/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011024.mbx C L A S S A C T I O N R E P O R T E R Wednesday, October 24, 2001, Vol. 3, No. 208 Headlines CALIFORNIA AMPLIFIER: Shapiro Haber Files Securities Suit in C.D. CA CRITICAL PATH: Kaplan Fox Launches Securities Suit in N.D. California DOLLAR GENERAL: Pomerantz Haudek Begins M.D. TN Securities Suit DQE INC.: Weiss Yourman Files Securities Suit in W.D. Pennsylvania ENRON CORPORATION: Shapiro Haber Commences Securities Suit in S.D. TX ENRON CORPORATION: Milberg Weiss Commences Securities Suit in S.D. TX G&L REALTY: California State Court Issues TRO v Management Buyout GENESISINTERMEDIA INC.: Levy Levy Lodges Securities Suit In C.D. CA GENESISINTERMEDIA INC.: Rosen Law Files Securities Suit in C.D. CA GRAND RIVER: Oklahoma Couple Awarded $60T For Flood Property Damage INFORMATION ARCHITECTS: NC Securities Suit Dismissed With Prejudice INSURANCE LITIGATION: Wolf Haldenstein Files N.D. GA Securities Suit INTERVOICE-BRITE INC.: Faruqi Faruqi Lodges Securities Suit in N.D. TX NAVISTAR INTERNATIONAL: Sued By Employees For Discriminatory Practices LIBERATE TECHNOLOGIES: Milberg Weiss Lodges Securities Suit in S.D.NY NCI BUILDING: Pomerantz Haudek Commences Securities Suit in S.D. TX NETEASE.COM: Milberg Weiss Initiates Securities Suit In S.D. New York NETWORK ASSOCIATES: Berman DeValerio Files Securities Suit in N.D. CA NICE SYSTEMS: Kaplan Fox Commences Securities Suit in New Jersey NORTHPOINT COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA RAZORFISH INC.: Cohen Milstein Commences Securities Suit in S.D. NY SCHERING-PLOUGH CORPORATION: Kaplan Fox Files Securities Suit in NJ STEVE MADDEN: Kaplan Fox Commences Securities Suit in E.D. New York TIFFANY'S BILLIARDS: North Raleigh Sportsbar Faces Bias Allegations TOBACCO LITIGATION: Witnesses Testify For Plaintiffs' Case in WV Suit VARI-L COMPANY: Kaplan Fox Initiates Securities Suit in Colorado Court WESTPOINT STEVENS: Milberg Weiss Initiates Securities Suit in N.D. GA ********* CALIFORNIA AMPLIFIER: Shapiro Haber Files Securities Suit in C.D. CA -------------------------------------------------------------------- Shapiro Haber and Urmy LLP commenced a securities class action against California Amplifier, Inc. in the United States District Court for the Central District of California. The suit was filed on behalf of all persons or entities that purchased the Company's common stock from April 7, 2000 through March 28, 2001, inclusive. The complaint alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In March 2001, the CalAmp shocked the investing public when it announced that it was conducting an internal financial investigation in response to the abrupt resignation of the Company's corporate controller. The Company also stated that the fiscal year 2000 net income may have been overstated by as much as $2.2 million. This news caused the trading of California Amplifier common stock on NASDAQ to be halted at $5-1/32 per share - more than 90% below its Class period high of $59-1/4 per share. The Company has since admitted that it overstated its net income for the fiscal years 2000 and 2001. For further details, contact Thomas G. Shapiro by Mail: 75 State Street, Boston, Massachusetts 02109 by Phone: (800) 287-8119 by Fax: (617) 439-0134 by E-mail: info@shulaw.com. CRITICAL PATH: Kaplan Fox Launches Securities Suit in N.D. California --------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Critical Path, Inc. (NASDAQ: CPTH) and certain of the Company's officers and directors in the United States District Court for the Northern District of California. The suit is brought on behalf of all persons or entities who purchased the common stock of Critical Path, Inc. (NASDAQ: CPTH) between November 2, 2000 and February 1, 2001 inclusive. The complaint charges the defendants with violations of the Securities Exchange Act of 1934. The Company provides e-mail hosting services to a variety of organizations, including Internet service providers, Web hosting companies, Web portals, and corporations. The complaint alleges that many of these types of companies were new and were suffering from a downturn in Internet-related funding, which began in the spring of 2000. The defendants also allegedly knew for months that new accounting regulations would negate the Company's ability to continue to recognize up front license fees in 4th Quarter 2000. Consequently, defendants knew this would severely impair the Company's future revenue growth and impair their ability to make future stock sales and extract future bonuses, which were tied to the Company's performance. However, the defendants continued to make positive, but allegedly false, statements about the Company's business and future revenues during 4th Quarter 2000. As a result, the Company's stock traded as high as $48. On January 18, 2001 after the market closed, the Company announced that in the fourth quarter 2000 it would report a multi-million dollar loss. This was directly contrary to what the Company's Chief Executive Officer had told shareholders and analysts just weeks before. Then, on February 2, 2001, the Company announced that the their results reported on January 18, 2001, maybe materially misstated and placed two of its senior officers on "administrative leave." This disclosure shocked the market, causing the Company's stock to decline to less than $4 per share in pre-market trading. For more information, contact Frederic S. Fox, Joel B. Strauss or Christine Fox by Mail: 805 Third Avenue - 22nd Floor New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E- mail: mail@KaplanFox.com or visit the firm's Website: www.kaplanfox.com DOLLAR GENERAL: Pomerantz Haudek Begins M.D. TN Securities Suit --------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP commenced a class action suit on behalf of purchasers of Dollar General Corporation (NYSE: DG) securities during the period between February 23, 1999 and April 27, 2001, inclusive. The suit, filed in the United States District Court for the Middle District of Tennessee (Nashville Division), names the Company, CEO Cal Turner Jr. and CFO Brian M. Burr as defendants. The suit alleges that the Company, a discount retailer of general merchandise, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by reporting materially false and misleading financial results for fiscal years 1998, 1999 and 2000. As a result, the market price of the Company's securities was artificially inflated throughout the class period. On April 30, 2001, before the market opened, Dollar issued a press release announcing that the Company "expects to delay the filing of its annual report on Form 10-K for the fiscal year 2000." The Company also revealed that it anticipated "restating its audited financial statements for fiscal years 1998 and 1999 as well as restating the unaudited financial information for the fiscal year 2000 as previously released" due to accounting irregularities. The Company also announced that their audit committee "is conducting an investigation of these irregularities." Dollar further indicated that it "estimates a reduction in aggregate earnings of approximately $0.07 per share over the three-year period from the previously reported total earnings of $1.81 per share over the same period." The market reaction to this news was dramatic as the Company's common stock closed at $16.50 that same day, down $7.38, or 31%, from its close on April 27, 2001 at $23.88. The drop in stock price wiped out approximately $2.44 billion in market value. For further details, contact Andrew G. Tolan by Phone: 888-476-6529 (or (888) 4-POMLAW) (toll free) by E-mail: agtolan@pomlaw.com or visit the firm's Website: www.pomerantzlaw.com DQE INC.: Weiss Yourman Files Securities Suit in W.D. Pennsylvania ------------------------------------------------------------------ Weiss and Yourman commenced a securities class action on behalf of purchasers of DQE, Inc. (NYSE: DQE) shares between December 6, 2000 and April 30, 2001. The suit was filed in the United States District Court for the Western District of Pennsylvania, against the Company and an executive associated with the Company. The complaint charges defendants with violations of the Securities Exchange Act of 1934. The defendants allegedly issued a series of material misrepresentations that caused DQE common stock to trade at artificially inflated prices. The complaint also alleges that the Company issued statements concerning the positive impact that DQE Enterprises, Inc., the Company's investment subsidiary, was having on their financial results. During this time, the market for initial public offerings had dramatically slowed down. Accordingly, the ability of the companies in DQE Enterprises' investment portfolio to go public was substantially impaired. The defendants, however, issued a stream of positive statements concerning the Company's operations and prospects, but failed to disclose the impaired nature of DQE Enterprises' investments. They also failed to disclose that DQE would not realize the investment gains that defendants had caused the market to expect. As a result, defendants' estimates, projections and opinions as to the Company's operations, products, earnings and income were knowingly lacking in a reasonable basis at all relevant times. This information finally became publicly known on April 30, 2001, when DQE reported its earnings for the first quarter of 2001 and revised its earnings outlook for the full year, based in part, on the weakened outlook for DQE Enterprises. In response to this negative announcement, when trading resumed on May 1, 2001, the price of the Company's common stock dropped from $30.43 per share to $23.75 per share on extremely heavy trading volume. For more information, contact David C. Katz, Mark D. Smilow or James E. Tullman by Mail: Weiss and Yourman, The French Building, 551 Fifth Avenue, Suite 1600, New York, NY 10176 by Phone: (888) 593-4771 or (212) 682-3025 or by E-mail: info@wynyc.com. ENRON CORPORATION: Shapiro Haber Commences Securities Suit in S.D. TX --------------------------------------------------------------------- Shapiro Haber & Urmy LLP initiated a securities class action suit in the U.S. District Court for the Southern District of Texas (Houston Division) against Enron Corporation (NYSE:ENE) and certain of its officers and directors. The case was filed on behalf of all purchasers of the common stock of Enron during the period from July 13, 2001 through October 16, 2001, inclusive. The suit alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit also alleges that the defendants' wrongful conduct artificially inflated the price of the Company's common stock during the class period. The defendants allegedly misrepresented the facts concerning the Company's financial transactions with two partnerships established by the Company's Chief Financial Officer, which resulted in substantial losses and a reduction in shareholders' equity of over $1 billion. Enron's common stock price plummeted over 20% in just three trading days following disclosure of the financial losses resulting from their dealings with these partnerships. For more information, contact Thomas G. Shapiro or Liz Hutton by Mail: 75 State Street, Boston, MA 02109 by Phone: (800) 287-8119 by Fax: (617) 439-0134 by E-mail: cases@shulaw.com or visit the firm's WebsiteL www.shulaw.com ENRON CORPORATION: Milberg Weiss Commences Securities Suit in S.D. TX --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the common stock of Enron Corp. (NYSE:ENE) between January 18, 2000 and October 17, 2001, inclusive. The action is pending in the United States District Court for the Southern District of Texas, Houston Division against the Company and officers: (1) Kenneth Lay, (2) Jeffrey K. Skilling, and (3) Andrew Fastow The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The defendants allegedly issued a series of material misrepresentations to the market between January 18, 2000 and October 17, 2001, thereby artificially inflating the price of the Company's common stock. Specifically, the complaint alleges that the Company issued a series of statements concerning its business, financial results and operations which failed to disclose: (i) that the Company's Broadband Services Division was experiencing declining demand for bandwidth and the Company's efforts to create a trading market for bandwidth were not meeting with success as many of the market participants were not creditworthy; (ii) that the Company's operating results were materially overstated as result of the Company failing to timely write- down the value of its investments with certain limited partnerships which were managed by the Company's chief financial officer; and (iii) that the Company was failing to write-down impaired assets on a timely basis in accordance with GAAP. On October 16, 2001, the Company surprised the market by announcing that it was taking non-recurring charges of $1.01 billion after-tax, or ($1.11) loss per diluted share, in the third quarter of 2001, the period ending September 30, 2001. Subsequently, the Company revealed that a material portion of the charge related to the unwinding of investments with certain limited partnerships that were controlled by their chief financial officer. The Company further revealed that it would be eliminating more than $1 billion in shareholder equity as a result of its unwinding of the investments. As this news began to be assimilated by the market, the price of Company common stock dropped significantly. During the class period, Company insiders disposed of over $73 million of their personally held common stock to unsuspecting investors. For more information, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: Enroncase@milbergNY.com or visit the firm's Website: www.milberg.com G&L REALTY: California State Court Issues TRO v Management Buyout ----------------------------------------------------------------- The Los Angeles County Superior Court issued an order temporarily enjoining the management buyout closing of G&L Realty Corp. (NYSE:GLR) by Daniel M. Gottlieb and Steven D. Lebowitz, officers and directors of G&L Realty Corp. A hearing on an order to show cause why an injunction should not be issued enjoining the closing of the management buyout is scheduled for Friday October 26, 2001. The effectiveness of the Court's order is conditioned upon receipt of a bond no later than 1:00 p.m., Tuesday, October 23, 2001. The Court's order was issued in response to the application of shareholder plaintiffs in connection with a pending class action against the Company and its board of directors. The basis of the plaintiffs' application for a temporary restraining order was that a share ownership limitation waiver granted Gottlieb and Lebowitz on May 10, 2001 by the Company's board of directors (including Gottlieb and Lebowitz) was unauthorized and granted in breach of the the Company's fiduciary duties. The effect of the share ownership limitation waiver was to allow Gottlieb and Lebowitz to control, notwithstanding a limitation in the Company's articles of incorporation, over 9.8 percent of the Company's outstanding common stock upon conversion of partnership units held by Gottlieb and Lebowitz in the company's operating partnership. The defendants' counsel has represented that approximately 43 percent of the Company's outstanding common stock has been voted by the defendants in favor of the management buyout. Based on the Company's announcement, as of October 19, 2001, proxies representing approximately 15 percent of the Company's outstanding common shares have been voted in favor of the buyout by persons other than Gottlieb and Lebowitz. Subsequent to the court's order, the special committee of G&L Realty Corporation's board of directors responded to the most recent proposal of a group of investors including Lyle Weisman competing with Gottlieb and Lebowitz to acquire the outstanding common stock of the Company. In that response, released by the Company on October 20, 2001, the special committee represented that it was prepared to recommend to the board of directors a transaction with the Weisman Group at a common stock purchase price of $16.50 per share, subject to due diligence, but, in any event, not less than $15.50 per share (consistent with the purchase price of previous offers by the Weisman Group). For further information, contact Darren J. Robbins or James I. Jaconette of Milberg Weiss Bershad Hynes and Lerach LLP by Mail: 600 West Broadway, 1800 One America Plaza, San Diego, CA 92101-3356 by Phone: (800) 449-4900 or visit the firm's Website: www.milberg.com GENESISINTERMEDIA INC.: Levy Levy Lodges Securities Suit In C.D. CA ------------------------------------------------------------------- Levy and Levy PC commenced a securities class action on behalf of purchasers of GenesisIntermedia Inc. (NASDAQ:GENI) securities during the period between Dec. 21, 1999 and Sept. 25, 2001. The suit, filed in the U.S. District Court for the Central District of California, charges the Company, CEO Ramy El-Baratwi, certain of its officers, directors and financial commentator Courtney Smith with violations of the Securities Exchange Act of 1934. The complaint alleges that in December 1999, defendants plotted and unleashed their scheme to inflate the price of Company shares. The defendants gave shares worth more than $3 million to Smith who helped send the stock soaring after agreeing to issue allegedly false, positive recommendations for it on CNN, CNBC and Bloomberg Television. However, the defendants allegedly concealed the payment of 216,000 shares to Smith in order to induce the purchase of Company shares and raise tens of millions of dollars via multiple private securities offerings. As a result of defendants' false statements, the Company's stock price traded at inflated levels during the class period, increasing to as high as $25 in June 2001. After the close of the market on Sept. 25, 2001, the Company's shares were halted pending the resolution of an investigation. The Company's shares remain halted and are, in essence, worthless. Just hours before the announcement of the investigation and "halt," defendant El-Batrawi sold over $1.7 million worth of his own shares. For more information, contact Levy and Levy PC by Mail: 245 Park Avenue 39th Floor, New York, NY 10167 by Phone: (212) 792-4343 or (212) 792- 4001 by E-Mail: info@levylawfirm.com or visit the firm's Website: www.levylawfirm.com GENESISINTERMEDIA INC.: Rosen Law Files Securities Suit in C.D. CA ------------------------------------------------------------------ The Rosen Law Firm filed a securities class action on behalf of all purchasers of GenesisIntermedia, Inc. (NASDAQ: GENI) publicly traded securities during the period between December 21, 1999 and September 25, 2001. The suit, filed in the United States District Court for the Central District of California, charges the Company, CEO Ramy El-Batrawi, certain of its officers and directors financial commentator Courtney Smith with violations of the Securities Exchange Act of 1934. The complaint alleges that in December 1999, defendants began an illegal scheme to artificially increase the price of Company shares and gave shares worth more than $3 million to Smith. Smith conspired to drive up the stock price by falsely promoting Company stock and issuing bogus recommendations for it on CNN, CNBC and Bloomberg Television. The complaint alleges the defendants concealed the payment of 216,000 shares to Smith in order to induce the purchase of Company shares and raise tens of millions of dollars via several private securities offerings. As a result of defendants' false statements, the Company's stock price traded at inflated levels during the class period, rising to as high as $25 in June 2001. After the close of the market on September 25, 2001, the Company's shares were halted pending a Nasdaq investigation. Company shares have not resumed trading. However, just hours before the announcement of the investigation and "halt," defendant El-Batrawi allegedly sold over $1.7 million dollars worth of his own shares. For more information, contact Laurence Rosen by Phone: 212-532-7299 or 866-767-3653 by E-mail: lrosen@rosenlegal.com or visit the firm's Website: www.rosenlegal.com GRAND RIVER: Oklahoma Couple Awarded $60T For Flood Property Damage ------------------------------------------------------------------- Associate District Judge Robert Reavis recently ruled in favor of two homeowners against the Grand River Dam Authority, in a class-action lawsuit that alleged property damage from flooding, according to a recent Associated Press report. Judge Reavis awarded $58,377 in property damage and $4,900 for the value of a flowage easement to Randy and Dena Stoner, who charged in their lawsuit that the Authority operated the Pensacola Dam in such a manner that it caused flooding. "A perpetual flowage easement in and upon the real property would permit the intermittent flow of floodwaters on the real property during flood periods," Judge Reavis wrote in the judgment. The Stoners are among 115 plaintiffs in a class action lawsuit who contend that it was the Authority's operation of the floodgates that caused a series of 14 floods from a backwater between November 1992 and June 1995. A week before the recent Stoner award, Judge Reavis awarded $75,000 for property damage to Jeff and Carol McCool, a Miami, Oklahoma couple, the first test case presented in the suit. Attorneys on both sides of the issue agreed to waive the right to have a jury hear the cases, which were tried before Judge Reavis. "It was not a settlement," said Allen Pease, general counsel for the Authority. "We stipulated to the facts and, based upon that stipulation, Judge Reavis entered a judgment on behalf of the plaintiffs in the test cases." The judgments can be appealed to the Oklahoma Supreme Court, Pease said. INFORMATION ARCHITECTS: NC Securities Suit Dismissed With Prejudice ------------------------------------------------------------------- The U.S. District Court for the Western District of North Carolina dismissed with prejudice the securities class action against Information Architects Corporation (NASDAQ:IARC). The Company and several of its current and former officers and directors were named as defendants in four purported class action lawsuits between May 14, 1999 and July 13, 1999. The suits purport to be brought on behalf of a class of Company common stock purchasers between November 14, 1997 and April 1, 1999 and allege violations of the federal securities laws. The suits were later consolidated and an amended complaint was filed in September 1999. The Company filed a motion to dismiss the suit in January. "We contended from the beginning that the lawsuit was without merit and are very pleased that the final appeal was dismissed with prejudice," said Bob Gruder, Information Architects Chairman and CEO. Information Architects is a content management software provider. Its SmartCode software formats documents, catalogs, multimedia files, and other Web content for distributing custom versions of the same content to multiple Web sites at once. INSURANCE LITIGATION: Wolf Haldenstein Files N.D. GA Securities Suit -------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class action lawsuit against several securities and insurance companies in the United States District Court for the Northern District of Georgia. The suit names as defendants: (1) WMA Securities, Inc., (2) AEGON USA, Inc., (3) Western Reserve Life Insurance Company of Ohio, (4) First AUSA Life Insurance Company, (5) AEGON Financial Services Group, Inc., (6) AFSG Securities Corporation, (7) PFL Life Insurance Company, (8) AEGON USA Securities, Inc., (9) AUSA Life Insurance Company, Inc., (10) Bankers United Life Assurance Company, and (11) other "John Doe" corporate entities The suit was filed on behalf of all persons who, from October 1, 1998 through October 1, 2001, inclusive, purchased an individual tax- deferred variable annuity contract or who received a certificate to a group deferred variable annuity contract, sold, marketed or underwritten by one of the defendants, which was used to fund a contributory (not defined benefit) retirement plan or arrangement qualified for favorable income tax treatment pursuant to Internal Revenue Code, including but not limited to an IRA, rollover IRA, Keogh account or 401(k). Excluded from the class are defendants, officers, directors, and agents of the defendants, members of their immediate families, their legal representatives, heir, successors or assigns, and any entity in which any of the defendants or any excluded person has a controlling interest. The complaint alleges that WMA, the AEGON defendants, and other financial institutions, violated the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The above defendants also breached their fiduciary duties to plaintiff and the other members of the class or their employers, by making materially false and misleading statements and omissions that caused plaintiff and other members of the class to purchase the variable annuity contracts. These tax-deferred variable annuities sold by defendants are never suitable investments for tax-deferred retirement accounts because: (i) earnings on any investment placed in such an annuity already are tax-deferred; and (ii) purchase of a deferred annuity in an already tax-deferred retirement account represents a completely useless approach which simply increases carrying costs For further details, contact George Peters, Robert B. Weintraub or Daniel W. Krasner by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or whafh@aol.com or visit the firm's Website: www.whafh.com. All e-mail correspondence should make reference to AEGON/WMA. INTERVOICE-BRITE INC.: Faruqi Faruqi Lodges Securities Suit in N.D. TX ---------------------------------------------------------------------- Faruqi and Faruqi LLP initiated a securities class action on behalf of all purchasers of InterVoice-Brite, Inc. (NASDAQ: INTV) common stock between October 12, 1999 and June 6, 2000, inclusive. The suit, filed in the United States District Court for the Northern District of Texas, charges the Company with violations of federal securities laws. The Company allegedly issued a series of materially false and misleading press releases concerning their business, its financial results, the success of its integration with Brite and its prospects. As a result, the Company's stock was artificially inflated to as high as $38.75 per share, allowing defendants to collectively sell 525,916 shares of their stock for $13.4 million in proceeds. On June 2000, the Company shocked the market, revealing that it would report a loss of $0.03 to $0.05 and revenues of only $67-$68 million for the 1st Quarter 2001 rather than the EPS of $0.22 and revenues of $89 million defendants had led the market to expect. Defendants blamed the shortfall on sales people who had begun leaving the Company in the months prior to this disclosure, some of which were unhappy with the integrated Company. Defendants also claimed they had implemented new guidance from the SEC, Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements earlier than planned. These revelations caused Company stock to plummet to as low as $5.75 per share before closing at $6.125, a decline of 85% from its class period high on volume of 15.5 million shares. For more information, contact Anthony Vozzolo 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 Srowley@faruqilaw.com or visit the firm's Website: www.faruqilaw.com NAVISTAR INTERNATIONAL: Sued By Employees For Discriminatory Practices ---------------------------------------------------------------------- African-American employees of Navistar International Corporation's Indianapolis engine plant sued the Company last week, alleging numerous instances of racial harassment and discrimination. The suit was filed in Chicago federal court on behalf of 23 current employees, three former employees and one job applicant. The U.S. Equal Employment Opportunity Commission (EEOC) said in a determination that evidence supports that black employees were harassed and subjected to a hostile work environment due to their race. The EEOC report further said that the Company has failed to take effective action to eliminate the discriminatory practices. A spokesman for the Company declined to comment on the suit, saying it has not yet been served on the Company. LIBERATE TECHNOLOGIES: Milberg Weiss Lodges Securities Suit in S.D.NY --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Liberate Technologies, Inc. (NASDAQ: LBRT) between July 27, 1999 and December 6, 2000, inclusive. The suit, pending in the United States District Court, Southern District of New York, names as defendants the Company and: (1) Credit Suisse First Boston Corp., (2) BancBoston Robertson Stephens, Inc., (3) Merrill, Lynch, Pierce, Fenner & Smith, Inc., (4) Mitchell E. Kertzman and (5) Nancy J. Hilker. 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. In July 1999, the Company commenced an initial public offering of 6, 250,000 of its shares of common stock at an offering price of $16 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the Securities and Exchange Commission. The complaint further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwrites had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate Company shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices For more information, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th Floor New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: liberatecase@milbergNY.com or visit the firm's Website: www.milberg.com NCI BUILDING: Pomerantz Haudek Commences Securities Suit in S.D. TX ------------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP initiated a securities class action lawsuit against NCI Building Systems, Inc. (NYSE: NCS) on behalf of all purchasers of Company securities from August 25, 1999 to April 12, 2001, inclusive. The case was filed in the United States District Court for the Southern District of Texas, Houston Division and also names the Company's Chief Executive Officer and Chief Financial Officer as defendants. The Complaint alleges that the Company issued materially false and misleading information concerning the its' financial results with respect to the financial performance for the third and fourth quarters of fiscal 1999 and for the fiscal year ended October 31, 2000. These false and misleading statements resulted in the inflation of the Company's securities during the class period. In addition, the Company announced to investors that it will restate its financial statements for the fiscal year ended October 31, 2000, and for the quarter ended January 31, 2001 due to improper accounting practices. The Company also revealed that those same accounting improprieties could result in changes to its financial statements for the third and fourth quarters of fiscal 1999. As a result, the Company's share price fell 32%, from a closing price of $18.30 a share on April 12, 2001, to $12.45 on April 16, 2001. For more information, contact Andrew G. Tolan by Phone: 888-4-POMLAW (888-476-6529) (toll-free) by E-mail: agtolan@pomlaw.com or visit the firm's Website: www.pomerantzlaw.com NETEASE.COM: Milberg Weiss Initiates Securities Suit In S.D. New York --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the American Depositary Shares (ADS) of NetEase.com, Inc. (NASDAQ:NTESE) between July 3, 2000 and August 31, 2001, inclusive. The suit is pending in the United States District Court for the Southern District of New York against defendants: (1) King F. Lai, (2) William Lei Ding, (3) Helen Haiwen He, (4) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, (5) Deutsche Bank Securities, Inc., (6) Chase Securities, Inc., (7) Salomon Smith Barney, Inc. and (8) UBS Warburg LLC. and (9) the Company The defendants allegedly violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The defendants allegedly issued a series of material misrepresentations to the market between July 3, 2000 and August 31, 2001. In May 2001, the Company discovered that $1 million in contracts had been improperly reported as revenue, which would delay announcing its financial results for the first quarter of 2001. In June 2001, the Company announced that the revenue overstatement appeared to affect its full year 2000 financial statements and the amount of the overstatement would be approximately $3 million. Then, in August, the Company finally revealed the full extent of the overstatement and announced that it would be restating all of its year 2000 financial statements because $4.3 million in revenue had been overstated. The complaint alleges that the prospectus and registration statement issued in connection with the initial public offering of NetEase.com ADSs were materially false and misleading because they contained artificially inflated financial results for the first quarter of 2000. Following the IPO, defendants issued press releases announcing the Company's quarterly 2000 and full year 2000 financial results which were materially false and misleading because they overstated the Company's financial performance. For further details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: NetEasecase@milbergNY.com or visit the firm's Website: www.milberg.com NETWORK ASSOCIATES: Berman DeValerio Files Securities Suit in N.D. CA --------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt and Pucillo LLP commenced a securities class action against Network Associates, Inc. (NASDAQ: NETA) in the U.S. District Court for the Northern District of California. The suit, filed on behalf of all investors who bought the Company's common stock between July 19, 2000 and December 26, 2000, alleges that the Company violated federal securities laws. According to the complaint, the Company misled investors by recognizing revenue when it shipped software to its distributors instead of waiting until it was shipped to end-users. The complaint also accused Network Associates of "channel stuffing" - overselling to its distributors to pad short-term results. Last December, the company issued a press release reporting a fourth- quarter sales shortfall of $120 million due to returns of excess inventory by its distributors. In addition, the Company announced that it would book revenue only after software was shipped to end-users. The company also said it was replacing its CEO, CFO and president. As a result, Company shares lost 62% of their value. For more information, contact N. Nancy Ghabai by Mail: One Liberty Square Boston, MA 02109 by Phone: (617) 542-8300 by Fax: (617) 542-1194 Or visit the firm's Website: www.bermanesq.com NICE SYSTEMS: Kaplan Fox Commences Securities Suit in New Jersey ---------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Nice Systems, Ltd. (NASDAQ:NICE) and two of its officers in the United States District Court for the District of New Jersey. The suit is brought on behalf of persons who purchased NICE Systems, Ltd. (Nasdaq: NICE) American Depository Shares (ADS) between February 16, 2000 and February 7, 2001 inclusive. The complaint charges defendants with violations of the Securities Exchange Act of 1934. The complaint also alleges that during the class period, defendants issued materially false and misleading financial statements for fiscal year 1999 and the first three quarters of fiscal 2000. Defendants improperly recognized material amounts of revenue, in violation of generally accepted accounting principles, on among other things, consignment "sales." The complaint further alleges that defendants "cooked" the Company's books in order to: (1) report revenues, profits and growth rates, which the Company had led the market to believe would be achieved in fiscal 1999 and 2000; and (2) inflate the price of the Company's ADSs, which were used in two acquisitions during the class period which were both partially funded with the Company's artificially inflated ADSs. Because of defendants' allegedly fraudulent practices, the Company's securities traded at artificially inflated prices throughout the class period. On February 8, 2001, the Company announced that its financial results for fiscal year 1999 and the first three quarters of fiscal 2000 would require restatement due to the improper recognition of revenue. This resulted to the fall of the price of Company's ADSs of about 30% in one day to $13.10. For more information, contact Frederic S. Fox, Joel B. Strauss, Donald R. Hall by Mail: 805 Third Avenue - 22nd Floor New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E- mail: mail@KaplanFox.com or visit the firm's Website: www.kaplanfox.com NORTHPOINT COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA -------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP commenced a securities class action on behalf of purchasers of NorthPoint Communications Group, Inc. (NASDAQ:NPNT; NPNTQ.OB) publicly traded securities during the period between August 8, 2000 and November 29, 2000. The suit, filed in the United States District Court for the Northern District of California, charges certain of the Company's officers and directors with violations of the Securities Exchange Act of 1934. NorthPoint provides high-speed local data network services. The Company's networks use digital subscriber line technology to transport data at faster speeds than common dial-up modems. The Company then markets its network and data transport services to Internet service providers, broadband data service providers, and long-distance and local telephone companies. On October 26, 2000, following the close of trading, NorthPoint announced its 3rd Quarter 2000 financial results in a press release proclaiming that such results were the result of the Company's "conservative revenue recognition policy." Then, on November 20, 2000, the Company announced that it would restate its 3rd Quarter 2000 financial statements because of accounting misstatements that will require eliminating $6 million in revenue from the quarter. On November 29, 2000, Verizon Communications withdrew from a merger agreement with NorthPoint, citing the Company's deteriorating financial condition and false quarterly report as its reason. As such, Verizon would not continue to fund the Company's operations, leaving it to operate on its own. Company shares dropped to just pennies per share in response. For more information, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th Floor New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: liberatecase@milbergNY.com or visit the firm's Website: www.milberg.com RAZORFISH INC.: Cohen Milstein Commences Securities Suit in S.D. NY ------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll PLLC initiated a securities class action on behalf of purchasers of the common stock of Razorfish, Inc. (NASDAQ:RAZF) between February 15, 2000 and October 5, 2000, inclusive. The suit, filed in the United States District Court for the Southern District of New York, names the Company and these individuals as defendants: (1) Jeffrey A. Dachis, (2) Craig M. Kanarick, (3) Jean-Phillipe Maheu, (4) Michael Pehl, and (5) John J. Roberts The defendants allegedly violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing to the investing public false and misleading statements and press releases regarding the Company's business and financial condition. When the Company began to disclose the truth about its operations, the Company's stock fell 43% in one day. For further information, contact Daniel S. Sommers or Robert Smits by Mail: 1100 New York Avenue, N.W. Suite 500 - West Tower Washington, D.C. 20005 by Phone: 888-240-0775 or 202-408-4600 by E-mail: dsommers@cmht.com or rsmits@cmht.com or visit the firm's Website: www.cmht.com SCHERING-PLOUGH CORPORATION: Kaplan Fox Files Securities Suit in NJ ------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP lodged a class action against Schering- Plough Corporation (NYSE:SGP) and certain of the Company's officers and directors in the U.S. District Court for the District of New Jersey. The suit is brought on behalf of all persons or entities that purchased the Company's securities between March 2, 2000 and February 15, 2001 inclusive. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint also alleges that during the class period, the Company issued three materially false and misleading earnings releases highlighting the Company's success and continued growth. These releases failed to disclose material facts, concerning manufacturing difficulties at certain plants; and, that given the Company's manufacturing difficulties, the FDA would force the Company to curtail its operations and delay FDA approval of a significant and new product, desloratadine. In February 2001, the Company finally disclosed the extent of the problems it was experiencing with its manufacturing practices and announced that it would be reducing sales and earnings expectations for the first quarter of 2001 and for the full-year 2001. Additionally, the Company reported that the FDA was requiring that all of its manufacturing deficiencies be resolved before the FDA would grant final approval of desloratadine. As a result, in after-hours trading, the Company's stock price sank to $38.75 per share after closing earlier in the day at $48.32. On February 16, 2001, the day after the announcement, the stock opened trading at $38.25. For more details, contact Frederic S. Fox, Hae Sung Nam, Adam Walsh by Mail: 805 Third Avenue - 22nd Floor New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E-mail: mail@KaplanFox.com or visit the firm's Website: www.kaplanfox.com STEVE MADDEN: Kaplan Fox Commences Securities Suit in E.D. New York ------------------------------------------------------------------- Kaplan Fox and Kilsheimer LLP initiated a securities class action on behalf of all purchasers of Steven Madden Ltd. (Nasdaq: SHOO) common stock between November 3, 1999 and June 20, 2000, inclusive. The suit, filed in the United States District Court for the the Eastern District of New York, alleges that the Company and Chief Executive Officer Steven Madden violated the Securities Exchange Act of 1934. The lawsuit charges that the defendants failed to disclose material adverse facts about the Company and defendant Madden. Specifically, defendants failed to disclose, among other things, that (1) defendant Madden had participated in a scheme to manipulate the market for various initial public offerings of common stock of certain companies and that he had done so in conjunction with Stratton Oakmont - a securities brokerage that was censured and fined by the NASD and SEC for securities fraud and is now defunct; (2) that the Company's projections of future success were lacking in a reasonable basis at all times because defendant Madden's ability to continue in his roles at the Company were subject to increased risk and uncertainty given his involvement in the aforementioned scheme; and (3) that, given defendant Madden's involvement in the aforementioned scheme, his ability to continue to operate and direct the operations of the Company were subject to increased and heightened risk in that he would be unable to continue in his roles at the Company and, accordingly, the Company's operations would be adversely affected. On June 20, 2000, when news of defendant Madden's arrest for his alleged involvement with a massive securities fraud reached the securities markets, the Company's common stock fell from 13 1/8 to 11 3/16 before trading was halted on the NASDAQ. For more information, contact Frederic S. Fox, Brigid T. Kavanaugh, Donald R. Hall by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E-mail: mail@KaplanFox.com or visit the firm's Website: www.kaplanfox.com TIFFANY'S BILLIARDS: North Raleigh Sportsbar Faces Bias Allegations ------------------------------------------------------------------- Four African-American women recently filed a class-action lawsuit, alleging that Tiffany's Billiards Sportsbar & International Restaurant in North Raleigh discriminated against them last month, The News & Observer recently reported. The four plaintiffs are Angela Merritt, Angela King, Teresa Manns and Stephanie Cortes, all from Raleigh. They allege they were singled out because one of the owners, who was acting as manager and bartender when they ordered their drinks, assumed they would not tip because of their race and raised the cost of their drinks in accordance with the bar's posted non-tipping policy. The sign setting forth this policy, reads, "Non-tippers please notice: There is an automatic $.50 gratuity added per drink ordered or 15% added to your total bill." Merritt said that the owner serving the plaintiffs said that he was going to get their order, "but I'm gonna charge you a 15 percent tip on your individual order because your people don't tip." Merritt said the owner/server refused to give her a refund of the $9.50 for the drinks when she told him she was no longer comfortable in the Sandy Forks Road establishment and wanted a return of the monies spent. Jimmy Nguyen, who is the owner who served the four plaintiffs, told The News and Observer that he did not recognize the women as regulars, but he would not say how he determined they were non-tippers. He declined repeated requests to speak further on the matter, referring to the advice of his former attorneys, Brown Crump Vanore & Tierney of Raleigh. Tommy Tran, a co-owner of Tiffany's, called the matter a "misunderstanding" and agreed to an interview at Tiffany's with the reporting newspaper. He, however, declined to appear at the appointed time. Merritt's lawyer is Judy Tseng of the law firm Kurtz & Blum in Raleigh, whose family is originally from Taiwan. Tseng says she sees this as an unfortunate incident that reinforces the stereotype of friction between Asian-American business owners and African-American customers. Nguyen is from Du Nang, located in central Vietnam. The plaintiffs have not yet set the amount of compensation they are seeking. Merritt said she is more concerned with how Nguyen will act in the future. "I care more about him learning his lesson and getting some kind of diversity training or something to get rid of that mindset," said Merritt. TOBACCO LITIGATION: Witnesses Testify For Plaintiffs' Case in WV Suit --------------------------------------------------------------------- Lawyers for West Virginia smokers have nearly completed their arguments in the landmark class action suit against four national tobacco companies. 250,000 healthy smokers filed the suit, asserting the tobacco industry did not exert effort to create a "safer" cigarette and seeking that the companies pay for annual medical monitoring tests. Defendants in the suit are Philip Morris, R.J. Reynolds, Brown & Williamson and Lorillard tobacco companies. The lawyers presented both live witnesses and taped depositions in their attempt to prove that the tobacco industry created a defective product that has increased their risks for disease. Bethesda consultant Jack Henningfield showed jurors how cigarettes are constructed, and how cigarette smoke circulates in the body, with nicotine traveling to the heart and brain through red blood cells. He also contended that tobacco executives considered other "nicotine- delivery" systems such as sprays and chewing gums but ultimately returned to cigarettes referring to them as "pharmacologically effective and cheap" Pulmonologist Dominic Gaziano testified that the smoking risks do not vanish if a smoker quits and that the tests proposed by the plaintiffs can make treatment more effective by detecting disease early. Former Philip Morris director of applied research William Farone testified next, saying that the Company did not conduct biological testing on cigarettes that were sold to consumers. Finally, university professor Dr. David Burns said that medical monitoring was necessary because even smokers who smoked for just five years could have latent tumors that could develop several years later. The plaintiffs want a medical monitoring program to test for lung cancer and chronic obstructive pulmonary disorders like emphysema. The program would provide spirometry tests for lung function beginning at age 40, a second test at age 45 and a test every two years thereafter. The plaintiffs also want the tobacco industry to pay for yearly spiral or helical computed tomography scans beginning at age 50 to test for lung cancer. Experts have testified that both tests can catch disease at its earliest stages. However, these experts also admitted that the tests are not part of any medical monitoring program accepted by health or medical organizations the way a mammogram has been accepted as an acceptable screening program for breast cancer, for example. The tobacco industry has contended that developing a "safe" cigarette that people are willing to buy and smoke was impossible. They have said that if the plaintiffs wanted to decrease their risks of developing a smoking-related illness, they should just quit the habit. The witnesses also have admitted that quitting smoking is the best way to reduce the risks of smoking. The trial is the first medical monitoring class action lawsuit against the tobacco industry in the country to make it to the trial stage. The case first began in January but after a mistrial was ordered, the trial started over in September with a new jury. VARI-L COMPANY: Kaplan Fox Initiates Securities Suit in Colorado Court ---------------------------------------------------------------------- Kaplan Fox and Kilsheimer LLP commenced a securities class action against Vari-L Company Inc. (Nasdaq: VARL) and certain of its officers and directors. The suit was filed in the United States District Court for the District of Colorado on behalf of purchasers of the Company's common stock between December 17, 1997 and July 6, 2000, inclusive. The lawsuit charges the Company and certain of its officers, with violations of the federal securities laws by issuing materially false and misleading financial statements. On May 17, 2000, Vari-L revealed it would be restating its previously reported financial results for the period ended December 31, 1997, and potentially other periods as well. In addition, during the class period insiders sold massive amounts of stock, reaping substantial proceeds as a result of the inflated value of Company's stock. After the Company's announcement, Company shares fell roughly $5 per share from their May 16 close of $16.188, to close at $11.25 on May 22, 2000, a drop of roughly 35%, as the market fully absorbed the impact of these disclosures. For further information, contact Frederic S. Fox, Christine M. Comas, Hae Sung Nam by Mail: 805 Third Avenue - 22nd Floor New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E- mail: mail@KaplanFox.com or visit the firm's Website: www.kaplanfox.com WESTPOINT STEVENS: Milberg Weiss Initiates Securities Suit in N.D. GA --------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP commenced a securities class action on behalf of purchasers of WestPoint Stevens Inc. (NYSE:WXS) common stock during the period between Feb. 10, 1999 and Oct. 10, 2000. The suit, filed in the United States District Court for the Northern District of Georgia, charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that to boost Company stock on February and April 1999, defendants caused the Company to report better-than-expected 4thQ 98 and 1stQ 99 results. The Company also assured investors and analysts that: (1) its business remained extremely strong, demand for all of its products was good, its inventories were under control; and (2) that it remained postured to achieve revenue and EPS growth of 5% and 20%, respectively, going forward and was increasing its 1999 and 2000 EPS forecasts to $1.82-$1.85 and $2.10-$2.20, respectively. Based on these better-than-expected 1st Quarter 1999 results and defendants' positive commentary on the Company, the Company stock advanced to its class period high of $37-9/16 from $25-3/8 at the beginning of the class period. When the Company reported its 2nd Quarter and 3rd Quarter 1999 results, it again assured investors that its business was very strong. It also told investors that while its inventories had increased, especially towels, the increased towel inventory did not pose any significant risk of loss to the Company because it was basic solid colored goods with core value. The Company continued to forecast strong revenue and EPS growth for the balance of 1999 and 2000, including 2000 EPS of $2.10-$2.20. On June 2000, defendants announced that: (i) the Company's Eight-Point Program would ensure strong performance in the future; (ii) momentum was building for strong prospects throughout 2000; (iii) inventory was now on target to below $400 million by year-end; and (iv) the Company was still on track to report EPS of $2.08+ and $2.40 in 2000 and 2001, respectively As a result, Company stock stabilized in the $10-$15 range through the remainder of the class period. However, by September 2000, defendants allegedly knew that it would be impossible for them to continue to conceal the severe deterioration in the Company's business any longer. They allegedly realized that once the Company reported its 3rd Quarter 2000 results, it would be apparent to the market how horrible the Company's business was actually performing and the stock would collapse. In an alleged attempt to cause the stock to make a "soft landing" for what they knew would be horrible 2000 results, defendants announced that 3rd Quarter 2000 results would be level with 3rd Quarter 1999 results. In the same press release the Company also announced a new licensing agreement with Disney. The Company stock declined only slightly on this news to $11-9/16 due to defendants' positive statements. When the Company revealed that 3rd Quarter 2000 sales would actually decline 3% from the prior year, with earnings of only $0.55-$0.60 per share, lower than prior guidance. On this news, Company stock declined to below $9 per share. For more details, contact William Lerach or Darren Robbins by Phone: (800) 449-4900 by E-mail: wsl@milberg.com or visit the firm's Website: www.milberg.com/westpoint. ********* 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, Aurora Fatima Antonio 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. 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