/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011128.mbx C L A S S A C T I O N R E P O R T E R Wednesday, November 28, 2001, Vol. 3, No. 232 Headlines CARESCIENCE INC.: Berger Montague Initiates Securities Suit in E.D. PA DOLE FOOD: Sued By Ex-Employees For WARN Violations in February Lay-off ENRON CORPORATION: Kaplan Fox Commences Securities Suit in S.D. TX ENRON CORPORATION: Dalton Gotto Initiates Suit For ERISA Violations ENRON CORPORATION: Gottesdiener Firm Files Suit For ERISA Violations GENESISINTERMEDIA INC.: Kirby McInerney Initiates Securities Suit IASIAWORKS INC.: Milberg Weiss Lodges Securities Suit in S.D. New York INTEGRATED INFORMATION: Milberg Weiss Initiates Securities Suit in NY INTERNET SECURITY: Marc Henzel Commences Securities Suit in N.D. GA NEXTCARD INC.: Kaplan Fox Commences Securities Suit in N.D. California PROTECTION ONE: Sued By Former Dealers For Breach of Contract in KY SHOPKO STORES: Berger Montague Commences Securities Suit in E.D. WI SILVERSTREAM SOFTWARE: Milberg Weiss Files Securities Suit in S.D. NY SIRIUS SATELLITE: Stull Stull Initiates Securities Suit in Vermont SMARTDISK CORPORATION: Milberg Weiss Initiates Securities Suit in NY TENFOLD CORPORATION: Milberg Weiss Commences Securities Suit in Utah TERRORIST ATTACK: Compensation Fund For Victims To Begin December 21 TIBCO SOFTWARE: Milberg Weiss Initiates Securities Suit in S.D. NY TOBACCO COMPANIES: Appeal "Excessive" $145B Award For Florida Smokers TORCHMARK CORPORATION: Plaintiffs Appeal Case Against American Income TORCHMARK CORPORATION: Seeks En Banc Decision On Alabama's 'Repose' Law WINSTAR COMMUNICATIONS: Milberg Weiss Files Securities Suit in S.D. NY ********* CARESCIENCE INC.: Berger Montague Initiates Securities Suit in E.D. PA ---------------------------------------------------------------------- Berger & Montague PC filed a securities class action against CareScience, Inc. (Nasdaq:CARE) and its principal officers and directors in the United States District Court for the Eastern District of Pennsylvania on behalf of all persons or entities who purchased the Company's securities during the period from June 28, 2000 through and including November 1, 2000, inclusive. The complaint alleges that the Company and its principal officers and directors violated Sections 11,12(a)(2) and 15 of the Securities Act of 1933 and misled investors by misrepresenting and failing to disclose material facts that the prospectus: (1) represented that the Company intended to use $20 million of the proceeds of its June, 2000 public offering for product development, and an additional $13 million to expand the Company's sales and marketing efforts; (2) stated that the Company's operating expenses were expected to continue to increase "as we expand our product development and sales and marketing efforts;" and that "as we execute our strategy we expect significant increases in our operating expenses to fund development of current and new product lines;" and (3) touted the Company's Careleader.com and CareScience.com products, stating that the sales of those products were expected to commence in 2001. In fact, as disclosed at the end of the class period, (i) the Company was planning only extremely minimal increases in selling, general and administrative expenses, a rate of increase which would not equal the represented $13 million to be used for the purpose for more than a decade. Indeed the increase in such expenditures was completed with the addition of a mere eight sales and marketing employees; (ii) the Company planned only modest increases in research and development, at a rate which similarly would not equal the represented amount to be used for that purpose for more than a decade; and (iii) the Company had yet to determine the marketability of its CareScience and CareLeader products, and, as a result, had no reasonable basis for the representation that sales of those products would begin in 2001. For more information, contact Sherrie R. Savett, Carole A. Broderick, Karen Orman 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: http://www.bergermontague.com DOLE FOOD: Sued By Ex-Employees For WARN Violations in February Lay-off ----------------------------------------------------------------------- Dole Food Company faces a class action filed by hundreds of its farm workers that it laid off earlier this year, alleging the Company violated the Worker Adjustment and Retraining Notification (WARN) Act. The suit alleges that the Company failed to notify the farm workers of their lay-off, and owes the workers up to $4.8 million in severance pay. The WARN act requires companies to give their employees 60 days notice before implementing any mass lay-offs. The Company laid off 1,900 workers in February, saying the financial returns on its 5,000 acres of southern San Joaquin County vineyards and fresh fruit orchards "were not acceptable," another official said, according to a report in the Modesto Bee. The suit was filed in Fresno, California on behalf of 10 former employees who worked at three Dole ranches and a packing house that was shut down in February 2000, and would affect around 300 to 800 others. The workers allegedly had a "reasonable expectation" of employment in the 60-day periods after the layoffs. However, "hundreds" of former Dole employees have not been able to find work since the layoffs. California Rural Legal Assistance Foundation attorney Cynthia Rice says that "Certainly nowhere close to a majority" found jobs, "A handful here and there, but it appears that the more experienced workers that we've interviewed did not get jobs with the farm labor contractor crews." Paul Strauss, attorney for the plaintiffs, also told the Modesto Bee, "We certainly think it's important that companies understand and follow their obligations to give employees advance notice of mass layoffs and terminations." He added, "Employees need severance pay as required by federal law or advance notice so they can find other employment.It's particularly important in seasonal agricultural work, where if you don't get work at the beginning of the season, you're not going to get work at all." A Company official had said in July that the Company did give the workers advance notice of the lay-offs and that the employees seasonal status did not guarantee them a likelihood of work that would have been covered by the WARN Act. Company spokeswoman Freya Maneki declined to comment, saying the company had not been served with the lawsuit as of Thursday and that it is the firm's policy not to comment on pending litigation. The suit could cost the Company $1.125M to $4.8M in payouts, if the plaintiffs prevail in the suit. ENRON CORPORATION: Kaplan Fox Commences Securities Suit in S.D. TX ------------------------------------------------------------------ Kaplan Fox and Kilsheimer LLP initiated a securities class action against Enron Corporation (NYSE: ENE) and certain of the Company's officers and directors in the United States District Court for the Southern District of Texas, on behalf of all persons or entities who purchased securities of Enron Corporation (NYSE: ENE) between January 20, 1998 and November 8, 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 the defendants engaged in asset and securities sales to closely related affiliates and interested parties, which disguised the Company's true financial position. Many of the details of these transactions were hidden from the public. Defendants used these asset sales to falsely improve the Company's balance sheet, thereby maintaining shares at an artificially inflated price. Certain Company executives, who held positions in the affiliates that presented clear conflicts of interest, reaped millions of dollars in personal gains from these transactions. The complaint further alleges that the defendants made misleading statements regarding the potential value of Company's Broadband business, in order to artificially boost share price. With knowledge that the Company's Broadband business would never post a profit and was seriously overvalued, defendants continued to make misleading statements about the Broadband business in order to maintain the share price at its artificially inflated levels. Defendants used the artificially inflated value of the Company's Broadband business in order to gain millions of dollars in financing. The defendants failed to disclose the risk of these financing arrangements and hid the true nature of the Company's earnings, its hedging, its businesses, and the correct state of finances from its investors and the market, further artificially inflating Company share price. While the stock was artificially inflated for the above reasons, Company executives engaged in extensive insider trading, gaining personal proceeds of more than $482 million during the class period, before the public became aware of the above practices. For more information, contact Frederic S. Fox or Laurence D. King by Mail: 805 Third Avenue, 22nd Floor New York, NY 10022 or 100 Pine Street, 26th Floor San Francisco, CA 94111 by Phone: 800.290.1952 or 415.336.1238 or visit the firm's Website: http://www.kmslaw.com ENRON CORPORATION: Dalton Gotto Initiates Suit For ERISA Violations ------------------------------------------------------------------- The law firm of Dalton Gotto Samson & Kilgard commenced a class action lawsuit against Enron Corporation alleging breach of ERISA fiduciary duties, on behalf of participants and beneficiaries of the Company's 401(k) plan, from November 1, 2000, to the present. The suit alleges that, under the law interpreting ERISA, the Company and the individual trustees of the plan breached their fiduciary duties of loyalty and prudence in a variety of ways, including: (1) the failure to adequately disclose to the plan participants and beneficiaries the risks of employer stock as a plan investment; (2) the failure to adequately monitor employer stock as a plan investment; and (3) the failure to address their own conflicts of interest as company insiders on the one hand and trustees of the plan on the other. Rather than providing complete and accurate information to the plans' participants, it is alleged that the Company and the individual trustees: (i) withheld and concealed material information about the use of employer stock as a long-term savings vehicle; (ii) did not adequately monitor the employer stock for its suitability as an investment in a retirement plan; and (iii) did nothing to address their own conflicts of interest. On October 16, 2001, the Company surprised the market when it announced that the Company was taking "non-recurring charges totaling $1.01 billion after-tax, or ($1.11) loss per diluted share," in the third quarter of 2001. The Company later revealed that a material portion of the charge related to the unwinding of investments with certain limited partnerships, were controlled by Enron's CFO, and that the Company 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 the Company's common stock dropped significantly. In addition, several recently filed securities suits allege that Company executives engaged in extensive insider trading, gaining millions of dollars in personal proceeds. The Company's plan participants have lost a substantial portion of their retirement earnings due to the drop in value of their retirement assets. For more information, contact R. Douglas Dalton or Ron Kilgard by Phone: 602.248.0088 or by E-mail: dalton@DGSK.com or Britt Tinglum by Phone: 800.776.6044 or by E-mail: investor@kellerrohrback.com. ENRON CORPORATION: Gottesdiener Firm Files Suit For ERISA Violations -------------------------------------------------------------------- The Gottesdiener Law Firm filed a class action against troubled Houston-based energy producer and trader Enron Corporation, on behalf of several current and former employees seeking to recover for themselves and their co-workers the approximately $850 million they have lost in 401(k) retirement savings due to the recent collapse in the price of Company stock. In recent weeks, the value of the Company's common stock has plummeted from a high of $90 to a low recently of $5 in the wake of revelations that for years the Company materially misled investors concerning the its profitability and concealed billions of dollars of debt through secret off-shore partnerships set up to borrow and covertly funnel money to the Company. The new suit, filed under the federal Employee Retirement Income Security Act (ERISA) and federal securities law, is similar to two other 401(k) lawsuits in recent days. Like the other suits, the new suit alleges that the Company and other individual defendants breached their fiduciary duties under the law by selling employees Company stock while knowing the price was artificially inflated, and by locking employees into Company stock because of an administrative change to the company 401(k) plan. The new suit also contends that the Company violated federal securities law by offering and selling employees stock without the required prospectus, which, if proven, would give workers the automatic right to rescind their purchases (made, in many cases, when the stock was selling for $90 a share) and get their money back, with interest. The suit also alleges that the Company violated its federal fiduciary duties by enforcing a provision of the plan that prevented employees under the age of 50 from selling the stock they received from the Company as its "employer matching contribution," even though the Company knew it was imprudent for those employees to continue to hold the Company's stock. Washington, D.C. lawyer Eli Gottesdiener, said he hopes his, and the related suits will serve as a wake-up call to Congress. "Congress sensibly placed a 10% limit on company stock in traditional defined benefit plans back in 1974, but at the behest of the corporate lobby, it placed no such cap on defined contribution plans. Today, when workers have been forced to assume virtually all of the investment risk and responsibility for funding their retirements, having no such cap is completely indefensible," he explained. Although investment advisers generally recommend investing no more than 5-15% of an investment portfolio in any single stock, participants in 401(k) plans offering an employer stock option invest on average around 33% in company stock, based on studies. The Company's employees had more than 60% of their retirement savings invested in stock, according to Gottesdiener, who accused the Company of encouraging employees to "load-up" on stock when the Company knew it was not prudent to do so. "How many workers have to lose both their jobs and their retirement savings before Congress steps in and puts a stop to this by placing some a cap on the amount of company stock that can be in a 401(k) plan?" he asked. For more information, access the Website: http:\\www.enronsuit.com GENESISINTERMEDIA INC.: Kirby McInerney Initiates Securities Suit ----------------------------------------------------------------- Kirby McInerney & Squire LLP commenced a securities class action on behalf of investors who purchased the common stock of GenesisIntermedia, Inc. (NASDAQ: GENI) between December 21, 1999 and September 25, 2001, against the Company and: (1) Ramy El-Batrawi, the company's former CEO, (2) Ultimate Holdings Ltd., a Bermuda investment company owned by Adnan Khashoggi that was the company's largest shareholder and its alleged accomplice, and (3) others Company-related defendants The suit alleges violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934, arising from an elaborate two-year scheme to manipulate the market in the company's stock. The complaint also alleges that, during the class period, Company stock price was artificially inflated by the defendants, who directly (through complex insider trading) and indirectly (through the dissemination of materially false and misleading information about the company) manipulated the market for the Company's common stock. Allegedly that scheme began in December 1999 when Khashoggi and El- Batrawi made a secret stock payment worth $3 million to financial commentator Courtney Smith to tout the company's stock. Smith recommended the stock at least 18 times during appearances on CNBC, CNN, Bloomberg Television and other media outlets. By the time of Smith's last appearance in March 2001, the stock had jumped from less than $1.50 per share in December 1999 to highs of between $14 and $28 per share. The stocked jumped again in May 2001, soaring 42% in a single week after a buy recommendation by Rafi Khan, an ex-stockbroker banned from the securities industry who had spent several days meeting Company executives at their offices. According to the complaint, the defendants accentuated the stock run-up with their own false statements and insider trading. By late summer, the stock was selling at more than $17 per share and Ultimate Holdings, Khashoggi's company, had reaped some $7 million in illegal insider trading "short-swing" profits. Moreover, as the complaint alleges, during the late summer defendants directly intervened in the market at critical times in order to support the company's stock price (at times accounting for nearly 90% of the shares traded). The final chapter in the alleged fraud began in September 2001 when, in order to facilitate short-selling, 7.2 million Company shares were loaned to Native Nations Securities, Inc., a small firm in New Jersey. The only entity holding enough shares to make the loan was Khashoggi's Ultimate Holdings. Native Nations, in turn, loaned the 7.2 million shares to MJK Clearing, Inc., which then re-loaned the shares to at least four other securities firms. When the Company's share price later fell and the other firms asked for repayment, Native Nations revealed that someone had altered its books and had walked away with $60 million. The Securities Investor Protection Corporation seized MJK Clearing for insufficient capital - producing the largest failure of a U.S. brokerage firm in at least 30 years. The Nasdaq Stock Market halted trading in Company stock on September 25, 2001, but not before El-Batrawi had sold $1.7 million worth of his stock. The Securities and Exchange Commission has since announced a formal investigation. For more information, contact Ira Press or Orie Braun by Mail: 830 Third Avenue, 10th Floor New York, New York 10022 by Phone: 212.317.2300 or 888.529.4787 (toll-free) by E-Mail: obraun@kmslaw.com or visit the firm's Website: www.kmslaw.com IASIAWORKS INC.: Milberg Weiss Lodges Securities Suit in S.D. New York ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the securities of Iasiaworks, Inc. (NASDAQ: IAWK) between August 3, 2000 and November 27, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company and: (1) Joann F. Patrick-Ezell, (2) Jonathan F. Beizer, (3) Farrokh K. Billimoria, (4) Daniel A. Carroll, (5) Robert Lee, (6) Peter T. Morris, (7) William R. Stensrud, (8) William P. Tai, (9) Goldman Sachs & Co., (10) Morgan Stanley & Co, Inc. and (11) Salomon Smith Barney, Inc The suit alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a materially false and misleading registration statement and prospectus in connection with the Company's initial public offering (IPO) in August 2000. Specifically, the prospectus misleadingly stated that the proceeds that would be raised from the IPO would be sufficient to fund several of the Company's needs for at least nine months, including the establishment of the first three large-scale Internet Data Centers needed to augment the small scale centers then in existence. In November 2000, the defendants issued a press release indicating that it would be building data centers that were much larger than described in the prospectus and at a much greater cost, so much so that the Company would be forced to borrow additional money to complete the project. The market's reaction to this announcement was harsh. From a closing price of $7.81 on November 24, the stock slid to $6 3/8 on November 27 and to $4 7/16 on November 28, representing a 43% drop in just two days. For more 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: iasiaworkscase@milbergNY.com or visit the firm's Website: http://www.milberg.com INTEGRATED INFORMATION: Milberg Weiss Initiates Securities Suit in NY --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the securities of Integrated Information Systems, Inc. (NASDAQ: IISX) between March 17, 2000 and December 6, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York against FleetBoston Robertson Stephens, Inc. and Lehman Brothers, Inc, and alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In March 2000, the Company commenced an initial public offering of 4,600,000 of its shares of common stock at an offering price of $15 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: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (2) defendants had entered into agreements with customers whereby defendants 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 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: IIScase@milbergNY.com or visit the firm's Website: http://www.milberg.com INTERNET SECURITY: Marc Henzel Commences Securities Suit in N.D. GA ------------------------------------------------------------------- The Law Office of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Georgia, on behalf of purchasers of Internet Security Systems (Nasdaq: ISSX) between April 5, 2001 and July 2, 2001, inclusive, against the Company and certain of its officers. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. The complaint also alleges that during this period of artificial inflation, Company insiders took advantage of their insider status to sell thousands of their own shares of ISSX stock at artificially high prices for proceeds of over $18 million. The Company further took advantage of the artificially inflated share prices by using its stock as currency to make acquisitions. In July 2001, however, defendants revealed that rather than achieving revenues of $64-67 million for the second quarter as they had led investors to expect, the Company's revenues were actually in the $50-52 million range. Instead of earning $0.15 to $0.16 per share, the Company would actually suffer losses of up to $0.02 per share. Ultimately, the Company announced losses of $0.13 per share for the quarter. As a result of these announcements, Company stock fell by more than 40% in one day, thus causing damages to class members. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888. 643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenze182 NEXTCARD INC.: Kaplan Fox Commences Securities Suit in N.D. California ---------------------------------------------------------------------- Kaplan Fox and Kilsheimer LLP initiated a securities class action against Nextcard, Inc. (NASDAQ: NXCD) and certain of the Company's officers and directors in the United States District Court for the Northern District of California on behalf of all persons or entities who purchased the Company's common stock between March 30, 2000 and October 30, 2001, inclusive. The complaint charges the defendants 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 Company's financial statements were materially false and misleading and violated GAAP because, among other reasons, they: (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 the Company to: (i) amend its accounting practices; (ii) increase its protection against bad loans; (iii) exit certain business lines; and (iv) cease certain marketing practices. As a result of the required changes, the Company disclosed that bank examiners had declared NextCard "significantly undercapitalized," according to FDIC guidelines, which means that NextCard 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 the Company's stock to plummet drastically from $5.35 per share to $0.87 per share, a one-day decline of 84%. .As a result of defendants' false and misleading statements during the class period, the price of Nextcard common stock traded at artificially inflated levels. For more information, contact Jonathan K. Levine 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: http://www.kaplanfox.com PROTECTION ONE: Sued By Former Dealers For Breach of Contract in KY ------------------------------------------------------------------- Protection One Alarm Monitoring, Inc. faces a class action filed by Six former Protection One dealers in the U.S. District Court for the Western District of Kentucky, styled Total Security Solutions, Inc., et al. v. Protection One Alarm Monitoring, Inc., Civil Action No. 3:99CV- 326-H. The suit, commenced in May 21, 1999, alleges breach of contract arising from the way the Company interpreted their dealer contracts. In September 1999, the court granted the Company's motion to stay the proceeding pending the individual plaintiff's pursuit of arbitration, as required by the terms of their agreements. In June 2000, the court denied plaintiffs' motion to have collective arbitration. Notwithstanding the court's ruling, the six former dealers filed a motion to compel consolidated arbitration with the American Arbitration Association (AAA). The AAA later denied the dealers' motion and advised they would proceed on only one matter at a time. Only one dealer is presently proceeding with arbitration, which is scheduled for February 19, 2002. SHOPKO STORES: Berger Montague Commences Securities Suit in E.D. WI ------------------------------------------------------------------- Berger & Montague PC has entered an appearance in a class action in the United States District Court for the Eastern District of Wisconsin this week on behalf of all persons or entities who purchased securities of Shopko Stores, Inc. (NYSE:SKO) during the period from March 9, 2000 through November 9, 2000, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between March 9, 2000 and November 9, 2000, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued statements concerning the integration of its acquisition of Pamida Holding Corporation, the owner and operator of Pamida discount stores, Shopko's financial results and the Company's prospects. The suit alleges that these statements were materially false and misleading because they failed to disclose, among other things, that the Company was experiencing significant shipping and inventory control problems at Pamida's distribution centers. On November 9, 2000, the Company issued a press release announcing its earnings for the third quarter of 2000 reporting a loss of ($0.23) per share - far below the $.02 to $.07 per share previously represented by the Company - and revealed that it was experiencing problems at Pamida's distribution centers and that those problems accounted for the Company's reduced earnings. For more information, contact Sherrie R. Savett, Robin Switzenbaum 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: http://www.investorprotect.com SILVERSTREAM SOFTWARE: Milberg Weiss Files Securities Suit in S.D. NY --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the securities of SilverStream Software, Inc. (NASDAQ: SSSW) between August 16, 1999 and December 6, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company and: (1) Morgan Stanley & Co., Incorporated, (2) BancBoston Robertson Stephens, Inc., (3) David A. Litwack, (4) Craig A. Dynes and (5) David R. Skok. 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 August 1999, the Company commenced an initial public offering of 3,000,000 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 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 they 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 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: silverstreamcase@milbergNY.com or visit the firm's Website: http://www.milberg.com SIRIUS SATELLITE: Stull Stull Initiates Securities Suit in Vermont ------------------------------------------------------------------ Stull Stull and Brody commenced a securities class action in the United States District Court for the District of Vermont on behalf of purchasers of the common stock of Sirius Satellite Radio, Inc. (NASDAQ:SIRI) from between February 17, 2000 and April 2, 2001, inclusive against the Company (formerly known as CD Radio, Inc.) and: (1) David Margolese, (2) Robert D. Briskman, and (3) Patrick L. Donnelly. 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, by failing to disclose facts known to them, or recklessly disregarded by them, which demonstrated that the announced commercial launch dates for the Company's satellites required for the Company's service were impossibly ambitious. Defendants knew, or recklessly disregarded, that it would be impossible for the Company to offer its service commercially by the end of 2000, as initially disclosed, or early in 2001, as subsequently disclosed. The complaint alleges that at all times during the class period defendants issued materially false and misleading statements and press releases concerning when the Company's service would be commercially available, which caused the market price of common stock to be artificially inflated. When the truth about the Company's business was revealed to the public, the price of common stock dropped precipitously. For more information, contact Tzivia Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone: 800.337.4983 (toll-free) by Fax: 212.490.2022 or by E-mail: SSBNY@aol.com SMARTDISK CORPORATION: Milberg Weiss Initiates Securities Suit in NY -------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the securities of SmartDisk Corp. (NASDAQ: SMDK) between October 5, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York against defendant FleetBoston Robertson Stephens Inc and alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In October 1999, the Company commenced an initial public offering of 3,000,000 of its shares of common stock, at an offering price of $13 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: (1) the underwriter had solicited and received excessive and undisclosed commissions from certain investors in exchange for which it allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (2) the underwriter had entered into agreements with customers whereby it 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 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: smartdiskcase@milbergNY.com or visit the firm's Website: http://www.milberg.com TENFOLD CORPORATION: Milberg Weiss Commences Securities Suit in Utah -------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action in the United States District Court for the District of Utah on behalf of purchasers of TenFold Corporation (NASDAQ:TENF) common stock during the period between January 18, 2000 and August 14, 2000. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company describes itself as a leading provider of large-scale e- business applications for customers in banking, communications, energy, healthcare, insurance, investment management and other industries. The suit alleges that defendants made false and misleading statements with respect to the Company's ability to deliver applications on target, that worked and were on time. Defendants also made false and misleading statements concerning the revenues to be derived from its software sales and the quality of its receivables. Further, the Company concealed the fact that: (1) the quality of its receivables was rapidly deteriorating; (2) the length of its sales cycle was exploding; (3) it failed and/or was unable to produce a stable environment to conduct acceptance tests; (4) it falsely represented "completion dates" in order to induce customers to sign contracts; and (5) its customers were canceling contracts and/or refusing to pay for delivered product which defendants were booking as revenue and receivables. These statements and omissions artificially inflated the price of Company stock to a class period high of $70. This upsurge in the Company's stock price caused by defendants' alleged false and misleading statements allowed defendants to sell 508,000 shares of Company stock for proceeds of $26.5 million. The Defendants' scheme began to unravel when on July 10, 2000 the Company disclosed preliminary results for the second quarter ending June 30, 2000, which were well below expectations. After this announcement, the price of Company stock fell nearly 40% to $10-1/4 per share on volume of about 6.6 million shares, more than 25 times the three-month daily average. The full extent of defendants' scheme was not revealed until August 14, 2000, when the Company announced its actual results for the second quarter ending June 30, 2000. In that press release, the Company announced that its net loss for the quarter would be $(6.5) million, or $(0.19) per share, well below the projections in the July 10, 2000 press release. 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 or visit the firm's Website: http://www.milberg.com TERRORIST ATTACK: Compensation Fund For Victims To Begin December 21 -------------------------------------------------------------------- The United States has set up a compensation fund, set to begin December 21, for the victims of the September 11 terrorist attack and their families. The fund, established by Congress in September, will dispense money, the amounts of which have yet to be determined, to cover lost wages and the victim's pain and suffering. The fund was created in September as an alternative to filing class actions and other lawsuits against airlines and entities, where those who place claims will forfeit their right to sue. This week, Attorney General John Ashcroft appointed Washington lawyer Kenneth Feinberg to oversee the fund. Feinberg will play an important role in determining how the compensation fund will work, and how much the victims' families can expect to receive. Feinberg has considerable experience as a mediator, taking part in several high profile cases, notably the Agent Orange cases, and the asbestos class action against the maker of Dalkon Shield Birth Control. He will oversee several critical issues such as how people should apply for compensation, whether the program should pay for victims' lawyers and whether people who are not satisfied with their payment can appeal. The law creating the program says awards should take into account the amount of "collateral source compensation" applicants have or will receive but does not specify what sources should be included in determining reductions in awards. TIBCO SOFTWARE: Milberg Weiss Initiates Securities Suit in S.D. NY ------------------------------------------------------------------ Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the securities of Tibco Software, Inc. (NASDAQ: TIBX) between July 13, 1999 and December 6, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York against: (1) Goldman Sachs & Co., (2) Bear Stearns & Co., Inc., (3) BancBoston Robertson Stephens, Inc. and (4) Credit Suisse First Boston Corporation. The suit alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, relating to its July 1999 initial public offering of 7,300,000 of its shares of common stock, at an offering price of $15 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) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) defendants had entered into agreements with customers whereby defendants 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 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: Tibcocase@milbergNY.com or visit the firm's Website: http://www.milberg.com TOBACCO COMPANIES: Appeal "Excessive" $145B Award For Florida Smokers --------------------------------------------------------------------- The tobacco industry has appealed the whopping $145 billion award for sick Florida smokers, calling the decision fraught with legal error and the award as "bankrupting and excessive." The suit was commenced in Miami Dade Circuit Court. The jury later decided that cigarettes were deadly and addictive opening the door for $12.7 million in compensatory damage awards for three smokers and group punitive damages the largest jury award ever. Five tobacco companies filed a 174-page appeal in the 3rd District Court of Appeals in Miami, starting what is expected to be a protracted legal battle over the July 2000 verdict. The five companies involved in the suit are: (1) Philip Morris Companies, (2) RJ Reynolds, (3) Brown & Williamson, (4) Lorillard and (5) the Liggett Group Liggett, the smallest of the industry's five biggest companies, did not join in the joint court filing with the other companies. Philip Morris Vice President Bill Ohlemeyer said that each of the phases of the case "were infected with legal error and tainted with the misconduct of counsel," according to an Associated Press report. He also said the trial was marred by "a series of critical errors by the trial judge leading to an unconstitutional and unjust result." The appeal also criticized the closing arguments of smokers' attorney Stanley Rosenblatt, saying he "compared defendants to defenders of slavery and the Holocaust" before a predominantly black jury. Ohlmeyer asserted "Where are the lines that can't be crossed that prevent a party from getting a fair trial.Florida law and your sense of fairness and justice tell you that something happened in the case that shouldn't have happened." Rosenblatt did not react to the appeal itself but said that it would take longer than 30 days to respond. "Undoubtedly with the thickness of the appendix, we may very well need an extension. It's a massive amount of material," he said. "I was advised it's in two boxes." TORCHMARK CORPORATION: Plaintiffs Appeal Case Against American Income --------------------------------------------------------------------- Plaintiffs in the two-year-old case against American Income Life Insurance Company, a subsidiary of Torchmark Corporation, have appealed the ruling in September affirming the company's motion for summary judgment. According to a Securities and Exchange Commission report filed recently by Torchmark, the case is now before the U.S. Circuit Court of Appeals for the Fifth Circuit. In September, the U.S. District Court for the Western District of Texas ruled in favor of American Income's motion for summary judgment with respect to its defined benefit plan. Said plan has been the core issue of this purported class action, which the plaintiffs claim is in violation of the Employee Retirement Income Security Act. The suit, docketed as Peet, et al v. American Income Life Insurance Company, et al, Case No. C-99-2283, was filed in May 1999. Plaintiffs, individually and on behalf of all current and former public relations representatives of American Income, assert that they had been improperly classified as independent contractors rather than employees and thus denied participation in certain of American Income's employee benefit plans. The lawsuit alleged breach of fiduciary duty and wrongful denial of access to plan documents and other information under the Employee Retirement Income Security Act. Declaratory and injunctive relief together with restitution, disgorgement and statutory penalties were sought. Last year, the District Court granted the defendants' motions for partial summary judgment and denied plaintiffs motion for class certification with leave to renew plaintiffs' certification motion if they provided the Court with information regarding additional benefit plans from which they had been improperly excluded. Subsequently, plaintiffs submitted additional information to the Court alleging the additional benefit plans and they also filed a motion for reconsideration of the order granting defendants' motion for summary judgment. The Court denied plaintiffs' motion for reconsideration and in September 2001 entered a final judgment for American Income. TORCHMARK CORPORATION: Seeks En Banc Decision On Alabama's 'Repose' Law ----------------------------------------------------------------------- Liberty National Life Insurance Company, a subsidiary of Torchmark Corporation, is pushing for an en banc rehearing from the 11th Circuit appellate court, which ruled in September that Alabama's "repose" rule does not apply in the case against the company. In a recent ruling, the appellate court said the common law doctrine does not bar claims made by plaintiffs against the company in the Moore v. Liberty National Life Insurance Company, Case No. CV-99-BU-3262-S. According to the court, there is no reverse pre-emption under the McCarrin Ferguson Act. This purported class action suit was filed in December 1999 in the U.S. District Court for the Northern District of Alabama. Plaintiffs include all African-Americans who have or have had at the time of policy termination an ownership interest in certain life insurance policies ($25,000 face amount or less) marketed by Liberty and certain of its former subsidiaries. The alleged class period covers virtually the entire twentieth century. Plaintiffs claim racial discrimination in Liberty's premium rates in violation of 42 U.S.C. (S) 1981, breach of fiduciary duty in sales and administrative practices, receipt of excessive and unreasonable premium payments by Liberty, improper hiring, supervision, retention and failure to monitor actions of officers, agents and employees, breach of contract in dismantling the debit premium collection system, fraudulent inducement and negligent misrepresentation. Unspecified compensatory and punitive damages are sought together with a declaratory judgment and equitable and/or injunctive relief, including establishment of a constructive trust for the benefit of class members. Liberty filed a motion for judgment on the pleadings or in the alternative for summary judgment on January 27, 2000. On April 7, 2000, the District Court entered an order granting Liberty's motion for judgment on the pleadings and dismissing plaintiffs' claims under 42 U.S.C. (S) 1981 with prejudice as time-barred and dismissing their state law claims without prejudice to re-file in state court if desired. Plaintiffs subsequently filed motions with the District Court to reconsider its April 17, 2000 order and for permission to file an amended complaint adding similar claims under 24 U.S.C. (S) 1982. Liberty opposed this motion. On June 22, 2000, a purported class action, with allegations comparable to those in the Moore case, was filed against Liberty in the Circuit Court of Jefferson County, Alabama (Baldwin v. Liberty National Life Insurance Company, Case No. CV 00-684). The Baldwin case is currently stayed pending disposition of the Moore case. On July 3, 2000, the District Court issued an order in the Moore case granting in part and denying in part the plaintiffs' motions. The District Court ordered the Moore plaintiffs to file an amended complaint setting forth their claims under 28 U.S.C. (S)(S) 1981 and 1982 and, if such claims are timely, any state law claims for breach of contract related to the discontinuance of debit collections, and dismissed with prejudice all remaining state law claims of the plaintiffs as time-barred by the common law rule of repose. On July 14, 2000, plaintiffs filed their amended complaint with the District Court and Liberty filed a motion to alter or amend the District Court's July order or, in the alternative, requested that the District Court certify for purposes of appeal the issue whether the state law doctrine of repose should be applied to and bar plaintiffs' actions under (S)(S) 1981 and 1982. The District Court entered such an order on July 21, 2000 and stayed proceedings in Moore pending resolution of Liberty's petition to the U.S. Circuit Court of Appeals for the Eleventh Circuit. Liberty filed a petition on July 30, 2000 with the Eleventh Circuit seeking that Court's permission to appeal the portions of the District Court's July order in Moore granting the plaintiffs the right to file the amended complaint. The Eleventh Circuit Court granted Liberty's motion and agreed to consider Liberty's arguments regarding the applicability of the state law of repose to actions under (S)(S) 1981 and 1982. The court heard oral arguments on July 20, 2001. On September 28, 2001, the circuit court ruled that the rule of repose was not a bar to the Moore claims in federal court. WINSTAR COMMUNICATIONS: Milberg Weiss Files Securities Suit in S.D. NY ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP commenced a securities class action on behalf of purchasers of the securities of Winstar Communications, Inc. (NASDAQ: WCII) between August 2, 2000, and April 2, 2001 inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company and: (1) William J. Rouhana, Jr., (2) Richard J. Uhl and (3) Nathan Kantor The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between August 2, 2000 and April 2, 2001, regarding the Company's performance and future prospects. Specifically, defendants indicated to investors that the Company was experiencing significant growth and was sufficiently funded through the first quarter of 2002. In truth, however, the Company's strong financial results were the result of improper accounting practices in which it capitalized numerous capital expenditures as assets instead of as expenses causing its EBITDA to be materially overstated. The Company also overstated its revenues by improperly reporting non-collectible receivables as revenues. Investors finally became aware of the Company's problems when it announced that it would be delaying the filing of its Form 10-K because it was involved in material transactions that precluded it from making a timely filing. The Company then announced that it was "halting" its expansion plans and would be laying off approximately half of its workforce. The reaction to these announcements was immediate and punitive. Shares of the Company's stock closed at $0.875 per share from a prior close of $2.16 per share and on April 6,2001, shares declined even further to close at $0.40, far less than the class period high of $32 per share. For more information, contact Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: 800.320.5081 by E-mail: winstarcase@milbergNY.com or visit the firm's Website: http://www.milberg.com ********* 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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