignment will include waivers that specifically
identify the discrimination lawsuit against the company, said Ben
Deutsch, company spokesman.

Cyrus Mehri, the lead lawyer in the discrimination case, said
plaintiffs' lawyers will closely monitor the situation. "If it appears
that the company is trying to coerce class members to waive their civil
rights or to buy their silence, we will fight it every step of the way
to protect the rights of our class members," Mehri said.

Deutsch said all employees offered severance packages will be clearly
notified of their rights. "The company's commitment is to be sensitive
of all employees and their families and implement this plan with the
dignity and respect that Coca-Cola people deserve," Deutsch said. "All
employees who are affected by today's realignment will be treated
equally, fairly and with the utmost sensitivity and compassion by the
Coca-Cola Co."

Deutsch said waiver forms will state that if affected employees are
plaintiffs in the case or prospective class members, they can contact
local plaintiffs' lawyers. The attorneys' phone numbers will be included
on the waiver forms, he said.

Mehri represents eight current and former Coca-Cola employees in a
lawsuit that claims African-Americans have been discriminated against in
pay, promotions and performance evaluations. The lawsuit seeks to expand
the case to class-action status and represent more than 2,000 black
employees in the United States.

Coca-Cola has strongly denied allegations in the complaint. It also
opposes the plaintiffs' attempts to make it a class-action lawsuit.

An employment law professor said Coca-Cola should be extremely careful
in how it handles its layoffs because of the pending litigation. Dawn
Bennett-Alexander, law professor at the University of Georgia, said, "
It could make what appears to be a perfectly good business move and
something that's done for all the right reasons... . But if you've got
these considerations hanging over you, like this lawsuit, sometimes you
have to make sure or make adjustments so any layoffs don't fall unevenly
on groups that would be affected by law."

U.S. Magistrate E. Clayton Scofield III recently granted the plaintiffs
permission to amend their complaint, which now contends Chairman and
Chief Executive M. Douglas Ivester and other company senior managers
knew about " companywide discrimination"against black employees since at
least 1995.

Ultimately, U.S. District Judge Richard Story in Atlanta will decide
whether the class will attain class-action status. (The Atlanta Journal
and Constitution, January 27, 2000)


FARMERS INSURANCE: Agrees to Pay $5M to Simi Valley Condominium Owners
----------------------------------------------------------------------
It's over. Farmers Insurance Group agreed on January 26 to pay $5
million to settle a judgment pitting an Arcadia contractor against
unwitting Simi Valley condominium owners. Ten lawyers involved in the
bitter dispute lined up before Ventura County Superior Court Judge Henry
J. Walsh on January 26 morning to cement the deal.

Truck Insurance Exchange, a Farmers group member, will pay ZM Corp. $5
million. In return, 264 homeowners will not have to pay ZM Corp. a $6.6
million judgment, plus interest, for deeds done by their homeowners
association in 1994.

The agreement vaporizes a growing stack of lawsuits, appeals,
assessments, liens and pending foreclosures that arose after an
arbitrator levied the judgment in 1998.

Homeowners, afraid of losing their homes, no longer have to pull their
hair. Lawyers, sucked into an ever-complicated morass that threatened to
form legal precedent, no longer have to gnash their teeth. For Farmers,
which insured the Le Parc Homeowners Association, resolution means an
end to neighborhood protests before its state headquarters in Simi
Valley. For ZM owner Darren Zuzow, the decision means remedy for slander
and contractual losses incurred during a dispute over repairs with Le
Parc Homeowners Association board members after the Northridge
earthquake.

"It doesn't make the company whole," said ZM attorney Glenn Campbell
immediately after the decision, "but allows this case -- which has
involved seven different judges; six separate appellate proceedings; 84
days of arbitration; three Superior Court lawsuits; one Superior Court
trial and a battalion of attorneys -- to end."

It is the Le Parc homeowners who, as a group, stand to gain the most
from the settlement. A court-appointed receiver had threatened to turn
their west Simi Valley complex into a slum after routing homeowners
association dues intended for maintenance and utilities to ZM. Gardeners
were let go. Utility bills piled up. Outside power blinked more than
once. The courts, which held homeowners responsible for the debt, also
assessed each homeowner $166 a month to pay the debt. Add interest and
homeowners faced paying more than $30,000 each. And that doesn't include
the hit from tanking property values.

"I want to say one thing: Hurray," said Ferenc Gutai, president of the
new Le Parc Community Association. "We have our lives back." Gutai said
there are about $100,000 in utility bills -- half of which is owed the
city for water bills -- that remain to be paid. A settlement between
Farmers and the two Le Parc homeowners associations remains
confidential.

Jim Lingl, an attorney representing the Le Parc Homeowners Association,
said a bad-faith lawsuit brought against Farmers probably turned the
tide. Farmers, which had acknowledged $1 million in coverage for Le
Parc, had agreed to let the courts decide the extent of its policy.
Before that occurred, Lingl said, a new team of Farmers attorneys found
an additional $2 million covered by its policy.

A class-action lawsuit brought against Farmers by at least one resident
is still under way, an attorney said.

Sylvia Damien, a Le Parc renter for seven years, was relieved to learn
of the settlement. "Very cool," she said. "It's been a struggle for
these people. It means landscaping, and feeling safer 'cause all the
lights can be changed and be on at night -- and the fear of not being
ousted." (Ventura County Star (Ventura County, Ca.), January 27, 2000)


FRANCIS HOWELL: Homeowners Overtaxed; Prosecutor Prefers No Litigation
----------------------------------------------------------------------
The best bet for taxpayers in the Francis Howell School District would
be a 6-cent rollback in their property tax levy for next year, said Jack
Banas, St. Charles County prosecuting attorney.

"A lawsuit would be financially disastrous to the taxpayers and the
district itself," Banas said. A report issued by the state auditor's
office last month noted several political subdivisions that overcharged
their residents on the property tax levy. In Francis Howell, the
overtaxed amount was 3 cents for each $ 100 of assessed valuation.

The auditor suggested that taxpayers ask their county prosecutors to
remedy the situation. One potential course of action was a class-action
lawsuit to recover the excess money.

Banas said his office was inundated with calls when the auditor's report
was publicized. After he reviewed the report, Banas agreed that the
Francis Howell rate was too high. For a home owner of a $ 100,000 house,
the amount overtaxed was $ 5.70. But the cost of a lawsuit to both
taxpayers and the district would be more than the recovered amount, he
said.

Banas attributes the mistake to a miscalculation by John Hutchison, the
former finance director in the district. Hutchison could not be reached
for comment. He resigned earlier this month.

"Hutchison was given that number (the correct amount to be levied) in
late August or early September," Banas said. "He failed to apprise
anybody of the discrepancy."

Superintendent Dan Brown said he did not know that the auditor's office
had contacted Hutchison until Banas told him.

The information "may have been shared with the previous superintendent,"
Brown said. Former Superintendent Lee Brittenham resigned in
mid-September last year. Brittenham could not be reached for comment.

Brown plans to recommend the levy rollback to the School Board at the
next meeting. At the last meeting, school officials had recommended
putting a 27-cent tax levy increase on the April ballot. The motion
failed. Banas said the miscalculation did not indicate any criminal
misconduct.

                     How Much Is The Overpay?

Multiply the assessed value of a house by 0.19 (or 19 percent). Then
multiply that number by 0.0489. That's the amount paid. Multiply that
number by 0.0486 to find out how much should have been paid.

Example: $ 100,000 X 0.19 = $ 19,000
         $ 19,000 X 0.0489 = $ 929.10
         $ 19,000 X 0.0486 = $ 923.40
         Difference = $ 5.70

(St. Louis Post-Dispatch, January 26, 2000)


HASTINGS MANUFACTURING: Responds to MI Suit over Retirees’ Healthcare
---------------------------------------------------------------------
Hastings Manufacturing Company (Amex: HMF) announced on January 27 that
a complaint has been filed against the Company in the U.S. District
Court for the Western District of Michigan.

The complaint, which is seeking class-action status, alleges that the
Company breached its collective bargaining agreements with retirees by
improperly modifying their healthcare benefits. An attorney has filed a
complaint on behalf of three retired union workers: Margaret Greenfield,
Evelyn Curtis Hecht and William Pickard.

"As previously disclosed in our filings with the Securities and Exchange
Commission, we have been in talks with these retirees and their counsel
to resolve this issue for more than two years," said Andrew Johnson,
co-CEO of Hastings. "Unfortunately, we have been rebuffed in our
attempts to reach a resolution that is equitable to retirees, yet
balances our current situation as a Company.

"We are deeply disappointed that this situation could not have been
resolved without turning to the courts. We intend to vigorously defend
Hastings Manufacturing and do what's right for our 451 current
employees, our shareholders, customers, suppliers -- and our retirees."

Hastings Manufacturing expects the litigation will have no immediate
impact on the day-to-day operations of the Company as more fully
described in the Company's filings with the Securities and Exchange
Commission. If the plaintiffs' position prevails, it is anticipated that
this proposal, if implemented, would have a material adverse effect on
both future results of operations of the Company and its future cash
flow.

Hastings Manufacturing (http://www.hastingsmfg.com) is a leading
manufacturer and marketer of piston rings and specialty tools under the
Hastings(R) brand, and additives for engines, transmissions, cooling
systems and fuel systems under the Casite(R) brand.


HOLOCAUST VICTIMS: German Cabinet Okays Slave-Labor Bill
--------------------------------------------------------
Germany's cabinet approved a bill on distributing payments to survivors
of Nazi-era forced and slave labor on January 26, but officials said
there is room to alter the bill to answer the criticism of lawyers and
victims' groups.

The proposed law has come under attack because earlier versions would
count previous compensation against payments victims could received from
the new DM 10 billion fund.

About half of the roughly 235,000 slave laborers covered under the fund
are Jews, many of whom have received earlier compensation. Up to 2.3
million people, mostly non- Jews from Eastern Europe, stand to receive
payments from the new fund.

The other main issue in contention is a clause that limits compensation
to those deported to the area of Germany's borders in 1937 - before
Hitler began his campaign to create a greater German Reich in Europe.

Government spokeswoman Charima Reinhardt said both of the criticisms
would be the main issues discussed by German envoy Otto Lambsdorff in
Washington, where the next round of the negotiations over the
compensation fund is planned. "With this proposed bill, the government
confirms its will, together with the participating companies, to give a
further indication of as soon as possible undoing the wrongs inflicted
on many people by Germans during World War II," Reinhardt said. The bill
was not made public, pending possible changes, and will be reviewed by
the cabinet again in March, she said.

German industry proposed the fund a year ago, under pressure of
class-action lawsuits in the US. Under the agreement, the US government
has said it will step in to intervene if new cases arise and suggest to
judges that claims be handled by the fund. (The Jerusalem Post, January
27, 2000)


INMATES LITIGATION: 9th Cir Rules against Fast-Track Death Sentence
------------------------------------------------------------------
A law designed to speed up death penalty decisions by the federal courts
does not apply to the vast majority of the 563 men and women on death
row in California, the 9th U.S. Circuit Court of Appeals ruled on
January 24.

The decision came in the case of Sacramento child-killer Troy Ashmus. He
was among approximately 40 condemned inmates to whom California
prosecutors tried to apply the fast-track provisions of the U.S.
Anti-Terrorism and Effective Death Penalty Act of 1996.

In every case federal trial judges had found the statute inapplicable,
mainly because the state until two years ago did not comply with the
law's strict standards for appointing defense lawyers.

Ashmus' case was the first from California to reach the circuit court.
In one sense January 24's decision applies only to him. But the
reasoning of the three-judge panel sets a binding precedent. It must be
followed throughout the federal trial court system in the nine Western
states unless and until it is reversed by either an 11-judge circuit
panel or the U.S. Supreme Court. Ronald Matthias, the supervising deputy
attorney general representing the state, acknowledged that "no district
court is free to disregard it, no matter how wrong it is -- and wrong it
is."

Matthias was unable to say what his next step will be. The question
"will be channeled appropriately (in the state Department of Justice) in
light of its importance" and the 9th Circuit's "thoroughly incorrect"
analysis of California law, he said.

But Ashmus' lawyer, Michael Laurence, said California's failure to meet
the federal law's standards was clear "within days" of its passage by
Congress. By repetitiously "litigating rules and what rules mean," he
said, the state has been wasting time and resources that could be better
spent in grappling with the substance of the cases.

January 24's ruling wasn't the first time the 9th Circuit held that the
state did not meet the fast-track standard. But the earlier case was
thrown out by the U.S. Supreme Court in 1998 because it was improperly
framed as a class-action suit. The Supreme Court did not rule on the
merits of the 1997 9th Circuit decision.

The difference between applying and not applying the death penalty
speed-up provisions could be dramatic. Instead of taking a decade or so
to rule on death sentences after they've been upheld in the California
Supreme Court, federal trial judges would have to rule in about a year.
Federal appellate judges would have just four months to rule after
receiving final written arguments.

However, there was a trade-off in the 1996 statute. To assure that death
sentences would be reviewed thoroughly in the state courts, Congress
said a state could qualify for the fast-track provisions only if it had
a firmly established mechanism for appointing, paying and funding the
expenses of competent death penalty defense lawyers. No state has
qualified so far.

Matthias argued that California has had such a system since 1989. But
the 9th Circuit said in an opinion by Judges William Canby of Phoenix,
Susan Graber of Portland and David Thompson of San Diego that the system
didn't comply with the precisely worded federal statute until Jan. 1,
1998, at the earliest.

That was about 10 years too late for Ashmus. Now 37, Ashmus was
sentenced to death in San Mateo County in 1986 for the 1984 rape and
murder of a 7-year-old girl in a Sacramento County park.

According to Robert Reichman, who tracks death penalty appeals for the
California Supreme Court, only 38 death row inmates in the state have
had lawyers appointed to handle their appeals since the start of 1998.
Their cases could be subject to the fast-track law when they reach the
federal courts.

Lawyers currently are being appointed for inmates who were sentenced to
death in 1995 and 1996, Reichman said. About 160 inmates -- 28 percent
of those on death row -- are unrepresented for their first appeals to
the California Supreme Court, he said. An additional 45 have no lawyers
for the important round of appeals known as habeas corpus, where the
federal trial and circuit courts enter the picture for the first time.
Traditionally, federal judges have thrown out about 40 percent of death
sentences because of violations of the U.S. Constitution.

Under 1997 legislation, California created a new state-supported legal
office to represent death row inmates in habeas corpus cases. That
office, which Laurence heads, has been appointed in "a small number" of
cases, Reichman said. "That will be increasing," he said. (Ventura
County Star (Ventura County, Ca.), January 25, 2000)


INTERGOLD CORP: Shareholders Are Commencing Suit over Issues Re Gold
--------------------------------------------------------------------
The Company has been informed that certain shareholders of the Company
are commencing a shareholder lawsuit regarding issues raised in its
press release. Shareholders can contact the Company's president, Gary
Powers at (888) 848-7377.

Through the Company's subsidiary, "International Gold Corporation" the
Intergold Corporation now advises that it has ceased to explore its set
of claims in the State of Idaho - the Blackhawk I Project, which is
comprised of 321 contiguous unpatented lode mining claims in Lincoln
County, Idaho.

On behalf of the Board of Directors, Intergold Corporation (OTC Bulletin
Board: IGCO), ("the Company") reports that its wholly owned subsidiary,
International Gold Corporation ("IGC") has received the results from the
audit of sample assays and leach testing from the Company's Blackhawk
Property ("the Property") located in Lincoln County, Idaho performed by
Strathcona Mineral Services Limited ("Strathcona"). Strathcona was
engaged by IGC to review the available data including a site visit to
the Property, and has analyzed both core samples from previous drilling
and surface samples collected by Strathcona using assaying and
extractive leach procedures. Laboratories utilized were the
well-recognized firms of Lakefield Research and Activation Laboratories.

Testing Results: Strathcona reports that both laboratories could not
find gold above the minimum detection limits in the samples, and
concluded that based on the samples provided, gold and silver are not
present in economic quantities in the rhyolitic lavas on the Property.
The methods utilized included fire assaying, neutron activation
assaying, and cyanide and thiourea leaching for gold. The tests were
performed on splits of core materials from which AuRIC Metallurgical
Laboratories, LLC. ("AuRIC") had previously reported some of the highest
gold results to the Company from some of the over 800 assays that AuRIC
performed for the Company. AuRIC had previously reported gold values of
0.1 to 94.1 g/t on splits of the same samples.

Further Testing Confirmations: The Company confirms it also engaged
Mineral Science, Limited of London, England which obtained the services
of the internationally recognized facilities of OMAC Laboratories Ltd.
of Ireland to provide fire assay, ICP, and geochemical analysis as well
as CSMA Consultants Ltd. of Cornwall, England to perform leach testing.
Splits of the same samples provided to Strathcona were provided to
Mineral Science, Limited. Mineral Science Limited's results confirm and
reiterate the negative Strathcona findings which are gold values below
the detection limits.

Validity of Prior Testing: As reported in previous press releases, AuRIC
had developed fire assay and extraction procedures relating to the
Property for IGC. IGC entered into contractual obligations with both
AuRIC and Dames & Moore to have AuRIC's developed fire assay procedures
duplicated at another laboratory so that IGC could receive independent
verification of the technology. This would have then allowed IGC to
complete a drilling program intended to support an ore reserve estimate.
To date, and pursuant to certain contractual terms and provisions, AuRIC
and Dames & Moore have not been successful in transferring the AuRIC
developed fire assay technology to any independent assay laboratory.
This forms part of the subject of IGC's and Geneva Resources Inc.'s
legal proceedings against AuRIC and Dames & Moore.

The application of AuRIC's assay and metallurgical recovery procedures
was verified by Dames & Moore in several independent engineering reports
prepared by Dames & Moore as follows. These reports and their results
are not supported by the current testing results and further testing
confirmation work conducted by the Company.

Dames and Moore Report 1: Verification of Validity of Developed
Analytical Procedures Blackhawk Project Prepared for AuRIC Metallurgical
Laboratories November 30, 1998.

Some of the conclusions from this Dames & Moore report include:

* "AuRIC Metallurgical Laboratories is well qualified to perform fire
  assay and chemical assay analyses for gold, silver, and other
  precious metals."

* "AuRIC's procedures follow the basic industry standards for fire
  assay analyses."

* "AuRIC has the necessary sample preparation equipment, test
  facilities, and analytical instrumentation to analyze an individual
  sample through pilot plant process control samples."

                      Dames and Moore Report 2

Some of the conclusions from the Dames & Moore report, Determination of
Repeatability of the Verified Developed Analytical Procedures for the
Blackhawk Project January 6, 1999, include:

* "Compared to the variation in concentrations from one core to another
  (which is an order of magnitude), the relative standard deviations
  were small; therefore, the repeatability was good."

* "AuRIC's mean ore result on a CANMET standard run with each set of
  samples was within the recommended value range. This indicates that
  the AuRIC measurements, on the average, were accurate."

                    Dames and Moore Report 3

Some of the conclusions from this Dames & Moore report, Reconnaissance
Site Visit and Surface Sampling The Blackhawk Project Lincoln County,
Idaho Project Report Prepared for International Gold Corporation January
21, 1999, include:

* "IGC has followed and continues to follow a careful third party
  independent evaluation of its Blackhawk gold prospect in Lincoln
  County, ID."

* "IGC has been effective in dealing with the Bureau of Land Management
  (BLM) in bringing the project to its current status."

* "Dames & Moore is confident that, based on its random selection of
  the four surface rock sample locations, the outcrops sampled were not
  salted or artificially impregnated with precious metals."

* "The four Dames & Moore independently selected and analyzed surface
  rock samples show the presence of gold and silver."

* "The surface gold concentrations (0.003 to 0.009 troy ounces per
  short ton, opt) are highly anomalous. It is highly unusual to have
  gold and silver (0.282 to 0.351 opt) values of this concentration in
  unaltered flow rocks."

* "The four Dames & Moore surface rock samples were more than an order
  of magnitude higher in gold than the surface samples(s) obtained by
  an Idaho state Geologist."

* "Dames & Moore confirmed, in another independent laboratory, that the
  flux used in the fire assay procedure did not contain any gold (<0.02
  parts per million Au)."

* "The use of a graphite furnace atomic absorption spectrometer with
  automatic dilution, duplicate sample averaging, values measured in
  the parts per billion range, and rechecking with duplicate solution
  samples gave Dames & Moore with high confidence in the results."

* "The anomalous gold and silver values in the surface rock samples
  provide further confirmation of Dames & Moore's previous independent
  third party work on core samples that showed levels of gold ranging
  form 0.003 to 0.099 opt, 98C-9 and 98C-22 respectively."

                     Dames and Moore Report 4

Some of the conclusions from this Dames & Moore report, Verification of
Validity of Developed Extraction Methods for the Blackhawk Project April
7, 1999, include:

* "In light of the considerable difficulty in fire assaying the
  extraction associated with the history of the Blackhawk Project core
  material, the three extraction methods put forward by AuRIC are a
  clear positive accomplishment for recovering the gold and silver in
  the material."

* "The summary data in Table 4, Extraction Data Comparisons, verifies
  that the AuRIC developed extraction methods do extract the gold and
  silver from the Blackhawk Project core."

* "The test results clearly indicate that Process 2 is the most
  effective process for the samples tested, and Process 3 closely
  follows Process 2 in its apparent effectiveness."

* "Process 3 is a straightforward leaching process, although innovative
  when compared to typical US gold industry standard practices. It also
  has the potential to be environmentally friendly."

                              Summary

As the latest independent assessment information regarding the Property
obtained by the Company does not support the claims of Auric or Dames &
Moore, the Company advises that it will suspend indefinitely the further
exploration of its Blackhawk claims.


JUSTICE SYNDER: Gang Members' Claim Against Judge Rejected by App. Div.
-----------------------------------------------------------------------
A GROUP OF gang members who claimed that their constitutional rights
were violated when a Manhattan judge imposed severe restrictions on
their pretrial confinement has seen the dismissal of its suit affirmed
by the Appellate Division, First Department.

The plaintiffs, members of gangs known as the Yellow Top Crew (also
referred to as "Talented Young Children") and the Purple Top Crew,
argued that Justice Leslie Crocker Snyder and the special master she
appointed, Hillel Bodek, had assumed authority that properly belonged to
the Department of Correction when they added restrictions to the
inmates' imprisonment with the aim of protecting the safety of
witnesses.

But the First Department, upholding Bronx Supreme Court Justice Douglas
E. McKeon's 1997 dismissal of the suit, disagreed. "The measures taken
in this case... were rationally related to the threats posed by these
detainees," Justice Peter Tom wrote for the four-judge majority in
Alvarez v. Snyder, 2140. "The measures taken by the court clearly do not
overstep the immunity conferred on Justice Snyder in this action seeking
personal damages."

The plaintiffs, including lead plaintiff Omar Alvarez, were arrested in
connection with a large-scale investigation into criminal gangs in which
more than 100 individuals were charged with crimes including murder,
attempted murder and conspiracy.

After several of those indicted agreed to cooperate with prosecutors and
the safety of those witnesses became a concern, Justice Snyder in August
1995 appointed Mr. Bodek, a certified social worker, as a special
master. Mr. Bodek was charged with coordinating trial-related logistics
and security issues for those awaiting trial.

The following month, after one of the Yellow Top detainees, Pedro Diaz,
attempted to arrange the contract killing of a witness, Justice Snyder
imposed a "lock down" under which he and three others were denied
visitation and telephone use except for attorney communications.

Two of the detainees, who had already slashed other inmates, were
ordered to undergo daily strip searches. Later in September, after Mr.
Bodek learned that the detainees were sending messages to threaten
cooperating witnesses, Justice Snyder modified her order to include the
screening of the detainees' outgoing mail. Victor Ocasio, the reputed
leader of the Purple Top gang, was subjected to the same restrictions
after he threatened an informant.

The plaintiffs filed suit in October 1996 under 42 USC @ 1983, arguing
that the lock down orders were issued on the basis of ex parte
information and were not reasonably related to the underlying reasons
for the restrictions.

In dismissing the suit, Justice McKeon found that the criminal
proceeding conferred jurisdiction and that the orders were enforced to
ensure the administration of justice, particularly in light of concern
over the safety of witnesses.

                         Judicial Immunity

The First Department panel agreed, noting that plaintiffs' complaint was
unverified and failed to reference any specific Department of Correction
regulations they claimed were violated by Justice Snyder or Mr. Bodek.
Justice Tom characterized as "spurious" the plaintiffs' assertion that
Justice Snyder had acted not as judge but as an unsanctioned jailor.

The panel concluded that the plaintiffs had failed to pierce the shield
of immunity protecting Justice Snyder, given that she had acted within
her judicial jurisdiction.

"When reliable information alerted the court presiding over the criminal
trial of detainees regarding their direct interference with the
administration of that trial, the court's adjudicative duties included
the exercise of its inherent power to ensure that the interference end,
providing a jurisdictional basis for the court's orders," Justice Tom
wrote.

The panel also found that the additional restrictions to the detainees'
confinement did rationally relate to legitimate concerns over the safety
of witnesses.

"The measures taken in this case, restricting these particular
detainees' demonstrated ability, despite being in Correction custody, to
communicate those threats, or to solicit the services of other inmates
or outside parties to perpetrate assaults or homicides, or to physically
carry out assaults personally, were rationally related to the threats
posed by these detainees," Justice Tom wrote. "The measures taken by the
court clearly do not overstep the immunity conferred on Justice Snyder
in this action seeking personal damages."

Finally, the majority ruled that Mr. Bodek did enjoy quasi-judicial
immunity in his actions as special master in the case. "The record makes
clear that Bodek's authority, and his exercise of such, expanded
incrementally in tandem with the exacerbation of dangerous conduct by
the detainee plaintiffs, and at all times was under the aegis of Justice
Snyder's orders," Justice Tom wrote.

"Bodek always synchronized his recommendations and actions with the
court's directives and, rather than acting arbitrarily, was always
responsive to the circumstances created by the detainee plaintiffs."

In a separate opinion, Justice David Saxe concurred in the majority's
conclusion that the suit against Justice Snyder and Mr. Bodek must be
dismissed based on judicial immunity. But he argued that the doctrine of
inherent powers did not authorize Justice Snyder's ex parte orders on
matters of conditions of confinement, and that those were issues
properly left to the correctional system.

Eugene B. Nathanson and Malvina Nathanson represented the plaintiffs.
Assistant Attorneys General Rebecca Ann Durden and Michael S. Belohlavek
appeared for Justice Snyder. David Henry Sculnick of Gordon & Silber
represented Mr. Bodek. (New York Law Journal, January 14, 2000)


LEGATO SYSTEMS: Wolf Haldenstein Files Securities Lawsuit in CA
---------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a securities class
action lawsuit in the United States District Court for the Northern
District of California on behalf of investors who bought Legato Systems,
Inc. stock between October 21, 1999 and January 19, 2000.

The lawsuit charges Legato and certain officers of the Company, with
violations of the securities laws and regulations of the United States.
The lawsuit alleges that defendants issued a series of false and
misleading statements during the Class Period concerning the Company's
earnings growth and revenue recognition. The complaint alleges that
defendants' false and misleading statements artificially inflated the
price of the Company's stock during the Class Period. The complaint
further alleges that defendants took advantage of their inside knowledge
of the stock's inflation by selling over 178,000 of their own personal
Legato holdings for proceeds of approximately $11.5 million. On January
19, 2000, after the market closed, defendants stunned the investment
community by announcing that Legato would restate its third quarter
financial statements. Upon the release of this announcement the
Company's stock price sank to a close of $29.75 on January 20, 2000 from
a close of $53.625 on January 19, 2000.

For additional information concerning this securities lawsuit, please
contact Michael Miske, George Peters, Gregory Nespole, Esq., Fred Taylor
Isquith, Esq. or Shane T. Rowley, Esq. of Wolf Haldenstein Adler Freeman
& Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone
at 800-575-0735 or via e-mail at classmember@whafh.com or visit website
at http://www.whafh.com


LIBERATE TECHNOLOGIES: Ct Dismisses All but 1 Employees’ Claims in CA
---------------------------------------------------------------------
In December 1998, one of the former employees filed an action in the
California Superior Court for the County of San Mateo against the
Company for, among other things, unpaid commissions of approximately
$1.5 million, constructive employment termination, intentional
misrepresentation and negligent misrepresentation. In October 1999, the
plaintiff amended his complaint against us, adding claims for damages
for failure to pay wages under the California Labor Code and common law
retaliation, and sought to impose a constructive trust on the allegedly
withheld commissions and any enhancement in value of that money.

The Company says these claims are without merti and has conducted
discovery. In December 1999, the Company filed a motion for summary
judgment/summary adjudication to dismiss all of the claims brought by
the plaintiff. In January 2000, the Court dismissed eight of the ten
claims brought against us leaving only the claims of intentional and
negligent misrepresentation for trial. The Company says it intends to
continue to vigorously defend this action as to the remaining claims.


LIFE FINANCIAL: Rabin & Peckel Files Securities Complaint in NY
---------------------------------------------------------------
Rabin & Peckel LLP filed a class action complaint in the United States
District Court for the Southern District of New York on behalf of all
persons or entities who purchased or otherwise acquired Life Financial
Corporation common stock during the period June 24, 1997 through March
3, 1999, inclusive.

The Complaint alleges that defendants violated the Securities Act of
1933 and the Securities Exchange Act of 1934 by making a series of
materially false and misleading statements concerning the Company's
financial results during the Class Period. On March 3, 1999, the Company
announced that it would have to restate its financial results for the
fiscal years 1996 and 1997 and the first, second and third quarters of
the fiscal year 1998, including those in the Registration Statement. The
Company stated that it would have to restate net income, shareholders
equity, and earnings per share for the afore mentioned time period and
retroactively measure credit enhancement assets using the "cash-out"
accounting method. The restatement was required because the financial
statements improperly used the practice of measuring and accounting for
all excess cash flows by using the "cash-in" accounting method as
opposed to the "cash-out" method mandated pursuant to Generally Accepted
Accounting Principles. The Complaint alleges that as a result of these
false and misleading statements the price of Life Financial common stock
was artificially inflated throughout the Class Period causing plaintiff
and the other members of the Class to suffer damages.

For additional information concerning this securities complaint, please
contact plaintiff's counsel, Joseph V. McBride, Rabin & Peckel LLP, 275
Madison Avenue, New York, NY 10016, by telephone at (800) 497-8076 or
(212) 682-1818, by facsimile at (212) 682-1892, by e-mail at
email@rabinlaw.com or at the website at http://www.rabinlaw.com


MCDERMOTT INTERNATIONAL: Stull, Stull Files Securities Lawsuit in LA
--------------------------------------------------------------------
Stull, Stull & Brody filed a class action lawsuit on January 25, 2000,
in the United States District Court for the Eastern District of
Louisiana on behalf all persons who purchased the common stock of
McDermott International, Inc. between May 21, 1999, and November 11,
1999.

The complaint charges defendants with violations of the Securities
Exchange Act of 1934. The complaint alleges that defendants issued a
series of false and misleading statements concerning the Company's
estimated liability for asbestos related product liability claims
relating to its now defunct boiler division. The complaint further
alleges that the material under-reporting of the Company's reasonable,
expectant liability for these claims allowed defendants to artificially
inflate the Company's earnings.

For more information concerning this suit, please contact Tzivia Brody,
Esq. at Stull, Stull and Brody by calling toll-free 1-800 337-4983, or
by e-mail at SSBNY@aol.com or by fax at 212/490-2022, or by writing to
Stull, Stull and Brody, 6 East 45th Street, New York, NY 10017.


MOBIL OIL: Howls Of Protest Will Greet Any Backdown on Hardship Money
---------------------------------------------------------------------
Howls of protest would greet any backdown by Mobil on its commitment to
pay $15 in million hardship money to operators of grounded aircraft,
Civil Aviation Safety Authority (CASA) said on January 27.

On January 25, Mobil warned aviation businesses involved in legal action
over contaminated fuel that they could jeopardise their chances of
accessing the fund. CASA director of aviation safety Mick Toller said he
was uncertain whether Mobil was intimidating operators.

Mr Toller told the Nine Network, "If (Mobil) don't (honor its
commitment), there's going to be howls of protests. "I think pressure's
got to be put on them certainly to ensure that the operators are not
significantly disadvantaged by something that was not their fault."

Mr Toller said he could not confirm whether Mobil was finalising details
of a compensation package on top of the hardship fund as Mobil was not
being upfront.

Mr Toller said at least 20 grounded planes were now back in the air. He
said the cleaning of contaminated fuel systems took a day to a
day-and-a-half with longer for more complex aircraft. "I think we're
definitely talking about still several weeks before all the aircraft are
back in the air," Mr Toller said.

He said Mobil was delivering fuel testing kits around eastern Australia
and hoped to have all 1,000 out by the end of the week. Mr Toller said
Mobil would cover the cost of both the testing and the decontamination
procedure carried out by aircraft engineers.

              Moorabbin Air Operators Set Deadline

Moorabbin aircraft businesses in Melbourne are threatening oil giant
Mobil with legal action unless it provides them with urgent funding.

Moorabbin Airport Users Group spokesman Max Quartermain said the Mobil
had been given until midday January 27 to provide money from its $15
million fuel contamination hardship fund. He said Mobil's assistance
claim form was highly complex so the group had drawn up its own.

"This financial assistance program or hardship program has been around
now for nearly a week and ... (Mobil) assured me that the payments would
be made rapidly and without dispute on evidence of legitimate claims,"
Mr Quartermain told the Nine Network. "They then produced a claim form
that would take a lawyer to complete and our members are just bewildered
by the questions that have been asked. "So, … we totally rejected their
claim form. "They invited us to produce our own which we did immediately
and faxed to them … and we've set them a deadline … to respond to that
new claim form and to start the cheques flowing so businesses can remain
afloat."

Mr Quartermain said his group had no intention of joining either of the
two court class actions filed on January 24. Rather, members could take
individual action as each claim was different. "We're not interested in
just one class action," Mr Quartermain said. "We have big operators,
small operators and employees that all have different requirements so
we'll be taking advice from our legal advisers. He said if nothing is
heard from Mobil after the deadline, another meeting will be held to
decide what would follow.

He said about 130 planes at Moorabbin had been tested and all were found
to be contaminated. But he said the strict cleaning procedures meant the
aircraft would be the cleanest they have ever been since they left the
factory. (AAP Newsfeed, January 27, 2000)


QUANTAS: To Announce Compensation For Victim Fans in Ticket Bungle
------------------------------------------------------------------
Qantas was expected to make an announcement on January 27 on how it will
compensate about 500 holiday-makers who are the victims of an Australian
Open semi-final ticket bungle.

The holiday makers had come from all corners of Australia, as well as
others from Canada, the United States and Germany, having bought
packages from Qantas which included tickets to January 27’s sessions and
the final two days of the tournament.

However Qantas failed to purchase the tickets for the session on January
27 night, meaning the fans will be unable to watch the much-anticipated
Pete Sampras-Andre Agassi semi-final and what could be the last ever
appearance of the Woodies in the doubles at the Open.

Legal firm Slater and Gordon has already been down to Melbourne Park to
talk about a possible class action, while many of the fans are
determined to stage a sit-in inside centre court after the end of the
day session.

Qantas had offered the angry fans dinner at the Hilton Hotel where they
would watch the matches on a big screen - quickly rejected by the group.
"Qantas Holidays regret to advise that due to an unfortunate error on
our part we are unable to provide you with the tickets for tonight's
session of the Australian Open," a letter from Qantas to the holiday
makers said. (AAP Newsfeed, January 27, 2000)


RACIAL PROFILING: Defense Lawyers Fume over AG’s Consolidation Request
----------------------------------------------------------------------
Attorney General John Farmer Jr.'s attempt to consolidate all racial
profiling cases in one courtroom is catching flak from criminal defense
attorneys, who are accusing the state of trying to shift the cases to a
prosecution-friendly forum.

In briefs filed Jan. 5, the lawyers call Farmer's motion -- filed Dec.
27 with the state Supreme Court -- a "blatant violation of due process
and fundamental fairness." The briefs were filed by Burlington County
Assistant Public Defender Kevin Walker, Gloucester County Deputy Public
Defender P. Jeffrey Wintner, and Moorestown solo practitioner William
Buckman.

Farmer asked the high court to consolidate 80 post-conviction motions in
10 counties, each alleging that the arrest resulted from racial
profiling by the State Police. The request came in State v. Dickerson,
99-01-0067, Walker's case in Burlington County on behalf of 18
motorists, in which Burlington County Superior Court Judge Victor
Friedman held last October that the public defender was entitled to
every document and record in the state's possession relating to
profiling since 1993.

But in December, Morris County Superior Court Judge Theodore Bozonelis
held in State v. Ross, A-1237-97T4, that convicted defendants stopped by
state troopers after June 13, 1995, can reopen their cases only if
racial profiling was raised as a defense at their original trial. That
was the date that a Gloucester County judge, in State v. Soto,
A-5334-95T3, dismissed criminal charges after two troopers testified
that they had been trained to stop motorists fitting a racial profile
like that of the defendant.

Roger Shatzkin, a spokesman for Farmer, says case management, not forum
shopping, is the goal of consolidation. "We have had different judges
reaching different conclusions about similar issues," he says. "We are
just trying to deal with some of the threshold issues in a consistent
matter."

The defense lawyers opposing the move call it not only an "end run" but
a tactic to delay providing overdue discovery. Walker says if the state
is interested in statewide uniformity and expediting profiling cases, it
should submit to whichever county has the most expansive discovery
order. "How is staying cases going to get things done quickly? ... You
don't expedite a case by getting a stay."

For Neil Mullin, who represents civil plaintiffs suing the state for
profiling -- and whose request for class certification the attorney
general is opposing -- the new argument for consolidation is "an obscene
hypocrisy." "Out of one side of their mouth, the state is saying that
these criminal cases are so similar that they should be tried by one
judge," says Mullin, a partner with Montclair's Smith Mullin. "And at
the same time, they are arguing that the civil cases are too different
for the class to be certified in Morka *v. New Jersey, L-8429-97*."

Buckman and Walker also are critical of the timing of Farmer's motion,
filed in the middle of the holiday season when most state offices were
closed and the defense would have little or no time to file a response.
Buckman says he was not aware of the state's motion until Jan. 3 when he
returned from vacation and only learned of it from a Burlington County
attorney who faxed him a copy.

But Shatzkin says public defenders Wintner and Walker were properly
notified of the state's motion. "It isn't like you can file something
with the state Supreme Court and expect no one to notice. We filed the
motion and received the responses we anticipated."

Beatrice Kellum, a spokeswoman for the Administrative Office of the
Courts, says that no date has been set for oral argument on Farmer's
motion. She also says a decision has not been made on whether Chief
Justice Deborah Poritz and Justice Peter Verniero, who both served as
attorney general during the period under scrutiny, will recuse
themselves. (New Jersey Law Journal, January 17, 2000)


SHOPCO REGIONAL: Intends to Defend Vigorously Unitholders’ Suit in DE
---------------------------------------------------------------------
Shopco Regional Malls LP reports on the following litigation to the
Securities and Exchange Commission:

On or about June 9, 1999, a purported class action, Rice, et al. v.
Regional Malls, Inc., et al., was commenced on behalf of all Unitholders
in the Court of Chancery for New Castle County, Delaware, against the
General Partner of the Partnership, the Partnership, and Lehman Brothers
Inc. (the "Defendants"). The complaint alleges, among other things, that
the General Partner failed to protect the Partnership's assets and the
interests of the Unitholders in connection with the default on the
mortgage encumbering Assembly Square Mall, the foreclosure sale of
Assembly Square Mall and the efforts to sell Cranberry Mall. The
complaint purports to assert claims for breach of fiduciary duty and
breach of contract and seeks an accounting. The Defendants intend to
defend the action vigorously.


SKECHERS U.S.A.: Shepherd & Geller Files Securities Lawsuit in CA
-----------------------------------------------------------------
The Law Firm of Shepherd & Geller, LLC filed a class action in the
United States District Court for the Central District of California on
behalf of all individuals and institutional investors that purchased the
common stock of Skechers U.S.A., Inc. issued in or traceable to
Skecher's initial public offering (the"IPO") on June 9, 1999, or
thereafter on the open market, prior to July 6, 1999.

The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by commencing the IPO
pursuant to a Registration Statement and Prospectus that failed to
disclose material information about the Company's current business and
operations. As a result of these omissions, the Company's stock traded
at artificially inflated prices during the class period. When the truth
about the Company was revealed, the price of the stock dropped
significantly.

For additional information concerning this lawsuit, please contact
Jonathan M. Stein of SHEPHERD & GELLER, LLC at 7200 West Camino Real,
Suite 203 Boca Raton, FL 33433 by telephone (561) 750-3000 (toll free)
1-888-262-3131 or jstein@classactioncounsel.com via e mail or website at
http://www.classactioncounsel.com


SUNTERRA CORP: Burt & Pucillo Files Securities Lawsuit in FL
------------------------------------------------------------
Burt & Pucillo, LLP filed in the United States District Court for the
Middle District of Florida against Sunterra Corporation, Case No.
6:00-CV- 97-ORL-19A on behalf of a class of persons who purchased the
common stock of Sunterra Corporation during the period from October 4,
1998 and January 19, 2000.

The complaint alleges that Sunterra and certain of its officers and
directors violated the Securities Exchange Act of 1934 and Rule 10b 5 by
issuing materially false and misleading information concerning
Sunterra's business and financial condition during the Class Period
between October 4, 1998 and January 19, 2000. It alleges that on January
20, 2000 the Defendants revealed that the Company would be taking a
charge of $38 to $45 million to write off delinquent accounts receivable
which had been improperly left on the Company's books. As a consequence,
at that time it was revealed that Sunterra's fourth quarter earnings
would be in the range of $0.01 to $0.08 per share as compared with
earnings of $0.31 per share during the prior year. After this
disclosure, Sunterra's stock plunged by more than 35% in price.

For more details regarding this lawsuit, you may contact plaintiffs'
counsel, C. Oliver Burt, III, or Michael J. Pucillo of Burt & Pucillo
LLP, at 561/835-9400 or 800/349-4612, or e-mail address:
law@burt-pucillo.com


SUNTERRA CORP: Cohen, Milstein Files Securities Suit in FL
----------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. filed a lawsuit in the United
States District Court for the Middle District of Florida on behalf of
all persons who purchased the common stock of Sunterra Corp. during the
period of October 4, 1998 and January 19, 2000, inclusive.

The Complaint charges Sunterra and certain of its senior officers and
directors with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by, among
other things, misrepresenting and/or omitting material information. On
January 20, 2000, the Company revealed that its fourth quarter results
would be between $.01 to $.08 per share, compared with $.31 per share
for the prior year, and that the Company planned to take a $38 to $45
million charge in order to write-off delinquent receivables improperly
left on its books.

For additional information concerning the above mentioned securities
suit, please contact Andrew N. Friedman (Afriedman@cmht.com) or Robert
Smits (rsmits@cmht.com) of Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
1100 New York Avenue, N.W., Suite 500 -West Tower, Washington, D.C.
20005 at telephone 888/240-0775 or 202/408-4600


SUNTERRA CORP: Schatz & Nobel Files Securities Complaint in FL
--------------------------------------------------------------
Schatz & Nobel, P.C filed a class action complaint in the United States
District Court for the Middle District of Florida on behalf of all
persons who purchased or otherwise acquired the common stock of Sunterra
Corporation between October 4, 1998 and January 19, 2000, inclusive.

The complaint charges that Sunterra and certain of its officers violated
the Securities Exchange Act of 1934 by materially overstating Sunterra's
accounts receivable, revenues, and earnings, thereby causing the members
of the class to purchase stock at artificially inflated prices. On
January 20, 2000, defendants revealed that Sunterra's results would be
significantly lower than in the prior year and that Sunterra would be
taking a massive charge of $38-$45 million to write off delinquent
receivables improperly left on Sunterra's books. When the truth was
disclosed, Sunterra's stock price plunged more than 35% to an all-time
low.

For more information regarding this securities complaint, please contact
Andrew M. Schatz or Jeffrey S. Nobel of Schatz & Nobel, toll-free at
(800) 797-5499, or by e-mail at SN06106@aol.com or visit the website at
http://www.snlaw.net


* Federal Courts Deeply Divided Over Securities Fraud Intent Standard
---------------------------------------------------------------------
In 1995, Congress enacted the Private Securities Litigation Reform Act
(the "PSLRA" or "Reform Act") to standardize and elevate the pleading
requirements in securities fraud class actions. 15 U.S.C. Sec. 78u-4 et
seq. (West Supp. 1999). Prior to the Reform Act, courts had required
varying degrees of particularity from plaintiffs in pleading scienter,
the requisite state of mind for defendants to be found liable in
securities fraud cases. N1 The Second Circuit which required plaintiffs
to plead sufficient facts to create a "strong inference" that the
defendants acted with scienter was widely recognized as having the most
stringent pleading standards for plaintiffs. The Second Circuit had
ruled that the strong inference could be met by either pleading (1)
facts constituting circumstantial evidence of either recklessness or
conscious behavior or (2) facts establishing a motive to commit fraud
and an opportunity to do so. See In re Time Warner Inc. Sec. Litig., 9
F.3d 259, 269 (2d Cir. 1993). The Second Circuit recognized that the
"circumstantial evidence" prong of the test was a more difficult
standard to meet than "motive and opportunity." Beck v. Manufacturers
Hanover Trust Co., 820 F.2d 46, 50 (2d Cir. 1987). n1. Prior to 1995,
the federal circuit courts had uniformly ruled that scienter included
not only intentional wrongdoing, but also recklessness, although the
Supreme Court specifically reserved ruling on the issue in Ernst & Ernst
v. Hochfelder, 425 U.S. 185, 193-94 (1976). A reckless statement in the
securities fraud context had been consistently defined as one "involving
not merely simple, or even inexcusable negligence, but an extreme
departure from the standards of ordinary care, [ ] which presents a
danger of misleading buyers or sellers that is either known to the
defendant or is so obvious that the actor must have been aware of it."
See e.g. McLean v. Alexander, 599 F.2d 1190, 1197 (3d Cir. 1979)
(quoting Sunstrand Corp. v. Sun Chem. Corp., 553 F.2d 1033, 1045 (7th
Cir. 1977)).

The Reform Act now specifically requires plaintiffs to state facts in
their complaints which give rise to a "strong inference" that the
defendants acted with the required state of mind. In particular, the
Reform Act states: "In any private action arising under this chapter in
which the plaintiff may recover money damages only on proof that the
defendant acted with a particular state of mind, the complaint shall,
with respect to each act or omission alleged to violate this chapter,
state with particularity facts giving rise to a strong inference that
the defendant acted with the required state of mind." 15 U.S.C. Sec.
78u-4(b)(2) (emphasis added). If the plaintiffs fail to meet this
pleading standard, the Reform Act mandates that the complaint be
dismissed. Id. at Sec. 78u-4(b)(3)(A).

       Circuit Courts Are Beginning to Analyze the Reform Act

While Congress intended the Reform Act to standardize the pleading
requirement in securities fraud class actions throughout the country,
the federal circuit courts which have addressed the issue have reached
vastly different conclusions about the pleading standard adopted.
Contrary to Congress' intent to eliminate disparity among the circuits,
the Reform Act has resulted in more debate, confusion and, potentially,
forum shopping.

In the last few months, many circuit courts have reviewed the pleading
requirements of the Reform Act resulting in four different conclusions
about the standard and test adopted by Congress. All have affirmed the
dismissal by the district court (although the Second Circuit on
different grounds than the failure of plaintiffs to meet the pleading
requirements of the Reform Act). Furthermore, all but the Second Circuit
ruled that the Reform Act heightened the pleading standard above the
previous Second Circuit test. N2 n2. The Second Circuit interpreted the
Reform Act as merely codifying its previous standard. Press v. Chemical
Inv. Servs. Corp., 166 F.3d 529, 537-38 (2d Cir. 1999). Thus, the Second
Circuit, which was the most demanding, may now be the most lenient
circuit for securities plaintiffs.

The Circuit Courts analyzing the Reform Act have based their
interpretations of the pleading standard on various factors. For
instance, the Second Circuit took refuge in the Reform Act's use of the
term "strong inference" -- the prior Second Circuit standard -- to hold
that the Reform Act essentially adopted the pre-1995 Second Circuit
standard and test. Other courts have reviewed the legislative history of
the Reform Act to reach different conclusions. While the "strong
inference" language comes from the Second Circuit standard, the
legislative history of the Reform Act demonstrates Congress' intent to
heighten the pleading standard above that previously required by the
Second Circuit. For example, in the legislative record, Congress
indicated that it passed the Reform Act to restrict abuses in securities
class action litigation, in particular "the practice of filing lawsuits
against issuers of securities in response to any significant change in
stock price, regardless of defendants' culpability." H.R. Conf. Ref. No.
104-369, at 28 (1995), reprinted in 1995 U.S.C.C.A.N. 679, 748. The
Statement of Managers further specified that the purpose of the Reform
Act was to "establish . . . more stringent pleading requirements to
curtail the filing of meritless lawsuits." H.R. Conf. Rep. No. 104-369,
at 37. The Statement of Managers also noted: "For this reason [its
intention to heighten the pleading standard], the Conference Report
chose not to include in the pleading standard certain language relating
to motive, opportunity, or recklessness." Id. at n. 23. Finally,
President Clinton vetoed the Reform Act, because he believed that
Congress made "crystal clear . . . their intent to raise the [pleading]
standard even beyond that [of the Second Circuit]." 141 Cong. Rec.
H15214 (daily ed. Dec. 20, 1995). Congress overrode the President's veto
without changing the pleading standard.

            Courts Adopting the Second Circuit Standard

As discussed above, in Press, the Second Circuit held, without
discussion, that the Reform Act merely adopted the standard and test
previously used by its courts. Id. at 537-38 ("The [PSLRA] heightened
the requirement for pleading scienter to the level used by the Second
Circuit..."). Thus, the court noted that the Reform Act would still
allow plaintiffs to plead a strong inference of scienter by either
conscious behavior or a motive and opportunity to commit fraud. Id. at
538. The court specifically noted that the test was somewhat lenient to
plaintiffs but refused to raise the bar for securities cases, because
"[t]o require more in pleading of motive . . . would make virtually
impossible a plaintiff's ability to plead scienter in a financial
transaction involving a corporation, institution, bank or the like that
did not involve specifically greedy comments from an authorized
corporate individual." Id.

The Third Circuit also recently analyzed the standard adopted by the
Reform Act. In re Advanta Corp. Sec. Lit., 180 F.3d 535 (3d Cir. 1999).
After an in-depth analysis of the legislative history which the court
found to be "contradictory and inconclusive" (id. at 531-533), the Third
Circuit relied on the language of the Reform Act in determining that it
adopted a standard approximately equal in stringency to the prior Second
Circuit standard, but raised the pleading requirements above those of
the Second Circuit by requiring that the complaint state facts "with
particularity" which give rise to the "strong inference" of scienter. N3
Id. at 534. The Third Circuit retained the Second Circuit test allowing
plaintiffs to plead either "conscious behavior" or "motive and
opportunity" but stated that the plaintiffs must plead "the who, what,
where, and how: the first paragraph of any newspaper story." Id. (citing
DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990)). n3. The
Third Circuit also specifically held that the Reform Act did not alter
the substantive requirements in securities fraud cases, only procedural
ones. Id. at 534. Therefore, the court ruled that the "required state of
mind" could still be satisfied by recklessness (except in the case of a
forward-looking statement, where actual knowledge that the statement is
false or misleading is required). Id. at 533 & 536-37.

In analyzing the requirements for meeting this pleading standard, the
Third Circuit held: "[a]fter the Reform Act, catch-all allegations that
defendants stood to benefit from wrongdoing and had the opportunity to
implement a fraudulent scheme are no longer sufficient, because they do
not state facts with particularity or give rise to a strong inference of
scienter." Id. at 535. The court found that the complaint in that case
merely contained "conclusory assertions that the defendants acted
'knowingly'" and "blanket statements that defendants must have been
aware of the impending losses by virtue of their positions within the
company," none of which were found to be sufficient under the Reform
Act. Id. at 539. Notably, the court rejected the plaintiffs' inference
that defendants "must have known" certain facts due to their positions
in the company. Id. The court, furthermore, rejected plaintiffs'
allegations of motive and opportunity which were based on insider
trading as certain defendants had sold no stock and two officers had
sold only small percentages of their holdings. Id. at 540-41. With
respect to two other defendants, the Third Circuit cited the failure of
the complaint to allege the percentage of stock sales in comparison with
the defendants' holdings as a factor in its decision to find the
complaint inadequate. Id. at n. 10. Accordingly, the Third Circuit now
specifically requires plaintiffs to plead not the absolute number of
shares sold, but the percentage of each defendants' holdings sold by
corporate insiders in order to establish motive and opportunity under
the Reform Act. Id.

         The Particularly Rigorous Ninth Circuit Standard

In re: Silicon Graphics Inc. Sec. Litig., 183 F.3d 970 (9th Cir. 1999)
presented the Ninth Circuit with a typical securities fraud case
involving a significant drop in stock price after negative information
about the company's performance was announced. The Ninth Circuit, in a
split decision, addressed the pleading standard of the Reform Act. In a
significant shift for that circuit, which, prior to the Reform Act, had
adopted one of the more lenient pleading standards, the court ruled: "We
hold that a private securities plaintiff proceeding under the PSLRA must
plead, in great detail, facts that constitute strong circumstantial
evidence of deliberately reckless or conscious misconduct." Id. at 974.
Thus, the Ninth Circuit eliminated both the "motive and opportunity" and
the "recklessness" aspects of the prior Second Circuit test. Id. The
court adopted this heightened standard primarily based on its conclusion
that "Congress intended to elevate the pleading requirement above the
Second Circuit standard requiring plaintiffs merely to provide facts
showing simple recklessness or a motive to commit fraud and opportunity
to do so." Id.

The court held that plaintiffs failed to state with particularity all
facts on which their belief that defendants committed securities fraud
was based. Id. at 985. In particular, the court held that plaintiffs who
plead on information and belief must now provide "in great detail" all
relevant facts forming the basis for their belief. Id. Therefore, the
court required plaintiffs to include very specific facts about any
alleged internal reports which supported their contentions, including,
for instance, "the sources of . . . information with respect to the
reports, how [plaintiffs] learned of the reports, who drafted them, or
which officers received them" as well as "an adequate description of
their contents which . . . would include countless specifics . . ." Id.
In connection with plaintiffs' claims of defendants' insider trading,
the court specifically ruled that courts must consider the percentage of
shares sold compared with defendants' total holdings, including
exercisable options in determining whether the stock sales give rise to
a strong inference of scienter. Id. at 986-87 (emphasis supplied).

              The Middle Road, Led by the Sixth Circuit

Shortly after the Ninth Circuit ruling in Silicon Graphics, the Sixth
Circuit issued its own opinion and came down in the middle in its
analysis of the pleading requirements adopted by the Reform Act. In re
Comshare Inc. Sec. Litig., relying on the plain language of the Reform
Act, the Sixth Circuit held that the statute "did not change the
scienter that a plaintiff must prove to prevail in a securities fraud
case but instead changed what a plaintiff must plead in his complaint in
order to survive a motion to dismiss." 183 F.3d 542 (6th Cir. 1999).
Accordingly, unless the alleged misleading statement is forward-looking,
the court concluded that recklessness could still suffice as the
required state of mind. Id. at 550. The court, however, eliminated the
"motive and opportunity" test to plead a claim of securities fraud: "we
hold that plaintiffs may meet PSLRA pleading requirements by alleging
facts that give rise to a strong inference of reckless behavior but not
by alleging facts that illustrate nothing more than defendant's motive
and opportunity to commit fraud." Id. at 551.

The Sixth Circuit found that the vast majority of the plaintiffs'
scienter allegations related to the motive and opportunity of the
defendants to profit by selling their stock at inflated prices. Id. at
552-53. The court ruled, however, that "claims of motive and opportunity
do not, without more, suffice to give rise to a 'strong inference' of
scienter." Id. The court also rejected the complaint's contentions that
the defendants should have known about the errors in the revenue
recognition prior to the time they were announced. Id. at 553.
Plaintiffs' failure to allege specific facts that illustrated "red
flags" to the corporate defendants caused the court to reject this
contention. Id. Therefore, the Sixth Circuit affirmed the dismissal of
the complaint for failure to adequately plead scienter under the Reform
Act.

Both the Eleventh Circuit (Bryant v. Avado Brands, Inc., 187 F.3d 1271
(11th Cir. 1999)) and the First Circuit (Graebel v. FTP Software, Inc.,
194 F.3d 185 (1st Cir. 1999)) have noted general agreement with the
interpretation of the Reform Act adopted by the Sixth Circuit. In
particular, the Bryant case held: "we are in basic agreement with the
Sixth Circuit; we hold that the Reform Act does not prohibit the
practice of alleging scienter by pleading facts that denote severe
recklessness, the standard previously approved of by this Circuit . . .
but we hold that the Reform Act does not codify the 'motive and
opportunity' test formulated by the Second Circuit." Bryant, 187 F.3d at
1283. Similarly, the First Circuit ruled that motive and opportunity
alone do not necessarily meet the pleading requirement of the Reform
Act. Graebel, 194 F.3d at 197. Instead, the court directed that a fact
intensive inquiry is necessary and that the Reform Act is "congruent and
consistent with the pre-existing standards of [that] circuit" which the
court noted had been "strict and rigorous in applying the rule 9(b)
standard in securities fraud actions." Id. at 193.

                           Conclusion

The split in authority demonstrated by the rulings from the various
circuit courts suggests that a determination of the pleading standard
adopted by the Reform Act is ripe for resolution by the U.S. Supreme
Court. Only after the Supreme Court renders a decision on this issue
will the meaning and proper application of the Reform Act be known.
Until then, the first question plaintiffs' counsel will have to ask
themselves when drafting a securities fraud class action complaint will
be -- "What Circuit are we in?" (Legal Backgrounder, January 21, 2000)


* New Megan's Law Guidelines Ordered
------------------------------------
A federal judge has ordered New Jersey to rework its landmark sexual
offender notification statute, warning that Megan's Law could be shut
down for the first time.

U.S. District Judge Joseph Irenas said New Jersey has failed to
implement consistent standards of how notifications are conducted. He
wants tighter controls on who gets the information. He ordered state
Attorney General John Farmer to rewrite the law and issued an order to
halt all sex offender notifications, but he agreed to delay its
implementation to give Farmer a chance to appeal. The ruling in response
to a class action lawsuit filed by the state Public Defender's Office
was handed down late January 24 and disclosed January 26.

The law, named for a girl raped and killed by a released convict who
lived in her neighborhood, instructs prosecutors to notify people when
sex offenders classified as a moderate or high risk move into their
communities. The law demands carefully written notification plans for
each case that map out which people on which blocks would be informed.
The plans must be approved by a judge.

Public defenders say too many people outside the law's limits can learn
about an offender's past. In one case, the notification was given to a
newspaper. In another, a school employee handed out the notification to
students.

All 50 states have some type of sexual offender law modeled after the
New Jersey law, but many have come under fire.

Earlier this month, the U.S. Supreme Court refused to reinstate
Pennsylvania's sexual-predator law, which was thrown out by that state's
highest court on the ground that it violated defendants' rights. (AP
Online, January 27, 2000)


                               *********


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
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