/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010511.mbx C L A S S A C T I O N R E P O R T E R Friday, May 11, 2001, Vol. 3, No. 93 Headlines AEGIS’ ADVISERS: Face 3 Suits over Proposed Acquisition of Properties AMTRAK: Passengers Amend Lawsuit over Train Wreck to Demand Amenities AVANT! CORP: Fired Audit Firm That Warned About Internal Control BARR LABORATORIES: Says Tamoxifen Patent Settlement is Pro-Competitive BURLINGTON NORTHERN: Accused of Conspiring with law firm on Payouts CARREKER CORP: Resolves TX Suit re Contract with Knowledge Based Systems COLUMBIA LABORATORIES: Announces Securities Lawsuit Dismissed CORVIS CORP: Stamell & Schager Announces Securities Suit Filed in N.Y. DAIMLERCHRYSLER AG: Moves Fd Ct to dismiss investor Suits over 1998 Deal FIRESTONE, FORD: A National Lawsuit Has Been Launched In Canada FORD MOTOR: Demands Atty. Take Down Website Detailing Lawsuit over Bias GEORGIA POWER: Groups Seek to Halt Rate Hike for Parent's Race Bias Suit HASTINGS ENTERTAINMENT: Securities Suits in TX Consolidated HMOs: Judge OKs More Evidence to Be Turned over to Plaintiff Doctors HOLOCAUST VICTIMS: Judge Dismisses Suits Blocking Nazi Compensation Fund INTERWORLD CORP: SEC Conducts Formal Investigation re Securities Trading PHONE COMPANIES: Landowners Along Rail Lines Seek Compensation SUMITOMO CORP: Reaches $ 87 Mil Settlement for Copper Scam Case U OF CALIFORNIA: Ct OKs Students with Hearing Problems for Class Action XEROX CORPORATION: Black Sales Agents File Discrimination Suit ********* AEGIS’ ADVISERS: Face 3 Suits over Proposed Acquisition of Properties --------------------------------------------------------------------- The Board of Trustees of directs the management of the business of Charter Municipal Mortgage Acceptance (CharterMac), but retains Related Charter, LP (the "Manager") to manage the Company's day-to-day affairs. The Board of Trustees has delegated certain responsibilities to the Manager including, among other things, overseeing the Company's portfolio of assets and acquiring and disposing of investments. On or about February 8, 2001, a complaint was filed in the New York Supreme Court, County of New York, against the external advisor of Aegis. Also named as defendants in the suit were certain affiliates of Aegis' adviser and Messrs. Boesky, Hirmes, Ross, Brenner, Allen and Fisch, each of whom is a trustee of Charter Municipal Mortgage Acceptance. Aegis was also named as a nominal defendant. The action is entitled PAUL V. THE RELATED COMPANIES, L.P., ET AL., Index No. 01-600669, and is purportedly a class and derivative action. On or about March 23, 2001 a second action, entitled SCHNIPPER V. AEGIS REALTY, INC., ET AL., Case No. 219736-V, was filed in the Circuit Court for Montgomery County, Maryland against Aegis and each of Aegis's five directors (Messrs. Boesky, Brenner, Hirmes, Allen and Fisch). SCHNIPPER is purportedly brought as a class action. On or about April 2, 2001 a third action, entitled OPPORTUNITY PARTNERS, L.P. V. STUART J. BOESKY, ET AL., Civ. No. 24-C-01-001579, was filed in the Circuit Court for Baltimore County, Maryland against, among others, Aegis, each of its five directors, and Aegis' external advisors, which are affiliates of the Manager. OPPORTUNITY PARTNERS is purportedly a class and derivative action. Each of these three actions challenges Aegis' proposed acquisition of a property portfolio and development business owned by a third party, which transaction also involves the termination by Aegis of its external advisory agreements with affiliates of the Manager and purchase by Aegis of various assets owned by those external advisors. Each suit alleges that the defendants breached their fiduciary duties to the Aegis stockholders by, among other things, committing Aegis to pay unwarranted fees and other consideration to affiliates of the Manager. All three actions seek money damages, injunctive and declaratory relief and attorneys' fees. The transaction at issue in each suit, Charter Municipal says, was however approved by Aegis' independent directors (Messrs. Allen and Fisch), who first obtained legal advice and two fairness opinions from nationally recognized investment banking firms before approving those transactions. Additionally, the transaction at issue is subject to Aegis stockholder approval after proxy materials describing that transaction are disseminated to the Aegis stockholders. The defendants have advised the Company that they intend to defend all three actions vigorously. The defendants filed motions to dismiss the complaint in PAUL on or about April 16, 2001. Not all of the defendants have been served yet in SCHNIPPER and OPPORTUNITY PARTNERS and the time to answer for the defendants that have been served has not yet expired. AMTRAK: Passengers Amend Lawsuit over Train Wreck to Demand Amenities --------------------------------------------------------------------- Passengers suing Amtrak over a train wreck that injured 61 people are demanding that Amtrak equip its trains with seat belts for all passengers and ways to anchor wheelchairs. "We're talking about simple amenities. There was not a thing to hang onto," said Ben Penner, 56, of Fairport, one of 21 injured passengers who have joined in a $4.6 million class-action lawsuit against Amtrak in connection with the Feb. 5 accident near Syracuse. The amended lawsuit, filed Wednesday, contends that Amtrak is in violation of the Americans with Disabilities Act by failing to have proper accommodations for passengers with disabilities. Amtrak spokeswoman Karen Dunn said the railroad is in compliance with all requirements of the ADA. The law does not require securing devices, she said. A preliminary investigation by the National Transportation Safety Board found that veteran Amtrak engineer Steven R. Gill misread a signal and crashed into the back of a slow-moving 92-car CSX freight train that was waiting to enter a rail yard. According to "event recorders" on the trains and signal mechanisms, Gill apparently missed a signal indicating "restricted" speed of 15 mph or less. Investigators said the Amtrak train reached 58 mph before the Gill applied the emergency brake. Gill, 48, has been on an unpaid leave until federal authorities issue their final report. Dozens of the train's 98 passengers suffered broken arms, legs and head injuries. The passengers included a small group of disabled people who were traveling to Albany for a seminar on how to live more independently. Penner, a group member, said he suffered a head injury and a cut knee when the scooter he was in was jolted upward in the crash. Two other wheelchair-bound passengers were thrown from their wheelchairs - one of whom landed on Penner. In their initial lawsuit filed in U.S. District Court, the passengers accused Amtrak and CSX of operator negligence. A preliminary hearing on the lawsuit is scheduled for July 10 in Syracuse. (The Associated Press State & Local Wire, May 10, 2001) AVANT! CORP: Fired Audit Firm That Warned About Internal Control ---------------------------------------------------------------- Avant! Corp. fired KPMG LP after the nation's third-largest accountant warned that the software maker lacked the ability to detect inaccuracies in its own financial reports. Avant! fired KPMG on April 13, just 11 days after the company filed its annual report with the Securities and Exchange Commission, according to an SEC filing. KPMG signed off without reservations on the 2000 financial statements for the maker of software used to design computer chips. But on April 23, KPMG notified the SEC that it had warned Avant!'s audit committee about the "ineffectiveness of internal controls" found during its 2000 audit. The letter was filed with the SEC by Avant! on April 24. Clayton Parker, an Avant! spokesman, denied a connection between the warning from KPMG and the accounting firm's dismissal. "Any organization that has seen our growth will have conditions that are not 100 percent perfect," said Parker. "Their departure was purely for business reasons." Robert Zeitlinger, a KMPG spokesman, declined to comment on the letter, because of client confidentiality. In its letter to the SEC, KMPG said that, because it considered the deficiencies serious enough to be "reportable events," it brought them to the attention of Avant!'s board of directors. Avant! had previously said there were "no reportable events" over the past two years. Reportable events are defined by the American Institute of Certified Public Accountants as "significant deficiencies in the design or operation of internal control which could adversely affect the organization's ability to record, process summarize and report financial data consistent with the assertions of management in the financial statements." Avant!, which replaced KPMG with PricewaterhouseCoopers LLP, delayed announcing its year-end earnings by two weeks until Feb. 13, explaining that it was "still in the process of completing its year-end audit." KMPG said its 2000 audit found that Avant! had ineffective "internal controls associated with recording revenue, which resulted in numerous errors throughout the year." In its 1999 audit, KMPG found "incomplete and missing contract documentation, inadequate internal communications in connection with recording revenue on complex contracts and the lack of timely and accurate account reconciliations." Chief Executive Officer Gerald C. Hsu and several other Avant! employees are scheduled to go on trial Monday in a California state court on charges that they stole secrets from a competitor. On March 29, Avant! agreed to pay $47.5 million to plaintiffs in two class action lawsuits related to the alleged corporate espionage. In its annual report, the company said it has spent $32.8 million on lawyers fees over the past three years defending itself against the accusations. Avant shares fell 49 cents to $16.10 on May 9. (The Baltimore Sun, May 10, 2001) BARR LABORATORIES: Says Tamoxifen Patent Settlement is Pro-Competitive ---------------------------------------------------------------------- Barr Laboratories, Inc. (NYSE: BRL) reiterated that its Tamoxifen patent challenge settlement is pro-consumer and pro-competitive, resulted in the introduction of a lower cost alternative nearly a decade before the expiration of the patent, and has generated millions of dollars in consumer savings. The Company said that a class action suit filed by the Prescription Access Litigation Project (PAL) is without merit. "As a result of our patent settlement, breast cancer patients have had access to a more affordable version of Tamoxifen years earlier than they would have if we had pursued our challenge and failed," said Bruce L. Downey, Barr's Chairman and CEO. The Company distributes its product to drug stores, distributors and wholesalers at approximately 15% less than the brand price. "The validity of this settlement, and its value to consumers, is obvious," Downey continued. "Our decision to settle the case has given women a lower cost alternative to the brand product. When we settled the case, we believed that there was a very real possibility that we might have lost when the innovator appealed our district court decision. In fact, subsequent challenges by other companies have failed, confirming that we made the right decision. If we had not settled, and had lost on appeal, nearly a decade of multi-million dollar savings would never have been realized by consumers." In 1993, as a result of a settlement of a patent challenge against the innovator of Tamoxifen, Barr entered into a non-exclusive supply and distribution agreement with the innovator. Under the terms of the agreement, Barr purchases Tamoxifen directly from the innovator and sells it as a distributed product. The Company also has a tentatively approved Abbreviated New Drug Application (ANDA) for the manufacture of Tamoxifen. Barr Laboratories, Inc. is engaged in the development, manufacture and marketing of generic and proprietary pharmaceuticals. BURLINGTON NORTHERN: Accused of Conspiring with law firm on Payouts ------------------------------------------------------------------- Burlington Northern Santa Fe Railroad conspired with a Portland law firm to limit payments to railroad workers who suffered hearing loss, according to claims in a federal lawsuit filed Wednesday. The lawsuit is similar to three others filed in Washington and Oregon in recent months, seeking class-action status on behalf of some 4,000 BNSF workers. Steve Berman, a Seattle lawyer for the plaintiffs, said as many as 1,000 Montana residents, all employees or former employees of the railroad, may have claims against BNSF and the law firm. The only named plaintiff in Wednesday's lawsuit is Russell Lambert of Great Falls, a former BNSF employee. The lawsuit accuses the railroad of conspiring with the firm Bricker, Zakovics, Querin, Thompson and Ritchey as the railroad faced growing hearing-loss claims from workers under the Federal Employers Liability Act. The lawsuit contends that under a deal with the railroad, the law firm stopped aggressively representing its hearing-impaired clients, waived jury trials and agreed to settlements. Steve Thompson, with Bricker, Zakovics, Querin, Thompson and Ritchey, said the allegations are false. "This law firm has done nothing wrong and we look forward to vindicating ourselves in a courtroom," he said. Thompson said his firm was a "pioneer" in securing damages for railroad workers who suffered hearing loss. "We're proud of our record," he added. "We've achieved unparalleled results that no other law firm has." Richard Russack, a BNSF vice president based in the company's Fort Worth, Texas, headquarters, did not immediately return a phone call seeking comment Wednesday. However, he characterized an earlier lawsuit filed in federal court in Seattle as lacking merit. The employees contend Burlington Northern and the Portland law firm were aware of the size of awards obtained in similar litigation elsewhere and wanted to avoid that. Between 1989 and 1997, juries awarded individual plaintiffs damages ranging from $463,750 to $1.4 million for hearing-loss complaints against railroad companies. The lawsuit contends that under the secret agreement, Burlington Northern would pay a maximum of $65,000 on every claim, no matter how severe the hearing loss. That agreement breached the law firm's responsibility to its clients, the suit contends. Thompson said the law firm is so confident it did nothing wrong that it invited Berman to the firm's Portland office to "examine at his leisure" any hearing-loss claim it handled. "That is an offer he has not taken us up on," Thompson said. (The Associated Press State & Local Wire, May 10, 2001) CARREKER CORP: Resolves TX Suit re Contract with Knowledge Based Systems ------------------------------------------------------------------------ The company began to develop with Knowledge Based Systems, Inc., or KBSI, the CashForecaster suite of products in 1996 pursuant to a development contract. KBSI provided the algorithm-based components for these products. This contract was the subject of a lawsuit filed in September 2000 and was pending in the United States District Court for the Northern District of Texas. On April 9, 2001, Carreker entered into a settlement agreement with KBSI and on April 11, 2001 all legal proceedings were dismissed. The company believes this settlement will not have a material adverse effect on our business, financial position or results of operations. COLUMBIA LABORATORIES: Announces Securities Lawsuit Dismissed ------------------------------------------------------------- Columbia Laboratories (AMEX:COB) on May 10 announced the dismissal of the class action lawsuit filed against the Company. Six class action lawsuits filed in June and July 2000, which were later combined into one, alleged that the company and certain of its officers and directors made materially misleading statements and omissions about the likely prospects for two of the Company's products in violation of federal securities laws. The Company, represented by Weil, Gotshal & Manges LLP and Akerman, Senterfitt & Eidson, P.A., filed a motion to dismiss in December 2000. On May 9, the Court granted defendants' motion, dismissing all claims with prejudice. "We are pleased with Judge King's decision regarding this legal action, and we consider the Company thoroughly vindicated with this ruling," said James J. Apostolakis, Vice Chairman. Columbia Laboratories, Inc. is a U.S.-based international pharmaceutical company dedicated to research and development of women's health care and endocrinology products, including those intended to treat infertility, dysmenorrhea, endometriosis and hormonal deficiencies. Columbia is also developing hormonal products for men and a buccal delivery system for peptides. Columbia's products primarily utilize the company's patented bioadhesive delivery technology. CORVIS CORP: Stamell & Schager Announces Securities Suit Filed in N.Y. ---------------------------------------------------------------------- A class action lawsuit was filed on May 7, 2001, in the United States District Court for the Southern District of New York, on behalf all persons who purchased the common stock of Corvis Corporation. (NASDAQ:CORV) between July 28, 2000 and May 7, 2001, against Corvis Corporation, Credit Suisse First Boston Corp. ("CSFB"), David R. Huber, Anne H. Stuart, Timothy C. Dec, Frank Bonsal, Vinod Khosla, Frank M. Drendel and Joseph R. Hardiman. According to the complaint, Corvis' May 4, 2000 Registration Statement, filed with the SEC in connection with its initial public offering of 31,625,000 shares of Corvis common stock, declared effective July 27, 2000, and the Prospectus included with the Registration Statement contained material misrepresentations and/or omissions in violation of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The misrepresentations and/or omissions alleged in the complaint detail hidden, inflated commissions paid to CSFB that were not disclosed in Corvis' offering materials. Specifically, the complaint alleges that CSFB obtained excessive and undisclosed commissions from certain investors in exchange for preferential allocations of restricted Corvis shares issued in the offering, and further, that CSFB also entered into buyback agreements with customers whereby CSFB allocated Corvis shares in return for the customers' agreements to purchase additional Corvis shares in the aftermarket at pre-determined prices, also known as "tie-in arrangements." Contact: Stamell & Schager, LLP, New York John Crow, Esq. (212) 566-4047 stamellschager@ssnyc.com DAIMLERCHRYSLER AG: Moves Fd Ct to dismiss investor Suits over 1998 Deal ------------------------------------------------------------------------DaimlerChrysler AG wants a federal court to throw out investor lawsuits over claims the automaker's executives misrepresented the 1998 deal that created the German-American company. The world's fifth-largest automaker filed motions Wednesday in U.S. District Court in Wilmington, Delaware, seeking dismissal of the suits, including an dlrs 8 billion one by Kirk Kerkorian's Tracinda Corp. investment company. ''None of the complaints identify a single, actionable false statement, nor do they point to even one material fact that wasn't disclosed,'' DaimlerChrysler said in a statement Thursday. ''Simply,'' the company added, ''these lawsuits would appear to be opportunistic vehicles being used by well-represented, sophisticated investors and class-action lawyers in a thinly veiled attempt to rewrite history.'' The company said it remained ''confident in its position and will pursue this litigation in the only forum that counts the courtroom.'' One DaimlerChrysler motion seeks to scuttle lawsuits by Kerkorian and New York investment firm Glickenhaus & Co., while a second filing looks to dismiss a class-action suit involving several smaller investors, the company said. Tracinda and others behind the suits called Wednesday's move expected from the automaker defending Daimler-Benz AG's 1998 acquisition of the Chrysler Corp. and the combined company's ensuing management changes. ''We're absolutely still confident we have a very strong case, and we fully expect it to go to trial,'' Tracinda spokeswoman Stephanie Pillersdorf said. ''There's been no change in our convictions.'' Alluding to Schrempp, Glickenhaus & Co. partner Seth Glickenhaus said: ''We didn't think he was gonna fold and pay us all the money we asked for without a fight.'' ''When this motion of his is dismissed, we're not interested in settling with him except where we get full recovery,'' Glickenhaus said. A hearing date on Wednesday's motions has not been set, a clerk at the Delaware federal courthouse said. Kerkorian, a casino and hotel billionaire among DaimlerChrysler's largest shareholders, has sued in hopes of undoing the 1998 deal, alleging it was never a ''merger of equals'' as the companies first touted and that the combined company has failed to live up to its promise. Kerkorian sued last November, a month after the London-based Financial Times quoted DaimlerChrysler chief Juergen Schrempp as saying he never meant for the merger to be one of equals, and that the deal was billed that way ''for psychological reasons.'' Schrempp said he secretly planned to make Chrysler a division of the German parent company, fueling Kerkorian's claims the 1998 deal was a takeover of Chrysler not a ''merger of equals.'' Most of DaimlerChrysler's stock is held in Germany, and a majority of top management has come from Daimler-Benz. Calls to Chrysler on Thursday were directed to the company's Germany headquarters, where spokesman Thomas Froehlich declined to comment beyond the prepared statement. During the company's annual meeting in Berlin last month, shareholders vented at DaimlerChrysler's management for a buying spree that turned sour, among other things saddling the maker of Mercedes cars with its troubled Chrysler arm. Several critics at the meeting demanded the ouster of Schrempp for presiding as billions of dollars in stock value evaporated, notably in the wake of Chrysler's losses. Shares of DaimlerChrysler, once as high as dlrs 108 in January 1999, were up 25 cents to dlrs 50.05 in afternoon trading Thursday on the New York Stock Exchange. Chrysler, which has lost dlrs 3 billion over the past three quarters, now wages a three-year, dlrs 3.9 billion revival plan that includes cutting 26,000 jobs one-fifth of its work force _ and closing six plants in hopes of breaking even next year. Despite the investor lawsuits, DaimlerChrysler ''management is entirely focused on running the company and implementing the (Chrysler) turnaround plan, and these efforts retain their unwavering attention and energy,'' the company said Thursday. (AP Worldstream, May 10, 2001) FIRESTONE, FORD: A National Lawsuit Has Been Launched In Canada --------------------------------------------------------------- A national class action lawsuit has been launched on behalf of Canadians who were injured in accidents involving Ford Explorers and Firestone tires. The class action was commenced by Michelle Rambharos of Brampton, Ontario. Ms. Rambharos was injured when her 1995 Ford Explorer suddenly rolled over. She was driving on the highway near Milton, Ontario, when all of a sudden one of the Firestone tires on her vehicle ruptured, causing the vehicle to flip over. "I could have been killed", said Ms. Rambharos. "We think Ms. Rambharos is lucky to be alive", explains Joel Rochon, one of Ms. Rambharos' lawyers. "Other people in similar accidents around the world haven't been so lucky." Reports from around the world indicate that some 184 people have been killed and 700 injured in rollover crashes (accidents caused when the tires on the Ford Explorer suddenly fall apart). Following these reports, Ford and Firestone recalled certain tires from the Canadian market in August, 2000. Joel Rochon continues, "We allege that Ford and Firestone knew for years that their products were unsafe, and that they failed to take action to protect Canadians. We want to know what these executives knew, and when. We want the truth." The class action lawsuit also seeks to expand the recall of Firestone tires. "We allege that the recall is inadequate", says David Zarek, another lawyer for Ms. Rambharos. "We allege that there are many unsafe tires still on the road. The defendants need to recall all of their defective tires, and not just the limited number of tires covered by the original recall." The class action also seeks to help consumers in other ways. "We are concerned that consumers may have difficulty reselling their Ford Explorers," says Mr. Zarek. "Canadians paid a premium price for Ford Explorers because they thought they were getting a safe vehicle. Given all the reported problems with these vehicles, Ford Explorers may no longer fetch such a "premium" when consumers try to resell them. The defendants profited from the sale of these vehicles. If they generated these profits with the knowledge that their products were unsafe, then consumers should be entitled to a refund." About the lawsuit contact Joel Rochon or Vincent Genova at Rochon Genova, (416) 363-1867, www.rochongenova.com; Or call David Zarek at Zarek, Taylor, Grossman & Hanrahan, www.ztgh.com, (416) 777-2811; For more information about Ford/Firestone rollovers, one may also refer to the web site of "Public Citizen", a noted consumer group originally founded by Ralph Nader. Their site is at www.citizen.org/fireweb/index7.htm; Canadians who want more information about the class action may also call, toll-free at 1-866-881-2292 (Canada NewsWire, May 10, 2001) FORD MOTOR: Demands Atty. Take Down Website Detailing Lawsuit over Bias ----------------------------------------------------------------------- Ford Motor Co. is asking a Michigan attorney to take down an Internet address that details a lawsuit he filed against Ford for allegedly discriminating against older white men. Last week, Ford sent a letter to attorney James Fett asking him to "cease and desist" from using the Web site, http://fordmotorsclassaction.com, which details a class action filed against Ford for alleged racial and age bias. The letter, written by Ford attorney Oliver Mitchell Jr., said the Web site violates trademark and unfair competition laws. It's "likely to create confusion among the public as to whether Ford Motor Co. sponsors or authorizes the Web site," the letter says. The letter also demanded that Fett hand over a videotape of a Ford Global Leadership meeting in 1999, saying it was confidential. Fett, based in Pinckney, fired back a letter to Ford on Monday, saying that "your request was pure retaliation" and that the company was "simply mistaken about the applicable law." "We are in no way competing against Ford in the use of our Web site," read part of the letter by Fett. "No goods or services that would compete against Ford are offered on the site." Fett, who filed a discrimination suit against Ford on behalf of workers in February, said he's willing to compromise by stating on his Web page that it is not connected with Ford. But a Ford spokeswoman said Wednesday that would not be good enough. "Showing any leniency would only make it difficult for us in the future," said spokeswoman Kristen Kinley. "We need as a company to set a precedent." Kinley said the company was concerned with protecting its trademarks. So far, the owners of more than 60 Web site names have been sued by Ford for attempting to profit from them. One of the sites is www.jaguarcenter.com, the site of a 13-year-old British girl who wants to save the jaguar, an endangered species. Fett's Web site contains a link to www.blueovalnews.com, a controversial site that Ford had tried to squash, but decided last year to stop trying to shut after extensive publicity. Blueovalnews.com bills itself as the "independent voice of the Ford community" and has a banner at the top of its home page that reads: "Help Wanted @ Ford Motor Company, Many Positions Available, (White Males need not apply)." The site also says how to get in touch with James Fett. (Detroit Free Press, May 10, 2001) GEORGIA POWER: Groups Seek to Halt Rate Hike for Parent's Race Bias Suit ------------------------------------------------------------------------ A number of civil rights groups have started a petition drive asking that any Georgia Power Co. request for a rate hike be denied until its parent company resolves a high-profile race discrimination lawsuit. The groups, led by the NAACP and the American Civil Liberties Union, held a press conference Tuesday, featuring pictures of hangman s nooses and offensive literature that is being used as exhibits in the lawsuit now pending in U.S. District Court in Atlanta. The African-American plaintiffs, saying they were denied promotions and pay increases because of their race, are asking for class-action status. Georgia Power, in court filings, strongly denies the allegations. As part of the evidence in the case, plaintiffs lawyers, led by attorney Johnnie Cochran, have put into evidence hangman s nooses taken from a number of Georgia Power stations in Georgia. The NAACP and ACLU said they expect to present the signed petitions to the Georgia Public Service Commission in July when the Southern Co. subsidiary can ask for a new rate hike. The groups said they are passing out the petitions by hand and putting them on websites. "Georgia Power must take seriously these allegations and make themselves a welcome place for African-Americans,"Gerry Weber, legal director for the ACLU of Georgia, said. "Until that happens, Georgia should not reward the Southern Co. and Georgia Power with rate hikes." To do so would only "perpetuate and fund discriminatory policies and practices," Weber said. Georgia Power officials say the company has not decided whether to ask for a rate hike this summer, and that any proposed plan to increase rates and the discrimination lawsuit are unrelated issues. (The Electricity Daily, May 10, 2001) HASTINGS ENTERTAINMENT: Securities Suits in TX Consolidated ----------------------------------------------------------- Following the company’s initial announcement on March 7, 2000 of the requirement for the accounting restatements, as previously described, six purported class action lawsuits were filed in the United States District Court for the Northern District of Texas against the company and certain of the current and former directors and officers of the Company asserting various claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Although four of the lawsuits were originally filed in the Dallas Division of the Northern District of Texas, all of the five pending actions have been transferred to the Amarillo Division of the Northern District and have been consolidated. One of the Section 10(b) and 20(a) lawsuits filed in the Dallas Division was voluntarily dismissed. On May 15, 2000, a lawsuit was filed in the United States District Court for the Northern District of Texas against the company, its current and former directors and officers at the time of the company’s June 1998 initial public offering and three underwriters, Salomon Smith Barney, A.G. Edwards & Sons, Inc. and Furman Selz, LLC asserting various claims under Sections 11, 12(2) and 15 of the Securities Act of 1933. None of the six pending complaints specify the amount of damages sought. The company says that although it is not feasible to predict or determine the final outcome of the proceedings or to estimate the potential range of loss with respect to these matters, an adverse outcome with respect to such proceedings could have a material adverse impact on its consolidated financial position, results of operations and cash flows. HMOs: Judge OKs More Evidence to Be Turned over to Plaintiff Doctors -------------------------------------------------------------------- Aetna Inc., Humana Inc., Cigna Corp. and other health insurers have to turn over more documents to the doctors suing them, a judge ruled. The physicians say the companies engaged in racketeering and broke contracts by not paying claims on time. U.S. District Judge Federico Moreno lifted a stay on discovery in the lawsuits, allowing lawyers to gather more evidence as they seek to prove that the suits qualify for class-action status. That would increase any liability for the health-maintenance organizations. The order, dated Tuesday, may open the HMOs to subpoenas and subject executives to depositions by attorneys for the doctors. Moreno hasn't ruled on the class-action claim and hasn't determined whether the lawsuit allegations meet the legal definition of racketeering. The order doesn't affect suits filed by patients who allege the HMOs limited medical care. Harley Tropin, a Miami lawyer who is co-lead counsel for the plaintiffs, said Moreno's scheduling of a pretrial conference with attorneys in July 2002 means he intends to let the case go to trial. (Los Angeles Times, May 10, 2001) HOLOCAUST VICTIMS: Judge Dismisses Suits Blocking Nazi Compensation Fund ------------------------------------------------------------------------ A federal judge on Thursday dismissed lawsuits that had been blocking payouts from a dlrs 4.6 billion fund set up to compensate a million former Nazi slave laborers. ''I hereby grant the motion to dismiss the consolidated complaint,'' U.S. District Judge Shirley Wohl Kram said. The decision paves the way for payouts to begin from the fund, which was set up by German industry and the German government. ''We're very pleased and we hope that this will lead to the German parliament certifying legal closure in order that the survivors can begin to finally receive the payments they've been waiting for for some 60 years,'' said Hillary Kessler-Godin, spokeswoman for the Conference on Jewish Material Claims Against Germany. Kram had previously refused to throw out the lawsuits holding up the payouts because lawyers still had not resolved how those victims not yet identified could be protected if they decided to make claims later on. But Morris Ratner, a lawyer for the plaintiffs, had said Wednesday that attorneys had come up with a plan to satisfy the judge's concern by setting aside millions of dollars to protect the class of plaintiffs Kram feared might be shut out. The money includes dlrs 2 million that had originally been committed to the archiving of documents, and millions more generated by lawyers in the case who waived their fees. Distribution of the payments could begin within a few weeks if German officials sign off on their end of the deal. They had previously refused to proceed until the lawsuits were resolved. In Berlin, the German government press office declined to immediately comment on the decision, saying it needed time to read over Kram's reasoning. More than one million former laborers worldwide, most of them central and eastern Europeans, are eligible for payments. The fund also would compensate people subjected to Nazi medical experiments and some with other Holocaust-related claims. Former slave laborers individuals who worked for the Nazis in concentration camps or ghettos are eligible to apply for payments of approximately dlrs 7,500. Former forced laborers individuals who were forced to work for the Nazis under other conditions will be eligible for approximately dlrs 2,500. Most of the plaintiffs are elderly and it is estimated that they are dying at a rate of 10 to 15 percent a year. The heirs of victims who died before Feb. 16, 1999, when the case began, are not eligible to make claims. Plaintiffs involved in the case live in Belarus, the Czech Republic, Israel, Poland, Russia, Slovakia, Ukraine and the United States. (AP Worldstream, May 10, 2001) INTERWORLD CORP: SEC Conducts Formal Investigation re Securities Trading ------------------------------------------------------------------------ In March 2001, InterWorld was notified that the SEC is conducting a formal, non-public investigation of matters related to trading in InterWorld's securities. At present, InterWorld has no reason to believe it is a target of the investigation. InterWorld is cooperating fully with the SEC in connection with this investigation. PHONE COMPANIES: Landowners Along Rail Lines Seek Compensation -------------------------------------------------------------- Many of the nation's communications companies turned to railroads to produce their phone networks by laying thousands of miles of fiber optic cables next to tracks in the 1980s and 1990s. The action has spurred lawsuits across the nation and, in some cases, earned landowners compensation for the use of their property. In Southern Illinois, a rising venue for class-action lawsuits, four claims have been filed in U.S. District Court in East St. Louis seeking money for property that was used to produce phone networks across the state and beyond. A suit filed last year against Sprint Communications Co. L.P., the nation's third-largest telephone company, cleared its first hurdle last month. And a new suit against a smaller telecommunications company, Global Crossing, and its offshoot companies was filed last month seeking the same sort of compensation. The Sprint suit claims that cable was placed along more than 18,000 miles of land without owners' consent. The case is filed here because some of the lead plaintiffs live along tracks in Southern Illinois. Lead plaintiffs are people who believe they have a claim against a company and who receive a fee for having their names used in lawsuits and sometimes attending court hearings. But these lawsuits represent thousands of landowners who live alongside train tracks. The class, a legal term for the entire group of plaintiffs, was certified last month in the Sprint case by U.S. District Judge Michael Reagan, one of the first steps in these types of cases. "Sprint did not obtain from the railroad . . . companies any title, interest, or right to occupy or use the rights of way," the suit claims. "Sprint has no valid easement, license or right of occupancy." Sprint had previously built a phone network using microwave towers along railroad rights of way and "allegedly 'purchased' or 'leased'" them again to build the fiber optic network, according to an order filed by Reagan. Sprint claims in its filings that it legally obtained permission to use the rights of way from the railroad companies, including Southern Pacific, Illinois Central Gulf, Union Pacific, Conrail, CSX and other railroads. The suit against Global Crossing doesn't specify the miles of cable that the company installed or the railroad company rights of way used, but lead plaintiffs stretch from Clinton County to California. The suit claims that rights of way have passed into the hands of landowners. "Due to the competitive need to construct a network as quickly as possible," the suit states, "Global Crossing made the business decision to forego the time-consuming negotiation and compensation process with the named plaintiffs and class members." The company has not yet filed a response, and representatives could not be reached for comment. AT&T settled a claim two years ago in an Indiana court that netted landowners about $ 45,000 per mile. The company denied any wrongdoing but settled the case for $ 3.6 million, saying it would avoid a more expensive defense of the lawsuit. Companies began using railroad rights of way for phone lines in the early 1980s. Qwest Communications Inc., the nation's fourth-largest long-distance carrier, was launched in 1993 when fiber cables were laid in trenches alongside railroad tracks. (St. Louis Post-Dispatch, May 10, 2001) SUMITOMO CORP: Reaches $ 87 Mil Settlement for Copper Scam Case --------------------------------------------------------------- Japanese trading house Sumitomo Corp. said Thursday it had reached an out-of-court settlement over a copper scam case, agreeing to pay 87 million dollars to 51 US firms. "Sumitomo ... today settled an anti-trust action pending in state court in San Diego, California, with 51 corporations that purchased copper and copper-based products during 1986-1997," the firm said in a statement. It "agreed to pay the sum of 87.5 million dollars without any admission of wrongdoing," Sumitomo said. The settlement -- the fourth so far out of a total of 10 damages cases -- relates to a claim against the Japanese firm after its former rogue copper trader Yasuo Hamanaka ran up losses of 2.6 billion dollars in the world's biggest unauthorised trading scandal. Known as "Mr. Five Percent" for his influence on the world copper market, Hamanaka accumulated the losses over 10 years from 1985 mostly through deals on the London Metal Exchange. In November 1996, prosecutors charged Hamanaka with fraud and forging documents on the illegal copper deals between September 1993 and September 1994 to conceal the losses. Hamanaka pleaded guilty and is currently in jail serving an eight year sentence. The agreement is the second largest in connection with the scam following a previous settlement of 99 million dollars reached in New York a in class-action suit in 1998. The plaintiffs in that suit were companies and individuals who engaged in copper futures or options trade on the New York commodity exchange for three years from June 1993, a Sumitomo spokesman said. The company said it planned to write off the latest payment as an extraordinary loss in its financial results for the year ended in March, but this would not affect its earnings forecast. On the Tokyo Stock Exchange, Sumitomo's share price closed down 11 yen or two percent at 886 yen. Hamanaka admitted the charges but his defence team insisted Sumitomo's slack monitoring was also to blame. Sumitomo denied any involvement in the deals. In March, five former Sumitomo executives reached an out-of-court settlement and agreed to pay 3.6 million dollars to the company for causing it massive losses. (Agence France Presse, May 10, 2001) U OF CALIFORNIA: Ct OKs Students with Hearing Problems for Class Action ----------------------------------------------------------------------- Decision: A federal court certified a group of deaf students to represent class plaintiffs against the University of California at Berkeley and Davis. What it means: Be careful that limits on approved accommodations do not deny access to students with disabilities. The U.S. District Court, Northern District of California certified four named plaintiffs to represent deaf or hard-of-hearing students at the University of California at Berkeley and the University of California at Davis. Siddiqi v. Regents of the University of California, No. C 99-0790 SI (N.D. Cal. 9/6/00). The court agreed that the lawsuit would be bifurcated, that is, the issue of whether the universities violated the ADA and the Rehabilitation Act of 1973 would first be determined. If they were liable, then a separate proceeding would determine the amount of money damages. The plaintiffs seeking to represent the class of deaf or hard-of-hearing students claimed that the universities discriminated as follows: * Failed to provide accommodations in nonacademic settings. * Terminated accommodations if students were late to class. * Suspended accommodations if students did not provide at least 24 hours' notice of being unable to attend class. * Canceled accommodations if a student missed class or failed to provide notice to a certain number of classes. * Required three days' notice for an academic event not on their regular schedule of classes. * Required students to recruit, hire, supervise and sometimes pay their own note-takers. * Prohibited interpreters from having social, personal or professional contact with the students that were deaf or hard-of-hearing. (Disability Compliance for Higher Education, May 01, 2001) XEROX CORPORATION: Black Sales Agents File Discrimination Suit -------------------------------------------------------------- Current and former black sales representatives of the Xerox Corporation sued the company, accusing it of racial discrimination and retaliation. The suit, which seeks class-action status for "hundreds of black salespeople," is being brought on behalf of six black sales representatives from New York, California, Texas and Georgia. The lawsuit echoes charges filed earlier this year with the Equal Employment Opportunity Commission by former and current Xerox sales representatives who contend they were discriminated against on the basis of race. The sales representatives, many of whom worked in the New York metropolitan area, described Xerox's sales organization as a "boys' club" and a "buddy-buddy system." The representatives contend that white sales managers would routinely exclude them from opportunities that would allow them to earn higher commissions and to advance. While Xerox said it had not yet seen the lawsuit and therefore could not comment on the specific claims, the company defended itself against allegations of discrimination. "Our commitment to a balanced work force has never wavered and has, in fact, never been stronger," a company spokeswoman said. Xerox, which enjoys a reputation for emphasizing diversity and being one of the best companies for minorities, also says it is continuing to investigate the earlier claims made by the sales representatives. In May 9's suit, the black sales representatives say they were given poor assignments, often in low-income and minority neighborhoods, and that Xerox refused to promote them or give them better assignments. They assert that they were denied sales commissions. They also contend that the company retaliated against those who complained about the unfair treatment. Alicia Dean-Hall, for example, says that she had sought a position available in the advertising and media sales team last year where she could earn as much as $250,000. Although Ms. Dean-Hall said that she was assured she would be given the position, it was instead awarded to a white male with less experience and who had worked at Xerox for less time. She was told that she "was not the right fit," according to the lawsuit. Kenneth Jimerson, who works for Xerox in the Atlanta area, contends that the company took away his most lucrative accounts in late 1999 as part of a reorganization, giving them to white sales representatives, many of whom had less tenure at Xerox. The white representatives earned commissions on several sales that were pending at the time, the lawsuit says. Mr. Jimerson, who filed charges with the E.E.O.C. last year, received a notice that he had a right to sue earlier this year, according to the suit. In the Houston area, Dora Miller also says she has repeatedly been given less attractive sales territories than her white counterparts, according to the suit. She, too, contends that the company took away accounts and gave them to white sales representatives. In one instance, she contends, she was told a general manager had asked whether another black sales representative was "too black" to handle a major account, according to the lawsuit. The sales representatives are being represented by the law firms of Milberg Weiss Bershad Hynes & Lerach and Leeds, Morelli & Brown. The lawsuit has been filed in the United States District Court for the Eastern District of New York. "This lawsuit will send a powerful message to corporations nationwide that no corporation has the right to disrespect, abuse or discriminate against any individual," said Lenard Leeds of Leeds, Morelli. While some of the earlier sales representatives who complained about discrimination to the E.E.O.C. were Hispanic, the lawsuit does not cover those individuals. There is a possibility of a second lawsuit on behalf of Hispanic representatives, said Barry A. Weprin of Milberg Weiss. (The New York Times, May 10, 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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. * * * End of Transmission * * *