/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010702.mbx C L A S S A C T I O N R E P O R T E R Monday, July 2 2001, Vol. 3, No. 128 Headlines 724 SOLUTIONS: Cauley Geller Begins Securities Suit In S.D. New York ACRODYNE COMMUNICATIONS: Settles MD Suit For 1.6M Shares, 750T Cash AETHER SYSTEMS: Stull Stull Begins Securities Suit In S.D. New York AREMISSOFT CORPORATION: Faruqi & Faruqi Brings Securities Suit In NJ ASCHE TRANSPORTATION: Lionel Glancy Files Securities Suit In Illinois CHESTER UPLAND: Parties In School District Suit Agree To Drop Case CHINADOTCOM CORPORATION: Milberg Weiss Files S.D. NY Securities Suit DOUBLECLICK INC.: CA Suit To Go To Trial Jan.'02 If Not Settled ECI TELECOM: Faruqi & Faruqi Files Securities Suit In E.D. Virginia ETONIC/TRETORN: 16 Ex-workers Demand Back Wages, Class Status in Suit ETOYS INC.: Lovell, Sirota Law Firms Files Securities Suit In S.D. NY FRED HUTCHINSON: Files Answer To Liability Suit For Death Of Patients INFOSPACE INC.: Slotnick Shapiro Files Securities Suit In W.D. WA INFOSPACE INC.: Spector Roseman Commences Securities Suit In W.D. WA NORTEL NETWORKS: Middle-aged Laid-Off Employees Sue For More Benefits ONESOFT CORPORATION: Ex-workers Mull Suit Over Lack Of Lay-off Notice PALM INC.: Cauley Geller Brings Securities Suit In S.D. New York RAYTHEON CORPORATION: Kirby McInerney Files Securities Suit In Idaho SAFEGUARD SCIENTIFICS: Beatie Osborn Files Securities Suit In E.D. PA SARA LEE: Racial Discrimination Suits In Philadelphia Plant Increase SOUTH KOREA: Gov't Pushes For Class Action In Transparency Issues VALUE AMERICA: Cauley Geller Commences Securities Suit In S.D. NY * International Franchise Association Backs Class Action Reforms Law ********* 724 SOLUTIONS: Cauley Geller Begins Securities Suit In S.D. New York -------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP filed last week a class action in the United States District Court for the Southern District of New York on behalf of purchasers of 724 Solutions, Inc. (Nasdaq: SVNX) common stock during the period between January 27, 2000 and December 6, 2000, inclusive. The complaint charges defendants with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. For more information, contact: CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 (toll free) or by E-mail: info@classlawyer.com ACRODYNE COMMUNICATIONS: Settles MD Suit For 1.6M Shares, 750T Cash ------------------------------------------------------------------- Acrodyne Communications, Inc. (ACROE) announced last week that the proposed settlement of the class action litigation filed in the United States District Court for the District of Maryland in which the Company and two of its officers and directors were named defendants has been finally approved. The settlement requires the Company to issue to the class plaintiffs in the aggregate five (5) year warrants to purchase One Million Six Hundred Thousand (1,600,000) shares of the Company's voting common stock at an exercise price of One Dollar ($1.00) per share and to pay the class plaintiffs Seven Hundred Fifty Thousand Dollars ($750,000.00) in the aggregate. The payment of cash portion of the settlement has been funded by the Company's officers' and directors' indemnity insurance policy. The Court, by Order and Final Judgement dated June 26, 2001: (i) found the settlement to be fair, reasonable, and adequate and in the best interests of the parties; (ii) settled, released, discharged and dismissed with prejudice the cases against the defendants; (iii) determined that the neither the settlement nor any of the documents or statements associated therewith are, or shall be construed as, a concession or admission by the defendants of the existence of any damages or wrongdoing; and (vi) awarded the plaintiffs' counsel 25% of the gross amount of the settlement fund as attorneys' fees, which amount is to be paid out of the settlement fund. The Company also announced that its negotiations with Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), its single largest shareholder and creditor, regarding a plan of re-capitalization and the restructure of the Company's debt are again moving forward. While there is no final agreement at this time (and any final agreement is still contingent upon the occurrence of certain events, including the restructure of some of the Company's non-Sinclair debt and obligations), the Company reported that it is optimistic that the negotiations have resumed and is hopeful that it will be able to complete a fair arrangement that will afford the Company the financial stability to continue operations and build for the future. The Company's Chairman and President, Nathaniel Ostroff, commented: "We are pleased that the Company has been able to finally resolve the shareholder litigation. This is another giant step for Acrodyne. "As a result of the approval by the court of the settlement, the Company's demonstrated ability to build and deliver its new Quantum transmitter product line, and the receipt of new non-Sinclair Orders for Quantum Transmitters, the company is now in a position to plan and build for the future," he said. Sinclair commented: "The litigation settlement removes one of the most significant hurdles to any re-capitalization of Acrodyne. It is great news for the Company and all its shareholders." Sinclair Broadcast Group (NASDAQ:SBGI) is a diversified broadcasting company that currently owns or programs 61 television stations. Sinclair's television group reaches approximately 25% of U.S. television households and includes ABC, CBS, FOX, NBC, WB, and UPN affiliates. AETHER SYSTEMS: Stull Stull Begins Securities Suit In S.D. New York ------------------------------------------------------------------- Stull, Stull & Brody filed late last week a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Aether Systems, Inc. (NASDAQ:AETH) common stock between October 21, 1999 and June 15, 2001, inclusive. The complaint alleges that the following defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934: (i) Aether, Inc., (ii) David S. Oros, (iii) David C. Reymann, (iv) Merrill Lynch, Pierce, Fenner & Smith Incorporated, (v) BancBoston Robertson Stephens Inc., (vi) Donaldson, Lufkin & Jenrette Securities Corporation, (vii) U.S. Bancorp Piper Jaffray Inc., (viii) Deutsche Bank Securities Inc. and (ix) Friedman, Billing, Ramsey & Co., Inc. For more information, contact: Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 1001 AREMISSOFT CORPORATION: Faruqi & Faruqi Brings Securities Suit In NJ -------------------------------------------------------------------- Faruqi & Faruqi, LLP filed a class action lawsuit in the United States District Court for the District of New Jersey on behalf of all purchasers of AremisSoft Corporation (Nasdaq:AREM) common stock between Dec. 17, 1999, and May 17, 2001, inclusive. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. For additional information, contact: FARUQI & FARUQI, LLP through Anthony Vozzolo, Esq. by Mail: 320 East 39th Street, New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330 by E-mail: Avozz@faruqilaw.com or visit the firm's Website: www.faruqilaw.com ASCHE TRANSPORTATION: Lionel Glancy Files Securities Suit In Illinois --------------------------------------------------------------------- The law office of Lionel Z. Glancy commenced a Class Action lawsuit against Larry L. Asche, Diane L. Asche, Leon M. Manachos, and Ernst & Young LLP on behalf of a class consisting of all persons who purchased common stock of Asche Transportation Services, Inc. between March 30, 1998 and April 7, 2000. ATS, whose common stock was traded on the NASDAQ exchange under the symbol "ASHE," was not named as a defendant and has filed for bankruptcy protection under Chapter 7 of the federal bankruptcy laws. The action was filed in the United States District Court for the Northern District of Illinois, Western Division. The case was filed under Civil Action No. 01 C 50057, and has been assigned to U.S. District Judge Philip B. Reinhard and Magistrate Judge P. Michael Mahoney. The Complaint charges Larry L. Asche, Diane L. Asche and Leon M. Manachos -- former officers and directors of ATS -- with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiff Christopher Cronau claims that these defendants' issued a series of materially false and misleading press releases and filings with the United States Securities and Exchange Commission from March 30, 1998 through November 15, 1999. These press releases and filings allegedly failed to disclose the true nature of ATS's revenues and earnings, causing ATS's stock price to become artificially inflated and inflicting damages on investors. In January through April 2000, the Company issued a series of press releases that plaintiff claims revealed the Company's true financial status, including an announcement on January 11, 2000 that certain accounts may have been misstated in the Company's 1999 quarterly reports and 1998 annual report. On April 7, 2000 -- the end of the class period -- Nasdaq halted trading in the Company's shares. The Complaint also charges the accounting firm of Ernst & Young LLP with violating Section 10(b) of the Securities Exchange Act of 1934 by signing false and misleading audit reports on the financial statements contained in the Company's annual reports filed with the SEC for fiscal years 1997 and 1998. For more information, contact: Michael Goldberg, Esq., of the Law Offices of Lionel Z. Glancy, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com. CHESTER UPLAND: Parties In School District Suit Agree To Drop Case ------------------------------------------------------------------ Pennsylvania Secretary of Education Charles B. Zogby commended last week Eastern District federal court Judge Ronald Buckwalter's decision to dissolve the Office of Special Master in the Chester Upland School District. "We're pleased that Judge Buckwalter has approved the motion filed by the Department of Education and the Chester Upland School District," Secretary Zogby said. "It's time to empower the district to make decisions that are best for its students. Chester Upland has made significant strides to improve the education of all the district's children with special needs," he said. "I'm confident Chester Upland will continue to ensure these students receive the quality education that they're entitled to under the law -- and that every child deserves," he added. The class action suit, Duane B. v. Chester Upland School District, et al., originally was filed in January 1990. The suit centered on a small number of students in the district who plaintiffs maintained were not properly identified as behavioral support students, and were not receiving the free appropriate public education (FAPE) to which they were entitled by law. The court created an Office of Special Master to establish a neutral party to monitor services rendered to the children. In addition to dissolving the Office of Special Master, the defendants' motion also stated that, during the 2000-01 school year, the district and the Department of Education met their obligations contained in the "Final Plan for Restructuring Services" -- a comprehensive plan that outlined the necessary services for the Duane B. class members. The case now has been placed in civil suspension, and will not be acted on throughout the coming school year. The district and the Department of Education anticipate another productive year and, pending the successful completion of the 2001-2002 school year, all parties have agreed to dismiss the suit. Under the Education Empowerment Act, the Chester Upland School District Board of Control recently decided to contract with private educational companies to provide educational services to the district's students. Contracted services will begin this fall. The department has a mandated process to address parents' concerns about services for children with special needs. CHINADOTCOM CORPORATION: Milberg Weiss Files S.D. NY Securities Suit -------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP began late last week a class action lawsuit on behalf of purchasers of the securities of Chinadotcom Corp., (NASDAQ: CHINA) between July 12, 1999 and December 6, 2000, inclusive. The action alleges the following as defendants: (i) Chinadotcom Corp., (ii) Lehman Brothers, Inc., (iii) Bear, Stearns & Co., Inc., (iv) BancBoston Robertson Stephens, Inc., (v) Merrill Lynch, Pierce Fenner & Smith Inc., (vi) Raymond Ch'ien, (vii) Peter Yip, (viii) Zhou Shun Ao, and (ix) David Kim The case is pending in the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, NY 10007. The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about July 12, 1999 Chinadotcom commenced an initial public offering of 4,200,000 of its shares of common stock at an offering price of $20 per share. In connection therewith, Chinadotcom filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants (Lehman Brothers, Bear Stearns, Robertson Stephens, and Merrill Lynch) had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Chinadotcom shares issued in connection with the Chinadotcom IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Chinadotcom shares to those customers in the Chinadotcom IPO in exchange for which the customers agreed to purchase additional Chinadotcom shares in the aftermarket at pre-determined prices. For additional information, contact: Milberg Weiss Bershad Hynes & Lerach LLP through Steven G. Schulman or Samuel H. Rudman by Phone: 800/320-5081 by E-mail: chinadotcomcase@milbergNY.com or visit the firm's Website: http://www.milberg.com DOUBLECLICK INC.: CA Suit To Go To Trial Jan.'02 If Not Settled --------------------------------------------------------------- A California judge recently ruled to allow the suit against DoubleClick Inc. to go on trial if the company fails to ink a settlement on the matter by January next year, Newsbytes reported recently. San Rafael District Court Judge Lynn O'Malley Taylor denied DoubleClick's motion to dismiss the case, which is seeking damages from the ad giant company for allegedly tracking and profiling users as they browse the Internet. Companies like DoubleClick use cookies to target specific advertisements to users who have shown interest in certain topic areas. But plaintiffs argue that by using cookies, DoubleClick can store personally identifying information and build up a virtual warehouse of user profiles based on their Internet surfing history. They also claim that the practice amounts to a violation of their right to privacy since information is often collected and sold to third parties without the user's knowledge or permission. ECI TELECOM: Faruqi & Faruqi Files Securities Suit In E.D. Virginia ------------------------------------------------------------------- Faruqi & Faruqi, LLP filed recently a class action lawsuit in the United States District Court for the Eastern District of Virginia on behalf of all purchasers of ECI Telecom, Ltd. (Nasdaq:ECIL) common stock between May 2, 2000, and Feb. 14, 2001, inclusive. The complaint charges defendants with violations of federal securities laws by, among other things, issuing a series of false and misleading press releases concerning ECI Telecom's financial condition and business prospects. For further details, contact: FARUQI & FARUQI, LLP through Anthony Vozzolo, Esq. by Mail: 320 East 39th Street, New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330 or by E-mail: Avozz@faruqilaw.com ETONIC/TRETORN: 16 Ex-workers Demand Back Wages, Class Status in Suit --------------------------------------------------------------------- Sixteen former employees of Etonic/Tretorn and Spalding Sports Richmond have brought a suit against the company seeking back wages, severance pay and class action status. According to the Morning Sentinel, the former workers in the Company's golf-shoe factory in Richmond filed the suit in the U.S. District Court, Portland. The former employees seek severance pay equal to a week for each year they worked on the factory. Should the court grant class action status, all 66 people laid off by the company on April 21, 1999 would be able to benefit from any settlement, the newspaper said. Under the federal Worker Adjustment Retraining Notification Act, the back wages claims of the former employees could run as high as $1,000 per individual. The sixteen workers have been with the company for 10 to 25 years. ETOYS INC.: Lovell, Sirota Law Firms Files Securities Suit In S.D. NY --------------------------------------------------------------------- The law firms of Lovell & Stewart, LLP and Sirota & Sirota, LLP filed Thursday last week a class action lawsuit on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of eToys, Inc. between May 19, 1999 and May 26, 2000, inclusive. The lawsuit asserts claims under Section 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, Mehta v. eToys Inc., is pending in the U.S. District Court for the Southern District of New York, Docket No. 01-CV-5911 (SAS) and has been assigned to the Hon. Shira A. Scheindlin, U.S. District Judge. The complaint alleges that eToys Inc, Edward C. Lenk, its President and Chief Executive Officer at the time of its IPO, and Steven J. Schoch, its CFO at the time of its IPO, violated the federal securities laws by issuing and selling eToys common stock pursuant to the initial public offering without disclosing to investors that three of the lead underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. 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 eToys offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions. For more information, contact: Lovell & Stewart, LLP through Christopher Lovell, Victor E. Stewart or Christopher J. Gray by Phone: 212/608-1900 or by E-mail: sklovell@aol.com or contact Sirota & Sirota, LLP through Howard B. Sirota or Saul Roffe by Phone: 212/425-9055 or by E-mail: info@sirotalaw.com FRED HUTCHINSON: Files Answer To Liability Suit For Death Of Patients --------------------------------------------------------------------- Fred Hutchinson Cancer Research Center filed last week its response to a federal class action suit that has accused it of not fully informing patients of the risks of its tests, the Seattle Times reported. The research center argued that the suit brought by five individuals, whose spouse died in relation to a blood-cancer experiment, should not be certified as a class. Instead, the cases should be broken into individual suit, the Center said in its answer before the U.S. District Court In Seattle. "The adequacy of disclosure to each patient presents an individual question," the Center claims. "The results of each patient's treatment, and the question of whether (The Hutch) caused any injury, much less a wrongful death, is an individual issue with respect to each patient," the court reply said. The suit stems from an investigative series run by Seattle Times about how patients gave uninformed consent to experiments conducted by the cancer research center. According to the newspaper, there have been 20 blood-cancer patients who have died prematurely in a test of experimental drugs, in which Center doctors held financial interests. INFOSPACE INC.: Slotnick Shapiro Files Securities Suit In W.D. WA ----------------------------------------------------------------- SLOTNICK, SHAPIRO & CROCKER, LLP filed last week a class action in the United States District Court for the Western District of Washington on behalf of all individuals and institutional investors that purchased the publicly traded securities of InfoSpace, Inc. (Nasdaq: INSP) between January 26, 2000 through January 30, 2001, inclusive. The Complaint charges the Company and its Founder and Chairman, Naveen Jain, with violating the federal securities laws by providing materially false and misleading information about the Company's financial performance FY 1999 and 2000, and as a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the Class Period. For further details, contact: SLOTNICK, SHAPIRO & CROCKER, LLP through Stephen D. Oestreich, Esq. by Mail: 100 Park Avenue, 35th Floor, New York, NY 10017 by Phone: (212) 687-5000 or 1-888-367-5291 (toll free) by Fax: (212) 687-3080 or by E-Mail: soestreich@sscny.com INFOSPACE INC.: Spector Roseman Commences Securities Suit In W.D. WA -------------------------------------------------------------------- Spector, Roseman & Kodroff, P.C. commenced a class action lawsuit in the United States District Court for the Western District of Washington against defendant InfoSpace, Inc. (Nasdaq: INSP) on behalf of purchasers of the stock of InfoSpace during the period from January 26, 2000 through January 30, 2001, inclusive. The complaint charges InfoSpace and its founder and Chairman, Naveen Jain, with violations of the Securities Exchange Act of 1934. For more information, contact: Robert M. Roseman by Phone: 888-844-5862 (toll free) by E-mail: classaction@spectorandroseman.com or visit the firm's Website: http://www.spectorandroseman.com NORTEL NETWORKS: Middle-aged Laid-Off Employees Sue For More Benefits --------------------------------------------------------------------- A Lawsuit seeking additional severance and retirement benefits has been filed against Nortel Networks Corporation in Canada, The Ottawa Citizen reported recently. According to the report, many former employees aged 50 or older when laid off argue they deserve more benefits because of their difficulty in finding equivalent jobs in the technology industry following their termination. Robert Isaacs, 54, a 33-year Nortel veteran, is the representative plaintiff. The Ottawa Citizen said Isaacs has been holding a senior management position since 1991 until May 31 this year when he was told we would be gone in two months. Lawyers say considering Mr. Isaacs' age, service and position, he did not get "reasonable notice" of his termination, or compensation in lieu of that notice. A Nortel spokesman, however, has labeled the suit as "without merit" and promised to defend against it "vigorously," the report said. The class-action suit, if it goes ahead, would apply to all non- unionized workers employed by Nortel who received notice of being laid off on or after Dec. 1, 2000, were aged 50 or older, and who had worked at the company for at least two years, the report said. ONESOFT CORPORATION: Ex-workers Mull Suit Over Lack Of Lay-off Notice --------------------------------------------------------------------- At least 100 former employees of OneSoft Corporation are contemplating on filing a class action lawsuit against the company for allegedly violating a 1988 worker-notification law, Newsbytes reported recently. The group of employees claim under the law employees are supposed to be given ample time to find new jobs or training programs in the event of a mass layoff or plant closing. This action, if filed, will be the second labor-related suit lodged against the company by its former employees. More than 20 other former employees brought a case against the web designer and consulting shop last month for unpaid severance. The workers, who were dismissed in November 2000, claim they are entitled to at least two weeks of severance pay and compensation for vacation time, commissions and bonuses they earned. OneSoft did not provide two months' written notice of the impending layoffs or offer pay in lieu of notice, as required by federal law, according to court papers filed by the former employees, Newsbyte said. PALM INC.: Cauley Geller Brings Securities Suit In S.D. New York ---------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP began a class action last week in the United States District Court for the Southern District of New York on behalf of purchasers of Palm Inc. (Nasdaq: PALM) securities during the period between March 1, 2000 and December 6, 2000, inclusive. The complaint charges the following defendants with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder: (i) Palm, (ii) Goldman Sachs & Co., (iii) Morgan Stanley & Co. Inc., (iv) Merrill Lynch, Pierce Fenner & Smith Inc., (v) FleetBoston Robertson Stephens, (vi) Salomon Smith Barney Inc., (vii) Carl J. Yankowski, and (viii) Judy Bruner. For more details, contact: CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 (toll free) or by E-mail: info@classlawyer.com RAYTHEON CORPORATION: Kirby McInerney Files Securities Suit In Idaho -------------------------------------------------------------------- Kirby McInerney & Squire, LLP commenced a class action lawsuit in the United States District Court for the District of Idaho against Raytheon Corporation and certain of its officers on behalf of all purchasers of Washington Group International, Inc., (NYSE: WNG) securities -- including common stock and 11% senior notes -- during the period from April 17, 2000 through March 1, 2001. The action charges Raytheon Corp. and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by reason of material misrepresentations and omissions. The complaint alleges that Raytheon misrepresented the financial condition of its Raytheon Engineers & Constructors division in order to sell this division to Washington Group, formerly known as Morrison Knudsen Corporation, at an artificially inflated price. On April 17, 2000, the beginning of the Class Period, Raytheon and Washington Group each issued press releases disclosing Raytheon's sale of RE&C to Washington Group for a modest cash price and Washington Group's assumption of RE&C's liabilities of approximately $500 million. The sales agreement, which was filed with the Securities and Exchange Commission on the same day, detailed the transaction, including Raytheon's promise to reimburse Washington Group for cost overruns from certain projects. The complaint further alleges that throughout the Class Period, defendants issued misleading financial statements for RE&C that failed to disclose massive cost overruns of approximately $700 million that existed at the time of the sale transaction. On March 2, 2001, Washington Group made the shocking announcement that Raytheon was refusing to honor its previously disclosed contractual commitments to reimburse Washington Group for these massive cost overruns. Further, Washington Group announced that Raytheon's refusal to reimburse Washington Group for these massive cost overruns placed Washington Group in a severe "near-term liquidity problems" -- including being in default of its senior credit facilities -- that could result in the bankruptcy of the Washington Group. Following this announcement, the price of Washington Group stock plummeted 80% from $8.00 per share to $1.65 per share, causing a market capitalization loss of more than $400 million to stockholders, and more than $200 million to noteholders. Ultimately, these cash shortages forced Washington Group to seek protection under the bankruptcy laws on March 14, 2001. For more information, contact: KIRBY McINERNEY & SQUIRE, LLP through Ira M. Press, Esq. or Shan Anwar by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: (212) 317-2300 or (888) 529-4787 (toll free) or by E-Mail: sanwar@kmslaw.com SAFEGUARD SCIENTIFICS: Beatie Osborn Files Securities Suit In E.D. PA --------------------------------------------------------------------- Beatie And Osborn LLP filed early last week a class action in the United States District Court, Eastern District of Pennsylvania on behalf of all shareholders of Safeguard Scientifics, Inc. (NYSE: SFE) who purchased Safeguard's common stock between December 1, 1999 and December 5, 2000. The named plaintiff alleges that defendants Safeguard and Warren V. Musser violated the federal securities laws during the class period. Specifically, the complaint alleges that defendants failed to disclose the fact that defendant Musser had pledged substantially all of his Safeguard shares as collateral to secure margin trading in his personal brokerage accounts. When defendant Musser's investments declined in value, he received margin calls from his brokers and was forced to liquidate his Safeguard stock, causing the price of Safeguard's shares to decline significantly. Plaintiff alleges that defendants' failure to disclose the pledge, coupled with their subsequent efforts to conceal the consequences of several margin calls, violated the federal securities laws. For more details, contact: Beatie And Osborn LLP through Eduard Korsinsky, Esq. or Ben Coleman, Legal Assistant by Mail: 521 Fifth Avenue, 34th Floor, New York, New York 10175 by Phone: 800-891-6305 (toll free) or 212-888-9000 by Fax: 212-888-9664 or by E-mail: clientrelations@bandolaw.com SARA LEE: Racial Discrimination Suits In Philadelphia Plant Increase -------------------------------------------------------------------- Racial discrimination suits have increased dramatically over the last three weeks against Sara Lee Corp. filed by employees at its Philadelphia hot dog plant, the Philadelphia Business Journal reported. According to the report, there are now 23 separate suits that are related to a 1999 case that failed to gain class action certification in May this year. And the number is still growing, the report said. That 1999 case, which is currently ongoing, was denied certification due to an absence of a common claim by the group of plaintiffs. The present suits are pending in the U.S. District Court against Sara Lee and Hygrade Food Products Corp, a Detroit-based subsidiary that operates the Philadelphia plant. Among the allegations of the plaintiffs is the delegation of menial jobs within the facility to African-American workers, harassment, subjection to racial epithets and denial of promotions to less labor- intensive jobs. In addition, the employees also claim that their supervisors have allegedly ordered white hats that resemble Ku Klux Klan hoods. The hats are supposed to prevent hair from entering food. SOUTH KOREA: Gov't Pushes For Class Action In Transparency Issues ----------------------------------------------------------------- Deputy Prime Minister Jin Nyum has announced adoption of two public policy positions reflecting the government's resolve that transparency in corporate governance should become integral to the way a corporation conducts its business, according to a recent report in the Asia Pulse. First, the government will offer incentives in credit ratings and loans to companies that maintain transparency in corporate governance; and, at the other end of the spectrum, "the government will strengthen sanctions against firms that put up false public notices or put together misleading financial statements." The newly authorized class actions, also recently announced, are themselves closely linked to the government's encouragement of transparency in corporate governance; since these newly-allowed class actions may be filed only in cases related to transparency of accounting practices at listed companies. VALUE AMERICA: Cauley Geller Commences Securities Suit In S.D. NY ----------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP filed a class action in the United States District Court for the Southern District of New York on behalf of purchasers of Value America, Inc. (Nasdaq: VUSQE) common stock during the period between April 8, 1999 and December 6, 2000, inclusive. The complaint charges defendants with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. For more information, contact: CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 (toll free) or E-mail: info@classlawyer.com * International Franchise Association Backs Class Action Reforms Law -------------------------------------------------------------------- The International Franchise Association (IFA) announced last week its support of an effort that could curb class action lawsuit abuse and return fairness to the civil justice system. IFA joined other business associations in welcoming the introduction of the Class Action Fairness Act, sponsored in the U.S. House by Reps. Bob Goodlatte (R-Va.) and Rick Boucher (D-Va.). IFA is the world's oldest and largest organization representing franchising. It is the only group that represents both franchisees and franchisers. IFA Chair and Mail Boxes Etc. President and CEO James H. Amos Jr. hailed the legislation, acknowledging the implications for franchised businesses. "Attorneys may go after franchises in class action suits thinking they are digging into deep corporate pockets, when in fact they are threatening the stability of a network of perhaps thousands of individually-owned and operated small businesses," Amos said. One of the primary goals of the legislation is to allow large, multi- state class action suits to be moved to federal court to ease overburdened state courts and to ensure that uniform standards are applied to interstate class action litigation. Allan Tanenbaum, senior vice president and general counsel of Atlanta- based AFC Enterprises (Popeye's, Cinnabon, and Church's Chicken) said, "Franchise systems like ours operate in multiple jurisdictions and are subject to disparate laws. No one is suggesting denial of access-only that we need fairness and predictability in our legal standards." Last year the U.S. House of Representatives passed a similar bill. Proponents are hopeful of passage again this year. Introduction of a bill in the U.S. Senate is also being considered. ********* 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. Enid Sterling, Larri-Nil Veloso and Lyndsey Resnick, Editors. Copyright 2001. All rights reserved. ISSN 1525-2272. 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