/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/001201.MBX C L A S S A C T I O N R E P O R T E R Friday, December 1, 2000, Vol. 2, No. 233 Headlines AT&T: Milberg Weiss and NH Retirement System File Securities Suits in NJ BAYER CORP: Mass. Jury Awards $ 15.9M For Environmental Damage BIO CROPS: USDA Mulls about Regulations to Separate and Monitor Crops BRIDGESTONE/FIRESTONE, FORD: Keep Recalled Tires As Potential Evidence CABLE CAR: US Attorney Meets With State Prosecutor On Tragedy In Austria CHRYSLER: Weiss & Yourman Files Suit On Behalf of Former Shareholders DAIMLERCHRYSLER AG: Schoengold & Sporn Files Securities Suit in Delaware DAIMLERCHRYSLER AG: Stull, Stull Files Securities Suit in Delaware DAIMLERCHRYSLER: Detroit News Says Anger Brewed Before Kerkorian Sued DAIMLERCHRYSLER: Germans Say Daimler Overpaid For Crasher ELECTRICITY SUPPLIERS: CA Plans to Present Strategy for Energy Crisis FERDINAND MARCOS: Zamora Criticized U.S. Judge for Terminating Deal LERNOUT & HAUSPIE: Belgian Speech Software Maker Files for Bankruptcy MILLER INDUSTRIES: Announces Dismissal of Shareholder Lawsuit in GA MYLAN LABORATORIES: FTC OKs $100M Settlement in Drug Price Fixing Suit NETMANAGE, INC: Schubert & Reed Files Securities Suit in California PACIFICARE HEALTH: Milberg Weiss Files Securities Suit in California PADUCAH GASEOUS: DOJ Wants More Time to Consider Whether to Join PRESIDENTIAL ELECTION: Ballots Trucked to Florida Capital PRESIDENTIAL ELECTION: Fla. Republican Legislature Urges Special Session PSINet INC: Files Motions to Dismiss Securities Litigation QUINTUS CORPORATION: Wolf Popper Expands Lawsuit over Mustang.com Merger TOBACCO LITIGATION: Appellate Court Affirms Denial of Geiger Action TRILOGY SOFTWARE: TX Court Prohibits Tender Offer for pcOrder.com, Inc. UNISYS CORP: Securities Suit Will Continue, E.D. Pa. Says ********* AT&T: Milberg Weiss and NH Retirement System File Securities Suits in NJ ------------------------------------------------------------------------ On October 27, 2000, Milberg Weiss announced that a class action lawsuit had been filed on October 27, 2000, on behalf of purchasers of the stock of AT&T Corporation ("AT&T" or the "Company") (NYSE:T) between October 25, 1999 and May 1, 2000 (the "Class Period"). That notice was published on October 27, 2000 on Business Wire. The lawsuit announced in the October 27, 2000 notice was filed by plaintiff, the International Brotherhood of Electrical Workers Local 98, against defendants AT&T and C. Michael Armstrong in the United States District Court for the District of New Jersey. The case number of the action is Civil Action No. 3:00cv05364 (GEB). The action is pending before the Honorable Garrett E. Brown, Jr., at the United States District Court, Clarkson S. Fisher Federal Building & U.S. Courthouse, 402 East State Street, Trenton, New Jersey 08608. In addition, on November 27, 2000, plaintiff, the New Hampshire Retirement System ("New Hampshire"), filed a class action lawsuit on behalf of purchasers of the stock of AT&T between October 25, 1999 and May 1, 2000 against defendants AT&T and C. Michael Armstrong in the United States District Court for the District of New Jersey. The case number for the New Hampshire action is Civil Action No. 3:00cv05785 (GEB). The action is pending before the Honorable Garrett E. Brown, Jr., at the United States District Court, Clarkson S. Fisher Federal Building & U.S. Courthouse, 402 East State Street, Trenton, New Jersey 08608. A copy of the complaint filed by New Hampshire can be viewed on Milberg Weiss's web site at: http://www.milberg.com/att/. Plaintiffs allege that defendants' materially false and misleading statements, included, among others: statements about AT&T's Concert joint venture, AT&T's Business Services corporate long-distance segment, AT&T's improving competitive position, and AT&T's accelerating revenue and earnings growth made between 10/25/99 and 5/2/00 which were false due to undisclosed problems. These problems were exacerbated by AT&T's loss during 99 of two large U.S. government long-distance contracts (the FTS 2000 contracts) and a huge ($ 650 million per year) BP Amoco PLC contract. As a result of these negative factors, AT&T's competitive position was impaired and AT&T and Armstrong knew by 10/25/99 that AT&T's Business Services unit's revenues were being materially adversely affected. Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach, 800/449-4900 wsl@mwbhl.com BAYER CORP: Mass. Jury Awards $ 15.9M For Environmental Damage -------------------------------------------------------------- CASE TYPE: environmental property damage CASE: Kanavos v. Bayer Corp., No. 96-7232-D (Super. Ct., Middlesex Co., Mass.) PLAINTIFFS' ATTORNEYS: Paul S. Samson and Craig J. Ziady of Boston's Riemer & Braunstein DEFENSE ATTORNEYS: Lawrence C. Kenna and H. Hamilton Hackney III of Boston's Choate, Hall & Stewart JURY VERDICT: $ 15.9 million FROM THE 1970s through 1994, Bayer Corp. and several predecessor companies were tenants at a 90,000-square-foot building at 65 Industrial Way in Wilmington, Mass. During this time, said plaintiffs' attorney Paul S. Samson, Bayer and the other companies operated a sheet metal and industrial paint plant at which cleaning solvents containing 1, 1, 1-tricholoethane, or TCA, were used. In 1994, the owners of the building, the I. Fred DiCenso Trust, "discovered TCA in the groundwater" below the structure, said Mr. Samson. This TCA had also broken down into other toxic chemicals, he said. In July 1996, Arthur Kanavos and Rossana DiCenso, trustees of the DiCenso Trust, sued Bayer Corp. In October 1998, after an investigation of a separate, 231,000-square-foot property at 80 Industrial Way, the plaintiffs added this site to the lawsuit, alleging that this property was also contaminated. At the beginning of trial, Bayer conceded liability for environmental damage and negligence regarding both properties and accepted responsibility for past and future cleanup costs at 65 Industrial Way, noted defense counsel Lawrence C. Kenna. But the company contested the lost-property-value damages and contended that Bayer was already paying for the cleanup at 80 Industrial Way. On Oct. 17, a Cambridge, Mass., jury awarded the plaintiffs $ 15.9 million. In an advisory verdict, the jury found that Bayer had committed unfair or deceptive practices and suggested an additional $ 5 million award. A final determination of liability on this count and any award will be determined by the trial judge, noted Mr. Samson. Until then, said Mr. Kenna, no post-trial motions will be filed. (The National Law Journal, November 27, 2000) BIO CROPS: USDA Mulls about Regulations to Separate and Monitor Crops --------------------------------------------------------------------- WASHINGTON (Reuters) - Amid the debate over the bio-corn contamination that triggered the recall of hundreds of foods, the U.S. Agriculture Department said on Wednesday it was mulling what new regulations might be needed to separate and monitor gene-spliced crops. Agriculture Secretary Dan Glickman said the USDA wants the food industry, farm groups, grain exporters and consumer activists to offer suggestions on what, if anything, the USDA ought to do to help farmers market biotech crops in a way that will preserve public confidence. Under federal law, the USDA is responsible for promoting American farm exports, which generate some $50 billion annually and are a crucial part of farm income. But the department also is responsible for inspecting meat and poultry plants, preventing plant diseases, approving field trials of new gene-altered crops, and maintaining U.S. consumer confidence in a safe food supply. ``One of the things we want to talk about with the world, with the public, is what is our role? What ought to be our role in dealing with the marketing of these products?'' Glickman told reporters after addressing a meeting of the USDA's agricultural biotechnology advisory committee. The USDA will publish on Thursday in the Federal Register a detailed notice asking for public comments and guidance. Should Usda Certify Bio-Crops? Among the key issues are whether the USDA should be involved in reviewing or certifying the performance of companies' systems to carefully segregate gene-altered grain from conventional crops. Another issue is whether the USDA should create definitions for biotech and non-biotech crops as part of its quality grades and standards. The department also wants to know if it should expand its accreditation of laboratories that detect biotech grains and oilseeds to other kinds of gene-spliced crops, such as fruits, vegetables and ornamental plants. ``We've got to make sure we do it in the way that makes the most sense,'' Glickman said, referring to any possible new biotech regulations. Most U.S. farmers, grain elevators, processing firms and shippers are accustomed to handling corn, for example, as a commodity crop that can be freely interchanged because the quality is roughly the same for most varieties. The contamination of huge quantities of the American corn supply with StarLink bio-corn this year has been blamed on the accidental commingling by farmers and grain elevators who were not aware of the need for strict segregation. StarLink, made by Aventis SA (AVE.N), was approved by the U.S. Environmental Protection Agency for use only in livestock feed because of concerns about human allergies. As part of that licensing approval, Aventis had to promise to keep the corn completely separate from varieties headed for human food use. In September, traces of StarLink were found in taco shells and more than 300 kinds of chips, cornmeal and other foods were recalled by food companies. Several key buyers of U.S. corn such as Japan and South Korea have balked at purchasing more shipments because of fears of contamination. ``I'm not sure that the particular company (Aventis) did an effective job of doing what they needed to do to protect the situation here,'' Glickman said. ``It is something that I don't think industry was ready for.'' Segregation Crucial For New Bio-Crops New regulations and programs to strictly separate crops may be even more important as agribusinesses develop the next generation of bio-plants that are engineered to produce pharmaceuticals and nutritional benefits, USDA officials said. Some seed companies are already at work creating plants that will offer such consumer benefits. Currently, gene-spliced plants are designed mainly to fight pests and increase yields for farmers. ``When you are talking about something like pharmaceuticals, I think all of us envision it being a carefully regulated crop. It's not going to be deregulated like we have done with Bt corn,'' said Keith Pitts, a special advisor to Glickman on biotech issues. StarLink is a variety of Bt corn, so-named because it contains a natural pesticide known as bacillus thuringiensis. But some U.S. crops are already being carefully separated throughout production and distribution, said Richard Rominger, deputy agriculture secretary. Makers of specialty seeds for lawns have set up marketing channels to keep different varieties pure and clearly identified. ''We do have the capability in industry but it's never been something that the grain industry has had to deal with,'' Rominger said. Currently, three U.S. agencies share responsibility for various aspects of bioengineered foods. The USDA monitors the crop and environmental impacts of seed companies' field trials of new gene-modified crops. The Food and Drug Administration has jurisdiction over labeling and human safety issues related to biotech plants. And the EPA becomes involved when a plant is engineered to contain a gene that acts as a pesticide, like StarLink. Aventis has since asked the EPA to grant temporary approval of StarLink in human food, citing what it said is new scientific data that shows the gene-spliced corn is harmless. (Washington (Reuters)) BRIDGESTONE/FIRESTONE, FORD: Keep Recalled Tires As Potential Evidence ---------------------------------------------------------------------- Bridgestone/Firestone Inc. has agreed to preserve some of its recalled tires as potential evidence in lawsuits against the company, a key attorney in the cases said Wednesday. A lawyer for the plaintiffs said a tentative deal had been struck with the tire maker, pending a final agreement which both sides hoped to reach before a Dec. 6 court hearing. A spokeswoman for the tire company confirmed the tentative agreement. The plaintiffs' attorneys want to prove that defects like those under investigation in dozens of accidents were not limited to the tire models covered by the company's massive recall. U.S. District Court Judge Sarah Evans Barker on Nov. 17 ordered the company to stop shredding recalled tires until both sides could agree on how to save some for evidence. Firestone said the shredding was part of its normal recycling program and that the tires being destroyed were not linked to the cases. About 160 cases from around the country, many of them involving allegations of injury or death, have been consolidated in federal court in Indianapolis. Many of the lawsuits allege that Bridgestone/Firestone's Aug. 9 recall of 6.5 million ATX, ATX II and Wilderness AT tires - most of them used on the Ford Explorer - was not broad enough to include all defective models. Two out of every 100 recalled tires have been set aside as potential evidence, and about 20,000 other tires are also being preserved. The government is investigating more than 3,500 complaints about the tires, including reports of 119 deaths and more than 500 injuries. Many of the complaints involve sudden tread separation, mostly on Ford Explorers. (AP, November 29, 2000) CABLE CAR: US Attorney Meets With State Prosecutor On Tragedy In Austria ------------------------------------------------------------------------ U.S. attorney Ed Fagan, who has made a name for himself in class action suits representing Holocaust victims, met with the state prosecutor investigating the circumstances of the cable car tragedy that killed 155 skiers and snowboarders. Fagan recently invited survivors and relatives of the victims to contact him for possible legal proceedings against those found responsible for the accident, the worst ever involving winter holidayers in Austria. His visit comes a day after all 155 victims were identified by forensic experts working primarily with DNA samples because the remains were too badly burned to be recognized by relatives. The victims died Nov. 11, after a fire engulfed a cable car traveling through a mountain tunnel at the Alpine resort of Kaprun. Eight Americans were among the dead. The other victims were from Austria, Germany, Japan, Slovenia, the Netherlands and the Czech Republic. Extensive investigations are continuing to try to establish the cause of the fire. (AP Worldstream, November 30, 2000) CHRYSLER: Weiss & Yourman Files Suit On Behalf of Former Shareholders --------------------------------------------------------------------- A class action lawsuit was filed on behalf of all former shareholders of Chrysler Corporation who held shares of Chrysler on August 6, 1998 and exchanged those shares for shares of DaimlerChrysler AG ("DamilerChrysler") (NYSE:DCX) as a result of a merger between Chrysler and Daimler-Benz AG. The complaint charges defendants with violations of the antifraud provisions of the federal securities laws. The complaint alleges that the defendants have admitted that they intentionally misrepresented and never intended to honor their commitment that the Merger would be a "merger of equals." It alleges that Daimler-Benz acquired Chrysler without paying a takeover premium and that the trading value of the securities issued in connection with the Merger has declined substantially because Chrysler was treated as a mere division and its management team was eviscerated. Contact: Weiss & Yourman James E. Tullman, Mark D. Smilow and/or David C. Katz 888/593-4771 or 212/682-3025 wynyc@aol.com DAIMLERCHRYSLER AG: Schoengold & Sporn Files Securities Suit in Delaware ------------------------------------------------------------------------ Schoengold & Sporn, P.C. announced that a securities class action lawsuit was filed in the United States District Court for the District of Delaware against DaimlerChrysler AG ("DaimlerChrysler") (NYSE: DCX), Daimler-Benz AG ("Daimler-Benz") and certain of their key officers on behalf of persons who owned the common stock of Chrysler Corporation ("Chrysler") from August 6, 1998 to November 17, 1998 ("the "Class Period") as well as all persons whose Chrysler shares were converted into shares of DaimlerChrysler stock in connection with the merger of Chrysler with a DaimlerChrysler subsidiary (the "Merger"). The securities class action complaint charges the defendants with violations of the federal securities laws (Sections 11 and 12(2) of the Securities Act of 1933; Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder), by, among other things, omitting material information and disseminating materially false and misleading statements concerning the Merger, contained in filings with the Securities and Exchange Commission ("SEC"). The registration statement/proxy statement issued in connection with the Merger represented that the Merger would be a "merger-of-equals" transaction, and the complaint alleges that this representation was materially false and misleading. In a recent article published in the Financial Times of London, Jurgen Schrempp, the chairman and chief executive officer of Daimler-Benz and the co-chairman and co-chief executive officer of DaimlerChrysler, was quoted in part as stating: "Me being a chess player, I don't normally talk about the second or third move. The structure we have now with Chrysler (as a standalone division) was always the structure I wanted ... We had to go a roundabout way but it had to be done for psychological reasons. If I had gone and said Chrysler would be a division, everybody on their side would have said: 'There is no way we'll do a deal.' "But it's precisely what I wanted to do. From the start structure, we have moved to what we have today." The complaint alleges that defendants always intended to relegate Chrysler to the status of a "division" and always intended to replace Chrysler's management with executives from Daimler-Benz's headquarters in Stuttgart. Contact: Schoengold & Sporn, P.C., 212-964-0046, 800-232-8092, fax - 212-267-8137, SHAREHOLDERRELATIONS@SPORNLAW.COM DAIMLERCHRYSLER AG: Stull, Stull Files Securities Suit in Delaware ------------------------------------------------------------------ A class action lawsuit was filed in the United States District Court for the District of Delaware on behalf of all investors who held Chrysler Corporation securities at the time of the announcement of the proposed Daimler-Benz transaction and who exchanged their Chrysler securities for DaimlerChrysler AG ("DaimlerChrysler") securities (NYSE: DCX) pursuant to the merger, and who suffered damages thereby (the "Class"). The complaint charges that defendants Daimler-Benz AG ("Daimler-Benz") and DaimlerChrysler engaged in a concerted fraud orchestrated by defendant Jurgen Schrempp, the long-time chairman and chief executive officer of Daimler-Benz, and implemented by that company's executive inner circle, including defendants Manfred Gentz and Hilmar Kopper in order to induce Chrysler shareholders to tender their shares of Chrysler to Daimler-Benz. As detailed in the complaint, Mr. Schrempp knew that Chrysler's directors and shareholders would never approve a transaction if he told the truth, namely, that a foreign corporation was seeking to acquire complete operating control of one of America's "Big Three" auto manufacturers. Thus, Mr. Schrempp falsely told Chrysler and its shareholders that Daimler-Benz contemplated a true "merger of equals" in which Daimler-Benz and Chrysler would operate as two equal companies with Chrysler's management continuing to run U.S. operations and having parity in all respects with Daimler-Benz's management, including equal representation on the management team of the combined companies. According to the complaint, defendants never intended the transaction to be a merger of equals and never intended to have Chrysler run as an independent and co-equal cooperation. To the contrary, defendants always intended to relegate Chrysler to the status of a "division," and always intended to replace Chrysler's management with executives from Daimler-Benz's headquarters in Stuttgart. This plan culminated on Friday, November 17, 2000, when Mr. Schrempp fired James P. Holden from his post as chief executive officer of Chrysler's operation in North America, and replaced Mr. Holden with Dieter Zetsche and Wolfgang Bernhard, two of Mr. Schrempp's former confederates. All told, by Thanksgiving, Mr. Schrempp had fired almost all of Chrysler's top executives and now feels free to exercise openly his control over the combined companies. His cavalier attitude toward the American executives who believed his prior promises and the welfare of Chrysler's employees has so devastated the company that Mr. Schrempp has been forced to apologize to over 400 of Chrysler's managers to maintain order and in an effort to prevent the further downward spiral of DaimlerChrysler's stock which has dropped approximately 18% in the last three weeks. Plaintiff seeks actual damages which include the acquisition premium that defendants denied investors, under Section 10(b) of the Securities Exchange Act of 1934; an award of "rescissory" damages representing the difference between the value of the common stock of Chrysler that investors exchanged in the merger and the present value of the stock that investors now own in DaimlerChrysler, under Sections 11 and 12(a)(2) of the Securities Act of 1933; to award of compensatory and punitive damages in an amount sufficient to punish and make an example of defendants for lying to Chrysler's shareholders and the investing public at large, under common law fraud and conspiracy; and to unwind the transaction in order to allow Chrysler once again to exist as an independent corporation owned by Chrysler's shareholders and to return all value, including distributions, which DaimlerChrysler caused Chrysler to transfer since the merger, under Section 14(a) of the Securities Exchange Act of 1934. Contact: Stull, Stull & Brody, New York Tzivia Brody, Esq., 1-800-337-4983 e-mail: SSBNY@aol.com DAIMLERCHRYSLER: Detroit News Says Anger Brewed Before Kerkorian Sued --------------------------------------------------------------------- His frustration over events at DaimlerChrysler AG had been brewing for months before Kirk Kerkorian filed his $8-billion lawsuit against the German automaker on Monday. The 83-year-old billionaire wasn't just angry over a cancelled meeting with DaimlerChrysler Chairman Juergen Schrempp. He didn't focus only on the slumping stock price, the exodus of American executives, or even Schrempp's admission that he never intended DaimlerChrysler to be a merger of equals. Kerkorian simply had had enough. And he wasn't about to let Schrempp ignore him any longer. But Schrempp can't ignore Kerkorian now. The enigmatic financier, who owns a 4-percent stake in DaimlerChrysler, is a patient, tenacious opponent who is not going away. "When Kirk gets unhappy, it happens over time," said Terry Christensen, Kerkorian's attorney. "Since the beginning of the year, bit by bit, he got angrier." The anger boiled over Monday when Kerkorian's Tracinda Corp. filed suit in U.S. District Court in Delaware against DaimlerChrysler, Schrempp, and two other top German officials. The suit charged Schrempp with fraud in misrepresenting the DaimlerChrysler deal in 1998 as a merger of equals when he was, in fact, planning a takeover of Chrysler. Kerkorian, who owned a 13.7-percent stake in Chrysler, claims he never would have voted his shares in favor of a deal that stripped Chrysler of its autonomy and destroyed its executive roster. His lawsuit has been followed in rapid fashion by a series of copycat class- action suits. As of Wednesday, five law firms have filed nearly identical suits against Schrempp and DaimlerChrysler. Going toe-to-toe Kerkorian is approaching his showdown with Schrempp in the same way he stood toe-to-toe with Chrysler in 1995. When Chrysler fought off Kerkorian's own attempted buyout of the automaker, Kerkorian reloaded and threatened a proxy fight to recast the company's board of directors. After a protracted public battle, Chrysler ultimately gave Kerkorian what he wanted: a board seat for one of his deputies, a major stock buyback to boost the share price, and fatter dividend payouts. The legal fight launched by Kerkorian on Monday is shaping up as the same type of long-term war of nerves. "I would never say that Kirk wouldn't be willing to settle out of court," said Christensen. "But it's highly, highly improbable." DaimlerChrysler has yet to react to Kerkorian's suit except to publicly dismiss it as "without merit," according to a company spokesman. Legal papers served Christensen said that legal papers were served on DaimlerChrysler in Delaware on Tuesday, and that a German-translated version of the suit will be served on the company by early next week. From that point, DaimlerChrysler will have 20 days to respond in court. Unless DaimlerChrysler can get the case dismissed in court, depositions of company executives, including Schrempp, could begin in early spring. Kerkorian has been silently moving toward a confrontation with Schrempp since early this year. In February, he expressed his disappointment to associates about the departures of key Chrysler executives, including Chrysler's former chairman, Robert J. Eaton, and president, Thomas Stallkamp. $1.4-billion loss The steady deterioration in the company's stock also vexed him. As of Wednesday, the value of his 33 million shares has plummeted by about $1.4 billion since the DaimlerChrysler deal was finalized in November 1998. DaimlerChrysler shares closed Wednesday at $39.02, down 0.5 percent. Moreover, Kerkorian found himself unable to influence Schrempp or the DaimlerChrysler supervisory board. James Aljian, a top Kerkorian aide, served on the company's "shareholder committee," but that group lacked any authority in the German corporate governance system. Even so, the shareholder committee, including Aljian, tried to convince Schrempp that a stock-buyback program -- a favorite tactic of Kerkorian's -- could pump up the flagging stock price. Kerkorian himself hoped to push for a stock buyback in a personal meeting with Schrempp. Kerkorian rebuffed In May, Kerkorian was in Berlin at the same time as the DaimlerChrysler annual shareholders meeting. Aljian approached Schrempp to make time for a meeting with Kerkorian. Schrempp agreed, then cancelled the session. Kerkorian, associates say, was livid when he learned that Schrempp flew to his ranch in South Africa rather than meet with him. The rebuff intensified Kerkorian's analysis of the worsening situation within Chrysler. Through intermediaries, he learned of the sagging morale of executives and managers at Chrysler headquarters in Auburn Hills. He grew concerned that Schrempp had stripped the old Chrysler of any semblance of independence. By early October, Kerkorian asked Christensen to analyze possible courses of legal action. "We began exploring options," Christensen said. The last straw Then, on Oct. 30, the Financial Times article landed on Kerkorian's desk in his office just off of ritzy Rodeo Drive in Beverly Hills, Calif. Kerkorian, associates said, was floored by Schrempp's admission that the "merger of equals" laid out in the DaimlerChrysler proxy was never Schrempp's intent. "If I had gone and said Chrysler would be a division, everybody on their side would have said, there's no way we'll do a deal," Schrempp was quoted as saying. "But it's precisely what I wanted to do." Almost immediately, Kerkorian assembled his war machine -- Christensen's firm in Los Angeles; the New York law firm of Fried, Frank, Harris Shriver & Jacobson; and the New York public relations firm Citigate Sard Verbinnen. The lawsuit was prepared and filed 27 days later. The wave of class-action suits following Kerkorian's lead don't alter the dramatic showdown shaping up. Financier calls shots "Those are a sideshow," said Adam Pritchard, a securities-law professor at the University of Michigan. "Even if the suits are consolidated by the court, Kerkorian will be calling the shots." And once Kerkorian moves, he isn't in a negotiating mode. On Monday evening, a few hours after the suit was filed, a senior DaimlerChrysler lawyer telephoned Aljian. The lawyer, Kerkorian's associates say, asked if Schrempp could meet with Kerkorian to talk things over. The offer was turned down flat. (The Detroit News, November 30, 2000) DAIMLERCHRYSLER: Germans Say Daimler Overpaid For Crasher --------------------------------------------------------- From IBD News Services FRANKFURT, Germany - Pressure on DaimlerChrysler Chief Juergen Schrempp mounted on both sides of the Atlantic Ocean Wednesday after German shareholders urged him to quit over losses at Chrysler. Criticism in Germany grew as two more lawsuits were filed against DaimlerChrysler. Both sought class-action status and alleged that shareholders had been deceived by the company's 1998 tie-up with Chrysler, whose losses have triggered a slump in the group's share price to all-time lows. German and U.S. shareholders are attacking Schrempp for different reasons. Germans believe he paid too much for Chrysler, while the Americans are aghast at his admission that the link was conceived as a takeover of Chrysler, not a merger of equals. 'Toilet Paper' Shares U.S.-German tension came to the fore as a member of the group's supervisory board said Chrysler shares would be "toilet paper" if Daimler had not bought the company. And leading German newspapers blamed Chrysler for the share-price slide. Helmut Lense, who represents employees on DaimlerChrysler's supervisory board, described as immoral the $ 8 billion lawsuit filed earlier this week against the group by U.S. billionaire Kirk Kerkorian, DaimlerChrysler's third-largest shareholder. "Without the tie-up, he could use his shares as toilet paper at best," Lense said. "I think after the disaster at Chrysler and the consequences for German shareholders that (Schrempp) should think seriously about resigning," said Reinhild Keitel, a leading member of Germany's Association for Protection of Small Shareholders. Seeking Schrempp's Ouster Economics professor Ekkehard Wenger, a leading German shareholder activist and an outspoken critic of the 1998 merger of Daimler-Benz and Chrysler Corp, added fuel to the fire. He said he planned to call for the dismissal of Schrempp and supervisory board head Hilmar Kopper, who represents DaimlerChrysler's biggest shareholder, Deutsche Bank AG, at the next annual shareholders meeting. Klaus Nieding of Germany's Association for Securities Investment, a shareholder rights protection lobby, said Wenger's call would be premature, but agreed the clock was ticking. "We need to wait a little longer. The next quarter will be crucial," he said. "If Chrysler doesn't look good by then, it may be better to have a miserable end rather than endless misery." DaimlerChrysler sought to play down the U.S. lawsuits on Wednesday, saying it did not expect to face extra costs. 'Merger Of Equals' "As we view the Kerkorian case as totally unfounded, we see no reason to make provisions," a company spokesman said. Kerkorian has accused the company of presenting the original tie-up as a "merger of equals," though it later admitted it was a takeover. Sentiment on the stock has turned sour. It has lost a third of its value since the Chrysler deal. Few industry experts or lawyers think the lawsuits or motions will succeed, but they are a sign of increasing pressure on Schrempp to turn around the ailing Chrysler unit quickly. Cleaning House "The current news flow is problematic, and if Kerkorian's case were to be accepted by the courts it could be disastrous," said Trudbert Merkel, a fund manager at DEKA Deutsche Kapitalanlagegesellschaft. Earlier this month, Schrempp fired James Holden as head of Chrysler and sent in a team led by Dieter Zetsche, who had run the group's commercial vehicles unit, to get it back on track. Third-Quarter Deficit Chrysler turned in a third-quarter loss of $ 512 million. The company acknowledged that the situation there is worse than expected, but has not provided specifics. Some analysts question whether the group will be back in the black in 2001. "The uncertainty is very bad for the shares," said Pia-Christina Schulze, an analyst at Merck Finck & Co. "The question is what and how many skeletons Zetsche will find in the cupboard. Investors want to know if Chrysler is capable of being restructured." (Investor's Business Daily, November 30, 2000) ELECTRICITY SUPPLIERS: CA Plans to Present Strategy for Energy Crisis --------------------------------------------------------------------- Gov. Gray Davis is expected Friday to reveal his plan for solving California's energy crisis, and a lot of people think it's about time someone did something. Ever since the electricity market meltdown last summer, the question "Who should fix this mess?" has prompted a display of finger-pointing among government regulators, politicians, utility company executives, power plant operators and others. Consumers have waited months for someone -- anyone -- to rescue them. Every other week, it seems, they have been buffeted by the threat of blackouts and warnings that Pacific Gas & Electric Co.'s rate freeze may soon end, potentially exposing them to the kind of price increases that clobbered San Diego this year. Yet, so far, most of the parties with responsibility for protecting the public have suggested that someone else is more responsible. Experts say this behavior is, in part, a reflection of how complicated the energy problem is. But if it continues, impatient Californians may take matters into their own hands: A consumer group Tuesday proposed a ballot measure that would reverse much of what the Legislature did in 1996 when it deregulated electricity sales. "The most startling and shocking thing that deregulation has wrought is the decentralization of authority" over electricity sales, said Nettie Hoge of The Utility Reform Network in San Francisco. "The fragmentation just facilitates their ability to duck. But also, people don't know what to do." John Nelson, a PG&E spokesman, said he believes most public and private officials are trying hard to find a solution. Even so, "the huge difficulty for everyone is that there is no silver bullet," he added. "No one entity can come forward to say, 'Here is the way to fix it.'" Davis has expressed interest in a variety of remedies, some of which would require federal approval, according to sources who have met with his aides. These range from confiscating the profits of power suppliers and pushing for wholesale price caps throughout the West to letting him appoint the boards of several key agencies and promoting energy efficiency with government money. Davis also has considered calling a special legislative session on energy issues. But it's unclear how much of this might be announced. Here is a look at the groups and individuals holding some authority over California's energy system and what they have said so far about solving the current crisis. State regulators, utility firms and consumer groups have been counting on help from the Federal Energy Regulatory Commission, which oversees wholesale electricity transactions. They want it to order wholesale power suppliers to refund their profits, which many people consider excessive, although the companies insist they've done nothing wrong. California authorities also have asked Congress for assistance, and some federal lawmakers are talking tough. During federal hearings in September, Rep. Bob Filner, D-Chula Vista, called the wholesalers "criminals" because of what they were charging. Sen. Dianne Feinstein has proposed beefing up the federal commission's power to order refunds. But the commissioners say they lack the authority and evidence of wrongdoing to demand reimbursements. So instead, they have advised California on changes it should make to keep prices down. As the federal commission discovered, the trouble in California is figuring out which agency has responsibility for what. One of its recommendations -- to speed approval of power plants here -- was sent on to the California Energy Commission because it oversees plant permits. Another -- giving utility companies more leeway to buy electricity months ahead of when it is used -- was forwarded to the Public Utilities Commission, which oversees that. More suggestions were directed at the California Independent System Operator, which supervises most of the state's power grid, while others went to the California Power Exchange, which oversees electricity sales. Meanwhile, the federal recommendation to ease state restrictions on power-plant pollutants went to yet another agency -- the California Air Resources Board. And to California's Electricity Oversight Board, a largely invisible agency, the federal commission offered this advice: cease to exist because you're not needed at all. Since the Federal Energy Regulatory Commission hasn't yet found proof of price-gouging to warrant refunds, others in California hope the state's own investigators will. Among those looking are the Public Utilities Commission, the Energy Oversight Board and the state attorney general. But investigators with those agencies say they can't do their job without help from the federal commission because power suppliers won't turn over key financial data. As a result, the investigators have implored the federal agency to order the firms to provide it. Even as they attempt to rein in the profits of power companies by imposing rate caps and making other adjustments, California officials are desperately wooing the same companies to help solve the state's energy nightmare. Government officials reason that if they can persuade the companies to build more power plants in California, the resulting increase in the electricity supply will make prices plummet. But the companies are playing hard to get, contending their decision to build here hinges on how much profit the state will let them make. An attractive business climate "is imperative if we are to move forward with our power plant projects," Duke Energy Co. warned recently. Many people also are seeking solutions from California's three major utility firms, including PG&E. Critics have accused them of failing in the summer to use what authority they had to buy relatively cheap electricity in advance of its use, and they have urged the utilities to do a better job of that in the future. But PG&E wants help with a bigger problem: the $ 3.4 billion in unexpected wholesale electricity bills that it incurred in the summer. If federal and state regulators won't order wholesale power firms to refund that money, PG&E wants consumers to bear the cost. Because of the rate freeze, however, PG&E can't force consumers to pay it. Several months ago, it asked state lawmakers to pass the bills on to the public. That went nowhere. So now, PG&E has taken the request to the Public Utilities Commission and to federal court. In the absence of anyone who can assume clear leadership over the state's problem, fingers increasingly are being pointed at consumers. Since electricity consumption among California residents jumped 24 percent in June this year over the previous June, they're being asked to conserve more, for one thing. Then there's that $ 3.4 billion that PG&E wants them to pay. And once the rate freeze is declared over, which PG&E wants to have happen by spring, experts say consumer bills will soar. Two class-action lawsuits were filed this week in Southern California, trying to force power suppliers to refund their profits. But short of getting help from the courts or through the ballot initiative proposed this week, many consumers are looking for protection from their elected leaders, especially the state's chief executive in Sacramento. Gray Davis may be California's most powerful public figure, but when it has come to solving the power crisis in recent months, his political juice has seemed sorely constrained. That's not to say Davis hasn't been busy. He has called for studies, issued executive orders, created a team of energy advisers and signed a few laws intended to ease the problem, including one to speed construction of new plants. But lately the governor has been forced to spend a lot of time begging the Federal Energy Regulatory Commission for help. And that strikes many people -- including Davis -- as an unfortunate comment on the fractured and sometimes incomprehensible division of authority presiding over California's precarious energy future. Given "the severe flaws" in the state's electricity markets, Davis declared recently, decisions about how to fix them "must not be left to technocrats that neither live in California nor are accountable to Californians." Whether California is ready for that challenge remains to be seen. Even if Davis proposes new laws Friday, as is likely, he'll have to depend on the Legislature to pass them. That means dumping much of the problem back into the lap of lawmakers who created the deregulated system in the first place. Among those anxiously awaiting the governor's plan is Carl Wood, a Public Utilities Commission member who was appointed by Davis. "I'm hoping that it will provide a framework" for dealing with the crisis, Wood said. At the same time, though, he said he fears the flaws in California's electricity infrastructure will prove difficult to repair. Looking back on the events of the past few months, Wood said, "I am very skeptical of the ability of this market to work at all." (San Jose Mercury News, November 30, 2000) FERDINAND MARCOS: Zamora Criticized U.S. Judge for Terminating Deal ------------------------------------------------------------------- A U.S. federal judge was being unfair when he blamed the Philippine president for the collapse of a $150 million settlement for victims of human rights abuses, a senior presidential aide said. The money is supposed to compensate people who suffered under the regime of late Philippine dictator Ferdinand Marcos. But U.S. District Judge Manuel Real terminated the settlement Tuesday at the request of the human rights victims, who said the Philippine government had blocked the transfer of funds from Swiss bank accounts to pay their claims. Real blamed President Joseph Estrada in part for the settlement's collapse. ''I think that is unfair,'' Presidential Executive Secretary Ronaldo Zamora said of Real's statement. Zamora said the administration sought approval of the proposed settlement with the government's Sandiganbayan anti-graft court but was rejected. ''We can't do anything. We cannot spend the money,'' he said in an interview with DZRH radio. The Sandiganbayan has ruled that the money cannot be used by the Marcoses to compensate the victims of human rights abuses. It says the money in the Swiss accounts could not have been legally acquired by the Marcos family and should go to the government. Real's ruling restores a nearly $2 billion judgment handed down by a Hawaii federal court jury in 1995 against the Marcos estate. Including interest, that award now stands at $2.9 billion, attorneys for the human rights victims said. However, Real gave Marcos' widow, Imelda, a final chance to end the case by paying the $150 million settlement plus $12 million in interest within four months. Zamora said lawyers for Mrs. Marcos say she doesn't have the money. The class-action lawsuit by 9,539 Filipinos was filed against the Marcos estate in 1986, the year Marcos was ousted in a popular revolt and fled to Hawaii. He died there in 1989. The Hawaii court found the Marcos estate liable for compensation for the torture, murder and disappearance of thousands of dissidents who fought his rule. (AP Online, November 30, 2000) LERNOUT & HAUSPIE: Belgian Speech Software Maker Files for Bankruptcy --------------------------------------------------------------------- Facing scrutiny on accounting irregularities and lawsuits from both sides of the Atlantic, Lernout & Hauspie Speech Products N.V., a Belgian maker of speech-recognition software, filed for Chapter 11 bankruptcy protection in Delaware on Wednesday, November 29. The company's Dictaphone division, a Connecticut-based rival that it bought earlier this year, and L.& H. Holdings USA, a unit formed to own the recently purchased Dragon Systems, also filed for protection. Lernout & Hauspie also said it would seek similar protection in Belgium, where it became a shining star of Europe's high-tech industry before falling under the weight of suspected financial misconduct. Earlier this month, the company said it would revise financial statements since 1998 because of "errors and irregularities" in accounting. The company has $255.3 million in short-term loans, including more than $200 million due by the end of March, and is burdened by long-term debt of $234.3 million, according to the filing, made in United States Bankruptcy Court in Wilmington, Del. The company listed assets of $2.37 billion. "This court-supervised process will enable us to focus on realizing the enormous commercial potential of L.& H.'s considerable technology resources, while continuing to investigate and remediate problems emanating from the past," John Duerden, the president and chief executive, said in a statement. Within the last year, as its stock price soared above $70, Lernout & Hauspie bought two leading American speech-recognition software makers, Dictaphone and Dragon Systems. But Wednesday's bankruptcy filing accelerated the company's long tumble from the top of the industry, which included the recent resignation of its founders, Jo Lernout and Pol Hauspie. Lernout & Hauspie's shares were suspended indefinitely this month on Easdaq, the European stock market, and on Nasdaq, where the price had dropped below $7. The Securities and Exchange Commission has begun an investigation into the company's accounting practices and its revenues in South Korea, where its sales jumped to $127 million for the first half of this year, from only $1.2 million during the 1999 period. Daniel Hart, the company's general counsel, said the discovery of "a very significant cash shortfall on the balance sheet of the Korean subsidiary" played a significant role in the decision to file for protection. Earlier Wednesday, a group representing 14,000 minority shareholders in Europe said it had asked a Belgian prosecutor to demand that the company seek protection in commercial court to avoid bankruptcy. Stonington Partners, which owned 96 percent of Dictaphone before its sale to Lernout & Hauspie, filed a lawsuit in Delaware Chancery Court on Monday, seeking to rescind the $511 million merger. Judith A. Witterschein, general counsel for the New York-based investment firm, said financial figures used in merger talks amounted to fraud. Lernout & Hauspie also faces a federal class-action lawsuit in Massachusetts on behalf of institutional and individual investors. A person close to Lernout & Hauspie, who spoke on condition of anonymity, said the company's new management arrived to find "a culture of secrecy," in which financial information was withheld not only from the public, but from its own accountants. "We intend to refer this matter to criminal authorities if we don't get some pretty quick answers from prior management," the person said. The founders could not be reached for comment in Belgium. Calls to the company's American offices were referred to Lanny J. Davis, a former special counsel for President Clinton hired by Lernout & Hauspie's new management, who said the filing "represents this company's best chance to clean up the mess" and allow the new team to build upon its technology. Though the company is based in Ieper, Belgium, it decided to file for bankruptcy protection in the United States because of the lawsuits here and its holdings in Dictaphone, said Luc Despins, a partner with Milbank, Tweed, Hadley & McCloy of New York, which prepared the filing. "We hope this Chapter 11 case gives this company the breathing room it needs," Mr. Despins said. Mr. Lernout and Mr. Hauspie founded the company in 1987 after learning of a primitive version of voice recognition software in Asia. They bought the rights to similar technology from Belgian scientists and brought them into the company. Money was so tight that the founders canvassed rural areas to sign up farmers as shareholders. In 1993, AT&T bought a 5 percent stake for $5 million, giving the men their first financial windfall. They took the company public on Nasdaq two years later, and the price rose more than 40 percent on its first day of trading. The men still own about 30 percent of the company. Dictaphone, founded in 1888 by Alexander Graham Bell, gained fame for its business dictating equipment before sales plunged as its technology became obsolete. (The New York Times, November 30, 2000) MILLER INDUSTRIES: Announces Dismissal of Shareholder Lawsuit in GA ------------------------------------------------------------------- On November 27, 2000, Miller Industries, Inc. (NYSE: MLR) was notified that the United States District Court for the Northern District of Georgia had entered summary judgment on November 20, 2000 in favor of the Defendants, dismissing the securities class action lawsuit, relating to events between November, 1996 and September, 1997, which has been described in its prior public filings. On November 21, 2000, the Company also was notified that the Tennessee Supreme Court had denied Plaintiffs' Writ of Certiorari regarding the affirmance by the Tennessee Court of Appeals of the dismissal of the securities class action complaint in the Hamilton County, Tennessee Chancery Court. That ruling terminated the shareholder suit brought at the State Court level in Tennessee. These favorable rulings dismiss all pending shareholder litigation against the Company. In granting Defendants' motion for summary judgment, the Federal District Court in Atlanta found that Plaintiff's allegations were without a sufficient basis to present a legitimate issue for trial. The Court's most recent order held that Plaintiffs had failed to present any evidence relating to 5 of the 7 alleged accounting violations which had survived Defendants' initial motion to dismiss in the Court's July, 1998 order. As to the remaining 2 alleged accounting violations, the Court found that the Company made no actionable statements or omissions. MYLAN LABORATORIES: FTC OKs $100M Settlement in Drug Price Fixing Suit ---------------------------------------------------------------------- The Federal Trade Commission has approved a tentative $100 million settlement of claims that Mylan Laboratories Inc. fixed prices of anti-anxiety drugs widely used by senior citizens, the company said Wednesday. If approved, the settlement would be the largest in FTC history. Attorneys general in 32 states and U.S. District Judge Thomas Hogan also must approve the settlement. Thirty-two states, the District of Columbia, patients and the federal government filed lawsuits in 1998 accusing the Pittsburgh-based pharmaceutical giant of illegally increasing prices for two tranquilizers and cutting off competition. The drugs are used to treat Alzheimer's disease and other ailments. Pennsylvania Attorney General Mike Fisher said the company hiked the price of clorazepate 3,000 percent in January 1998 and Lorazepam by 2,500 percent in March that year. If finalized, the $100 million will be divided among the states, including Pennsylvania, who sued Mylan. The money then will be used to repay consumers and state agencies who paid the hiked prices for the drugs. Other states that sued include Texas, Alaska, California, Louisiana, Minnesota, North Carolina, Tennessee and Vermont. The lawsuits alleged that Mylan cut off competition by striking an exclusive agreement with Profarmaco S.R.L. in Milan, Italy, a crucial supplier. The suits said other suppliers could not make enough of the drugs for Mylan's competitors. The company says the deal was intended to ensure Mylan's source of ingredients would not be interrupted. (Washington, (AP), November 29, 2000) NETMANAGE, INC: Schubert & Reed Files Securities Suit in California ------------------------------------------------------------------- The parties to the action pending in the United States District Court For the Northern District of California entitled Sucher v. Alon, et al., No. 98-17323, on appeal to the United States Court of Appeals For the Ninth Circuit, Docket No. 98-17323 (the "Derivative Action"), have entered into a Stipulation of Settlement to resolve the claims asserted therein. Pursuant to an Order of the United States District Court for the Northern District of California, a hearing will be held on January 26, 2001 at 10:00 a.m. before the Honorable Charles R. Breyer, United States District Court Judge, for the purpose of determining: (1) whether the proposed settlement of the claims in the Derivative Action should be approved by the Court as fair, reasonable and adequate; (2) whether the application of Plaintiffs' Counsel for the payment of attorneys' fees and reimbursement of expenses incurred in connection with the Derivative Action should be approved; and (3) whether judgment should be entered, dismissing the Derivative Action with prejudice as against all defendants in the Derivative Action. Contact: Schubert & Reed LLP, San Francisco Juden Justice Reed, 415/788-4220 PACIFICARE HEALTH: Milberg Weiss Files Securities Suit in California -------------------------------------------------------------------- Milberg Weiss (http://www.milberg.com/pacificare/)announced that a class action has been commenced in the United States District Court for the Central District of California on behalf of those who purchased or otherwise acquired PacifiCare Health Systems, Inc. (NASDAQ:PHSY) securities during the period between October 27, 1999 and October 10, 2000 (the "Class Period"). The complaint charges PacifiCare and certain of its officers, directors and one of its largest shareholders with violations of the Securities Exchange Act of 1934. The complaint alleges that PacifiCare's interim results were false and materially misstated due to its failure to properly record medical expenses, particularly its under-accrual of incurred but not reported costs ("IBNR"). In order to inflate the price of PacifiCare's stock, defendants caused the Company to falsely report its results for Q3 1999, Q4 1999, Q1 2000 and Q2 2000 by misstating its results through its deliberate under-accrual of medical expenses and its reserves for doubtful accounts receivable, all of which resulted in artificially inflating PacifiCare's earnings per share ("EPS"). The complaint further alleges that defendants misrepresented that the revenues PacifiCare was reporting were consistent with Generally Accepted Accounting Principles ("GAAP"), which, together with defendants' false representations that PacifiCare would post Q3 EPS of$1.90, operated to artificially inflate the price of PacifiCare stock to a Class Period high of $ 72-5/16 on June 16, 2000. While PacifiCare's shares were inflated, defendants sold approximately$50,000,000 worth of PacifiCare stock. On October 10, 2000, PacifiCare revealed that it was in fact suffering a huge decline in revenues, was not posting EPS growth as earlier represented, and contrary to defendants' repeated assurances, PacifiCare was forced to reveal the problems it had been experiencing during the Class Period in attempting to grow its business. This announcement caused its stock price to drop to as low as $14-5/8 (or over $18 per share) on record volume of 5.6 million shares on October 11, 2000, causing tens of millions of dollars in damages to members of the Class. Contact: Milberg Weiss William Lerach, 800/449-4900 wsl@mwbhl.com PADUCAH GASEOUS: DOJ Wants More Time to Consider Whether to Join ---------------------------------------------------------------- The U.S. Justice Department has yet to decide whether to join a lawsuit against the former operators of the Paducah Gaseous Diffusion Plant, and federal prosecutors plan to ask for a fourth extension to the deadline for making that decision. Federal law requires the Justice Department to investigate claims raised in whistleblower lawsuits that allege fraud against the government. The department also has the option of joining such suits as a plaintiff and sharing in any financial recovery. Bill Campbell, an assistant to U.S. Attorney Steve Reed, said an extension to March would be requested, the latest deadline for the department to disclose its intentions. Three times previously, federal prosecutors have asked for an extension to decide whether to join the suit. The first came in July 1999, the second in November 1999 and the third in April. The lawsuit was filed under seal in U.S. District Court at Paducah in June 1999. It alleged that two companies that ran the government's uranium-separation plant for nearly 50 years covered up environmental problems and health issues to obtain financial bonuses. The amount of damages claimed has never been specified. But Joseph Egan, a lawyer for the plaintiffs, said the total could run into the tens of millions of dollars. The plaintiffs are three current or former plant workers and the Washington-based environmental group Natural Resources Defense Council. Damages are unclear because the plaintiffs do not know the full amount the Department of Energy and its predecessors paid Union Carbide, Martin Marietta and its successor, Lockheed Martin, to enrich uranium at the plant and to monitor and protect the environment. Federal authorities have conducted a detailed investigation into the suit's allegations. Reed characterized the probe as "massive, in which we have expended an extreme amount of time and resources." He said the government would spend whatever was required to verify or disprove the suit's claims. Campbell said the government has interviewed several hundred people and has reviewed a large number of the estimated 30 million pages of records. He said he thinks the investigation is nearing the end. "It may seem like it's taken a long time, but it's not unusual," Reed said of the investigation. (The Associated Press State & Local Wire, November 30, 2000) PRESIDENTIAL ELECTION: Ballots Trucked to Florida Capital --------------------------------------------------------- Helicopters speeding above a highway convoy. Bystanders gawking and snapping photos. An unassuming truck driver/elections official getting his 15 minutes of fame. With inevitable echoes of O.J. Simpson's slow-speed Bronco ride, the freeway odyssey of a truckload of disputed presidential ballots became a metaphor Thursday for a presidential race-turned-public spectacle. The ballots were hauled from West Palm Beach to the state capital, Tallahassee, where they were stored in a courthouse vault. A judge will consider this weekend whether their dimples, chads and punch holes should be examined anew. The trip made for street theater - literally - as cameras chronicled the truck's every move. ``I don't know if it compares to the white Bronco, but it sure is funny,'' said John Harvey, 37, of Tallahassee, among 30 people watching as the truck backed into a courthouse garage. Was it any wonder that the lunch break took place at a highway rest stop not far from Disney World? Or that the route took the ballots over the Ronald Reagan Turnpike? Or that the much-watched journey began with the ballots stuck in rush hour traffic - much like the stuck-in-limbo presidential race? ``Oh, my God. The whole world is watching!'' declared Lt. Jim Kersey, driving the caravan's lead car. Well, not quite. But O.J. Simpson, now a Florida resident, couldn't resist tuning in. ``In my case it may have been a little more intriguing because people didn't know what was going to happen,'' said Simpson of events six years ago. ``Here they know the ballots are going to get to Tallahassee.'' Retired police officer Rodger England of Sorrento drove to a rest stop in Ocala to get a glimpse of the yellow Ryder truck and its armada of escort vehicles. ``It's history in the making,'' said England. ``It's something you gotta see. This may turn out to be nothing, but then again it may be really something.'' Gore was hoping for the latter. Hoping Leon County Judge N. Sanders Saul would order that the ballots be recounted to see if Gore votes were hidden among those previously rejected. A second load of 600,000 ballots, from Miami-Dade County, were packed into 82 boxes and stored on the 19th floor of the Miami's local government building to await a similar trip north on Friday. Among the ballots were 10,535 in dispute because they did not record a vote in the presidential race. But the spotlight Thursday belonged to the 462,000 ballots from Palm Beach County, hauled north by driver Tony Enos, the county's voting systems coordinator. Even the caravan's lunchtime break at a highway rest stop attracted attention, with Enos pausing to give a few interviews as he bought some orange juice and bystanders posed for pictures with the truck. ``It's going good - keeping two hands on the wheel,'' he reported. Video coverage of the truck's eight-hour, 450-mile journey drew people to the edges of the Ronald Reagan Turnpike and Interstate 75 and 10. Spectators took pictures at rest stops and from bridges, and someone draped a sign reading ``No Chad Zone'' from an overpass near Orlando. Doris Hill, 74, of Birmingham, Ala., who posed for a photo at a rest stop, expressed concern about when the election will end. ``They may have to change the rules and leave Clinton in office until they get this settled,'' she said. (Fla. (AP)) PRESIDENTIAL ELECTION: Fla. Republican Legislature Urges Special Session ------------------------------------------------------------------------ Florida's Republican Legislature is ready to jump in and do what an election so far hasn't been able to make George W. Bush president. Al Gore's camp says the lawmakers could cause a constitutional crisis. A legislative committee voted Thursday to recommend to state House and Senate leaders that they call a special session ``as soon as practicable'' to name Florida's presidential electors. Top lawmakers said it would probably happen early next week. The vote brought a strong reaction from Democrat Al Gore's running mate, Sen. Joseph Lieberman, who said it was ``just wrong and sets a terrible precedent'' for other states' lawmakers to meddle in future presidential elections. ``It threatens to put us into a constitutional crisis, which we are not in now by any stretch of the imagination,'' Lieberman said. He accused the Florida Legislature of trying to make an ``end run'' around the election. Republicans say the U.S. Constitution allows them to step in because the legal wrangling over who won Florida could drag past the Dec. 12 deadline for naming voters to the Electoral College, putting in jeopardy the state's participation. Democrats challenge that notion, saying the state has certified Bush the winner and the only thing that could put that in question would be if Gore won his court challenge. Bush, asked in Texas about the situation, said simply: ``I've won three counts and I think it's time to get some finality to the process.'' House Speaker Tom Feeney and Senate President John McKay would have to call for a special session and could do so as early as Friday. The session could begin Monday, but staff members said Tuesday was more likely. Bush's younger brother, Florida Gov. Jeb Bush, was still holding out the possibility that Gore's court challenges might be settled in the Republicans' favor, making legislative intervention moot. ``I don't believe it should be done unless there is uncertainty,'' Jeb Bush said. ``If this could be cleared prior to Dec. 12 then, clearly, the Legislature doesn't have to act.'' But he said he was willing to sign into law a bill creating a slate of electors ``if the bill is acceptable.'' ``I can't recuse myself from my constitutional duties as governor of the state and I can't recuse myself, frankly, of being my brother's brother either,'' Bush said. Meanwhile, both candidates turned to the U.S. Supreme Court, Republican Bush defending the lawmakers' power to get involved and Gore challenging it. ``It is not self-evident that such direct legislative appointment is even available'' under federal law, Gore's lawyers argued. But Bush's lawyers said in their filing that ``the Constitution specifically assigns the power to determine the manner of appointing presidential electors to the state legislature.'' Republicans outnumber Democrats 102-58 in the Legislature and Democrats accused them of charging into a session to protect Bush's 537-vote win in Florida from the possibility that Gore would be found in a legal contest to have won. Republicans were trying to decide if they needed to actually pass a bill that Jeb Bush would be required to sign. They were studying the legality of using a resolution that wouldn't have to be signed by the governor to name the electors. If the leaders do call the special session, it would take a minimum of five days under normal Senate and House rules, although if Republicans could muster enough votes, they could waive some of those rules and speed the process. If they decide to pass a resolution, rather than a bill, that could also speed the process by a day. But Democrats could slow things with amendments and with lengthy debate, although there are rules that limit the time of debate in both chambers. The committee's recommendation for a special session came on a straight party-line vote. Florida's lawmakers directly chose the state's electors once before, in 1868, when the Reconstruction Republican Legislature voted for Republican Ulysses S. Grant. At the time, Florida was occupied by federal troops in the wake of the Civil War. The only time since then that any legislature has selected electors was in 1876 in Colorado. (Tallahassee, Fla. (AP)) PSINet INC: Files Motions to Dismiss Securities Litigation ---------------------------------------------------------- PSINet Inc. (Nasdaq:PSIX), announced on November 29 that it has filed motions to dismiss 15 purported class action complaints alleging violations of securities laws by the company and certain of its senior officers and directors that had been filed since November 3, 2000. In its motions, PSINet stated that all of the complaints fall within the category of claims that Congress clearly prohibited under the Private Securities Litigation Reform Act of 1995 and therefore should be dismissed. The company says that the rapidity with which the complaints were filed, along with the repetition of obvious typographical and factual errors, demonstrates that plaintiffs and their counsel made their claims without engaging in reasonable investigation or factual inquiry before asserting claims that are simply untrue. QUINTUS CORPORATION: Wolf Popper Expands Lawsuit over Mustang.com Merger ------------------------------------------------------------------------ On November 16, 2000, Wolf Popper LLP filed a securities class action against Quintus Corporation (Nasdaq: QNTS) and certain of its senior officers. The class action was filed in the United States District Court for the Northern District of California. Based on new developments, Wolf Popper filed an amended complaint extending the class period back to January 19, 2000, and asserting additional claims on behalf of those who acquired Quintus securities in the merger with Mustang.com, Inc. On November 15, 2000, Quintus announced that it had delayed filing with the Securities and Exchange Commission its Form 10-Q for the quarter ended September 30, 2000, pending completion of the investigation of revenue and accounts receivable for that period and earlier periods. The company also announced that the chief executive officer of Quintus had been placed on "administrative leave" by the Company's Board of Directors. On November 22, 2000, Quintus announced that "revenue was improperly recognized for three transactions with respect to which the company relied on falsified documentation." The three transactions included (i) revenues of approximately $4.5 million, which were improperly recognized in the quarter ending December 31, 1999; (ii) revenues of approximately $2 million, which were improperly recognized in the quarter ending June 30, 2000; and (iii) revenues of approximately 7 million, which were improperly recognized in the quarter ending September 30, 2000. The Company also announced that it had terminated its Chairman and Chief Executive Officer, Alan Anderson, "for cause." Based on these new developments, Wolf Popper filed an amended complaint on behalf of those who: (i) acquired Quintus securities in the merger of Mustang.com, Inc. into Quintus, which closed on May 18, 2000 or (ii) purchased Quintus common stock on the open market during the period January 19, 2000 through November 14, 2000. Contact: Carl L. Stine of WOLF POPPER LLP, 212-451-9668, 212-451-9642, 212-451-9625, or toll free, 877-370-7703, IRRep@wolfpopper.com TOBACCO LITIGATION: Appellate Court Affirms Denial of Geiger Action ------------------------------------------------------------------- A New York state appellate court has affirmed denial of class-action status for a lawsuit that had been filed against R.J. Reynolds Tobacco Company and other cigarette manufacturers. The lawsuit against cigarette manufacturers was filed by the estate of Anita Geiger and other plaintiffs in 1997. The plaintiffs had sought class certification for New York state residents who were alleged to have contracted lung and throat cancer as a result of cigarette smoking. An appellate court in the state of New York (Second Judicial Department) has now upheld the decision made by a trial judge in Queens, N.Y., in June 1999 to deny class- action certification for the lawsuit. In its ruling, the appellate court stated: "The purportedly common issues proposed by the plaintiffs in their complaint are actually dependent on the resolution of issues such as addiction and causation as to each individual member of the proposed class. Issues of causation must be resolved on a case- by-case basis, and thus, the difficult questions of causation and the extent of injuries weigh against class action treatment ... even if there are common issues in this case, those issues do not predominate." "The court's decision is very sensible, and consistent with the facts of the case and the law," said Daniel W. Donahue, senior vice president and deputy general counsel of R.J. Reynolds Tobacco Co. "With very limited exceptions, courts have rejected smoker class-action lawsuits. Every smoker's circumstances are unique. Class actions are not appropriate for litigating claims by groups of people who each have different personal smoking and medical histories. This decision and many other similar rulings show that most courts recognize that a class action by smokers claiming damages for alleged injuries should not be certified." R.J. Reynolds Tobacco Company is a wholly owned subsidiary of R.J. Reynolds Tobacco Holdings, Inc. (NYSE: RJR). R.J. Reynolds Tobacco Company is the second-largest tobacco company in the United States, manufacturing about one of every four cigarettes sold in the United States. Reynolds Tobacco's product line includes four of the nation's 10 best-selling cigarette brands: Winston, Camel, Salem and Doral. For more information, visit the company's web site at www.rjrt.com. Source: R.J. Reynolds Tobacco Company TRILOGY SOFTWARE: TX Court Prohibits Tender Offer for pcOrder.com, Inc. ----------------------------------------------------------------------- Trilogy Software, Inc. and pcOrder.com, Inc. (Nasdaq: PCOR) jointly announced that in connection with a lawsuit filed on November 28, 2000, a Texas state court issued a temporary restraining order that prohibits them from proceeding with Trilogy's cash tender offer to acquire all of pcOrder's outstanding Class A common stock at a price of $6.375 per share. Trilogy, pcOrder and the individual members of the pcOrder Board of Directors are named as defendants in the action. The order was issued on an ex parte basis and the defendants in the action were not notified that an application had been made to the court for a temporary restraining order and the defendants were not provided with an opportunity to contest the application. The lawsuit and the order have been served on pcOrder. The order restrains until December 12, 2000, or further order of the court, Trilogy, pcOrder and the directors from proceeding with the merger agreement between Trilogy and pcOrder, proceeding with the tender offer by Trilogy for the purchase of pcOrder shares or consummating the tender offer by Trilogy. The order further provides for a hearing on the plaintiff's motion for a temporary injunction on December 12, 2000. Trilogy and pcOrder intend to vigorously defend the lawsuit. Including this latest lawsuit, three purported class action lawsuits have been filed in Texas District Court to date with respect to the tender offer and merger. The defendants have removed one of these actions to Federal court. Five cases had been filed in Delaware Chancery Court, but they subsequently were voluntarily dismissed by the plaintiffs. UNISYS CORP: Securities Suit Will Continue, E.D. Pa. Says --------------------------------------------------------- U.S. District Judge Clarence J. Newcomer of the Eastern District of Pennsylvania refused to dismiss a shareholder class action lodged against Unisys Corp. and its principals, finding that the plaintiffs had sufficiently pleaded a motive on behalf of the company to make fraudulent misrepresentations regarding contracts with private industry and the federal government. In re Unisys Corp. Securities Litigation, No. 00-1849 (E.D. Pa., Sept. 21, 2000). The action, brought on behalf of all purchasers of common stock in the information-technology concern between May and October 1999, also named President/CEO/Chairman Larry Weinbach; Vice President--Investor Relations Jack McHale; and former Executive Vice President--Global Customer Services Gerald Gagliardi, who left Unisys concurrent with the third-quarter 1999 disclosures. The complaint says that on May 4, 1999, the defendants disseminated knowingly false and misleading statements concerning Unisys' entry into long-time service contracts with British Telecommunications (five years, $200 million estimated revenue) and the U.S. General Services Administration (10 years, $445 million estimated revenue). The following July 15, Unisys announced a 58 percent increase in second-quarter earnings per share and 9 percent revenue growth, and attributed such in part to the BT and GSA contracts.Unisys' share price averaged $37 to $50 during the class period, up from $31.875 on May 3, 1999. On Oct. 14, 1999, the company disclosed its third-quarter revenues. Weinbach attributed the failure to meet expectations in part on delays in performance on the BT and GSA contracts and failure to be competitive on contract bids. Unisys' share price fell to $22 by Oct. 19, and has yet to recover to the levels reached during the class period. The class complaint alleges that the defendants failed to disclose that the contracts with BT and GSA were subject to contingencies and regulatory approvals. Further, the shareholders contend that the GSA contract did not commit the government to utilize Unisys' services, but only to be retained as one of 12 contractors that could be chosen for work upon a competitive bid. Further, the plaintiffs plead the existence of motivational and circumstantial evidence to support their allegations of fraudulent intent. They asserted that the defendants sought to inflate the stock price so as to entice its preferred shareholders to take a stock-for-stock conversion for their upcoming dividend, rather than a cash payout estimated at $1 billion. A second motive for inflating the stock price was ascribed to Unisys' June 1999 stock-for-stock acquisition of the software developer PulsePoint. PulsePoint's shareholders were to have received $6.60 worth of Unisys stock under the merger agreement, the plaintiffs asserted, and the inflated stock price minimized the number of shares to be delivered. Lastly, the plaintiffs pointed to the fact that Gagliardi and McHale dumped a significant amount of their own Unisys holdings by August 1999. Judge Newcomer found these allegations sufficient to avoid dismissal under the requirements of the Private Securities Litigation Reform Act. "The Court is not persuaded that defendants' statements were forward looking," he wrote. "Here, plaintiffs plead particularized factual allegations that defendants' knew that defendants' revenue estimates were false and misleading when made." (Government Contract Litigation Reporter, October 26, 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. 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