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             C L A S S   A C T I O N   R E P O R T E R

             Tuesday, October 10, 2000, Vol. 2, No. 197

                             Headlines

BANKATLANTIC BANCORP: Anti Laundering Revelation Not Breach of Privacy
BRIDGESTONE/FIRESTONE INC: Attorneys to Depose Tire Maker's Top Chief
CALIFORNIA AMPLIFIER: Sues Insurer after Settling Securities Suit
CYPRESS HILLS: Seeks Relief in Face of Suits for Crumbling Burial Hill
EVEREX SYSTEMS: Securities Suit Reinstated in CA, Weiss & Yourman Says

FEDERAL DEPOSIT: to Settle Employees Race-Bias Lawsuit for $15 Million
FEN-PHEN: Opt-out Lawsuits Flood Tampa Bay Courts
GRANT'S TRAIL: Landowners’ Lawsuit Moves Forward; May Expand Territory
HIKARI, CRAYFISH: Japanese Paper Reports on U.S. Securities Complaints
MARVIN WINDOWS: Allegedly Rotting Doors and Windows Lead to Lawsuit

MICROSOFT CORP: Likely to Offer Consumers Coupons for Antitrust Suit
NEW PIPER: Lawsuit Says Engine Problem Caused 4 Plane Crashes
OWENS CORNING: Asbestos Related Ch 11 Filing Sent Armstrong Stock down
PHILIPS INTERNATIONAL: Decries Merit of Securities Suit in New York
PROFESSIONAL GOLF: Sp Ct to Decide If Golfer Can Ride Cart Between Shots

RACIAL PROFILING: Judge Declines Certification of Minority Motorists
RITALIN LITIGATION: Conspiracy Suit to Boost Sales Filed in New Jersey
WONDER BREAD: Judge Slashes Award in Bias Case  from $132M to $27M

                           *********

BANKATLANTIC BANCORP: Anti Laundering Revelation Not Breach of Privacy
----------------------------------------------------------------------
A bank that provided customer account information in response to grand
jury subpoenas in a federal investigation into possible money laundering
is not liable to the account holder, the 11th Circuit has held. The
decision states that the Annunzio-Wylie Anti-Money Laundering Act
provides the bank with immunity from suit. Coronado v. BankAtlantic
Bancorp Inc., No. 99-12108 (11th Cir., Aug. 18, 2000).

In 1995 BankAtlantic Bancorp Inc. conducted an audit of its new
international division, which it gained in an acquisition of MegaBank, a
Dade County, Fla., institution. The audit revealed suspicious activity
involving deposits delivered from Bogota, Columbia, by an uninsured
private service, and new accounts that had been opened in spite of
missing customer identification information. Concerned that the new
division was involved in money laundering and fraud, BankAtlantic
officials notified federal authorities. An investigation began and grand
jury subpoenas were issued to the bank, requesting account documents and
records for 1,100 accounts under the supervision of the head of the
international division, Piedad Ortiz.

On May 13, 1996, Jose Daniel Coronado opened an account at BankAtlantic.
The account was opened by Ortiz using instruments drawn on U.S. banks,
but had been shipped from Bogota to Miami by private courier. Coronodo's
account information and records of account activity were later turned
over to the authorities in response to subpoenas. On June 5, 1996, a
number of accounts, including Coronado's, were then frozen pursuant to an
order issued by the U.S. District Court for the Southern District of
Florida. Coronado's funds were seized under an order of the district
court and forfeiture proceedings began in early August 1996. The account
was later released and the funds were returned by the government, with
interest, in late 1996.

Prior to the return of his funds, Coronodo sued BankAtlantic in a
putative class action in district court. He sought to represent all of
the account holders who had been subject to the investigation. The suit
asserted that the bank violated the Electronic Communications Privacy Act
(ECPA), 18 U.S.C. @ 2510 et seq., the Right to Financial Privacy Act, 12
U.S.C. @ 3401 et seq., and Florida law when it disclosed account
documents in response to the grand jury subpoenas.

The bank moved to dismiss, and the district court granted the motion,
holding that the bank was immune from suit pursuant to the safe harbor
provisions of the Annunzio-Wylie Anti-Money Laundering Act, 31 U.S.C.
5318(g)(3). This ruling was reversed on appeal to the U.S. Court of
Appeals for the 11th Circuit in Lopez v. First Union Nat'l Bank of
Florida, 129 F.3d 1186 (11th Cir., 1997), and the matter was remanded.
The circuit court held that the complaint did not establish grounds for
the bank's immunity.

Upon return to the district court, BankAtlantic moved for summary
judgment, arguing that it was immune from suit under Annunzio-Wylie. U.S.
District Judge Jose A. Gonzalez Jr. agreed and granted the motion.

Coronado turned to the 11th Circuit for relief, arguing that the account
records requested in the grand jury subpoenas were privileged under the
ECPA and therefore fell outside of the reach of the grand jury. The grand
jury did not have the power to compel production of the information and
BankAtlantic's disclosure violated the ECPA, he asserted. The bank cannot
hide behind the safe harbor provisions of Annunzio-Wylie as a result,
Coronado said.

The appellate panel stated that Annunzio-Wylie was enacted to encourage
cooperation between domestic financial institutions and the federal
government in the fight against the global movement of drug money.
Because disclosure of suspicious activity could lead to litigation filed
by disgruntled bank customers, the safe harbor provisions were enacted,
the panel continued. The provisions give immunity to banks and financial
institutions when certain disclosures are at issue.

The circuit court stated that the issue in the case was not whether the
disclosures violated the ECPA, but rather whether the bank was liable to
Coronado for the disclosures. BankAtlantic was subpoenaed as a witness
and was not in the position to challenge the grand jury's power, the
court continued. Even if the ECPA deprived the grand jury of the
authority to request bank records, Bank Atlantic was not required to
challenge a facially valid subpoena, the panel said. The act does not
intend that result. The grand jury subpoenas fall within the act and the
disclosures are protected, the court ruled, adding that the lower court
correctly held in favor of the bank on summary judgment. The district
court's holding was affirmed. (Bank & Lender Liability Litigation
Reporter, September 8, 2000)


BRIDGESTONE/FIRESTONE INC: Attorneys to Depose Tire Maker's Top Chief
---------------------------------------------------------------------
Attorneys representing customers who have sued Bridgestone/Firestone Inc.
are hoping to get answers from the embattled tire maker's top chief that
will help bolster their case.

CEO Masatoshi Ono has already testified before congressional committees
looking into the recall of some 6.5 million Firestone tires. He
apologized for dozens of fatal accidents that may be linked to his
company's tires.

Attorneys Gordon Ball and Mary Pat Viles are trying to get the courts to
expand the recall now limited to Firestones's ATX, ATX II and Wilderness
tires to 24 other brands and to have a judge oversee the recall, rather
than the tire maker. ''It's somewhat akin to the fox guarding the hen
house right now,'' Ball said Sunday.

The lawyers had planned to depose Ono on Monday at a Nashville hotel in
what was believed to be the first time he will talk to attorneys suing
over his company's tires. ''We want to know when he knew there were
problems with the tires, what he knew, what the company knew,'' said
Ball, of Knoxville.

Two other top Bridgestone/Firestone executives vice presidents Gary
Crigger and John Lampe were to be questioned later this week.

Nashville-based Bridgestone/Firestone Inc., the U.S. subsidiary of
Tokyo's Bridgestone Corp., announced the recall in August.

The National Highway Traffic Safety Administration later issued a
consumer advisory on 1.4 million more Firestone tires considered
potentially unsafe, and opened an investigation into the Steeltex brand.

Ball, of Knoxville, and Viles, of Fort Myers, Fla., represent consumers
seeking class action status for lawsuits claiming Bridgestone/Firestone
and Ford Motor Co., which used the tires as standard equipment on some
vehicles, breached their warranties and provided products that were not
fit for their intended use.

Last week, Bridgestone President Yoichiro Kaizaki told Nikkei Business
magazine that Bridgestone/Firestone's top management would be
restructured, though he didn't specify how.

Bridgestone/Firestone officials have said the cost of the original tire
recall will likely run the company about $350 million. In a ''60
Minutes'' interview that aired Sunday night, Ford CEO Jacques Nasser was
asked about the cost of the recall to Ford. Nasser didn't specify a
number, but when asked if it would be around $500 million, he said that
was a close figure. (AP Online, October 9, 2000)


CALIFORNIA AMPLIFIER: Sues Insurer after Settling Securities Suit
-----------------------------------------------------------------
As previously reported in the CAR, the company reached settlement for
securities suits filed in 1997.

On June 11, 1997, the Company and certain of its directors and officers
had two legal actions filed against them, one in the United States
District Court, Central District of California, entitled Yourish v.
California Amplifier, Inc., et al., Case No. 97-4293 CBM (Mcx), and the
other in the Superior Court for the State of California,  County of
Ventura, entitled Yourish v. California Amplifier, Inc. et al., Case No.
CIV 173569. On June 30, 1997, another legal action was filed against the
same defendants in the Superior Court for the State of California, County
of Ventura, entitled Burns, et al., v. California Amplifier, Inc., et
al., Case No. CIV 173981. All three actions were purported class actions
on behalf of purchasers of the common stock of the Company between
September 12, 1995 and August 8, 1996. The actions claimed that the
defendants engaged in a scheme to make false and misleading statements
and omit to disclose material adverse facts to the public concerning the
Company, allegedly causing the Company's stock price to artificially
rise, and thereby allegedly allowing the individual defendants to sell
stock at inflated prices. Plaintiffs claimed that the purported
stockholder class was damaged when the price of the stock declined upon
disclosure of the alleged adverse facts. On September 21, 1998, the
Federal legal action was dismissed in the United States District Court.
The dismissal was upheld by the U.S. Court of Appeals for the Ninth
Circuit on October 8, 1999.

On March 27, 2000 the trial began for the lawsuit filed in the Superior
Court for the State of California, County of Ventura, entitled Yourish v.
California Amplifier, Inc., et al., Case No. CIV 173569.

On March 29, 2000 the parties reached a settlement. The terms of the
settlement called for the issuance by the Company of 187,500 shares of
stock along with a cash payment of $3.5 million, funded in part by
insurance proceeds, for a total settlement of approximately $11.0
million.

                                Update

Of the total settlement, $9.5 million was accrued in the accompanying
consolidated financial statements for the year ended February 26, 2000
and August 26, 2000.

By Order dated September 14, 2000, the court approved the terms of the
settlement and dismissed the action with prejudice.

In connection with the settlement of the Yourish action, the Company and
certain of its former and current officers and directors have filed a
lawsuit (California Amplifier, Inc., et al. v. RLI Insurance Company, et
al., Ventura County Superior Court Case No. CIV196258), against one of
its insurance carriers to recover $2.0 million of coverage the insurance
carrier has stated was not covered under its policy of insurance.
Discovery has commenced and the insurance carrier has filed a Motion for
Judgment on the Pleadings, to which the Company has filed opposition,
which is set to be heard by the court on October 5, 2000.


CYPRESS HILLS: Seeks Relief in Face of Suits for Crumbling Burial Hill
----------------------------------------------------------------------
Facing potentially costly suits over a crumbling burial hill built on
demolition debris, Cypress Hills Cemetery, the huge graveyard on the
border of Brooklyn and Queens, has filed a bankruptcy petition.

The move is intended to stave off legal actions brought on by the
construction and disintegration of the hill, which is 50 feet high.

Lawyers for the cemetery, the 220-acre resting place of many thousands,
including Jackie Robinson and Mae West, appeared in Federal Bankruptcy
Court in Brooklyn on Sept. 19 to seek protection, a day before the first
trial in several suits filed against the cemetery was to start.

That trial involves $1.1 million that the cemetery is said to owe in
connection with the construction of the burial hill in the late 1980's,
when compressed rubble from demolished buildings across the city was
trucked to the graveyard to form a huge soil-capped mound with room for
more than 5,000 bodies.

That suit is now in limbo, pending the outcome of the bankruptcy case, as
are several other suits filed on behalf of relatives of many of the 1,000
people who were buried on the hill, called Terrace Meadow. The plaintiffs
assert that they did not know that their relatives were to be buried on
top of construction debris. Most of the graves were dug in the early
1990's, before it became publicly known that the soil on the mound went
down only part way and that much of the hill was made of crushed concrete
slabs, broken bricks, squashed stoves and other remnants of torn-down
buildings.

Horrified that their relatives rested atop rubble, and saying they should
have been told about the hill's composition, many families reburied the
bodies elsewhere in Cypress Hills or in other cemeteries.

In 1998, a state judge ordered all the remains removed after engineers
warned that the hill would eventually collapse as wood in the debris
decomposed. The hill had already begun shifting, and many coffins removed
by then had come out of the ground crumpled and waterlogged.

Today, hundreds of the corpses have been reburied -- at the cemetery's
expense if the families kept the bodies at Cypress Hills -- and the long
process of removing the others continues.

"Caskets are coming out crushed; bodies are coming out of caskets,"
Carmen A. Pacheco, a lawyer for nearly 200 families, said. "We feel they
filed the bankruptcy petition as a shield to protect the corporation."

She questioned its validity, holding that the cemetery "has substantial
resources and has been making money" from the continued sale of graves
elsewhere in the cemetery.

She and her associate Betty Lugo also said court-appointed receivers who
had run the cemetery in recent years and their lawyers had earned
hundreds of thousands of dollars in fees from the cemetery's assets.

The lawyer who filed the bankruptcy petition, Lester A. Lazarus, agreed
that the bankruptcy action was intended to protect the 152-year-old
cemetery, a not-for-profit corporation, but said it was necessary. "We
felt the potential loss from the various suits could be so great that it
could make it impossible for them to operate," he said.

The petition seeks a court-supervised reorganization of the cemetery
under Chapter 11 of the bankruptcy laws. If the request is granted, the
plaintiffs will have to line up with other creditors for whatever
payments the court awards, almost certainly much less than they are
seeking. Ms. Pacheco and Ms. Lugo are seeking $12 million for their
clients, and other plaintiffs are seeking millions more.

But Mr. Lazarus said, "We're hoping that when people see the file and the
assets of the cemetery, they'll be a little more realistic in what they
are asking for in their claims." His court papers list $9 million in
cemetery assets and $2.4 million in liabilities, including $864,000 in
estimated liabilities for the court-ordered disinterments.

Mr. Lazarus said most of the $6.6 million in remaining assets was in
trust funds that he thinks may not be legally used for anything but
perpetual care of graves.

In another proceeding, the New York attorney general, Eliot L. Spitzer,
is seeking to end the court receivership into which the cemetery was
placed in 1994, after a former attorney general, Robert Abrams, accused
the cemetery of mismanagement, citing the hill's construction and what he
called financial improprieties. There has been no decision on the request
to end the receivership.

Scott Brown, a spokesman for Mr. Spitzer, said his office favored a new
cemetery board elected by the lot owners, "to return the cemetery to
their control."

The receivership itself has been a source of trouble. Early this year,
two Brooklyn lawyers complained, in a letter that became public, that
they had been fired as legal advisers to the cemetery's receiver despite
their "unwavering loyalty" to the Brooklyn Democratic Party. The letter
led to a federal investigation into possible illegal patronage in court
appointments. No charges have been brought so far.

The burial hill, built when the board was running Cypress Hills, sought
to create more plots and to appeal to the city's growing Chinese
population, many of whose members prefer to be buried on high ground amid
picturesque scenery, two requirements for auspicious feng shui, the
Chinese art of balancing the unseen forces of landscape and people.

Among the people closely following the cemetery's travails are a Florida
couple, Barbara and Don Davis. Members of Mrs. Davis's family have been
prominent in running the cemetery over the years, as board leaders, since
her great-great- grandfather became involved shortly after Cypress Hills
was established in 1848.

The Davises said their family was the largest lot owner in Cypress Hills,
with about 40 lots containing perhaps 700 burial plots. The couple, who
also plan to be buried there, said they would serve on a new board if Mr.
Spitzer's request was granted.

"I never expected I'd be this involved in Cypress Hills before I died,"
Mrs. Davis said. (The New York Times, October 8, 2000)


EVEREX SYSTEMS: Securities Suit Reinstated in CA, Weiss & Yourman Says
----------------------------------------------------------------------
The following is an announcement by the law firm of Weiss & Yourman:

A class action securities fraud lawsuit on behalf of purchasers of stock
of Everex Systems, Inc. ("Everex") between November 21, 1991 and December
10, 1992, which had been dismissed by a federal judge in the middle of a
trial, has been reinstated by the United States Court of Appeals for the
Ninth Circuit, according to lawyers for the class.

In an opinion dated September 29, 2000, the three judge Court of Appeals
panel unanimously held that the District Court erred in granting judgment
as a matter of law in favor of defendant Stephen L.W. Hui, Everex's Chief
Executive Officer and Chairman of the Board during the class period. The
Court of Appeals held that, as a corporate officer, Hui could be held
liable for violating the federal securities laws by reason of his having
signed allegedly false financial statements, even though he was not
involved in the preparation of the financial statements. The Court of
Appeals held that the District Court erred in finding that the evidence
was not sufficient for a finding that Hui acted knowingly or recklessly
as required by the federal securities laws. The Court held that plaintiff
met her burden by demonstrating the defendants' motive and opportunity to
engage in securities fraud, which, combined with the red flags of
Everex's financial condition, were sufficient to withstand the motion for
judgment as a matter of law.

"This is a major victory for investors in public companies," said Joseph
H. Weiss, one of the attorneys for the class. "It will help balance the
scales to protect defrauded investors and vindicates our determination to
take this case to trial." He noted that the Court of Appeals opinion is
particularly significant because it distinguished and limited its own
decision in In re Silicon Graphics, which held that a mere showing of
motive and opportunity do not suffice to survive a motion to dismiss. The
Court held that such a showing is sufficient to defeat summary judgment
or judgment as a matter of law.

Finally, the Court of Appeals held that the District Court erred in
dismissing the claims against foreign defendants who are alleged to have
knowingly traded on an American exchange on the basis of material,
nonpublic information.

Counsel for plaintiff and the class are the law firms of Weiss & Yourman,
Stull Stull & Brody, and Browning & Peifer. The case will be retried in
the District Court for the Northern District of California.

Contact: Weiss & Yourman, New York Joseph H. Weiss 212/682-3025 or
888/593-4771


FEDERAL DEPOSIT: to Settle Employees Race-Bias Lawsuit for $15 Million
----------------------------------------------------------------------
The Federal Deposit Insurance Corp. has agreed to pay more than $15
million to settle a racial discrimination lawsuit brought against the
agency eight years ago by current and former employees. The agreement was
reached last month, a spokesman said, but a federal judge must approve it
before funds may be distributed.

The parties have earmarked $14 million to cover lost earnings,
compensatory damages, and lawyer fees for about 3,100 current and former
employees. Another roughly $1.5 million was set aside for a fund to be
used for purposes such as hiring an expert to recommend changes in the
agency's personnel policies and an official to monitor the agreement.
Though small compared with the agency's nearly $1.2 billion budget for
fiscal year 2000, the settlement amount is more than the agency budgeted
for its research and statistics division. The FDIC is funded primarily by
premiums paid by the banking industry and interest it earns on that
money.

The class action was filed in 1992 by Chris Conanan, a counsel in the
agency's legal division, who accused it of passing him over for promotion
because he is black. Other African-American employees later joined the
suit, alleging similar mistreatment.

Lawyers for the plaintiffs said they hope the agreement will be completed
and approved by spring. Joseph M. Sellers, head of the civil rights
practice at the law firm of Cohen, Milstein, Hausfeld, & Toll, said the
plaintiffs actively involved in the negotiations "are pleased with the
arrangement as it now stands but they recognize that it isn't final."
They "are optimistic this can come to a good conclusion," he added.

The case stayed in legal limbo during most of the 1990s after early
attempts at a negotiated settlement broke down. The agency contested the
suit, and the case was sent to the Equal Employment Opportunity
Commission, which did not clear the complaint to move forward until 1998.

Settlement negotiations started again in February. Mr. Sellers credited
the FDIC's senior management for moving toward an agreement. "I think
there was a genuine intent on the part of senior management to settle
this," he said.

An FDIC spokesman said the agency is satisfied with the agreement.
"Senior management is pleased with the progress of the mediation," he
said. "They wanted to deal with this suit in a fair and equitable manner
that benefits all employees."

Industry analysts were not alarmed at the news, and they said the
industry is unlikely to react harshly. "I don't think you will hear much
outrage over this," said Bert Ely, a financial services industry
consultant in Alexandria, Va. "Now, if you look at the $750 million" that
the failure of First National Bank of Keystone in West Virginia "cost the
industry, that was something to get upset about." (The American Banker,
October 10, 2000)


FEN-PHEN: Opt-out Lawsuits Flood Tampa Bay Courts
-------------------------------------------------
Since some users of the diet drugs opted out of a class action decision,
800 suits have been filed in the Tampa Bay area.

Saddled with extra weight and chronic fatigue, Pati Daniel sought out
what many considered the 1990s miracle drug. She shed 30 pounds,
recaptured her youthful energy and couldn't have been more confident in
the popular diet drug fen-phen. But after 10 months, she discovered the
little pills had a life-threatening side effect. Mrs. Daniel began to
have attacks in which she could feel her heart skip beats. Even after she
stopped taking the pills, she had to catch her breath after walking
across her small Brooksville home. Her blood pressure soared - and so did
her weight. She regained the 30 pounds she lost and packed on 40 more. At
5 feet 5, Mrs. Daniel now weighs 190. "I was in shock," said Mrs. Daniel,
now 40. "I haven't quit living, but I know this is going to shorten my
life greatly. It's a nightmare."

Doctors and tests confirmed she had heart and lung problems - similar to
those plaguing thousands of other men and women who took fen-phen.

What began as a weight-loss craze quickly became a breeding ground for
lawsuits when the drug was taken off the market in late 1997. Courts
across the nation, including those in the Tampa Bay area, were bombarded
with cases.

In late August, a federal judge approved the largest personal injury
settlement in U.S. history - a $ 3.75-billion class-action settlement to
fen-phen users expected to end much of the nationwide litigation against
the biggest marketer of the paired drugs.

But about 45,000 of the 6-million fen-phen users across the nation opted
out of the settlement, many choosing to sue the drugs' distributor
themselves.

Most of the 2,500 suits filed in Florida will be heard in about a
half-dozen metropolitan centers. So far, 800 suits have been filed in
Pinellas, Pasco and Hillsborough counties with the first cases set for
trial in January.

Many say American Home Products of New Jersey knew of potential problems
with the pills but continued to sell them anyway. Similar complaints have
been lodged against the makers of tobacco and Firestone tires. "It's
worse than Firestone," said David Krathen, a Fort Lauderdale lawyer
handling fen-phen cases. "It's as bad as you get."

Mrs. Daniel estimates she would have received about $ 6,000 from the
nationwide settlement, less than she said she already has spent on
medical expenses. So she sued individually. "Six thousand dollars? You've
ruined my life and that's it?" said Mrs. Daniel. "Somebody should at
least take care of us. . . . These people will pay one day."

                          Unforeseen Danger

Only five years ago, doctors couldn't prescribe the fen-phen combination
fast enough. It was dubbed a medical marvel for those who had tried
countless diets and drugs but had never been successful losing weight.

The two drugs - fenfluramine and phentermine - were approved as
weight-loss drugs as early as the 1960s but didn't become popular until a
1992 study showed dramatic results when the pills were taken together.

Weight-loss clinics heavily promoted fen-phen and, in turn, millions
flocked to the appetite suppressants. It was intended to be used only for
a few weeks by those who were severely obese but that didn't always
happen.

Mrs. Daniel, who heard about the drug from her sister who was also taking
the pills, took the combination for almost a year although at the time
she was not considered seriously obese. Her sister has not experienced
any health problems.

Krathen said some clients took the drugs to lose 3 or 4 pounds. About
6-million Americans were taking them when the "fen" drug was taken of the
market in September 1997.

That's when the Food and Drug Administration, which initially approved
the drugs, learned studies had linked fen-phen to leaky heart valves and
an often fatal lung disease, pulmonary hypertension.

Scientific studies done since then concluded that people who took the
drugs for short periods - less than two or three months - are unlikely to
have serious injury. About 75 percent of fen-phen users fall into that
category.

Following in the footsteps of large companies that marketed breast
implants and other supposedly defective products, American Home Products
agreed to a nationwide settlement.

The company will pay up to $ 2.8-billion for people who sustained
injuries. Almost another billion would pay for the medical monitoring of
those who took the drugs and have not shown any signs of damage.

The deal pays about 200,000 users, including 1,000 Florida residents,
anywhere from a few hundred dollars to $ 1.5-million depending on a
variety of factors, including injuries.

American Home Products spokesman Lowell Weiner declined to comment about
any specific cases but said the company now faces an additional 11,000
lawsuits.

In August 1999, a Texas jury awarded nearly $ 23.4-million to a fen-phen
user. In December 1999, a Mississippi jury awarded $ 150-million to
another five people.

Earlier this month in Mississippi, American Home Products reached a $
200-million settlement with fen-phen users who claimed to have suffered
heart or lung damage. The settlement was reached in the same Jefferson
County court that last year yielded a nearly $ 400-million settlement
involving a different set of plaintiffs and the drugmaker.

The company already has settled more than a dozen cases for undisclosed
amounts between $ 500,000 and $ 7-million. Some cases already had been to
trial but those who sued agreed to settle for less money so they could
receive the award more quickly.

"Each time a jury has heard about what this company did, they get very
angry," said Joseph Saunders, a St. Petersburg lawyer with about 100
fen-phen cases in Florida. "The company was telling everyone it was safe.
They put profit over health."

                       Still Holding out

Though some cases have been settled, most fen-phen users who filed suits
continue to wait. Many continue to rack up medical bills or suffer
further health problems.

Attorneys say some of their clients have had strokes or brain damage.
Others have died.

Brenda Fulmer, a Tampa lawyer whose firm filed about 700 suits, said five
of her clients have died from heart or lung problems.

Thousands of people opted out of the national settlement because they
would rather have an attorney handle their claim than be locked into the
settlement, said Scott Liotta, an Orlando lawyer whose office represents
600 fen-phen users.

Class-action suits, like the national settlement, give ordinary people
the ability to take on big business by contributing little money. But
once people are involved with one of these suits, they are stuck with the
outcome.

Attorneys say their clients would have been shortchanged by the
settlement if they have serious heart valve injuries or any lung
problems. "Its insulting," Fulmer said. "Some would not even be
reimbursed for out-of-pocket medical expenses."

In Florida alone there are at least 2,500 individual claims. The Times
contacted more than a dozen plaintiffs, but almost all declined to talk
for fear of harming their cases or because of the stigma attached to
being overweight and taking a diet drug. All of Florida's plaintiffs are
represented by only a handful of lawyers around the state because of the
high cost. Lawyers do not receive any money for the cases unless there is
a jury award or settlement. The massive number of suits filed in
Pinellas, Pasco and Hillsborough counties prompted Chief Judges Susan
Schaeffer and Dennis Alvarez to assign one judge in each circuit to
handle all pretrial motions.

Schaeffer and Alvarez both said it's easier for one judge to hear the
pretrial motions because at this early stage the motions in all fen-phen
cases would be similar. Also, they said they want to make sure there are
consistencies from one case to another. When it's time for trial, though,
the cases would likely be divided among civil trial judges. Hillsborough
has dealt with this magnitude of cases before with silicone breast
implants and asbestos, also having one judge handle all pretrial motions.
But it's unprecedented in Pinellas.

Mrs. Daniel is one of those waiting for her day in a Pinellas court. She
quit her job and can't even fold laundry without wheezing. She uses a
wheelchair when she takes her 11-year-old daughter to Sea World. She
takes 14 pills a day and eventually may need open-heart surgery to
replace leaky heart valves. "It's a nightmare," she said. "The company is
killing people. Where is the publicity? Where is the apology?"

(Times researcher Caryn Baird contributed to this report, which also
includes information from Times wires; published in St. Petersburg Times,
October 08, 2000)


GRANT'S TRAIL: Landowners’ Lawsuit Moves Forward; May Expand Territory
----------------------------------------------------------------------
A class-action suit by a group of property owners along Grant's Trail in
south St. Louis County is moving forward. About 250 property owners
potentially could be involved, said Mark F. "Thor" Hearne II, attorney
for the class-action litigants.

Property owners who live along the trail have until Oct. 31 to indicate
whether they want to be part of the suit, says Hearne.

Hearne says he has a telephone number, 314-613-2546, for property owners
who have questions about the class action.

The original suit seeking compensation for property owners along the
trail was filed in December 1998. In April, a judge certified it as a
class action.

The property owners got a legal boost in January, when a federal judge in
Washington cleared the way for hundreds of property owners who own land
along the Katy Trail or Grant's Trail to be compensated by the federal
government for abandoned railroad easement that was converted into
recreational trails.

The U.S. Supreme Court previously decided the government had a right to
preserve unused railroad right of ways for future railroad use by
converting the railbeds to trails. But the federal judge in January ruled
the government owed the landowners compensation in a yet-to-be determined
amount.

Hearne said the class-action suit wouldn't stop Grant's Trail from being
expanded. "All it would do is compensate those property owners who live
along the trail, " he says.

Ted Curtis, executive director of Trailnet, a nonprofit group that helped
establish Grant's Trail, also said the suit wouldn't stop the trail's
progress. However, Curtis said, he feared that the federal judge's ruling
might affect future rails-to-trails projects throughout the nation.

Trailnet is trying to expand Grant's Trail to Oakland, Crestwood and
Kirkwood.

The paved hiking and biking trail is about four miles long. An additional
two miles of paved trail are expected to be added this fall. If the trail
is expanded into Kirkwood, it will be about eight miles long.

Grantwood Village tried unsuccessfully to stop Grant's Trail. It filed
suit in 1994 and claimed that the municipality owned the property on
which the trail was being built. The courts ruled against Grantwood
Village, which later filed a similar suit in federal court. That case was
affected by the federal judge's decision in January.

Hearne said that within a year he hoped to have the class-action suit
resolved. The property owners who are eligible to take part are those who
owned property along the trail on Dec. 30, 1992, the day it was created,
says Hearne.

Notes: To contact reporter Joan Little: E-mail: jlittle@postnet.com
Phone: 314-849-1531 (St. Louis Post-Dispatch, October 9, 2000)


HIKARI, CRAYFISH: Japanese Paper Reports on U.S. Securities Complaints
----------------------------------------------------------------------
The Daily Yomiur says that battered Internet investor Hikari Tsushin Inc.
and its business partner and e-mail service provider Crayfish Co. have
recently been hit with class-action complaints filed by lawyers on behalf
of Crayfish's U.S. shareholders, with claims expected to swell to between
5 billion yen and 8 billion yen.

Investors who purchased common stock in Crayfish Co. from March 8 through
Aug. 22 are being invited to take part in the class-action suit. On its
Web site, a New York law firm is calling for Crayfish shareholders to
join the suit.

After Shalov Stone & Bonner, the law firm representing the plaintiffs,
filed a complaint on Sept. 8 with the United States District Court for
the Southern District of New York, many law firms throughout the country
began searching for possible plaintiffs. So far at least 10 law firms
have filed similar class-action complaints with the district court. The
number of plaintiffs is likely to reach into the hundreds.

The lawsuit alleges that the defendants violated the federal securities
laws by, among other things, misrepresenting Crayfish's business
condition and failing to disclose material facts concerning the impact of
decline in business of its major business partner, Hikari Tsushin.

The complaint alleges that Crayfish failed to disclose that Hikari
Tsushin's declining financial condition was impacting its business at the
time of Crayfish's initial public offering--March 8 to Aug. 30. Hikari
Tsushin has to face the complaint with Crayfish as U.S. federal
securities laws stipulate any entity that affects a defendant's
management must also shoulder responsibility.

Crayfish was established in 1995. The Tokyo-based company provides e-mail
and other Internet-related services to small and medium-sized businesses
in Japan. Its president, Isao Matsushima, is 26 years old. Hikari Tsushin
is the company's largest shareholder.

Crayfish became the first Japanese company to list on the U.S. Nasdaq
market on March 8, and listed on the Tokyo Stock Exchange's
Mothers--short for "market of high-growth and emerging stocks"--later
that month.

Its stock price soared on the first day of its IPO, closing at 126
dollars. By last Thursday, October 5, the price had plunged to only 2
dollars.

The suit alleges that the plunge in Crayfish's stock price was caused by
the decline in Hikari Tsushin's business, which it says was not properly
disclosed by Crayfish.

Hikari Tsushin was established in 1988, and emerged as a leading Internet
venture. The Tokyo-based company manages cellular phone sales agents
through a chain of nationally franchised retail outlets.

Hikari Tsushin's business expanded at a remarkable rate as its agents'
mobile phone retail outlets enjoyed brisk sales in line with the booming
popularity of cellular phones.

The company made its debut on the TSE's First Section in September last
year and poured the funds raised from the market into various information
technology-related companies.

President Yasumitsu Shigeta, 35, was once introduced by Forbes magazine
as the fastest money-earning executive in the world.

However, as a result of a slowdown in its cellular phone sales and a
barrage of negative news, including magazine articles about questionable
business practices at its retail outlets, Hikari Tsushin's stock price
started to drop in March after Crayfish debuted on the Nasdaq.

Its stock price peaked at 241,000 yen, but was 3,850 yen last Friday
October 6.

The plaintiffs must establish that Hikari Tsushin's ailing financial
situation should have been disclosed to prospective shareholders in the
United States. Hikari Tsushin officially announced in Japan that it was
in the red on March 30, about three weeks after Crayfish's IPO in the
United States.

According to Ralph Stone, a lawyer for the plaintiffs, Crayfish failed to
disclose that Hikari Tsushin's declining financial condition was
impacting Crayfish's business at the time of its initial public offering.

Crayfish disagrees, saying that the company never failed to disclose any
information, and that it will fight the accusation to the end.

Hikari Tsushin, meanwhile, said it immediately disclosed the information
when it knew its business was going into the red, although it said it has
yet to receive an official notice of complaint.

Hikari Tsushin also said that it did not know about its deteriorating
business situation when Crayfish debuted on the Nasdaq in March.

However, a former executive of one of Hikari Tsushin's agents said that
he had already been told to downsize his sales division in January,
pointing out that the company's financial situation was then in a
tailspin. (The Daily Yomiuri (Tokyo), October 9, 2000)


MARVIN WINDOWS: Allegedly Rotting Doors and Windows Lead to Lawsuit
-------------------------------------------------------------------
Marvin Windows and Doors, which has been battling for six years with a
supplier over receiving allegedly defective wood preservatives, now faces
consumer litigation over the same dispute.

A Pennsylvania couple filed a lawsuit against the Warroad company last
Friday October 6 for selling thousands of defective doors and windows
from 1985 through 1988 and no longer paying the full cost to replace the
prematurely rotting doors and windows.

The lawsuit, filed in Hennepin County District Court, claims potential
consumer damages could top $70 million if it is certified as a class
action.

A Marvin spokeswoman said the company thought its dispute with Patrick
and Cindy O'Hara had been resolved and was surprised by their lawsuit.

The O'Haras accuse Marvin of breaking customer contracts, failing to meet
product warranties and violating state consumer protection laws. They
want Marvin to either pay damages or reinstate the company's "full
replacement policy" to thousands customers who have or will have
prematurely rotting windows and doors containing a disputed preservative
made by PPG Industries.

Marvin sued PPG Industries in 1994, alleging the window manufacturer has
spent millions of dollars to replace windows and doors that prematurely
rotted because of an allegedly defective preservative from
Pittsburgh-based PPG.

The O'Haras contend that Marvin has admitted its doors and windows with
the PPG preservative are defective and could be in a dangerous condition.
PPG has denied there was any defect with the wood preservative that
Marvin used to coat its doors and windows.

The O'Haras say in the lawsuit that Marvin paid all consumer costs to
replace consumers' prematurely rotting windows and doors with the PPG
preservative until early 1999, but now only gives consumers a discount to
buy replacement windows and doors after losing a federal court ruling to
PPG. (The Associated Press State & Local Wire, October 9, 2000)


MICROSOFT CORP: Likely to Offer Consumers Coupons for Antitrust Suit
--------------------------------------------------------------------
Microsoft officials were elated when the Supreme Court sent the landmark
antitrust case back to the appeals court, which in the past has favored
Microsoft.

But this victory overshadows an underreported loss the company is
suffering on a different front. A San Francisco judge has opened the door
to the first consumer lawsuit against Microsoft--a triumph for lawyers
who will be the prime beneficiaries of these cases.

Roughly 140 consumer lawsuits have been filed against Microsoft
nationwide. Until the August 29 ruling by San Francisco Superior Court
Judge Stuart R. Pollak, the company had a perfect record in getting cases
dismissed.

Trial attorneys will undoubtedly use the judge's ruling as ammunition to
push other class-action suits against the company through the courts.
Attorneys behind the California class-action case claim the software
giant has used its dominant market position to bilk California consumers
of countless dollars for products, including the Windows operating
system, and Word and Excel software programs.

But as Pollak himself suggested, it will be a difficult task for
attorneys to demonstrate how Microsoft wronged consumers. Microsoft may
be tempted to offer a settlement to avoid the risk of an inflated jury
award, just as Toshiba did last year when attorneys confronted the
company with a suit over allegedly defective floppy disks.

But California consumers should not await a check in the mail from
Microsoft. Experts say the company is more likely to settle the lawsuits
with coupons--the latest trend in class-action suits.

In that scenario, consumers could use the coupons to offset the cost of a
Microsoft product. But few consumer litigants end up redeeming their
coupons, particularly when they have to complete complicated paperwork in
order to get the rebate.

For example, the record shows that in a settlement with the loan company
ITT Financial, only two of 96,754 people used the coupons sent to them
for $ 29 toward a membership in the company's hotel and airline discount
club.

Lawyers, however, do not have such problems. They get paid in hard cash,
usually 10 percent to 15 percent of the total value of the coupons. The
lawyers in the Microsoft case will probably say the price of Windows is
at least $ 40 too high, as the Justice Department also claims. Triple
punitive damages--the rule in antitrust class-action suits--would bring
the coupon to $ 120.

If one million people are certified in the California suit, the damages
will amount to $ 120 million. A case that settles at 50 cents on the
dollar would bring the figure to $ 60 million, sending at least $ 6
million to the plaintiffs' lawyers and a bunch of coupons to consumers.

It's difficult to imagine how the case would benefit consumers. Consider
the outcome of the billion-dollar tobacco settlement between the 46
states and the major cigarette companies. Smokers today are paying an
average of $ 2.81 for a pack of cigarettes, a 37-percent rise in price
since the settlement was made in late 1998.

Smokers won't receive any monetary compensation under the settlement. The
states, however, will collect $ 246 billion over 25 years as
reimbursement for the cost of treating smoking-related illnesses.

Since there are no rules on how the money must be spent, states have been
earmarking the settlement funds for general funds and a variety of
non-health related programs.

A recent report released by the National Conference of State Legislatures
reveals that states plan to spend $ 8 billion of the tobacco settlement
money within the next year. Less than 10 percent of that figure will be
used to fund smoking prevention programs.

While smokers are shelling out more as a result of the settlement,
lawyers are cashing in on a vast fortune, upwards of $ 20 billion in
legal fees to be paid over the 25-year period.

The fees, which will be split between approximately 100 law firms, are
already nearing the $ 10 billion mark. Turning Microsoft into the next
Philip Morris will not benefit the economy or consumers. It will only
help trial lawyers live a lifestyle more like that of Bill Gates. End

(By Helen Chaney is a policy fellow at the San Francisco-based Pacific
Research Institute; published in Bridge News, October 6, 2000; views are
not necessarily those of BridgeNews.)


NEW PIPER: Lawsuit Says Engine Problem Caused 4 Plane Crashes
-------------------------------------------------------------
The New Piper Aircraft Inc. of Vero Beach faces a $75 million lawsuit
over a faulty engine part in the Malibu Mirage, a sleek six-seat airplane
billed by the company as "perfection."

The suit, filed in U.S. District Court in Fort Pierce, targets Piper and
the plane's engine manufacturer, Textron Lycoming of Williamsport, Pa.

The plaintiff, Dallas businessman William Montgomery, contends Piper and
Textron knew about the engine problem for several years and did nothing
about it, jeopardizing people's safety and costing owners hundreds of
thousands of dollars.

Though no one was killed, four plane crashes in the past four years were
caused by the problem - a lead alloy in a rod bearing that melts when the
engine heats up, said one of Montgomery's attorneys, Charles Ames of
Dallas.

Textron last month acknowledged a problem with the engine's rod bearing
and offered to replace it starting in October, but Ames said Mirage
owners deserve at least $75 million for maintenance expenses, lost flying
time, alternative travel costs and lower resale values.

Mirage owners are supposed to be able to fly 2,000 hours before
overhauling the engine but instead are averaging about 600 to 700 hours,
said Ames, part of a team that includes Fred Misko of Dallas and Michael
Pucillo of West Palm Beach.

The attorneys are seeking class action status for the suit.

An engine replacement costs about $95,000, plus six weeks of down time,
Ames said.

"When you buy something that you think will go for 2,000 hours and it
only goes 600 or 700 hours, you've lost two-thirds of what you bought,"
Ames said Monday from his Dallas office. "The owner is taking a huge
financial loss."

The single-engine Malibu Mirage, which lists for $869,800, is popular
with business travelers because of its ability to fly at an altitude of
25,000 feet - uncommonly high for a single-engine airplane.

Piper's Web site bills it as "Perfection: It's no illusion, it's a
mirage."

Since production began in 1987, Piper has built and sold about 465 Malibu
Mirages, the suit states.

About 1,200 past and present owners could be eligible for compensation if
damages are awarded, Ames said.

Piper President and Chief Executive Chuck Suma was unavailable for
comment Monday. The company said in a press release: "Textron Lycoming,
with New Piper's participation, has addressed and is currently resolving
all known component issues. New Piper is committed to manufacturing safe
and airworthy products and maintains that the Malibu Mirage is a safe and
reliable aircraft."

Piper, a privately held company with 1,400 employees, had $146 million in
revenue last year and expects to have $200 million this year.

A survey of past and present Mirage owners, accounting for 111 planes,
found that there were 60 in-flight engine failures, 66 premature engine
overhauls, 46 instances of metal in the oil and 32 replaced engines, the
suit claims.

Montgomery filed suit after participating in an initial survey last
spring by Enhanced Flight Group of Lexington, Ky., which uncovered
similar complaints.

Pilot Jonathan Sisk ran into problems with his Mirage and started
Enhanced Flight Group this year on the theory that he could make better
engine parts.

"Responses to our survey came back a lot more negative than we
anticipated, and it put us in a funny situation," said Sisk, who also
owns an electronics manufacturing business in Lexington. "What we
initially tried to find out is whether there's enough of a problem to
warrant a business venture. "Now the issue is: Do we want to be involved
in any way in this engine?" (Palm Beach Post, September 26, 2000)


OWENS CORNING: Asbestos Related Ch 11 Filing Sent Armstrong Stock down
----------------------------------------------------------------------
The shock waves from Owens Corning's bankruptcy filing made the stock
price of Armstrong Holdings Inc. collapse last Thursday October 5, as it
tumbled 39 percent. And the repercussions might shake Lancaster-based
Armstrong in other ways in the future. Meanwhile, in trading on Monday,
Armstrong stock continued to sag from Thursday's 18-year low. By noon, it
had fallen another $1.50 to $5.50 a share, on heavy volume.

Owens Corning became the 23rd company to seek bankruptcy protection from
the spiraling cost of asbestos litigation. That means attorneys for
people claiming injury from exposure to asbestos products will sharpen
their focus on the dwindling number of solvent companies, such as
Armstrong, some observers said.

But an Armstrong spokesman said on Monday it's too early to predict how
the Owens Corning filing will affect Armstrong's cost of settling
asbestos lawsuits. And that cost is spread across Armstrong and 18 other
firms which formed a coalition years ago to jointly settle the deluge of
asbestos suits filed against most or all of them, the spokesman noted.
"It will take a little bit of time to truly see what the impact is," said
spokesman Stan Steinreich. "The event just happened. We'll have to see
how it plays out."

Goldman Sachs analyst Christopher Winham, who tracks building materials
firms including Armstrong, said that Armstrong can expect added pressure
from attorneys representing asbestos victims. "With Owens Corning out of
the system, the plaintiffs' attorneys will shift their attention to the
remaining players...," said Winham, vice president of investment
research. "Whether that means they get more from the remaining players
remains to be seen, but they're certainly going to try," he said.

"The cynical way to think about it is, Owens Corning was scheduled to pay
out $400 million in claims next year. While they're in bankruptcy,
they'll pay nothing. "You can probably assume that (the plaintiffs'
attorneys) will be looking for places to make up the difference," said
Winham.

Richard Weinberg, general counsel for another asbestos defendant, GAF
Corp., made a similar comment in Monday's New York Times. "This will
increase by a substantial factor the burden on the remaining asbestos
defendants," he said.

Owens Corning, Armstrong and dozens of other firms have been besieged by
thousands of suits in recent years from people alleging personal injury
from asbestos products the firms made decades ago. Armstrong, owner of
Armstrong World Industries Inc., stopped selling asbestos-containing
insulation in 1969. Owens Corning stopped selling such a product in 1972.

Nonetheless, Armstrong faces about 176,000 personal injury claims. It
estimates its future asbestos payouts could reach $1.4 billion. Owens
Corning, facing 460,000 claims, predicts $3 billion in future payouts.

But by filing for Chapter 11 reorganization, Owens Corning halted all
asbestos payouts, as long as it's in bankruptcy. Owens Corning also
ceased paying a dividend. "With Owens Corning in bankruptcy
reorganization, the bull's-eye got bigger on the backs of other
asbestos-litigation defendants," The Wall Street Journal concluded.

Investors seemed to agree last Thursday. Armstrong stock fell $4.50 to $7
a share, the worst decline of all 3,300 issues trading on the New York
Stock Exchange. Armstrong bonds were down 28 percent, the fifth worst
drop on the Big Board. Trading in Armstrong stock was among the heaviest
ever for the company's shares, with 2.6 million shares changing hands --
or eight times its average daily volume. Last Thursday's descent extended
the staggering slide of Armstrong's stock price from its record high of
$90 in April 1998.

Armstrong's stock price has decreased by 92 percent since then. In other
words, an investor who spent $10,000 on Armstrong stock in April 1998
would find his stake worth only $778 now. That's grim news for the
thousands of Armstrong shareholders, including many company employees and
retirees. The stocks of other building material firms with asbestos woes
got punished as well Thursday. W.R. Grace fell 34 percent, for instance;
Owens Illinois was down 28 percent.

Asbestos is a flaky mineral once used to improve the effectiveness of
insulating and fireproofing materials. Inhaling asbestos fibers can cause
lung diseases, including cancer.

Armstrong already has taken charges against profits three times in the
past two years to increase the liability figure on its books for future
asbestos payouts. It took an after-tax charge of $153.4 million in this
year's second quarter, similar to charges in 1999's fourth quarter
($218.0 million after tax) and 1998's fourth quarter ($178.2 million
after tax).

Though Armstrong and Owens Corning both face mounds of asbestos lawsuits,
they have approached the problem differently. Armstrong is among the 19
companies in the Center for Claims Resolution, a group of former asbestos
making and selling firms that banded together to settle asbestos claims.
Owens Corning, though, decided to go it alone. It created a "National
Settlement Program," signing settlement agreements with 50 major law
firms representing thousands of plaintiffs.

But the rising cost of settlements, a "flurry" of new claims from lawyers
who refused to participate in the program and a downturn in Owens
Corning's business made bankruptcy a "difficult but necessary action,"
the firm said.

However, Steinreich noted "significant differences" between Owens
Corning, best known for its fiberglass insulation, and Armstrong, a maker
of floors and ceilings. He elaborated, "The businesses we're in, the
performance of those businesses, our asbestos exposure and our (asbestos)
strategies... "People should not be quick to draw conclusions" about
Armstrong, based on what happened to Owens Corning, Steinreich warned.

Armstrong executives for months have emphasized that managing the costs
of asbestos litigation is the top priority for the company, one of
Lancaster County's top employers, with 3,000 workers here.

That task would be easier if Congress would enact proposed legislation
limiting the kinds or amounts of asbestos claims, or increasing the tax
deductions that companies could take for asbestos payouts.

Steinreich reiterated that the Owens Corning bankruptcy should serve as
"a wake-up call" to all branches of the federal government that
legislation is needed to help companies cope with the flood of
litigation. (Lancaster New Era (Lancaster, Pa.), October 6, 2000)


PHILIPS INTERNATIONAL: Decries Merit of Securities Suit in New York
-------------------------------------------------------------------
On October 2, 2000, a class action was filed in the United States
District Court for the Southern District of New York against Philips
International Realty Corp., a Maryland corporation and its directors. The
complaint alleged a number of improprieties concerning the pending plan
of liquidation of the Company. The Company decries merit of the suit and
says it will defend such action vigorously. The following is an extract
of the complaint. More details are available from the Company’s Form 8-K
report dated October 5, 2000 filed with the SEC.

UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK

THE ZEMEL FAMILY TRUST, on behalf of itself   )
and a class of persons similarly situated,    ) CIVIL ACTION NO. 7438
                                                      )
                            Plaintiff,              )
                                                      )  CLASS ACTION
         - against -                                )  COMPLAINT
                                                          ---------
                                                      )
PHILIPS INTERNATIONAL REALTY CORP.,            )
PHILIP PILEVSKY, LOUIS J. PETRA, SHEILA       )  JURY DEMANDED
                                                         -------------
LEVINE, BRIAN GALLAGHER, ELISE JAFFE,         )
ROBERT S. GRIMES, ARNOLD S. PENNER, and      )
A.F. PETROCELLI,                                  )
                            Defendants.            )

         Plaintiff, the Zemel Family Trust, as and for its complaint,
alleges as follows upon information and belief, based upon the
investigation of its counsel, including but not limited to a review and
analysis of the publicly available documents, except for paragraphs 20
through 21, which are alleged upon personal knowledge, as follows:

                                 NATURE OF CASE
                                 --------------
         1. This is a class action brought on behalf of all record
holders of the shares of Philips International Realty Corp. ("Philips" or
the "Company") as of August 15, 2000 or their successors-in-interest,
except for the defendants and any firm, person, trust, corporation, or
other entity related to or affiliated with any of the defendants (the
"Class").

         2. On about September 8, 2000, Philips disseminated a proxy
solicitation statement on Schedule 14a (the "Proxy") to holders of record
of its shares as of August 15, 2000, for a shareholders' meeting to be
held on October 10, 2000.

         3. The Proxy seeks shareholder approval of two proposals:

            (a) an amendment to Philips' charter reducing the affirmative

stockholder vote necessary to approve an extraordinary corporate
transaction, such as the liquidation of the Company, from its present
requirement of two-thirds of all votes entitled to be cast, to a majority
of all votes entitled to be cast; and

            (b) a plan of liquidation of the Company (the "Plan of
Liquidation" or the "Liquidation").

         4. The Plan of Liquidation which is being proposed is composed
of four segments, some of which have already occurred:

            (a) the dilatory approval of a sale of certain assets to
Kimco
Realty Corporation ("Kimco"), which closed in July 2000 (the "Prior Kimco

Transaction");

            (b) the sale of certain significant assets to a group lead by

defendant Philip Pilevsky ("Pilevsky"), the chairman of Philips' board of

directors, and other of his family members, including his sister,
defendant Sheila Levine ("Levine"), the Company's chief operating officer
(the "Insider Transaction");

            (c) a second proposed sale to Kimco (the "Current Kimco
Transaction"); and

            (d) the marketing of certain other properties, which has not
yet
occurred, and for which Class members are being asked to vote for without

knowing prices or time frames in which such properties will be sold (the
"Open Market Transaction").

         5. By way of the Plan of Liquidation, Class members may, but are
not guaranteed, to receive gross cash consideration equal to $18.25 per
share, and will no longer retain their interests in the Company.

         6. Plaintiff and Class members have not be informed as to what
their net consideration is, whether they can reasonably expect that they
will ever receive $18.25 per share, given that a portion of the assets
has not yet occurred.

         7. Furthermore, they have not been informed that the net asset
value of the Philips' portfolio is about $21.00 to $22.00 per share.

         8. The $18.25 per share price, moreover, is inadequate and
unfair, as it is based upon the market price of the Company's shares
which has been depressed over the past several years through the actions
and mismanagement of Pilevsky and the remaining individual defendants
(together with Pilevsky, the "Individual Defendants").

         9. Furthermore, it is a gross figure, from which undisclosed
expenses will be deducted.

         10. Thus, Class members are being asked to vote for a Plan
without
being informed as to how much consideration will be received, or the true
value of Philips' assets.

         11. Approval for the Plan of Liquidation is being solicited
through a materially false and misleading Proxy, in violation of Section
14(a) of the Securities Exchange Act of 1934.

         12. In order to assure approval of the Plan of Liquidation, and
his ability to cheaply purchase certain of Philips properties, moreover,
Pilevsky has taken steps to manipulate the Class' voting franchise by
seeking approval of an amendment to the Company's Charter (the "Charter"
and the "Charter Amendment") pursuant to a false and misleading Proxy,
simultaneously with the Plan of Liquidation.

         13. By seeking approval of the Charter Amendment, Pilevsky seeks
to manipulate the voting requirements under applicable Maryland law, so
that the Plan of Liquidation may be approved by less than 40% of Class
members (excluding the 25% of Philips' share which the Pilevsky Group
holds). Maryland Law requires a two-third vote for extraordinary
transactions.

         14. Class members have no appraisal rights, as the Company is
traded on the New York Stock Exchange, although the market for Philips'
shares is highly illiquid.

         15. Because approval of the Plan of Liquidation is being
solicited
pursuant to a false and misleading Proxy, and because of Pilevsky's
manipulation of the Class' members voting franchise, Class members will
suffer irreparable damage if the vote and the Liquidation are not
enjoined.

. . .

                                    PARTIES
                                    -------

         20. Plaintiff, the Zemel Family Trust (the "Trust"), has at all
time relevant been a shareholder of Philips

         21. The Trust purchased 2,000 shares of Philips stock on April
19,
2000.

         22. Pilvesky is the chairman of Philip's board of directors and
the founder of Philips. At relevant times, Pilevsky (and Levine) have
maintained control over Philips, its business and management.

         23. Pilevsky is part of the Pilevsky Group, a group consisting
of
Pilevsky, Levine, various members of the Pilevsky family, and their
affiliated entities.

         24. The Pilvesky Group presently owns approximately 25% of
Philips
outstanding stock and 25% of Philips' operating units and, through the
Liquidation, seeks to purchase some of Philips' most valuable properties.

         25. Philips is a Maryland incorporated, self-administered real
estate investment trust ("REIT"), whose principal place of business is in
New York City.

         26. Philips was formed by members of the Philips Group for the
purpose of continuing and expanding the shopping center business of
affiliates of the Pilevsky Group, and is owned and controlled in
significant part by Pilevsky and the Pilevsky Group.

         27. Philips stock is traded on the New York Stock Exchange.
However, the market for Philips' stock is illiquid, with the average
daily trading of Philips stock at about 14,000 shares per day.

         28. As of December 31, 1999, Philips's portfolio consisted of
interests in 26 retail properties plus two development sites. Twenty-one
of the properties are anchored by national or regional supermarkets of
discount stores such as Publix Supermarkets, Inc., Winn-Dixie Stores,
Inc.,
Waldbaums/APW Supermarkets, Inc., and K-mart.

         29. Philips is the general partner of Philips International
Realty,
L.P. (the "Operating Partnership"), the operating partnership which owns
the properties, and holds about 75% of the units in the Operating
Partnership. As part of Philips' formation in 1997, the Philips Group
received limited partnership units (the "Units") in the Operating
Partnership which are redeemable at the unitholder's request, and
presently own about 25% of the Operating Partnership Units.

         30. A significant portion of the consideration being contributed
to Philips in exchange for the Insider Transaction segment of the
Liquidation is the redemption of the Philips Group's Operating
Partnership Units.

         31. Levine is Philip's chief operating officer, a member of the
Philips Group, and a director of the Company. Levine oversees the daily
operations of the Company and the Company's property development, and was
one of the founders of the entities which eventually comprised Philips.
Levine is Pilevsky's sister.

         32. Defendant Louis J. Petra ("Petra") is the Company's
president and a director, and was the Kimco's chief financial officer
prior to joining Philips. At Philips' formation, Petra entered into a
significant employment contract which provides that Philips termination,
he will receive significant remuneration.

         33. Defendant Brian J. Gallagher ("Gallagher") is the Company's
director of operations.

         34. At Philips' formation, Gallagher entered into a significant
employment contract which provides that at Philips' termination,
Gallagher will receive substantial remuneration.

         35. Defendants, Elise Jaffe ("Jaffe"), Arnold J. Penner
("Penner"),
A.F. Petrocelli ("Petrocelli") and Robert S. Grimes ("Grimes") are
purportedly outside directors of the Company.

                               CLASS ALLEGATIONS
                               -----------------

         36. Plaintiffs bring this action individually and as a class
action pursuant to Federal Rule of Civil Procedure 23(a) and
(b)(1)-(b)(2), or alternatively, Rule 23(b)(3), on behalf of the Class
defined in paragraph 1 above. . . .


PROFESSIONAL GOLF: Sp Ct to Decide If Golfer Can Ride Cart Between Shots
------------------------------------------------------------------------
The U.S. Supreme Court will decide whether disabled golfer Casey Martin
has a legal right to ride in a golf cart between shots at Professional
Golf Association Tour events. The Court said in late September it will
hear the Tour's argument that a federal anti-bias law does not apply to
Mr. Martin's case. The U.S. Court of Appeals for the Ninth Circuit, which
heard arguments from Mr. Martin's lawyers at Simpson Thacher & Bartlett,
ruled last spring that the Americans with Disabilities Act requires the
PGA Tour to waive its requirement that players walk the golf course
during tournaments. (New York Law Journal, September 27, 2000)


RACIAL PROFILING: Judge Declines Certification of Minority Motorists
--------------------------------------------------------------------
A judge denied civil class-action certification last Thursday October 5
to minority motorists who claim they were victims of racial profiling.

In denying the motion brought by nine minority drivers, Middlesex County
Superior Court Judge Amy Piro Chambers cited the remedial steps already
taken by the state. They include the state's admission of some profiling
in the attorney general's April 1999 report. Most important, says
Chambers, is the consent decree in federal court between the state and
the U.S. Department of Justice last December. The other key to the
state's success in beating back the class action, according to Chambers'
24-page opinion, was the disparateness of the stories told by the nine
plaintiffs who allege they were victims of profiling. The judge took
pains to note how different the allegations were, saying that the
individual issues eclipsed the common questions.

Chambers also concluded that the proposed class was way too broad and
therefore unworkable and unmanageable. The plaintiffs' lawyers sought to
include in the class every non-white driver on the New Jersey Turnpike
from 1988 to the present and all future minority Turnpike drivers.
Chambers said it would be an "immense ... task" just to identify and
notify such a "vast breadth" of a class.

The individual motorists, most of whom are black and Hispanic, can, of
course, continue with their particular cases, filed in 1999 against the
state, the state police, the Turnpike Authority and two troopers.

Neil Mullin, one of the plaintiffs' attorneys, calls the decision flawed
on several points, saying it will be appealed.

"The governor's lawyers have achieved what they wanted, which was to
prevent a hundred thousand victims of racial profiling from getting their
remedy," says Mullin, of Montclair's Smith Mullin.

Mullin says that Chambers' reliance on the consent decree that ended the
Justice Department's civil rights suit against New Jersey was not only
wrong, but that the state violated the decree by using it as an argument
against class-action certification. "The consent decree states right in
the front that 'nothing in the consent decree shall be construed to
impair the right of any person or organization to seek relief against the
state ... for its conduct' in condoning racial profiling."

Nonsense, counters the state's lead outside counsel, Benjamin Clarke, a
partner with DeCotiis, FitzPatrick, Gluck, Hayden & Cole in Teaneck.
"Neil tried that argument with Judge Chambers and she saw right through
it. The consent decree has nothing to do with whether plaintiffs should
be certified as a class," says Clarke, a former assistant attorney
general in charge of litigation.

Clarke adds, "Certification as a class is not a remedy, or a right. It's
discretionary with the judge and it's based upon efficiency and economy.
No one lost their right to seek a remedy, they just can't proceed as a
class."

Not surprisingly, Clarke agreed with the judge, who concluded that the
134 provisions of the consent decree deal with every aspect of racial
profiling by troopers and that having two courts dealing with the same
issue would cause each to "bump into each other."

Chambers found that the plaintiffs' team, which included the state
chapter of the American Civil Liberties Union, met the four threshold
prerequisites for a class action. The class is large enough in numbers;
there are questions of law and fact common to the class; the claims of
the named plaintiffs are typical of those who would be in the class; and
the named plaintiffs and their counsel are adequately qualified to
represent the entire class.

However, under state Rule 4;32-1, the plaintiffs must make a showing on
two other critical related points and they failed, according to Chambers.
First, she found that the questions of law or common fact did not
predominate over the questions affecting individual members. Second, she
concluded that a class action is not a superior method to resolve the
controversy compared to other methods, such as individual suits.

Chambers cited the differences in the allegations of each of the nine
plaintiffs, saying that each was too fact-specific and would have to be
examined separately to determine liability. She also concluded that some
stops of minority drivers had to have been appropriate, and she noted
that the motives of each trooper would have to be explored.

Some of the drivers were stopped but once, but others often, including a
dentist who claims he was stopped 100 times but was never ticketed. Some
were ticketed, but others weren't. Some claimed they were assaulted
and/or insulted, while others made no such claim; some in fact were
speeding while others were not.

Plaintiffs' lawyer Mullin argues the common issue still dominated the
claims, but state lawyer Clarke scoffs, saying, "The lack of commonality
was startling," adding that a class action in state court along with the
continued monitoring by the federal government under the Justice
Department consent decree "is a formula for judicial chaos." (New Jersey
Law Journal, October 9, 2000)


RITALIN LITIGATION: Conspiracy Suit to Boost Sales Filed in New Jersey
----------------------------------------------------------------------
Lawyers from around the country who were part of the national tobacco
litigation are now taking on a New Jersey pharmaceutical company in a
suit over the drug Ritalin, a stimulant prescribed to millions of
children diagnosed with attention-deficit disorders.

The lawyers, including Teaneck's Marc Saperstein, filed a putative class
action suit in Bergen County Superior Court on Sept. 13, alleging that
Novartis Pharmaceuticals Corp. conspired with a doctors' group and a
nonprofit association in order to boost Ritalin sales. Dawson et al. v.
Ciba- Geigy et al., BER-L-7774-00. Ciba and Sandoz Pharmaceuticals Corp.
merged in 1996 to form Novartis. The New Jersey case is one of three
Ritalin actions brought by the team.

A similar class-action suit was filed Sept. 13 in federal court in San
Diego, basing jurisdiction on diversity. The third case, also a class
action, was commenced in May in Texas state court but was removed to
federal court in Dallas, also on the basis of diversity. The first
pre-trial conference is scheduled for October 16.

Saperstein, a partner at Davis, Saperstein & Salomon, says the three
complaints contain essentially the same allegations. As early as the
1950s, the suits charge, Novartis/Ciba and the American Psychiatric
Association began conspiring to create the diagnoses of attention-deficit
hyperactivity disorder (ADHD) and attention-deficit disorder (ADD), to
include these illnesses in the Diagnostic and Statistical Manual of
Mental Disorders (DSM), to encourage the overdiagnosis of these ailments
and to promote Ritalin (methylphenidate) as the drug of choice for
treatment.

The complaint also alleges that the Maryland-based "Children and Adults
with Attention-Deficit Hyperactivity Disorder" (CHADD) conspired with
Novartis and the APA to increase Ritalin sales and to reduce legal
restrictions on use of the drug.

Between 1990 and 1994 alone, the complaint alleges, CHADD received
$748,000 from Ciba-Geigy, and Saperstein says discovery will likely show
that amount was a very substantial part of CHADD's total funding.

The suit also charges Novartis/Ciba with false advertising about the
efficacy of Ritalin and its side effects, which the complaint lists as
including pituitary-gland dysfunction and cardiovascular,
gastrointestinal and nervous system disorders.

The complaint describes the putative class as "all individuals in the
State of New Jersey who have taken the drug Ritalin." It also defines a
subclass of "those persons who have suffered an enhanced risk of injury
or may suffer injury as a result of using the aforementioned drug," for
whom the suit seeks medical monitoring.

The relief sought for the class under the Consumer Fraud Act, N.J.S.A.
56:8- 1 et seq., includes disgorgement, restitution, punitive and
exemplary damages and attorney's fees. The complaint estimates that
Novartis/Ciba has sold more than a billion dollars worth of the drug in
New Jersey alone.

Other claims asserted include inducement through false and misleading
statements, fraud and intentional misrepresentation, strict product
liability, negligence and breach of express and implied warranties of
merchantability. Injunctive relief and medical monitoring are sought as
remedies under these counts.

Also on the team are Richard Scruggs of Scruggs, Millette, Bozeman & Dent
(Pascagoula, Miss.); Donald Hildre of Dougherty, Hildre, Dudek & Haklar
(San Diego); John Coale of Coale, Cooley, Lietz, McInerney & Broadus
(Washington, D.C.); and C. Andrew Waters of Waters & Kraus (Dallas).

Novartis' chief national counsel for the Ritalin cases, James O'Neal of
Minneapolis' Faegre & Benson, declined to respond to the allegations and
New Jersey counsel, John Brenner of Newark's McCarter & English, did not
return a call seeking comment. The company's written response blasts the
allegations as "unfounded and preposterous" and characterizes plaintiffs'
assertions about ADHD as "contrary to medical evidence and scientific
consensus."

APA spokesperson Cecilia Obejero says the group has not yet retained
counsel to defend the New Jersey suit. An APA statement in response to
the Texas action calls the charges "ludicrous" and labels the suit "an
opportunistic attack on the scientific process."

CHADD's attorney, Gerald Zingone, a partner at Arent Fox Kintner Plotkin
& Kahn in Washington, D.C., did not respond to a request for comment, but
a CHADD statement calls the lawsuits "baseless," "gravely irresponsible"
and "a shocking insult to the millions of families coping with this very
serious condition." It quotes Dr. Peter Jensen, former Associate Director
for Child & Adolescent Research at the National Institute of Mental
Health: "Alleging that CHADD created ADHD to help a pharmaceutical
manufacturer reap profits is akin to accusing the American Diabetes
Association of conspiring with makers of insulin to invent diabetes."

The plaintiffs do not deny that ADD and ADHD exist but contend that the
defendants' efforts have contributed to its vast overdiagnosis. "ADHD may
exist," says Saperstein, "but the criteria used encompass normal
children." He says the goal of the suit is to have Novartis disgorge its
profits and give the money to appropriate groups for long-term study "to
further define the diagnosis and what drugs work and what don't."

Saperstein acknowledges a split in the medical community about the
illness and the means to treat it, but he wants the drug less available
in the meantime. "While the psychiatrists are debating among themselves,
children are becoming addicted and having permanent side effects, and
adverse reactions when they are first growing."

Saperstein points out that CHADD lobbied the Food and Drug Administration
to recategorize Ritalin from Schedule II -- a category that includes
medically useful drugs most subject to abuse and likely to induce
dependency -- to an easier-to-obtain Schedule III drug under the
Controlled Substances Act.

According to testimony given to Congress by Terrance Woodworth, deputy
director of the Drug Enforcement Agency in May, CHADD did file such a
petition, along with the American Academy of Neurology, but withdrew it
after DEA review contradicted CHADD's assertions that the drug was only a
mild stimulant with little potential for abuse.

Though other companies also sell methylphenidate under different names,
Ritalin is 70 percent or 80 percent of the market, says Waters, and the
other sellers "are Johnny-come-latelies who don't have the historic
involvement" of Novartis/Ciba.

None of the defendants has yet been served, but Saperstein expects
service to follow shortly the filing of an amended complaint that will
change the named plaintiffs but nothing else.

There will be additional suits filed in other states, says Saperstein.
Waters indicates it is likely that some individual cases for personal
injury from Ritalin will also eventually be brought.

Two weeks ago, Bergen County courthouse personnel said they were in the
process of transferring the case to Middlesex County, as a mass tort.
There, it will join the fen-phen and Rezulin actions. Saperstein's firm
is involved in both of those litigations. (New Jersey Law Journal,
October 9, 2000)


WONDER BREAD: Judge Slashes Award in Bias Case  from $132M to $27M
------------------------------------------------------------------
A judge slashed on October 6 more than $100 million from the damages
awarded to 19 black workers who were discriminated against by their
employer at a Wonder Bread plant in San Francisco.

The decision, by Superior Court Judge Stuart R. Pollak, reduced from $132
million to $27 million the amount the plaintiffs will collect in punitive
damages, lost wages and as compensation for pain and suffering enduring
at the plant.

"Even for a large corporation, these amounts are not insignificant and
there is no reason to assume they will be taken lightly by the defendant
or by the officers who are accountable for the financial results of the
company," Pollak said in his order reducing the award.

The jaw-dropping award stemmed from a discrimination lawsuit filed in
1998 by drivers, salesman and assembly-line workers at Interstate Brands
Corp. -- the Kansas City, Mo., parent company of Hostess, Home Pride and
Dolly Madison.

The employees said they were routinely passed over for promotions, given
menial and monotonous jobs and subjected to racial slurs and other
indignities.

After a two-month trial and nine days of deliberations, a jury in August
awarded the plaintiffs $121 million in punitive damages and $11 million
more for lost wages and for pain and suffering.

Pollak said the astronomical verdict -- intended to punish Interstate
Brands and deter it from future discrimination -- was excessive. "The
evidence clearly was insufficient to justify the verdict," Pollak wrote.

Pollak's decision came as no surprise, as the judge announced that he
planned to reduce the amount of the verdict. The only question was by how
much.

The plaintiffs can reject Pollak's ruling and ask for a new trial. But
San Francisco attorney Angela Alioto, who represented some of the
plaintiffs, accepted the ruling and said she will urge her clients to do
the same. "The $27.7 million is still a historic amount of money for
punitive damages in this country," Alioto said. "I believe the judge made
a solid, well-thought-out decision and it will change the face of racism
in this nation."

In a statement, Interstate Brands praised Pollak's decision but said it
still plans to appeal. "We continue to believe that the allegations are
unsubstantiated," the company said.

Judges have increasingly used their discretion to reduce verdicts they
view as unjust. (The Associated Press contributed to this story;
Published in The San Francisco Chronicle, October 7, 2000)


                             *********


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