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

               Thursday, April 5, 2001, Vol. 3, No. 67

                             Headlines

99-CENT STORES: 11 Immigrant Workers In Abuse Suit Will Share $ 100,000
ASBESTOS LITIGATION: W.R. Grace Files for Ch. 11 Relief
AURELIA PUCINSKI: IL Ap Ct Affirms $10 Fee on Civil Filings
AURELIA PUCINSKI: IL Ap Ct Affirms $10 Fee on Civil Filings
CAMBRIDGE TECHNOLOGY: Announces Dismissal of 1999 Securities Lawsuits

H&R BLOCK: Lawyers Accuse of Collusion in Settlement over RALs
HIH INSURANCE: Australian Shareholders Association Seeks Legal Advice
HMOs: N.Y. Ct Rejects Bad-Faith Claim, Leaves Suit over Fraud Intact
HOLOCAUST VICTIMS: Ap Ct Stays On Sidelines As Dispute On Case Heats Up
INCO LTD: Reports Says Cancer Risk 40 Times Higher Than Ont. Standards

LEAD PAINT: ICI Price Tumbles As Brokers Fret On Suits and Tough Markets
MICROSOFT CORP: Cohen, Milstein Files Consolidated Race & Sex Bias Suit
MOBIL AUSTRALIA: Has Paid $10.6 Mil for Aircraft Fuel Contamination
MONSANTO CO: Residents Claim Company Poisoned City for Decades with PCBs
ORANGE ATTORNEYS: Paul T. Locke Files Suit over Fraud Re Big Fat Fish

RED HAT: Milberg Weiss Announces Filing of Securities Suit in New York
SALOMON BROTHERS: Sp Ct Remands Suit By Trust Appealing for ERISA Claims
SALOMON SMITH: Contests NY Suit By Hedge Fund over Misuse of Money
SMITH BARNEY: Settles with IRS and SEC Re Mark-ups By Broker-Dealers
ST. CHARLES: Student's Lawsuit Says School Mold Caused Ailments

TOBACCO LITIGATION: Blue Cross Case Set for Trial in Brooklyn
TOBACCO LITIGATION: Damage Trial Winds Up For Flight Attendants' Suit
TWA: Klein & Solomon Files Suit over NYC-Tel Aviv Route Cancellation
U OF MI: Judge Denies Stay To Law School Using Race As Admission Factor

* Senate Panel Queries Energy Firms' Lower Rates Bigger Profits Messages

                               *********

99-CENT STORES: 11 Immigrant Workers In Abuse Suit Will Share $ 100,000
-----------------------------------------------------------------------
Eleven Hispanic workers will divide $ 100,000 from the operators of a
chain of 99-cent stores to settle a lawsuit that accused the employer of
treating the workers "like animals."

The settlement was announced Tuesday, less than three months after the
workers charged that bosses locked them in unopened stores overnight and
failed to pay them fair wages and overtime despite shifts that spanned 72
consecutive hours.

The workers sued in U.S. District Court in January, claiming that
possibly hundreds of workers were subjected to"inhumane"working
conditions.

Charged were Universal Distribution Center LLC of North Bergen, Dollar
Strength LLC of Hackensack, Dollar Star LLC of Elizabeth, and company
officers Kishor Thakkar, Mahommed Yousuf, and Mohammed Arif.

The settlement ends the effort to gain class-action status for 1 the
lawsuit.

The chain has about 40 stores in Connecticut, New Jersey, and New York
under various names, including 99-cent Dreams.

The settlement was reached with mediator Paul Schachter of the Center for
Creative Mediation in New York, said the American Civil Liberties Union
of New Jersey, which represented the workers, most of whom were Mexican.

"The defendants apologized to the workers at the conclusion of the
mediation, which was well received,"according to a joint statement issued
by the ACLU and the lawyer for the chain, Robert E. Margulies.

The chain agreed to ensure compliance with wage and hour laws by
distributing notices in English and Spanish to all employees explaining
the laws and workplace protections, the statement said.

The distribution of the settlement has not yet been determined, ACLU
lawyer Jennifer Ching said.

"These workers set an important precedent for all immigrant workers in
New Jersey by coming forward to denounce the abuses they faced,"said
Denis Johnston, director of the immigrant rights program of the American
Friends Service Committee in Newark.

The workers, some of whom said they lacked proper documents to be
employed, said the chain liked to recruit illegal aliens, believing the
workers would be more susceptible to threats of being reported to the
Immigration and Naturalization Service.

Although promised salaries of $ 5 to $ 9 an hour, workers got a far lower
rate, and no overtime, generally getting $ 230 for a seven-day workweek
of about 12 hours a day, or $ 2.74 an hour, about half the state minimum
wage, the lawsuit said. (The Record (Bergen County, NJ), April 4, 2001)


ASBESTOS LITIGATION: W.R. Grace Files for Ch. 11 Relief
-------------------------------------------------------
Plaintiffs' attorneys who have filed lawsuits against W.R. Grace & Co.
said that it could take years to resolve the thousands of claims now that
the chemical firm has filed for Chapter 11 bankruptcy protection.

Monday's filing prevents new lawsuits from being brought against the
Columbia-based company and freezes pending suits, which were filed on
behalf of people who allege they developed health problems after exposure
to asbestos fibers in products manufactured by Grace.

The bankruptcy filing makes it unlikely those lawsuits will be settled
quickly, said Anne Biby, an attorney with McGarvey, Heberling, Sullivan &
McGarvey of Kalispell, Mont. Biby's firm represents more than 100 former
Grace employees, their relatives, and residents of Libby, Mont., where
Grace operated a vermiculite mine for 27 years.

Biby's clients say they were injured or had relatives die from lung
cancer, asbestosis and other diseases associated with exposure to
asbestos in the vermiculite, a material used in insulation, potting soil
and fertilizer.

"Our Libby clients will probably be treated as a group" by the bankruptcy
court, Biby said. "W.R. Grace will probably stay up and running during
the pending bankruptcy, and it will be a battle back and forth to
determine how much money needs to be put into the pool."

Biby estimated that half her clients are former workers in Libby, and
others include their wives and children.

Grace said its liabilities largely stem from asbestos it used in some of
its fire-protection products. The company said it stopped putting the
material in its products in 1973. The company's filing in U.S. Bankruptcy
Court in Wilmington, Del., lists $ 2.5 billion in assets and $ 2.57
billion in debts. Grace said it has received more than 325,000
asbestos-related personal injury claims and has paid $ 1.9 billion to
manage and resolve the litigation.

William M. Corcoran, Grace's vice president of public and regulatory
affairs, said a bankruptcy judge approved an order allowing Grace to
continue its $ 250,000 annual donation to St. John's Lutheran Hospital in
Libby for a program to provide medical care to residents with
asbestos-related health problems. The court also approved the
continuation of normal pay and benefits for the company's employees,
Corcoran said. Grace has 6,000 employees worldwide, including 1,100 in
Maryland.

Fabrice Vincent, a partner with Lieff, Cabraser, Heimann & Bernstein of
San Francisco, said he remained optimistic that his clients will
eventually receive a settlement. In January 2000, his firm filed a
class-action suit against Grace seeking the creation of a diagnostic
program for Libby residents and workers exposed to vermiculite.

"We are hoping for substantial relief," Vincent said. "What remains to be
seen is whether other defendants in the cases will remain subject to
ongoing litigation. We need to see how the bankruptcy court wishes to
proceed and then take our cue from that." (The Washington Post, April 04,
2001)


AURELIA PUCINSKI: IL Ap Ct Affirms $10 Fee on Civil Filings
-----------------------------------------------------------
Imposition of $ 10 fee on all civil filings on class of litigants who are
specifically excluded from receiving benefit of state's mandatory
arbitration program funded by fee does not violate state Constitution
because arbitration program benefits entire court system by easing
backlog of cases.

The Illinois Appellate Court, 1st District, 4th Division, has affirmed a
ruling by Judge Ronald C. Riley.

Section 2-1009A of the Code of Civil Procedure provides for a $ 10 charge
on all circuit court civil filings to pay for the state's mandatory
arbitration program. The charge is imposed even for cases that are
precluded by rule and statute from entering the arbitration system.

The plaintiffs in this case are litigants who were compelled to pay the
fee when they filed their lawsuits for a range of claims but who did not
qualify for arbitration. The suit named as defendants the clerk of the
Cook County Circuit Court, who charges and collects court fees, and the
Illinois treasurer, who administers the court fees that the clerk
collects.

The plaintiffs' class action asserted that they were required to pay the
mandatory arbitration fee in filing complaints for numerous kinds of
cases, including specific performance, probate and dissolution of
marriage, despite the fact that none of those matters is eligible for
arbitration. The plaintiffs also alleged that the statute establishing
the fee violates the due process, free access, uniformity and equal
protection clauses of the state Constitution.

The defendants moved to dismiss, arguing that the mandatory arbitration
fee is constitutional because its burden falls equally on all civil
litigants in Cook County and is related to the overall operation and
maintenance of the state court system. The trial judge granted the
dismissal motion.

On appeal, the issue was whether the imposition of a fee on a class of
litigants who are specifically excluded from receiving the benefit of the
program funded with the fee violates various provisions of the Illinois
Constitution.

The appeals court agreed with the trial judge and affirmed. The court
said the creation of the mandatory arbitration system benefits the
overall administration of justice by easing the backlog of cases in the
circuit courts. The court cited several cases that it said stand for the
proposition that under the Constitution, funds obtained via the civil
justice system may be used to pay for expenses incurred by the court
system as a whole.

The court also said the fee provision satisfies the requirements of the
free access clause because the fee serves solely to improve the overall
administration of the courts and was imposed for a court-related purpose
that frees the litigation calendars.

Kevin Rose, et al. v. Aurelia Pucinski, et al., No. 1-99-1987. Justice
Allen Hartman wrote the court's opinion with Justices Leslie E. South and
Francis Barth concurring. Released March 22, 2001.  (Chicago Daily Law
Bulletin, April 3, 2001)


AURELIA PUCINSKI: IL Ap Ct Affirms $10 Fee on Civil Filings
-----------------------------------------------------------
Imposition of $ 10 fee on all civil filings on class of litigants who are
specifically excluded from receiving benefit of state's mandatory
arbitration program funded by fee does not violate state Constitution
because arbitration program benefits entire court system by easing
backlog of cases.

The Illinois Appellate Court, 1st District, 4th Division, has affirmed a
ruling by Judge Ronald C. Riley.

Section 2-1009A of the Code of Civil Procedure provides for a $ 10 charge
on all circuit court civil filings to pay for the state's mandatory
arbitration program. The charge is imposed even for cases that are
precluded by rule and statute from entering the arbitration system.

The plaintiffs in this case are litigants who were compelled to pay the
fee when they filed their lawsuits for a range of claims but who did not
qualify for arbitration. The suit named as defendants the clerk of the
Cook County Circuit Court, who charges and collects court fees, and the
Illinois treasurer, who administers the court fees that the clerk
collects.

The plaintiffs' class action asserted that they were required to pay the
mandatory arbitration fee in filing complaints for numerous kinds of
cases, including specific performance, probate and dissolution of
marriage, despite the fact that none of those matters is eligible for
arbitration. The plaintiffs also alleged that the statute establishing
the fee violates the due process, free access, uniformity and equal
protection clauses of the state Constitution.

The defendants moved to dismiss, arguing that the mandatory arbitration
fee is constitutional because its burden falls equally on all civil
litigants in Cook County and is related to the overall operation and
maintenance of the state court system. The trial judge granted the
dismissal motion.

On appeal, the issue was whether the imposition of a fee on a class of
litigants who are specifically excluded from receiving the benefit of the
program funded with the fee violates various provisions of the Illinois
Constitution.

The appeals court agreed with the trial judge and affirmed. The court
said the creation of the mandatory arbitration system benefits the
overall administration of justice by easing the backlog of cases in the
circuit courts. The court cited several cases that it said stand for the
proposition that under the Constitution, funds obtained via the civil
justice system may be used to pay for expenses incurred by the court
system as a whole.

The court also said the fee provision satisfies the requirements of the
free access clause because the fee serves solely to improve the overall
administration of the courts and was imposed for a court-related purpose
that frees the litigation calendars.

Kevin Rose, et al. v. Aurelia Pucinski, et al., No. 1-99-1987. Justice
Allen Hartman wrote the court's opinion with Justices Leslie E. South and
Francis Barth concurring. Released March 22, 2001.


CAMBRIDGE TECHNOLOGY: Announces Dismissal of 1999 Securities Lawsuits
---------------------------------------------------------------------
Cambridge Technology Partners (Massachusetts), Inc. (NASDAQ:CATP), a
global e-Solutions provider, announced that the United Stated District
Court for the District of Massachusetts dismissed with prejudice the
securities class action litigation filed in March 1999 against Cambridge
and certain of the Company's former officers. (Carney, et al. v.
Cambridge Technology Partners (Massachusetts), Inc., et al., Civil Action
No. 99-CV-10630-RCL). The litigation, which was brought in the wake of
Cambridge's announcement on March 18, 1999 that it was revising downward
its revenue and earnings estimates for the first quarter and full year
1999, alleged that Cambridge and certain of its former officers had made
misleading statements about the Company's business and financial
condition in order to inflate the Company's share price.

Cambridge and its former officers are represented in the litigation by
Jordan D. Hershman, Esq. and Christopher F. Robertson, Esq. of the Boston
law firm of Testa, Hurwitz & Thibeault, LLP.

                 About Cambridge Technology Partners

Cambridge Technology Partners provides strategic and management
consulting as well as systems integration services to transform its
clients into e-Businesses.


H&R BLOCK: Lawyers Accuse of Collusion in Settlement over RALs
--------------------------------------------------------------
Angry plaintiffs' lawyers have accused other members of the plaintiffs'
bar of colluding with H&R Block and Beneficial National Bank to settle
litigation allegedly worth more than $ 1 billion for just $ 25 million.

Lawyers making the accusation intervened in a federal district court
settlement that ended all related litigation pending across the country.
But Judge James B. Zagel of the Northern District of Illinois rejected
their arguments and certified the settlement in February. The intervenors
are appealing his ruling to the U.S. Court of Appeals for the 7th
Circuit.

The suits concern H&R Block's use of so-called Refund Anticipation Loans
(RALs) -- short-term, high-interest loans that the company arranged for
customers who anticipated tax refunds.

Plaintiffs' lawyers had suits pending in half a dozen states -- including
New York, Maryland and Texas -- alleging that the practice constituted a
violation of both the federal Truth in Lending Act and state "unfair and
deceptive acts and practices" laws, and was a breach of fiduciary duty.

The lawyers making the claims of collusion include Roger Kirby of Kirby
McInerney & Squire in New York; Edward Carstarphen of Woodard, Hall &
Primm in Houston; and Steven Angstreich of Levy, Angstreich, Finney,
Baldante, Rubenstein & Coren in Philadelphia. They allege that a group of
Chicago plaintiffs' lawyers negotiated the settlements without doing any
discovery, consulting any experts or including principal defendant H&R
Block as a party of record.

In their court papers, the accused lawyers -- who include solos Daniel
Harris, Francine Schwartz, Howard Prossnitz and Miller Faucher &
Cafferty's Marvin Miller and Dom Rizzi -- hotly deny any collusion. They
are, however, no longer able to comment on the litigation. Ms. Schwartz
explains: "One of the terms of our settlement is that it would be
discussed only by counsel for Block."

Counsel for H&R Block, N. Louise Ellingsworth, a partner at Bryan Cave in
St. Louis, referred all questions to a company representative. "After a
two-day hearing and extensive discovery by the attorneys, the Court found
there was no basis for the allegations," Block's counsel responded
through a representative.

Lawyers for Beneficial, which also is permitted under the settlement
agreement to speak, referred calls to the company, which declined to
comment.

                          Persistent Plaintiffs

In their argument to the federal court, the intervenor plaintiffs said
that the disputed settlement, coming after the Chicago plaintiffs'
counsel had lost all claims against H&R Block and much of their case
against Beneficial, was timed to avoid imminent proceedings in other
states that could have been costly to the two defendants.

The intervening lawyers are not alleging that the actions of the other
lawyers were illegal or in violation of ethics rules. And they say that
even if there was no collusion, the Chicago lawyers still failed to
represent the class adequately.

"If this settlement was affirmed, it would stand for the proposition that
representation was less important than a court's own business judgment of
the value of a litigation," says Mr. Kirby. "It would open the door to
other defendants' approaching cooperative plaintiffs and confidentially
entering into settlement without regard to the adequacy of the
representative."

The suits were initiated as a result of H&R Block's practice of referring
its low-income customers to a partner bank, which would grant them an
RAL.

For each loan applicant, H&R Block, which prepares one in seven of
Americans' income tax returns each year, secretly collected a licensing
fee from Beneficial or another partner bank, ranging from $ 3 to $ 9 per
loan -- a fee the intervenor plaintiffs call a "kickback" in court
papers.

In addition, H&R Block benefited financially from the loans through a
third method. Block had a pooling arrangement with Beneficial that gave
it a 49.99% ownership in the loans -- the most permitted by law. This
means that the tax preparers also collected nearly half of the loan fee
the bank charged, which ranged from $ 30 to $ 90 per client.

The intervening plaintiffs' lawyers object that the extra fees were not
disclosed to the clients and that the fees, when calculated on an annual
basis, could amount to 500% annual interest.

"It's the hugest consumer rip-off scam I've ever heard of," says Mr.
Carstarphen, a Houston lawyer who started his class action in Texas after
an acquaintance complained of her experience. Mr. Carstarphen, who
normally handles defense in personal injury lawsuits, adds, "It's
unconscionable."

H&R Block asserts in its court papers that the program is popular with
consumers, as is made clear by the number of repeat customers. Ms.
Ellingsworth wrote in support of the settlement that the company was
settling only to end "ten years of expensive, time-consuming and
heretofore fruitless RAL litigation."

Mr. Kirby and his colleagues assert that the settlement was planned,
before any litigation was filed, during a September 1997 lunch meeting at
the Metropolitan Club in Chicago.

Ms. Schwartz and Mr. Prossnitz were in the midst of settling a case
against Beneficial and another tax preparer for $ 15 in coupons per
customer, attorney fees and an order vacating sanctions against
plaintiffs' lawyers. Adams v. Jackson-Hewitt, No. 95 CH 11826.

Ms. Schwartz, Mr. Prossnitz and his office mate, Mr. Harris, met
Beneficial lawyers to discuss global settlement of RAL litigation,
according to a deposition by Mr. Harris. None of the plaintiffs' lawyers
had filed or had any other RAL litigation pending at that time, although
most say they had already retained relevant clients.

According to Mr. Harris' deposition, Beneficial counsel suggested that a
global settlement of the RAL claims would be worth about $ 23 million or
$ 24 million -- a recollection backed up by Mr. Prossnitz in an affidavit
but denied by Beneficial counsel.

Seven months after the luncheon, in April 1998, lawyers accused of
collusion filed two suits concerning RAL litigation: Ms. Schwartz and Mr.
Prossnitz, with Miller Faucher attorneys, filed against H&R Block,
Beneficial National Bank and Beneficial Tax Masters Inc. Zawikowski v.
Beneficial, No. 98 C 2178. The other, filed by Mr. Harris, named
Beneficial National Bank and Tax Services and was followed 35 days later
by a settlement offer to Beneficial for redeemable customer coupons and $
1.6 million in cash. Turner v. Beneficial National Bank, No. 98 C2550.

The two suits were not consolidated but proceeded on a coordinated basis.
Beneficial wasn't interested in the settlement offer, and as the suits
went forward, Mr. Harris, Ms. Schwartz and their co-counsel were defeated
in pressing some of their clients' claims against the defendants. In
January 1999, the court granted Beneficial's motion to dismiss several
counts in Zawikowski. Block was dismissed entirely, eliminating the tax
preparer from litigation in Illinois as a defendant. Turner survived
Beneficial's summary judgment motions.

That same month, rather than make what the intervenor plaintiffs' lawyers
say was the obvious move to consolidate federal cases, Beneficial
contacted the plaintiffs' lawyers in Illinois to negotiate a settlement.
That, say the intervenors, was because of a threat to the bank from
favorable rulings in other cases in other parts of the country.

Mr. Kirby notes in his brief that the settlement talks initiated by
Beneficial in January 1999 came on the same day that a federal judge in
New York set a class discovery schedule in his suit against the bank.
Affatato v. Beneficial National Bank, No. CV 96-5376 (E.D.N.Y.). That
same day, Mr. Kirby says, he had informed the court and defense counsel
that he would move promptly for certification, without waiting until the
end of class discovery.

                            Block Woes

In the months after Block was dismissed, it suffered a series of legal
blows nationally, say the intervenor plaintiffs' lawyers. "California was
moving forward to a trial date," says Mr. Angstreich. "It's my
understanding that Texas was moving forward to a trial date. The Superior
Court in Pennsylvania had reversed the trial court, which had granted
summary judgment in favor of Block. And the highest court in Maryland had
reversed the trial court's dismissal of our case."

In July 1999, the Chicago plaintiffs' lawyers announced a preliminary
settlement. According to Block, the company had joined settlement
discussions that spring. On Oct. 26, a final settlement was executed. It
set aside $ 25 million for plaintiffs, capping individual recovery at $
15. It also required the defendants both to pay for class notification
and up to $ 4.25 million in attorney fees and to disclose more terms of
the RAL to customers. Any money left in the $ 25 million pot reverted
back to the defendants.

Block's counsel was not a formal party to the settlement until Nov. 19,
when the plaintiffs' lawyers filed an amended complaint asserting claims
against Block in the Zawikowski suit.

"The lawyers had to bring in Block as a condition of settlement," says
Mr. Carstarphen, whose August trial was cancelled by the settlement.
"That was the thing that just smelled to high heaven." Block counsel, via
a representative, say its re-entry into the case wasn't unusual: "It is
not uncommon to amend a complaint to insure complete settlement."

Both the defendants and the Chicago plaintiffs' lawyers argued in court
papers that the timetable of events demonstrates that there was no
collusion. The settlement amount had grown steadily over the nine-month
period, a point the lawyers say shows the adversarial nature of the
settlement negotiations.

Beneficial's counsel, James Adducci of Chicago's Adducci, Dorf, Lehner,
Mitchell & Blankenship, wrote in court papers that the intervenors'
attack on the Chicago plaintiffs had another motivation. "The New York
plaintiffs' real reason for intervening is to protect their own claim to
attorney's fees by interfering with a settlement negotiation that may
leave them out in the cold insofar as their fees are concerned."

There was a contentious fairness hearing on the initial settlement terms
in July 2000. The settlement was rejected by Judge Zagel, who said he
would reconsider if the provision permitting unclaimed funds to revert
back to the defendants was taken out, permitting all $ 25 million to go
to the class. The Chicago plaintiffs' and defense counsel reformulated
the settlement according to his ruling; Judge Zagel approved it last fall
and entered the order on Feb. 15.

According to Block, 15 million customers were affected by the settlement;
about 1.5 million responded by the end of the claim period last December.
If "kickback" and pooling fees were recoverable for this class -- and
punitive damages were awarded -- plaintiffs' lawyers say that recovery
would exceed $ 1 billion.

                            Legal Standard

In arguing against the settlement, the intervenor plaintiffs said it did
not satisfy the provisions that it be fair, reasonable and adequate, nor
did the class counsel provide adequate representations to the members of
the class.

Lawyers for Mr. Kirby's firm argued that the Chicago plaintiffs had
failed to make claims in their initial filings and to assess the
potential recovery for all of the claims. The intervenors say further
collusion and bumbling on the part of the plaintiffs' lawyers is evident
because Block rewrote the final draft settlement to include all the
claims outstanding nationally.

But the Chicago plaintiffs' lawyers say the claims were difficult to
prove and the intervening plaintiffs lawyers were facing caps that made
their visions of billion-dollar sums delusional.

In court papers, H&R Block's counsel, Ms. Ellingsworth, names nearly two
dozen suits with 43 different claims that the company has defeated as
proof of the slim chance of success of the intervenor plaintiffs. But the
intervening plaintiffs' lawyers say they should have had their chance
before a jury.

Judge Zagel disagreed. "The story presented is one of numerous plaintiffs
assailing RAL practices with little success," he wrote in his opinion
last July.

Meanwhile, as the settlement spat moves on to the 7th Circuit, it has
spawned a new fight: The Chicago plaintiffs' lawyers are now fighting
over how to share settlement fees. (The National Law Journal, April 2,
2001)


HIH INSURANCE: Australian Shareholders Association Seeks Legal Advice
---------------------------------------------------------------------
The Australian Shareholders Association (ASA) on April 4 said it was in
talks with lawyers about taking legal action against the beleaguered HIH
Insurance Ltd. ASA president Ted Rofe said the shareholders' group had
met with lawyers from Maurice Blackburn Cashman about launching a class
action against HIH which collapsed last month with $800 million in
losses.

The action could be taken against the company, its directors and
auditors.

Mr Rofe said while talks had been held with the lawyers, they had not
been officially hired to take on the case. "They ran the GIO class
action, so they have the relevant experience in this area but we don't
yet know if a class action (against HIH) will be appropriate," he said.
"I think it will take some time for the facts to emerge. "I think
shareholders and the public in general need to know more detail about
what really went wrong before we can think about what we may or may not
do in the way of a class action."

HIH's 30,000 Australian shareholders are now facing the prospect of their
stock being made worthless following the insurer's decision to place
itself into provisional liquidation on March 15.

KPMG has been appointed provisional liquidator to HIH.

The insurer's shares were suspended from trading at an all-time low of
17.5 cents last month.

HIH is being investigated by the Australian Securities and Investments
Commission and the industry watchdog, the Australian Prudential
Regulation Authority.

The Institute of Chartered Accountants in Australia called for an
independent evaluation of the insurance industry watchdog, the Australian
Prudential Regulation Authority (APRA), after its failure to stop HIH's
collapse. APRA has been widely criticised for not acting earlier to save
HIH. APRA claims if it had intervened last year when it realised the
company was having difficulties, it could have sparked panic in the
market. It has recently released a set of proposals it hopes will prevent
another insurer from caving in. (AAP Newsfeed, April 4, 2001)


HMOs: N.Y. Ct Rejects Bad-Faith Claim, Leaves Suit over Fraud Intact
--------------------------------------------------------------------
A NEW YORK appellate court has rejected an insured's claim of bad-faith
denial of treatment coverage by a health insurer and an HMO but left open
whether plaintiffs with better facts might be able to prevail with such a
cause of action.

Five justices voted, 3-2, on March 20 against adopting a cause of action
for a tortious breach of an implied covenant of good faith between the
health maintenance organization and its subscribers.

But Justice David B. Saxe, in a dissent, said that New York courts should
recognize such a cause of action, arguing that subscribers face the
possibility of catastrophic medical outcomes if health insurers and HMOs
place their financial position ahead of medical need.

The three-justice majority said that the class action before the court
did not require the imposition on health insurers and HMOs of "some
special, tort duty of good faith toward their policyholders."

All five justices left in place Manhattan Supreme Court Justice Herman
Cahn's 1999 decision to allow a class action to go forward on the issue
of whether the plaintiffs' health plan was fraudulent and breached
contract rights by assigning to nondoctors the task of making decisions
on medical necessity of treatment.

In Batas v. Prudential Insurance Co., No. 1102, Musette Batas and Nancy
T. Vogel sued on behalf of themselves and all other people who subscribed
to health plans offered through Prudential Insurance Co. or its
subsidiary Prudential Health Care Plan of New York Inc.

Ms. Batas was admitted to a hospital in March 1996 after her Crohn's
disease flared up. She alleges that her doctors wanted her to stay in the
hospital for further tests but that this course of action was rejected by
Prudential, whose personnel -- a "concurrent review nurse" -- decided the
patient should be sent home immediately.

Ten days later, Ms. Batas was readmitted with a high fever and severe
pain. During exploratory surgery (which had not been authorized by
Prudential), Ms. Batas suffered a burst intestine and had to have a
portion of her colon removed.

Also in March 1996, Ms. Vogel, who had a uterine tumor, was admitted to a
hospital for a hysterectomy. After the operation, the patient's doctors
recommended a four-day stay for recovery. Two days later, a Prudential
nurse said further hospitalization was unnecessary. The nurses allegedly
relied on standards developed by an actuarial firm, and not on any
doctor's recommendations.

The suit charged Prudential with deceptive trade practices, breach of
contract, breach of an implied covenant of good faith and fiduciary duty,
common-law fraud and tortious interference with contractual relations.
The plaintiffs also sought to have part of the Prudential contracts
declared void as against public policy. Justice Cahn dismissed causes of
action for breach of an implied covenant of good faith and fiduciary
duty, tortious interference and the request for declaratory relief.

The panel affirmed Justice Cahn's decision in all but one respect. It
restored a claim for tortious interference with the contractual
relationship between Ms. Vogel and a nonparty health care insurer whose
responsibilities Prudential was discharging under an agreement among the
two plans and Ms. Vogel's employer.

                         Duty of Good Faith

The disagreement between the dissenters and the majority centered on the
issue of the duty of good faith.

Justice Saxe, in his dissent, said that the relationship between a health
plan and its subscribers was analogous to that between a liability
insurance carrier and its policyholders.

"[The] position of the medical insurer is, like that of the liability
insurer in the context of claim settlement, one of total control; that of
the insured patient is one of powerlessness," he wrote.

That power relationship, the dissenters said, provided a solid
public-policy basis for the finding of a duty of good faith. "When we
consider the nature of the health insurance industry, it becomes apparent
that medical insurers, even more than most, should be held to a special
standard of conduct toward their policyholders, beyond that required of
parties to an ordinary, commercial contract," Justice Saxe said.

The majority, in an unsigned opinion, said that remedies for breach of
contract provided adequate protection for HMO and health insurance
subscribers.

They further noted that the plaintiffs did not allege a bad-faith denial
of payment, but a breach of contract. They alleged that their health was
jeopardized by premature discharges, determined by a review based on
actuarial, not medical, standards.

In the majority were justices Milton L. Williams, Richard T. Andrias and
Alfred D. Lerner. Joining Justice Saxe in dissent was Justice Richard W.
Wallach. (The National Law Journal, April 2, 2001)


HOLOCAUST VICTIMS: Ap Ct Stays On Sidelines As Dispute On Case Heats Up
-----------------------------------------------------------------------
An urgent effort by a lawyer to pressure a federal appeals court to
intervene in a case he says is blocking payouts to more than 1 million
former slave laborers under the Nazis was quietly rebuffed.

The 2nd U.S. Circuit Court of Appeals did not grant lawyer Burt
Neuborne's request for oral arguments Tuesday in an appeal of a judge's
refusal to dismiss a class-action lawsuit stemming from the Holocaust.
Neuborne said the lawsuit stands in the way of payouts to elderly
Holocaust victims.

In a letter to the appeals court in Manhattan on Monday, Neuborne urged
immediate intervention by the court, saying the existence of the lawsuit
''jeopardizes the very existence of the German Foundation'' that is
supposed to disburse a dlrs 4.6 billion fund.

The money will not be paid to compensate people enslaved by the Nazis
during World War II until the lawsuit is thrown out, something U.S.
District Judge Shirley Wohl Kram has so far refused to do.

In an unusual legal move, Kram wrote a letter to the appeals court noting
that Neuborne had written a letter saying that an emergency meeting in
Berlin on Wednesday would consider whether ''the foundation remains a
viable mechanism to provide relief for Holocaust victims, or whether the
Foundation should be dissolved.''

He had also urged the appeals court to act ''to restore confidence'' that
agreements establishing the German foundation could be brought to
fruition.

She said Neuborne's request to proceed without comment from her was
''potentially detrimental to adequate appellate review of this case.''

''As the voluminous submissions in this matter suggest, the applications
for emergency relief are complex and involve many substantive legal
issues and facts that developed over several years,'' she wrote.

She then asked for the opportunity to obtain a lawyer to represent her
should the appeals court decide to consider Neuborne's urgent request.

Robert Swift, a Philadelphia lawyer also representing plaintiffs,
suggested that Neuborne's anguish might be overstated. ''The continuation
of the foundation is one of the lynchpins of overall peace. It would take
more than the act of the foundation to undermine the international
compact, which was signed last summer, he said.

Kram last week expressed sympathy for the elderly victims involved in the
case and suggested that the foundation begin administering the fund and
sending checks even before the lawsuit is dismissed.

She said she had to reject a request to dismiss the lawsuit for a second
time because lawyers still had not resolved how those victims not yet
identified could be protected if they decided to make claims.

The money is to be funded in equal parts by German industry and the
German government.

More than 1 million former laborers worldwide, most of them central and
eastern Europeans, are eligible for payments. The fund also will
compensate people subjected to Nazi medical experiments and some with
other Holocaust-related claims.

Plaintiffs involved in the case live in the United States, Israel,
Russia, Poland, Ukraine, the Czech Republic, Slovakia and Belarus. (AP
Worldstream, April 4, 2001)


INCO LTD: Reports Says Cancer Risk 40 Times Higher Than Ont. Standards
----------------------------------------------------------------------
An initial review of a study by the Ministry of the Environment ("MOE")
has been completed by Dr. Mark Richardson, former Head of Health Canada's
Air and Waste Section and a risk assessment expert. Dr. Richardson is
routinely retained to conduct community wide risk assessments and to
provide other risk assessment services to the Government of Canada,
provincial governments (including the Government of Ontario) and to
industry.

Dr. Richardson has prepared a report on the MOE study. Highlights include
the fact that cancer risks to Port Colborne residents are at least 8
times, and may be up to 40 times higher than Ontario government standards
allow. The MOE has failed to advise residents, and has not announced any
plans to require Inco to reduce these levels. Dr Richardson's report will
also address numerous other health risks that the highly elevated levels
of nickel oxide, now confirmed in Port Colborne soils, may pose to
residents.

In addition, documents show that the Ontario Government and Inco have
known since at least 1960 of Port Colborne's toxic nickel levels, and
have known since 1978 that the toxin is primarily nickel oxide. (Canada
NewsWire, April 4, 2001)


LEAD PAINT: ICI Price Tumbles As Brokers Fret On Suits and Tough Markets
------------------------------------------------------------------------
Shares in speciality chemicals giant Imperial Chemical Industries PLC
topped the blue chip fallers board in a very nervous morning market as
brokers fretted about possible litigation in the U.S. on lead paint, and
warned about the impact of tougher markets on profitability in the first
quarter, dealers said. CSFB is understood to have highlighted in a note
this morning the continuing threat to ICI from litigation in the U.S. on
lead paints -- which has been an ongoing concern for the past couple of
years amid talk of several class actions.

But the real concern for the market -- which began to emerge late last
week is that trading conditions in several of ICI's key markets have got
even tougher in the last few weeks. Anecdotal evidence from the industry
over recent weeks has suggested that the U.S. flavours and fragrances
market -- crucial for ICI's Quest -- were weak in March, as was the U.S.
paint market.

But of more concern is talk that the very weak performance in the fourth
quarter at National Starch has continued into the first quarter, with
little sign of any upturn seen before mid-year. The fear is that ICI's
first-quarter results, due in early May, will fall short of market
expectations -- triggering some swingeing downgrades to full-year
estimates. Leading brokers last week told AFX News that full-year
forecasts for ICI could be reduced to around the 420-430 mln stg level
should first-quarter profits miss estimates.

Currently, brokers are looking for ICI to report full-year pretax of
around 460 mln stg. CSFB is understood to have repeated its 'hold' stance
on ICI and its 460 pence price target -- but warned that forecasts could
be under pressure. HSBC Securities also turned more cautious, cutting its
target price on ICI back to 450 pence from the previous 525 pence -- but
reiterating its 'hold' recommendation. By 9.23 am, ICI shares were down
25 pence, or 6.17 pct, at 380 pence. (AFX.COM, April 4, 2001)


MICROSOFT CORP: Cohen, Milstein Files Consolidated Race & Sex Bias Suit
-----------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, P.L.L.C., and Johnnie Cochran of
Cochran, Cherry, Givens, and Smith, P.C. have filed a Consolidated
Amended Class Action Complaint in the United States District Court for
the Western District of Washington in Seattle against Microsoft
Corporation alleging a pattern and practice of race and sex
discrimination against African Americans and female salaried employees in
violation of the federal civil rights laws.

Joining as attorneys for plaintiffs is Carl Lopez of Lopez & Fantel, P.S.
The court has appointed Cohen Milstein as lead counsel in the
consolidated action.

The Consolidated Amended Complaint seeks to certify a class consisting of
all current and former African American salaried employees in the United
States who have been employed by Microsoft at any time from October 4,
1997 through the commencement of trial and all current and former female
salaried employees in the United States who have been employed by
Microsoft at any time from February 23, 1999 through the commencement of
trial. The Consolidated Amended Complaint was filed after Judge Marsha
Pechman ordered consolidation of all similar cases filed in the Western
District of Washington.

The Consolidated Amended Complaint alleges that employment policies and
practices of Microsoft allow the Company's managers to exercise unbridled
discretion, which have had the effect and caused the denial of
promotional opportunities and equal compensation to qualified African
American and female salaried employees.

The four named plaintiffs in the case have alleged they have been
affected by Microsoft's policy of allowing managers to exercise excessive
subjectivity in deciding on compensation, evaluations, promotions, and
job selections, such that the decisions were infected with racial and/or
gender bias. Three of the named plaintiffs are current or former
Microsoft employees in the Seattle area, one is a former employee who
worked in Texas.

In the consolidated amended complaint, plaintiffs describe the following
experiences:

Landruff E. Trent II, an African American male and another named
plaintiff, began working for Microsoft as a Group Program Manager in June
1998. Four months later, the Group Manager, overseeing Data Center
Operations, announced his departure and recommended Trent for the
position. Trent was asked to perform the Group Manager duties, but not
offered the position's salary or job title.

Trent received two excellent performance reviews while acting as Group
Manager. Yet, in October 1999, his supervisor removed him from the
position and promoted in his place a white individual who Trent had
trained. Trent was demoted to manage a team known for underperforming and
Trent had to report to the man who he previously had supervised. Trent
turned that team around and received a good performance review in the
summer of 2000. Shortly thereafter, Trent went on vacation. When he
returned, he learned of an incident that had occurred while he was away.
Trent's white manager made him the scape goat. Trent was told to "move
on." Since that time, Trent has applied for and been denied numerous
positions at Microsoft.

Donaldson began her career at Microsoft in 1992 as a "contract" employee.
She became a full-time employee the following year and consistently
received excellent review ratings. In 1996, Donaldson left Microsoft to
pursue another opportunity. She returned to the Microsoft in 1998 as a
Technical Writer. At first she got along well with the white male Project
Lead in her group. In fact, he frequently sought her advice on management
and morale issues. However, in a discussion prior to the review process,
he told her that there were several areas where she did not have certain
"core competencies." When she asked him for examples, he could not
provide any, became defensive and ended the meeting.

Soon after, Donaldson was offered the position of Program Manager in the
MSN Operations Group. Because she left in the middle of a review period,
her former Project Lead conducted her performance review. He gave her an
undeserved rating which reflected his racial and gender biases as well as
his dissatisfaction that other managers felt her performance was better
than he did.

When Donaldson's began in the position of Program Manager, Microsoft
changed its grade level system. Donaldson was denied the standard level
for her position because of her former supervisor's biased evaluation.
Within three months, Microsoft hired the contractor as a full-time
employee and made him her supervisor although he was unqualified for the
position and the position was not posted prior to Microsoft's decision to
interview him. Donaldson's office was moved to another building which
isolated her from her team.

Donaldson asked permission to interview internally at Microsoft, but was
denied the amount of time normally given to employees. In February 2000,
another group was interested in hiring Donaldson, but her supervisor gave
her a performance review score which prevented the group from hiring her.
In May 2000, Donaldson resigned because of the discrimination she
experienced.

Douglas had an 11 year career at Microsoft which ended in April 2000 when
he resigned from Microsoft because of its practices of denying him
promotions and equitable compensation. In 1995, Douglas was a Program
Manager, overseeing Microsoft's global e-mail system migration. The
following year, when the project was nearly complete, Douglas' white
supervisors brought in a white Project Manager to take over the project
and as a result, receive credit for its success. Douglas had been
promised a promotion at the end of the project which he never received.

After a corporate re-organization, Douglas became a Program Manager for
Microsoft's Office Group. His white manager assigned Douglas to a product
that would ship in April 1997. After it successfully shipped, Douglas was
told that he would get an excellent performance review score. However,
instead, Douglas received an average score and was told that his ability
to write code was insufficient. This was the first time such a
requirement had ever been mentioned for the position. Douglas' supervisor
refused to let him take training courses and instead asked him to leave
the group. Douglas expressed interest in another position in the group,
but his manager offered it to a white person who was less qualified for
the position.

Douglas transferred positions. He stayed in the next group for 15 months.
His manager in that group was directed to take courses on improving
communications and interpersonal relations after half of the team
resigned because of the treatment they received. In February 1999,
Douglas transferred positions and became responsible for MSN's intranet
site, used by nearly 4,000 people. In November 1999, Douglas' supervisor
announced that he was leaving and agreed to conduct Douglas' review
before his departure. Douglas received an excellent review and a
promotion request. Yet, the new manager rejected his review score and
promotion in February 2000. Douglas appealed his review and was awarded a
salary and grade level increase. Soon after, he learned that Microsoft
had offered a white male contractor a full-time position as a Program
Manager. This individual was making $15,000 more per year than Douglas
and received a $10,000 signing bonus and higher grade level. This white
employee had no prior management experience, in contrast to Douglas' five
years.

In addition to the Seattle case, there is another discrimination case
pending against Microsoft in the United States District Court for the
District of Columbia, filed by Willie E. Gary of Gary, Williams, Parenti,
Finney, Lewis, McManus, Watson, & Sperando. That case only involves
claims for African American employees at Microsoft. It had been assigned
to Judge Thomas Penfield Jackson, who recently recused himself from
hearing the case. Microsoft's motion to transfer that case to Seattle is
pending.

Contact: Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Steven J. Toll,
206/521-0080 stoll@cmht.com or Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
Michael D. Hausfeld, 202/408-4600 sbollen@cmht.com


MOBIL AUSTRALIA: Has Paid $10.6 Mil for Aircraft Fuel Contamination
-------------------------------------------------------------------
Australia is to propose an overhaul of international standards on
aviation fuel following a contamination crisis last year that grounded
more than half of the country's light aircraft.

Following publication of a report on the crisis, one of the worst of its
kind in the world, John Anderson, the transport minister, said he would
be writing to his counterparts in the UK and US urging changes in the two
international standards, set in those countries, that apply to fuel
quality.

Australia would also consider new regulations to monitor aircraft fuel
quality - for small aircraft and for larger jets - following the safety
scare caused by problems at a refinery operated by Exxon Mobil, the US
oil group.

Regular testing of aviation fuel quality ceased in 1991 and there was
currently no regulatory oversight of fuel production, Mr Anderson said.

The contamination led to more than 3,000 piston-engine aircraft being
grounded for several weeks early last year, disrupting medical, emergency
and other services in rural Australia where many communities rely on air
travel for everyday transport.

The report by the Australian Transport Safety Bureau found that the
contamination had been caused by an alkaline anti-corrosion chemical -
ethylene diamine - that Mobil had failed to remove from its aviation
fuel.

Tests conducted according to international standards had not detected the
contaminant but there was enough to react with brass components,
producing a sticky black substance that clogged fuel systems.

Mobil said it would study the report before deciding whether to resume
aviation fuel production at its Altona refinery in Melbourne.

The oil group has paid out ADollars 21.5m (USDollars 10.6m) in
compensation but is still facing a class action.

Publication of the report coincides with a military inquiry into health
problems suffered by maintenance staff working on fighter jet fuel tanks.

In an investigation that could have worldwide implications, the
Australian Defence Force is considering whether there is a link between
chemicals used in maintaining its fleet of F-111 jets over the past 25
years and a range of illnesses suffered by the workers, including cancer,
psoriasis and multiple sclerosis.

The personnel worked with the chemicals inside the fuel tanks of the
aircraft made by General Dynamics of the US - for up to eight hours at a
time. (Financial Times (London), April 4, 2001)


MONSANTO CO: Residents Claim Company Poisoned City for Decades with PCBs
------------------------------------------------------------------------
A federal trial opened Wednesday over claims Monsanto Co. poisoned an
east Alabama community with toxic PCBs and tried to cover up the problem
rather than help people.

Attorneys representing about 1,600 Anniston residents in the class-action
suit told the nine-member jury that the company, now called Solutia,
should be forced to pay a "substantial" amount.

"The evidence is going to show that Monsanto dumped PCBs out its back
door into the neighborhood for years and years," said plaintiff lawyer
Bob Shields.

Residents suing the company include Ruth Mims, who lived closer to the
plant than anyone for about 70 years. Her blood contained one of the
highest concentrations of PCBs ever found in a human, Shields said.

Monsanto did not deny that the chemical escaped from the plant to the
area water supply. But, it said, there is no proof Mims or anyone else
was harmed.

"PCBs at the levels which these plaintiffs have has not caused and will
not cause any of them to get sick," said company lawyer Jere White. "The
reason no one is ... the amount is so small."

PCBs, or polychlorinated biphenyls, were manufactured in Anniston from
1927 through 1972 for use as insulation in electrical equipment including
transformers. The government banned production in the late '70s amid
questions about possible health risks.

PCBs-laden wastewater and storm water from the plant emptied into a
drainage ditch and creek in a poor section of Anniston. From there, the
water ran to Choccolocco Creek and Lake Logan Martin.

Monsanto previously agreed to pay $43.7 million to property owners along
Choccolocco Creek and Lake Logan Martin, where PCBs was found. The trial
is over an unresolved portion of the suit that led to the settlement.

Testimony will begin Thursday before U.S. District Judge Inge Johnson,
who banned participants from talking to reporters. The trial is expected
to last at least a month.

Similar cases have been filed in state court.

Shields told jurors that PCBs contamination damages the liver and can
lead to cancer, reproductive problems, developmental difficulties in
children, heart disease and other problems.

Company documents show Monsanto knew the chemical was hazardous by the
1960s but continued manufacturing it without proper safeguards, he
claimed. Rather than warn residents of a risk, the company put up a
"smoke screen" to protect profits, he claimed.

"That smoke screen continues today," said Shields.

But White, the Monsanto lawyer, said there is no proof anyone involved in
the case has a health problem linked to PCBs. The chemical has been
proven to cause cancer only in lab rats, not people, he said.

Monsanto followed all the recommendations it received on limiting health
risks linked to PCBs, he said, and company workers never had serious
health problems associated with the material.

"We think it is unfair for these lawyers to be blaming all these problems
on us," said White.

The company said it has spent more than $30 million since 1995 to remove
PCBs around Anniston, located an hour east of Birmingham.

Monsanto was the only U.S. manufacturer of PCBs. Besides serving as an
electrical insulator, the material was used in products including paint,
adhesives, floor tiles and inks.

"The truth is PCBs are everywhere," White said. "It's a result of living
in a consumer, industrial society." (The Associated Press State & Local
Wire, April 4, 2001)


ORANGE ATTORNEYS: Paul T. Locke Files Suit over Fraud Re Big Fat Fish
---------------------------------------------------------------------
A class action lawsuit has been brought against three Orange County,
Calif., attorneys on behalf of a class consisting of all persons who are
minority shareholders of Big Fat Fish Inc. ("BFF").

Plaintiffs seek to recover from three Orange County attorneys: Defendants
Robert D. Fish, Fish & Associates LLP, Crockett & Fish; Carl F. Agren;
Clifford W. Roberts Jr.; and Roberts & Associates (the "Defendants"). The
action is brought on behalf of the class of minority shareholders and
also on behalf of BFF for damages the Defendants have caused to the class
and BFF. The action was filed on March 29, 2001, in the U.S. District
Court in Los Angeles.

This action is brought with reference to the following allegations:

Plaintiff minority shareholders allege that the Defendants participated
in a scheme to embezzle and defraud BFF out of its assets, including
certain proprietary technology involving self-evolving database
technology applicable to the Internet ("Technology").

The scheme to defraud and embezzle was accomplished by the Defendants,
who were (and/or are) attorneys of record for BFF. Defendant Robert D.
Fish ("Fish") is the patent attorney of record for BFF and inventor of
the Technology, along with his numerous supremacy roles as BFF president,
director, majority shareholder, controlling person, corporate attorney
and BFF founding director.

Immediately upon the completion of a private placement, which by March
15, 2000, had raised the $2 million for BFF, Fish transferred the
Technology from the name of BFF to his own name, exclusively. Those
transfers took place between March 15, 2000, and April 13, 2000.

In the private placement documents and orally in meetings with potential
investors, Fish had represented unequivocally that the exclusive rights
to the Technology were owned by BFF and that the future income to BFF
from exploitation of the Technology would rapidly grow to hundreds of
millions of dollars per year. However, Fish later testified that those
representations were false.

Further, on April 3, 2000, one of Fish's partners in the fraud, Defendant
Carl F. Agren ("Agren"), who was at that time the attorney for BFF
("corporate counsel" to quote Agren's writings sent at the time), filed
the lawsuit on behalf of Fish, Superior Court of the State of California,
County of Orange, Case No. 00CC04098 ("Related Action No. 1"), and
against the interests of his client BFF, by which lawsuit Fish and Agren
attempt to destroy BFF by having the state court declare that all rights
to the Internet Technology belong to Fish alone, thereby attempting
further to perfect the removal of the Internet Technology from BFF.

Related Action No. 1 seeks to have the state court to declare that BFF,
Agren's and Fish's client, has no rights whatsoever to the Technology and
that Fish owns all rights to the Technology.

Plaintiffs' complaint further alleges that on about June 5, 2000, BFF
received a refund check in the amount of $250,000 from EMC Corp. with
respect to a refund of a lease deposit of $250,000 BFF had paid to EMC
Corp. on about Feb. 22, 2000. The check was made payable to
"BigFatFish.com". Fish, without the knowledge of or authority from any
disinterested director, officer or shareholder of BFF, endorsed the check
"Pay to the order of Fish & Associates, LLP by: Robert D. Fish (signed)
Robert D. Fish, Pres. Big Fat Fish."

The $250,000 of BFF funds was thereupon deposited into Fish's trust
account. The complaint alleges that Fish, in conspiracy with his
co-conspirators, attorneys Agren and Clifford W. Roberts Jr. ("Roberts"),
embezzled the $250,000, and thereafter paid the same to himself and his
co-conspirators, attorneys Agren and Roberts, or most of it, in order to
advance the scheme of Fish, Agren and Roberts to defraud BFF of the
Technology and of the $250,000.

The complaint alleges that Fish took his client's (BFF's) money,
deposited the $250,000 in his trust account, and then, in conspiracy with
Agren and Roberts, has used the client's (BFF's) money to finance
litigation directed against BFF to wreck the client BFF and destroy the
$2 million investment of BFF's minority shareholders. Plaintiffs also
allege that Defendants, by the taking, possessing and maintaining control
of the $250,000, and/or portions thereof, violated, among other things,
the Preliminary Injunction referred to below.

The complaint further alleges that at all times after about June 1, 2000,
while doing the acts alleged in the complaint, Agren and Roberts were
aware of the existence of the tape recording by Fish expressing in Fish's
own admitted voice his intentions to make BFF "worthless" and of Fish
conspiring with an unknown third party to take the Technology from BFF.

Fish and Agren were given a copy of said tape recording at and pursuant
to the Fish deposition session on May 26, 2000. The complaint alleges
that Fish's overt acts and Agren's overt acts up to that point and the
overt acts thereafter performed by Fish, Agren and Roberts were in
furtherance of their conspiracy and designed and conducted to make BFF
"worthless."

As additional overt acts in furtherance of their conspiracy, the
complaint alleges that on June 8, 2000, Fish and Agren acted again in
writing to revoke and terminate BFF's exclusive rights to the Technology.
Plaintiffs allege that Agren and Roberts, in performing the overt and
predicate acts alleged in the complaint, acted in concert with Fish,
having the knowledge that Fish had expressed his fraudulent intentions to
destroy BFF.

In doing the overt acts complained of, it is alleged that Agren and
Roberts performed the predicate acts and engaged in the overt acts and
fraudulent conduct alleged therein, knowingly and intentionally and in
conspiracy with Fish, to make BFF "worthless"; to take all BFF's assets
for the benefit of Fish, Agren, Roberts and other Conspirators; and to
promote their fraudulent conspiracy.

Roberts, the nominal attorney for BFF, also has acted against the
interests of his "client" BFF, by failing to investigate why BFF has no
assets despite an investment of $2 million by the BFF
investor/shareholders and who is responsible for the disappearance of
BFF's assets, and also by supporting and defending the taking of BFF's
rights to the Technology by Fish and Agren, in part by representing to
the court at the hearing on the Motion for Preliminary Injunction that
he, Roberts, was "neutral" on whether the Technology was the property of
his "client," Big Fat Fish Inc.

Finally, the complaint alleges that the Defendants have engaged in other
serious acts of misconduct to further their conspiracy to defraud BFF and
its minority shareholders, including, but not limited to, numerous
violations of the Rules of Professional Conduct applicable to attorneys
licensed by the State of California, the making and filing of a false and
perjurious declaration (under oath) by Agren in opposition to a Motion
for Preliminary Injunction requested by Plaintiffs in the Superior Court
of the State of California, County of Orange, Case No. 00CC08780
("Related Action No. 2"), and violations by Fish, Fish & Associates LLP,
Agren, Roberts and Roberts & Associates of the Preliminary Injunction
issued on Sept. 15, 2000, against the Defendants in Related Action No. 2,
prohibiting Fish and his agents and attorneys from, among other things:
"4. Taking any action to take possession of, maintain control of,
prejudice the rights of Big Fat Fish, Inc., to, tamper with, change,
effect, transfer, sell or otherwise deal with any or all of the assets of
Big Fat Fish, Inc., and/or e*par, LLC, including, without limitation, the
rights to the Technology under the Exclusive License Agreement; ..."

Plaintiffs' claims in favor of the class of minority shareholders of BFF
are based upon the misrepresentations and omissions to state facts in
connection with the sale of securities, in violation of Rule 10b-5, 15
U.S.C. Section 78j(b); a scheme to defraud in connection with the sale of
securities, in violation of Rule 10b-5, 15 U.S.C. Section 78j(b); and
unfair business practices, in violation of California Business &
Professions Code Section 17200, et seq., and California common law
prohibiting unfair competition, in a conspiracy to defraud BFF and
embezzle BFF's rights to the Technology and its other assets.

Plaintiffs have also sued Defendants on behalf of BFF (in favor of BFF),
in a shareholders' derivative action, for RICO Act violations, including
conspiracy, in violation of RICO, 18 U.S.C. Section 1961, et seq., based
upon mail fraud and wire fraud, together with claims for legal
malpractice, breach of fiduciary duty, conspiracy to embezzle and defraud
and unfair business practices.

The class is defined as those who are minority shareholders of BFF,
having acquired shares of common stock of Big Fat Fish Inc. between about
Oct. 18, 1999, and March 31, 2000.

The lawsuit is entitled Jeffrey Messinger and Robert I. Gorrie,
Plaintiffs vs. Robert D. Fish, Crockett & Fish, Fish & Associates, LLP,
Carl F. Agren, Clifford W. Roberts, Jr., Roberts & Associates, Big Fat
Fish, Inc., a Nevada corporation, Does 1 through 10, inclusive,
Defendants, United States District Court for the Central District of
California, Case No. 01-02920 GHK (RCx).

Plaintiffs are represented by Paul T. Locke, Esq., 2001 Wilshire Blvd.,
Suite 505, Santa Monica, Calif. 90403. Any inquiry you or your counsel
may wish to make concerning this notice should be addressed to Paul T.
Locke, Esq., 2001 Wilshire Blvd., Suite 505, Santa Monica, Calif. 90403;
Telephone 818/735-7886; Facsimile 818/735-7889; e-mail
ptlocke@earthlink.net. Paul T. Locke is a member of the purported class
and a witness to many of the facts alleged in the complaint.

Not later than 60 days after the date on which this Notice is published,
any member of the purported class may move the Court to serve as lead
plaintiff of the purported class.

Contact: Law Offices of Paul T. Locke Paul T. Locke, 818/735-7886
ptlocke@earthlink.net


RED HAT: Milberg Weiss Announces Filing of Securities Suit in New York
----------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on April 3, 2001 on behalf of purchasers
of the securities of Red Hat, Inc. (NASDAQ: RHAT) between August 11, 1999
and May 25, 2000 inclusive. A copy of the complaint filed in this action
is available from the Court, or can be viewed on Milberg Weiss' website
at: http://www.milberg.com/redhat/

The action, numbered 01 Civ. 2818, is pending in the United States
District Court for the Southern District of New York, located at 500
Pearl Street, New York, NY 10007, against defendants Red Hat, Goldman
Sachs & Co. ("Goldman Sachs"), Credit Suisse First Boston Corporation
("Credit Suisse"), Robert F. Young, Matthew J. Szulik and Marc Ewing.

The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. On August 11, 1999, Red
Hat commenced an initial public offering of 6 million of its shares of
common stock at an offering price of $14 per share (the "Red Hat IPO").
In connection therewith, Red Hat filed a registration statement, which
incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
further alleges that the Prospectus was materially false and misleading
because it failed to disclose, among other things, that: (i) Goldman
Sachs and Credit Suisse had solicited and received excessive and
undisclosed commissions from certain investors in exchange for which
Goldman Sachs and Credit Suisse allocated to those investors material
portions of the restricted number of Red Hat shares issued in connection
with the Red Hat IPO; and (ii) Goldman Sachs and Credit Suisse had
entered into agreements with customers whereby Goldman Sachs and Credit
Suisse agreed to allocate Red Hat shares to those customers in the Red
Hat IPO in exchange for which the customers agreed to purchase additional
Red Hat shares in the aftermarket at pre-determined prices. As alleged in
the complaint, the SEC is investigating underwriting practices in
connection with several other initial public offerings.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP Steven G. Schulman or
Samuel H. Rudman 800/320-5081 redhatcase@milbergNY.com
http://www.milberg.com


SALOMON BROTHERS: Sp Ct Remands Suit By Trust Appealing for ERISA Claims
------------------------------------------------------------------------
In September 1992, Harris Trust and Savings Bank (as trustee for
Ameritech Pension Trust), Ameritech Corporation, and an officer of
Ameritech sued Salomon Brothers Inc and Salomon Brothers Realty
Corporation in the U.S. District Court for the Northern District of
Illinois (Harris Trust Savings Bank, not individually but solely as
trustee for the Ameritech Pension Trust, Ameritech Corporation and John
A. Edwardson v. Salomon Brothers Inc and Salomon Brothers Realty Corp.).
The complaint alleged that purchases by Ameritech Pension Trust from the
Salomon entities of approximately $20.9 million in participations in a
portfolio of motels owned by Motels of America, Inc. and Best Inns, Inc.
violated the Employee Retirement Income Security Act ("ERISA"), the
Racketeer Influenced and Corrupt Organization Act ('RICO") and state law.
Salomon Brothers Inc had acquired the participations issued by Motels of
America and Best Inns to finance purchases of motel portfolios and sold
95% of three such issues and 100% of one such issue to Ameritech Pension
Trust.

Ameritech Pension Trust's complaint sought (1) approximately $20.9
million on the ERISA claim, and (2) in excess of $70 million on the RICO
and state law claims as well as other relief.

In various decisions between August 1993 and July 1999, the courts
hearing the case have dismissed all of the allegations in the complaint
against the Salomon entities.

In October 1999, Ameritech appealed to the U.S. Supreme Court and in
January 2000, the Supreme Court agreed to hear the case. An argument was
heard on April 17, 2000. The appeal seeks review of the decision of the
U.S. Court of Appeals for the Seventh Circuit that dismissed the sole
remaining ERISA claim against the Salomon entities.

In June the Supreme Court reversed the Seventh Circuit and the matter has
been remanded to the Trial Courts.

Both the Department of Labor and the Internal Revenue Service have
advised Salomon Brothers Inc that they were or are reviewing the
transactions in which Ameritech Pension Trust acquired such
participations. With respect to the Internal Revenue Service review,
Salomon Smith Barney Holdings, Salomon Brothers Inc and Salomon Brothers
Realty have consented to extensions of time for the assessment of excise
taxes that may be claimed to be due with respect to the transactions for
the years 1987, 1988 and 1989.


SALOMON SMITH: Contests NY Suit By Hedge Fund over Misuse of Money
------------------------------------------------------------------
In March 1999, a complaint seeking in excess of $250 million was filed by
a hedge fund and its investment advisor against Salomon Smith Barney in
the Supreme Court of the State of New York, County of New York (MKP
Master Fund, LDC et al. v. Salomon Smith Barney Inc.). The complaint
included allegations that, while acting as prime broker for the hedge
fund, Salomon Smith Barney breached its contracts with plaintiffs,
misused their monies, and engaged in tortious (wrongful) conduct,
including breaching its fiduciary duties. Salomon Smith Barney asked the
court to dismiss the complaint in full. In October 1999, the court
dismissed the tort claims, including the breach of fiduciary duty claims.
The court allowed the breach of contract and misuse of money claims to
stand, Salomon Smith Barney will continue to contest this lawsuit
vigorously.

Smith Barney Principal Plus Futures Fund L.P. II (the Partnership) is a
limited partnership organized on November 16, 1995 under the partnership
laws of the State of New York. The Partnership engages in speculative
trading of commodity interests, including contracts on foreign
currencies, commodity options and commodity futures contracts including
futures contracts on United States Treasury and other financial
instruments, foreign currencies and stock indices. The Partnership
maintains a portion of its assets in principal amounts stripped from U.S.
Treasury Bonds under the Treasury's STRIPS program ("Zero Coupons") which
payments will be due November 15, 2003. The Partnership uses the Zero
Coupons and its other assets to margin its commodities account.

Smith Barney Futures Management LLC acts as the general partner (the
"General Partner") of the Partnership. The Partnership's commodity broker
is Salomon Smith Barney Inc. ("SSB"). SSB is an affiliate of the General
Partner. The General Partner is wholly owned by Salomon Smith Barney
Holdings Inc.


SMITH BARNEY: Settles with IRS and SEC Re Mark-ups By Broker-Dealers
--------------------------------------------------------------------
As previously reported in the CAR, in November 1998, a class action
complaint was filed in the United States District Court for the Middle
District of Florida (Dwight Brock as Clerk for Collier   County  v.
Merrill Lynch, et al.).

The complaint alleged that, pursuant to a nationwide conspiracy, 17
broker-dealer defendants, including Salomon Smith Barney, charged
excessive mark-ups in connection with advanced refunding transactions.
Among other relief, plaintiffs sought compensatory and punitive damages,
restitution and/or rescission of the transactions and disgorgement of
alleged excessive profits. In October 1999, the plaintiff filed a second
amended complaint. Salomon Smith Barney has asked the court to dismiss
the amended complaint.

In connection with the Louisiana and Florida matters, the IRS and SEC
have been conducting an industry-wide investigation into the pricing of
Treasury securities in advanced refunding transactions.

In April 2000 SSB and several other broker-dealers entered into a
settlement with the IRS and the SEC.


ST. CHARLES: Student's Lawsuit Says School Mold Caused Ailments
---------------------------------------------------------------
A student at St. Charles East High School filed a suit Tuesday contending
he is suffering "various physical conditions, including a respiratory
condition" stemming from his exposure to toxic mold in the school.

Attorneys for Nicholas Patrick, 18, a senior, are seeking class-action
status for the lawsuit, filed in Kane County Circuit Court. That
designation could expand the number of plaintiffs to an estimated 10,000.
The school's enrollment is 2,300, but the lawsuit states that the
plaintiffs could include St. Charles East students who have attended the
school since 1986, when renovations generated chronic complaints about
the school's air quality.

"What we want to do is find how pervasive the problem is," said Terry
Ekl, one of Patrick's attorneys. "If the mold molecules have become
airborne and gotten into the ventilation system, this problem becomes
huge."

The complaint alleges the district failed to adequately monitor the
school's air quality, failed to take reasonable action to detect toxic
mold or excess moisture that promoted the mold, failed to provide
adequate heating, ventilation and air conditioning, and "was otherwise
careless and negligent."

In addition to Community Unit School District 303, the lawsuit names
"John Doe" architect, engineer and general contractors as defendants.
Attorneys are uncertain who designed, engineered and built the structure,
but they said they wanted to file the lawsuit promptly so a team of their
experts could examine the building while it is closed this week to
students.

The complaint seeks "an amount sufficient to cover all costs and expenses
for necessary and appropriate medical screening now and in the
foreseeable future." Also, it asks "for compensatory damages in an amount
in excess of $50,000."

The lawsuit arose a day after District 303 officials temporarily closed
the building and held a community meeting that drew an overflow crowd to
the school's 1,100-seat auditorium.

District 303 tested St. Charles East High School over spring break last
week and found three strains of mold that can yield allergic reactions.
The district then closed the school at least until Monday, while experts
continue evaluating and cleaning the school. District officials are
expected to make a decision after meeting with an environmental firm
Thursday.

The molds, stachybotrys, aspergillus and penicillium, can cause allergic
reactions, scratchy throats and sinus or bronchial irritation if inhaled.

Students, parents and teachers have complained for years that the school
caused breathing difficulties, sinus infections, nausea, fatigue and
other symptoms dating to 1983.

District officials have noted that the school was built "very tight" in
the energy crisis of the mid-1970s to cut costs.

After a 1998 report found mold, insufficient fresh air, high carbon
dioxide levels and water leakage, school officials spent about $5.6
million the next year to replace a ventilation system, carpeting and
tile. But parents have complained that the measures are inadequate, and
last month, a former student now living in Massachusetts filed a lawsuit
making similar allegations. (Chicago Tribune, April 4, 2001)


TOBACCO LITIGATION: Blue Cross Case Set for Trial in Brooklyn
-------------------------------------------------------------
The suit is part of a judge's attempt to settle tobacco liability once
and for all.

Just weeks after a mistrial in a billion-dollar case against Big Tobacco,
another billion-dollar case goes to trial in the same Brooklyn, N.Y.,
courtroom on March 26.

Lawyers for 21 Blue Cross and Blue Shield health care plans will try to
convince a Brooklyn federal jury that the tobacco industry should
reimburse them for money paid to treat sick smokers. Blue Cross and Blue
Shield of New Jersey Inc. v. Philip Morris Inc., No. 98-3267 (E.D.N.Y.).

The suit, presided over by U.S. District Judge Jack B. Weinstein, claims
the industry conspired to hide the addictiveness of nicotine and the
health risks of smoking, resulting in added costs to one of the plans,
Empire Blue Cross and Blue Shield of New York. Last year, Judge Weinstein
held that he would try Empire's claims before those of the other "Blues"
plans.

Like the earlier case, on behalf of an asbestos trust fund, the Blue
Cross case is one of a dozen big, complex tobacco cases before Judge
Weinstein, a widely respected activist judge. He has been trying to use
the cases as a base for engineering a nationwide judicial resolution of
tobacco liability.

But tobacco lawyers have complained that Judge Weinstein is trying to
strong-arm them into a global settlement, refusing to dismiss Blue Cross
and other cases that are all but identical to ones that have been
rejected across the country.

                             Brooklyn Blues

At the trial, which is expected to last eight weeks, Blue Cross will
attempt to tell the story of what it claims is the industry's
decades-long conspiracy to mislead Americans about the effects of
smoking. This deception, it claims, required Blue Cross to pay for
treating "a lot more people than we would have seen if they'd told the
truth," said Vincent R. Fitzpatrick, Jr., of New York's Dewey Ballantine,
counsel for Blue Cross.

The case will be tried under RICO -- the federal racketeering statute --
New York's consumer protection laws and common-law fraud. Blue Cross
intends to use statistics to prove reliance on alleged industry
deceptions, causation and injury. Among the witnesses will be Julius
Richmond, a former surgeon general of the United States. Mr. Fitzpatrick
said potential damages are $ 965 million under RICO (which is subject to
trebling under the statute) or $ 870 million plus possible punitive
damages on the state-law claim.

For their part, defense lawyers have complained bitterly about Judge
Weinstein's refusal to dismiss Blue Cross and some of the other tobacco
cases in his courtroom. "He has not followed clearly binding 2d Circuit
precedent," said Steven B. Rissman, an in-house lawyer at Philip Morris.

The case has a lot going against it. Ruling in September that the case
should go to trial, Judge Weinstein nevertheless wrote that he was
"skeptical of plaintiffs' ability to fully support their allegations."

The case was one of three similar actions brought on behalf of different
groups of Blue Cross/Blue Shield plans, filed in Brooklyn, Chicago and
Seattle federal courts in 1998. In 1999, the U.S. Court of Appeals for
the 7th Circuit dismissed the Chicago suit, Arkansas Blue Cross & Blue
Shield v. Philip Morris Inc., 1999 U.S. App. Lexis 33549 (Dec. 16, 1999).
In February, the 9th Circuit dismissed the Seattle case, Regence
BlueCross BlueShield of Oregon v. Philip Morris Inc., 2001 U.S. App.
Lexis 3246 (9th Cir. Feb. 28, 2001). (Blue Cross has asked for a
rehearing by the full court.)

                         Final Resolution?

All six circuit courts of appeal that have considered so-called
third-party payer cases, which include the Blue Cross cases, have
rejected them.

Judge Weinstein is considering a nationwide class action that could, in
theory, resolve nearly all outstanding claims for injury against the
tobacco industry. In Re: Simon (II) Litigation, No. 00-5532 (E.D.N.Y.).
The proposed class action would include all claims for compensatory
damages, except for plaintiffs who affirmatively opt out. Claims for
punitive damages would be considered on a mandatory class basis, meaning
that no one may opt out.

The goal of such a litigation leviathan would be to resolve Big Tobacco's
liability once and for all, a goal Judge Weinstein articulated a year
ago, when, pressing for global settlement talks, he said "the time for
bringing a close to tobacco litigation is nigh."

The question is whether the judge can fit all of these claims into a
single package in the face of recent Supreme Court precedent limiting the
use of class actions to resolve mass personal injury claims.

In the earlier tobacco trial in front of Judge Weinstein, a trust fund
set up to pay asbestos-related claims against the bankrupt Johns Manville
Corp. sued the tobacco industry, seeking contribution for money paid out
to smokers. Falise v. American Tobacco Co., No. 99-7392 (E.D.N.Y.). Judge
Weinstein was forced to declare a mistrial on Jan. 25, when the jury
deadlocked. A retrial is expected sometime after the Blue Cross trial.
(The National Law Journal, April 2, 2001)


TOBACCO LITIGATION: Damage Trial Winds Up For Flight Attendants' Suit
---------------------------------------------------------------------
The tobacco industry should be ordered to pay hundreds of thousands of
dollars, at a minimum, to a disabled flight attendant whose lung disease
was aggravated by cigarette smoke on airliners, her attorneys said
Wednesday in closing arguments.

The nation's four biggest cigarette makers were to offer their final
remarks to a six-member jury later in the day.

Philip Gerson, attorney for Marie Fontana, asked jurors to calculate for
themselves her past and future economic losses, pain and suffering. He
said they should order them to pay at least hundreds of thousands.

"What an ugly future she faces, filled with more suffering that will
ultimately end in her death," he said. "She has a death sentence."

The case is the first of more than 3,200 mini-trials to decide
compensatory damages for non-smoking attendants who blame their illnesses
on cigarette smoke in airline cabins.

The defendants are Philip Morris, R.J. Reynolds, Brown & Williamson and
Lorillard.

The panel will begin deliberating after defense closings and jury
instructions.

Fontana, who turned 59 during the trial, flew primarily international
flights with TWA from 1973 until her disability retirement in 1996. The
jury will be asked to decide if cigarette smoke on jets was a legal cause
of damage to Fontana.

Fontana was diagnosed in 1987 with sarcoidosis, a disease with no known
cause. Her treating physicians never changed that finding, but two
radiologists testified she also suffers from emphysema and chronic
bronchitis, which can be caused by second-hand smoke.

Fontana's attorneys charged the tobacco industry tried to make the case
incomprehensible and paid witnesses for favorable testimony to protect
their financial future.

Her claim and the thousands of others are an outgrowth of the industry's
landmark $349 million settlement of a national class-action lawsuit by
sick attendants.

The trial is being held across the foyer from a courtroom where tobacco
giants lost a record-setting $145 billion award to Florida smokers last
July. (The Associated Press State & Local Wire, April 4, 2001)


TWA: Klein & Solomon Files Suit over NYC-Tel Aviv Route Cancellation
--------------------------------------------------------------------
Klein & Solomon, LLP, of New York City filed a class action suit on April
4 against Trans World Airlines, Inc. (TWA) on behalf of Rabbi Yehuda
Kolko and all other individuals similarly impacted by the airline's
cancellation of its New York City-Tel Aviv route last week. The action
was filed in United States District Court, Eastern District of New York.

It alleges that TWA's cancellation of flights on this route as of March
29, 2001, is a violation of the Warsaw Convention, a long-standing United
States treaty regulating international air transportation.  The action
seeks damages on behalf of Kolko, of Brooklyn, and others who hold
tickets for travel between JFK International Airport and Tel Aviv's David
Ben-Gurion Airport scheduled to begin on or after March 29th. Before
March 29, TWA operated one flight daily from JFK to Tel Aviv and one
flight daily from Tel Aviv to JFK.

"We believe there are thousands of members in this Class because the
route has been regularly flown by TWA's Boeing 747 aircraft," said Edward
E. Klein, one of Kolko's attorneys. "Each plane routinely carries some
400 passengers and TWA continued to sell New York to Tel Aviv tickets
until right before the formal cancellation announcement was made.
Ticketed passengers showed up for the flight in both New York and Tel
Aviv last Thursday and were turned away at the gates."

Prior to Thursday's announcement, the St. Louis, Missouri-based airline
had provided service on the New York-Tel Aviv route for 54 years,
predating the creation of the state of Israel in 1948, with travel
particularly heavy during Passover and the Easter season. "TWA's
cancellation of the route is unconscionable," said Kolko, who was forced
to purchase tickets from El Al on short notice after his TWA arrangements
were cancelled, "but the company's timing is even more egregious to those
of us who purchased tickets to visit with families and friends in Israel
for Passover. TWA's action will prevent many of us from seeing our loved
ones on this important holiday." "While TWA has attempted to provide
alternative transport for some of those holding tickets," Joseph Garland
of Klein & Solomon notes, "this action concerns those for whom reasonable
accommodations have not been made."

TWA cited labor disputes in Israel related to its recent filings in
federal Bankruptcy Court in Delaware as a reason for the route's
cancellation. But, according to Klein, the alleged Warsaw Convention
violations are not related to the bankruptcy and are not under the
Bankruptcy Court's jurisdiction.

The Warsaw Convention (formally the Convention for the Unification of
Certain Rules Relating to International Transportation by Air) was
concluded at Warsaw, Poland on October 12, 1929. Adherence by the United
States was declared on June 27, 1934, and the Convention became effective
as to the United States on October 29, 1934. Certain aspects of the
treaty were amended and ratified in 1955 by the U.S. Most countries,
including Israel, are signatories.

Klein cites Article 19 of the Convention as applicable to the
circumstances of Kolko and others who hold TWA tickets for the
now-defunct route. It provides that "the carrier shall be liable for
damage occasioned by delay in the transportation by air of passengers,"
Klein explained. "Rabbi Kolko and other members of the Class have
suffered damages occasioned by TWA's unpredictable actions. They deserve
to be compensated for their losses."

The suit asks the Federal District Court to provide the Plaintiff and the
Class unspecified compensatory damages, reimbursement of fees and
expenses incurred in bringing the suit, including attorney's and expert's
fees, and other relief the Court may consider reasonable and appropriate
for this situation.

Contact: Jamie Moss, 201-493-1027, or cell, 201-788-0142, Edward E. Klein
or Joseph P. Garland, 212-661-9400, all for Klein & Solomon


U OF MI: Judge Denies Stay To Law School Using Race As Admission Factor
-----------------------------------------------------------------------
A federal judge in Detroit, who last week put an end to the use of race
in admissions at the University of Michigan law school, has denied the
school's request for a stay of his injunction.

The ruling means the school must immediately halt using race as a factor
in selecting students for its next class.

U.S. District Judge Bernard A. Friedman denied the school's request in a
nine-page ruling, saying that with the law school's "extensive experience
in reviewing law school applications, defendants should have no
difficulty identifying 100 excellent candidates within this time frame
without considering race."

Because of the time frame, many of the school's 2001 summer and fall
applicants have already been admitted, said Curt Levey of the Washington
D.C.-based Center for Individual Rights, which represented the plaintiff
in the case.

Judge Friedman, in his ruling, said that more than 750 offers had been
made to prospective students with about 300 to 450 offers yet to be made.
He said that posed "no insurmountable obstacle" to obeying the
injunction.

The judge said neither the interests of other parties nor the public
interest were reason enough to grant a stay.

"Because this is a class action, the plaintiffs are not merely one
individual but all non-minority applicants whose applications are
reviewed less favorably than those of minority applicants," the judge
wrote. "There is also strong public interest in ensuring that public
institutions comply with the Constitution."

The decision came in the case of Barbara Grutter, 47, and a mother of
two, who sued the law school in 1997 after her application for admission
was denied. Mrs. Grutter, who is white, claimed her civil rights were
violated.

Judge Friedman, who ruled in the case last Tuesday, agreed, saying that
whatever method the school uses for admissions must be "race neutral."

"The focus must be upon the merit of individual applicants, not upon
assumed characteristics of racial groups," wrote Judge Friedman in a
91-page decision.

In 1978, the U.S. Supreme Court ruled that considering race in university
admissions was constitutional, but it outlawed the use of quotas. In
1996, the University of Texas law school ended the use of race in
admissions. Racial preferences also have been banned in Washington and
Florida. (The Washington Times, April 04, 2001)


* Senate Panel Queries Energy Firms' Lower Rates Bigger Profits Messages
------------------------------------------------------------------------
In the summer of 1999, a top official with a major player in California's
power market testified during a congressional committee hearing in
support of speeding up deregulation. Unleashing market forces, said the
Dynegy Inc. executive, would ensure "maximum customer savings" and
"low-cost power."

That same month, the Houston-based firm made a far different pitch to
Wall Street: Deregulation and major swings in electricity prices would
boost revenue and stock value. "We know how to take advantage of
volatility spikes across the gas and power market," Chief Executive
Officer Charles Watson declared in a publication targeting large
investors. "The energy marketplace," he predicted, "will simply get more
volatile."

Dynegy was not alone, a review of federal filings, company documents and
public records shows. In the years since California's pioneering
deregulation plan was approved, other major out-of-state energy suppliers
were sending similar, seemingly contradictory signals to the public and
stock buyers.

Now, those divergent messages--electricity prices will fall but corporate
revenue and profits will climb--will be a key focus of a special state
Senate committee charged with investigating the alleged manipulation in
the power market.

"How you can tell your investors you're about to make a whole ton of
money in the very short term, and tell the consumers of California you're
about to get lower rates?" said Sen. Joe Dunn (D-Santa Ana), a former
consumer attorney who is heading the legislative probe.

Investigations by the state attorney general and federal regulators are
continuing, but remain largely secret.

The Senate panel could offer the most open and wide-ranging examination
yet of alleged misconduct among power sellers. The bipartisan panel
expects to begin requesting documents from power producers as early as
April 4 and begin hearings in a few weeks. Committee members stress that
they are hoping the power companies will cooperate but are ready to issue
subpoenas if necessary.

                    Suppliers Deny Misleading Public

The legislative probe comes as many state officials are moving
aggressively to expose alleged market manipulation and overcharges
totaling billions of dollars by the power suppliers.

"Somewhere along the line, there may be a skunk in the woodpile. And if
there is, we need to find out about it," said K. Maurice Johannessen
(R-Redding), the committee's ranking Republican.

Another panel member, Sen. Debra Bowen (D-Marina del Rey), noted that all
companies try to maximize profits. "But we want to understand how the
market was manipulated and how sellers took advantage of the market."

The power traders strongly deny acting improperly or sending misleading
signals to the public.

"Hogwash," said Tom Williams, spokesman for North Carolina-based Duke
Energy. Spokesmen for Dynegy said there was nothing inconsistent in the
statements of their executives.

The companies maintain that California's problems stem from soaring
electricity demand, lagging power plant construction and a faulty
deregulation plan adopted by the Legislature in 1996. "You have a flawed
structure there," said Dynegy spokesman John Sousa.

Sousa and executives of other power suppliers say their comments to the
general public and to Wall Street are not contradictory because
unfettered competition--not the California model--would have created
opportunities to both make money and cut rates.

Still, regulators, lawmakers and ratepayer groups note that only half the
promises made by the power dealers have been realized so far--their
earnings and stock prices have risen at record rates as electricity
prices have soared.

"The big lie was, while they were telling ratepayers to 'Trust us, we're
going to lower your rates,' they were planning the entire time to raise
the rates," said San Diego attorney Michael Aguirre, a former federal
prosecutor who specialized in fraud cases. Aguirre is representing state
ratepayers in a class-action lawsuit against the power companies.

Just last month, California's independent grid operator reported that
many power sellers "used well-planned strategies to ensure maximum
possible prices." Potential overcharges could total nearly $ 6.3 billion.

The Senate panel wants to track information that Dynegy and other
generators were providing to the investment community in the 1990s as a
possible way of determining whether they entered the California market
with plans to run up electricity costs. Among many other things, the
committee plans to seek internal projections of how the firms expected
wholesale prices and profits to rise under deregulation.

Members also want to know how the suppliers expected to recoup billions
in outlays for California power plants being unloaded by regulated
utilities. Some of the purchases were far above book value, stunning
analysts.

"What did they know that the rest of us didn't at the time they were
purchasing those generations facilities?" asked Dunn. "They knew
something."

One thing the power wholesalers say they did know was that tight power
supplies in California would probably boost prices, at least for a time.

"They were going anywhere where they thought energy use would spike
upward," recalled market analyst Joan Goodman, who was familiar with
company pitches. "California was one of those places because it didn't
have sufficient power plants."

Duke Energy projected that prices would rise after 2000, although the
company says it did not foresee the huge increases that occurred,
according to spokesman Williams.

However, when the company sealed one of the first packages of power plant
purchases in the state in 1997, Chief Executive Officer Richard Priory
said in a press release it would "deliver greater value" to California
customers.

The publicity spin was similar when Edison's sprawling beachfront power
plant in El Segundo changed hands the following year. "Consumers in
California will begin to benefit from more competitively priced
electricity and more vibrant economy," announced Craig Mataczynski, vice
president of Minneapolis-based NRG Corp., a partner in the purchase with
Dynegy.

                     Big Growth Was Predicted

Utilities reaping profits from plant sales also trumpeted the consumer
windfall theme. Electricity rates would drop 20% by 2001, Pacific Gas &
Electric's top executive, Robert Glynn, said in early 1998. "There is no
product bought on a daily basis that has such a predictable downward
price trajectory into the future."

But to its Wall Street audience, the power suppliers emphasized climbing
revenues.

Atlanta-based Southern Co., now Mirant, told investors in 1999 that its
plan to buy plants and market power had brought the company to the
"doorstep of significant growth opportunities."

"We believe our strategies will result in the best shareholder return
available," Bill Dahlberg, then-chief executive officer, said shortly
after buying three California plants.

Mirant spokeswoman Jamie Stephenson said assurances given the public and
assumptions directed to Wall Street were "just a different way of
delivering the same message." The firm was saying it would be "reliable
to shareholders and reliable to consumers."

Now, with rolling blackouts and record electricity bill increases,
federal and state authorities are alleging that large energy suppliers
played the power market too hard.

Last month, the Federal Energy Regulatory Commission said it found
evidence of $ 124 million in "unjust and unreasonable" charges during the
severest periods of electricity shortage. The commission, often
criticized for being too lenient on private power companies, ordered the
firms to refund the money or further justify the charges.

Some firms are contesting the findings, saying the prices they charged
were justified.

Investigators and regulators have faced a vexing challenge trying to
unravel the complex financial workings of the large power traders. The
companies closely guard information, and some recently refused to comply
with subpoenas from the state Public Utilities Commission, which is also
probing the power market.

Whether the Senate investigating committee will have the resources and
tenacity to get much further remains to be seen. But Democrats and
Republicans alike insist they are serious about untangling how the power
market went haywire.

"I haven't seen that much smoke where there hasn't been a fire," Dunn
said.

                             Power Points

The state Legislature approved electricity deregulation with a unanimous
vote in 1996. The move was expected to lower power bills in California by
opening up the energy market to competition. Relatively few companies,
however, entered that market to sell electricity, giving each that did
considerable influence over the price. Meanwhile, demand has increased in
recent years while no major power plants have been built. These factors
combined last year to push up the wholesale cost of electricity. But the
state's biggest utilities--Pacific Gas & Electric and Southern California
Edison--are barred from increasing consumer rates. So the utilities have
accumulated billions of dollars in debt and, despite help from the state,
have struggled to buy enough electricity.

                           Daily Developments

The Public Utilities Commission ordered an investigation into the
transfer of billions of dollars from utilities to their holding
companies, even as utilities sought rate increases to cover excess costs.

The commission also agreed to allow the Department of Water Resources to
sell $ 12 billion to $ 14 billion in bonds to help pay for the state's
power purchases.

Negotiations between Edison International and the state over public
purchase of the utility's transmission system reach a critical stage.

                                Verbatim

"The commission, which is probably faced with one of the greatest
challenges since the state was formed in 1850, is wasting its time
reviewing old ground." -- PG&E Corp. spokesman Greg Pruett (Los Angeles
Times, April 4, 2001)


                             *********


S U B S C R I P T I O N  I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at 301/951-6400.


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