/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010517.MBX C L A S S A C T I O N R E P O R T E R Thursday, May 17 2001, Vol. 3, No. 97 Headlines ACCELERATED NETWORKS: Expects Five Securities Class Suit Consolidated AT&T WIRELESS: One Insufficient Network Capacity Suit Seeks $100 Mil AT&T WIRELESS: Three Objectors Appeal Price Fixing Settlement Pact BARR LABORATORIES: Insists Bayer Agreement Bars Antitrust Claims BOEING CO.: Anticipates Women's Motion to Certify Class This Month CALIFORNIA SOFTWARE: Will Defend Officers and Directors in Two Suits CITGO PETROLEUM: $5 Million Damage Claim Up for Summary Judgment COLUMBIA LABORATORIES: Court Dismisses All Claims With Prejudice CORVIS CORPORATION: Milberg Weiss Files Securities Suit in New York DATASTREAM SYSTEMS: Issues $1.25 MM in Shares for Settlement Pact DELIAS CORPORATION: New Amended Complaint Filed Against Company DIMON INC.: Court Holds Discovery of Merits Pending Class Certification DIRECTV: Files Counter Suit Following Dismissal of Plaintiff's Claims DOLLAR GENERAL: Scott & Scott Files Shareholder Suit in M.D. Tennessee ENTRUST TECHNOLOGIES: Nortel Awaits Ruling on Motion to Dismiss E STAMP: Sued In New York Supreme Court for Its Internet Stamp Products FINITY HOLDINGS: Sued for Fraud and Conspiracy FREEMARKETS INC.: Says Fraud Suits Filed Recently Are Without Merits LINCOLN LIFE: Preliminary Settlement on Class Suit Reaches $64.7 Mil LUCENT TECHNOLOGIES: Too Early to Evaluate Effect of Shareholder Suits MPOWER COMMUNICATIONS: Underwriters Joined to Then Severed from Suit NEW FOCUS: Expects Consolidation of Eight Class Suits Filed in Court PHOENIX HOME: To Strongly Contest Suits Against Reorganization Plan PHOTOWORKS, INC.: Settlement Gives Consumers Free Film & $1 Coupons PRICELINE COM: Twenty-one Suits Follow Revenue Shortfall Announcement PROFIT RECOVERY: Company's January 2001 Motion to Dismiss Sub Judice RENT-A-CENTER, INC.: Court Grants EEOC's Motion to Intervene in Suit SYKES ENTERPRISES: Suit Claims Fraud Committed For Three Years UNIVERSAL CORP.: Awaits Ruling of Dismissal Motion on Bid-rigging Suit WARNACO GROUP: Stull & Stull Files Securities Complaint in New York XEROX CORP: Awaits Court Decision on Motion to Dismiss Class Suit ******** ACCELERATED NETWORKS: Expects Five Securities Class Suit Consolidated --------------------------------------------------------------------- As of May 4, 2001, five securities class action lawsuits have been filed against the Accelerated Networks, Inc. and certain current and former officers, in the United States District Court for the Central District of California. The lawsuits allege that defendants made materially false and/or misleading statements regarding the Company's financial condition and prospects during the period of June 22, 2000 through April 17, 2001, in violation of sections 10(b), 10b-5 and 20(a) of the Securities Exchange Act of 1934. The Company expects the cases and any subsequently filed cases will be consolidated into a single action. The Company believes these lawsuits are without merit and it intends to vigorously defend itself. AT&T WIRELESS: One Insufficient Network Capacity Suit Seeks $100 Mil -------------------------------------------------------------------- AT&T Wireless Services, Inc. disclosed in a recent regulatory filing with the Securities and Exchange Commission that it is facing several class action lawsuits that allege it did not have sufficient network capacity to support the influx of new subscribers who signed up for AT&T Digital One Rate service beginning in May 1998 and therefore have failed to provide service of a quality allegedly promised to subscribers. The plaintiffs in these cases have not asserted specific claims for damages, with the exception of one case filed in Texas, in which the named plaintiffs have asserted claims for compensatory and punitive damages totaling $100 million. AT&T WIRELESS: Three Objectors Appeal Price Fixing Settlement Pact ------------------------------------------------------------------ The L.A. Division of AT&T Wireless Services, Inc. is currently named as a defendant in the class actions of Garabedian, et. al. vs. LASMSA Limited Partnership, et. al. Richard W. Thomas, et. al. v. Los Angeles Cellular Telephone Company, et. al. and Eurus Cady v. Los Angeles Cellular Corp., all of which seek damages for an alleged conspiracy to fix prices of retail and wholesale service. The Orange County Superior Court approved a settlement and entered a final judgment on May 20, 1998. As of December 31, 1997, the L.A. Division had recorded a contingent liability of $24.3 million that has been reduced to $8.3 million as of December 31, 1998 based upon the final judgment referenced above. Three objectors to the settlements have appealed the judgment. BARR LABORATORIES: Insists Bayer Agreement Bars Antitrust Claims ---------------------------------------------------------------- On July 14, 2000, Louisiana Wholesale Drug Co. filed a class action complaint in the United States District Court for the Southern District of New York against Bayer Corporation, the Rugby Group and BARR LABORATORIES, INC. The complaint alleges the Company and the Rugby Group agreed with Bayer Corporation not to compete with a generic version of Ciprofloxacin pursuant to an anti-competitive agreement between the defendants. The plaintiff purports to bring claims on behalf of all direct purchasers of Cipro from 1997 to present. On August 1, 2000, Maria Locurto filed a similar class action complaint in the United States District Court for the Eastern Division of New York. On August 4, 2000, Ann Stuart, et al filed a class action complaint in the Superior Court of New Jersey, Law Division, Camden County. This complaint alleges violations of New Jersey statutes relating to the Cipro agreement. The Company believes its agreement with Bayer Corporation is a valid settlement to a patent suit and cannot form the basis of an antitrust claim. Although it is not possible to forecast the outcome of these matters, the Company intends to vigorously defend itself. It is anticipated these matters may take several years to be resolved but an adverse judgment could have a material adverse impact on the Company's financial statements. BOEING CO.: Anticipates Women's Motion to Certify Class This Month ------------------------------------------------------------------ On February 25, 2000, a purported class action lawsuit alleging gender discrimination and harassment was filed against The Boeing Company, Boeing North American, Inc., and McDonnell Douglas Corporation. The complaint, filed with the United States District Court in Seattle, alleges the Company has engaged in a pattern and practice of unlawful discrimination, harassment and retaliation against females over the course of many years. The complaint, Beck v. Boeing, names 28 women who have worked for Boeing in the Puget Sound area; Wichita, Kansas; St. Louis, Missouri; and Tulsa, Oklahoma. On March 15, an amended complaint was filed naming an additional 10 plaintiffs, including the first from California. The lawsuit attempts to represent all women who currently work for the Company, or who have worked for the Company in the past several years. The Company has denied the allegation that it has engaged in any unlawful "pattern and practice" and believes the plaintiffs cannot satisfy the rigorous requirements necessary to achieve the class action status they seek. Plaintiffs' motion for class certification will be filed by early May 2001. The Company intends to vigorously contest this lawsuit. CALIFORNIA SOFTWARE: Will Defend Officers and Directors in Two Suits -------------------------------------------------------------------- On August 17, 2000, a shareholder class action was commenced in the United States District Court for the Central District of California against the California Software Corporation and two of its officers and directors, Bruce Acacio and Carol Conway DeWees. The class action was brought on behalf of purchasers of the stock of the Company during the period February 9, 2000 through August 6, 2000. In October 2000, the shareholder class action was consolidated with three other nearly identical lawsuits filed in the same court against the Company, Acacio, and DeWees. The plaintiffs in the consolidated class action allege the defendants made false and misleading statements about the Company's actual and expected financial performance to inflate the value of the Company's stock to defraud investors, in violation of federal securities laws. The plaintiffs seek damages, interest, costs and such other equitable or injunctive relief as the Court may deem just and proper. On December 4, 2000, an action was commenced in the United States District Court for the District of Nevada against the Company and two of its officers and directors, Bruce Acacio and Carol Conway DeWees by three shareholders of the Company who acquired their stock through a Private Placement conducted by the Company. The plaintiffs in the action contend that the defendants made false and misleading statements about the Company's actual and expected financial performance to defraud investors, in violation of federal securities laws. The plaintiffs seek damages, interest, costs and other equitable and injunctive relief. The Company believes it has meritorious defenses to above actions and intends to vigorously defend them. The actions are in the early stages. CITGO PETROLEUM: $5 Million Damage Claim Up for Summary Judgment ---------------------------------------------------------------- A class action lawsuit is pending in Corpus Christi, Texas state court against CITGO PETROLEUM CORPORATION, which claims damages for reduced value of residential properties as a result of alleged air, soil and groundwater contamination. CITGO has purchased 275 adjacent properties included in the lawsuit and settled those related property damage claims. CITGO has contested an agreement that purported to provide for settlement of the remaining property damage claims for $5 million payable by it. Motions by CITGO and the plaintiffs for summary judgment related to the enforcement of this agreement are currently under consideration by the court. COLUMBIA LABORATORIES: Court Dismisses All Claims With Prejudice ---------------------------------------------------------------- Columbia Laboratories announced last Tuesday the dismissal with prejudice of a class action filed in 2000, which alleged 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, 2001 the Court granted defendants' motion, dismissing all claims with prejudice. CORVIS CORPORATION: Milberg Weiss Files Securities Suit in New York ------------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces a class action lawsuit was filed on May 15, 2001, on behalf of purchasers of the securities of Corvis Corporation (NASDAQ: CORV) between July 27, 2000 and December 6, 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/corvis/ The action, numbered 01 CIV 4106, is pending in the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, NY 10007, against defendants Corvis, Credit Suisse First Boston Corp., FleetBoston Robertson Stephens, Inc., Lehman Brothers, Inc., Merrill, Lynch, Pierce, Fenner & Smith, Inc., David R. Huber, Anne H. Stuart and Timothy C. Dec. The Honorable John S. Martin is the Judge presiding over the case. 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 or about July 27, 2000, Corvis commenced an initial public offering of 31,625,000 of its shares of common stock at an offering price of $36 per share. In connection therewith, Corvis filed a registration statement, which incorporated a prospectus, with the SEC. The complaint alleges the Prospectus was materially false and misleading because it failed to disclose, among other things: (i) Credit Suisse, FleetBoston, Lehman and Merrill Lynch had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Credit Suisse, FleetBoston, Lehman and Merrill Lynch allocated to those investors material portions of the restricted number of Corvis shares issued in connection with the Corvis IPO; and (ii) Credit Suisse, FleetBoston, Lehman and Merrill Lynch had entered into agreements with customers whereby Credit Suisse, FleetBoston, Lehman and Merrill Lynch agreed to allocate Corvis shares to those customers in the Corvis IPO in exchange for which the customers agreed to purchase additional Corvis 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. For further details, contact the following attorneys: Steven G. Schulman or Samuel H. Rudman, One Pennsylvania Plaza, 49th fl. New York, NY, 10119- 0165. Phone number: (800) 320-5081 Email: corviscase@milbergNY.com Website: http://www.milberg.com DATASTREAM SYSTEMS: Issues $1.25 MM in Shares for Settlement Pact ----------------------------------------------------------------- During 2000, the Company reached an agreement to settle the consolidated securities class action litigation filed against the Company in January 1999. Under the agreement all claims against the Company and all of the individually named defendants have been dismissed. In agreeing to the settlement, the Company and the individual defendants specifically denied any wrongdoing or liability relating to the claims made in the litigation. The principal financial terms of the agreement called for payment to the plaintiffs, for the benefit of the class, of a total of $5.00 million in a combination of $3.75 million in cash and $1.25 million in shares of the Company's common stock (which was determined to be 132,571 shares). The Company's insurance carrier funded $2.40 million of the settlement. The Company paid the cash portion of the settlement in the fourth quarter of 2000 and issued the common stock portion of the settlement in the first quarter of 2001. DELIAS CORPORATION: New Amended Complaint Filed Against Company --------------------------------------------------------------- In 1999, two separate purported securities class action lawsuits were filed against dELiA*s Inc. and certain of its officers and directors, and one former officer of a subsidiary. The original complaints were filed in Federal District Court for the Southern District of New York by Allain Roy on June 1, 1999 and by Lorraine Padgett on June 3, 1999. The suits were consolidated into a single class action and an amended and consolidated complaint was filed on March 22, 2000. The complaint in this lawsuit purports to be a class action on behalf of the purchasers of the company's securities during the period January 20, 1998 through September 10, 1998. The complaint generally alleges the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder by making material misstatements and by failing to disclose certain allegedly material information regarding business trends. The complaint also alleges the individual defendants are liable for those violations under Section 20(a) of the Securities Exchange Act. The complaint seeks unspecified damages, attorneys' and experts' fees and costs, and such other relief as the court deems proper. On April 14, 2000, dELiA*s Inc. and the other named defendants filed a motion to dismiss the lawsuit. The motion to dismiss was denied on March 26, 2001. The Company intends to vigorously defend against this action. Between August 17 and August 25, 2000, three purported class action complaints on behalf of a subsidiary's stockholders were filed in Delaware Chancery Court against the subsidiary, dELiA*s Inc. and each of the subsidiary's directors. These actions include: Pack v. Kahn, et al., Del. Ch., C.A. No. 18242NC, Semeraro v. Kahn, et al., Del. Ch., C.A. No. 18258, and Engel v. Kahn, et al., Del. Ch., C.A. No. 18260NC. All three complaints made virtually identical claims, alleging dELiA*s Inc. and the members of the subsidiary's board of directors breached their fiduciary duties to the subsidiary's public stockholders and that the merger exchange ratio was unfair to the subsidiary's public stockholders. The actions were consolidated and an amended complaint was filed on January 19, 2001. DIMON INC.: Court Holds Discovery of Merits Pending Class Certification ----------------------------------------------------------------------- On December 20, 2000, the plaintiffs in Deloach, et al. v. Philip Morris Companies Inc., et al., following the transfer of the suit from the United States District Court for the District of Columbia to the United States District Court for the Middle District of North Carolina, Greensboro Division (Case No. 00-CV-1235) filed a motion for leave to file a third amended complaint adding DIMON and other leaf tobacco merchants as defendants. On February 20, 2001, the court granted the motion for leave to amend and added DIMON and other leaf tobacco merchants as defendants. DIMON has joined in a motion to dismiss the complaint filed by all defendants and that motion is pending. The Deloach Suit is a purported class action brought on behalf of U.S. tobacco growers and quota holders that alleges the defendants violated antitrust laws by bid-rigging at tobacco auctions and by conspiring to undermine the tobacco quota and price support program administered by the federal government. The court has stayed discovery on the merits of the case, pending disposition of the Plaintiffs' motion for class certification. DIMON and the other defendants are opposing class certification and will otherwise vigorously defend the suit. DIRECTV: Files Counter Suit Following Dismissal of Plaintiff's Claims --------------------------------------------------------------------- In a recent regulatory filing with the Securities and Exchange Commission, DIRECTV disclosed it filed on March 9, 2001 counterclaims against the participating members of the National Rural Telecommunications Cooperative. The filing of these counterclaims comes after the dismissal by the Class of its equipment-related claims without prejudice to the Company. DOLLAR GENERAL: Scott & Scott Files Shareholder Suit in M.D. Tennessee ---------------------------------------------------------------------- Scott & Scott, LLC filed a shareholder lawsuit against Dollar General on behalf of shareholders who purchased the common stock of Dollar General Corp. (NYSE: DG) during the period between May 12, 1998 and April 27, 2001. The complaint was filed in the United States District Court for the Middle District of Tennessee. The complaint charges Dollar General and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company offers a focused assortment of consumable basic merchandise, including health and beauty aids, packaged food products, cleaning supplies, housewares, stationery, seasonal goods, basic apparel and domestics. On April 30, 2001, the Company issued a press release entitled, "Dollar General Expects to Restate Earnings; Maintains Current Year Guidance." The press release stated in part, "Dollar General Corporation expects to delay the filing of its annual report on Form 10-K for the fiscal year 2000 in anticipation of restating its audited financial statements for fiscal years 1998 and 1999 as well as restating the unaudited financial information for the fiscal year 2000 as previously released. The Company has become aware of certain accounting irregularities, and the audit committee of the Company's board of directors is conducting an investigation of these irregularities." This news triggered the slide in Dollar General shares to $16.50, or more than 37% lower than the Class Period high of $26. For further details, contact: David R. Scott or Neil Rothstein at 800-404-7770 or e-mail at scottlaw@scott-scott.com. ENTRUST TECHNOLOGIES: Nortel Awaits Ruling on Motion to Dismiss --------------------------------------------------------------- Nortel Networks Corporation disclosed in a regulatory document filed with the Securities and Exchange Commission that it has filed a motion to dismiss a class action lawsuit against the company by shareholders of its spin-off Entrust Technologies Inc. (ENTU.O), Reuters News Agency reported Tuesday. Brampton, Ontario-based Nortel, a major shareholder of Entrust, was included in an amended lawsuit served in February. In the complaint filed by Cauley & Geller, LLP, plaintiffs allege Entrust and three executives deliberately misrepresented revenues it would post in the second quarter to artificially boost its share price. A subsequent gain in Entrust stock allowed the company to complete its $703-million stock purchase of enCommerce, Reuters reported. But two days after that deal closed, Entrust warned it suffered a major sales decline and earnings would fall far short of expectations. Shares in Nortel shed 3.5 percent on the Toronto Stock Exchange to close at C$20.70 and slid 2.5 percent to end at $13.40 on New York, the news agency said. E STAMP: Sued In New York Supreme Court for Its Internet Stamp Products ----------------------------------------------------------------------- E Stamp Corporation disclosed in its latest regulatory filing with the Securities and Exchange Commission that a plaintiff filed a purported consumer class action suit in the Supreme Court of the State of New York, County of Kings. The complaint was filed on March 16, 2001. The suit alleges the company breached its contracts with Plaintiff and other customers. The plaintiff seeks compensatory damages and disgorgement of monies received in connection with the sale of Internet postage products. FINITY HOLDINGS: Sued for Fraud and Conspiracy ---------------------------------------------- On July 28, 2000, a class action complaint was filed against Finity Holdings, Inc., (formerly known as Columbia Capital Corp.) and Finity Corporation (formerly known as First Independent Computers, Corp.) under the caption Eric Grant v. Douglas R. Baetz, Glenn M. Gallant, Columbia Capital Corp., First Independent Computers Corp., in the United States District Court, Southern District of California. The complaint was not served on the Company and Finity Corporation until January 30, 2001. The complaint purports to be a class action on behalf of purchasers of the common stock of the Company from January 1, 1998 through and including March 13, 2001. The complaint outlines the following allegations: (i) violations of the anti-fraud provisions of the Securities Exchange Act of 1934, (ii) violations of California securities laws, (iii) violations of the Racketeer Influenced Corrupt Organizations Act, (iv) fraud, and (v) conspiracy. The Company and Finity Corporation believe the complaint is without merit and have instructed their counsel to represent their respective interests vigorously. FREEMARKETS INC.: Says Fraud Suits Filed Recently Are Without Merits --------------------------------------------------------------------- Since April 27, 2001, five securities fraud class action complaints have been filed against the Company and two executive officers in federal court in Pittsburgh, Pennsylvania. The complaints, all of which assert the same claims, stem from the Company's announcement on April 23, 2001 that, as a result of ongoing discussions with the staff of the SEC, the Company was considering amending its 2000 financial statements for the purpose of reclassifying fees earned by the Company under a service contract with Visteon. The Company and the individual defendants believe the plaintiffs' allegations are completely without merit and they intend to defend these claims vigorously. LINCOLN LIFE: Preliminary Settlement on Class Suit Reaches $64.7 Mil -------------------------------------------------------------------- During the fourth quarter of 2000, LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M reached an agreement in principle to settle all class action lawsuits alleging fraud in the sale of non-variable universal life and participating whole life insurance policies. The agreement is subject to court approval and is expected to become final in 2001. It requires that the Company provide benefits and a claim process to policyholders who purchased non-variable universal life and participating whole life policies between January 1, 1981 and December 31, 1998. The settlement covers approximately 431,000 policies. Total charges recorded during 2000 for this preliminary settlement were $64,700,000. LUCENT TECHNOLOGIES: Too Early to Evaluate Effect of Shareholder Suits ---------------------------------------------------------------------- Lucent Technologies, Inc., and certain of its former officers, are defendants in several purported shareholder class action lawsuits for alleged violations of federal securities laws, which have been consolidated into a single action. Specifically, the complaints allege, among other things, that beginning in late October 1999, Lucent and certain of its officers misrepresented Lucent's financial condition and failed to disclose material facts that would have an adverse impact on Lucent's future earnings and prospects for growth. These actions seek compensatory and other damages, and costs and expenses associated with the litigation. "These actions are in the early stages and the Company is unable to determine their potential impact on the Consolidated Financial Statements," the Company tells investors in its latest quarterly report filed with the SEC. "Lucent intends to defend these actions vigorously." Also, Lucent has been served with several derivative complaints filed by individual Lucent shareholders against the current members of Lucent's Board of Directors, two former directors and an officer, which have been consolidated in a single action. These actions make claims for breach of fiduciary duties allegedly owed to the Company, and seek damages against the defendants and in favor of Lucent, as well as costs and expenses associated with litigation for the individual plaintiffs. These derivative actions are in the early stages and the Company is unable to determine their potential impact on the Consolidated Financial Statements. MPOWER COMMUNICATIONS: Underwriters Joined to then Severed from Suit -------------------------------------------------------------------- On September 20, 2000, a class action lawsuit was commenced against Mpower Communications Corporation and its CEO, Rolla P. Huff, in federal court for the Western District of New York. On March 6, 2001, an amended consolidated class action complaint was served in that action, seeking to recover damages for alleged violations by us of the Securities Exchange Act of 1934 and rule 10(b)-5 thereunder and section 11 of the Securities Act of 1933. The amended consolidated complaint seeks to recover damages against several of the Company's officers and members of its board of directors in addition to Huff. The amended consolidated complaint also named various underwriters as defendants in the action. However, by agreement of the parties and order of the court, the action against the underwriters has been discontinued, subject to the plaintiff's right to rename the underwriters as defendants prior to the completion of discovery. The Company and the individual defendant officers and board members have denied any wrongdoing and will vigorously contest the class action suit. NEW FOCUS: Expects Consolidation of Eight Class Suits Filed in Court -------------------------------------------------------------------- On March 12, 2001, a putative securities class action, captioned Mandel v. New Focus, Inc., et. al., Civil Action No. C-01-1020, was filed against New Focus and several of its officers and directors in the United States District Court for the Northern District of California. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and seeks unspecified damages on behalf of a purported class that purchased New Focus common stock between January 31, 2001 and March 5, 2001. Substantially similar actions captioned Rosen v. New Focus, Inc., et. al., Civil Action No. C-01-1065; Solomon v. New Focus, Inc., et. al., Civil Action No. C-01-2023; Deutch v. New Focus, Inc., et. al., Civil Action No. C-01-1123; Connors v. New Focus, Inc., et. al., Civil Action No. C-01-1148; Spanos v. New Focus, Inc., et. al., Civil Action No. C-01-1328; Patton v. New Focus, Inc., et. al., Civil Action No. C-01-1413, and Naiditch v. New Focus, Inc., et. al., Civil Action No. C-01-1689 have also been filed against New Focus and several of its officers and directors in the United States District Court for the Northern District of California. The Naiditch action asserts a class period from October 25, 2000 to March 5, 20001. The cases are in the process of being consolidated. The Company believes it has meritorious defenses to the claims and intends to contest the lawsuits vigorously. PHOENIX HOME: To Strongly Contest Suits Against Reorganization Plan ------------------------------------------------------------------- On March 19, 2001, the New York Superintendent held a public hearing on the reorganization plan of Phoenix Home Life. At the public hearing, some policyholders and others raised objections to certain aspects of the plan. These objections alleged, among other things, that the plan was not fair and equitable to policyholders of Phoenix Life. Two lawsuits have been filed challenging the fairness of the reorganization plan and the adequacy and accuracy of Phoenix Life's disclosures to its policyholders regarding the plan. The first of these lawsuits, Burns v. Phoenix Home Life Mutual Ins. Co., et al., was filed on April 4, 2001 in the Circuit Court of Cook County for the Illinois County Department in the Chancery Division. Plaintiff seeks to maintain a class action on behalf of a putative class consisting of all current policyholders of Phoenix Life who purchased their policies prior to Phoenix Life's announcement of its intention to demutualize. The complaint seeks damages for losses allegedly sustained by the class as a result of the demutualization, as well as other relief. The defendants named in the complaint are Phoenix Life and some of its directors and officers. The second lawsuit, Kertesz v. Phoenix Home Life Mutual Ins. Co., et al., was filed on April 16, 2001 in the Supreme Court of the State of New York for New York County. Plaintiff seeks to maintain a class action on behalf of a putative class consisting of the eligible policyholders of Phoenix Life as of December 18, 2000, the date the plan of reorganization was adopted. Plaintiff seeks to enjoin the demutualization, damages and other relief. The defendants named in this complaint include Phoenix Life, The Phoenix Companies, Inc. and all its directors, as well as Morgan Stanley & Co. Incorporated. The company, however, believes it has meritorious defenses and intend to contest vigorously all plaintiffs' claims. PHOTOWORKS, INC.: Settlement Gives Consumers Free Film & $1 Coupons ------------------------------------------------------------------- The core parties involved in Drinkard, et al. v. PhotoWorks, Inc., King County WA Superior Court No. 00-2-09552-0SEA, propose to settle all claims on behalf of all persons or entities in the United States who processed film with Seattle FilmWorks or PhotoWorks, or received film distributed by Seattle FilmWorks or PhotoWorks, at any time after March 28, 1996. In the Class Suit the plaintiffs (who are 6 individuals) claim Seattle FilmWorks (now PhotoWorks) made false or misleading representations to customers, as well as to other photoprocessers that: (1) Seattle FilmWorks brand film can be processed only by Seattle FilmWorks or by only a few other labs, when in fact most of such film is of a C-41 type that can be processed by most other photofinishers; and (2) that replacement film distributed by Seattle FilmWorks to photo-processing customers is "free," when in fact customers are charged for the replacement film as part of their processing order. On behalf of the Class, plaintiffs seek injunctive and declaratory relief, as well as damages. PhotoWorks disputes and denies these allegations and denies any wrongdoing or liability on the claims asserted in the Class Suit. For the sole purpose of compromising disputed claims and avoiding costs and risks of further litigation, PhotoWorks and the plaintiffs who represent the Class have agreed to a proposed settlement. Here is a summary of its terms: * FUTURE CONDUCT/DISCLOSURES. Although PhotoWorks reaffirms its denials of any past wrongdoing, under the settlement PhotoWorks will agree that in the future: (a) it will not represent to customers that its film can be processed only by PhotoWorks or by a few or small number of other labs if such is not the fact; (b) it will not represent that replacement film is free unless it is provided at no charge over and above the regular price PhotoWorks charges for processing without replacement film; (c) so long as it generally offers customers the option not to purchase replacement film when purchasing processing services, it will conspicuously disclose that option and the method of exercising it on order forms and on signage in its retail stores; (d) until March 31, 2006, it will maintain a "C-41" designation on the rolls of all standard C-41 film it distributes that is of a type that is able to be properly developed using the industry standard C-41 process. PhotoWorks also affirms that most of the Seattle FilmWorks film it has distributed since 1996 is standard C-41 film. * OTHER BENEFITS. PhotoWorks will also provide these benefits to Class Members: (1) Within one year PhotoWorks will make the following distributions of free rolls of 24-exposure standard C-41 film: (a) It will distribute an aggregate of 900,000 rolls to persons who are active PhotoWorks customers, with the identity of recipients and number of rolls per recipient (not to exceed Three) determined by PhotoWorks in a way that reasonably takes into account past and/or anticipated quantity or frequency of their transactions; (b) It will also distribute one roll to each of the first 300,000 Class members who do not receive any of the 900,000 rolls mentioned above and who, within 6 months after the date of this notice, request a free roll: -- by entering their name and mailing address into the web form at: http://www.photoworks.com/filmsettlementrequest.asp -- by a telephone call to Photoworks at 1-800-922-2391 -- by a letter mailed to Photoworks, 3213 W. Wheeler St., #300, Seattle WA 98199. Each written request must contain the Class member's address, signed or subscribed name, and statement that he or she is a member of the Class. Materials accompanying these distributions will inform recipients that the C-41 process identified on the film is an industry standard chemical process that most photo-processing labs use to develop film. (2) Each member of the Class who does not receive free film under (1) above may submit to PhotoWorks the Coupon appended or attached to this Notice (prior to the Coupon's expiration) to receive a $1 discount on a film processing order. * OTHER PROVISIONS. (a) PhotoWorks will pay (subject to Court approval) $2,500 to each of the named plaintiffs/class representatives as compensation for their time and involvement in the Class Suit, and $320,000 to the attorneys for the Class for their services and costs in the Class Suit. (b) The settlement will release and bar all claims of Class members against Photoworks which arise out of any of the allegations in the Class suit, except for certain claims by Class members who exercise the option to request exclusion. The Court will hold a Fairness Hearing on June 7, 2001 at 9:00 a.m. in the Courtroom of Hon. Bruce Hilyer, Courtroom W-842, King County Courthouse, 516 Third Ave., Seattle, WA 98104, to determine whether the proposed settlement should be finally approved. Adam Berger, at Schroeter, Goldmark & Bender, serves as Class Counsel. Peter A. Danelo, at Heller, Ehrman, White & McAuliffe LLP, represents PhotoWorks. PRICELINE COM: Twenty-one Suits Follow Revenue Shortfall Announcement --------------------------------------------------------------------- Following an announcement on September 27, 2000 that revenues for the third quarter of 2000 would not meet expectations, Priceline Com, Inc. received 21 purported class action complaints. Below is the list of the complaints: * Mathis Weingarten, et al v priceline.com Incorporated and Jay S. Walker, 300 CV 1901 (District of Connecticut). * Randall Twardy, et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman 300 CV 1884 (District of Connecticut). * Natalie Berdakina, et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman 300 CV 1902 (District of Connecticut). * Samuel Mayer et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman 300 CV 1923 (District of Connecticut). * Anthony Mazzo, et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman 300 CV 1924 (District of Connecticut). * Mark Fialkov, et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman300 CV 1954 (District of Connecticut). * Jeremy Licht, et al v priceline.com Incorporated andJay Walker 300 CV 2049 (District of Connecticut). Jim M. Ayach & Sarah Sontag, et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman 300 CV 2062 (District of Connecticut). * Michael Cerelli, et al v priceline.com Incorporated, Jay Walker, R. Braddock, and D. Schulman 300 CV 1918 (District of Connecticut). * Howard Gunty Profit Sharing Plan, et al v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 1917 (District of Connecticut). * Thomas Atkin, et al v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 1994 (District of Connecticut). * Hyacinth S. Anish, et al v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 1048 (District of Connecticut). * Jerry Krim, et al v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 2083 (District of Connecticut). * Scott Lyon, et al v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 2066 (District of Connecticut). * Johnny Kwan, et al v. priceline.com IncorporatedR. Braddock, D. Schulman, and Jay S. Walker 300 CV 2069 (District of Connecticut). * Muhammed Zia, v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 1994 (District of Connecticut). * Monica R. Mazzo v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 1968 (District of Connecticut). * Rajiv Bazag v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 2122 (District of Connecticut). * Sherman Breier v. priceline.com IncorporatedR. Braddock, D. Schulman, and Jay S. Walker 300 CV 2146 (District of Connecticut). * Dr. Ramin Farzam, Jay Jaskolski, Todd Haskell, Peter Makhlouf and Bryan Koster, v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 2176 (District of Connecticut). * Jack A. Caswell v. priceline.com Incorporated, R. Braddock, D. Schulman, and Jay S. Walker 300 CV 2169 (District of Connecticut). All of these cases have been consolidated before Judge Dominick J. Squatrito, and two groups have filed motions requesting appointment as lead plaintiff and lead counsel. By agreement of counsel, once the lead plaintiff and lead counsel have been appointed, such lead plaintiff and counsel shall have forty-five days to file an amended and consolidated complaint, and the Company will thereafter have forty-five days to respond to the amended and consolidated complaint. The Company intends to defend itself vigorously against these actions. PROFIT RECOVERY: Company's January 2001 Motion to Dismiss Sub Judice -------------------------------------------------------------------- Beginning on June 6, 2000, three putative class action lawsuits were filed against PROFIT RECOVERY GROUP INTERNATIONAL, INC., and certain of its present and former officers in the United States District Court for the Northern District of Georgia, Atlanta Division. These cases were subsequently consolidated into one proceeding styled: In re Profit Recovery Group International, Inc. Sec. Litig., Civil Action File No. 1:00-CV-1416- CC. On November 13, 2000, the Plaintiffs in these cases filed a Consolidated and Amended Complaint. In the Complaint Plaintiffs allege, in general terms, that the Company, John M. Cook, Scott L. Colabuono, and Michael A. Lustig violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by allegedly disseminating materially false and misleading information about a change in the Company's method of recognizing revenue and in connection with revenue reported for a division. Plaintiffs purport to bring this action on behalf of a putative class of persons who purchased the Company's stock between July 19, 1999 and July 26, 2000. Plaintiffs seek an unspecified amount of compensatory damages, payment of litigation fees and expenses, and equitable and/or injunctive relief. On January 24, 2001, Defendants filed a Motion to Dismiss the Complaint for failure to state a claim under the Private Securities Litigation Reform Act, 15 U.S.C. sec. 78u-4 et seq., which is currently pending before the Court. The Company believes the alleged claims in this lawsuit are without merit and intends to defend this lawsuit vigorously. Due to the inherent uncertainties of the litigation process and the judicial system, the Company is unable to predict the outcome of this litigation. RENT-A-CENTER, INC.: Court Grants EEOC's Motion to Intervene in Suit -------------------------------------------------------------------- The United States District Court, Southern District of Illinois granted the Equal Employment Opportunity Commission's Motion to Intervene in support of a proposed nationwide class action against Rent-A-Center. The EEOC is now an active party in a lawsuit filed by 21 women, current and former employees of Rent-A-Center, Inc., a rent to own business. The women are part of a suit which seeks to establish a nationwide class of all former and current employees of Rent-A-Center and which alleges widespread discrimination against women by Rent-A-Center, including sexual harassment, failure to hire, failure to promote women, and wrongful discharge. The EEOC performed a nationwide investigation of the treatment of women by Rent-A-Center, examined the employment numbers of Rent-A-Center and conducted interviews with its managers. In a finding dated September 19, 2000, the EEOC found reasonable cause to believe that Rent-A-Center discriminated against women in promotions, hiring, terms and conditions of employment, discharge, constructive discharge, and other aspects of store operations, and that managers destroyed employment records in violation of federal regulations. The Plaintiffs are represented by Mary Ann Sedey of Sedey & Ray and Jerome Schlichter of Schlichter, Bogard & Denton in St. Louis. The suit seeks $410 million in damages including back pay and interest, as well as punitive damages for the class. Donna Harper, senior attorney for the EEOC in St. Louis said "We're pleased to join with the Plaintiffs in attacking systemic discrimination." When asked about the impact of the court's ruling, Schlichter stated "Rent- A-Center has vigorously opposed the intervention by EEOC on behalf of this group of women and has claimed that such intervention was improper. The Court rejected that position completely. Since the EEOC has the authority to obtain class wide relief even where there is no class certified, this ruling has serious implications for Rent-A-Center." For more information, contact Jerome Schlichter of the law firm of Schlichter, Bogard & Denton at 314-621-6115, 100 S. 4th Street, Suite 900, St. Louis, Missouri, 63102, or jschlichter@uselaws.com . SYKES ENTERPRISES: Suit Claims Fraud Committed For Three Years -------------------------------------------------------------- Sykes Enterprises Inc. disclosed in a recent SEC filing that it is facing sixteen purported class action lawsuits that have been filed against certain of its officers, alleging violations of federal securities laws. All of the actions have been consolidated into one case which is pending in the United States District Court for the Middle District of Florida. The plaintiffs purport to assert claims on behalf of a class of purchasers of Sykes' common stock during the period from July 27, 1998 through September 18, 2000. The consolidated action claims violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Among other things, the consolidated action alleges during the years 1998 through 2000, the Company and certain of its officers made materially false statements concerning the Company's financial condition and its future prospects. The consolidated complaint also claims that certain of the Company's quarterly financial statements during 1999 and 1998 were not prepared in accordance with generally accepted accounting principles. The consolidated action seeks compensatory and other damages, and costs and expenses associated with the litigation. The Company believes these claims are without merit and intends to defend the actions vigorously. UNIVERSAL CORP.: Awaits Ruling of Dismissal Motion on Bid-rigging Suit ---------------------------------------------------------------------- On February 26, 2001, Universal Leaf Tobacco Company, Incorporated, J.P. Taylor Company, Incorporated and Southwestern Tobacco Company, Incorporated, subsidiaries of UNIVERSAL CORPORATION were served with the Third Amended Complaint, naming them and other leaf tobacco merchants as defendants in DeLoach, et al. v. Philip Morris Inc., et al., a suit originally filed against U.S. cigarette manufacturers in the United States District Court for the District of Columbia and now pending in the United States District Court for the Middle District of North Carolina, Greensboro Division (Case No. 00-CV-1235). The DeLoach Suit is a purported class action brought on behalf of U.S. tobacco growers and quota holders that alleges defendants violated antitrust laws by bid-rigging at tobacco auctions and by conspiring to undermine the tobacco quota and price support program administered by the federal government. On March 14, 2001, the Company Subsidiaries and other leaf tobacco merchant defendants filed a joint motion to dismiss the Third Amended Complaint. WARNACO GROUP: Stull & Stull Files Securities Complaint in New York ------------------------------------------------------------------- Stull, Stull & Brody filed a class action lawsuit on May 15, 2001, in the United States District Court for the Southern District of New York, on behalf of purchasers of Warnaco Group, Inc. (NASDAQ:WAC) common stock between September 29, 2000 and April 18, 2001, inclusive. The complaint alleges that defendants Warnaco Group, Inc., Linda Wachner, William S. Finkelstein, and Stanley P. Silverstein disseminated materially false and misleading statements concerning Warnaco's operations and financial performance. The complaint alleges, among other things, a failure to divulge promptly certain necessary charges relating to reserves, operating shortfalls, restructuring, changing inventory accounting, and a restatement for prior years. Additionally, Warnaco recently revealed there is an SEC inquiry into "whether there have been any violations of the Securities Exchange Act of 1934 in connection with the preparation and publication of various financial statements and reports." During the Class Period, Warnaco stock lost more than 88% of its value with share price dropping to a low of $0.65 after reaching a Class Period high of $5.93. As a result of this decline in the value of Warnaco shares, investors have lost, in the aggregate, hundreds of millions of dollars. For additional information, contact: Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017. XEROX CORP: Awaits Court Decision on Motion to Dismiss Class Suit ----------------------------------------------------------------- A consolidated securities law action entitled "In re Xerox Corporation Securities Litigation" is pending in the United States District Court for the District of Connecticut. Defendants are Registrant, Barry Romeril, Paul Allaire and G. Richard Thoman, former CEO, and purports to be a class action on behalf of the named plaintiffs and all other purchasers of Common Stock of Registrant during the period between October 22, 1998 through October 7, 1999 (Class Period). The amended consolidated complaint in the action alleges that, in violation of Section 10(b) and/or 20(a) of the Securities Exchange Act of 1934, as amended (34 Act), and Securities and Exchange Commission Rule 10b-5 thereunder, each of the defendants is liable as a participant in a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of Registrant's Common Stock during the Class Period by disseminating materially false and misleading statements and/or concealing material facts. The amended complaint further alleges the alleged scheme: (i) deceived the investing public regarding the economic capabilities, sales proficiencies, growth, operations and the intrinsic value of Registrant's Common Stock; (ii) allowed several corporate insiders, such as the named individual defendants, to sell shares of privately held Common Stock of Registrant while in possession of materially adverse, non-public information; and (iii) caused the individual plaintiffs and the other members of the purported class to purchase Common Stock of Registrant at inflated prices. The amended consolidated complaint seeks unspecified compensatory damages in favor of the plaintiffs and the other members of the purported class against all defendants, jointly and severally, for all damages sustained as a result of defendants' alleged wrongdoing, including interest thereon, together with reasonable costs and expenses incurred in the action, including counsel fees and expert fees. The defendants' motion for dismissal of the complaint is pending. The named individual defendants and Registrant deny any wrongdoing and intend to vigorously defend the action. ********* 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., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Larri-Nil G. Veloso and Lyndsey Resnick, Editors. Copyright 2001. 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. 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