/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010814.mbx C L A S S A C T I O N R E P O R T E R Tuesday, August 14, 2001, Vol. 3, No. 158 Headlines BSQUARE CORPORATION: To Defend Against NY Suits, But Unsure Of Outcome CHUBU ELECTRIC: Air Pollution Lawsuit Settled For 1.52 Billion Yen CONAGRA FOODS: Cauley Geller Commences Securities Suit In Nebraska DIGITAL ISLAND: Stull Stull Files Securities Suit In S.D. New York DILLARD'S INC.: Race Discrimination Lawsuit Settled for $5.6 Million F5 NETWORKS: Marc Henzel Lodges Securities Suit In S.D. New York HERCULES INC.: Antitrust Suit In California In Early Discovery Stage IPRINT TECHNOLOGIES: Sued In S.D. New York Over IPO Prospectus KANA SOFTWARE: Marc Henzel Initiates Securities Suit In S.D. New York LANDIA CHEMICAL: Chemical Firms Settle Neighborhood Pollution Suit MEDIAPLEX INC.: Marc Henzel Commences S.D. New York Securities Suit METLIFE INC.: Motion To Dismiss Securities Violations Suits Dismissed METLIFE INC.: Suit Based On 'Constitutional' Grounds Dismissed METLIFE INC.: Racial Discrimination Suits To Go On Trial By Jan. 2002 MODEM MEDIA: Bernstein Liebhard Initiates Securities Suit In S.D. NY NET2PHONE INC.: Bernstein Liebhard Lodges Securities Suit In S.D. NY NIKE INC.: No.1 Shoemaker Sued Over False Business Prospects Claims PROFIT RECOVERY: Motion To Dismiss Denied, Compelled To Answer Suit RHYTHMS NETCONNECTIONS: Johnson & Perkinson Files Lawsuit In S.D. NY SCIQUEST.COM: Bernstein Liebhard Files S.D. New York Securities Suit SOUTH KOREA: Economic Study Warns Of 'Class Action' Side Effects SOUTHWALL TECHNOLOGIES: $3.75M Deal Final, Processing Until Aug. 22 TALARIAN CORPORATION: Cauley Geller Files Securities Suit In S.D. NY VIANT CORPORATION: Marc Henzel Begins Securities Suit In S.D. New York WASTE MANAGEMENT: Transfer Motion On Delaware, Michigan Suits Pending ******** BSQUARE CORPORATION: To Defend Against NY Suits, But Unsure Of Outcome ---------------------------------------------------------------------- BSQUARE Corporation recently said it will mount a vigorous defense against pending suits in New York, but it is unsure whether or not the outcome will seriously affect its operations. In a Securities and Exchange Commission report, the Company said the notices of the lawsuits were served last month. The suits name the following as defendants: (1) Credit Suisse First Boston Corporation, (2) William T. Baxter, chairman of the board and chief executive officer, (3) Brian V. Turner, president, chief operating officer and a member of the board of directors, (4) Albert T. Dosser, a former officer and director, (5) Peter R. Gregory, a former officer and director, (6) Jeffrey T. Chambers, a member of the board of directors, (7) Scot E. Land, a member of the board of directors, and (8) William Larson, a member of the board of directors. "We anticipate that the actions...and any additional related complaints that may be filed, will be consolidated into a single action. We intend to defend these actions vigorously," the report said. "However, due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of the litigation. Any unfavorable outcome of litigation could have an adverse impact on our business, financial condition and results of operations," the Company said. The suits are awaiting resolution in the U.S. District Court for the Southern District of New York. Purchasers of the Company's common stock during the period from October 19, 1999 to December 6, 2000 brought the suits, alleging violations of federal securities laws. BSQUARE's consumer software enables hand-held PCs to perform such tasks as faxing and printing. BSQUARE's engineering and development services and software enable ICD (intelligent computing devices) makers to integrate Microsoft's Windows CE operating system into their products such as, Internet appliances, hand-held computers, TV set-top boxes, and gaming consoles CHUBU ELECTRIC: Air Pollution Lawsuit Settled For 1.52 Billion Yen ------------------------------------------------------------------ The plaintiffs and defendants in a 12-year court battle over air pollution from factory and vehicle exhaust fumes in Nagoya ended when 10 companies announced at a recent press conference that they had reached an out-of-court settlement with the plaintiffs, The Yomiuri Shimbun said recently. Under the terms of the settlement agreement, the companies agreed to pay about 1.52 billion yen in compensation, and the central government pledged to introduce antipollution measures. The case was the last outstanding class action lawsuit on air pollution to be settled. The 328 plaintiffs include southern Nagoya residents recognized as suffering respiratory and air pollution-related diseases, and families of those who died from the diseases. The plaintiffs, organized into three groups, sued 10 companies and the central government. The companies sued are: (1) Chubu Electric Power Co. (2) Mitsui Chemicals Inc. (3) Nippon Steel Corp (4) Toho Gas Co. (5) Toray Industries Inc. . (6) Toagosei Co. (7) Aichi Steel Corp. (8) Nichiha Corp. (9) Daido Steel Co. (10) Chubu Steel Plate Co. Under the settlement, the companies will pay a total of 1.52 billion yen to the plaintiffs, who will abandon their claim against the central government. The settlement also obliged the companies to make public the data detailing air pollutants emitted from their factories through their local governments. Some of the compensation will be used to revitalize the community's environment, which has long suffered the effects of pollution. Typical of the initiatives that the central government will undertake in this area, among other things, are: (i) The central government acknowledges that air pollution in the area exceeds the government environmental standard and will promptly implement measures to reduce carbon dioxide and suspended particulate matter below the acceptable level, according to the settlement; and (ii) The central government will implement, in cooperation with local governments, measures including a survey of traffic volume on National Highway 23. The liaison panel -- composed of plaintiffs, the Construction and Transport, and the Environment Ministries -- which will be formed to follow implementation of antipollution measures along Highway 23, will submit a report to the central government based on its discussions. CONAGRA FOODS: Cauley Geller Commences Securities Suit In Nebraska ------------------------------------------------------------------ Cauley Geller Bowman & Coates, LLP filed a class action in the United States District Court for the District of Nebraska on behalf of purchasers of ConAgra Foods Inc. (NYSE: CAG) publicly traded securities during the period between August 28, 1998 and May 23, 2001, inclusive. The complaint charges ConAgra and certain of its officers and directors with violating the federal securities laws by issuing a series of material misrepresentations to the market during the Class Period concerning its financial performance for the Company's fiscal years 1998, 1999 and 2000. Throughout the Class Period, defendants issued press releases reporting ConAgra's quarterly and year-end financial performance, and filed reports confirming such performance with the Securities and Exchange Commission. These statements, as alleged in the complaint, were materially false and misleading because United Agri Products, a ConAgra subsidiary, engaged in improper accounting throughout the Class Period, including improperly recognizing revenue and insufficiently reserving for bad debt. On May 23, 2001 ConAgra issued a press release announcing that the Company will restate its financial results for the fiscal years 1998, 1999 and 2000. The press release revealed that ConAgra will restate revenues for the Company's fiscal years 1998-2000, inclusive, which will be reduced by an estimated total of $349 million. The press release further revealed that the Company estimated that, upon restatement, earnings per share will be reduced from $1.35 to $1.32 for 1998, from $1.46 to $1.41 for 1999, and from $1.67 to $1.60 for 2000. In addition, according to the press release, the Company is cooperating with an ongoing investigation by the SEC into the matter. 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 DIGITAL ISLAND: Stull Stull Files 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 Digital Island Corporation (NASDAQ:ISLD) common stock between June 29, 1999 and December 6, 2000, inclusive. The complaint alleges that defendants violated the federal securities laws by issuing and selling Digital Island common stock pursuant to the June 29, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group allocated Digital Island shares to customers at the IPO price of $10 per share. To receive the allocations (i.e., the ability to purchase shares) at $10, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Digital Island stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Digital Island's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $10 IPO price and then selling it later for a profit at inflated aftermarket prices. On July 2, 1999, within four days of opening for trading, Digital Island shares more than doubled from their initial public offering price, surging $11.25, or approximately 113%, to $21.25 on trading of more than 25 million shares over the four-day period. By July 16, 1999, the stock had more than tripled from the Offering price to close at $34.00 per share. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Digital Island offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above. For additional information, contact: Tzivia Brody, Esq. by Phone: 1- 800-337-4983 (toll free) by E-mail: SSBNY@aol.com by Fax: 1-212-490- 2022 or by Mail: 6 East 45th Street, New York, NY 10017 DILLARD'S INC.: Race Discrimination Lawsuit Settled for $5.6 Million -------------------------------------------------------------------- U.S. District Court Judge Ortrie Smith recently gave preliminary approval to a $5.6 million settlement of the class action lawsuit for race discrimination, brought against Dillard's Inc. by former black employees who had worked at several of the Dillard's stores in Kansas and Missouri. A final hearing on the settlement is scheduled for November 30, according to a recent Associated Press report. Under the terms of the settlement, affected employees of the Little Rock, Arkansas-based company will receive $4.2 million. The remainder of the $5.6 million will cover lawyers' fees and litigation expenses. About 1,000 people who worked at Dillard's stores from October 1994 through January of this year are believed to be covered by the agreement, which Judge Smith has characterized as "sufficiently fair, reasonable and adequate" to warrant notifying members of the class by the end of August. The settlement will end a lawsuit filed in 1999 by Danielle Wooten and later consolidated with seven other claims in a class action complaint. Former and current employees covered by the settlement class include individuals in Columbia, Jefferson City, St. Joseph, Springfield, Topeka, Kan., and Manhattan, Kan., and on both sides of the state line in the Kansas City area. F5 NETWORKS: Marc Henzel Lodges Securities Suit In S.D. New York ---------------------------------------------------------------- The Law Offices of Marc S. Henzel filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of the securities of F5 Networks, Inc. (Nasdaq: FFIV) between June 4, 1999 and December 6, 2000, inclusive. The action is pending against defendants F5 Networks, FleetBoston Robertson Stephens and Salomon Smith Barney, Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about June 4, 1999, F5 Networks commenced an initial public offering of 3,000,000 of its shares of common stock at an offering price of $10 per share. In connection therewith, F5 Networks 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: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of F5 Networks shares issued in connection with the F5 Networks IPO; and (2) defendants had entered into agreements with customers whereby defendants agreed to allocate F5 Networks shares to those customers in the F5 Networks IPO in exchange for which the customers agreed to purchase additional F5 Networks shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For further information, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106 by Phone: 888-643-6735 or 215-625-9999 by Fax: 215-440-9475 by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 HERCULES INC.: Antitrust Suit In California In Early Discovery Stage -------------------------------------------------------------------- Debt-ridden Hercules Inc. reported recently that the antitrust suit pending against it in California is still in discovery and early stages of motion practice. In its report to the Securities and Exchange Commission, the Company also said the August 1999 suit is now consolidated with the case captioned Thomas & Thomas Rodmakers v. Newport Adhesives and Composites. Accordingly, the Company is named in the suit in connection with its former Composites Products Division, which was sold to Hexcel Corporation in 1996. The antitrust suit was brought by buyers of the Company's carbon fiber and carbon prepreg, alleging violations of Section 1 of the Sherman Antitrust Act for price fixing. It is currently awaiting resolution in the U.S. District Court for the Central District of California. The Company supplies water-treatment products and services to the pulp and paper industry, and, through its BetzDearborn subsidiary, supplies chemical-treatment programs for water-treatment systems installed in industrial plants. It also produces staple fibers used in disposable diapers and automotive textiles. Heavily in debt, the Company is looking for a buyer. IPRINT TECHNOLOGIES: Sued In S.D. New York Over IPO Prospectus -------------------------------------------------------------- iPrint Technologies, Inc. informed the Securities and Exchange Commission recently that several of its stockholders have lodged class action complaints in New York between June 15 and July 7 this year. The purported class actions are all brought on behalf of purchasers of the Company's common stock since March 7, 2000, the date of its initial public offering. They allege that the Company's prospectus, filed with the Securities and Exchange Commission, was materially false and misleading because it failed to disclose, among other things, that the IPO underwriters required several investors who wanted large allocations of initial public offering securities to pay undisclosed and excessive underwriters' compensation in the form of increased brokerage commissions. In addition, the underwriters also required investors to agree to buy shares of the Company's securities after the initial public offering was completed at predetermined prices as a precondition to obtaining initial public offering allocations. The plaintiffs further allege that because of these purchases, the Company's post-initial public offering stock price was artificially inflated. The plaintiffs claim violations of Sections 11 and 15 of the Securities Act and Section 10(b) of the Securities Exchange Act. The lawsuits are pending in the U.S. District Court for the Southern District of New York. The Company anticipates that the actions and any additional related complaints that may be filed will be consolidated into a single action. The Company believes that it has meritorious defenses against these actions and intends to vigorously defend against them. iPrint Technologies allows customers to design, proof, and order some 3,500 customized print products -- including cards, stationery, label, mugs, and T-shirts -- through its retail Web site. The company, which outsources the printing work, also offers specialized printing and photocopying services; operates co-branded printing Web sites with 3M, OfficeMax, and other firms; and develops sites for third parties. KANA SOFTWARE: Marc Henzel Initiates Securities Suit In S.D. New York --------------------------------------------------------------------- The law firm of Marc S. Henzel filed class action lawsuit in the United States District Court, Southern District of New York, on behalf of purchasers of the securities of KANA Software, Inc. (Nasdaq: KANA) between September 21, 1999 and December 6, 2000, inclusive. The action alleges the following as defendants: (1) KANA, (2) Goldman Sachs & Co., (3) Lehman Brothers Inc., (4) Michael J. McCloskey, (5) Joseph D. McCarthy and (6) Mark S. Gainey The suit is pending in the United States District Court, Southern District of New York. 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 September 21, 1999, KANA (then called KANA Communications Inc.) commenced an initial public offering of 3,300,000 of its shares of its common stock at an offering price of $15 per share. In connection therewith, KANA 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 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 KANA shares issued in connection with the KANA IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby they agreed to allocate KANA shares to those customers in the KANA IPO in exchange for which the customers agreed to purchase additional KANA shares in the aftermarket at pre-determined prices. For more information, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106 by Phone: 888-643-6735 or 215-625-9999 by Fax: 215-440-9475 by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 LANDIA CHEMICAL: Chemical Firms Settle Neighborhood Pollution Suit ------------------------------------------------------------------ Judge Dick Prince recently approved a $6 million settlement in a class action lawsuit that residents had filed against chemical companies that operated in their west Lakeland neighborhood at various times for more than 50 years, The Tampa Tribune reports. Defendants in the lawsuit were Landia Chemical Co.; PCS Joint Venture, which operates the Florida Favorite Fertilizer plant; Agrico Chemical, Micro-fl0 Corp., Standard Spray and Chemical, and several other defunct companies. Judge Prince appointed Lakeland lawyer Thomas Clark, Jr. to serve as a special master to determine how much money each resident will receive. Attorneys for the plaintiffs will receive $2.4 million, with the rest of the money split among 1,373 current and former Westgate residents. The lawsuit was filed in 1999, after residents learned of possible groundwater contamination and possible health problems from chemicals found in a ditch leading from the plants, which was found to contain lead, arsenic and the pesticide toxaphene. The cash will be awarded based on the value of the residents' homes, how close residents lived to the contaminated site and how long they resided there. The 12-acre site was placed on the federal government's Superfund list in 1999, and a cleanup began last year. The Superfund is a list of the most polluted sites in the country and qualifies a site for federal money for cleanup. Florida Favorite Fertilizer occupies seven acres of the site and the Landia Chemical Company formerly occupied the other five acres. Even with the Superfund background, however, the health department and environmental agencies diminished their assessments of the health impact of the site on the plaintiffs. Therefore, said Jacksonville lawyer William Moore, an attorney for the plaintiffs, "At the end of the day, our strongest claims were the property value rights." Orlando lawyer Bryan McMinn, another attorney for the plaintiffs, said there never would have been a lawsuit if not for the tireless work of resident Sybil Conner. "I hope everybody will be happy with it," Conner, age 60, said of the settlement. "It wasn't about the money to start with; it was to get somebody to take care of a serious problem that has been let go too many years." MEDIAPLEX INC.: Marc Henzel Commences S.D. New York Securities Suit ------------------------------------------------------------------- The Law Offices of Marc S. Henzel lodged a securities class action lawsuit recently in the United States District Court for the Southern District of New York, on behalf all persons who acquired Mediaplex, Inc. (Nasdaq: MPLX) securities between November 19, 1999 and December 6, 2000. Named as defendants in the complaint are Mediaplex and the following executive officers and directors of Mediaplex: (1) Gregory R. Raifman, (2) Sandra L. Abbott, (3) Jon L. Edwards, (4) Lawrence D. Lenihan, (5) Peter S. Sealey, (6) James Desorrento, and (7) A. Brooke Seawell The complaint also names as defendants the following underwriters of Mediaplex's initial public offering: (i) Lehman Brothers Inc., (ii) SG Cowen Securities Corporation, (iii) U.S. Bancorp Piper Jaffray Inc., and (iv) Fidelity Capital Markets, a division of National Financial Services Corporation The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with Mediaplex's initial public offering of 6,000,000 shares of common stock at $12.00 per share that was completed on or about November 19, 1999. The complaint alleges the Prospectus was false and misleading because it failed to disclose that: (a) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Mediaplex shares in the IPO in exchange for exorbitant and undisclosed commissions; and (b) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Mediaplex shares in the after-market at pre-determined prices. For further information, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106 by Phone: (888) 643-6735 or (215) 625-9999 by Fax: (215) 440-9475 by E- mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 METLIFE INC.: Motion To Dismiss Securities Violations Suits Dismissed --------------------------------------------------------------------- U.S. District Court of the Eastern District of New York recently dismissed a motion to dismiss filed by MetLife, Inc. over suits challenging its reorganization plan, a SEC report bared. According to the report filed by the Company, the motion was denied July 23. The lawsuits were brought last year, questioning the fairness of the plan and the adequacy and accuracy of Company's disclosure to policyholders regarding the plan. The suits were anchored on allegations of federal securities laws violations. METLIFE INC.: Suit Based On 'Constitutional' Grounds Dismissed -------------------------------------------------------------- Meanwhile, plaintiffs challenging the same reorganization plan on constitutional grounds were not as successful as those citing violations of federal securities laws. The purported class action lodged in the U.S. District Court for the Southern District Court was dismissed last July 9. Plaintiffs, however, have since appealed the decision to the United States Court of Appeals for the Second Circuit. Metropolitan Life, MetLife, Inc. and the individual defendants believe they have meritorious defenses to the plaintiffs' claims and are contesting vigorously all of the plaintiffs' claims in this action. METLIFE INC.: Racial Discrimination Suits To Go On Trial By Jan. 2002 --------------------------------------------------------------------- Lawsuits originally filed in various federal courts but are now consolidated and pending in New York will go on trial January next year. This information was contained in a recent regulatory report filed by MetLife, Inc. with the Securities and Exchange Commission. This consolidated suit consists of three lawsuits filed separately in federal courts for the Eastern District of Louisiana, District of Kansas and Southern Districts of Illinois and New York. The suits allege racial discrimination perpetrated by the Company in the marketing, sale, and administration of life insurance policies, including "industrial" life insurance policies sold decades ago. The plaintiffs in these actions seek unspecified monetary damages, punitive damages, reformation, imposition of a constructive trust, a declaration that the alleged practices are discriminatory and illegal, injunctive relief requiring the Company to discontinue the alleged discriminatory practices and adjust policy values, and other relief. A summary judgment on statute of limitations grounds was denied last June 27, the Company said. Plaintiffs have moved for certification of a class consisting of all non-Caucasian policyholders who were purportedly harmed by the practices alleged in the complaint. Metropolitan Life has opposed the class certification motion, but no hearing date has yet been set. "Metropolitan Life believes it has meritorious defenses and is contesting vigorously plaintiffs' claims," the Company said. MetLife is one of the largest insurers in the US, offering life and property/casualty insurance (including home and auto coverage), as well as savings, retirement, and other financial services for groups and individuals. MODEM MEDIA: Bernstein Liebhard Initiates Securities Suit In S.D. NY -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated recently a securities class action lawsuit on behalf all persons who acquired Modem Media, Inc. (NASDAQ: MMPT) securities between February 5, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York the following defendants: (1) Gerald M. O'Connell (2) Steven C. Roberts (3) BancBoston Robertson Stephens, Inc., (4) NationsBanc Montgomery Securities, LLC, and (5) Bear Stearns & Co., Inc. The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with Modem Media's initial public offering of 2,600,000 shares of common stock at $16.00 per share that was completed on or about February 5, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose that: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Modem Media shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Modem Media shares in the after-market at pre-determined prices. For more information, contact: Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: MMPT@bernlieb.com NET2PHONE INC.: Bernstein Liebhard Lodges Securities Suit In S.D. NY -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP lodged recently a securities class action lawsuit on behalf all persons who acquired Net2Phone, Inc. (NASDAQ: NTOP) securities between July 29, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York against the following defendants: Hambrecht & Quist, LLC, BT Alex. Brown Incorporated, and Bear Stearns & Co., Inc. The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with Net2Phone's initial public offering of 5,400,000 shares of common stock at $15.00 per share that was completed on or about July 29, 1999. The complaint alleges that the Prospectus was false and misleading because it failed to disclose that: (1) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted Net2Phone shares in the IPO in exchange for exorbitant and undisclosed commissions; and (2) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Net2Phone shares in the after-market at pre-determined prices. For further information, contact: Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: NTOP@bernlieb.com NIKE INC.: No.1 Shoemaker Sued Over False Business Prospects Claims ------------------------------------------------------------------- World No.1 shoemaker Nike, Inc., along with its officers and directors, is facing a consolidated securities class action filed in Oregon early this year. In a report to the SEC recently, the Company revealed that the suit is grounded on alleged false and misleading statements issued by the Company related to its actual and expected business prospects. This, accordingly, violated federal securities laws, the Company said. The consolidated amended complaint seeks unspecified damages on behalf of a purported class consisting of purchasers of the Company's stock during the period December 20, 2000 through February 26, 2001. The suit is currently awaiting resolution in the U.S. District Court for the District of Oregon. "While the litigation is in a very preliminary stage, based on the available information we do not currently anticipate that the action will have a material financial impact. "We believe the claims are without merit, and we intend to vigorously defend them," the Company said. NIKE is the world's #1 shoe company and controls more than 40% of the US athletic shoe market. The company designs and sells shoes for a variety of sports, including baseball, volleyball, cheerleading, and wrestling. NIKE operates NIKETOWN shoe and sportswear stores and is opening JORDAN in-store outlets in urban markets (featuring the Michael Jordan brand). NIKE sells its products throughout the US and in about 140 other countries. PROFIT RECOVERY: Motion To Dismiss Denied, Compelled To Answer Suit ------------------------------------------------------------------- Profit Recovery Group International, Inc. revealed recently that it has already answered the consolidated class action suit filed last year and currently pending in Georgia. According to a SEC report, the Company was compelled to answer the suit lodged June last year after the federal court in Georgia denied its motion to dismiss earlier this year. The report also revealed that discovery is ongoing. "The Company believes the alleged claims in this lawsuit are without merit and intends to defend this lawsuit vigorously," the report said. Plaintiffs allege that the Company, John M. Cook, Scott L. Colabuono, and Michael A. Lustig violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by allegedly disseminating materially false and misleading information about a change in the Company's method of recognizing revenue and in connection with revenue reported for a division. Plaintiffs purport to bring the action on behalf of a putative class of persons who purchased the Company's stock between July 19, 1999 and July 26, 2000. Plaintiffs seek an unspecified amount of compensatory damages, payment of litigation fees and expenses, and equitable and/or injunctive relief. "Due to the inherent uncertainties of the litigation process and the judicial system, the Company is unable to predict the outcome of this litigation," the report said. "If the outcome of this litigation is adverse to the Company, it could have a material adverse effect on the Company's business, financial condition, and results of operations," the report added. The suit is pending in the United States District Court for the Northern District of Georgia, Atlanta Division. The Company provides recovery audit services to large retailers and other companies that make numerous transactions. Using proprietary software and auditing methods, the company checks clients' books (particularly accounts payable) and identifies mistakes (including tax overpayments). Profit Recovery Group has clients in more than 30 countries, with more than 30% of its sales coming from outside the US. RHYTHMS NETCONNECTIONS: Johnson & Perkinson Files Lawsuit In S.D. NY -------------------------------------------------------------------- Johnson & Perkinson filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Rhythms NetConnections Inc. (NASDAQ: RTHM.OB) between April 6, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the following defendants: (1) Rhythms, (2) Merrill Lynch, Pierce, Fenner & Smith Incorporated (3) Salomon Smith Barney, Inc. (4) Catherine M. Hapka and (5) Scott C. Chandler 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. The complaint alleges that defendants violated the federal securities laws by issuing and selling Rhythms common stock pursuant to the April 6, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. Specifically, the complaint alleges that in exchange for excessive commissions, Rhythm's underwriters allocated Rhythms shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Rhythms stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Rhythms' share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for a profit at inflated aftermarket prices. For more information, contact: Dennis J. Johnson, Esq. or Jacob B. Perkinson, Esq. by Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone: 1-888-459-7855 (toll free) or by E-mail: JPLAW@adelphia.net SCIQUEST.COM: Bernstein Liebhard Files S.D. New York Securities Suit -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP commenced a securities class action lawsuit on behalf all persons who acquired SciQuest.com, Inc. (NASDAQ: SQST) securities between November 19, 1999 and December 6, 2000. The case is pending in the United States District Court for the Southern District of New York the following defendants: (1) Donaldson, (2) Lufkin & Jenrette Securities Corporation, (3) Deutsche Banc Securities Inc., (4) Hambrecht & Quist LLC, (5) DLJdirect, Inc., and (6) E*OFFERING The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about November 19, 1999, SciQuest.com commenced an initial public offering of 7,500,000 of its shares of common stock at an offering price of $16 per share. In connection therewith, SciQuest.com filed a registration statement that incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was false and misleading because it failed to disclose that: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted SciQuest.com shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase SciQuest.com shares in the after-market at pre-determined prices. For more information, contact: Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: SQST@bernlieb.com SOUTH KOREA: Economic Study Warns Of 'Class Action' Side Effects ---------------------------------------------------------------- The Korea Economic Research Institute (KERI) warned in a report issued recently, that the government-backed class action suit system, if implemented, will slow the privatization of public firms and undercut the Chaebol's competitiveness, creating even greater problems in the Korean economy, The Korea Herald reports. The report stated that following the introduction of class action suits, shareholders' lawsuits will unexpectedly concentrate on initial public offering (IPO) markets, dealing a blow to the government's privatization drive. KERI decried what it perceived as the mis-direction of the class action drive. "Class action suits are targeted at large corporations with more than two trillion won ($1.54 billion) in assets. But the distortion of corporate information is a far more serious problem at venture businesses or the technology-heavy Kosdaq-listed firms than at the large firms," said the KERI report, emphasizing that "[t]hus, class- action suits may fail to promote investor protection [expected] and will rather damage the Chaebol's competitiveness." Additionally, KERI viewed the scope of corporate irregularities subject to the class action suit as very ambiguous, even though the government has stipulated specific violations such as false stock market disclosures, window dressing and stock price manipulation. The lack of manpower at local courts experienced in class actions will also pose problems, the report cautioned. Lee Ki-ho, a top aide to President Kim Dae-jung, told expatriate business leaders in early June that the government is determined to introduce class action suits March next year, in order to improve corporate transparency. The aide explained that a class action suit against a company permits all investors equal compensation whenever one of them wins a legal battle against a company or managers for irregular actions causing them financial losses. The Ministry of Finance and Economy also said recently that the government is ready to weaken other regulations on Chaebol, so long as they cooperate in the implementation of class action suits. An estimated 82 domestic conglomerates with assets of two trillion won as of the end of June are likely to be affected by the new system. The 82 companies, or 11.6 percent of the nation's listed companies, include Samsung Electronics, Hyundai Motor, SK Telecom, POSCO and all major conglomerates. SOUTHWALL TECHNOLOGIES: $3.75M Deal Final, Processing Until Aug. 22 ------------------------------------------------------------------- Southwall Technologies, Inc. has reached a final settlement on a 1998 class action suit and processing of claims ends this month, a SEC regulatory document reveals. The document revealed the $3.75 million settlement was inked in February and since the time to appeal has lapsed, the settlement has, by operation of law, become final. Accordingly, claims under the settlement will be processed up to August 22, 2001. The company makes thin-film coatings for energy conservation and for electromagnetic screens. Its Heat Mirror films provide insulation and shading for car and building windows. The company's electronics films include transparent conductive films used in touch-screen displays and LCDs. Southwall distributes in Japan through Mitsui and Marubeni; it conducts sales in China and South Korea through Samsung. Europe and Asia account for almost two-thirds of sales. TALARIAN CORPORATION: Cauley Geller Files Securities Suit In S.D. NY -------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP recently filed a class action in the United States District Court for the Southern District of New York, on behalf of purchasers of Talarian Corporation (Nasdaq: TALR) securities during the period between July 20, 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: (1) Talarian, (2) Lehman Brothers, Inc., (3) FleetBoston Robertson Stephens, (4) Merrill Lynch, Pierce Fenner & Smith Inc., (5) Paul A. Larson, (6) Michael A. Morgan and (7) Thomas J. Laffey On or about July 20, 2000, Talarian commenced an initial public offering of 4.2 million of its shares of common stock at an offering price of $16.00 per share. In connection therewith, Talarian 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, 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 Talarian shares issued in connection with the Talarian IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Talarian shares to those customers in the Talarian IPO in exchange for which the customers agreed to purchase additional Talarian shares in the aftermarket at pre- determined prices. 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 VIANT CORPORATION: Marc Henzel Begins Securities Suit In S.D. New York ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel commenced a securities class action lawsuit in the United States District Court for the Southern District of New York, on behalf all persons who acquired Viant Corporation (Nasdaq: VIAN) securities between June 17, 1999 and December 6, 2000. Named as defendants in the complaint are Viant and the following executive officers of Viant: Robert L. Gett and M. Dwayne Nesmith. The complaint also names as defendants the following underwriters of Viant's initial public offering and secondary offering: (1) Goldman, Sachs & Co., (2) Credit Suisse First Boston Corporation, (3) BancBoston Robertson Stephens Inc., and (4) Lehman Brothers, Inc. The complaint alleges that defendants disseminated materially false and misleading information in connection with Viant's initial public offering on or about June 17, 1999 and Viant's secondary offering on or about December 7, 1999 in violation 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. Specifically, the complaint alleges that the prospectuses filed in connection with the Viant IPO and Secondary Offering were materially false and misleading because they failed to disclose, among other things, that: (i) the Underwriter Defendants 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 Viant shares issued in connection with the Viant IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Viant shares to those customers in the Viant IPO in exchange for which the customers agreed to purchase additional Viant shares in the aftermarket at pre-determined prices. For more information, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106 by Phone: 888-643-6735 or 215-625-9999 by Fax: 215-440-9475 by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 WASTE MANAGEMENT: Transfer Motion On Delaware, Michigan Suits Pending --------------------------------------------------------------------- Solid waste industry leader Waste Management, Inc. informed the Securities and Exchange Commission that it has asked the Judicial Panel on Multi-district Litigation to transfer cases pending against it to the U.S. District Court for the Southern District of Texas. The Company said the motion covers cases currently lodged in Delaware and Michigan. The motion was filed June 14 so that pre-trial proceedings can be coordinated or consolidated. The Delaware and Michigan plaintiffs have opposed the Company's transfer motion and the stay motions. All motions are currently pending. This particular lawsuit is a splinter case that stems from the Company's restatement of financial reports and disclosures in 1999. The Delaware putative class action was filed against the Company in Delaware state court by a class of former stockholders in Eastern Environmental Services, Inc., who received Company common stock pursuant to the merger transaction with the latter. The plaintiffs allege that the stock they received in exchange for their Eastern shares was overvalued. "The case is at an early stage, and the extent of possible damages, if any, cannot yet be determined," a SEC report of the Company said. Waste Management, Inc., formerly USA Waste Services, is at the top of the heap in the US solid-waste industry. The company serves about 27 million municipal, business, and residential customers in the US, Canada, and Mexico. It has a network of landfills and collection operations, as well as waste transfer, disposal, and recycling services. ********* 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. 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