/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010522.MBX C L A S S A C T I O N R E P O R T E R Tuesday, May 22 2001, Vol. 3, No. 100 Headlines 21st CENTURY: Awaits Decision on Motion to Dismiss Securities Suit ADAMS GOLF: Decision on Motion to Dismiss Securities Suit Forthcoming ANSWERTHINK INC.: Discovery on 2nd Amended Plaint Drags On Indefinitely AURORA FOODS: Court Confirms Settlement Of All Class & Derivative Suits AUTONATION INC.: New Suits Filed After First Case Settled for $2.1 M AUTOWEB.COM: Marc Henzel Files Lawsuit In New York for Securities Fraud BERGEN BRUNSWIG: Court Dismisses Securities Suit Against PharMerica BICO INC.: Final $1.3 Million Of Settlement Pact To Be Paid In July BRUSH ENGINEERED: Three Chronic Beryllium Disease Cases Filed CELLPHONE LITIGATION: Mobile Phone Makers Face Liability Suits COOPER TIRE: Federal Judicial Panel Sends 17 Suits To S.D. Ohio Court COVENTRY HEALTH: Sued For RICO Violations And Breaches Of Contract DIGIMARC CORPORATION: Says Securities Suit In New York Is Without Merit EXXON MOBIL: Appeals On 1989 Oil Spill Incident Ongoing FORD MOTOR: Court Sets May 31 Hearing For All Disparate Impact Claims FOUNDRY NETWORKS: California Court Consolidates Shareholder Suits HASTINGS MANUFACTURING: Attempts to Settle Suit Continue in Uncertainty HUMPHREY HOSPITALITY: Securities Suit Filed in E.D. Virginia INTERTRUST TECHNOLOGIES: Lovell Stewart Commences Securities Suit in NY JOHNSON&JOHNSON: Court To Announce Decision On Antitrust Suit LUPRON LITIGATION: Three Drug Companies Charged For Overpricing Drug MARKETWATCH.COM: Marc Henzel Files Securities Suit In S.D. New York MOTOROLA INC.: Expects Lawsuit From Committee of Unsecured Creditors MP3.COM: Lovell Stewart Commences Securities Lawsuit in S.D. New York MULTEX.COM: Wolf Haldenstein Files Securities Fraud Suit In New York NETWORK COMMERCE: Wechsler Harwood Files Securities Suit in Washington NOVARTIS PHARMACEUTICALS: Court Dismisses Lawsuit Due to Vague Claims ORTHODONTIC CENTERS: Wolf Haldenstein Commences Suit in E.D. Louisiana RELIANT ENERGY: Reliant Resources Offers Indemnity and Possible Defense RR DONNELLEY: Court Certifies Three Classes in Jones and Adams Cases STAMPS.COM: Lovell Stewart Files Suit in New York For Securities Fraud SULZER ORTHOPEDICS: Liability Suit Filed On Behalf of Canadian Patients TORCHMARK CORPORATION: Trial on Securities Fraud Suit Set For November UBS AG: Says Finances Won't Be Affected By Resolution Of Ongoing Appeal WJ COMMUNICATIONS: Pays Full Settlement Amount in 1st Quarter 2001 ********* 21st CENTURY: Awaits Decision on Motion to Dismiss Securities Suit ------------------------------------------------------------------ In June 2000, a lawsuit was filed against 21st Century Holding Company and its directors and executive officers seeking compensatory damages on the basis of allegations that the Company's amended registration statement dated November 4, 1998 was inaccurate and misleading concerning the manner in which the Company recognized ceded insurance commission income, in violation of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The lawsuit was filed in the United States District Court for the Southern District of New York and seeks class action status. The plaintiff class purportedly includes purchasers of the Company's common stock between November 5, 1998 and August 13, 1999. The Company believes that the lawsuit is without merit and intends to vigorously defend such action. On November 1, 2000, the Company filed a motion to dismiss this lawsuit and is awaiting a decision from the district court. ADAMS GOLF: Decision on Motion to Dismiss Securities Suit Forthcoming --------------------------------------------------------------------- Beginning in June 1999, the first of seven class action lawsuits was filed against Adams Golf Inc., certain of its current and former officers and directors and the three underwriters of the Company's initial public offering in the Untied States District Court of the District of Delaware. The complaints allege violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, in connection with the Company's IPO. In particular, the complaints allege that the Company's prospectus, which became effective July 9, 1998, was materially false and misleading in at least two areas. Plaintiffs allege that the prospectus failed to disclose that unauthorized distribution of the Company's products (gray market sales) allegedly threatened the Company's long-term profits. Plaintiffs also allege that the prospectus failed to disclose that the golf equipment industry suffered from an oversupply of inventory at the retail level, which had an adverse impact on the Company's sales. On May 17, 2000, these cases were consolidated into one amended complaint, and a lead plaintiff was appointed. The plaintiffs are seeking unspecified amounts of compensatory damages, interests and costs, including legal fees. On July 5, 2000, the Company filed a motion to dismiss the consolidated, amended complaint. The motion is now fully briefed and under submission with the court. The Company denies the allegations in the complaint and intends to defend it vigorously ANSWERTHINK INC.: Discovery on 2nd Amended Plaint Drags On Indefinitely ----------------------------------------------------------------------- THINK New Ideas, Inc., a subsidiary of ANSWERTHINK INC., and three of its former officers are defendants in a consolidated class action filed in federal court in New York. In February 1999, a Consolidated and Amended Class Action Complaint was filed seeking to assert claims on behalf of all individuals who purchased THINK New Ideas' common stock from November 5, 1997 through September 21, 1998. The defendants filed a motion to dismiss the Consolidated Complaint and the plaintiffs opposed the motion. On March 15, 2000, the court granted the defendants' motion to dismiss the Consolidated Complaint. The plaintiffs filed a Second Consolidated and Amended Class Action Complaint on April 14, 2000. The defendants filed a motion to dismiss the Second Amended Complaint on May 1, 2000. On September 14, 2000, the Court denied the motion. The defendants filed an answer to the Second Amended Complaint on November 10, 2000. The parties are engaged in discovery. No schedule has been set for the completion of discovery or for further proceedings. The Company believes there are meritorious defenses to the claims made in the Second Amended Complaint and intends to contest those claims vigorously. AURORA FOODS: Court Confirms Settlement Of All Class & Derivative Suits ----------------------------------------------------------------------- Aurora Foods Inc. (NYSE:AOR) disclosed in a recent regulatory filing with the Securities and Exchange Commission that the United States District Court for the Northern District of California has confirmed the settlement of all class action and derivative suits brought against the Company relating to the earnings restatements announced in February 2000. As a result of the settlement, the Company anticipates it will record a net, after-tax, non-cash gain in the range of $2 million to $3 million in the second quarter of 2001 related to its receipt of shares from former management. AUTONATION INC.: New Suits Filed After First Case Settled for $2.1 M ---------------------------------------------------------------------- In October 2000, the California Department of Motor Vehicles brought action against one of the Company's California dealerships for alleged customer fraud as well as several other claims. In April 2001, the California DMV action and a related action by the State of California were settled. As part of the settlement, the dealership closed its sales operations for six days, agreed to provide restitution to certain customers in the estimated amount of approximately $1.0 million and paid $1.1 million in fines, penalties and costs. Three purported civil class actions and other related lawsuits have been filed against the dealership based on the allegations underlying the California DMV case. The Company intends to vigorously defend itself in these matters. AUTOWEB.COM: Marc Henzel Files Lawsuit In New York for Securities Fraud ----------------------------------------------------------------------- A class action lawsuit was filed in the U.S. District Court for the Southern District of New York, 500 Pearl Street, New York, New York, on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Autoweb.com, Inc. (Nasdaq: AWEB) between March 22, 1999 and April 18, 2001, inclusive. The lawsuit asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The complaint alleges that Autoweb.com, Inc., Dean A. DeBiase, its Chairman and Chief Executive Officer, Farhang Zamani and Payam Zamani, its founders, and Directors Mark N. Diker, Jay C. Hoag, Mark R. Ross and Peter S. Sealey violated the federal securities laws by issuing and selling Autoweb.com common stock pursuant to the March 22, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriters Credit Suisse First Boston Corporation and BancBoston Robertson Stephens, Inc., together with underwriters Morgan Stanley Dean Witter & Co., Incorporated and Salomon Smith Barney, Inc. allocated Autoweb.com shares to customers at the IPO price of $14.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $14.00, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Autoweb.com stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Autoweb.com's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $14.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $41.00 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. For more information, contact: Marc S. Henzel, Esq. of The Law Offices of Marc S. Henzel, 210 West Washington Square, Third Floor Philadelphia, PA 19106, by telephone at (888) 643-6735 or (215) 625- 9999, by facsimile at (215) 440-9475, by e-mail at Mhenzel182@aol.com or visit the firm's website at http://members.aol.com/mhenzel182. BERGEN BRUNSWIG: Court Dismisses Securities Suit Against PharMerica ------------------------------------------------------------------- On November 1998 and February 1999, two putative securities class actions were filed against PharMerica, Inc., a subsidiary of BERGEN BRUNSWIG CORPORATION, and certain individuals in the United States District Court for the Middle District of Florida. The Court consolidated the actions into one putative class action and appointed two groups as co-lead Plaintiffs for the proposed class, who filed a Consolidated Amended Complaint. The proposed classes consist of all persons who purchased or acquired stock of PharMerica between January 7, 1998 and July 24, 1998. The Consolidated Amended Complaint seeks monetary damages but does not specify any amount. In general, the Consolidated Amended Complaint alleges that the Defendants made material misrepresentations with respect to an alleged violation of generally accepted accounting principles, and omissions by withholding from the market information related to the costs associated with certain acquisitions. The Consolidated Amended Complaint alleges claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934. Defendants' Motion to Dismiss was assigned to a Magistrate for a Report and Recommendation (R&R). On April 18, 2001, the Magistrate issued an R&R recommending that Defendants' Motion be granted and the plaintiffs' Consolidated Amended Complaint be dismissed without prejudice for failure to satisfy the elements of the Private Securities Litigation Reform Act. The R&R also recommends that the plaintiffs be allowed to attempt to cure their pleading deficiencies. The R&R will be submitted to the District Court for its consideration. BICO INC.: Final $1.3 Million Of Settlement Pact To Be Paid In July ------------------------------------------------------------------- During April 1998, Bico Inc. and its affiliates were served with subpoenas by the U.S. Attorneys' office for the U.S. District Court for the Western District of Pennsylvania. The subpoenas requested certain corporate, financial and scientific documents and the Company continues to provide documents in response to such requests. On April 30, 1996, a class action lawsuit was filed against the Company, Diasense, Inc., and individual officers and directors. The suit, captioned Walsingham v. Biocontrol Technology, et al., was certified as a class action in the U.S. District Court for the Western District of Pennsylvania. The suit alleged misleading disclosures in connection with the Noninvasive Glucose Sensor and other related activities, which the company denies. Without agreeing to the alleged charges or acknowledging any liability or wrongdoing, the company agreed to settle the lawsuit for a total amount of $3,450,000. As of March 31, 2001, $2,150,000 has been paid toward the settlement. An additional $1,300,000 is included in accrued liabilities and will be paid in July 2001. Although it is not known whether the class action plaintiffs have been formally notified of the settlement, or if they have accepted its terms, the company believes that the existing settlement will end this matter. BRUSH ENGINEERED: Three Chronic Beryllium Disease Cases Filed ------------------------------------------------------------- During the first quarter of 2001, the number of Chronic Beryllium Disease (CBD) cases grew from 71 cases, involving 192 plaintiffs, as of December 31, 2000, to 76 cases involving 203 plaintiffs, as of March 31, 2001. The 76 pending CBD cases fall into three categories: (i) 42 "employee cases" involving an aggregate of 42 Brush Wellman employees, former employees or surviving spouses. In 24 of these cases, a spouse has also filed claims as part of his or her spouse's case, and in one case, one child has filed a claim as part of his parent's case; (ii) 31 cases involving third party individual plaintiffs, with 66 individuals, and 44 spouses who have filed claims as part of their spouse's case, and ten children who have filed claims as part of their parent's case; and (iii) three purported class actions involving 14 individuals and two spouses who have filed claims as part of their spouse's case. In the three purported class actions pending against Brush Wellman Inc., a subsidiary of BRUSH ENGINEERED MATERIALS, INC., the named plaintiffs allege that past exposure to beryllium has increased their risk of contracting CBD, though most of them do not claim to have actually contracted it. They seek medical monitoring funds to be used to detect medical problems that they believe may develop as a result of their exposure and, in some cases, also seek compensatory and punitive damages. One of the three purported class actions pending against Brush Wellman was brought by named plaintiffs on behalf of tradesmen who worked in one of Brush Wellman's facilities as employees of independent contractors. The two others were brought on behalf of current and former employees of Brush Wellman's present and former customers and vendors. CELLPHONE LITIGATION: Mobile Phone Makers Face Liability Suits -------------------------------------------------------------- Motorola Inc. and several mobile phone manufacturers are defendants in a number of cases arising out of its manufacture and sale of portable cellular telephones. On April 19, 2001, Brower v. Motorola, Inc., et al. was filed in the Superior Court of the State of California, County of San Diego against Motorola and other cellular phone manufacturers and carriers. The plaintiff alleges that his brain tumor was caused by the use of a cellular phone. Also on April 19, 2001, a purported state class action suit, Pinney and Colonell v. Nokia, Inc., et al., was commenced against cellular phone manufacturers and carriers in the Circuit Court for Baltimore City, claiming that defendants exposed users to radio frequency radiation that allegedly caused adverse cellular reaction and dysfunction. Plaintiffs also contend that the defendants did not disclose to the consuming public the alleged fact that cellular phones cause injury and create a risk to the users' health. Monetary damages, declaratory and/or equitable relief are sought. Similar purported state class action suits were filed in the Pennsylvania Court of Common Pleas, Philadelphia County, Farina v. Nokia, Inc., et al., on April 19, 2001 and in the Supreme Court of the State of New York, County of Bronx, Gillian et al., v. Nokia, Inc., et al., on April 20, 2001. COOPER TIRE: Federal Judicial Panel Sends 17 Suits To S.D. Ohio Court ---------------------------------------------------------------------- Cooper Tire and Rubber Company has been named in 30 separate class action lawsuits filed against it in 28 separate state courts, plus the Commonwealth of Puerto Rico. One lawsuit purports to represent a national class, while in two others, the proposed class character has been voluntarily withdrawn by amendment. The lawsuits, all of which have been filed under the auspices of the same group of plaintiffs, attorneys, assert claims under the respective states consumer protection and deceptive trade practices statutes, and comparable commercial law and other theories. They allege that the Company used certain materials and procedures in its process of manufacturing steel-belted radial tires, which rendered a portion of the tires unsafe, and failed to disclose those practices to purchasers of its tires. The suits are brought on behalf of all persons (excluding those who have sustained personal injury and/or property damage as a result of the alleged unlawful practices) in the respective states who purchased steel-belted radial tires manufactured by the Company from 1985 to the present, and still retain those tires. The lawsuits generally seek, on behalf of each class member, relief sufficient to secure replacement of their tires, statutory, compensatory and punitive damages, costs and attorneys fees. The Company has removed each of the actions to Federal court. Plaintiffs have filed motions to have each of the actions remanded to state court, and five of the actions have been remanded. On motion filed by the Company, the Federal Judicial Panel on Multidistrict Litigation has transferred 17 of the actions remaining in Federal court to the U. S. District Court for the Southern District of Ohio, for consolidated pre-trial handling. The Company is seeking similar transfer of the rest of the actions and plaintiffs are opposing transfer. Rulings by the Panel are expected in due course. The Company believes that substantial defenses, both factual and legal, to the allegations contained in the lawsuits exist, and it intends to contest vigorously the claims made in these lawsuits. COVENTRY HEALTH: Sued For RICO Violations And Breaches Of Contract ------------------------------------------------------------------ On April 16, 2001, Coventry Health Care Inc. was served with an Amended Complaint filed in the United States District Court for the Southern District of Florida, Miami Division, MDL No. 1334, styled In Re: Humana, Inc., Managed Care Litigation, Charles B. Shane, M.D., et al. vs. Humana, Inc., et al. This matter is a purported class action lawsuit filed by a group of health care providers against the Company and 11 other defendants in the managed care field. The lawsuit alleges multiple violations of the Racketeer Influenced and Corrupt Organizations Act, violations of the "prompt pay" statutes in certain states, and breaches of contract for failure to pay claims. DIGIMARC CORPORATION: Says Securities Suit In New York Is Without Merit ----------------------------------------------------------------------- On May 3, 2001, a class action complaint was filed in the Southern District of New York against Digimarc Corporation and the underwriters of its initial public offering. The complaint alleges violations of the securities laws in connection with certain alleged compensation arrangements entered into by the underwriters subsequent to the offering. The Company is reviewing the action and believes that the allegations are without merit. Although no assurance can be given that this matter will be resolved in the Company's favor, the Company believes that the resolution of these lawsuits will not have a material adverse effect on the Company's financial position, results of operations or cash flows. EXXON MOBIL: Appeals On 1989 Oil Spill Incident Ongoing ------------------------------------------------------- A number of lawsuits, including class actions, were brought in various courts against Exxon Mobil Corporation and certain of its subsidiaries relating to the accidental release of crude oil from the tanker Exxon Valdez in 1989. Essentially all of these lawsuits have now been resolved or are subject to appeal. FORD MOTOR: Court Sets May 31 Hearing For All Disparate Impact Claims --------------------------------------------------------------------- Ford Motor Credit Company disclosed in a recent regulatory filing with the Securities and Exchange Commission that the plaintiffs in the Reverse Discrimination Class Action withdrew the initial case that was filed in the federal district court for the Eastern District of Michigan. On March 6, 2001, four plaintiffs filed a new purported class action in state court of Michigan against Ford. This suit alleges reverse race, reverse gender and age discrimination. Specifically, the purported class claims that the Company's diversity initiatives discriminate against older white males. The suit alleges that the Company's Performance Management Process was intended to support the diversity initiatives by driving out the older white males. The suit alleges both intentional discrimination as well as disparate impact. Ford has filed a motion to dismiss all of the disparate impact claims. This motion is scheduled to be heard simultaneously with a similar motion filed in the Performance Management Process Class Action on May 30, 2001. FOUNDRY NETWORKS: California Court Consolidates Shareholder Suits ----------------------------------------------------------------- In December 2000, a shareholder class action lawsuit was filed against Foundry Networks Inc. and certain of its officers in the United States District Court for the Northern District of California, following Foundry's announcement in December 2000 of its anticipated financial results for the fourth quarter ended December 31, 2000. The lawsuit alleges violation of federal securities laws and purports to seek damages on behalf of a class of shareholders who purchased Foundry common stock during the period from October 18, 2000 to December 19, 2000. Following the filing of the lawsuit, several virtually identical lawsuits were filed making essentially the same allegations. On April 6, 2001, the court consolidated all actions and directed plaintiffs to file a consolidated complaint. The court also selected lead plaintiffs and approved lead plaintiffs' choice of counsel. Foundry has reviewed the lawsuits, believes them to be without merit and intends to seek dismissal of the lawsuits at its first opportunity. HASTINGS MANUFACTURING: Attempts to Settle Suit Continue in Uncertainty ----------------------------------------------------------------------- As a result of the amendment by Hastings Manufacturing Company of its postretirement benefit plans, the Company's retirees filed a class action lawsuit in the Western District of Michigan on January 24, 2000, under the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act of 1947 (LMRA). The suit alleges that the Company denied class retirees and their dependents certain health insurance benefits to which the retirees have vested rights pursuant to the terms of the Company's collective bargaining agreements (1964 to the present). Specifically, the retiree class disputes the increase in their health insurance deductibles, the elimination of their prescription drug card and the requirement that they pay a portion of their health insurance premiums. The Company has denied any wrongdoing in this suit and intends to defend it and any related class certification vigorously. Minimal discovery has taken place to date in the lawsuit because the parties have been attempting to reach a settlement. At this stage, the prospect of settlement is uncertain. Furthermore, because the lawsuit is in its early stages, the Company's ultimate chances of success are uncertain. If the retirees prevail, the Company anticipates that a requirement to provide postretirement benefits at the pre-amendment level would have a material adverse effect on the Company's future financial position, results of operations and cash flows. HUMPHREY HOSPITALITY: Securities Suit Filed in E.D. Virginia ------------------------------------------------------------ The Law Firm of Schiffrin & Barroway, LLP filed a class action lawsuit in the United States District Court for the Eastern District of Virginia, on behalf of all purchasers of the common stock of Humphrey Hospitality Trust, Inc. (Nasdaq: HUMP) from November 14, 2000 through March 29, 2001, inclusive. The complaint charges Humphrey Hospitality and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. As of December 31, 2000, Humphrey Hospitality owned 92 existing limited service hotels and one office building. The Hotels (containing approximately 6,400 rooms in 19 states) and office building are leased to Humphrey Hospitality Management, Inc. and its subsidiary Supertel Hospitality Management, Inc. Specifically, the complaint alleges that defendants conditioned the market to believe in the strength of Humphrey's financial condition, and that Humphrey's conservative fiscal policies meant that its dividend was secure. The complaint further alleges that on March 29, 2001, the Company shocked the market by announcing that its Lessee advised that, without a substantial reduction in the rent, it would be unable to lease and operate the hotels; and that the Board of Directors had established "a committee of independent directors" to "explore alternatives available to the (Company)." Humphrey also announced that its dividend would be reduced for monthly payments subsequent to those payable to shareholders of record on March 30, 2001. Humphrey common stock opened at $7.0938 per share on March 29, 2001 and closed that day at $4.7812 that day on volume of 217,200 shares, approximately seven times its average volume. For additional details, contact: Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com. INTERTRUST TECHNOLOGIES: Lovell Stewart Commences Securities Suit in NY ----------------------------------------------------------------------- The law firms of Lovell & Stewart, LLP and Sirota & Sirota, LLP filed a class action lawsuit on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Intertrust Corporation (NasdaqNM:ITRU) between October 26, 1999 and May 16, 2001 inclusive. The lawsuit asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. Any member of the class may move the Court to be named lead plaintiff. The action, Morris Kassin v. Intertrust Technologies Corp., et al., is pending in the U.S. District Court for the Southern District of New York, Docket No. 01-CV-4187 (BSJ) and has been assigned to the Hon. Barbara S. Jones, U.S. District Judge. The complaint alleges that Intertrust Technologies Corporation and certain of its current and former officers and directors violated the federal securities laws by issuing and selling Intertrust common stock pursuant to the IPO and secondary offering without disclosing to investors that at least two of the lead underwriters and two of the other underwriters in the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriters Credit Suisse First Boston Corp. and Salomon Smith Barney, Inc. and underwriters BancBoston Robertson Stephens, Inc. and Morgan Stanley Dean Witter & Co. allocated Intertrust shares to customers at the IPO price of $18.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $18.00, the aforementioned defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Intertrust stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Intertrust's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying Intertrust stock at the $18.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $55.00 during its first day of trading. The complaint further alleges that Intertrust was able to price the secondary offering of Intertrust stock at an artificially high $35.00 per share (or $70.00 per pre-two-for- one-split share) due to the continued effects of the foregoing violations. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the aforementioned defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectuses distributed to investors and the Registration Statements filed with the SEC in order to gain regulatory approval for the Intertrust offerings contained material misstatements regarding the commissions that the underwriters would derive from the IPO and secondary offering and failed to disclose the additional commissions and "laddering" scheme discussed above. For additional information, contact: Lovell & Stewart, LLP, New York; Christopher Lovell, Victor E. Stewart, Christopher J. Gray at Tel. Nos: 212/608-1900 Email: sklovell@aol.com or Sirota & Sirota, LLP, New York; Howard B. Sirota, Saul Roffe at Tel. Nos: 212/425-9055 Email: info@sirotalaw.com JOHNSON&JOHNSON: Court To Announce Decision On Antitrust Suit ------------------------------------------------------------- Johnson & Johnson Vision Care Inc., a subsidiary of Johnson & Johnson, together with a trade association and various individual defendants, is a defendant in several consumer class actions and an action brought by multiple State Attorneys General on behalf of consumers alleging violations of federal and state antitrust laws. These cases, which were filed between July 1994 and December 1996 and are consolidated before the United States District Court for the Middle District of Florida, assert that enforcement of Vision Care's long- standing policy of selling contact lenses only to licensed eye care professionals is a result of an unlawful conspiracy to eliminate alternative distribution channels from the disposable contact lens market. In April 2001, after five weeks of trial, these cases were concluded on terms, which will be announced by the Court in late May 2001. LUPRON LITIGATION: Three Drug Companies Charged For Overpricing Drug -------------------------------------------------------------------- Drug companies' improper pricing activities are costing senior citizens millions of dollars, alleges a class action suit filed in Boston by Jeffrey L. Kodroff, a partner with the Philadelphia-based firm of Spector, Roseman & Kodroff, P.C. This suit is focusing on the drug Lupron, commonly used in the treatment of prostate cancer and manufactured by the defendants, Tap Pharmaceuticals, Inc., Abbott Laboratories (NYSE: ABT) and Takeda Chemical Industries. The federal government is also investigating the marketing of this cancer drug though a grand jury in Boston. Filed on behalf of senior citizens who subscribe to Medicare Part B, the class action suit alleges that the defendants targeted Medicare patients by illegally inflating the "average wholesale price" of Lupron for Medicare. The "average wholesale price" is the amount upon which Medicare reimbursement, and Medicare beneficiaries' co-payments are set. The complaint also alleges that the defendants provided free samples of Lupron to medical providers and instructed them that they could, and should, bill Medicare and Medicare patients for the free samples. Under Medicare Part B, the government picks up the cost for 80 percent of Lupron, with the patient paying the additional 20 percent through a co-payment. "The U.S. government has been actively investigating the alleged overcharging to recover portions of its 80 percent payments for some time," said Kodroff. "But the individual senior citizens who have also been cheated haven't had a voice -- until now." "According to the Health Care Finance Administration's Office of Inspector General, if Medicare reimbursed for the drugs at the same prices as the Veteran's Administration, the government and patients would save 42 percent," said Kodroff. "In 1997, the 20 percent portion paid for by patients and/or insurers for Lupron was approximately $129 million; in 1998, $117 million; and in 1999, $124 million. If costs were inflated even just 10 percent over those three years, that's close to $35 million in extra charges -- and we believe it is much higher. "We are talking about millions of dollars and millions of people affected by this scam. This class suit will serve to put the drug companies on notice that they are accountable for their actions when dealing with the senior citizens of this country," Kodroff said. This suit is timely, in light of the ongoing questions as to the financial viability of both Social Security and Medicare. "With the Federal Government contemplating a prescription drug plan for Medicare, if this type of fraud is left unchecked, the plan is sure to have problems," said Kodroff. For more information, contact Kodroff at 215-496-0300. MARKETWATCH.COM: Marc Henzel Files Securities Suit In S.D. New York -------------------------------------------------------------------- A class action lawsuit was filed in the U.S. District Court for the Southern District of New York on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of MarketWatch.com, Inc. (Nasdaq: MKTW) between January 15, 1999 and April 16, 2001, inclusive. The lawsuit asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The complaint alleges that MarketWatch.com, Inc., Larry S. Kramer, its Chairman and Chief Executive Officer and Directors James A. DePalma, Alan R. Hirschfield, Allan R. Tessler, Mark F. Imperiale, Andrew Heyward and Michael H. Jordan violated the federal securities laws by issuing and selling MarketWatch.com common stock pursuant to the January 15, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriter Salomon Smith Barney, Inc. and underwriters BancBoston Robertson Stephens, Inc., Credit Suisse First Boston Corporation, The Goldman Sachs Group, Inc., Merrill Lynch, Pierce, Fenner & Smith, Incorporated and Morgan Stanley Dean Witter & Co. allocated MarketWatch.com shares to customers at the IPO price of $17.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $17.00, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of MarketWatch.com stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive MarketWatch.com's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $17.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $130.00 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the MarketWatch.com offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above. For more details, contact: Marc S. Henzel, Esq. of The Law Offices of Marc S. Henzel, 210 West Washington Square, Third Floor Philadelphia, PA 19106, by telephone at (888) 643-6735 or (215) 625-9999, by facsimile at (215) 440-9475, by e-mail at Mhenzel182@aol.com or visit the firm's website at http://members.aol.com/mhenzel182. MOTOROLA INC.: Expects Lawsuit From Committee of Unsecured Creditors -------------------------------------------------------------------- A number of purported class action and other lawsuits alleging securities law violations have been filed naming Old Iridium, certain current and former officers of Old Iridium, other entities and MOTOROLA INC. as defendants. In addition, a committee of unsecured creditors of Old Iridium has, over objections by Motorola and Old Iridium, been granted leave by the Bankruptcy Court to file a complaint on Old Iridium's behalf against Motorola. Although, to date no complaint has been filed by this committee, in March 2001, the Bankruptcy Court approved a settlement between this committee and Old Iridium's secured creditors that provides for the creation of a litigation fund to be used in pursuit of such proposed claims against Motorola. Motorola anticipates that a complaint will be filed by this committee. On November 20, 2000, the United States Bankruptcy Court for the Southern District of New York issued an Order that approved the bid of Iridium Satellite LLC for the assets of Iridium LLC and its operating subsidiaries (Old Iridium). The Bankruptcy Order provided, among other things, that all obligations of Motorola and its subsidiaries and affiliates under all executory contracts and leases with Old Iridium relating to the Iridium system would, upon completion of the asset sale, be deemed terminated and, to the extent executory, be deemed rejected. Claims against Motorola by Old Iridium and others with respect to certain credit agreements and related matters were not discharged. MP3.COM: Lovell Stewart Commences Securities Lawsuit in S.D. New York --------------------------------------------------------------------- The law firms of Lovell & Stewart, LLP and Sirota & Sirota, LLP and filed a class action lawsuit on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of MP3.com, Inc. (NasdaqNM:MPPP) between July 21, 1999 and May 16, 2001 inclusive. The lawsuit asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The action, Saul Kassin v. MP3.com, Inc., et al., is pending in the U.S. District Court for the Southern District of New York, Docket No. 01-CV-4183 (RLC) and has been assigned to the Hon. Robert L. Carter, U.S. District Judge. The complaint alleges that MP3.com, Inc. and certain of its current and former officers and directors violated the federal securities laws by issuing and selling MP3.com common stock pursuant to the IPO without disclosing to investors that at least two of the lead underwriters in the offering had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriters Credit Suisse First Boston Corp. and BancBoston Robertson Stephens, Inc. allocated MP3.com shares to customers at the IPO price of $28.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $28.00, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of MP3.com stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive MP3.com's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the lead underwriters and their customers to reap enormous profits by buying MP3.com stock at the $28.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $105.00 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant lead underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the MP3.com offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above. For additional details, contact: Lovell & Stewart, LLP, New York; Christopher Lovell, Victor E. Stewart, Christopher J. Gray at Tel. Nos.: 212/608-1900 Email: sklovell@aol.com or Sirota & Sirota, LLP, New York; Howard B. Sirota, Saul Roffe at Tel. Nos.: 212/425-9055 Email: info@sirotalaw.com MULTEX.COM: Wolf Haldenstein Files Securities Fraud Suit In New York -------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP filed a lawsuit in the United States District Court for the Southern District of New York on behalf of all purchasers of Multex.com Inc., (Nasdaq: MLTX) securities during the period between March 17, 1999 and December 4, 2000, inclusive against Multex.com Inc., certain of its officers and directors, and certain of its underwriters. The case name and index number are Schwartz v. Multex.com Inc., [01-CV- 4266]. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at http://www.whafh.com. The complaint alleges that defendants violated the federal securities laws by issuing and selling Multex common stock pursuant to the IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. Specifically, the complaint alleges that in exchange for the excessive commissions, defendants allocated shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Multex rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive the share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying Multex stock at the IPO price and then selling it later for a profit at inflated aftermarket prices. For additional information, contact: Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone at (800) 575-0735 (Gregory M. Nespole, Esq., Michael Miske, Gustavo Bruckner, Esq., George Peters, Fred Taylor Isquith, Esq.), via e-mail at classmember@whafh.com or visit its website at http://www.whafh.com. NETWORK COMMERCE: Wechsler Harwood Files Securities Suit in Washington ---------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP files a class action lawsuit in the United States District Court for the Western District of Washington at Seattle on behalf of all investors who purchased the common stock of Network Commerce Inc. (Nasdaq: NWKC) between September 28, 1999 and April 16, 2001, inclusive, and who suffered damages thereby. The complaint charges that Network Commerce and its Chairman and CEO Dwayne M. Walker violated Sections 11, 12(2), and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. It is alleged that during the Class Period, defendants disseminated to the investing public false and misleading registration statements and prospectuses related to Network Commerce's Initial and Secondary Public Offerings, as well as its merger with Ubarter.com. Defendants distributed to the investing public false and misleading financial statements and press releases concerning the Company's growth of revenue, earnings, and ability to achieve profitability. In addition, each document, as well as quarterly and annual financial reports filed with the Securities and Exchange Commission failed to disclose, among other things, the terms upon which Walker executed several promissory notes with the Company that led to a $4.5 million loss to the Company. Once the truth was revealed, the Company's stock plummeted. For more information, contact: Ramon Pinon IV, Paralegal Shareholder Relations Department; Wechsler Harwood Halebian & Feffer LLP, 488 Madison Avenue 8th Floor New York, New York 10022; Telephone: (877) 935-7400 (toll free) Facsimile: (212) 753-3630 NOVARTIS PHARMACEUTICALS: Court Dismisses Lawsuit Due to Vague Claims --------------------------------------------------------------------- U. S. District Judge Hilda G. Tagle dismissed the class action lawsuit against Novartis Pharmaceuticals Corporation, manufacturers of Ritalin(R)(methylphenidate), which claimed the company conspired with the American Psychiatric Association (APA) and Children and Adults with Attention-Deficit/Hyperactivity Disorder (CHADD) to promote the diagnosis of Attention-Deficit/Hyperactivity Disorder (ADHD). Judge Tagle found that the plaintiffs failed to state their claims of fraud and conspiracy with sufficient particularity. Additionally, she found that the plaintiffs' vague mentions of side effects in their complaint failed to state a legal claim. This was the plaintiffs' third attempt to state a sufficient cause of action. The first complaint was dismissed on October 17, 2000 because Judge Tagle ruled charges were too vague and unclear and did not state a legal claim. "We applaud Judge Tagle's dismissal of the Texas class action," said Novartis General Counsel, Dorothy Watson. "This ruling supports Novartis' position that this lawsuit and others like it are an unmerited attempt to promote an agenda that contradicts scientific and medical consensus." In addition to dismissing the suit, the court also ordered that the plaintiffs pay the legal fees for Novartis, APA and CHADD. Similar suits have been filed in Florida, New Jersey and Puerto Rico. The defendants also filed motions to dismiss those cases and rulings in those cases are pending. Contrary to the position advanced in the lawsuits, ADHD is a real and serious disorder. It is a well-established and valid diagnosis recognized by the leading medical authorities in the U.S., including the American Medical Association, American Psychiatric Association, American Academy of Pediatrics, the U.S. Food and Drug Administration and the U.S. Surgeon General. Ritalin has been shown to be an effective and safe medication for more than 45 years and has been scientifically evaluated in more than 200 studies involving over 6,000 school-aged children. "Ritalin and similar treatments are among the most widely studied therapies available," said Watson. "We're heartened that an overwhelming body of scientific evidence cannot just be litigated away by lawyers and anti- psychiatry advocates." Ritalin is a mild central nervous system stimulant that helps to address the neurochemical problems underlying attention deficit hyperactivity disorder (ADHD). ORTHODONTIC CENTERS: Wolf Haldenstein Commences Suit in E.D. Louisiana ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP filed a lawsuit in the United States District Court for the Eastern District of Louisiana on behalf of all purchasers of Orthodontic Centers of America (NYSE: OCA) securities during the period between April 27, 2000 and March 15, 2001, inclusive against OCA, and certain of its officers and directors. The case name and index number are Ma v. Orthodontic Centers of America [01-CV-1510], and it is before Judge Mary Ann Vial Lemmon. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at http://www.whafh.com. The complaint alleges that defendants violated the federal securities laws by issuing a series of false and misleading press releases concerning OCA's financial condition, and improperly recognizing revenues in violation of Generally Accepted Accounting Principles. As a result, the price of the Company's common stock was artificially inflated throughout the Class Period, allowing defendants to collectively sell or propose to sell millions of dollars worth of shares in personally held OCA Stock. Additionally, the complaint alleges that when the Company disclosed that as a result of an SEC inquiry, it must change its revenue recognition policy to conform with GAAP, thus finally revealing an accurate description of its true financial condition, the stock price dropped precipitously, thereby resulting in substantial damages to shareholders. For further details, contact: Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone at (800) 575-0735 (Gregory M. Nespole, Esq., Michael Miske, Gustavo Bruckner, Esq., George Peters, Fred Taylor Isquith, Esq.), via e-mail at classmember@whafh.com or visit our website at http://www.whafh.com. RELIANT ENERGY: Reliant Resources Offers Indemnity and Possible Defense ----------------------------------------------------------------------- Reliant Energy Inc. and Reliant Energy Services, Inc. have been named as defendants in class action lawsuits and other lawsuits filed against a number of companies that own generation plants in California and other sellers of electricity in California markets. Reliant Energy Resources Corp., a Delaware Corporation all of the stock of which is owned by REI, has also been named as a defendant on one of the lawsuits. Pursuant to the terms of the master separation agreement between Reliant Energy Inc. and Reliant Resources, Reliant Resources will agree to indemnify RERC Corp. for any damages arising under this lawsuit, and will agree to indemnify Reliant Energy Inc. for damages arising under any of these lawsuits, and may elect to defend these lawsuits at Reliant Resources' own expense. Three of these lawsuits were filed in the Superior Court of the State of California, San Diego County; two were filed in the Superior Court in San Francisco County. While the plaintiffs allege various violations by the defendants of state antitrust laws and state laws against unfair and unlawful business practices, each of the lawsuits is grounded on the central allegation that defendants conspired to drive up the wholesale price of electricity. In addition to injunctive relief, the plaintiffs in these lawsuits seek treble the amount of damages alleged, restitution of alleged overpayments, disgorgement of alleged unlawful profits for sales of electricity during all or portions of 2000, costs of suit and attorneys' fees. In one of the cases the plaintiffs allege aggregate damages of over $4 billion. Defendants have filed petitions to remove the cases to federal court. Furthermore, defendants have filed a motion with the Panel on Multidistrict Litigation seeking transfer and consolidation of all the cases. These lawsuits have only recently been filed. RR DONNELLEY: Court Certifies Three Classes in Jones and Adams Cases -------------------------------------------------------------------- On November 25, 1996, a class action was brought against R.R. DONNELLEY & SONS CO. in federal district court in Chicago, Illinois, on behalf of current and former African-American employees, alleging that the company racially discriminated against them in violation of the Civil Rights Act of 1871, as amended, and the U.S. Constitution (Jones, et al. v. R.R. Donnelley & Sons Co.). The complaint seeks declaratory and injunctive relief, and asks for actual, compensatory, consequential and punitive damages in an amount not less than $500 million. Although plaintiffs sought nationwide class certification, most of the specific factual assertions of the complaint relate to the closing by the company of its Chicago catalog operations in 1993. Other general claims relate to other company locations. On June 30, 1998, a class action was filed against the company in federal district court in Chicago on behalf of current and former African-American employees, alleging that the company racially discriminated against them in violation of Title VII of the Civil Rights Act of 1964 (Adams, et al. v. R.R. Donnelley & Sons Co.). While making many of the same general discrimination claims contained in the Jones complaint, the Adams plaintiffs are also claiming retaliation by the company for the filing of discrimination charges or otherwise complaining of race discrimination. The complaint seeks the same relief and damages as sought in the Jones case. On April 6, 2001, in an amended opinion, the district court judge in the Jones and Adams cases certified three plaintiff classes in the actions: (i) a class consisting of African-American employees discharged in connection with the shutdown of the Chicago catalog operations; (ii) a class consisting of African-American employees of the Chicago catalog operations after November 1992 who were other than permanent employees; and (iii) a class consisting of African-Americans subjected to an allegedly hostile working environment at the Chicago catalog operations, the Chicago Financial, Pontiac or Dwight, Illinois, manufacturing operations. The judge also consolidated the Jones and Adams cases for pretrial purposes. On May 1, 2001, the federal court of appeals denied plantiffs' application for leave to appeal the certification of classes. STAMPS.COM: Lovell Stewart Files Suit in New York For Securities Fraud ---------------------------------------------------------------------- The law firms of Lovell & Stewart, LLP and Sirota & Sirota, LLP filed a class action lawsuit on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Stamps.com, Inc. (NasdaqNM:STMP) between June 24, 1999 and May 16, 2001 inclusive. The lawsuit asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The action, Collegeware USA, Inc. v. Stamps.com, Inc., et al., is pending in the U.S. District Court for the Southern District of New York, Docket No. 01-CV-4186 (JSM) and has been assigned to the Hon. John S. Martin, Jr., U.S. District Judge. The complaint alleges that Stamps.com, Inc. and certain of its current and former officers and directors violated the federal securities laws by issuing and selling Stamps.com common stock pursuant to the IPO and secondary offering without disclosing to investors that at least one of the lead underwriters in the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriter BancBoston Robertson Stephens, Inc. allocated Stamps.com shares to customers at the IPO price of $11.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $11.00, the aforementioned defendant underwriter's brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Stamps.com stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Stamps.com's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriter and its customers to reap enormous profits by buying Stamps.com stock at the $11.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $45.81 during its first day of trading. The complaint further alleges that Stamps.com was able to price the secondary offering of Stamps.com stock at an artificially high $65.00 per share due to the continued effects of the foregoing violations. Rather than allowing its customers to keep their profits from the IPO, the complaint alleges, the aforementioned defendant lead underwriter required its customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectuses distributed to investors and the Registration Statements filed with the SEC in order to gain regulatory approval for the Stamps.com offerings contained material misstatements regarding the commissions that the underwriters would derive from the IPO and secondary offering and failed to disclose the additional commissions and "laddering" scheme discussed above. For more details, contact: Lovell & Stewart, LLP, New York; Christopher Lovell, Victor E. Stewart, Christopher J. Gray at Tel. Nos.: 212/608-1900 Email: sklovell@aol.com or Sirota & Sirota, LLP, New York; Howard B. Sirota, Saul Roffe at Tel. Nos.: 212/425-9055 Email: info@sirotalaw.com SULZER ORTHOPEDICS: Liability Suit Filed On Behalf of Canadian Patients ----------------------------------------------------------------------- On behalf of Canadian patients, a group of United States law firms has filed a nationwide class action lawsuit in the United States District Court in Texas against Sulzer Orthopedics, Inc. and related companies which develop, manufacture, and market orthopedic products worldwide. In pursuing this litigation, the U.S. law firms are being assisted in Canada by the Canadian law firm of Perley-Robertson, Hill & McDougall LLP. This nationwide class action lawsuit seeks damages for all Canadian patients who had the defective products implanted. "This lawsuit now seeks to protect those thousands of patients in Canada who have been injured by Sulzer's corporate decision to distribute this defective U.S. product in Canada," says Robert Foote, one of the lead attorneys. Sulzer Orthopedics issued a recall in the United States on December 5, 2000, alerting surgeons that patients have been implanted with a hip prosthesis with a defective shell that requires replacement. According to the company and evidence discovered in the U.S. litigation, an oily residue was improperly left on the surface of the shell because of a manufacturing error. In many cases, the residue caused inflammation and pain and prevented the patients' bones from fusing normally with the hip implant. Symptoms caused by a loose connection between the implant and the bone include severe groin pain and an inability for the joint to bear weight. The largest number of defective hips was distributed in the United States. However, it is expected that over a thousand of these defective hips were distributed in Quebec and Ontario. The lawsuit in the U.S. is seeking hundreds of millions of dollars on behalf of the individual patients who have the defective hip products implants. While the company recalled the products in the United States and reported the recall to the U.S. equivalent of Health Canada, the suit seeks to determine if the company ever notified Health Canada. Michael Ryan, another attorney suing Sulzer, explained, "Every patient has a right to demand that Sulzer be held accountable and responsible for their negligence. Each and every patient who has had one of these defective hips may be at risk of injury." For additional information, contact the following attorneys: David Hill QC, Perley-Robertson, Hill & McDougall LLP in Ottawa, Ontario, Canada, and can be reached at 1-800-268-8292. Robert Foote, Esquire, Foote, Meyers, Mielke & Flowers in Chicago, Illinois and can be reached at 630-232-8333. Peter McNulty, Esquire, The Law offices of Peter McNulty, in Bel Air, California and can be reached at 310-471-2707. Archie Lamb, Esquire, The Law offices of Archie Lamb, in Birmingham, Alabama and can be reached at 205-324-4644. Michael Ryan, Esquire, Krupnick Campbell Malone Roselli in Fort Lauderdale, Florida and can be reached at 954-763-8181 Jay Waller, Esquire, Campbell, Waller and Loper, in Birmingham, Alabama and can be reached at 205-803-0051 Mark Gray, Esquire, Gray and Weiss, in Louisville, Kentucky and can be reached at 502-585-2060. TORCHMARK CORPORATION: Trial on Securities Fraud Suit Set For November ---------------------------------------------------------------------- On March 15, 1999, Torchmark Corporation was named as a defendant in consolidated derivative securities class action litigation involving Vesta Insurance Group, Inc. filed in the U.S. District Court for the Northern District of Alabama (In re Vesta Insurance Group, Inc. Securities Litigation. Master File No. 98-AR-1407-S). The amended consolidated complaint in this litigation alleges violations of Section 10(b) of the Securities Exchange Act of 1934 by the defendants Vesta, certain present and former Vesta officers and directors, Vesta's former independent public accountants and Torchmark and of Section 20(a) of the Exchange Act by certain former Vesta officers and directors and Torchmark acting as "controlling persons" of Vesta in connection with certain accounting irregularities in Vesta's reported financial results and filed financial statements. Unspecified damages and equitable relief are sought on behalf of a purported class of purchasers of Vesta equity securities between June 2, 1995 and June 29, 1998. A class was certified in this litigation on October 25, 1999. On October 23, 2000, the District Court denied the defendants' motions to dismiss the consolidated amended class action complaint in this litigation and ordered the defendants to answer the amended class action complaint. Discovery is proceeding and the case has been set for trial in November 2001. UBS AG: Says Finances Won't Be Affected By Resolution Of Ongoing Appeal ----------------------------------------------------------------------- Several class actions, in relation to the business activities of Swiss Companies during World War II, have been brought against UBS AG (as legal successor to Swiss Bank Corporation and Union Bank of Switzerland) in the United States District Court for the Eastern District of New York (Brooklyn). These lawsuits were initially filed in October 1996. Another Swiss bank was designated as a defendant alongside the Bank. On August 12, 1998, however, a settlement was reached between the parties. This settlement provides for a payment by the defendant banks to the plaintiffs, under certain terms and conditions, of an aggregate amount of USD 1.25 billion. UBS agreed to contribute up to two-thirds of this amount. As a result of contributions by Swiss industrial companies to the settlement, UBS' share was reduced by CHF 50 million. A number of persons have elected to opt out of the settlement and not to participate in the class action. Based on the Bank's estimates of forthcoming contributions, the Bank provided USD 610 million in 1998, an additional USD 95 million in 1999 and USD 123 million in 2000. Several payments have been made approximating the reserved amount. The settlement agreement was approved by the competent judge on July 26, 2000, and on November 22, 2000 the distribution plan was approved. Appeals against these decisions are still pending, but the Bank do not believe they should have a financial impact on the Group. WJ COMMUNICATIONS: Pays Full Settlement Amount in 1st Quarter 2001 ------------------------------------------------------------------ In 1999, four shareholder class action lawsuits were filed against WJ Communications Inc. and its former directors in the California Superior Court for the County of Santa Clara: (i) Rosenzweig v. Watkins-Johnson Company, et al., Case No. CV885528; (ii) Soshtain v. Watkins-Johnson Co., et al., Case No. CV785560; (iii) Leong v. Watkins-Johnson Co., et al., Case No. CV785683; (iv) Fong v. Watkins-Johnson Co., et al., Case No. CV785683. These lawsuits alleged essentially the same grounds for relief, namely that the individual defendants breached their fiduciary duty to its shareowners in connection with the recapitalization merger, which was completed on January 31, 2000. On January 14, 2000, all parties to the class action executed a memorandum of understanding to settle the lawsuits. An estimated settlement payment and related legal fees, of approximately $500,000 has been accrued and included in the December 31, 1999 results of operations. Final settlement was reached with no admission of liability and approved by the court during the fourth quarter of 2000. The Company paid the previously accrued settlement in the first quarter of 2001 as full and final payment of the court approved settlement agreement. ********* 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. 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 * * *