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/raid1/www/Hosts/bankrupt/CAR_Public/011120.mbx C L A S S A C T I O N R E P O R T E R Tuesday, November 20, 2001, Vol. 3, No. 227 Headlines AIRNET COMMUNICATIONS: Bernstein Liebhard Files Securities Suit in NY APROPOS TECHNOLOGY: Berger Montague Lodges N.D. CA Securities Suit AUTOBYTEL INC.: Sued For Federal Securities Violations in S.D. New York BAAN COMPANY: Shareholders Sue For Securities Acts Violations in DC CARGILL INC.: Black Employees Allege Racial Discrimination in MN Suits CHEEKTOWAGA CENTRAL: Norfolk Southern Sues Over Property Assessments ESC MEDICAL: Parties Drafting S.D. NY Securities Suit Settlement FATBRAIN.COM: Lovell Stewart Initiates Securities Suit in S.D. NY I2 TECHNOLOGIES: Asks Texas Court To Dismiss Pending Securities Suits INAMED CORPORATION: CA Suits Relating To Breast Implants Dismissed JOHNSON & JOHNSON: New Jersey Minority Employees Sue For Racial Bias LIBERTY SATELLITE: Acquisition By Liberty Media Spurs Securities Suits LIQUID AUDIO: Shareholders Sue For S.D. NY Securities Act Violations LOS ANGELES: Police Union Charges LAPD Blacklists Officers LUCENT TECHNOLOGIES: Squitieri Fearon Files Securities Suit in N.D. NJ NANOPHASE TECHNOLOGIES: Lionel Glancy Files Securities Suit in N.D. IL OKLAHOMA STATE: Suit Over Retirement Benefits Could Cost $44 Million PACIFICARE HEALTH: Sued For Unfair Business Practices In San Francisco MICROSOFT CORPORATION: Judge Refuses To Certify Discrimination Suit NEXTCARD INC.: Kaplan Fox Initiates Securities Suit in N.D. California PACIFICARE HEALTH: Court Dismisses Two Securities Suits In C.D. CA PREDICTIVE SYSTEMS: Schiffrin Barroway Files S.D. NY Securities Suit PROLONG INTERNATIONAL: Settles California Suits By Issuing 1.4M Shares PSS WORLD: Flurry Of M.D. FL Securities Suits "Without Merit" PURDUE PHARMA: Judge Refuses Transfer of $5.2B Lawsuit To State Court RADIO ONE: Bernstein Liebhard Commences Securities Suit in S.D. NY REPEATER TECHNOLOGIES: Wolf Haldenstein Files Securities Suit in NY RAFFLES TOWN: Founding Members Sue Singapore Club For False Prospectus SOUTH AFRICA: Suit For Disabled Causes Social Grants Reinstatement STORAGE USA: Denies Pending TN Securities Suits' Allegations TRANSMETA CORPORATION: Schiffrin Barroway Files Securities Suit in NY THORN AMERICAS INC.: To Vigorously Oppose Consumer Suits in New York UNITED STATES: Changes In Managing Indian Trust Fund Money Ordered VIXEL CORPORATION: Schiffrin Barroway Files Securities Suit in S.D. NY ZIFF-DAVIS INC.: Settlement For Securities Suits Approved By DE Court ZIFF-DAVIS INC.: Agrees To Settle Securities Suit in S.D. New York ********* AIRNET COMMUNICATIONS: Bernstein Liebhard Files Securities Suit in NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf of purchasers of the securities of Airnet Communications Corporation (NASDAQ: ANCC) between December 6, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company and: (1) Salomon Smith Barney, Inc., (2) Volpe Brown Whelan & Co., (3) Hambrecht & Quist, LLC, (4) R. Lee Hamilton, Jr., and (5) Gerald Y. Hattori. 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 December 1999, Airnet commenced an initial public offering of 5,500,000 of its shares of common stock, at an offering price of $14 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the pospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriters 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 they agreed to allocate 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 details, contact Ms. 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 by E-mail: ANCC@bernlieb.com or visit the firm's Website: www.bernlieb.com APROPOS TECHNOLOGY: Berger Montague Lodges N.D. CA Securities Suit ------------------------------------------------------------------ Berger & Montague PC filed a class action suit against Apropos Technology, Inc. (NASDAQ:APRS) and its principal officers and directors in the United States District Court for the Northern District of Illinois. The suit was filed on behalf of all purchasers of Company stock in or traceable to its February 17, 2000 initial public offering or in the open market from February 17, 2000 through April 10, 2001. This is the only action filed on behalf of purchasers of Apropos during the period February 17, 2000 through April 10, 2001. The class period in previously filed actions ends on May 15, 2000. The complaint alleges that pursuant to the registration statement in February 2000, the Company commenced an initial public offering of 3.7 million of its shares of common stock at an offering price of $22 per share. Apropos and its principal officers and directors allegedly violated Sections 11 and 15 of the Securities Exchange Act of l933 by making material misrepresentations in the prospectus and registration statement the uses to which it would put the money raised in the IPO. Specifically, the prospectus claimed that to achieve its strategic goals the money would be used for research and development to enhance the Company's products and for marketing and sales. In fact, a large part of the money raised was simply held as cash or short-term investments. Accordingly, Apropos' statements about its goals and the uses for the proceeds of the IPO were false and misleading. The complaint also alleges that the registration statement and prospectus for the IPO contained material misrepresentations and omissions regarding the role that defendants, Brady and Bach, played in the Company at the time of the IPO. Specifically, the prospectus misrepresented that these two were both active members of the executive management team and Apropos' most senior technology officers. In July 1999, Brady failed in an effort to have the Company's Board of Directors oust defendant Kerns from the company. As a result, Brady packed up his office and stopped reporting for work, effectively ending his tenure as Chief Technology Officer. He had no involvement in the day-to-day affairs of the Company, nor was he involved in the development of its business and technology. At about the same time, Bach also fell out of favor with Kerns. Kerns limited Bach's role in Apropos to being in charge of two employees responsible for designing and implementing customer interfaces. At the time of the IPO, the Company's technology and development departments were in disarray. None of these material facts were disclosed to the investing public in the IPO documents. As a result of the misrepresentations, the investing public was misled. On April 10, 2001 share price declined to $2.98 from a class period high of $70 near the beginning of the class period. For more details, contact Sherrie R. Savett, Carole A. Broderick, Elizabeth Fox or Kimberly A. Walker by Mail: 1622 Locust Street Philadelphia, PA 19103 by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail: InvestorProtect@bm.net or visit the firm's Website: www.bergermontague.com AUTOBYTEL INC.: Sued For Federal Securities Violations in S.D. New York ----------------------------------------------------------------------- Autobytel, Inc. will vigorously oppose several securities class actions filed in the United States District Court, Southern District of New York alleging federal securities violations. The suits names as defendants, the Company, certain of its current directors and officers and underwriters involved in the Company's initial public offering. The suits similarly allege violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Specifically, the suits allege that: (1) the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in Exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre-determined prices; and (2) the prospectus for the Company's initial public offering was false and misleading in violation of the securities laws because it did not disclose these arrangements. The suits have been consolidated into a single action, and Autobytel is not required to respond to plaintiffs' claims before a consolidated complaint is filed. The Company believes that it has meritorious defenses to the complaints. BAAN COMPANY: Shareholders Sue For Securities Acts Violations in DC ------------------------------------------------------------------- Baan Company NV faces a consolidated securities class action commenced in October 1998, in the United States District Court for the District of Columbia, for alleged violations of federal securities laws. The suit arose from seven lawsuits brought in the same court, similarly alleging that the Company made purportedly false and misleading statements about its operations. The suits were later consolidated. In June 2000, the court dismissed for lack of subject matter jurisdiction the claims of those plaintiffs who neither reside in the United States nor made their stock purchases in the United States, and the litigation is proceeding with respect to the remaining claims. The plaintiffs also moved to certify a class including (subject to certain exceptions) of all purchasers of Baan's securities between January 28, 1997 and October 12, 1998, who: (1) are current residents of the United States, (2) were residents of the United States at the time of such purchase, or (3) purchased such securities within the United States, including securities purchased on the NASDAQ National Market System. The briefing on this motion is still pending. Baan denied the suit's allegations. CARGILL INC.: Black Employees Allege Racial Discrimination in MN Suits ---------------------------------------------------------------------- Cargill Inc., the agricultural business that is one of the world's largest private companies, is facing a discrimination class action, The Wall Street Journal and New York Times News Service reported recently. The suit was filed in the U.S. District Court in Minneapolis on behalf of an estimated 1,000 blacks who work or have worked in salaried positions as managers or professionals in the last six years. The suit, commenced by 25 current and former African-American employees, charged the company with widespread racial discrimination. This is the second time the Company faces accusations of racial discrimination. In 1984, it settled for $1.2 million a discrimination class action brought by the U.S. Equal Employment Opportunity Commission. In their suit, the employees point to company-wide evaluation systems that they contend "favor employees who `look and talk' like Cargill's white executives." The plaintiffs allege that these systems help determine pay and promotions at Cargill. Lawrence Schaefer, lawyer for the plaintiffs, asserts the evaluation systems are "so poorly constructed and poorly operated," that they place a lower value on work done by black employees. Further, many of the employees in the lawsuit allege that the systems have led to their having been denied promotions, to unwarranted dismissals and to lower pay for the African-American employees. Cargill operated under a court-supervised consent decree that set goals for hiring and promoting women and African-Americans as a result of the 1984 suit, according to a recent Wall Street Journal report. The new suit alleges that the Company continued in a pattern of discrimination after the consent decree expired in August 1989, thereby carrying forward its long tradition of discrimination. Cargill executives, however, deny any discrimination has taken place and state the Company is committed to a diverse workplace and defend its evaluation systems. "They are based on objective, job-related criteria," said Nancy Siska, a corporate Vice President. Cargill would not discuss the number of black senior executives it employs, but said there was a lot of diversity among its senior managers at roughly 90 business units in the United States and around the world. Robert Lumpkins, a Vice Chairman for Cargill, made a sweeping denial of racial discrimination, saying "We don't have systems that discriminate; we don't have policies that discriminate and we don't have a culture that discriminates." The 25 current and former employees suing the company represent "a wide range of circumstances," he said, including some whose performance was "objectively unsatisfactory," The New York Times News Service recently reported. Addressing the period subsequent to the consent decree, Lumpkins said, "We met all the terms of the agreement in 1985, (and) since then, the company has invested in a broad set of initiatives to create opportunities for minorities." He added that Cargill's tracking system is similar to those in many large corporations and objectively measures job-related skills and performance. He says this ".creates a system based on merit that gives equal opportunity." CHEEKTOWAGA CENTRAL: Norfolk Southern Sues Over Property Assessments -------------------------------------------------------------------- Norfolk Southern Railroad has initiated a federal class action against The Cheektowaga Central School District and several municipalities and organizations regarding property assessments. Tom DeBoy, the District's attorney, told the Cheektowaga Times that it is difficult to determine what Norfolk Southern's complaint is with the District. However, he said that he discovered from the Town Assessor's Office that there are two parcels of property potentially affected by the suit. The district owns properties located near the Amtrak Station in Depew with assessed value of nearly $7 million. Deboy believes the railroad may have found the assessed value too high. "I won't even speculate as to what portion of that nearly $7 million that they're seeking to reduce," added DeBoy. The first group named in the suit was the New York State Office of Real Property Services, who has significant control over the maximum amounts that can be taxed and the set the value, Deboy said. The complaint says the office is overvaluing the properties, added DeBoy. The lawsuit was also brought up at the October 29 joint meeting of the Cheektowaga School Districts. The District has also been named in another lawsuit filed by the CSX Railroad. "Because the decision made in Albany has an effect across the State explains why this was ideal...to bring all the parts together (in one suit)," said DeBoy. DeBoy recommended the Board allow him to monitor the lawsuit before taking action. He added that prior to September, there was "talk" of a legislative solution to the CSX lawsuit. ESC MEDICAL: Parties Drafting S.D. NY Securities Suit Settlement ---------------------------------------------------------------- ESC Medical Systems, Inc. is working with plaintiffs in a consolidated securities class action to draft a formal agreement to settle the suit for an undisclosed amount. The suit arose from a number of suits filed in the fall of 1998 in the United States District Court for the Southern District of New York. In July 1999, a consolidated amended complaint was filed naming the Company, subsidiary Laser Industries, Inc., Salomon Smith Barney Inc., and several current and former directors and officers as defendants. The suit alleges: (1) irregularities in the way in which the Company reported its financial results and disclosed certain facts throughout 1997 and 1998; (2) "tipping" of non-public information to Salomon Smith Barney Inc. in September 1998. In December 1999, ESC moved to dismiss the consolidated amended complaint. Later in August 2000, the Court entered an order dismissing the claim against the Laser Industries director and officer defendants and denying the remaining dismissal counts. The final settlement is subject to negotiation and execution of the formal agreement. In addition, the final agreement must be approved by the court, a process which will likely take several months. FATBRAIN.COM: Lovell Stewart Initiates Securities Suit in S.D. NY ----------------------------------------------------------------- Lovell & Stewart, LLP commenced a securities class action on behalf of all persons and entities who purchased, converted, exchanged or otherwise acquired the common stock of Fatbrain.com, Inc. (formerly NasdaqNM:FATB) between November 19, 1998 and November 16, 2000, inclusive. The lawsuit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder. The action, pending in the U.S. District Court for the Southern District of New York, alleges that the Company (which is not named as a defendant) and certain of its officers and directors at the time of its IPO violated the federal securities laws. The defendants allegedly issued and sold Fatbrain.com stock pursuant to the initial public offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriters: (1) Banc of America Securities LLC, (2) US Bancorp Piper Jaffray Inc., (3) Needham & Company, Inc., (4) FleetBoston Robertson Stephens, Inc., (5) Chase H&Q (formerly known as Hambrecht & Quist LLC), (6) Morgan Stanley Dean Witter & Co., Inc. allocated Company shares to customers at the IPO price of $10.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $10.00, the defendant underwriters' brokerage customers allegedly 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 Fatbrain.com stock rocketed upward was allegedly intended to drive share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying Company stock at the $10.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $24.50 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant 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 and the registration statement contained material misstatements regarding the commissions that the underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above. For more information, contact Lovell & Stewart by Phone: (212-608-1900) or visit the firm's Website: www.lovellstewart.com I2 TECHNOLOGIES: Asks Texas Court To Dismiss Pending Securities Suits --------------------------------------------------------------------- i2 Technologies, Inc. has filed a motion to dismiss the consolidated securities class action filed against them in the United States District Court for the Northern District of Texas, Dallas Division. The suit arose from several class actions commenced early this year against the Company and certain of its officers and directors. The cases were later consolidated, and in August 2001, plaintiffs filed a consolidated amended complaint, that charged the defendants with violating the federal securities laws. The suit specifically alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by making purportedly false and misleading statements concerning the characteristics and implementation of certain of i2 software products. The consolidated amended complaint seeks unspecified damages on behalf of purchasers of i2 common stock during the period between May 4, 2000 and February 26, 2001. INAMED CORPORATION: CA Suits Relating To Breast Implants Dismissed ------------------------------------------------------------------ The United States District Court for the Northern District of California dismissed two class action suits against breast implant manufacturer, Inamed Corporation. The suits were commenced in August 2000 titled Kerr et al. v. Inamed Corp. et al. and Vaernes v. Inamed Corp. et al., also naming other breast implant manufacturers as defendants. The suits allege personal injury claims arising out of the development and sale of Trilucent breast implants, which were principally sold outside the U.S., although clinical trials were conducted in the country. Both suits seek "medical monitoring" and monetary damages. The Kerr suit was filed on behalf of overseas implant patients, while the Vaernes action was filed on behalf of U.S. clinical trials patients. In June 2001, the court dismissed the Kerr case on the grounds of forum non conveniens, or lack of a convenient forum. As a condition of this dismissal, Inamed and several of the other defendants agreed to litigate any claims brought by plaintiffs Crane, Kerr and Campbell in the United Kingdom. The Kerr plaintiffs have appealed the court's decision to dismiss the suit for forum non conveniens. In August 28, 2001, the court also dismissed the Vaernes action for failing to state a claim against the Company upon which relief could be granted. The Court entered a similar order with respect to other defendants in the action and granted the plaintiff leave to file an amended complaint against the defendants, including the company. Last month, the plaintiff filed an amended complaint, but did not include any claims against Inamed. Consequently, the Company is not presently a party to the Vaernes suit. JOHNSON & JOHNSON: New Jersey Minority Employees Sue For Racial Bias -------------------------------------------------------------------- Two employees of Johnson & Johnson filed a lawsuit in U.S. District Court in Newark, New Jersey, representing all of the Company's African American and Hispanic white collar employees. The suit alleges that the health care giant discriminated against hundreds of minority employees by not promoting them or paying them what whites were paid in comparable positions, reported the New York Times News Service recently. The two employees named as plaintiffs in the case are Linda Morgan, an African-American woman, who is a manager at Ethicon, a Johnson & Johnson subsidiary in Somerville, New Jersey; and Nilda Gutierrez, a Hispanic woman who works as a recruiting consultant for Johnson & Johnson. Morgan has worked for the Company since 1979 and claims she has been repeatedly denied promotions, despite positive performance evaluations. Morgan said she had asked her white supervisors for a promotion in December, but despite qualifications that she said were equal or superior to those of five white employees considered for the job, she said she did not even receive an interview. Gutierrez, who has a bachelor's degree, claimed she was earning far less than white employees in comparable positions. Gutierrez was hired to a full-time position in 1997 at a salary of $40,000 and her current salary is $41,400. According to the suit, Johnson & Johnson hired a white female recruiter in 1999, with no college degree, and paid her about $65,000. The lawsuit claims that the Company's practice of not posting job openings for high-level positions results in "scores of jobs being filled through an informal, behind-the-scenes process in which predominantly white managers handpick favored white candidates." The lawsuit claims that Johnson & Johnson has known, since at least 1997, that its managers were discriminating against black and Hispanic employees but has done little about it. The lawsuit further claims that the Company's 15-member Board of Directors, which includes one black executive and no Hispanics, is partially at fault for what it calls a "company-wide pattern of discrimination." The suit contends that the board does not require senior management to report to it on whether the Company is providing equal opportunities to all employees. According to the complaint, discrimination at Johnson & Johnson begins when minority employees are hired and given lower starting salaries than white employees with equal or lesser qualifications. The bias continues, the lawsuit alleges, when minority employees are not promoted or given raises comparable to those awarded to white colleagues in similar positions. LIBERTY SATELLITE: Acquisition By Liberty Media Spurs Securities Suits ---------------------------------------------------------------------- Liberty Satellite and Technology, Inc. faces two class actions filed in the U.S. District Court in Arapaho County, Colorado and eight suits filed in the Court of Chancery in New Castle County, Delaware. The suits were commenced after parent company, Liberty Media Corporation, announced last month its offer to acquire by merger all the issued and outstanding shares of the Company's common stock that Liberty Media does not already own. In the proposed merger, each share of Company common stock would be exchanged for 0.09 of a share of Liberty Media Series A common stock. The suits names Liberty Media, the Company and members of the board of directors of the Company (and in one case certain officers of the Company) as defendants. The suits allege various breaches of duty and other claims in connection with the proposed merger. The plaintiffs generally seek preliminary and permanent injunctive relief, and if the transaction is consummated, an order rescinding the transaction or damages. Liberty Satellite believes that the pending suits are premature and without merit. LIQUID AUDIO: Shareholders Sue For S.D. NY Securities Act Violations -------------------------------------------------------------------- Liquid Audio, Inc. says it has meritorious defenses to the securities class actions pending in the United States District Court for the Southern District of New York. The suits were commenced in July 2001 against the Company, certain of our officers and directors and three underwriters in our initial public offering. The suits allege: (1) violations of Section 11 of the Securities Act of 1933, as amended against all defendants; (2) violation of Section 15 of the Securities Act against the Individual Defendants; and (3) violations of Section 12(a)(2) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against the underwriters. The suits were filed on behalf of purchasers of Liquid Audio's common stock between July 8, 1999 and December 6, 2000. These lawsuits are currently pending for coordinated pretrial proceedings. There have been no significant developments yet in these lawsuits. LOS ANGELES: Police Union Charges LAPD Blacklists Officers ---------------------------------------------------------- The Los Angeles Police Protective League recently filed a lawsuit against the Los Angeles Police Department and Chief Bernard Parks, in Superior Court, charging the department's leadership with creating a blacklist of officers it deems "unpromotable," according to a recent Associated Press report. The lawsuit names two officers, Darryl Brown and Rodney Gregson, as plaintiffs and submits class-action allegations on behalf of all past, present and future officers who have been denied promotion. The lawsuit, which seeks unspecified damages, further alleges that: (1) candidates for promotion are subjected to evaluations beyond those designated by the Civil Service Commission and department policy; (2) that the candidates are reviewed by confidential boards of inquiry that are influenced by Parks - boards that have been converted by Parks into "backroom tribunals," which are not authorized under the city charter. The lawsuit says the dispute arose when the promotional applications of the two lead plaintiffs were subjected to one of these confidential boards. "The analogy to the studio `blacklists' of the forties and fifties is a fitting comparison," said Devonne L. Midson, attorney for the League. "The officers wake up one day to find that their careers have essentially been ruined, and they have no way of finding out why or challenging the decision-makers." Officer Don Parks, a police spokesman, declined to comment, saying the Department does not discuss pending litigation. LUCENT TECHNOLOGIES: Squitieri Fearon Files Securities Suit in N.D. NJ ---------------------------------------------------------------------- Squitieri and Fearon LLP initiated a securities class action on behalf of purchasers of Lucent Technologies, Inc. (NYSE: LU and LU7G06, LU5K08, LU6A28, LU6C29) debt securities during the period December 21, 2000 through March 27, 2001. The suit, filed in the United States District Court for the Northern District of New Jersey, charges the Company and these individuals with violating federal securities laws: (1) Henry Schacht, CEO and Chairman, and (2) Deborah Hopkins, who was Lucent's Chief Financial Officer The defendants allegedly misrepresented and concealed material facts concerning the Company's operations, including the state of its Agere business and vendor financing program. The suit alleges that defendants failed to disclose that Lucent's vendor financing program had crippled its financial condition and that their efforts to refinance their debt and to realize the highest possible price for the Agere business were in jeopardy. The plaintiff purchased the Lucent 7.25% Notes due July 15, 2006 and alleges that he was damaged by defendants' misconduct. Plaintiff brings the case on behalf of purchasers of: (i) the Company's 7.25% notes due July 15, 2006; (ii) the Company's 6.9% Notes due July 15, 2001, (iii) the Company's 6.50% Debentures due January 15, 2028; (iv) the Company's 5.50% Notes due November 15, 2008; and (v) the Company's 6.45% Debentures due March 15, 2029 The plaintiff claims that defendants made misrepresentations of material fact in these public statements: (a) the December 21, 2000 statement that "Agere is not suffering from any of the problems that Lucent's service provider business is." (b) the January 24, 2001 press release announcing a "seven-point restructuring plan" that failed to disclose the substantial decline in Agere's operating results or the adverse impact on Lucent of its vendor financing plan; (c) the February 7, 2001 press release stating that Lucent's "fastest growing unit (Agere) will" raise $7.4 billion in its upcoming IPO. Defendants failed to disclose that Lucent's "fastest growing unit" was in serious trouble and that Agere's IPO could not raise anywhere near $7.4 billion; (d) the February 7, 2001 representation that the Agere IPO "will" raise as much as $7.4 million; (e) the February 13, 2001 statement by Lucent's spokesperson assuring investors that Lucent no longer had any liquidity issues; and (f) the February 20, 2001 statements that Lucent was "confident that we will complete the financing on schedule by February 22, 2001." For more details, contact Stephen J. Fearon, Jr. by Mail: 521 Fifth Avenue, 26th Floor New York, NY 10175 or by Phone: 1-800-432-8174 (toll-free) or 646-487-3049 NANOPHASE TECHNOLOGIES: Lionel Glancy Files Securities Suit in N.D. IL ---------------------------------------------------------------------- Lionel Z. Glancy commenced a securities class action on behalf of all persons who purchased securities of Nanophase Technologies Corporation between April 5, 2001 and October 24, 2001, inclusive. The suit, pending in the United States District Court for the Northern District of Illinois, charges the Company and certain of its officers and directors with violations of federal securities laws. Among other things, the suit claims that defendants' material omissions and the dissemination of materially false and misleading statements regarding the nature of the Nanophase's revenues and earnings caused its stock price to become artificially inflated, inflicting enormous damages on investors. For further details, contact Michael Goldberg by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, CA 90067 by Phone: (310) 201-9150 or (888) 773-9224 (toll-free) by Fax: (310) 201-9160 or by E-mail: info@glancylaw.com. OKLAHOMA STATE: Suit Over Retirement Benefits Could Cost $44 Million -------------------------------------------------------------------- Resolution of a class action suit filed by Oklahoma State University (OSU) faculty members against University officials and Oklahoma Teacher Retirement System could cost the University $44 million. OSU faculty filed the suit last week in Oklahoma County District Court after University officials and the retirement system cut their retirement benefits. Charles Edgley, chairman of the OSU Faculty Council, told Associated Press recently that the benefits were lost when the state Legislature restructured the system as it was on the brink of insolvency in the mid-1990s. The suit alleges that the state improperly imposed caps on salary levels used to determine retirement benefits, and broke employment contracts when OSU stopped contributions to TIAA-CREF. TIAA-CREF is a "portable" investment plan somewhat like a 401(k). The state fund is more like Social Security, paying out a defined benefit based on salary and years of service. Those contributions were shifted into the Oklahoma Teacher Retirement System, a change that left faculty with far less retirement pay, said OSU chemistry Professor Mark Rockley. "With the average faculty member, we're talking a difference of $100,000," Rockley said. Edgley said he believes the legal action is "not necessarily unfriendly" toward OSU administration and that he believes the dispute can be settled amicably. "We're meeting with (the administration) on the 28th with our attorneys present," he said. In a statement, OSU President James Halligan said officials are trying to figure out how the concerns of people who have been most adversely affected by the situation can be addressed. "We share the concern of the faculty and staff about their retirement system, and we intend to work together to resolve their concerns," Halligan said. Tom Beavers, Executive Secretary of the Oklahoma Teacher Retirement System, disputed the allegations, saying "We will defend ourselves vigorously.They're getting more today than they ever would have." PACIFICARE HEALTH: Sued For Unfair Business Practices In San Francisco ---------------------------------------------------------------------- Pacificare Health Systems faces a consumer class action filed in San Francisco Superior Court on behalf of all enrollees in their health care plans other than Medicare and Medicaid enrollees. The suit was commenced in November 1999, against the Company, its California subsidiary, and FHP International Inc. and was later amended, omitting FHP as a defendant and relating to the period from November 2, 1995 to the present. The suit charges Pacificare with violations of California law and the California Consumer Legal Remedies Act by engaging in unfair business acts and false, deceptive and misleading advertising. The suit also alleges that the Company received unjust payments as a result of its conduct. Pacificare asked the court to compel arbitration, which the court denied. The Company promptly filed an appeal regarding this denial, but the California Court of Appeals of affirmed the state court's decision. The Company has filed a petition asking the California Supreme Court to review the Appellate Court's affirmation. The Company vehemently denied suit allegations in a disclosure to the Securities and Exchange Commission. MICROSOFT CORPORATION: Judge Refuses To Certify Discrimination Suit ------------------------------------------------------------------- U.S. District Court Judge Marsha Pechman, in Seattle, recently denied class-action status in a case alleging that Microsoft Corporation discriminates against employees based on race and gender. However, the plaintiffs still will be able to pursue individual discrimination claims under the ruling released by Judge Pechman, according to the Associated Press's recent report. The ruling stems from discrimination cases filed on behalf of Monique Donaldson, Ronald A. Douglas, Landruff E. Trent and Janice Harris. Lawyers for the plaintiffs could not immediately be reached for comment. Microsoft said it was pleased with the ruling and would try to be even more committed to promoting diversity in its work force. The Company also faces separate allegations of race discrimination in a lawsuit filed in January in U.S. District Court in Washington, D.C. NEXTCARD INC.: Kaplan Fox Initiates Securities Suit in N.D. California ---------------------------------------------------------------------- Kaplan Fox and Kilsheimer commenced a securities class action against Nextcard, Inc., 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 Nextcard, Inc. (NASDAQ: NXCD) between March 30, 2000 and October 30, 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 alleges that during the class period, defendants knew but failed to disclose that the Nextcard's financial statements were materially false and misleading and violated GAAP because, among other reasons, defendants: (1) improperly failed to adequately record provisions for NextCard's loan loss reserves; (2) overstated the gains recorded on the securitization of NextCard's credit card receivables; and (3) improperly classified certain losses on loans as "fraud losses" rather than as "credit losses." Because of this improper accounting, the Company's reported earnings for fiscal 1999, 2000, and the first two quarters of fiscal 2001 were materially misstated. The truth was revealed before the market opened on October 31, 2001, when the Company disclosed for the first time that federal bank regulators from the Office of The Comptroller of the Currency and Federal Deposit Insurance Corp. had ordered Nextcard to amend its accounting practices, increase its protection against bad loans, exit certain business lines, and cease certain marketing practices. As a result of the required changes, the Company disclosed that bank examiners had declared it "significantly undercapitalized," according to FDIC guidelines, which means that it will not be able to make most business decisions without the approval of bank regulators and will be restricted in its ability to open new accounts. This news caused the price of Nextcard's stock to plummet drastically from $5.35 per share to $0.87 per share, a one-day decline of 84%. For more information, contact Jonathan K. Levine, Christine Fox, or Laurence D. King, by Phone: 415-336-1238 or visit the firm's Website: www.kaplanfox.com PACIFICARE HEALTH: Court Dismisses Two Securities Suits In C.D. CA ------------------------------------------------------------------ The United States District Court for the Central District of California dismissed two securities class actions pending against managed care provider, Pacificare Health Systems. Shareholders commenced the first suit against the Company and several of its directors and officers on behalf of purchasers of Company stock from February 14, 1997 through November 24, 1997. The suit arose after Pacificare announced in November 24, 1997 that earnings for the fourth quarter of 1997 would be lower than expected. The suit alleged that the Company previously omitted and/or misrepresented material facts with respect to the Company's acquisition of FHP International Corporation and its financial position. Last October 2001, the court dismissed the suit with prejudice and without giving the plaintiffs leave to amend the suit. Shareholders also filed several class actions in November 2000 against Pacificare and several of its present and former directors and executive officers in the same court. The complaints related to the period between October 27, 1999 and October 10, 2000 and charged the Company with making false projections about its financial performance in 2000. The suits were later consolidated in April 2001, and in June 2001, Pacificare filed a motion to dismiss the consolidated complaint. Last month, the court dismissed the complaint but gave the plaintiffs permission to file an amended complaint. The Company denied all allegations in the suit and stated its intention to defend the actions vigorously in a filing with the Securities and Exchange Commission. PREDICTIVE SYSTEMS: Schiffrin Barroway Files S.D. NY Securities Suit -------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action on behalf of purchasers of the common stock of Predictive Systems, Inc. (NASDAQ:PRDS) between October 27, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. 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 October 1999, Predictive commenced an initial public offering of 4,000,000 of its shares of common stock, at an offering price of $18 per share. Subsequently, in March 2000, the Company made a public offering of 3,800,000 shares. In connection with each offering, Predictive filed a registration statement, which incorporated a prospectus with the SEC. The complaint further alleges that the prospectuses were materially false and misleading because they failed to disclose, among other things, that: (i) the underwriters 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 the secondary offering; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate shares to those customers in the IPO and the secondary offering in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For further details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1- 888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com PROLONG INTERNATIONAL: Settles California Suits By Issuing 1.4M Shares ---------------------------------------------------------------------- Prolong International Corporation settled a securities class action and a derivative suit pending since 1998 in the United States District Court in San Diego, California. Company shareholders filed the suit in connection with its acquisition of the assets of EPL Pro-long, Inc. The suits named as defendants, the Company, subsidiaries EPL Pro-long, Inc., Prolong International Corporation, Prolong Super Lubricants, and certain of their former and current officers and directors The suit alleges: (1) breach of contract, (2) certain fraud claims, (3) civil Racketeer Influenced and Corrupt Organizations claims, (4) breach of fiduciary duty, and (5) conversion Under the settlement, Prolong will issue approximately 1,490,500 shares of its common stock to EPL Pro-long, Inc., one-third of these shares are to be distributed to the plaintiff's attorneys and the remaining two-thirds to EPL shareholders. The settlement effectively dismisses all claims against the defendants. The Company stated in a disclosure to the Securities and Exchange Commission that the suit was settled without any admission of wrongdoing or liability on the part of the defendants. Prolong also said that settlement will not have any adverse affect on its financial position or results of operation. PSS WORLD: Flurry Of M.D. FL Securities Suits "Without Merit" ------------------------------------------------------------- PSS World Medical vehemently denied allegations in 10 securities suit filed against it and its former officers and directors in the United States District Court for the Middle District of Florida. The suits are titled: (1) Bordeaux v. PSS World Medical, Inc. et al.; (2) Gold v. PSS World Medical, Inc., et al.; (3) McIntosh v. PSS World Medical, Inc. et al.; (4) Rothbart v. PSS World Medical, Inc. et al.; (5) Schaechter v. PSS World Medical, Inc. et al.; (6) Van Den Haag v. PSS World Medical, Inc. et al.; (7) Rodighiero v. PSS World Medical, Inc. et al.; (8) Foster v. PSS World Medical, Inc. et al.; (9) Weiler v. PSS World Medical, Inc. et al.; and (10) Adams v. PSS World Medical, Inc. et al. The suits were filed on behalf of persons who purchased or acquired PSS' common stock at various times during the period between October 26, 1999 and October 3, 2000. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suits also allege the defendants issued false and misleading statements and failed to disclose material facts concerning the Company's financial condition. The plaintiffs further allege that because of the issuance of false and misleading statements and/or failure to disclose material facts, the price of the PSS' common stock was artificially inflated. Last September 13, 2001, certain plaintiffs filed a motion for consolidation of the above actions and for appointment of lead Plaintiff and lead counsel, which remains pending. PSS labeled the suits "without merit". However, it cannot give the assurance that the litigation will be ultimately resolved on terms favorable to the Company. PSS World Medical, Inc., a Florida corporation, is a specialty marketer and distributor of medical products to physicians, alternate-site imaging centers, long-term care providers, home care providers, and hospitals. PURDUE PHARMA: Judge Refuses Transfer of $5.2B Lawsuit To State Court --------------------------------------------------------------------- The lawsuit against Purdue Pharma will remain in the United States District Court in Big Stone Gap, Virginia, ruled Judge James Jones, the Roanoke Times and World News reported. The suit accused the Company of causing rampant crime and addiction in far Southwest Virginia with its potent painkiller OxyContin. The suit was initially filed in Lee County Circuit Court, but the Company had the case transferred to Big Stone Gap, on the grounds that none of the defendants were from Virginia. Lawsuits involving parties from different states are generally heard in federal court. However, the plaintiffs, hoping to have the case sent back to Lee County, had sought to add as defendant, Physician Access Inc., based in Scott County, Virginia. Physician Access is owned by Dr. Richard Norton, who formerly lived in Kingsport, Tennessee, before being sent to federal prison on fraud charges last year. Purdue Pharma countered this move by arguing that the late addition of a Virginia-based defendant was a sham designed solely to get the case back into state court. "The timing raises a red flag that the plaintiff may be forum shopping," Judge Jones wrote in his opinion, declining to add Physician Access as defendant and also declining to return the case to state court. Company attorney, William Eskridge, also had argued that Dederal Court was the proper venue because the U.S. Food and Drug Administration regulates OxyContin. Plaintiffs' attorney, Emmitt Yeary hoped to try the case in Lee County, one of the areas hardest hit by OxyContin abuse. He said he would pursue the case in Federal Court. "This is a very important case," Yeary said. "This is a very dangerous drug." The lawsuit, which attorneys hope to broaden into a class-action that would represent hundreds of Virginians, claims that Purdue Pharma promoted the drug as a miracle painkiller while failing to warn of its highly addictive side, thereby causing its users to get hooked on the medication. Since 1997, there have been at least 55 fatal overdoses in which the drug's active ingredient was the primary cause of death or a contributing factor, according to the State Medical Examiner's Office. Police say crime in the coalfields has soared as abusers have become addicted. Crushing OxyContin tablets and snorting or injecting the powder has become the method of abuse. The Company replies that it should not be blamed for illegal use of OxyContin, which is a highly effective painkiller when taken as prescribed. The lawsuit claims that some people became addicted after taking the drug exactly as told by their doctors. Laurence Hammack, the writer of the report appearing in the Roanoke Times can be reached at 981-3239 or laurenceh@roanoke.com . RADIO ONE: Bernstein Liebhard Commences Securities Suit in S.D. NY ------------------------------------------------------------------ Bernstein Liebhard and Lifshitz LLP initiated a securities class action on behalf of purchasers of the securities of Radio One, Inc. (NASDAQ: ROIA) between May 5, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company and: (1) Credit Suisse First Boston Corporation, (2) Bear, Stearns & Co., Inc., (3) BT Alex. Brown Incorporated, (4) NationsBanc Montgomery Securities, LLC, (5) Prudential Securities Incorporated, (6) Deutsche Bank Securities, Inc., (7) Bank of America Securities, LLC, (8) BancBoston Robertson Stephens, Inc., (9) Alfred C. Liggins, III, (10) Scott R. Royster, and (11) Catherine L. Hughes. 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 May 5, 1999, Radio One commenced an initial public offering of 6,500,000 of its shares of common stock, at an offering price of $24 per share. On November 12, 1999, it commenced a secondary public offering of 5,400,000 of shares of common stock, at an offering price of $59.25 per share. The Company filed registration statements with the SEC in connection with the offerings, each of which incorporated a prospectus. The complaint further alleges that the prospectuses were materially false and misleading because each failed to disclose, among other things, that: (i) the underwriters 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 offerings; and (ii) the underwriters had entered into agreements with customers whereby they agreed to allocate shares to those customers in the offerings in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre- determined prices. For more information, contact Ms. 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: ROIA@bernlieb.com. REPEATER TECHNOLOGIES: Wolf Haldenstein Files Securities Suit in NY ------------------------------------------------------------------- Wolf Haldenstein Adler Freeman and Herz LLP initiated a securities class action on behalf of purchasers of the securities of Repeater Technologies, Inc. (NASDAQ:RPTR) between August 8, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters: (1) Banc of America Securities, (2) The Bear Stearns Companies, (3) CIBC World Markets, (4) Dain Rauscher, (5) Deutsche Banc Alex Brown, (6) FleetBoston Robertson Stephens, (7) J.P. Morgan Chase, (8) Prudential Securities, (9) Thomas Weisel Partners and (10) U.S. Bancorp Piper Jaffray 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, Repeater commenced an initial public offering of 4.75 million of its shares of common stock, at an offering price of $9 per share. In connection therewith, the Company 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 underwriters on the offering had solicited and received excessive and undisclosed commissions from certain investors in exchange for which those underwriters allocated to those investors material portions of the restricted number of IPO shares issued in connection with the IPO; and (ii) the underwriters had entered into agreements with customers whereby the underwriters agreed to allocate 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 further details, contact Fred Taylor Isquith, Thomas Burt, Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E- mail: classmember@whafh.com or visit the firm's Website: www.whafh.com. All e-mail correspondence should make reference to REPEATER RAFFLES TOWN: Founding Members Sue Singapore Club For False Prospectus ---------------------------------------------------------------------- 4,895 Raffles Town Club founding members served a writ of summons to the High Court and the club's lawyers, demanding a full refund of the $28,000 they each paid as joining fees, the Business Times of Singapore recently reported. The plaintiffs are suing the club on the grounds of misrepresentation and/or breach of contract. In November 1996, Raffles sent out a prospectus inviting some members of the public to join the club. The prospectus comprised a letter of invitation, a document giving general information and a brochure. The plaintiffs base their claims on representations made in these documents, including representations, among others, that: (1) the club would be without peer in terms of size of facilities and sheer opulence; (2) the club's exclusive and limited memberships would be fully transferable; (3) there would be two classes of individual members - a limited number of exclusive transferable founder members at $28,000, and a second class of members who would pay $40,000 for their membership. The suit argues that these representations became part of the contractual terms between members and Raffles. The plaintiffs, led by public relations consultant Alan Lee, claim they were misled into joining what they thought was an "exclusive" club for 5,000 to 7,000 members. During the recent highly publicized court battle between former Company directors for control of the proprietary club, the members discovered they are part of a crowd of 19,000 persons. Company director Robert Lai said "If you had told us in November 1996 that there would be 19,000 members, and we joined the club with that knowledge, we would not be unhappy." Lai was one of the members who led the class action, but has since dropped out. He bought his membership on the open market and does not qualify as a founding member. The plaintiffs stand to recover $137 million in joining fees, the biggest claim against a local private club. The lawsuit is the largest class action of its kind in Singapore. SOUTH AFRICA: Suit For Disabled Causes Social Grants Reinstatement ------------------------------------------------------------------ A class action lawsuit started by the Legal Resources Center on behalf of disabled Eastern Cape residents had an unexpected positive result, when the center successfully managed to obtain the reinstatement of social grants to the disabled. The provincial Welfare Department had to undertake a detailed investigation, which not only saw that the rights of deserving individuals reinstated, but unearthed more than 120 public servants who have been getting disability grants as well as their salaries. A Business Day report said that a number of disabled people living in the Eastern Cape suffered real hardship when their social grants were unilaterally suspended in 1996, apparently the result of a poorly devised plan to root out fraudulent claims. The public servants are not likely to recover their social grants, disabled or not. In terms of the law, disabled people who earn more than R12000 a year do not qualify for social pensions, and no Eastern Cape public servant earns less than R1000 a month. STORAGE USA: Denies Pending TN Securities Suits' Allegations ------------------------------------------------------------ Storage USA labeled "without merit" several securities suits pending in the Chancery Court in Memphis, Tennessee relating to the modification of the standstill agreement with Security Capital Group, Inc. The suits were commenced early this month, naming the Company, Security Capital Group, Inc., SC Realty, Inc. and the Company's Board of Directors as defendants. The suits allege that the defendants have violated a duty of fair dealing and other fiduciary duties to the shareholders in modifying the agreement with Security Capital and considering Security Capital's proposal. The suits seek: (1) to enjoin the consummation of a sale of the Company to Security Capital; and (2) if such sale is consummated, to rescind it and recover rescissionary and other damages suffered by the plaintiffs as a result of the transaction. Storage USA has not yet been served with all of these lawsuits and has not filed responsive pleadings as of this date in any of the lawsuits. TRANSMETA CORPORATION: Schiffrin Barroway Files Securities Suit in NY --------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action on behalf of purchasers of the common stock of Transmeta Corporation (NASDAQ:TMTA) between November 6, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. 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 November 2000, Transmeta commenced an initial public offering of 13,000,000 of its shares of common stock, at an offering price of $21 per share. In connection therewith, the Company 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 underwriters 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 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 details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1- 888-299-7706 (toll free) or 1-610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Website: www.sbclasslaw.com THORN AMERICAS INC.: To Vigorously Oppose Consumer Suits in New York -------------------------------------------------------------------- Rental company and Rent-A-Center subsidiary, Thorn Americas, Inc., faces a consumer class action commenced in November 1997 in New York State Court for allegedly unfair business practices. The suit alleges the Company failed to disclose effective interest under New York consumer protection laws and that Thorn Americas violated consumer laws by: (1) excessive and unconscionable pricing, (2) late fees, harassment, (3) undisclosed charges, and (4) the ease of use and accuracy of its payment records. The plaintiffs seek: (i) class certification; (ii) injunctive relief requiring the Company to cease certain marketing practices, price their rental purchase contracts in certain ways, and disclose effective interest; (iii) unspecified compensatory and punitive damages; (iv) rescission of the class members contracts; (v) an order placing in trust all moneys received by the Company in connection with the rental of merchandise during the class period; (vi) treble damages, attorney's fees, filing fees and costs of suit; (vii) pre- and post-judgment interest; and (viii) any further relief granted by the court. The proposed class originally included all New York residents who were party to Thorn America's rent-to-own contracts from November 26, 1991 through November 26, 1997. In the class certification briefing, however, the plaintiff acknowledged claims under the General Business Law in New York are subject to a three-year statute of limitations, and is pursuing a class of all persons in New York who paid for rental merchandise since November 26, 1994. In November 2000, following interlocutory appeal by both parties from the denial of cross-motions for summary judgment, the Appellate Division of the State of New York dismissed the plaintiffs' claims based on the alleged failure to disclose an effective interest rate. However, the plaintiff's other claims were not dismissed. The plaintiff again moved to certify a statewide class in December 2000. The court heard the motion for class certification on November 7, 2001, at which time the court took the motion under advisement. Thorn America is vigorously defending the suit and believes that the Appellate Division decision is a significant and favorable development in the matter. UNITED STATES: Changes In Managing Indian Trust Fund Money Ordered ------------------------------------------------------------------ Interior Secretary Gale Norton has ordered sweeping changes to a system that was created to manage billions of dollars in royalties from use of Indian land, but continues to fail in its mission, reported the Associated Press recently. In an effort to meet and transform this failure, Norton has created the Bureau of Indian Trust Assets Management and will appoint an official, reporting directly to Norton, to manage the overhaul of the existing trust system. This action comes beneath the looming threat that Norton and other government officials could be held in contempt of court by U.S. District Court Judge Royce Lamberth for failing to comply with the court-ordered reform of the mismanaged system of Indian trust funds. Late last Wednesday, on the threshold of the Thursday, November 15th deadline for producing evidence that reform of the trust fund system was underway or else a contempt of court order would be issued, the Department of Interior notified Judge Lamberth of the changes that would take place to get reform of the Indian trust system "on track." "I understand that reorganization by itself does not solve the numerous problems of trust reform, but it does provide an avenue for developing solutions," Deputy Interior Secretary J. Steven Griles said in court documents. He also said he has taken temporary responsibility for trust reform. In 1994, Congress ordered the department to clean up the mismanaged system established in 1887 to manage royalties from mining, cattle grazing, oil drilling and timber harvesting on Indian land. The proceeds were supposed to be paid to the Indian beneficiaries. In 1996, a class action lawsuit was filed on behalf of 300,000 American Indians, alleging the government had squandered at least $10 billion in Indian royalties and possibly many times that amount. No one seemed to know where the money was. Nearly two years ago, Lamberth ordered the Interior to piece together how much it owes the Indians and to overhaul its accounting system. Neither of these happened, despite $614 million spent by Interior in the effort, according to a series of reports issued in recent months by a court-appointed monitor. Moreover, say the reports, Interior officials have misled the court about the status of the reform efforts. The Indians' attorneys want nearly 50 government officials held in contempt and possibly jailed on grounds that they have obstructed the reforms and misled the court. At a hearing two weeks ago, an exasperated Judge Lamberth said the actions of the current and previous administrations showed a blatant contempt for the court's orders. He thereupon told a government attorney it would be better to "to throw yourself on the mercy of the court," than to contest the contempt motions. Government attorneys were expected to contest the allegations of contempt in filings that were due last Thursday, November 15. They will probably bring to the judge's attention that their filing of the previous Wednesday contains plans for sweeping reform. In 1999, Judge Lamberth held President Clinton's Interior Secretary Bruce Babbit and Treasury Secretary Robert Rubin in contempt of court and fined them $600,000 for failing to turn over documents related to the case. VIXEL CORPORATION: Schiffrin Barroway Files Securities Suit in S.D. NY ---------------------------------------------------------------------- Schiffrin and Barroway LLP commenced a securities class action on behalf of purchasers of the common stock of Vixel Corporation (NASDAQ:VIXL) between October 1, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. 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 October 1999, Vixel commenced an initial public offering of 4,300,000 of its shares of common stock, at an offering price of $18 per share. In connection therewith, the Company 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 underwriters 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 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 Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Website: www.sbclasslaw.com ZIFF-DAVIS INC.: Settlement For Securities Suits Approved By DE Court --------------------------------------------------------------------- The Delaware Chancery Court, in and for New Castle County approved the settlement in two securities class actions filed by stockholders of media company Ziff-Davis, Inc. The suits were commenced in September 2000 against the Company and all of the members of its board of directors, as it was constituted in September 1998. The suits uniformly alleged that an allegedly improper repricing of employee stock options in September 1998 harmed Ziff-Davis' non- employee stockholders. More specifically, the suits alleged that but for the allegedly improper re-pricing employees would not have exercised their options, there would be fewer outstanding shares. Therefore, the proportional share of proceeds received by non-employee stockholders from the Ziff- Davis/CNET Networks, Inc. merger would have been larger. The parties agreed to settle the actions for an undisclosed amount and the agreement received court approval on September 11, 2001. ZIFF-DAVIS INC.: Agrees To Settle Securities Suit in S.D. New York ------------------------------------------------------------------ Parties in the consolidated securities class action filed against Ziff- Davis Inc. have signed a memorandum of understanding to settle the suit for an undisclosed amount. The suit arose from eight securities class actions commenced in the United States District Court for the Southern District of New York against the Company and certain of its directors and officers. The suits were filed on behalf of purchasers of Ziff-Davis stock from April 28,1998 through October 8,1998 and allege violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The suits related to the Company's registration statement filed with the Securities and Exchange Commission relating to its initial public offering commenced in April 1998. The suits alleged that the registration statement contained false and misleading statements and failed to disclose facts that could have indicated an impending decline in Ziff-Davis' revenue. In January 1999, the court ordered the actions consolidated and required the filing of a consolidated amended complaint. The consolidated amended complaint was filed in March 1999 and only alleged claims under Section 11 of the Securities Act of 1933. Final settlement papers are being drafted prior to court approval. ********* 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. 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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