/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010703.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 3 2001, Vol. 3, No. 129 Headlines AVENUE A: Closing London Office Amidst Legal Troubles Over U.S. IPO CHINADOTCOM CORPORATION: Schiffrin Barroway Brings Lawsuit In S.D. NY CHINADOTCOM CORPORATION: Cauley Geller Files Securities S.D. NY Suit CHRONIMED INC.: Berman DeValerio Files Shareholders Suit In Minnesota CHRONIMED INC.: Lowey Dannenberg Begins Securities Suit In Minnesota DIGITAS INC.: Stull Stull Commences Securities Suit In S.D. New York ESSO AUSTRALIAN:Faces Biggest Damage Suit In Australian Legal History GASOLINE LITIGATION: Senate Panel To Probe High Prices Of Gas In U.S. HOLOCAUST LITIGATION: Austrian Envoy Calls For End Of U.S. Lawsuits HOUSING LITIGATION: Homeowners Take $41 Million In Settlement Fees J.C. PENNEY: Sued In TX For Not Honoring Insurance Guarantee, Others LONDON LIFE: Settles "Premium Offset" Policy Suit For $180 Million MCI WORLDCOM: Court Orders Halt On Fiber Optic Cable Installation MONEY CONCEPTS: Accepts $5 Million Liability For Deceased Ex-adviser MORGAN STANLEY: Settles Swindling Charge In California For $23M MUSE TECHNOLOGIES: Faces Massachusetts Suit For Securities Violations NATIONAL WESTERN: 12,000 Policy Customers File Suit For Over-billing PURDUE PHARMA: Six Kentucky Residents Seek $300M For OxyContin Use RED CROSS: Ontario Judge Okays $79M Settlement Of Tainted Blood Suit RENT-WAY INC.: Investors File Lawsuit For Accounting Inaccuracies STARBUCKS: Ex-manager Sues Coffee Shop Giant For Not Paying Overtime WYNDHAM INTERNATIONAL: Sued In FL For Energy Surcharges On Bills ********* AVENUE A: Closing London Office Amidst Legal Troubles Over U.S. IPO ------------------------------------------------------------------- Avenue A, Inc. (Nasdaq:AVEA), a digital marketing services and technology company announced late last week that it plans to close its 16-person office in London, England. The Company has served clients in the United Kingdom from that office since September 2000. It will complete work on current campaigns for its clients in the UK over the next several months. Accordingly, this move will enable the Company to streamline its operations and focus resources on greater growth opportunities in its U.S. business. The Company also confirmed its intention to begin marketing its Atlas Digital Marketing Suite during Q3 of this year. Meanwhile, it will provide updated financial guidance during its Q2 earnings conference call, which is scheduled for July 27, 2001 at 11 a.m. EST. The Company recently announced it is the subject of several class action lawsuits in New York over its Initial Public Offering held from February to December last year. CHINADOTCOM CORPORATION: Schiffrin Barroway Brings Lawsuit In S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP filed a class action lawsuit last week in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of chinadotcom corp. (Nasdaq: CHINA) from July 12, 1999 through December 6, 2000, inclusive. For further details, contact: Schiffrin & Barroway, LLP through Marc A. Topaz, Esq. or Stuart L. Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com CHINADOTCOM CORPORATION: Cauley Geller Files Securities S.D. NY Suit -------------------------------------------------------------------- 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 Chinadotcom Corp. (Nasdaq: CHINA) securities during the period between July 12, 1999 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) Chinadotcom, Lehman Brothers, Inc., (ii) Bear, Stearns & Co., Inc., (iii) BancBoston Robertson Stephens, (iv) Merrill Lynch, Pierce Fenner & Smith Inc., (v) Raymond Ch'ien, (vi) Peter Yip, (vii) Zhou Shun Ao, and (viii) David Kim 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 CHRONIMED INC.: Berman DeValerio Files Shareholders Suit In Minnesota --------------------------------------------------------------------- Berman DeValerio & Pease filed a shareholders suit against Chronimed Inc. (Nasdaq: CHMD) last week accusing the company of defrauding its investors. The lawsuit is pending in the United States District Court for the District of Minnesota and is filed as 01-CV-1175 dsd/jmm. It seeks damages for violations of federal securities laws on behalf of all investors who bought Chronimed stock between October 27, 1999 and June 13, 2001. The complaint accuses Chronimed, a Minnetonka-based pharmaceutical and patient management services company, of issuing false and misleading financial statements to the investing public during the Class Period. Form more information, contact: Chauncey D. Steele IV, Esq. or Jeffrey C. Block, Esq. of Berman DeValerio & Pease LLP by Mail: One Liberty Square, Boston, MA 02109 by E-mail: bdplaw@bermanesq.com or by Phone: (800) 516-9926 CHRONIMED INC.: Lowey Dannenberg Begins Securities Suit In Minnesota -------------------------------------------------------------------- Lowey Dannenberg Bemporad & Selinger, P.C. filed a securities class action lawsuit on behalf of all persons who acquired Chronimed, Inc. (NASDAQ: CHMDE) common stock between October 27, 1999 and June 13, 2001. The lawsuit was filed in the United States District Court for the District of Minnesota under the caption 01-CV-1183 MJD/JGL. It seeks damages for violations of federal securities laws on behalf of all investors who bought Chronimed stock during the Class Period. Named as defendants in the complaint are Chronimed and certain executive officers of Chronimed: Maurice R. Taylor II, Henry F. Blissenbach, and Gregory H. Keane. For additional information, contact: Lowey Dannenberg Bemporad & Selinger, P.C. through Richard Bemporad or David C. Harrison by Phone: 877/777-3581 DIGITAS INC.: Stull Stull Commences 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 Digitas, Inc. (NASDAQ:DTAS) common stock between March 13, 2000 and June 26, 2001, inclusive. The complaint alleges that the following defendants violated the federal securities laws by issuing and selling Digitas common stock pursuant to the March 13, 2000 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: (i) Digitas, Inc., (ii) David W. Kenny, (iii) Kathleen L. Biro, (iv) Michael Goss, (v) Michael Ward, (vi) Michael E. Bronner, (vii) John L. Bunce, Jr., (viii) Orit Gadiesh, (ix) Philip U. Hammarskjold, (x) Patrick J. Healy and (xi) Arthur Kern 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 Digitas offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions. For further details, contact: Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017. ESSO AUSTRALIAN:Faces Biggest Damage Suit In Australian Legal History --------------------------------------------------------------------- Esso Australian Ltd. faces what is now shaping up to be the biggest class action for damages in Australian legal history, News Interactive reported recently. In addition, it is also facing fines of up to $2.75 million after a Victorian Supreme Court jury found it guilty on all counts for violating the Occupational Health and Safety Act. An explosion in September 1998 in the Longford gas processing plant of the company killed two workers and cut gas to more than a million Victorian homes and businesses for two weeks. Esso, a unit of Exxon Mobil Corporation, had pleaded not guilty on 11 charges of breaching the health and safety act. But a jury found it guilty last week. According to lawyers, the verdict makes success more likely in the unprecedented class action that now involves 20,000 claimants. Experts say it could cost the company more than $1.4 billion. GASOLINE LITIGATION: Senate Panel To Probe High Prices Of Gas In U.S. --------------------------------------------------------------------- A U.S. Senate panel will conduct an inquiry on July 17 to get to the bottom of the "artificially high" prices of gasoline in the country, particularly in California, the Union-Tribune reported. The Senate Permanent Subcommittee on Investigations has invited lawyer Tim Cohelan to appear before the panel and turnover documents that may be relevant to its investigation. Cohelan is the same lawyer who unsuccessfully filed a class action lawsuit against Chevron, Exxon and other petroleum companies alleging antitrust activities. Last month, the California Supreme Court threw out the Aguilar et al. v. Arco et al. lawsuit, ruling unanimously that the suit's allegations of unfair competition and unlawful conspiracy by nine major refiners to set gas prices contained "no triable issue of material fact." "I'll offer observations about how oil companies have enough connections to control (fuel) supplies and make agreements which keep gas prices higher than they should be," said Cohelan. "The same problems we've had in California with high gas prices are just starting to spread across the country," he said. The senate inquiry comes as the California Attorney General's Office continues its long-running investigation into oil company pricing policies in the state. The investigation was started in 1999 after gas prices spiked in San Diego, San Francisco and other areas, the Union-Tribune said. HOLOCAUST LITIGATION: Austrian Envoy Calls For End Of U.S. Lawsuits ------------------------------------------------------------------- An Austrian envoy called for the end of lawsuits in the U.S. that are delaying further the payment to Holocaust survivors who were used as forced laborers and slaves in wartime Austria, the Associate Press reported recently. Envoy Ernst Sucharipa labeled the delay as irresponsible. He said the payment program could start in a month if pending cases are voluntarily dismissed immediately. There are presently five pending cases in the United States from about a dozen filed since 1998. Three of the cases are expected to be dropped, while plaintiffs in the two cases are pressing ahead with the suits because they feel the compensation agreement inked last January was too small. Under the agreement, the Austrian business and government will pay more than $327 million to some 150,000 people used as slaves and forced laborers in wartime Austria. Both have also pledged $150 million for Holocaust-era seizures of apartments and businesses; more than $200 million for other property and unpaid insurance policies; and $112 million for social benefits such as health care for elderly survivors. The agreements also provided for the dismissal of lawsuits already filed by survivors in the U.S. Some 16,000 applications from former forced laborers have been approved and are awaiting payment. The largest single number of those are Poles, followed by Czechs, Ukrainians and about 1,000 from other parts of the world. HOUSING LITIGATION: Homeowners Take $41 Million In Settlement Fees ------------------------------------------------------------------ Some 5,000 homeowners in 15 Santa Clarita Valley housing developments will benefit from a $41 million settlement approved last week by a state court to be paid primarily by builders and plumbers who installed homes with defective foreign-made galvanized steel water pipes. The class action lawsuit litigated on behalf of the homeowners by the Los Angeles law firm Quisenberry & Kabateck LLP alleges that the developers, suppliers, plumbing contractors, manufacturers and water softening companies are liable for construction defect, strict product liability, negligence and other causes of action for the use of galvanized pipes in the Santa Clarita Valley potable and plumbing systems. "This case sends a strong message to the construction industry that you can be held responsible for cutting corners to save a buck," said Brian Kabateck, lead counsel and partner at Quisenberry & Kabateck LLP. "Not only is the case a victory for homeowners, but also a testament to the determination and skill of Ron Hartmann, a Quisenberry & Kabateck attorney, who pieced together a random series of plumbing issues to discover a pattern of consumer abuse," added Kabateck. Years after their homes had been built, residents in several Santa Clarita Valley Developments, including Northbridge, Mountainview, Stevenson Ranch, Shadow Hills, Saugus Canyon, North Bluffs, Hillcrest, Crown Villas North, Arroyo West, Las Ventanas, Canyon Park Village, Siena Villas, Ridgeview, Evergreen and Valencia Summit, began to detect such problems as pin hole leaks, brown rusty water, premature pipe corrosion and deterioration. The damage resulted in some homeowners having to replace their entire plumbing systems, and ceilings that collapsed because of leaks. "It was clear that the problems with the defective pipes were not limited to one house here and one house there. It was a defect that needed a community-wide resolution," said Ron Hartmann, attorney for the class action with Quisenberry & Kabateck LLP. "Corrosion problems could have been avoided if builders had used another type of pipe," he said. The foreign-made galvanized steel pipes prematurely corrode when they come into contact with water, and as the corrosion progresses, holes appear in the pipes. The homes included in the class action were built approximately between 1986 and 1994. "It's been a long battle and we are so happy that our fine team of attorneys were able to settle this case," said John Kelley, homeowner. "The nightmare we have had to endure will now finally come to an end." The $41 million is to be paid by large and small builders throughout the valley including The Newhall Land and Farming Co., American Beauty Homes, Dale Poe Development, Larwin Co., Pacific Bay Homes and three dozen others, as well as pipe manufacturers, suppliers, contractors and water softening companies. J.C. PENNEY: Sued In TX For Not Honoring Insurance Guarantee, Others -------------------------------------------------------------------- Plano, Texas-based retailer J.C. Penney and its partner, Dutch insurance giant AEGON, have been named as defendants in a class-action lawsuit filed on behalf of a Corpus Christi woman who unknowingly was billed for insurance premiums on her credit card for six years. In August 1999, Marguerite York was seriously injured after being struck by a car. Her son discovered a $100,000 insurance policy that his mother unknowingly had been paying for since 1993. Despite specific language that protected Mrs. York if she was "struck by a land vehicle," her claim was automatically rejected. Mrs. York's attorneys say her case represents the tip of the iceberg. "J.C. Penney engaged in a 14-year telemarketing scam that victimized millions of elderly residents, as well as low-income minorities," says Houston attorney David Berg, a founding partner in the law firm of Berg & Androphy and lead counsel for Mrs. York. "Contrary to the express purpose of an insurance policy, J.C. Penney's main business seems to be to deny, rather than honor, legitimate claims," he said. The lawsuit, filed in Corpus Christi State District Court, seeks class action status for millions of potential plaintiffs who were unaware that monthly policy premiums were being charged to their credit cards. A potential subclass of plaintiffs includes customers who discovered they had the insurance but had their claims rejected. According to the 13-page complaint, telemarketers began contacting customers in 1987 about the "ADD" insurance program with the promise that they would receive information in the mail, but were under no obligation to purchase insurance. However, customers of the direct response solicitation program were enrolled automatically. In fact, no signatures were required to activate the policy. Some customers were told that premiums for the first three months would be paid for them. What they were not told was that the defendants made withdrawing from the program nearly impossible, and any refunds were "capped" at two or three months, no matter how long premiums had been paid. The lawsuit names the following defendants: (i) J.C. Penney Company, Inc.; (ii) J.C. Penney Direct Marketing Services, Inc.; (iii) J.C. Penney Life Insurance Company; (iv) Quest Membership Services, Inc.; (v) AEGON, N.V.; (vi) AEGON USA, Inc.; (vii) AEGON Group; and (viii) AEGON Special Markets Group. In addition, the lawsuit alleges that defendants engaged in deceptive trade practices, insurance code violations, fraud, negligent misrepresentation, breach of contract, unjust enrichment, and gross negligence. Plaintiffs are seeking compensation and punitive damages. For additional information, contact: David Berg by Phone: 713/529-5622, or call Mike Androvett at 800/559-4534 or pager 800/943-1502. Consumers can gain additional information about the case by e-mailing questions to creditclass@bahou.com LONDON LIFE: Settles "Premium Offset" Policy Suit For $180 Million ------------------------------------------------------------------ London Life Insurance Company has agreed to settle a class action lawsuit covering 500,000 clients for $180 million, Globe and Mail reported last week. The settlement includes enhanced benefits and a review process to deal with individual claims. This case was brought by clients who bought the insurer's "premium offset" policies between 1980 and 1995. According to the report, the policies were designed so that the monthly premiums would disappear after a short period, provided interest rates remained level or fell. But rates jumped, leaving many customers facing premiums they didn't expect, the report said. The agreement still needs court approval in Ontario, British Columbia and Quebec. MCI WORLDCOM: Court Orders Halt On Fiber Optic Cable Installation ----------------------------------------------------------------- Telecommunications giant MCI WorldCom was ordered last week to stop a fiber optic cable installation project, and to remove its equipment and supplies, PR Newswire reported. In a class action lawsuit by landowners, the court found that MCI WorldCom's fiber optic installation was a "willful trespass." The court cited earlier decisions in which the plaintiff and other landowners had already proven that they owned the land. The court order also quoted a document in which MCI WorldCom acknowledged that it had not been authorized to enter the plaintiffs' land. Fiber optic cables have come under increasing legal attacks in recent years. According to the landowners' attorneys, more than 50 class actions have been filed nationally on behalf of landowners on pre-existing railroad, pipeline and utility rights of way, which often are preferred by telecom companies. In many cases courts have held that adjacent landowners own the land under railroads and other utilities, and only they can grant rights to fiber optic cable companies. MCI WorldCom claims to have more than 45,000 miles of fiber optic cable in the United States, and it is defending nationwide and statewide landowner class actions in Washington, D.C., Indiana and elsewhere. A similar class action arising on the very same railroad right of way was certified as a nationwide class against AT&T earlier. AT&T has agreed to pay an average of $45,000 per mile to landowners to settle a part of that lawsuit. Nels Ackerson, a Washington, DC lawyer who leads a group of four law firms that represent landowners in these class actions said: "This temporary restraining order raises a whole new dimension in these cases. "MCI WorldCom, AT&T, Sprint and other telecom companies have paid railroads and utilities but have ignored the landowners. They face hundreds of millions in damages, but even that pales in comparison to the billions of their wrongful profits from exploiting land that belongs to others. Now telecom companies are on notice that they face losing part of their core business," he said. Sallie Peeler, the homeowner who brought the lawsuit said: "MCI WorldCom's behavior has been outrageous. They never contacted me. I first saw the construction workers peering through the bushes at me and my children. "When I saw the construction crew behind my house, I told them I owned that land and they had to get off. I read my deed to them. They still refused and just kept on drilling," she said. "The telecommunications companies are just going to have to learn that their days of sneaking away with people's property are over," said Henry Price, the Indianapolis lawyer who appeared in court to argue for the temporary restraining order. "This temporary restraining order shows that landowners have the right to stop construction in its tracks," he said. The four law firms representing landowners in this and other right of way class action lawsuits are the following: (i) The Ackerson Group, Chartered, in Washington, DC; (ii) Price, Potter, Jackson & Mellowitz, P.C. in Indianapolis, IN; (iii) Koonz, McKenney, Johnson, DePaolis, Lightfoot, P.C. in Washington, DC; and (iv) Zelle, Hofmann, Voelbel, Mason & Gette, LLP in Minneapolis, MN, Boston, MA, San Francisco, CA, Los Angeles, CA, and Dallas, TX. MONEY CONCEPTS: Accepts $5 Million Liability For Deceased Ex-adviser -------------------------------------------------------------------- Money Concepts Financial Services agreed to shoulder the $5 million settlement reached with fifty clients who were swindled by a former financial adviser. According to The Plain Dealer, the suit, which was granted class action status in February, stems from a discovery that Chardon financial adviser Gregory Shefchuk misappropriated nearly $6 million in mutual funds contributions. Shefchuk committed suicide after the court issued a warrant for his arrest. Money Concepts has to honor the settlement payment after the court found it to be responsible for monitoring Shefchuk, and the 14 mutual funds and seven banks with which he did business. The Plain Dealer said Shefchuk was able to hide that he was misappropriating funds by having the mutual funds send quarterly statements to him, rather than his clients. Shefchuk then sent falsified statements to the clients that didn't reveal that he had been withdrawing money from the accounts. MORGAN STANLEY: Settles Swindling Charge In California For $23M --------------------------------------------------------------- Morgan Stanley & Co. has reportedly settled a class action suit that charged the investment company of being involved in swindling money from trust funds for victims of traffic crashes, botched medical procedures and industrial accidents. Citing documents filed last week in court, the Los Angeles Times said the settlement amounted $23 million. Accordingly, Morgan did not admit liability. A Los Angeles Superior Court judge must approve the settlements before payments can be made. A hearing is scheduled for July. MUSE TECHNOLOGIES: Faces Massachusetts Suit For Securities Violations --------------------------------------------------------------------- Muse Technologies, Inc. recently revealed that a securities class action suit was filed against it on June 13, 2001. According to a report filed by the company with the Securities and Exchange Commission recently, the suit alleges violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and other provisions. The suit is currently pending in the U.S. District Court for the District of Massachusetts against the company and some of its former and current officers and directors. NATIONAL WESTERN: 12,000 Policy Customers File Suit For Over-billing -------------------------------------------------------------------- National Western Life Insurance of Austin is facing a class action lawsuit alleging that the company over-billed policies covering children, according to a recent report appearing in the Austin American-Statesman. Plaintiffs' attorneys estimate that as many as 12,000 customers may join the class action. Roger Williams, National Western's lawyer, said the company will appeal the class action certification. The lawsuit arises from the original complaint by Kilgore resident Ella Mae Rowe, whose National Western policy contained a clause covering her children, stating that when a child turned 25 the policy and the premiums would end. Rowe contends billing procedures made it difficult to determine what premiums were being paid for different types of coverage. "The statement did not separate the premium for the insured and the premium for the children," said Austin attorney Joe Longley, who is working with San Antonio lawyer Wade Caldwell, who represents Rowe. National Western says it is the client's responsibility to tell the company when coverage should end; in part because the coverage is broader than just the children listed on a customer's initial application. Children born or adopted later would be covered by National Western's policies without the need for clients to submit a new application. PURDUE PHARMA: Six Kentucky Residents Seek $300M For OxyContin Use ------------------------------------------------------------------ Six residents of Middlesboro, Kentucky have sued Purdue Pharman, a Stamford Connecticut firm that manufactures and markets OxyContin, seeking $300 million in damages. In a report by the Associated Press, the suit is accordingly set to gain class action status. The suit also included as defendant Ali Sawaf, a physician serving time in jail for illegally prescribing the highly addictive painkiller. The suit was filed in Clay County Circuit Court. OxyContin, intended for use by terminal cancer patients and chronic pain sufferers, has been linked to at least 120 overdose deaths nationwide. Seven people who are former addicts or relative of addicts have also filed a suit earlier in Lee County, Virginia. The suit, which seeks class-action status for other victims, alleges the drug's makers aggressively marketed the painkiller while downplaying its risks, the news agency said. RED CROSS: Ontario Judge Okays $79M Settlement Of Tainted Blood Suit -------------------------------------------------------------------- Ontario Justice Warren Winkler has approved a $79 million settlement between the Red Cross and the class action plaintiffs who had been infected with hepatitis C through use of tainted blood, according to a report in the National Post. Justice Winkler said he found this settlement, which is intended for people left out of a federal-provincial package, to be "fair, reasonable and in the best interests of the class as a whole." Members of the class who accept the offer must waive the right to further legal action, and the settlement must still be approved by courts in Quebec and British Columbia, where similar class actions have been launched. If the settlement is approved in the other two provinces, payments will be made to about 5,000 to 7,000 people across Canada who were left out of the $1.5 billion federal-provincial compensation package put together in 1998. Mike McCarthy of the Canadian Hemophilia Society said that the victims will get payments of $5,000 up front and could end up with perhaps $7,000 or $8,000 in total over 10 years. RENT-WAY INC.: Investors File Lawsuit For Accounting Inaccuracies ----------------------------------------------------------------- Rent-Way, Inc., an Erie, Pennsylvania-based company and the nation's second-largest rent-to-own chain, consisting of a network of 1,135 stores, must cut $129 million from its earnings for the past three years because of false accounting entries allegedly made by top officials, according to a recent Associated Press report. A class action lawsuit has been filed by investors, claiming Rent-Way's stock was inflated because of the accounting inaccuracies. The recent disclosures sent the company's stock from $23.44 a share in October to a recent figure of $9.15. The lead plaintiff in the suit, New York financial services firm Cramer Rosenthal McGlynn, claims its clients lost $10.1 million. The Florida State Board of Administration, which manages trust funds, filed the second-largest claim for $6 million. The company's investigation has discovered that top executives hid $98 million in losses in more than a dozen categories in its ledger. The company has fired corporate controller Matthew Marini. Jeffrey Conway, the former president and chief operating officer, resigned at the company's request. Chief executive officer William Morgenstern said that the company's "long-range plans haven't changed, but we also know we have to regain our credibility." The company also said it has closed some of its stores and laid off workers and plans to change its pricing and reduce inventory. Rent-Way still faces an investigation by the federal Securities and Exchange Commission and the Federal Bureau of Investigation over the handling of its books. STARBUCKS: Ex-manager Sues Coffee Shop Giant For Not Paying Overtime -------------------------------------------------------------------- A former manager of Starbucks has filed a class-action lawsuit recently in Alameda County Superior Court in Oakland, stating that the Seattle- based coffee chain, failed to pay him overtime for "work weeks" that routinely totaled more than 40 hours, according to an Associated Press Report. James Carr, 49, who worked as a manager from October 1999 through January 2001, alleged that although he was a manager and was paid a fixed salary, most of his time was spent doing the tasks of hourly workers. Carr said he received no additional compensation for these tasks. Erin Day and Arthur Lazear, Carr's attorneys, contend the failure to pay the overtime for such work constitutes a violation of California's Business and Professional Code. Day estimates that at least 250 other California Starbucks coffee shop managers were also denied overtime pay. A spokeswoman for Starbucks said she would not comment because she had not studied the suit's allegations. Starbucks has 30 days to file a written response with the court. WYNDHAM INTERNATIONAL: Sued In FL For Energy Surcharges On Bills ---------------------------------------------------------------- Wyndham International chain of hotels is facing a class action for billing customers energy surcharges without prior notice, The Miami- Herald reported. The practice has also prompted the Attorney General of Florida to investigate other hotel establishments. Two men who checked in at Wyndham Harbour Island-Tampa and Wyndham Grand Bay-Coconut Grove brought the suit in Florida. They alleged that the Tampa hotel added a $2.75 energy surcharge while the Miami Hotel charged $2.81. Accordingly, neither man was informed about the surcharge when reservations were made when they checked in. Lawyer Jon Herskowitz, who represents the two men, said the additional charge constitutes a deceptive and unfair trade practice. Several other top hotel chains will be investigated by the Florida Attorney General. Subpoenas have been issued to Fort Lauderdale Airport Hilton, JW Marriott Hotel in Miami, Radisson Suites in Palm Beach, Embassy Suites Hotel in Palm Beach Gardens, the Comfort Inn in Palm Beach Lakes, Hilton Hotels Corp., Marriott International, Wyndham International, Starwood Hotels & Resorts Worldwide and Lodgian, Inc. ********* 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. 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 * * *