/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010606.mbx C L A S S A C T I O N R E P O R T E R Wednesday, June 6 2001, Vol. 3, No. 110 Headlines APAC CUSTOMER: $1 Million Settlement Deal Awaits Court Approval AT HOME: Unfavorable Verdict Could Seriously Harm Business AT HOME: Faces Five Securities Suits In California For Deceptive Ads ATI TECHNOLOGIES: Savett Frutkin Commences Suit In E.D. Pennsylvania BAXTER INTERNATIONAL: 6,202 Claimant Groups Receive Payments BAXTER INTERNATIONAL: One Gammagard(R) IVIG Suit Certified In U.S. BORON LEPORE: Class Certified In New Jersey Securities Lawsuit CCC INFORMATION:Plaintiffs Have Until July 18 To File Amended Plaints CCC INFORMATION: Added As Defendant In Suit Against Previous Customer CYNET INC.: Says Maryland Suit Lacks Merit Under Federal, State Laws DELTA FINANCIAL: Motion To Dismiss CA Securities Suit Still Pending DOT HILL: Settlement Offer Final As Plaintiffs Manifest No Objection EN POINTE: CA Shareholder Plaint To Be Consolidated With Federal Suit E TRADE: Outcome of Wurtman Putative Suit In California Uncertain GOLF TRUST: Faces Shareholder Suit In Maryland For Charter Violation HALL KINION: No Decision Due On Plaintiffs' Appeal Until 2002 HCB BANCSHARES:Deadline For Plaintiffs To File Amended Plaint Expires IC ISAACS: Denies Allegations In Securities Suits Pending In Maryland INDUS INTERNATIONAL: Case Dismissed As $4.3M Settlement Is Approved ITC DELTACOM: Sued By Stockholders Over $150M Equity Investment Deal LAMAUR CORPORATION: Minimal Discovery Conducted On Delaware Lawsuits MERCATOR SOFTWARE: Awaits Ruling On Motion To Dismiss From CT Court MIDWAY GAMES: Suit Blames Product For Columbine High School Shooting NAVARRE CORPORATION: District Judge Dismisses Lawsuit With Prejudice NEW ERA: Has Yet To Respond To Several Securities Suits In Discovery NRG ENERGY: CA Subsidiaries Sued For Anti-competitive Practices PHILIPS INTERNATIONAL:Continues To Fight Allegations In New York Suit SCIENTIFIC LEARNING: CA Securities Suit Settled Without Consideration STAFF LEASING: Settlement Deal Awaits Approval From Florida Court SULZER ORTHOPEDICS:Charfoos&Christensen Moves For Class Certification TERAYON COMMUNICATION: To File Another Motion To Dismiss CA Suit TERAYON COMMUNICATION: Moves For Further Proceedings In N.D. CA TRANSCRYPT INTERNATIONAL: Issues 3.12 M Shares As Part Of Settlement TUMBLEWEED COMMUNICATIONS:Awaits Decision On Three Motions To Dismiss TWINLAB CORPORATION: Settles Securities Suit In New York For $26,000 TWINLAB CORPORATION: No Adverse Effects Expected From Ma Huang Suits VERSATA INC.: Faces Several Federal Securities Law Violations Suits VLASIC FOODS: Berger & Montague and Stull Stull Appointed Co-counsel WINSTAR COMMUNICATIONS: Hit With New Securities Suit In S.D. New York * South Korea To Gradually Introduce Class Action Suit Law Next Year ********* APAC CUSTOMER: $1 Million Settlement Deal Awaits Court Approval --------------------------------------------------------------- In March 2001, APAC Customer Services, Inc. agreed to the settlement of three class action lawsuits which alleged violations of the federal securities laws during the period from September 19, 1996 through April 21, 1997. This settlement remains subject to court approval. In connection with this settlement the Company has recorded a charge for $1 million in the first quarter of fiscal 2001. AT HOME: Unfavorable Verdict Could Seriously Harm Business ---------------------------------------------------------- On March 19, 2001, Pogo.com, Inc. filed suit against At Home Corporation in San Mateo County Superior Court for alleged breach of a merger agreement under which the Company was to acquire Pogo.com in exchange for shares of the Company's Series A common stock. On January 5, 2001, the Company notified Pogo.com that it had terminated the merger agreement in accordance with the provisions of the agreement. The complaint seeks damages for breach of contract and breach of the implied covenant of good faith and fair dealing. "We believe this action is without merit and intend to defend against this action vigorously. If we do not prevail in this action, we may be required to pay substantial damages, which could seriously harm our business," the Company said in a recent regulatory filing with the Securities and Exchange Commission. AT HOME: Faces Five Securities Suits In California For Deceptive Ads -------------------------------------------------------------------- On March 12, 2001, four present and former subscribers of the @Home broadband Internet service initiated a purported class action suit in California State Superior Court in San Mateo County against AT&T and At Home Corporation for unfair business practices, false advertising, misrepresentation, and unjust enrichment. On April 19, 2001, another subscriber filed a private attorney general suit in the same court making similar allegations. Plaintiffs claim that advertising for the @Home broadband Internet service is false, misleading, and deceptive. In the complaints, plaintiffs seek an injunction prohibiting certain of our advertising practices, disgorgement of profits, restitution of monies acquired as a result of the alleged wrongful advertising and business practices, unspecified compensatory damages, punitive damages, and attorneys' fees. "We believe this action is without merit and intend to defend against this action vigorously," said the Company in a regulatory filing. ATI TECHNOLOGIES: Savett Frutkin Commences Suit In E.D. Pennsylvania -------------------------------------------------------------------- Savett Frutkin Podell & Ryan, P.C. filed a class action complaint Monday on behalf of a class of persons who purchased the securities of ATI Technologies, Inc. (NASDAQ:ATYT) between January 13, 2000 and May 24, 2000 and who were damaged thereby. The complaint was filed against defendants ATI, Kwok Yuen Ho, James Chwartacky and James Fleck, in the United States District Court for the Eastern District of Pennsylvania located at 601 Market Street, Philadelphia, PA 19106 (Civil Action No. 01-CV-2741). The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 13, 2000 and May 24, 2000, thereby artificially inflating the price of ATI securities. For additional information, contact: Barbara A. Podell, Adam T. Savett or Renee C. Nixon, of Savett Frutkin Podell & Ryan. P.C. at 800/993- 3233 or via e-mail at mail@savettlaw.com. All e-mail correspondence should indicate your mailing address. Information will be mailed to you at your request. BAXTER INTERNATIONAL: 6,202 Claimant Groups Receive Payments ------------------------------------------------------------ As of March 31, 2001, Baxter International, Inc. had been named in 146 lawsuits and 93 claims in the United States, Ireland, Italy, Taiwan, Japan, Spain, Sweden, France, and the Netherlands. The U.S.D.C. for the Northern District of Illinois has approved a settlement of all U.S. federal court factor concentrates cases. As of March 31, 2001, approximately 6,220 claimant groups had been found eligible to participate in the settlement, and approximately 300 claimants had opted out of the settlement. Approximately 6,202 of the claimant groups had received payments as of March 31, 2001 and payments are expected to continue through the second quarter of 2001 as releases are received from the remaining claimant groups. The company also has been named in four purported class actions. None of these class actions has been certified for trial. BAXTER INTERNATIONAL: One Gammagard(R) IVIG Suit Certified In U.S. ------------------------------------------------------------------ Baxter International, Inc. is also currently a defendant in a number of claims and lawsuits brought by individuals who infused the company's Gammagard(R) IVIG (intravenous immuno-globulin), all of whom are seeking damages for Hepatitis C infections allegedly caused by infusing Gammagard(R) IVIG. As of March 31, 2001, Baxter was a defendant in 27 lawsuits and 31 claims in the United States, Denmark, France, Germany, Italy, Spain and the United Kingdom. Two suits currently pending in the United States have been filed as purported class actions but only one has been certified. In September 2000, the U.S.D.C. for the Central District of California approved a settlement of the class action that would provide financial compensation for U.S. individuals who used Gammagard(R) IVIG between January 1993 and February 1994. BORON LEPORE: Class Certified In New Jersey Securities Lawsuit -------------------------------------------------------------- Boron Lepore & Associates, Inc. reported recently that a class has been certified in the securities suit filed by a stockholder of the Company in 1999. According to the report, the court granted the plaintiff's motion for class certification on February 14, 2001. The litigation is now in the discovery phase. On or about May 25, 1999, one stockholder of the Company filed a putative class action lawsuit against the Company and certain of the Company's officers in the United States District Court for the District of New Jersey. The suit alleges that the Company, certain of its officers and directors, and certain institutional stockholders violated the federal securities laws by making material misrepresentations and omissions in certain public disclosures related to, among other things, the secondary offering made by the Company in May 1998, the Company's acquisition of Decision Point, Inc. in January 1998, the termination of the Company's relationship with Glaxo-Wellcome, and the impact of various events on the Company's earnings. CCC INFORMATION:Plaintiffs Have Until July 18 To File Amended Plaints --------------------------------------------------------------------- On April 19, 2001, two pending putative class action complaints against CCC Information Services Group, Inc. and certain of its customers were stricken without prejudice by the Circuit Court of Cook County. The following are the two cases: (i) ALVAREZ-FLORES V. AMERICAN FINANCIAL GROUP, INC., ATLANTA CASUALTY CO., AND CCC INFORMATION SERVICES INC., NO. 99 CH 15032 (FILED October 29, 1999) and (ii) STEPHENS V. THE PROGRESSIVE CORP., PROGRESSIVE PREFERRED INS. CO. AND CCC INFORMATION SERVICES INC., NO. 99 CH 15557 (FILED October 29, 1999). The plaintiff(s) in each case will have until July 18, 2001 to file an amended complaint. CCC INFORMATION: Added As Defendant In Suit Against Previous Customer --------------------------------------------------------------------- In or around March of 2001, CCC was added as a defendant in a case that had been filed previously against one of its customers. The case, which is captioned LAWHON V. NATIONWIDE INSURANCE COMPANY, NO CIV-01-001-B, is pending in the United States District Court for the Eastern District of Oklahoma. The plaintiffs allege that Nationwide, using a valuation provided by CCC, offered the plaintiffs an inadequate amount for their automobile and that CCC's TOTAL LOSS valuation product provides values that do not comply with applicable state regulations governing total loss claims settlements. The plaintiffs assert various common law claims against CCC, and they seek an award of unspecified compensatory and punitive damages, penalties, attorneys' fees, interest, and costs. The plaintiffs' attorney in the LAWHON matter is part of a group of plaintiffs' attorneys who previously filed three putative class action complaints against CCC and several of its customers in the State Court of Fulton County, Georgia. CYNET INC.: Says Maryland Suit Lacks Merit Under Federal, State Laws -------------------------------------------------------------------- Cynet, Inc. has been named as defendant in a suit filed December 13, 2000, in the Circuit Court for Montgomery County, Maryland (Civil No. 216130 Civil) in a case filed as a class action lawsuit for sending unsolicited fax materials concerning certain financial securities promotions. The Company has not completed its discovery and investigations at this time; but based on the information it presently has, the Company is of the opinion that the allegations against it in this case are without legal merit under federal and Maryland state laws. The plaintiff is seeking to recover general damages. DELTA FINANCIAL: Motion To Dismiss CA Securities Suit Still Pending ------------------------------------------------------------------- In November 1999, Delta Financial Corporation received notice that it had been named in a lawsuit filed in the United States District Court for the Eastern District of New York, seeking certification as a class action and alleging violations of the federal securities laws in connection with the Company's initial public offering in 1996 and its reports subsequently filed with the Securities and Exchange Commission. The complaint alleges that the scope of the violations alleged recently in the consumer lawsuits and regulatory actions indicate a pervasive pattern of action and risk that should have been more thoroughly disclosed to investors in the Company's common stock. In May 2000, the Court consolidated this case and several other lawsuits that purportedly contain the same or similar allegations against Delta and in August 2000 plaintiffs filed their Consolidated Amended Complaint. In October 2000, Delta filed a motion to dismiss the Complaint in its entirety, which was opposed by plaintiffs in November 2000, and is now pending. Delta believes that it has meritorious defenses and intends to defend this suit. DOT HILL: Settlement Offer Final As Plaintiffs Manifest No Objection -------------------------------------------------------------------- In January 2001, a final settlement in the class action lawsuit filed against Dot Hill Systems Corporation, certain of its officers and directors, and the underwriters of the Company's September, 16, 1997 initial public offering was approved by the United State District Court for the Southern District of New York, and the action was dismissed with prejudice. No plaintiffs objected to the settlement, no plaintiffs opted-out of the settlement, and the judgment has not been appealed. Therefore, the action has been finalized. EN POINTE: CA Shareholder Plaint To Be Consolidated With Federal Suit --------------------------------------------------------------------- In February 2001, En Pointe Technologies, Inc. and five of its directors, one current officer, and certain former officers along with seven unrelated parties were named in a shareholder class action complaint alleging that the defendants made misrepresentations regarding the Company and that the individual defendants improperly benefited from the sales of shares of the Company's common stock and seeking a recovery by the Company's shareholders of the damages sustained as a result of such activities (Gregg A. Ruffalo v. En Pointe Technologies, et al., United States District Court, Southern District of California Case No. 01CV0205L (CGA). The defendants intend to vigorously defend the allegations and believe the case is without merit. This case is in the process of being consolidated with parallel federal class action complaints. E TRADE: Outcome of Wurtman Putative Suit In California Uncertain ----------------------------------------------------------------- E Trade Group, Inc. is a defendant in putative class actions alleging various causes of action for unfair or deceptive business practices that were filed against the Company between November 21, 1997 and March 11, 1999, as a result of various systems interruptions that E TRADE Securities previously experienced. With respect to the putative class action filed in the Superior Court of California, County of Santa Clara, by Eile Wurtman on March 11, 1999, the plaintiff filed her second amended complaint on or about March 21, 2001. On April 3, 2001, the Company filed an answer to plaintiff's second amended complaint denying plaintiff's allegations. "At this time, we are unable to predict the ultimate outcome of this proceeding," the Company noted is a recent regulatory filing with the Securities and Exchange Commission. GOLF TRUST: Faces Shareholder Suit In Maryland For Charter Violation -------------------------------------------------------------------- On April 5, 2001, a class action lawsuit was filed in the Circuit Court for Baltimore City, Maryland against Golf Trust of America, Inc., its directors and officers and Mr. Larry D. Young, a former director of the Company. The lawsuit was brought by Concordia I, L.P., which claims to be one of the Company's stockholders and which seeks to prosecute its claim on behalf of all of the Company's stockholders other than the defendants and their affiliates or immediate family members. The plaintiff alleges that the Company's payments to its officers under their employment contracts and agreement to sell golf courses to Legends resulted from a breach of the defendants' fiduciary duties to stockholders and that these transactions constitute non-pro rata liquidating distributions allegedly in violation of the Company's charter and Maryland law. Furthermore, the plaintiff alleges that the Company's preliminary proxy statement contained materially misleading statements and omissions and, on that basis, the plaintiff seeks to void any vote taken pursuant thereto. HALL KINION: No Decision Due On Plaintiffs' Appeal Until 2002 ------------------------------------------------------------- In June 1999, Hall Kinion & Associates, Inc. and certain of its directors and officers were named as defendants in three putative class actions filed in the United States District Court for the Northern District of California, alleging violations of Section 10(b) of the Securities and Exchange Act of 1934. Pursuant to court order, those cases have been consolidated, and a consolidated amended complaint was filed on January 24, 2000. The action arises out of the Company's announcement of a shortfall in earnings for the quarter ending June 1998, and purports to be brought on behalf of all purchasers of the Company's common stock between August 5, 1997, the date of our initial public offering, and June 18, 1998, when the Company pre-announced the earnings shortfall. The complaint generally alleges that the Company misstated its future prospects in various press releases and communications with analysts, and failed to disclose alleged internal problems with the integration of certain acquired businesses, while allegedly selling material amounts of stock held by insiders. The Company successfully moved to dismiss all claims in the action, and the court entered an order on April 25, 2000 dismissing the case with leave to amend. A first amended complaint was filed on June 16, 2000. On October 27, 2000, the court dismissed the lawsuit and entered judgment in the Company's favor. Plaintiffs have filed an appeal with the Ninth Circuit Court of appeals, and a decision is not expected until sometime in 2002. HCB BANCSHARES:Deadline For Plaintiffs To File Amended Plaint Expires --------------------------------------------------------------------- In May, 1999, a shareholder filed a putative class action complaint against HCB BANCSHARES, INC. and several current and former officers alleging that the defendants defrauded the plaintiff and other shareholder class members through various public statements and reports that had the supposed effect of artificially inflating the price the plaintiff and other putative class members paid to purchase the Company's common stock. The Company and the other defendants moved to dismiss the complaint. The federal district court granted the motion on March 30, 2001, but allowed plaintiffs 30 days from the date of the order to file an amended class action complaint. As of May 14, 2001, plaintiffs had not filed an amended complaint. IC ISAACS: Denies Allegations In Securities Suits Pending In Maryland --------------------------------------------------------------------- IC Isaacs & Company, Inc. and certain of its current and former officers and directors have been named as defendants in three putative class actions filed in the United States District Court for the District of Maryland. The first of the actions was filed on November 10, 1999 by Leo Bial and Robert W. Hampton. The three actions, which have been consolidated with Bial as the first-named plaintiff, purport to have been brought on behalf of all persons (other than the defendants and their affiliates) who purchased the Company's stock between December 17, 1997 and November 11, 1998. The plaintiffs allege that the registration statement and prospectus used in connection with the Company's initial public offering, completed in December 1997, contained materially false and misleading statements, which artificially inflated the price of the Company's stock during the class period. Specifically, the complaints alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The plaintiffs seek rescission, damages, costs and expenses, including attorney's fees, and such other relief as may be just and proper. The Company believes that the plaintiffs' allegations are without merit and intends to defend the cases vigorously. INDUS INTERNATIONAL: Case Dismissed As $4.3M Settlement Is Approved -------------------------------------------------------------------- Beginning in February 2000, Indus International Inc. and several of its former officers and/or directors were named as defendants in securities class action cases filed in the United States District Court, Northern District of California. The complaints were brought on behalf of all persons who purchased Indus common stock between October 28, 1999, when the Company issued a press release announcing unaudited financial statements for the third quarter of 1999 through January 27, 2000, when the Company announced its intention to restate those financial statements. In August 2000, all parties to the litigation agreed to a settlement. Under the settlement, defendants' insurance carriers paid $4.3 million. In January 2001, the Court granted final approval of the settlement and entered into a judgment dismissing the litigation with prejudice. ITC DELTACOM: Sued By Stockholders Over $150M Equity Investment Deal -------------------------------------------------------------------- On April 20, 2001 a complaint was filed in the Court of Chancery of the State of Delaware naming as defendants ITC DeltaCom, Inc., ITC Holding Company, Inc. and each member of the Company's Board of Directors. The complaint principally alleges that the Company's directors and ITC Holding Company violated fiduciary duties owed or alleged to be owed to its stockholders in connection with the entry by ITC DeltaCom and ITC Holding Company into a previously announced investment agreement on February 27, 2001. Pursuant to the agreement, ITC Holding Company has agreed to make an equity investment of up to $150 million in ITC DeltaCom. The complaint also alleges that the Company's directors violated fiduciary duties owed to its stockholders in connection with proposals relating to the ITC DeltaCom, Inc. 1997 Stock Option Plan which, together with the investment transaction, are scheduled for consideration by the Company's stockholders at the 2001 annual meeting of stockholders. ITC DeltaCom believes that the lawsuit is without merit and intends to vigorously defend the lawsuit. LAMAUR CORPORATION: Minimal Discovery Conducted On Delaware Lawsuits -------------------------------------------------------------------- On November 2, 1998, a class action and derivative lawsuit was filed by Parsow Partnership Ltd. and Elkhorn Partners, on behalf of themselves, Lamaur Corporation, and a putative class of the Company's stockholders, in the Delaware Court of Chancery in and for New Castle County alleging that the Company's Board of Directors breached their fiduciary duties to the Company and failed to disclose certain information in the Company's Proxy Statement for its stockholder meeting held in November 1998. Plaintiffs seek injunctive relief, damages, a rescission of all actions approved at the November 2, 1998 Annual Meeting and a revised Proxy Statement. The Company believes the lawsuit is without merit and is defending the action in the best interest of the stockholders. Minimal discovery has been conducted by the plaintiffs, including initial document demands to the Company and other defendants. No significant dates have been set in the litigation. MERCATOR SOFTWARE: Awaits Ruling On Motion To Dismiss From CT Court ------------------------------------------------------------------- Mercator Software Inc. recently filed a motion to dismiss the consolidated securities suit pending in the U.S. District Court for the District of Connecticut. According to a recent SEC regulatory document, the Company filed the motions to dismiss last March 12. The lead plaintiffs filed an opposition to the motion on or about April 18, 2001, to which Mercator promptly replied with a brief filed May 7, 2001. The case was originally filed as 14 separate purported securities suits between August 23, 2000 and September 21, 2000. On or about November 24, 2000, these lawsuits were consolidated into one lawsuit captioned: In re Mercator Software, Inc. Securities Litigation, Master File No. 3:00-CV- 1610 (GLG). On January 26, 2001 the lead plaintiffs filed an amended complaint alleging violations of Section 10(b) and Rule 10b-5 through alleged material misrepresentations and omissions and seeks an unspecified award of damages. MIDWAY GAMES: Suit Blames Product For Columbine High School Shooting -------------------------------------------------------------------- On April 19, 2001, a class action was commenced against Midway Games, Inc. and other companies by individuals representing the victims (parents, teachers, students living, injured and deceased) of the shootings by Eric Harris and Dyland Klebold on April 20, 1999 at Columbine High School in Jefferson County Colorado. The action, entitled Sanders, et al. v. Meow Media, et al., was brought in the U.S. District Court for the District of Colorado, Civil Action No. 01- - 0728 against 25 defendants. The defendants include 18 companies in the video game business, five companies that produced or distributed the movie "The Basketball Diaries" and two companies that allegedly provided obscene Internet content. The complaint alleges, with respect to Midway and other video game companies, that Harris and Klebold, then 17 years old, were influenced by the allegedly violent content of unspecified video games and that the video game manufacturers and suppliers are liable for Harris' and Klebold's conduct. The complaint seeks up to $10 million in compensatory damages for each of the members of the plaintiff class and $5 billion in punitive damages and relief "necessary to correct the abuses of the violent video game industry and the marketing of these wares to children." The Company received a Request for Waiver of Service of Summons for this action on May 11, 2001. NAVARRE CORPORATION: District Judge Dismisses Lawsuit With Prejudice -------------------------------------------------------------------- Navarre Corporation (Nasdaq:NAVR) announced Monday that the United States District Court for the District of Minnesota has "Dismissed with Prejudice" the class action suit filed against the Company and its directors. The Company and its directors had denied liability and sought dismissal of the lawsuit for failure to state a cause of action. In accordance with the Federal Rules of Appellate Procedure, the plaintiffs can file a Notice of Appeal within 30 days after the date of entry of the judgment. Navarre Corporation's major business groups are: Navarre Distribution Services, which distributes quality consumer software, major label music and DVD to a broad base of retailers nationwide; Navarre Entertainment Media, which distributes proprietary independent music and DVD in the United States and Canada; the company operates a "business to business" Internet E-Commerce web site www.navarre.com. NEW ERA: Has Yet To Respond To Several Securities Suits In Discovery -------------------------------------------------------------------- In January 2001 New Era of Networks, Inc. was named as a defendant in a number of class action lawsuits filed in Federal District Court for the State of Colorado alleging violation of the federal securities laws. Certain executive officers of the Company also are named as defendants. Most of the complaints in these lawsuits assert claims on behalf of purchasers of the Company's securities between October and December 2000. The complaints allege that the Company and the other defendants made material misrepresentations and omissions regarding the Company's business and prospects, causing harm to purchasers of the Company's securities. The complaints do not specify the amount of damages sought. These cases are in the early stages and the Company has not yet formally responded to the complaints. NRG ENERGY: CA Subsidiaries Sued For Anti-competitive Practices --------------------------------------------------------------- On May 2, 2001, certain partially owned subsidiaries of NRG Energy, Inc. and other power generators and power traders, were named as defendants in a class action filed in the Superior Court of the States of California for the County of Los Angeles (Cruz M. Bustamante and Barbara Matthews v. Dynegy, Inc., et al.). The complaint alleges that defendants engaged in various anti- competitive, unlawful, fraudulent and unfair business practices and acts, and acted with the anti-competitive purpose of using economic and physical withholding of electricity from the California electric generation market in order to derive monopoly profits from the sale of their electricity in California. NRG Energy does not believe that its affiliates named in this lawsuit engaged in any illegal activities, and NRG Energy's affiliates intend to vigorously contest these allegations. PHILIPS INTERNATIONAL:Continues To Fight Allegations In New York Suit --------------------------------------------------------------------- On October 2, 2000, a class action complaint was filed in the United States District Court for the Southern District of New York against Philips International Realty Corporation and its directors. The complaint alleged a number of improprieties concerning the pending plan of liquidation of the Company. On November 9, 2000, the Court, ruling from the bench, denied the plaintiff's motion for a preliminary injunction seeking to prevent the liquidation based essentially on the same allegations as in the complaint. This bench ruling was followed by a written order dated November 30, 2000 wherein the Court concluded that the plaintiff had failed to demonstrate either that it was likely to succeed on the merits of its case or that there were sufficiently serious questions going to the merits of its case to make it fair ground for litigation. The plaintiffs in the action continue to prosecute the suit as a damage claim against the Company and its directors. The Company continues to believe that the action is without merit and will continue to defend it vigorously. SCIENTIFIC LEARNING: CA Securities Suit Settled Without Consideration --------------------------------------------------------------------- Scientific Learning Corporation informed recently the Securities and Exchange Commission that it has already settled the securities suit pending in the U.S. District Court for the Northern District of California. The court gave final approval of the settlement last February 8. No consideration was exchanged in connection with the dismissal and neither the lead plaintiffs nor their counsel will receive any compensation or reimbursement of expenses. The suit, Stitt v. Scientific Learning Corporation, et al, alleged that the defendants made false and misleading statements and/or failed to disclose information concerning the Company's projected revenues for the second quarter of 2000, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The lawsuit was filed against the Company and certain of its officers and directors on August 22, 2000. STAFF LEASING: Settlement Deal Awaits Approval From Florida Court ----------------------------------------------------------------- On April 30, 1999, a shareholder of Staff Leasing, Inc. brought a class action in the Twelfth Judicial Division, Manatee County, Florida against the Company and certain of its directors alleging that the directors and senior officers of the Company breached their fiduciary duty to shareholders by failing to pursue a proposal from Paribas Principal Partners to acquire the Company in order to entrench themselves in the management of the Company. Defendants and counsel for the putative plaintiff class have reached a preliminary agreement on terms of a settlement, following mediation. The settlement is subject to court approval, following notice to the putative class. Management does not expect any settlement to have a material effect on the Company's financial position. SULZER ORTHOPEDICS:Charfoos&Christensen Moves For Class Certification --------------------------------------------------------------------- Detroit attorney J. Douglas Peters, of Charfoos & Christensen, P.C., filed Monday a Motion for Class Certification in the Sulzer hip class- action lawsuit his firm filed on March 6, 2001. This case was the first Sulzer hip case filed in Michigan. A national class-action lawsuit was filed Tuesday, March 6, 2001 in Detroit's federal court against Sulzer Orthopedics, Inc., claiming money damages as a result of the defendant's defective hip implant that was recalled on December 5, 2000. Detroit law firm Charfoos & Christensen filed this first of its kind suit in Michigan in Federal Court on behalf of Susan Jarrell of Sparta, Michigan, and the class of people who also received these defective implants. Ms. Jarrell underwent hip replacement surgery in June 2000. Sulzer's Inter-Op acetabular shell was used. An estimated 17,500 persons received the defective implant, Sulzer's Inter-Op acetabular shell, almost 90% of whom reside in the United States. The shells were primarily sold after October 1999, and a small number of lots were sold after July 1997. To date, over 1,400 surgeries have been performed to replace the defective hip prostheses. Thousands of additional surgeries will have to be performed on those who received the defective hip implants. Jarrell has filed claims for strict liability for a defective product, breach of warranty, negligence and strict liability for failure to warn. The complaint also seeks medical monitoring for the class. Commenting on the lawsuit, J. Douglas Peters, Charfoos & Christensen, P.C. shareholder, said "If Sulzer had been receiving reports of problems since October, 1999, we wonder why doctors and the public were not informed until December, 2000. Many patients could have been spared needless pain and suffering and would not be facing the prospect of a second surgery to replace the defective prosthesis." The Motion to Certify the Class Action case alleges that a lubricant used in the manufacturing process of the Inter-Op Shells was inadequately removed from the shell surface during the cleaning process. The lubricant residue prevents the implant from properly bonding with the bone, causing the shells to loosen. It can also cause inflammation and pain and prevent the patient's bones from fusing normally with the hip implant. Plaintiff also alleges that Sulzer failed to issue any warning of the defect to her, physicians or the general public. The company admits that mineral oil-based lubricants in the machines used in the manufacturing process may remain on the implant surface after the cleaning process. In January a company press release announced new multi-stepped procedures to address the problem. TERAYON COMMUNICATION: To File Another Motion To Dismiss CA Suit ---------------------------------------------------------------- Terayon Communication Systems, Inc. intends to file another motion to dismiss the amended securities suit filed by plaintiffs on April 13, 2001. This move is the second of its nature after the court granted the first motion in mid-March. On January 8, 2001, the court held a hearing on defendants' motion to dismiss, and on March 14, 2001, the court, in part, dismissed the consolidated complaint and granted plaintiffs thirty (30) days to file a new, amended complaint. In April 2000, a lawsuit against the Company and certain of its officers and directors, entitled Birnbaum v. Terayon Communication Systems, Inc., was filed in the United States District Court for the Central District of California. The venue for the lawsuit has been moved to the Northern District of California. The plaintiff purports to be suing on behalf of a class of stockholders who purchased or obligated themselves to purchase the Company's securities during the period from February 2, 2000 to April 11, 2000. The complaint alleges that the defendants violated the federal securities laws by issuing materially false and misleading statements and failing to disclose material information regarding its technology. TERAYON COMMUNICATION: Moves For Further Proceedings In N.D. CA --------------------------------------------------------------- Terayon Communication Systems, Inc. said recently in a report to the Securities and Exchange Commission that it is presently preparing a stipulation that will allow further proceedings of the Bertram v. Terayon Communications Systems, Inc. case in the Northern District of California. Earlier in March, the court also granted the Company's motion to dismiss the securities complaint, the report said. The lawsuit was originally filed on October 18, 2000 in the superior court of San Luis Obispo County, California. The complaint contains factual allegations similar to those alleged in the federal securities class action lawsuit. The complaint asserts causes of action under California Business & Professions Code Sections 17200 et seq. and 17500 et seq. for unlawful business practices, unfair and fraudulent business practices, and false and misleading advertising. TRANSCRYPT INTERNATIONAL: Issues 3.12 M Shares As Part Of Settlement -------------------------------------------------------------------- Transcrypt International, Inc. was named as a defendant in class action lawsuits that were filed subsequent to the Company's announcement on March 27, 1998 that the filing of its Annual Report on Form 10-K for year ended December 31, 1997 would be delayed, and that adjustments would be made to the Company's previously announced financial results. The Company has settled the stockholder class action suits against the Company and certain of its current or former officers. The Honorable Warren K. Urbom of the United States District Court for the District of Nebraska approved the settlement, which also resulted in a dismissal of the stockholder class action suit pending in the District Court for Scotts Bluff County, Nebraska. In accordance with the settlement, the Company issued 1,337,999 shares of common stock of the Company in the third quarter of 2000. The remaining 3,122,001 shares were issued during April of 2001. TUMBLEWEED COMMUNICATIONS:Awaits Decision On Three Motions To Dismiss --------------------------------------------------------------------- Interface Systems, Inc., a subsidiary of Tumbleweed Communications Corporation, is a defendant in several purported securities class action lawsuits. On July 7, 2000, three complaints were filed by David H. Zimmer, Congressional Securities, Inc. and other plaintiffs against Interface and various additional defendants, including Interface's President and Chief Executive Officer, Robert A. Nero and Fiserv Correspondent Services, Inc., in the United States District Court for the Southern District of New York. The three cases contain substantially similar allegations of false and misleading representations by various defendants allegedly designed to inflate Interface's stock price. On September 27, 2000, the Company filed (i) a motion to strike or dismiss for failure to meet the certification requirements of the Private Securities Litigation Reform Act, (ii) a motion to dismiss for failure to state a claim, and (iii) a motion to dismiss because of improper venue, or in the alternative, motion to transfer the lawsuits to the Eastern District of Michigan. TWINLAB CORPORATION: Settles Securities Suit In New York For $26,000 -------------------------------------------------------------------- In March 2001, Twinlab Corporation announced that it reached an agreement in principle to settle a shareholder securities class action lawsuit that was pending against the Company and certain of its officers and directors before the United States District Court for the Eastern District of New York. The lawsuit alleged that the Company and the other defendants violated the securities laws by making material misstatements and failing to state material facts about the Company's business and financial condition, among other things, in securities act filings and public statements. The class of plaintiffs included all buyers of the Company's stock from April 8, 1998 through February 24, 1999, other than the defendants and certain related parties. Pursuant to the settlement, which is subject to court approval, the Company has agreed to pay $26,000, all of which is covered by the Company's existing insurance. TWINLAB CORPORATION: No Adverse Effects Expected From Ma Huang Suits -------------------------------------------------------------------- Twinlab Corporation has been named as a defendant in several currently pending lawsuits alleging that its products containing Ma Huang caused injuries, death and/or damages, as well as proceedings seeking class action certification for alleged deceptive advertising claims related to its Ma Huang products. The Company intends to vigorously defend these lawsuits. Due to its insurance coverage, the Company believes that such lawsuits, if successful, would not have a material adverse effect on the financial condition or results of operations of the Company. VERSATA INC.: Faces Several Federal Securities Law Violations Suits ------------------------------------------------------------------- Versata, Inc. reported to the Securities and Exchange Commission that since April 11, 2001, several putative securities class action complaints were filed against the Company, and certain of its current and former officers and directors. The complaints allege violations of the federal securities laws. The complaints seek an unspecified amount of damages on behalf of persons who purchased the stock of the Company during the proposed class periods. "We intend to defend these actions vigorously," the company said in a regulatory filing. VLASIC FOODS: Berger & Montague and Stull Stull Appointed Co-counsel -------------------------------------------------------------------- The law firms of Berger & Montague, P.C. and Stull Stull & Brody announce that on May 22, 2001, Judge Joseph E. Irenas of the United States District Court, District of New Jersey, in Camden, appointed them co-counsel for the lead plaintiffs in the class action captioned Wilson v. Vlasic Foods International, Inc., Civil Action No. 01-0272 (JEI). The Complaint against Vlasic Foods International, Inc. (NYSE: VL; OTC Bulletin Board: VLFIQ) was administratively terminated following the Company's filing of a bankruptcy petition but continues against certain persons who were officers and/or directors of Vlasic during the Class Period of February 24, 1999, through and including February 10, 2000. The claims in the Complaint arise under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. For more information, contact: Berger & Montague, P.C. or Stull, Stull & Brody as follows: Jacob A. Goldberg, Esq. Mark Levince, Esq. Berger & Montague, P.C. Stull, Stull & Brody 1622 Locust Street 6 East 45th Street Philadelphia, PA 19103 New York, NY 10017 Phone: 888-891-2289 or 215-875-3000 Phone: 800-337-4983 Fax: 215-875-5715 Fax: 212-490-2022 Email: InvestorProtect@bm.net Email: SSBNY@aol.com Website: http://home.bm.net/ WINSTAR COMMUNICATIONS: Hit With New Securities Suit In S.D. New York --------------------------------------------------------------------- The law firm of Shalov Stone & Bonner announced Monday that a new class action has been commenced on behalf of Winstar Communications Inc. investors (NASDAQ: WCII and NASDAQ:WCIEQ). The class action includes investors who purchased Winstar securities in the period from March 10, 2000 to April 2, 2001. The complaint names William Rouhana, Richard Uhl, Nathan Kantor, Robert McGuire and Grant Thornton LLP as defendants. The lawsuit was filed by the law firm of Shalov Stone & Bonner in New York City (www.lawssb.com). Shalov Stone & Bonner conducted the investigation leading to the filing of the Winstar action and it was the first law firm to take action in these cases. In April 2001, contrary to prior representations, Winstar announced that it was halting its expansion, laying-off thousands of employees and declaring bankruptcy. Its stock price has collapsed. The lawsuit was filed in the United States District Court for the Southern District of New York. For additional details, contact: the firm by mail or email. Shalov Stone & Bonner (Mark J. Nemetz, Law Clerk), 276 Fifth Avenue, Suite 704, New York, New York 10001, email: mark@lawssb.com * South Korea To Gradually Introduce Class Action Suit Law Next Year -------------------------------------------------------------------- A top-ranking government official in South Korea announced Monday that a Class Action Suit Law will be gradually introduced next year, the Korean newspaper Joong Ang Ilbo reported. Economic Deputy Prime Minister Jin Nyum made the announcement even as the business sector widely opposes the plan. Nyum said the business communities should embrace the class action law as it will improve transparency and increase the value of companies. "The government will go ahead with the measures to improve transparency in accounting as planned," said Jin. "When the transparency in management is ensured and restructuring of financial institutions becomes more efficient, the government will ease the regulations that only exist in Korea, applying to conglomerates," he said. The business sector has been clamoring for easing regulations on conglomerates including classifying the 30 largest groups, the newspaper said. The Federation of Korean Industries is strongly opposed to the plan, promising on Sunday to start petition drives, the newspaper reported. The ruling Millennium Democratic Party and the Grand National Party criticized business communities for opposing government's efforts to increase transparency. "The class action law will only apply to 20 listed companies with 2 trillion won ($1.6 billion) capital or more, and the law covers false disclosure, and stock price and account manipulation," a statement released by the parties said. (Joong Ang Ilbo, June 4, 2001) ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., 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 * * *