CAR_Public/000824.MBX              C L A S S   A C T I O N   R E P O R T E R

             Thursday, August 24, 2000, Vol. 2, No. 165

                              Headlines

3COM CORP: Updates on Securities Lawsuits in California
ASBESTOS LITIGATION: GAF Owes More Than $ 50M in Settlements, CCR Says
BEHR PROCESS: CA Homeowner Says Wood Sealer Paint Promotes Mildew Growth
BRIDGESTONE/FIRESTONE: Legal Costs May Compound Recall's Impact
BRIDGESTONE/FIRESTONE: Retired Employees to Testify in Consumer Case

BRIDGESTONE/FIRESTONE: Rhode Island Man Sues Over Non-Recall Tires
CENDANT CORP: $3.1 Bil Deal Okayed in Securities Case; Lawyers Get $262M
CHASE BANK: Breaching Duties As Trustee, Alpine Claimant Charges
DRKOOP.COM INC: Ailing Health Information Web Site Gets $20 Mil
ELBIT MEDICAL: Announces Court Rejection of Class Cert. for Shareholders

FEN-PHEN: Hundreds of New Mexicans Decline Settlement Offer
INSURANCE COMPANIES: Race-based Underwriting Becoming National Issue
MCM CAPITAL: Resolves Suit over Sale of Receivables to 3rd Parties in 97
MERCATOR SOFTWARE: Wolf Haldenstein Files Securities Suit in Connecticut
PHARMAPRINT INC: Faces 2 Securities Suits in NJ for Two Periods in 1999

SCIENTIFIC LEARNING: Milberg Weiss Files Securities Suit in California
TENFOLD CORPORATION: Berman, DeValerio Files Securities Suit in Utah
TRANSWORLD HEALTHCARE: Pays $10 Mil to Settle Medicare Fraud Suit
WARNACO GROUP: Laurence D. Paskowitz Files Securities Suit in New York
WWII VICTIMS: Japan Downplays Chinese War Enslavement Lawsuit in US

                            *********

3COM CORP: Updates on Securities Lawsuits in California
-------------------------------------------------------
In its report filed with the SEC, the company reports on the status of
previously reported securities lawsuits in California:

                   Euredjian Action Dismissed

On February 10, 1998, a securities class action, captioned Euredjian v.
3Com Corporation, et al., Civil Action No. C-98-00508CRB (Euredjian), was
filed against 3Com and several of its present and former officers and
directors in United States District Court for the Northern District of
California asserting the same class period and factual allegations as the
Hirsch and Kravitz actions. The complaint alleges violations of the federal
securities laws, specifically Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and seeks unspecified damages. In May 2000, at the
request of plaintiffs, the Court dismissed the Euredjian case with
prejudice.

                    Stay Lifted for Hirsch Action

On March 24 and May 5, 1997, securities class action lawsuits, captioned
Hirsch v. 3Com Corporation, et al., Civil Action No. CV764977 (Hirsch), and
Kravitz v. 3Com Corporation, et al., Civil Action No. CV765962 (Kravitz),
respectively, were filed against 3Com and certain of its officers and
directors in the California Superior Court, Santa Clara County. The
complaints allege violations of Sections 25400 and 25500 of the California
Corporations Code and seek unspecified damages on behalf of a class of
purchasers of 3Com common stock during the period from September 24, 1996
through February 10, 1997. In late 1999, these cases were stayed by the
Court, pending resolution of proceedings in the Euredjian v. 3Com
Corporation matter. Because the Euredjian case has been dismissed, the
Hirsch and Kravitz cases are no longer stayed. They are in discovery. No
trial date has been scheduled.

                      Reiver Action in Discovery

In December 1997, a securities class action, captioned Reiver v. 3Com
Corporation, et al., Civil Action No. C-97-21083JW (Reiver), was filed in
the United States District Court for the Northern District of California.
Several similar actions have been consolidated into this action, including
Florida State Board of Administration and Teachers Retirement System of
Louisiana v. 3Com Corporation, et al., Civil Action No. C-98-1355. On
August 17, 1998, the plaintiffs filed a consolidated amended complaint
which alleges violations of the federal securities laws, specifically
Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, and
which seeks unspecified damages on behalf of a purported class of
purchasers of 3Com common stock during the period from April 23, 1997
through November 5, 1997. 3Com has answered an amended complaint and the
case is now in discovery. No trial date has been scheduled.

              Reaches Agreement to Stay Adler Action

In October 1998, a securities class action lawsuit, captioned Adler v. 3Com
Corporation, et al., Civil Action No. CV777368 (Adler), was filed against
3Com and certain of its officers and directors in the California Superior
Court, Santa Clara County, asserting the same class period and factual
allegations as the Reiver action. The complaint alleges violations of
Sections 25400 and 25500 of the California Corporations Code and seeks
unspecified damages. By agreement of the parties, this case will be stayed
to allow the Reiver case to proceed.

               Seeks to Dismiss Amended Gaylinn Action

On May 11, 1999, a securities class action, captioned Gaylinn v. 3Com
Corporation, et al., Civil Action No. C-99-2185 MMC (Gaylinn), was filed
against 3Com and several of its present and former officers and directors
in United States District Court for the Northern District of California.
Several similar actions have been consolidated into the Gaylinn action. On
September 10, 1999, the plaintiffs filed a consolidated complaint which
alleges violations of the federal securities laws, specifically Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and seeks
unspecified damages on behalf of a purported class of purchasers of 3Com
common stock during the period from September 22, 1998 through March 2,
1999. In January 2000, the Court dismissed the complaint. In February 2000,
plaintiffs filed an amended complaint. In June 2000, the Court dismissed
the amended complaint without prejudice. Plaintiffs filed another amended
complaint. On July 24, 2000, the Company filed a motion to dismiss the
latest amended complaint.


ASBESTOS LITIGATION: GAF Owes More Than $ 50M in Settlements, CCR Says
----------------------------------------------------------------------
GAF Corp. owes more than $ 50 million to thousands of asbestos plaintiffs
as part of settlements the Center for Claims Resolution reached prior to
termination of GAF's membership in the consortium, according to an
affidavit filed with the U.S. District Court for the Eastern District of
Pennsylvania.

The affidavit was filed June 16 by Michael F. Rooney, chief operating
office of the CCR, as part of a brief supporting plaintiffs' motion to
enforce the settlement agreement. The plaintiffs, led by Marion C. Myers,
Gates Cornet, Kathlyn A. Philips and Johnny Mae Gilliam, are from Texas.
Their lawsuits were filed with the Southern District of Texas, Houston
Division. The CCR on June 14 filed a memorandum in support of the Myers
plaintiffs' motion to have the MDL No. 875 court in Pennsylvania enforce
the agreement they reached with the CCR.

The CCR companies claimed that as of the settlement with the Myers
plaintiffs, GAF was still a member of the CCR. In joining the CCR in 1988,
GAF and other members agreed to have the CCR calculate its share of each
settlement in accordance with the members' allocation arrangements. Each
member then agreed to pay its share of settlements reached prior to
termination of their membership with the consortium.

                       Collateral Estoppel

The CCR companies argued that the plaintiffs' motion to enforce should be
granted on the basis of collateral estoppel. According to the CCR
companies' brief, other federal and state courts have entered judgments
requiring GAF alone to pay the amounts due to plaintiffs, including courts
in Texas, Pennsylvania, Michigan, California, Colorado, Illinois,
Washington and New Jersey.

Even if the MDL court decided to reconsider the earlier courts' positions,
the CCR urged the court to still find that GAF is directly liable for its
share and that the company's liability, as a disclosed principal, cannot be
shifted onto the CCR. Also, the CCR argued that it cannot be held liable
for the settlement costs since it has no assets of its own and because the
purpose of the CCR was to administer and arrange for the settlements and
not to pay them. Payment was the responsibility of the member
organizations, the CCR said. Finally, the CCR argued that the dispute
between itself and GAF is subject to mandatory arbitration.

The brief was filed by John D. Aldock of Shea & Gardner in Washington, D.C.
(Mealey's Litigation Report: Asbestos, July 7, 2000)


BEHR PROCESS: CA Homeowner Says Wood Sealer Paint Promotes Mildew Growth
------------------------------------------------------------------------
Stockton homeowner Judy Herum claims Behr Process Corp., the maker of Behr
Paints, sells a wood sealer that, instead of resisting mildew as advertised
actually promotes mildew growth.

Herum's attorney, James B. Brown of Stockton, said Behr's own tests found
that the sealer, sold as Super Liquid Rawhide or Natural Seal Plus,
actively promotes mildew growth within three to six months of application.
"Irrespective of that, it appears that the tests were buried or disregarded
and they marketed it," said Brown, whose law partner Steven Herum is Judy
Herum's husband.

Brown reported that the state Supreme Court on Monday assigned Judy Herum's
case and other similar cases as a class-action lawsuit to be handled by San
Joaquin County Superior Court. Her suit was originally filed in July. "We
think that the allegations are without merit and that we will be vindicated
at trial," said Samuel Cypert, vice president of investor relations for
Masco Corp., the Taylor, Mich.-based parent of Behr. "We have sold
thousands of these products, and we think that when they are property
applied, they will perform as advertised," Cypert said.

He declined to discuss the lawsuit's claim that Behr's own tests showed the
products to be faulty but promised instead to mount a vigorous defense.

Brown said that Judy Herum had been using Behr's sealer for several years
on the deck at her Stockton home but was having trouble with it. Her
complaints led Brown to investigate further, then file suit.

At this point, the attorney is unsure of the extent of the damages. Herum's
deck, he said, does need repair, but to determine the full extent of the
damage "would require destructive testing," yet to be performed. But Behr's
wood sealer is a widely available product sold at retailers such as Home
Depot. "We believe there are a number of similar decks ... and docks around
the lakes in Stockton that have been treated with the product," Brown said.

"Everyone who has the product is suffering the same kind of damage."
(The Record, August 23, 2000)


BRIDGESTONE/FIRESTONE: Legal Costs May Compound Recall's Impact
----------------------------------------------------------------
Over and above the cost of the Firestone tire recall announced Aug. 9, at
least $350 million, if the charges Bridgestone Corp. is taking against its
fiscal year 2000 earnings are accurate--are the legal costs
Bridgestone/Firestone Inc. faces.

These likely are to be disastrous, if not catastrophic.

Bridgestone/Firestone said Aug. 15 it has no estimates regarding the number
of product liability, injury and wrongful death lawsuits that have been
filed involving the Firestone ATX, ATX II and Wilderness AT tires. But Sean
Kane, a partner in the trial lawyer-funded research group Strategic Safety,
estimated in early August that the number had topped 100, and filings have
multiplied since the story of the government accident data and subsequent
recall broke worldwide.

This doesn't even include the motions--at least six so far--to create
national class action suits against Bridgestone/Firestone in various
jurisdictions.

Or the lawsuit filed by South Carolina Attorney General Charlie Condon,
which seeks to force Bridgestone/Firestone to immediately replace every
ATX, ATX II and Wilderness tire still in the hands of South Carolina
motorists and pay a criminal penalty of up to $5,000 for every one of those
tires.

Bridgestone/Firestone's liability may not even be limited to the specific
tires in the recall. On Aug. 14, consumer advocacy group Public Citizen and
product safety Internet service Safetyforum.com called on the company to
expand the recall to include 16-inch tires as well as 15-inch, and also to
include all 15-inch Wilderness tires, not just those manufactured at the
Bridgestone/Firestone plant in Decatur, Ill.

Tab Turner, who serves as legal counsel to Safetyforum.com, also is a
Little Rock, Ark., personal injury lawyer who specializes in cases
involving tires and sport-utility vehicles, including a number of current
cases involving Firestone tires as original equipment on the Ford Explorer
dating back as early as 1992.

At a Safetyforum.com news conference, Turner said the number of lawsuits
and insurance claims made so far on Firestone tires and the Ford Explorer
is "a very, very small percentage" of the actual extent of the problem. "If
the ocean is the scope of this problem, the personal injury and insurance
claims (filed to date) are a cup of water," he said.

Several personal injury and consumer advocacy firms, looking to tap some
treasure from that ocean, have filed motions in circuit courts across the
U.S. to form national class actions against Bridgestone/Firestone. These
actions are parallel to, but not connected with, individual lawsuits
involving the Firestone tires, according to Alexander Barnett, an attorney
with the Washington firm of Cohen Milstein Hausfeld & Toll.

Cohen Milstein, together with the Fort Myers, Fla.-based Viles Law Firm,
filed a class action suit Aug. 8 in the Lee County, Fla., circuit court on
behalf of all owners of Firestone ATX, ATX II and Wilderness tires.

Besides replacement of the tires, the suit seeks damages for each of the
plaintiffs--potentially millions of them, because Bridgestone/Firestone has
manufactured some 48 million of those tires since 1991--in an amount
between $15,000 and $74,999. The $15,000 figure is the minimum required by
the circuit court, Barnett said, and keeping the maximum figure below
$75,000 makes it more difficult for Bridgestone/Firestone to argue that the
case should be moved to a federal court.

Five other national class action suits have been filed by other law firms
in courts in Florida, Texas, New York and Tennessee. J. Douglas Richards,
an attorney with the New York firm of Milberg Weiss Bershad Hynes & Lerach,
declined to discuss the class action his firm filed in the Chancery Court
for Davidson County, Tenn.

The Lee County circuit court has scheduled an Aug. 25 hearing on the Cohen
Milstein petition, according to Barnett. "The court could issue a bench
ruling, or rule soon thereafter" on whether to certify the class action, he
said.

It is too soon to know whether the separate class actions will continue or
consolidate, or whether one will be given precedence, according to Barnett.
"We'll just have to wait and see," he said.

In any case, the class actions could face stiff competition for
Bridgestone/Firestone's money from state attorneys general.

Besides filing suit against the company Aug. 14 in the Richland County,
S.C., Court of Common Pleas, Charlie Condon called on other state attorneys
general to join him in demanding immediate satisfaction for Firestone tire
owners.

Condon was incensed by Bridgestone/Firestone's plan for a phased recall
beginning immediately with California, Arizona, Texas and Florida, and
including other states only after those four--which together accounted for
80 percent of Firestone-related accident reports--were taken care of.

He alleged that Firestone knew the tires could fail in normal use,
particularly in warm-climate areas such as South Carolina. "Firestone has
turned a deaf ear to our requests and pleadings for fair treatment of South
Carolina," he said in a news release. "The life and safety of South
Carolina citizens are just as precious as everyone else's. We cannot ration
human life."

Condon's office estimates that the lawsuit, if successful, could cost
Bridgestone/Firestone "tens of millions of dollars in damages." Meanwhile,
the attorneys general of North Carolina, New York, Georgia and Nevada also
are considering their options, and the National Association of Attorneys
General has discussed in a conference call whether their states should join
in a lawsuit against the company. (Rubber & Plastics News, August 21, 2000)



BRIDGESTONE/FIRESTONE: Retired Employees to Testify in Consumer Case
--------------------------------------------------------------------
Retired employees of the company's Decatur plant were expected to testify
Wednesday that inspectors were pressed to examine 100 tires an hour too
many to do an adequate job, The Wall Street Journal reported Wednesday. The
testimony was to be given as lawyers begin taking depositions in a Florida
personal-injury case against the company.

Firestone spokeswoman Christine Karbowiak said the former employees are
''disgruntled.'' ''Obviously we stand by our processes and procedures,''
she told the newspaper. ''Out of 2,100 Decatur employees, we have a small
handful of folks who are making allegations.''

Several attorneys have filed lawsuits seeking class-action status to
represent consumers affected by the recall, which is expected to cost the
company $350 million. Attorneys general in several states also are
investigating the safety of the tires and the expediency of the recall.

The Center for Auto Safety has filed a lawsuit contending 12 million more
Firestone tires all ATX, ATX II and Wilderness ATs still on the road should
be recalled. The safety advocacy group successfully pushed for 1970s
recalls of the Ford Pinto and 14.5 million Firestone 500 tires.

Additionally, Bridgestone/Firestone is facing the threat of a strike at
nine of its plants.

On Monday, Ford Motor Co. said it would temporarily halt production at
three plants to make more than 70,000 replacement tires available to
consumers. The tires were standard equipment on some Ford trucks and sports
utility vehicles, including the Explorer.

Barry Green, executive vice president of Lippincott & Margulies Inc., an
image consultant firm based in New York, said the troubles facing
Bridgestone/Firestone mean the company must work to regain the trust of
corporations and consumers. ''It's a long, long road for them,'' he said.
''I think they just have to be responsible to the marketplace and do what's
right. They've lost not only customers, they've lost confidence with the
automotive industry.'' (AP Online, August 23, 2000)


BRIDGESTONE/FIRESTONE: Rhode Island Man Sues Over Non-Recall Tires
------------------------------------------------------------------
A Rhode Island man has sued Bridgestone/Firestone Inc., claiming his tires
should have been among those recalled by the company as defective. Eric
Gasbarro of North Providence said the tires on his Ford Explorer were
cracked, split and had faulty tread, according to the class-action lawsuit
filed Tuesday in Superior Court.

Gasbarro has Wilderness AT tires, but they do not have the "VD" code, which
would indicate that they were manufactured at the Illinois plant, he said
in the suit. "We believe that the problem goes beyond the scope of the tire
they've put out for official recall," said Peter Wasylyk, Gasbarro's
lawyer.

Gasbarro is seeking unspecified damages along with reimbursement for the $
481.46 he spent to replace his four tires. He also names Ford Motor Co. as
a defendant in the suit, alleging the company was partly responsible
because it markets and sells vehicles with Bridgestone/Firestone tires.

The tires were standard equipment on some Ford trucks and sports utility
vehicles, including the Explorer. The National Highway Traffic Safety
Administration is investigating 62 deaths and more than 100 injuries in
connection with the tires. In many cases, the tread separated from the
tire, causing a blowout and a rollover accident. The recall is expected to
cost Bridgestone/Firestone about $350 million. (The Associated Press State
& Local Wire, August 23, 2000)


CENDANT CORP: $3.1 Bil Deal Okayed in Securities Case; Lawyers Get $262M
------------------------------------------------------------------------
Record-breaking awards in the Cendant securities fraud case have been
approved by a federal judge in New Jersey: a $3.1 billion settlement amount
and $262 million in fees to attorneys for the plaintiffs' class.

Cendant, a conglomerate that includes Avis car rental agencies and Ramada
Inn Hotels, had agreed to pay $2.8 billion in December to settle security
fraud charges stemming from the collapse of its stock price after
accounting irregularities were disclosed in April 1998.

Ernst & Young, the accounting firm that had certified Cendant's financial
statement, also agreed to contribute $335 million toward the settlement.
The most controversial component of Monday's ruling by U.S. District Judge
William H. Walls of Newark, N.J., was his rejection of New York City's
contention that the fees of the injured investors' lawyers should have been
cut by $76 million, to $186 million.

The two lead law firms for the plaintiffs were Bernstein Litowitz Berger &
Grossman in Manhattan and Barrack, Rodos & Bacine in Philadelphia. The
firms had been chosen by the three institutional plaintiffs selected by the
judge to control the litigation as lead plaintiffs: the pension systems for
California, New York State, and New York City.

But rather than simply accepting the lead plaintiffs' choice of counsel,
Walls in August 1998 conducted an auction and gave the two retained counsel
the option of meeting the lowest responsible bid submitted. The two firms
both opted to meet the lowest acceptable bid. The $262 million fee amount
was calculated on the formula contained in the winning bid, which was
matched by the two firms.

New York City challenged the $262 million fee, claiming that the formula in
the retainer contract negotiated between the two firms and the three
pensions systems would have produced a fee of $186 million, or $76 million
less than the auction amount.

Neither the California nor the New York pension systems joined New York
City's fee motion.

In Cendant Corp. Litigation, 98-1664, Walls rejected New York City's
argument, concluding that the fee amount was reasonable because the auction
had functioned as a surrogate for the marketplace. Pointing out that 15
firms, most of them prominent and operating nationwide, had participated in
the auction, Walls wrote, "The court has no reluctance to accept and find
the auction's lowest qualified bid as representative of the market."

Senior Assistant Corporation Counsel Lorna Goodman, who argued New York
City's case, disputed Walls' conclusion, saying that because the lead
counsel had diligently negotiated a fee there was "no need for an auction
in the first place."

New York City, in challenging the fee request, pointed out that the $262
million figure broke down to an hourly rate of $10,861 for each of the
24,123 hours that the two firms had devoted to the case. The retainer
formula would have yielded an hourly rate of $7,710, the city contended.

The award approved by Wall amounted to 8.3 percent of the recovery, as
opposed to New York City's contention that the retainer would have limited
that percentage to 5.8 percent. The $3.1 billion settlement was more than
twice as large as the previous largest settlement in a securities fraud
case: the $1.4 billion that Prudential Securities paid in 1994 to settle
claims by its investors, many of them elderly, that they had lost money on
high-risk investments they could ill afford. The $262 million in attorneys'
fees set a record for an award in a securities fraud case.

                          46 Percent Plunge

Cendant's stock plummeted 46 percent on April 16, 1998, following the
company's disclosure of accounting irregularities affecting one of two
companies that merged in 1997 to form Cendant. The price of Cendant's stock
plunged from $34.62 a share to $19. In the aggregate, the paper value of
the company declined by $14.4 billion that day. In August 1998, Cendant
announced that the pre-merger company, CUC International, had overstated
its income by $640 million during the three years prior to the December
1997 merger. (Fulton County Daily Report, August 23, 2000)


CHASE BANK: Breaching Duties As Trustee, Alpine Claimant Charges
----------------------------------------------------------------
A class action filed on behalf of all policyholders and third-party
claimants of Alpine Assurance Co. Ltd. accuses a Texas bank of breaching
its fiduciary duties as trustee of an NAIC trust fund, thereby aiding in
rendering the account worthless (Amarilis Black v. Chase Bank of Texas,
f/k/a Ameritrust of Texas, No. 324, N.D. Texas).

The complaint, filed against Chase Bank of Texas in the U.S. District Court
for the Northern District of Texas, seeks the payment of more than $ 13.4
million to Alpine policyholders and third-party claimants.

                         The Trust Agreement

In 1995, Amarilis Black obtained a $ 125,330 judgment against an insured of
Alpine Assurance Co. for injuries she sustained in a truck/auto accident.
The judgment remains due and owing and the insured assigned his interest in
the policy to Black. Meanwhile, Alpine, an offshore, alien insurer
domiciled in the British West Indies, was placed into conservation in
January 1999.

According to the complaint, Alpine established a trust account with
Ameritrust of Texas N.A. for the security and benefit of Alpine's U.S.
policyholders and third-party claimants. Ameritrust merged with Texas
Commerce Bank and was later succeeded by Chase Bank.

Many states required non-admitted insurers to establish such trust accounts
in a U.S. bank before placing coverage. After establishing the account, the
insurer would either be placed on a "white list" or be approved for sale by
the surplus lines brokers placing the coverage. The National Association of
Insurance Commissioners (NAIC) eventually drafted a standard form trust
agreement for Alien Surplus Lines Insurers. According to the complaint,
Alpine entered into the NAIC agreement with Ameritrust in December 1991.

The complaint avers that Ameritrust breached the obligations of the NAIC
agreement by failing to employ an agent to value the trust fund's assets,
submit to Alpine periodic statements of the trust fund's assets, certify
the existence and value of the trust fund to the NAIC on a quarterly basis
and collect the interest payable on the funds deposited in the trust fund.

Ameritrust and Alpine allegedly amended the trust agreement which would
"obviate Ameritrust's obligation to certify the existence and value of the
assets to the NAIC." This amendment is not valid, however, because the
beneficiaries did not give their consent, the complaint contends.
Ameritrust knew the trust fund was deficient and that the bank had not
sought NAIC approval of the assets, the suit avers.

                       'Insurance Con Artists'

Black contends Alpine was controlled and looted by "a small group of
insurance con-artists" led by Edmond H. Benton and James Southard Bowers.
The complaint says the Alpine insiders "did not deposit into the trust
account any assets of substantial value, and the assets Alpine did deposit
that were accepted by Ameritrust, as trustee, were not readily marketable
securities, U.S. cash or letters of credit from U.S. banks." Instead, the
insiders allegedly deposited worthless stock and a worthless letter of
credit into the trust account.

"Throughout the period from December 1991 until at least March 1994 when
Ameritrust allegedly attempted to terminate the trust, Ameritrust published
periodic statements showing that the trust fund was fully funded with
assets valued in excess of $ 5.4 million," the complaint states. "Alpine
never deposited and Ameritrust never received any qualified assets or
combination of assets into the trust fund sufficient to meet the $ 5.4
million minimum trust amount."

Had Ameritrust informed the NAIC of the unqualified assets deposited in the
trust fund, the NACI could have prevented the Alpine insiders from
soliciting the premiums, the complaint contends.

Black seeks payment of $ 5.4 million, the alleged minimum value of the
trust fund, and $ 8 million in compensatory and punitive damages. The
complaint lists causes of action for breach of express terms of irrevocable
trust agreement, breach of fiduciary duties, fraud and conspiracy.

The complaint was filed by John G. Busby of Hollister & Brace in Santa
Barbara, Calif.; Christopher D. Atwell of Oliphant, Hammond & O'Hara in
Steamboat Springs, Colo.; and Norton Rosenthal of Rosenthal, Reynolds &
Mateer in Dallas. (Mealey's Litigation Report: Insurance Insolvency, July
6, 2000)


DRKOOP.COM INC: Ailing Health Information Web Site Gets $20 Mil
---------------------------------------------------------------
Drkoop.com got an unexpected lifeline - but some are calling it a $20
million Band-Aid. Just as the Street was about to pronounce the death of
the health information Web site, several venture capital firms stepped in.

Along with the cash, the company also got a management transfusion. Three
members of Prime Ventures, a Los Angeles-based VC fund specializing in
technology firms, put up $3.5 million of their own money. One of them,
Richard Rosenblatt, will be drkoop.com's new CEO, and his colleagues at
L.A.-based Prime Ventures, Edward Cespedes and Stephen Plutsky, will be
president and CFO, respectively. "The company lost $40 million in the last
quarter, so this should last them about six weeks," said Forrester Analyst
Eric Brown. "I don't see a need for a stand-alone health information Web
site of this kind."

Last week drkoop.com was so busy looking for a buyer that its financial
team missed filing its second-quarter earnings statement. The company spent
its last $2 million between the end of June and Monday night, as well as
announcing wider-than-expected losses just before the VCs arrived.

Despite the skepticism of analysts, new CEO Rosenblatt has a track record.
"He's a star," said Gerry Cramer, a principal at Cramer Rosenthal McGlynn
and another of the private investors participating in Tuesday's round. "He
took over iMall.com when it was sick, fixed it and sold it on to
Excite@Home for $500 million."

The financing was offered to accredited investors in a private placement of
preferred stock, convertible into common stock at 35 cents per share. It
could be increased to $27.5 million if outstanding overallotment options
are exercised.

Drkoop's traffic and revenues have been limited because people casually
looking for health information can go to the big portals such as AOL or
Yahoo! Health, while people who are really sick can go to specialist sites
such as oncology.com or MyAsthma. "They need an acquisition for strategy's
sake, not for funding," said Brown. "If they think this money gives them
another run at the same business model, and that this time it'll work,
they're in fantasy land. Attaching itself to a bigger service company, such
as a medical insurance site, might be the way to go in the long term.
WebMD's Jeff Arnold realized this and got his site bolted on to Healtheon."

Co-founder and former Surgeon General C. Everett Koop will stay on as
chairman, and the two executives who left last month, Dennis Upah and Susan
Georgen-Saad, will be retained as consultants.

Another skeptic, Rachel Terrace, analyst with Jupiter Communications, said
"the money will keep them alive for a few months." Noting the company's
legal troubles, with class action suits and an investigation by the SEC,
she admitted it was not a very attractive acquisition target. "New
management is a good idea, but they're VCs, not health care experts." (The
New York Post, August 23, 2000)


ELBIT MEDICAL: Announces Court Rejection of Class Cert. for Shareholders
------------------------------------------------------------------------
Elbit Medical Imaging Ltd. (Nasdaq: EMITF) (EMI) announced on August 22
that on August 17, 2000, the District Court in Haifa handed down a decision
to reject an application filed by certain investors to have a claim
submitted by them recognized as a Representative Claim (class action).

In its press release dated Nov. 3, 1999, EMI announced that a Statement of
Claim, together with an Application to have the claim recognized as a class
action, had been submitted to the court against the Company, Elscint Ltd.
(in which EMI holds approximately 6 percent), Europe-Israel (M.M.S.) Ltd.
(the controlling shareholder of EMI), Control Centers Ltd. (the controlling
shareholder of Europe-Israel (M.M.S.) Ltd.), Marina Herzlia Limited
Partnership 1988 (which is controlled by Control Centers Ltd.), Elron
Electronics Industry Ltd. (the previous controlling shareholder of EMI),
and against 25 past and present office holders in the above companies.

The claim was submitted by a number of investors and others who hold shares
in Elscint Ltd., while the Application was submitted on behalf of those who
held shares in Elscint Sep. 6, 1999 and continued to hold such shares on
the date of the submission of the Application (excluding the respondents).

The claimants allege that the minority shareholders of Elscint have been
discriminated against as a result of activities carried out by the
controlling shareholders of Elscint and its Board of Directors. The
respondents filed a motion requesting that the Application be denied.

In its August 17 decision the court decided to accept the motion filed by
the respondents calling for the Application to be struck out in limine, and
directed that the Application be struck before hearing the Application on
its merits. EMI President Shimon Yitzhaki said: "We are gratified by the
court's decision to strike out the application to have this claim
recognized as a Representative Claim. We are of the opinion that the
allegations raised in the Statement of Claim are without merit, and we
shall continue to oppose same before the courts with all the means at out
disposal."


FEN-PHEN: Hundreds of New Mexicans Decline Settlement Offer
-----------------------------------------------------------
Hundreds of New Mexicans who opted out of a national settlement with the
manufacturers of the diet drug fen-phen are gearing up for their day in
court, some in the next few months. New Mexico dieters filed dozens of
lawsuits statewide, claiming they developed heart problems after using
three brands of appetite-suppressing pills.

The product liability lawsuits were filed against the drug's manufacturers
American Home Products Corp. of Princeton, N.J., A.H. Robbins Corp.,
Wyeth-Ayerst Laboratories Division of American Home Products Corp. and
Interneuron Pharmaceutical Inc. of Delaware.

The suits allege that the manufacturers knew the diet-drug combination
fen-phen is the comination of diet drugs fenfluramine and phentermine taken
together caused dangerous side effects, but never warned consumers.

Nationwide, nearly 11,000 lawsuits were filed against the pill makers, a
spokesman for one of the companies said. The drug combination was removed
from worldwide markets in 1997. Last October, American Home Products Corp.,
agreed to pay $4.75 billion to settle the class-action lawsuit filed by
dieters throughout the country, the spokesman said. The national settlement
is subject to approval by a federal judge in Philadelphia, who is expected
to act on it in September.

However, thousands of plaintiffs nationwide, including hundreds in New
Mexico, have opted out of the national settlement to pursue their cases in
state courts. Santa Fe resident Jim Gonzales, who claims his heart valves
were damaged as a result of taking one variety of the diet pills, was one
of them.

"If I agreed with the settlement, I would have gotten between $500 and
$600," 39-year-old Gonzales said. "That doesn't even pay for my heart
examinations." Gonzales said he took the drug for six months in late 1996
through early 1997, lost about 30 pounds and felt good about himself. Then,
he started to develop shortness of breath and swollen ankles, Gonzales
said. "I went to have my heart examined and they found out three of my
valves were damaged," he said. Gonzales, whose case has not been scheduled,
said he still suffers from fatigue and may have to replace his damaged
heart values through transplant surgery. "I would like to have this behind
me and move on with my life," he said. "I think there's another recourse.
They can give my heart values back and I will walk away."

Earlier this month, American Home Products settled claims with more than a
dozen New Mexican women who have sued the company, but opted out of the
national settlement. The settlement agreements were confidential.

Also this month, the company settled a claim filed by an Albuquerque woman,
who alleged that her husband died after taking the pills. The
wrongful-death lawsuit, filed in state District Court in Santa Fe by Cindy
Kayser, said the drugs were prescribed in 1996 and 1997 for Peter Kayser
and that he suffered a fatal heart attack shortly afterward. Kayser, 50,
had no heart problems before taking the drugs, the lawsuit stated.

Clyde DeMersseman, an attorney for the Branch Law Firm in Albuquerque, said
his law firm filed more than 20 lawsuits against American Home Products in
New Mexico after the March 31 deadline to opt out of the national
settlement. The Branch Law Firm is representing about 500 New Mexicans who
had taken the diet pills, DeMersseman said. "We had some clients who opted
for the national settlement, but a majority of them decided against the
settlement," he said.

DeMersseman declined to comment how many cases filed by his law firm have
been settled. DeMersseman said there was always a possibility that the
cases might be settled before trial. "Whenever anybody wants to talk, we'll
listen," he said.

In August 1996, the New England Journal of Medicine published results of
the International Primary Pulmonary Hypertension study entitled, "Appetite
Suppressants and the Risks of Primary Pulmonary Hypertension." The study
concluded that fenfluramine-based anorexigens, such as fenfluramine and
phentermine, increased the risk of primary pulmonary hypertension by more
than 30 times.

One lawsuit claimed that even before the study results were published, the
defendants were aware of the dangers associated with the drugs but failed
to warn consumers.

"Defendants purposefully downplayed and understated the health hazards and
risks associated with the diet drugs," the lawsuit said. "Defendants,
through promotional literature, deceived potential users of the diet drugs
by relaying positive information, including testimonials from satisfied
users, and manipulating statistics to suggest widespread acceptability."
(Albuquerque Journal, August 20, 2000)


INSURANCE COMPANIES: Race-based Underwriting Becoming National Issue
--------------------------------------------------------------------
Last month, lawsuits were filed against Prudential Life Insurance Co. and
Metropolitan Life Insurance Co., alleging underwriting discrimination along
racial lines in some ways similar to those in the recently settled $215.5
million suit against American General Life and Accident Insurance Co. The
allegations against Pru and MetLife say that when they sold industrial life
in the 1960s, blacks were charged higher premiums for policies providing
less coverage than comparable policies sold to whites. As of mid-July, the
suits had not yet attained class-action status, but were seeking it.
Meanwhile, the Florida insurance department is continuing to investigate 4
insurers that sold industrial life (also called burial insurance) in that
state. The 4 companies are: Liberty National Life Insurance Co., Life
Insurance Co. of Georgia, United Insurance Co. of America, and Monumental
Life Insurance Co.

A recent Florida probe into industrial life policies sold to
African-Americans is mushrooming into a national issue for major insurance
companies.

Last month, lawsuits were filed against Prudential Life Insurance Co. and
Metropolitan Life Ins. Co., alleging underwriting discrimination along
racial lines in some ways similar to those in the recently settled $215.5
million suit against American General Life and Accident Insurance Co.,
Nashville, Tenn., a unit of Houston-based American General Corp. The suits
were filed by Milberg Weiss Bershad Huynes & Lerach, New York, and James,
Hoyer, Newcomers & Smiljanich, Tampa, Fla., the same law firms that filed
the American General class action.

The allegations now being leveled at Pru and MetLife say that when they
sold industrial life in the 1960's, blacks were charged higher premiums for
policies providing less coverage than comparable policies sold to whites.
The allegations against one if not both companies are said to dispute the
use of "socioeconomic factors" in underwriting. As of mid July, the suits
had not yet attained class-action status, but were seeking it.

Both MetLife and Pru dispute the allegations. A Prudential spokesperson
said the allegations were "inconsistent with our understanding of the
facts." And MetLife spokesman Kevin Foley said the suit against it has
"serious inaccuracies and is very misleading."

Since MetLife was a mutual company during this period, Foley said the
policies issued then were participating policies that received dividends
and the cash value built up. He added that each holder of MetLife
industrial life policies still in force, whether white or African-American,
received 10 shares of MetLife stock in April when MetLife took itself
public. "No particular class suffered economically from doing business with
MetLife," he said.

Meanwhile, the Florida insurance department is continuing to investigate
four insurance companies that sold industrial life (also called burial
insurance) in that state. The four companies are: Liberty National Life
Insurance Co. a subsidiary of Torchmark Corp.; Life Insurance Co. of
Georgia, a unit of the Netherlands-based ING Groep; United Insurance Co. of
America, a unit of Unitrin Inc.; and Monumental Life Insurance Co., a unit
of Netherlands-based Aegon. Subpoenas have reportedly been issued for
underwriting books back to 1959.

The recent settlement paid by American General, which was negotiated by
Florida insurance commissioner Bill Nelson, not only covered the 4.9
million policies sold to African-Americans using discriminatory race-based
underwriting, but also several million more industrial life policies bought
by both blacks and whites, where premiums paid over time "far exceeded the
face value of the policy," according to a spokesperson for the Florida
Department of Insurance. Nelson is said to have urged recompense for this
situation, although it is not considered illegal.

The National Association of Insurance Commissioners has also taken up the
issue. Last month, the commissioners passed a resolution to create a
working group to investigate low face-value life insurance, and named
Nelson to lead the working group.

The working group is charged with ferreting out "race-based practices which
have not been corrected," and then "jointly seeking a negotiated settlement
with each of the affected" insurers, according to the NAIC resolution. The
group will also conduct a "regulatory analysis of the low-- value insurance
business." This analysis will consider the product's suitability for the
customer, sales of multiple policies and "the issue of fair value for the
premiums paid." From this analysis, the group is scheduled to submit
proposed reforms next June to be considered by the full NAIC membership.

A source in the home-service sector says these various investigations could
result in paradoxical unintended consequences. "By questioning the economic
value of smaller policies, they are drying up the supply of policies for
blue-collar and mass-market needs," he said, adding that insurers are
increasingly abandoning this market. According to a 1998 study he cited,
"The Underserved Market: a Social Dilemma" by LIMRA International and LOMA,
40% of Americans have no life insurance (including no group life through
work) and for those making less than $30,000, 60% have no life insurance.
"The downscale dilemma just gets worse," he says.

Still, it's unlikely that these race discrimination suits are going to go
away soon, as they are rising across industry lines. According to figures
reported from federal courts, the number of suits alleging racial
discrimination has doubled since 1992.

Though no major companies today are underwriting industrial life policies,
companies and investigators agree that most insurers quit selling products
with race-- based premiums at least by the mid-- 1960's. However, according
to Elsie Crowell, consumer advocate for the Florida insurance department,
financial discrimination based on race did not end in the 1960's. American
General subsidiaries, she said, continued to collect higher race-based
premiums for existing policies until Nelson issued a cease and desist order
in April. And while not speaking specifically of American General, she
added, "Action has not peaked yet." (Advisor Today, August, 2000


MCM CAPITAL: Resolves Suit over Sale of Receivables to 3rd Parties in 97
------------------------------------------------------------------------
MCM tells investors that the company was involved in litigation involving
the sales of certain receivables by MCM to third parties in 1997. This
litigation was settled and all amounts due were paid during the six months
ended June 30, 2000. The costs and expenses relating to the lawsuit and
this settlement were expensed in the fourth quarter of 1999.


MERCATOR SOFTWARE: Wolf Haldenstein Files Securities Suit in Connecticut
------------------------------------------------------------------------
Wolf Haldenstein commenced a class action in the United States District
Court for the District of Connecticut on behalf of purchasers of Mercator
Software, Inc. (Nasdaq:MCTR) securities during the period between April 20,
2000, and August 21, 2000, (the "Class Period"). A copy of the complaint
may be viewed on the firm's website at WWW.WHAFH.COM.

The complaint alleges that Mercator and certain offices and directors
issued false and misleading financial statements and press releases to the
investing public concerning the Company's publicly reported revenues,
earnings, and expenses. Moreover, the Company omitted to state material
information necessary to be issued in order to make prior statements not
misleading.

Specifically, on August 21, 2000, after the market had closed, Mercator
shocked the investing community by announcing that the Company restated and
lowered first- and second-quarter 2000 earnings to account for
approximately $ 2.4 million of under-reported expenses for the period. In
addition, the Company stated that it made key management changes to
strengthen financial controls and oversight, including the termination of
several members of upper management.

The Company said that discrepancies in the reporting of expenses surfaced
in a review by outside auditors. Following the review, the Company
appointed a new chairman and stated that defendant Kevin McKay, its chief
financial officer, only appointed four weeks ago, resigned.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP, New York Michael Miske,
George Peters, Fred Taylor Isquith, Esq., or Gregory M. Nespole
800/575-0735 e-mail: classmember@whafh.com website: www.whafh.com.


PHARMAPRINT INC: Faces 2 Securities Suits in NJ for Two Periods in 1999
-----------------------------------------------------------------------
On February 3, 2000, the company was served with a class action complaint
filed January 5, 2000, as amended January 27, 2000, in the U.S. District
Court, District of New Jersey. The action is on behalf of all those who
purchased or acquired the company's common stock between July 1, 1999 and
November 15, 1999.

The company was also served with a complaint filed January 20, 2000, also
in the U. S. District Court, District of New Jersey. This federal
securities class action is on behalf of all persons who purchased the
company's common stock from April 1, 1999 through November 17, 1999. Each
complaint has named the company and certain current and former officers as
defendants. The plaintiffs are seeking compensatory damages, and other
costs and expenses, including legal fees. The company, along with our
officers, intend to vigorously defend the merits of the lawsuit.


SCIENTIFIC LEARNING: Milberg Weiss Files Securities Suit in California
----------------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/scientific/)announced that a class
action has been commenced in the United States District Court for the
Northern District of California on behalf of purchasers of Scientific
Learning Corporation ("Scientific") (NASDAQ:SCIL) common stock during the
period between May 1, 2000 and July 11, 2000 (the "Class Period").

The complaint charges Scientific and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Scientific
develops, markets and sells neuroscience-based software and educational
products and services designed to increase human learning and performance.
The complaint alleges that defendants' false and misleading statements
concerning the revenues to be derived from Scientific's sales of its
software artificially inflated the price of Scientific stock to a Class
Period high of $23 1/4. This upsurge in Scientific's stock caused by
defendants' alleged false and misleading statements enabled defendants to
sell 68,300 Scientific shares for proceeds of $1.3 million. On 7/11/00, and
days after defendants had received over $1.3 million in trading proceeds,
Scientific revealed that it was in fact suffering a huge drop in revenues
associated with changes in executive leadership (i.e., superintendent of
four separate school districts). This announcement caused its stock price
to drop to as low as $6-3/16 on record volume on 7/12/00 causing millions
of dollars in damages to members of the Class.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach,
800/449-4900 wsl@mwbhl.com


TENFOLD CORPORATION: Berman, DeValerio Files Securities Suit in Utah
--------------------------------------------------------------------
TenFold Corporation (NASDAQ: TENF) ("TenFold" or the "Company") has been
named as a defendant in a shareholder class action charging the company
with misleading investors. The action, filed by Berman, DeValerio & Pease
LLP, www.bermanesq.com, is pending in the United States District Court for
the District of Utah on behalf of all persons and entities who purchased or
otherwise acquired the common stock of TenFold during the period January
31, 2000 through and including August 14, 2000 (the "Class Period").

The action alleges that the company violated the federal securities laws by
issuing a series of false and misleading statements concerning its business
and financial condition during the Class Period. In particular, the
Complaint alleges that the Company continued to report revenues from large
customer projects despite knowing that many of these customers were
extremely upset with TenFold and likely to cancel their orders. TenFold
prematurely recorded revenue from these projects and/or failed to timely
and properly increase their allowance for doubtful accounts from these
customers. After disclosing on July 10, 2000 that its second quarter 2000
earnings would be well below expectations as a result of project delays,
TenFold's stock collapsed, falling as much as 40%. The full truth was not
disclosed until August 14, 2000, however, when the Company released its
second quarter earnings, which were below the July 10, 2000 numbers because
a review of significant projects required the Company to reduce recorded
revenue and increase their allowance for doubtful accounts. During the
Class Period, but prior to the disclosures, TenFold executives sold their
stock for proceeds of over $26 million.

Contact: Berman, DeValerio & Pease LLP Jennifer L. Finger, Esq. (800)
516-9926 bdplaw@bermanesq.com


TRANSWORLD HEALTHCARE: Pays $10 Mil to Settle Medicare Fraud Suit
-----------------------------------------------------------------
Years after a whistleblower first took on the unenviable task of trying to
stop rampant Medicare billing fraud, the bell has finally tolled for
Transworld Healthcare, Inc. -- to the tune of $10,000,000. The official
settlement was unsealed on August 22. Christopher Piacentile, a New Jersey
businessman, filed a qui tam suit on behalf of the United States under the
False Claims Act, alleging that Transworld engaged in a massive kickback
scheme in order to generate patient referrals. Piacentile was awarded
$1,350,000 for his efforts.

Attorney Mitch Kreindler of Phebus & Winkelmann, West Chester, PA was
Piacentile's primary attorney. "My client became of aware of illicit
activities, and instead of looking the other way, he took a stand and used
an important tool -- the False Claims Act -- which empowers citizens to
stop fraudulent activities against the government," said Kreindler. "In the
process, he has helped to stop practices which promote escalating
medication prices and put people in potential danger."

Transworld -- which distributes a variety of unit-dose medications through
subsidiary companies -- agreed to pay $10 million to the U.S. government to
settle the suit. Most of the medicines involved were pre-mixed, unit-dose
respiratory medications, such as Albuterol -- widely-used used by asthma
sufferers.

Piacentile uncovered evidence of illicit marketing schemes and kickback
arrangements employed by RespiFlow, a Jacksonville, Florida-based
subsidiary of Transworld, and other Transworld-related entities. He brought
the matter to the attention of the government and filed suit under the
False Claims Act in October 1997 in the Eastern District of Pennsylvania.
In September 1999, the case was transferred under seal to the U.S. District
Court for the Eastern District of Texas, in Sherman, TX.

Piacentile's suit alleged that Transworld engaged in the systematic
defrauding of Medicare and other government-funded health insurance
programs by claiming or causing excessive reimbursements as part of a
nationwide marketing scheme. Specifically, the suit claimed that Transworld
improperly induced patient referrals by paying kickbacks to durable medical
equipment suppliers and physicians in exchange for patient referrals,
boasting that the kickbacks "could be a gold mine" for the recipients.
Additionally, the suit alleged that Transworld routinely waived
co-insurance payments for Medicare beneficiaries.

Disguised as "marketing fees," Transworld allegedly paid up to $750 in
kickbacks to durable medical equipment suppliers and physicians for single
patient referrals. Once the referral was made, no additional work was
required of the referral source. Transworld paid the kickbacks in small
increments each time a patient received a medication shipment. Transworld
subsidiaries followed a similar kickback program in the promotion of
diabetic, urological, urinary, tracheal, ostomy, entereal and surgical
supplies and products.

"This was a clear kickback operation with substantial ramifications," adds
Kreindler. "Transworld wanted patients to use their products, and they were
willing to 'buy' such patients by paying others. By all accounts, they were
successful on both counts. "As a result, the Medicare program incurred
extra, fraudulent costs, and a potentially dangerous situation involving
the oversupply and overutilization of drugs was created."

In addition to Kreindler, Piacentile's legal team included attorneys Mary
Louise Cohen of Phillips & Cohen, Washington, D.C., and Robert S.
Kitchenoff of Weinstein, Kitchenoff, Scarlato & Goldman, Philadelphia, PA.
Laurie Oberembt, a trial attorney at the Department of Justice in
Washington, D.C., Peter Winn, Health Care Fraud Coordinator for the U.S.
Attorney's Office in Dallas, and Matt Orwig, Assistant United States
Attorney for the Eastern District of Texas, handled the case on behalf of
the government.

"This case is really a perfect example of the public-private partnership
envisioned by the False Claims Act," notes Kreindler. "The Act mobilizes
private citizens and private attorneys to assist the government in
uncovering fraud and rewards all parties for successful efforts."

In False Claims Act suits, the government, complainant (known as the
"relator") and attorneys only receive a financial benefit if a recovery is
made from the company committing the alleged misconduct.

Contact: Dan Smith of Communication Solutions Group, 215-943-5062, for
Phebus & Winkelmann


WARNACO GROUP: Laurence D. Paskowitz Files Securities Suit in New York
----------------------------------------------------------------------
The Following is an Announcement by the Law Firms of Laurence D. Paskowitz,
Esq. and Roy L. Jacobs, Esq.:

On August 22, 2000 a Class Action was filed in the United States District
Court for the Southern District of New York on behalf of all persons and
entities who purchased Warnaco Group, Inc. (NYSE: WAC) common stock during
the period from December 11, 1997 through July 20, 2000 (the "Class Period
"), by attorneys Laurence D. Paskowitz, Esq. and Roy L. Jacobs, Esq.
Counsel have many years of successful experience in litigating class
actions.

The lawsuit alleges that during the Class Period, Warnaco and two of its
top officers and directors issued materially false and misleading
statements regarding Warnaco's earnings, prospects and business practices.
In particular, the suit alleges that Warnaco inflated sales through knowing
violations of a jeanswear distribution license obtained from Calvin Klein,
Inc. and the Calvin Klein Trademark Trust ("Klein"). On May 30, 2000, Klein
sued Warnaco over these alleged violations.

The suit also asserts that Warnaco stock was inflated during the Class
Period by misleading earnings forecasts, and that all of the alleged
misconduct was motivated by the defendants' interest in profiting from
salary, bonuses and stock sales.

The Complaint further alleges that, during the Class Period, Warnaco and
certain of its officers and directors, violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 by the issuance of the materially false
public statements described above.

Contact: Laurence D. Paskowitz, Esq. Telephone: 212-486-6798 Telecopy:
212-751-3175 email: classattorney@aol.com or - Roy L. Jacobs, Esq.
Telephone: 212-695-2476 Telecopy: 212-695-6007 email: rljacobs@pipeline.com



WWII VICTIMS: Japan Downplays Chinese War Enslavement Lawsuit in US
-------------------------------------------------------------------
Japan Wednesday downplayed a lawsuit filed in the United States alleging
that two Japanese conglomerates forced thousands of Chinese citizens into
slave labour during World War II. The lawsuit was filed in Los Angeles on
Tuesday by four Chinese-Americans and five Chinese nationals against
Japanese conglomerates Mitsubishi and Mitsui.

"This lawsuit is reported to be a private case in which the Japanese
government does not seem to be involved," a foreign ministry official said.
"But personally, I have some doubt over whether a Californian state court
can have jurisdiction over matters already resolved by both the Japanese
and Chinese governments," he said.

It alleges the giant trading houses enslaved Chinese nationals to work in
mines and factories in brutal conditions. Japan occupied a large swathe of
China during their 1937-1945 war.

Spokesmen for Mitsubishi and Mitsui in Tokyo declined to comment, saying
the companies had yet to receive a copy of the lawsuit.

Japan and China formally wrapped up hostilities in a peace treaty signed in
1978, six years after Japan formally recognised Beijing instead of Taiwan.
The treaty, however, left open the possibility of individuals suing
Japanese companies, said another foreign ministry official. "The Japanese
government cannot nullify their rights to do so, but the Japan-China joint
communique signed in 1972 does say that the right to seek compensation by
either government was abandoned," he said.

Japan's government has fought off compensation bids from former prisoners
of war lodged in Japanese courts by pointing to its comprehensive 1951 San
Francisco peace settlement with the Allies.

But the nine California plaintiffs, advised by lawyers who have extracted
compensation over the use of slave labour by Nazi Germany, are seeking to
turn the case into a wider class-action lawsuit. Four of the plaintiffs
live in California and five in Beijing. More are expected to be added to
the suit against Mitsubishi and Mitsui.

No dollar amount was specified in the complaint. But attorney David Grosz
said a case against Swiss banks holding Jewish war-time assets was settled
for 1.25 billion dollars, while settlements against German firms over
enforced labour reached some five billion dollars.

The nine plaintiffs were "herded like cattle into trains and loaded into
cargo ships, where they were forced to live under horrific conditions in
the cargo holds for weeks," the lawsuit claims. Some enslaved Chinese
workers were beaten by Japanese supervisors or buried alive in mines,
according to the plaintiffs' attorneys. "The facts are still largely
unrevealed of what the Japanese did," said Barry Fisher, a colleague of
Grosz. "It's important to redress the claims of these individuals who were
exploited by private companies." (Agence France Presse, August 23, 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
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

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