/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/011211.mbx C L A S S A C T I O N R E P O R T E R Tuesday, December 11, 2001, Vol. 3, No. 241 Headlines AAA MICHIGAN: Appeals Court Rules Firm Not Liable For Phone, TV Bills ADAMS MARK: Agrees To Settle NAACP Racial Bias Claims For $2 Million AETNA INC.: Rosen Law Firm Commences Securities Suit in S.D. New York ASSISTED CARE: Employees File $12M Suit Due To Wage, Working Conditions AUTO INSURANCE: GA Ruling on Vehicle Damage Applies To All Insurers CANADA: Toronto Doctor Settles For $27M Suit Due To Hepatitis Outbreak CHASE MANHATTAN: Sued For Safety Deposit Box Losses in September Attack CHRISTIAN MEMORIAL: Detroit Resident Sues For Nuisance Marketing Calls CORNING INC.: Milberg Weiss Initiates Securities Suit in W.D. New York DECODE GENETICS: Milberg Weiss Commences Securities Suit in S.D. NY DJ ORTHOPEDICS: Bernstein Liebhard Commences Securities Suit in S.D. NY EAST TIMOR: Refugees Sue Ex-President For Moral, Material Damages ENRON CORPORATION: Scott Scott Files Amended Securities Suit in S.D. TX HAWAII: Consent Decree To Improve Children's Special Service INDIAN AFFAIRS: Interior To Unlink Indian Funds Computers From Web JAPAN: Premier Sued For Glossing Over Yasukuni War Shrine Visit JAZZTEL PLC: Schiffrin Barroway Commences Securities Suit in S.D. NY MAXYGEN INC.: Schiffrin Barroway Commences Securities Suit in S.D. NY MICROSOFT CORPORATION: States Ask Maryland Court To Review Settlement MICROSOFT CORPORATION: Apple Opposes "Anti-Competitive" Settlement NETWORK ENGINES: Milberg Weiss Commences Securities Suit in S.D. NY PAC-WEST TELECOMM: Milberg Weiss Lodges Securities Suit in S.D. NY SILICON IMAGE: Milberg Weiss Commences Securities Suit in S.D. New York SMTC CORPORATION: Denies Allegations in Securities Suit in S.D. NY SONICWALL INC.: Milberg Weiss Initiates Securities Suit in S.D. NY VALICERT INC.: Milberg Weiss Initiates Securities Suit in S.D. New York VIDAMED INC.: Faces Suits For Breach of Fiduciary Duty In DE Court XO COMMUNICATIONS: Rabin Peckel Commences Securities Suit in E.D. VA XO COMMUNICATIONS: Hoffman Edelson Lodges Securities Suit in E.D. VA XO COMMUNICATIONS: Cohen Milstein Initiates Securities Suit in E.D. VA YAHOO FRANCE: Win in US Nazi Suit Appealed by French Advocacy Groups ********* AAA MICHIGAN: Appeals Court Rules Firm Not Liable For Phone, TV Bills --------------------------------------------------------------------- The Michigan Court of Appeals unanimously ruled that AAA Michigan is not obligated to pay for telephone and television access charges for an insured person hospitalized by an injury, Associated Press recently reported. Angela Hamilton filed the suit in Wayne County Circuit Court after her teenage daughter Tiandra Gunn was severely and permanently injured in a bus accident. Her insurance covered all Tiandra's expenses during an eight-week hospitalization except for a $140 charge for telephone and television use. Wayne County Judge Marianne Battani ruled that Ms. Hamilton could recover those funds, finding the telephone and TV were "reasonable services" provided an injured person, especially one who has had a leg amputated. The appellate court ruled that Judge Battani erred in her decision when she awarded the benefits and certified a class of plaintiffs who could pursue a class-action lawsuit seeking such benefits. The court ruled that allowing payment for the phone and TV access charges "was an overly broad remedy that runs afoul" of the no-fault law. The court permitted the Company to refuse to pay regular inpatient telephone and television access charges. The Company applauded the ruling, and said it doesn't affect "payment for reasonable and necessary expenses incurred" by injured people. Company spokeswoman Nancy Cain said, "Michigan's no-fault law attempts to provide a balance between excellent medical benefits for auto accident victims and the cost of providing those benefits.We are pleased that the court agreed with our position that allowing these extra benefits as a normal expense would upset that balance." ADAMS MARK: Agrees To Settle NAACP Racial Bias Claims For $2 Million -------------------------------------------------------------------- Adams Mark Hotel Chain forged a $2 million agreement with the National Association for the Advancement of Colored People (NAACP) to settle a class action suit and to end the organization's national boycott against the Company. According to a Florida Times-Union report, the agreement calls for the hotel chain to pay various individuals claiming the hotel had discriminated and donate to certain colleges. As a result, the NAACP called off its national boycott and voluntarily dismissed the class action it filed along with the state Attorney General's office and the US Department of Justice. The Company was accused of discriminating against black customers. According to Florida Attorney General Bob Butterworth, 109 African- American consumers claimed they were discriminated against after a reunion in Daytona Beach. They alleged they had to park in a remote lot, were forced to wear wristbands, told to put down unreasonable deposits to use the telephone in their rooms or drink from the mini- bar. Additionally, black guests were given a special room service menu that included only fried and barbecue chicken, foods based on social stereotypes, Assistant Attorney General Paul Hancock said. The Company's discrimination record was an issue in Jacksonville as far back as 1998, when company officials negotiated with the city to build its 966-room convention hotel on the downtown river front. The city gave the hotel $21 million in incentives to build its $216 million, 18- storey hotel. Under the settlements, the Company will make a one-time donation of: (1) $100,000 to Edward Waters College; (2) $250,000 to Florida A&M University; (3) $150,000 to Bethune-Cookman College; and (4) $100,000 to Florida Memorial College. The money is to help develop tuition scholarships, internships and cooperative education programs in hotel and hospitality management or business administration. Additionally, the Company will settle for $1 million a lawsuit filed by five people complaining of discrimination at the Daytona Beach Hotel. The Company will also compensate for $400,000 hotel guests who attended the 1999 Black College Reunion, the genesis of the lawsuits and boycott. Fred Kummer, President and Chief Executive Officer of HBE Corporation, parent company of the hotel, said in a statement, "We are very pleased to finally put this issue behind us." Isaiah Rumlin, head of Jacksonville's chapter of the NAACP, also said in a statement, "We are pleased that this situation is over with. We're going to have to see how Adams Mark does in the future." He added that he thinks the hotel and NAACP can work together. Hotel guests staying at the Daytona Beach Hotel April 9-10, 1999, can collect up to $1,000 for the troubles experienced there. The State Attorney General's office is still locating possible recipients who wish to file a claim for settlement eligibility. Those seeking more information about the claims process should call the Attorney General's civil rights office at 954.712.4607. AETNA INC.: Rosen Law Firm Commences Securities Suit in S.D. New York --------------------------------------------------------------------- The Rosen Law Firm lodged a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Aetna, Inc. (Nasdaq: AET) publicly traded securities during the period between December 1, 2000 through April 9, 2001, inclusive. The complaint charges the Company and certain of its officers and directors, with issuing a series of material misrepresentations to the market before and during the class period, thereby artificially inflating the price of the Company's common stock. Specifically, the complaint alleges that the Company issued statements concerning, among other things, its ability to control and monitor its costs and obligations in light of its expected and actual sales. Defendants knew that the Company's management systems, procedures and controls for monitoring such costs were lacking but they made positive statements about management, controls, and abilities to control costs while concealing the defective management systems. Between April 10, 2001 and May 8, 2001, the Company surprised the market by announcing higher-than-anticipated medical costs during the fourth quarter of 2000 and the first quarter of 2001 due to faulty record-keeping. The error caused the payment of millions of dollars in medical claims for former clients, and the absence of necessary management control systems required for management to know Aetna's obligations and proper medical costs. Finally, on June 7, 2001, it was revealed that the cause of much of the Company's financial woes was that: "Poor record-keeping has resulted in . paying millions of dollars in medical claims for people whose benefits have expired." During the class period, the value of Company shares had been artificially inflated to almost $43.00 per share but, as a result of these disclosures, the Company's stock price plunged in excess of forty percent to below $25.00 per share. For further details, contact Laurence Rosen by Phone: 866.767.3653 (toll-free) by E-mail: lrosen@rosenlegal.com or visit the firm's Website: http://www.rosenlegal.com ASSISTED CARE: Employees File $12M Suit Due To Wage, Working Conditions ----------------------------------------------------------------------- Assisted Care, Inc. faces a $12 million class action filed by its employees over unsatisfactory wage policies and working conditions in the course of serving a three-year, $3.2 million contract with San Joaquin County to provide health care and home care for senior citizens and disabled people. Six employees filed the suit in San Joaquin Superior Court on behalf of the 200 or so health care workers who have been employed with the company over the last four years, according to a Modesto Bee report. The suit alleges the Company: (1) Did not pay wages on time, (2) Refused to pay overtime and vacation and travel expenses, and (3) Did not provide rest periods, and forced employees to work seven or more consecutive days According to Dana Simon, Director of the Homecare Division of Service Employees International Union Local 250, the Company cannot retain workers because of the way it treats them, "The most dedicated workers stick around because they love their clients. Those people are being run ragged.There's not enough staff right now that the company can meet its obligation to the county or the clients." Employees also allege that workers receive minimum wage for work- intensive jobs that include helping disabled people bathe and dress, changing intravenous lines and colostomy bags, cooking, housekeeping and shopping. Mr. Simon told the Modesto Bee that the union tried to negotiate with company officials, but they refused to cooperate. "The workers have barely enough money to pay the rent.(Assisted Care) has been made aware of the facts, and they just wouldn't do anything about it," he said. Workers involved in the lawsuit pledged that there would be no interruption of service. Joseph Chelli, Deputy Director of the county's Human Services Agency, said, "So far, (the dispute) hasn't disrupted service and we don't expect it to. We're watching it very closely." He added that the county recently monitored the Company and did not find any violations. According to the Modesto Bee, Chris Malicki, Senior Vice President and General Manager of Assisted Care, said he had not been served with the lawsuit. He declined comment. AUTO INSURANCE: GA Ruling on Vehicle Damage Applies To All Insurers ------------------------------------------------------------------- In response to a recent landmark ruling by Georgia's Supreme Court, that state's insurance commissioner announced that he will direct all automobile insurers, not just the lawsuit's defendant, State Farm - to reimburse policy holders for the diminished value of cars damaged in collisions, The Atlanta Journal-Constitution reported recently. "We view the Supreme Court decision to be the law of the state of Georgia, and it applies to all insurance companies," said Insurance Commissioner, John Oxendine. Mr. Oxendine said he intends to issue the diminished value directive next week. Insurance companies that fail to comply could face everything from fines to expulsion from the state. The Supreme Court agreed with the contention of two State Farm policy holders, who had filed a class-action lawsuit, that wrecked cars are worth less on the open market no matter how well they are repaired, and that insurance companies are liable to pay the difference. David J. Colmans of the Georgia Insurance Information Service, which represents State Farm and many other insurance providers that operate in the state, said the cost of diminished value claims could end up being passed on to consumers. "If insurance companies are paying considerably more money, it stands to reason they would have to look at their rate structures," he said. Cathy Steinberg, the state consumers' insurance advocate who reviews all rate increase requests under authority of the governor, said that Mr. Oxendine would have to approve any rate increases. Insurance companies, she said, would have to prove they were spending more on diminished value claims before they could pass on the costs. Left to be determined is exactly how insurance companies will calculate the diminished values. Lawyers for State Farm and the policyholders who brought the lawsuit will argue this issue next week in Muscogee County Superior Court, where the case originated nearly two years ago. The first to be paid will be the State Farm policyholders whose claims date back to December 1 of last year, when a lower court judge first ordered State Farm to pay diminished value claims, said C. Neal Pope, the Columbus lawyer who filed the case against State Farm. State Farm put $10 million into an account to cover the claims in the event it lost its appeal. Given the Supreme Court's ruling, the Muscogee judge will have to order the money released from the account. Mr. Pope said he will make that request at the hearing to be held next week. Once the money is released, the first wave of policyholders affected by the class-action lawsuit could receive information by early next year telling them how to collect. Payouts could range from a few dollars to thousands, Mr. Pope estimated. Those who filed claims before December 1 of last year, will have to wait longer, because a separate case granting that group relief is still on appeal with the Supreme Court, which is not expected to rule until April, Mr. Pope explained. Eligible policyholders would have had to file a claim after December 23, 1993. State Farm has set aside $50 million for those back claims. The two lawsuits affect as many as 500,000 claims, Mr. Pope has said. State Farm insures more than 20 percent of the state's drivers. Similar lawsuits seeking back claims are pending in Muscogee County against eight other insurance companies, including Allstate and Progressive, who declined to comment. Together, the lawsuits affect about 70 percent of Georgia's drivers. CANADA: Toronto Doctor Settles For $27M Suit Due To Hepatitis Outbreak ---------------------------------------------------------------------- More than 14,000 Canadians are entitled to share in a $27.5 million settlement for the suit filed against neurologist Ronald Wilson after an estimated 1,000 people contracted hepatitis B six years ago from contaminated needles traced to his Toronto clinic. The settlement is believed to be the largest medical malpractice settlement in Canada's history. According to investigators, contaminated needles were inserted into his patients' scalps during electroencephalogram brain exams, or EEGs, tests that are used to diagnose conditions like epilepsy and are routinely performed with disposable paddles and tape. Dr. Wilson's technologist, who conducted the tests with him, had a highly infectious case of hepatitis B and did not wear surgical gloves. As many as 1,000 people contracted hepatitis, one of the largest outbreaks in the country's history. One victim supposedly died while many men and women became seriously ill. Ed Hyer, one of the lawyers involved in the class action, told CBC news, "I think anybody who understood the case and the facts of the case would agree that the settlement is a fair one." The doctor's insurer agreed to pay money to thousands of former patients, whether they were infected or not. Larger amounts will go to those who tested positive for the virus. Dr. Wilson continues to deny any wrongdoing and is now running a sleep clinic in Toronto. He will face a disciplinary hearing by the Ontario College of Physicians and Surgeons next month. CHASE MANHATTAN: Sued For Safety Deposit Box Losses in September Attack ----------------------------------------------------------------------- Chase Manhattan Bank faces a negligence class action filed by a woman who rented a safe deposit box at the bank's 5 World Trade Center office on behalf of herself and 2,500 who also rented safe deposit boxes at the office near the site of the September 11 terrorist attacks. Sylvia Yamamura filed the suit, now pending in the Manhattan Supreme Court, alleging the bank failed to take adequate steps to recover valuables left in the vault. The suit also seeks an injunction to prevent the building from being demolished so that she can be "reasonably" certain that the valuables cannot be recovered, according to a Reuters report. Mrs. Yamamura said she deposited jewelry and other heirlooms that had been in her family for generations. After the attacks, the Bank reportedly advised her that the boxes had been located and that it would be recovered. The suit states "High-ranking Chase representatives emphasized that the secured steel-reinforced vault is virtually indestructible.and that the casing was fire-proof." Later, the Bank sent a letter saying that it was "abandoning" efforts to recover their valuables stating that the boxes were "unrecoverable because of structural damage to the vault.unfortunately, our inspection (of the 5 WTC Branch) concluded that the weight of the debris as well as the extreme heat generated by the fires not only severely damaged the structure of the vault, but also either disintegrated the contents or severely damaged the boxes to the point that they are inaccessible." The suit charges the bank, and the J.P. Morgan Chase and Company with "negligent failure to provide safe protection for the valuables entrusted to them." Ms. Yamamura contends that the Bank will not be providing any compensation for her loss, saying in her suit that the bank "will not make further efforts to recover valuables from the vault prior to demolition of the building." She further alleges that the Bank was successful in recovering "significant sums of cash" that had been stored in 5 World Trade Center but was "simply unwilling to make the same effort and undertake the same expense to recover" irreplaceable possessions of Yamamura and other members of the class action. She said the members of the class were "also threatened with the loss of heirlooms to which no monetary value can be attributed." CHRISTIAN MEMORIAL: Detroit Resident Sues For Nuisance Marketing Calls ---------------------------------------------------------------------- Christian Memorial Cultural Center Inc. faces a class action filed by a 40-year old Detroit resident, alleging the company repeatedly called him and circumvented his caller ID, reported the Associated Press recently. The suit, which also names the Company's parent SCI Michigan Funeral Services, claims the defendants violated state law on several points, including blocking the number from the plaintiff's ID in order to make their sales pitch. "I've documented more than 400 nuisance calls. Usually, they try to hide their identity. "When you ask for a company name and address, you get obscenities," Plaintiff James Tucker told the Detroit News. Michigan law states that a company cannot solicit a person if that company blocks the display of caller identification information. It's a penalty punishable by up to 10 days in jail and a $1,000 fine. Daniel Hunter, an Ypsilanti attorney who filed the lawsuit for the plaintiff, is seeking more than $100,000 in damages for Mr. Tucker. However, he said the damages could go as high as $150 million, depending on the number of clients he finds to add to the litigation. Dewuse Guyton, senior attorney for SCI Michigan Funeral Services in Texas, declined to comment. However, in a March 2000 statement to the Michigan Attorney General's Office in Texas, Mr. Guyton admitted that Christian Memorial had blocked company information from caller IDs and did not give an address or telephone number when requested. CORNING INC.: Milberg Weiss Initiates Securities Suit in W.D. New York ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP filed a securities class action on behalf of purchasers of the common stock or zero coupon convertible debentures of Corning, Inc. (NASDAQ:GLW) pursuant to a prospectus dated November 2, 2000. The suit is pending in the United States District Court, Western District of New York against the Company and: (1) Roger A. Ackerman, (2) Katherine A. Asbeck and (3) James B. Flaws 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 offering of common stock and debentures in November 2000. Specifically, the complaint alleges that the Prospectus was materially false and misleading, among other reasons, because: (i) it stated that demand for the Company's products was robust; (ii) it omitted to disclose that the Company was amassing hundreds of millions of dollars of obsolete inventory that would have to be written-off; and (iii) given the foregoing, the projection of 25% earnings growth in 2001, contained in the prospectus, was lacking in a reasonable basis at all times. In July 2001, the Company announced it was taking a $5.1 billion charge primarily related to two recent acquisitions, that it would also write- off $300 million in excess and obsolete inventory, and that it would cut 1,000 jobs and close three plants. On July 25, 2001, the Company reported a massive second-quarter loss of $4.76 billion, or $5.13 per share. Company shares closed that day at $13.77, down 80% from the offering price. 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: corningcase@milbergNY.com or visit the firm's Website: http://www.milberg.com DECODE GENETICS: Milberg Weiss Commences Securities Suit in S.D. NY ------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action on behalf of purchasers of the securities of deCODE Genetics, Inc. (NASDAQ:DCGN) between July 17, 2000 and December 6, 2000, inclusive in the United States District Court, Southern District of New York against the Company and: (1) Kari Stefansson, (2) Axel Nielsen, (3) Lehman Brothers, Inc., and (4) Morgan Stanley & Co., Inc. The suit 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 2000, the Company commenced an initial public offering of 9,600,000 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 underwriter defendants 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 underwriter defendants 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 or visit the firm's Website: http://www.milberg.com DJ ORTHOPEDICS: Bernstein Liebhard Commences Securities Suit in S.D. NY ----------------------------------------------------------------------- Bernstein Liebhard and Lifshitz, LLP initiated a securities class action on behalf all persons who acquired DJ Orthopedics, Inc. (NYSE: DJO) securities pursuant to or traceable to the Company's initial public offering in November 15, 2001 in the United States District Court for the Southern District of New York, naming the Company and: (1) Leslie H. Cross, (2) Cyril Talbot, III, (3) Charles T. Orsatti, (4) JP Morgan Securities Inc., (5) UBS Warburg LLC, (6) US Bancorp Piper Jaffray Inc., and (7) First Union Securities, Inc. The suit alleges that defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, by issuing a registration statement and prospectus in connection with the IPO, which contained materially false and misleading statements and omissions. In the IPO, the Company sold 9 million shares of common stock to the investing public at $17 per share. Specifically, the complaint charges that the prospectus failed to disclose a sharp downward revision in the Company's fourth quarter 2001 earnings forecast. The complaint alleges that shortly after the commencement of trading on November 15, 2001, the IPO share price dropped precipitously from $17 per share upon news that analysts adjusted downward the Company's fourth quarter earnings forecast. These fourth quarter earnings estimates were touted by defendants in "road shows" to investors prior to the IPO. The news drove the price of the Company's shares down by at least 10%, to close at $15.25 per share, on heavy trading volume of 7.3 million shares. By its third full day of trading, the Company's shares were down to $13.16 per share, or over 22% off the IPO price. For more details, contact Linda Flood, Director of Shareholder Relations, by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800.217.1522 or 212.779.1414 or by E-mail: DJO@bernlieb.com or visit the firm's Website: http://www.bernlieb.com EAST TIMOR: Refugees Sue Ex-President For Moral, Material Damages ----------------------------------------------------------------- Former deputy commander of the East Timorese pro-integration fighters, Enrico Guterres, recently commenced a class action with the Central Jakarta court against the former president, B.J. Habibie, to pay Rp1 trillion in indemnity, Antara, the Indonesian National News Agency, recently reported. The lawsuit pointed out that Mr. Habibie, who has been named defendant II, is personally responsible for agreeing to the implementation of a popular ballot in East Timor, in August 1999, because he made the decision without asking for approval from the House of Representatives. The suit alleges that Mr. Habibie's policy inflicted moral and material losses upon pro-integration East Timorese. "After losing the popular ballot, pro-integration East Timorese had been forced to flee to East Nusa Tenggara (284,148 persons) and to Java (2,736 persons)," the lawsuit contended. The suit, in which Mr. Guterres and Nicholas Lay are acting on behalf of the East Timorese refugees, also named the Indonesian government as a defendant, for violating the law. Specifically, the lawsuit is accusing the Indonesian government under President Megawati Soekarnoputri of allowing pro-integration refugees to return to East Timor without proper legal protection, contrary to East Timor law or international law. The Indonesian government also has been charged with forcing the refugees to be repatriated, and the lawsuit further states that the Indonesian government should relocate the pro-integrationists to one location on Timor Island. Ex-President Habibie's legal counsel, Yan Djuanda, pointed out that the decision to agree with the holding of the popular ballot was a government policy, "The government policy was not detached from the situation and condition at that time." He pointed out that before the holding of the popular ballot, the East Timor issue had been a point of conflict in the international world. Mr. Djuanda then referred to the existence of a resolution of the United Nations Security Council and eight decisions of the UN General Assembly on the status of East Timor. "So, it is obvious that the holding of the popular ballot was directed to reach the legal certainty (on the status of East Timor)," Mr. Djuanda said. ENRON CORPORATION: Scott Scott Files Amended Securities Suit in S.D. TX ----------------------------------------------------------------------- Scott & Scott, LLC lodged an amended securities class action in the United States District Court for the Southern District of Texas on behalf of purchasers of publicly traded debt securities of Enron Corporation (NYSE:ENE) during the period of October 19, 1998 to November 19, 2001, inclusive. The charitable fund that filed this lawsuit helps to provide education to children, teach young adults job skills, assist the mentally impaired/challenged and provides funds for social services. It generally dedicates its resources to those charitable organizations that provide pertinent social services. The suit charges Arthur Anderson LLP, the Company's auditor, and twenty-nine (29) Company officers and directors with violations of Sections 11,12(a)(2) and 15 of the Securities Exchange Act of 1933. Insiders are alleged to have reaped over 1 billion dollars from insider trading. As readily reported, the Company has announced that it will restate its earnings for 1997, 1998, 1999 and 2000, and the first two quarters of 2001. The Company is not named as defendant in this action, which is filed solely on behalf of debt holders, as it has filed for protection pursuant to Chapter 11 of the U.S. Bankruptcy Code. For more details, contact David R. Scott or Neil Rothstein by Mail: PO Box 192, 108 Norwich Avenue, Colchester, CT 06415 by Phone: 800.404.7770 (toll free) or 860.537.5537 by Fax: 860.537.4432 by E- mail: scottlaw@scott-scott.com or visit the firm's Website: www.scott- scott.com. HAWAII: Consent Decree To Improve Children's Special Services Fails ------------------------------------------------------------------- Hawaiian lawmakers recently discovered that the Hawaii Federal Court's consent decree, despite good intentions to improve special education and health services for Hawaiian children with mental disabilities, "has also unleashed a Pandora's box of unintended consequences," according to a recent Associated Press report. Under the 1994 consent decree resulting from a class-action lawsuit brought by the parents and guardians of seven children, the state agreed to provide the health and education services required under the federal law. In May 2000, U.S. District Judge David Ezra found the state in contempt of the decree for failing to meet his deadlines for compliance. A Senate-House Investigative Committee undertook an investigative hearing into what looked like a large investment of funds for a special services system which did not improve. A recent draft report by the joint committee said, "The unclear requirements for compliance, the extraordinary powers granted by the Federal Court to certain administrators without any apparent oversight, and the Court's curtailment of the Legislature's access to information have exacerbated troubled governmental programs already mired in fiscal mismanagement." The draft report stated further that the Committee had heard testimony about apparent conflicts of interest, profiteering and wasteful spending. "Such practices erode public confidence in government and erode the morale of those public servants committed to doing a good job," the report stated. The draft report on the Committee's six-month investigation was sent to some 60 people who either testified under oath before the committee or who have a known interest in the investigation, giving them until December 18 to submit a response to be appended to the final report. The Committee concluded that: (1) implementing the consent decree was hampered by unclear compliance requirements; (2) the Department of Education (DOE) and Department of Health's (DOH) exploited the Federal Court's "money is no object" expectations; (3) their poor oversight and accountability; and (4) the "superpowers" the court allowed department heads to bypass procurement and personnel laws. These factors fostered an "environment of waste and profiteering," it said. >From $125 million, which the DOE and DOH spent on special education programs in 1994, the cost has swelled to $328 million in 2001, with the number of "Felix" children being served going from 2,894 in 1994 to 11,842, the draft report said. Since 1994, the state has spent nearly $1.5 billion on "Felix" programs, not counting federal funds and costs of other agencies such as attorneys' fees and costs of the Department of Human Services, stated the draft report. Compliance review was to be achieved by measuring compliance within a sample selection of various public school complexes statewide, using a "service testing instrument" designed specifically for this purpose. This previously unused tool had to be refined and structured with significant help from DOE administrators. However, the investigative committee said, in the draft report, that it was blocked from verifying the validity of the sample selection, because its subpoenas were quashed by Judge Ezra, who also prohibited access to the case files. The committee criticized Judge Ezra's actions in its efforts to subpoena the designers of the "service testing instrument," Judge Ezra's Court Monitor Ivor Groves, a nationally known adolescent mental health expert, and Ray Foster, Mr. Groves' business partner in Human Systems and Outcomes, Inc., characterizing the Judge's conduct as "highly unusual." The Committee said it was attempting to have Judge Ezra recused from its efforts to have its subpoenas reconsidered. "These actions, together with the Judge's highly critical and unsupported comments about the Committee, create the appearance that the judge, instead of remaining a detached and neutral adjudicator, has, perhaps unwittingly, become an interested participant, attempting to protect his appointees and himself," said the Committee. The report, in its final form, has to be submitted to the Hawaii Legislature by December 26. INDIAN AFFAIRS: Interior To Unlink Indian Funds Computers From Web ------------------------------------------------------------------ US Federal Judge Royce Lamberth censured lawyers for the Interior Department for not mentioning that computers that could access data from the accounting system keeping track of royalties from Indian lands were still connected to the Internet, even after Judge Lamberth issued an order to disconnect the system from the Internet until flaws in the system that make it vulnerable to hackers are fixed. The Judge called another hearing and ordered the system fixed to his satisfaction. He told Justice Department lawyer Matthew Fadar "I don't believe one word of what you are telling me. You are just harming your own credibility." This is but the latest of dramatic courtroom confrontations between Judge Lamberth and Department of Interior officials and their lawyers. First, came the class-action lawsuit by the 300,000 Indians to get a full accounting of billions of dollars, processed over the years by the banking system established by Congress in the 19th century to receive the royalties and rents due the Indians for the use of their lands for grazing, mining and other activities on their lands. Second, came a string of Interior Department Secretaries who failed to obey court orders to fix the flawed accounting system used to process and allocate the Indians' funds. The latest of whom is Secretary Gale Norton, who is to appear later this month before Judge Lamberth to show why she should not be held in contempt for not obeying his order to "fix" the accounting system. Third, there has arrived on the scene the issue of the vulnerability of the accounting system to hackers, accompanied by the failure of Interior's lawyers to make a full disclosure to Judge Lamberth about the continued connection to the Internet of Interior's personal computers dealing with Indian Affairs, in contravention of his order to cut computer connections, in order to protect Indian accounts from invasion. JAPAN: Premier Sued For Glossing Over Yasukuni War Shrine Visit --------------------------------------------------------------- Japan's Prime Minister Junichiro Koizumi is facing a class action filed in Tokyo District Court, over his pilgrimage to a controversial war shrine honoring wartime leaders. About 240 people filed the lawsuit against the premier as well as Tokyo's Governor Shintaro Ishihara over their visits to Tokyo's Yasukuni Shrine to mark the anniversary of Japan's surrender to the US-led allied powers in World War II. Claiming that the visits violated the constitutional dictum of separation between state and religion, the plaintiffs, including South Koreans, asked for 30,000 yen ($240) each in compensation for infringement of their religious rights. The shrine is dedicated to Japan's war dead, including 14 Class-A war criminals executed by the allies after World War II, and is seen by many in Asia as a symbol of Japanese nationalism. It is the fourth legal attack against Koizumi over the visit to the shrine, and also has sparked anger in South Korea, China and other Asian countries and areas that are home to victims of Japan's World War II aggression. On November 1, about 640 people, including relatives of war dead, filed lawsuits against the Premier in Osaka, alleging the visit was unconstitutional and demanding a ban on his future pilgrimages to the shrine. They also sought damages for psychological suffering caused by the visit. A similar suit has been filed in the southwestern cities of Matsuyama and Fukuoka. Takemitsu Ogawa, an 88-year-old doctor and one of the plaintiffs, told a news conference that "I want to bring to light that they (Premier Koizumi and Governor Ishihara) are making the mistake of irresponsibly glossing over the war." JAZZTEL PLC: Schiffrin Barroway Commences Securities Suit in S.D. NY -------------------------------------------------------------------- Schiffrin and Barroway LLP initiated a securities class action on behalf of purchasers of the common stock of Jazztel p.l.c. (NASDAQ:JAZZ) between December 8, 1999 and December 6, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. The suit 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, the Company commenced an initial public offering of 10,125,000 of its shares of common stock, at an offering price of $17.447 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 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 MAXYGEN INC.: Schiffrin Barroway Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Schiffrin and Barroway LLP initiates a securities class action on behalf of purchasers of the common stock of Maxygen, Inc. (NASDAQ:MAXY) between December 15, 1999 and December 6, 2000, inclusive. The suit is pending in the United States District Court, Southern District of New York against the Company, certain of its officers and its underwriters. The suit 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, the Company commenced an initial public offering of 6,000,000 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 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 or by E-mail: info@sbclasslaw.com MICROSOFT CORPORATION: States Ask Maryland Court To Review Settlement --------------------------------------------------------------------- Four states are jointly asking Maryland Federal Court to conduct a careful review of the proposed $1 billion national settlement of private class actions against software giant Microsoft Corporation, the Associated Press recently reported. Maine Attorney General Steven Rowe, said in a statement, that the four states, Connecticut, Iowa, Maine and Vermont, are asking Maryland Federal Court to conduct a review in recognition of "the public importance of securing meaningful remedies for Microsoft's proven antitrust violations." A letter to the Court, outlining the concerns of the four states, was signed by Attorney General Rowe on behalf of himself and the attorneys general of the other three states. The private lawsuits addressed by the letter are separate from the government's case against Microsoft, in which a settlement also is pending. Mr. Rowe also said, ""We must ensure that the relief afforded in this settlement is adequate, appropriate and in the public interest." Under the proposed settlement, the Company, acting through a foundation, would donate hardware and software to disadvantaged schools nationwide. Mr. Rowe's office said that the letter from the four states urged the court to consider whether the settlement would be adequate and whether it would effectively enhance the Company's market power. The office also said that the letter raised questions about the eligibility standards for schools obtaining relief and the actual benefits that would be made available. Eligible schools would be those with 70 percent student eligibility for federally assisted lunch programs. Mr. Rowe's office added that less than 20 schools in Maine would be eligible. Microsoft spokesman Jim Desler said that the company was confident it would prevail in court against various class action claims, but was willing to compromise as a way to "assist underserved communities rather than continue with protracted litigation." Mr. Desler called the pending settlement "a very well thought-out and carefully developed education proposal." A hearing on a motion for preliminary approval of the settlement is scheduled in Baltimore on December 10. MICROSOFT CORPORATION: Apple Opposes "Anti-Competitive" Settlement ------------------------------------------------------------------ Apple Computer Corporation, has formally opposed rival Microsoft Corporation's proposed settlement to hundreds of consumer class actions in which Microsoft would donate $1 billion in software and computers to schools nationwide. Apple filed a supplemental brief in the US District Court in Baltimore, Maryland, saying that the agreement would constitute "a massive subsidy" for the adoption of Microsoft technology. According to a recent report by Newsbytes News Network, the 31-page brief urged US Federal Judge J. Frederick Motz to reject Microsoft's proposed settlement. The Company has offered to donate $1 billion in free software and refurbished computers to 12,500 poor U.S. schools, as a means of settling more than 150 private antitrust claims that it used its monopoly in the computer operating system market to overcharge consumers for its products. Apple, on the other hand, argued in its brief that 80 to 90 percent of the settlement's value would be closely tied to the schools' adoption of Microsoft technology, thereby giving the Company "extraordinary leverage in the public schools." Apple said the court should amend the settlement to provide that Microsoft make a cash-only grant to an independent foundation. "Such a structure would ensure the freedom of choice necessary to meet the schools' needs, while preventing Microsoft from completely dominating what has been a competitive education market," Apple's attorneys, said. Apple and Microsoft are locked in a tight battle for the education Market, with Apple saying it now controls roughly 47 percent of the market, compared to Microsoft's 53 percent share. At a lengthy hearing on the settlement last month, Judge Motz was receptive to Apple's argument, noting that Microsoft's offer to provide free Windows software could "have an indirect anti-competitive effect" on the education market. Apple CEO Steve Jobs said in a prepared statement that "The centerpiece of Microsoft's proposed $1 billion civil antitrust settlement is their donation of Microsoft software, which they value at $830 million, to our schools. We think people should know that the actual costs to Microsoft for this donated software will likely be under $1 million. We think a far better settlement is for Microsoft to give their proposed $1 billion.to an independent foundation, which will provide our most needy schools with the computer technology of their choice." Judge Motz is holding a hearing on December 10 to receive the Company's testimony on its proposal for settlement. NETWORK ENGINES: Milberg Weiss Commences Securities Suit in S.D. NY ------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Network Engines Inc. (NASDAQ:NENG) between July 13, 2000 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) Lawrence A. Genovesi, CEO, President, Chairman and Chief Technology Officer, (2) Douglas G. Bryant, CFO and director, (3) FleetBoston Robertson Stephens Inc., (4) Credit Suisse First Boston Corp., (5) Goldman, Sachs & Co., (6) Lehman Brothers Inc. and (7) Salomon Smith Barney Inc. The suit 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 2000, the Company commenced an initial public offering of 6,500,000 of its shares of common stock, at an offering price of $17 per share. In connection therewith, the Company filed a registration statement, which incorporated a prospectus with the SEC. The suit further alleges that the prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriter defendants allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby the underwriter 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 or visit the firm's Website: http://www.milberg.com PAC-WEST TELECOMM: Milberg Weiss Lodges Securities Suit in S.D. NY ------------------------------------------------------------------ Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Pac-West Telecomm, Inc. (NASDAQ: PACW) between November 3, 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) Wallace W. Griffin, (2) Richard E. Bryson, (3) Dennis V. Meyer, (4) Bear Stearns & Co., Inc., (5) Merrill Lynch, Pierce Fenner & Smith Incorporated, (6) Goldman, Sachs & Co. and (7) Salomon Smith Barney, Inc. The suit 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 1999, the Company commenced an initial public offering of 12,600,000 of its shares of common stock, at an offering price of $10 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 underwriter defendants 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 underwriter defendants had entered into agreements with customers whereby they agreed to allocate Company shares to those customers in the IPO in exchange for which the customers agreed to purchase additional shares in the aftermarket at pre-determined prices. For more 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 or visit the firm's Website: http://www.milberg.com SILICON IMAGE: Milberg Weiss Commences Securities Suit in S.D. New York ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Silicon Image Inc. (NASDAQ:SIMG) between October 5, 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) David D. Lee, CEO, President and Chairman, (2) Daniel K. Atler, CFO and Vice President of Finance and Administration, (3) Credit Suisse First Boston Corp., (4) FleetBoston Robertson Stephens Inc., (5) Bear, Stearns & Co. Inc. and (6) Salomon Smith Barney Inc. The suit 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, the Company commenced an initial public offering of 3,900,000 of its shares of common stock, at an offering price of $12 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 underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriter defendants allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) the underwriter defendants had entered into agreements with customers whereby the underwriter 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 further details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: 800.320.5081 or visit the firm's Website: http://www.milberg.com SMTC CORPORATION: Denies Allegations in Securities Suit in S.D. NY ------------------------------------------------------------------ SMTC Corporation labeled "without merit" the securities class action filed in the US District Court for the Southern District of New York by Schiffrin and Barroway LLP relating to its initial public offering. The suit names as defendants the Company and: (1) Paul Walker, Chief Executive Officer, and (2) the CIBC World Markets, the brokerage arm of the Canadian Imperial Bank of Commerce The electronic components maker was charged with violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges the prospectus the Company filed in connection with its initial public offering last July failed to disclose that: (i) the underwriters received "excessive and undisclosed commissions" from certain investors in exchange for "material portions of the restricted number of shares" issued in connection with the IPO; and (ii) the underwriters allocated shares to customers on the condition that the clients would purchase more shares following the IPO at predetermined prices. Six investment dealers, including CIBC World Markets, were named as defendants in the lawsuit. The allegations are part of a complaint and have yet to be proven in court. The Company further added that Schiffrin & Barroway are handling a number of lawsuits challenging practices by Wall Street investment dealers in connection with IPOs. The Company also stated that it would vigorously oppose the suit. SONICWALL INC.: Milberg Weiss Initiates Securities Suit in S.D. NY ------------------------------------------------------------------ Milberg Weiss Bershad Hynes and Lerach LLP commenced a securities class action on behalf of purchasers of the securities of SonicWALL Inc. (NASDAQ:SNWL) between November 10, 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) Sreekanth Ravi, CEO, President and director, (2) Sudhakar Ravi, Vice President of Engineering, director, (3) Michael J. Sheridan, CFO and Secretary, (4) Bear, Stearns & Co. Inc., (5) FleetBoston Robertson Stephens Inc. and (6) Credit Suisse First Boston Corporation The suit 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 1999, the Company commenced an initial public offering of 4,000,000 of its shares of common stock, at an offering price of $14 per share. In March 2000, the Company commenced a secondary offering for the sale of 3,500,000 shares of common stock for $100 per share. In connection with the IPO and secondary offering, the Company filed registration statements, which incorporated prospectuses 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 underwriter defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriter defendants allocated to those investors material portions of the restricted number of Company shares issued in connection with the IPO; (ii) the underwriter defendants had entered into agreements with customers whereby the underwriter 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; and (iii) the secondary prospectus failed to disclose the aforementioned practices and the resulting inflation of the price of common stock which continued throughout the class period, including the time of the secondary offering. 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 VALICERT INC.: Milberg Weiss Initiates Securities Suit in S.D. New York ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action on behalf of purchasers of the securities of ValiCert Inc. (NASDAQ:VLCT) between July 27, 2000 and December 6, 2000, inclusive in the United States District Court, Southern District of New York, against the Company and: (1) Joseph Amram, CEO and President, (2) Timothy Conley, CFO, and (3) Merrill Lynch, Pierce, Fenner & Smith Incorporated The suit 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 2000, the Company commenced an initial public offering of 4,000,000 of its shares of common stock, at an offering price of $10 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) Merrill Lynch had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Merrill Lynch allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and (ii) Merrill Lynch had entered into agreements with customers whereby Merrill Lynch 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 or visit the firm's Website: http://www.milberg.com VIDAMED INC.: Faces Suits For Breach of Fiduciary Duty In DE Court ------------------------------------------------------------------ Vidamed, Inc. (NASDAQ:VIDA) faces three securities class actions in the Court of Chancery for the State of Delaware challenging the Company's recently announced merger with a subsidiary of Medtronic, Inc. The suits name as defendants the Company, its directors and Medtronic, Inc. Under the merger, the Company's stockholders will receive $7.91 per share in cash, which represents a 40% premium to the closing sale price of the Company's stock on the day prior to the public announcement of the transaction. The suits allege breach of fiduciary duty by the Company's directors in connection with the merger and seek, among other things, injunctive relief and unspecified damages and fees of attorneys and experts. The Company said in a press statement that it believes the terms of the proposed merger are fair, from a financial point of view, to the Company and its stockholders and believes that the complaints are without merit. It also stated its plans to vigorously defend its position. XO COMMUNICATIONS: Rabin Peckel Commences Securities Suit in E.D. VA -------------------------------------------------------------------- Rabin and Peckel LLP initiated a securities class action in the United States District Court for the Eastern District of Virginia on behalf of all persons or entities who purchased XO Communications, Inc. common stock (NASDAQ:XOXO) between April 4, 2001 and November 29, 2001, inclusive against the Company and: (1) Daniel F. Akerson, (2) Nathaniel A. Davis, and (3) Craig O. McGraw The suit alleges that defendants violated Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 by issuing a series of materially false and misleading statements about the Company's liquidity and cash flow problems. In particular, it is alleged that the Company's ability to survive its cash flow problems into the middle of 2003 without the need for additional financing was misrepresented. The suit also alleges that as a result of these false and misleading statements the price of the Company's common stock was artificially inflated throughout the class period causing plaintiff and the other members of the class to suffer damages. For more information, contact Eric Belfi or Maurice Pesso by Mail: 275 Madison Avenue, New York, NY 10016 by Phone: 800.497.8076 or 212.682.1818 by Fax: 212.682.1892 or by E-mail: email@rabinlaw.com. XO COMMUNICATIONS: Hoffman Edelson Lodges Securities Suit in E.D. VA -------------------------------------------------------------------- Hoffman & Edelson LLC initiated a securities class action in the United States District Court for the Eastern District of Virginia, on behalf of purchasers of XO Communications, Inc. Nasdaq:XOXO securities between April 4, 2001 and November 29, 2001, inclusive against the Company and: (1) Daniel F. Akerson, Chief Executive Officer and Chairman of the Board of Directors, (2) Nathaniel A. Davies, President, Chief Operating Officer and Director, (3) Craig O. McCaw, the Company's founder, controlling shareholder, and Director The suit charges the defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by, among other things, issuing false and misleading statements regarding the Company's financial condition as well as its present and future business operations. In particular, the suit alleges that defendants mislead the investing public concerning the Company's ability to finance its business operations until it would be cash-flow positive. Throughout the class period, defendants stated that the Company would be able to survive at least into the middle of 2003 without the need for further financing. These statements were false, and on November 29, 2001, defendants announced a transaction where the shareholders' equity was destroyed in exchange for a cash infusion of $800 million. Trading in the Company's stock was immediately halted. For further details, contact Marc H. Edelson by Mail: 45 W. Court Street, Doylestown, PA 18901 by Phone: 877.537.6532 (toll free) by Fax 215.230.8735 or by E-mail: medelson@hofedlaw.com. XO COMMUNICATIONS: Cohen Milstein Initiates Securities Suit in E.D. VA ---------------------------------------------------------------------- Cohen Milstein Hausfeld & Toll PLLC commenced a securities class action in the United States District Court for the Eastern District of Virginia, on behalf of purchasers of the common stock of XO Communications, Inc. (NASDAQ:XOXO) during the period of April 4, 2001 through and including November 29, 2001. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) by issuing false and misleading statements regarding the Company's financial condition as well as its present and future business prospects. In particular, the suit alleges that defendants misled the investing public concerning the ability of the Company to survive until it would be cash flow positive. Throughout the class period, defendants stated that the Company would be able to survive at least into the middle of 2003 without the need for further financing. However, on November 29, 2001, defendants announced a transaction where the shareholders' equity was destroyed in exchange for an investment of $800 million. Trading in the Company's stock was quickly halted. For more details, contact Steven J. Toll or Mary Ann Fink by Mail: 1100 New York Avenue, NW West Tower, Suite 500 Washington, DC 20005 by Phone: 888.240.0775 or 202.408.4600 or by E-mail: stoll@cmht.com or mfink@cmht.com YAHOO FRANCE: Win in US Nazi Suit Appealed by French Advocacy Groups -------------------------------------------------------------------- Two French humanitarian groups are appealing a US federal court's recent decision in favor of Yahoo regarding the sale of Nazi memorabilia on the portal's auction pages, Newsbytes News Network reported. The two French groups, Ligue Internationale Contre le Racisme et l'Anti-Semitisme (The International League Against Racism and Anti-Semitism) and the Union of Jewish Students, won an initial lawsuit, brought last year against Yahoo France, prohibiting the Web portal operator from allowing the sale of Nazi memorabilia on its pages. That lawsuit, which went through the French courts, was followed by a counter-suit, filed in the US by Yahoo against the two groups. That litigation, in turn, on November 9, secured a judge's ruling that the French judge's decision was unenforceable in the United States. The two groups' appeal could take up to a year to reach the courts, said Ronald S. Katz, the American attorney for the organizations. Whichever way the appeal to the 9th US Circuit Court goes, Mr. Katz said he thinks the case will go forward to the US Supreme Court for a final decision, even though only one percent of appeals court cases reach the high court. Mr. Katz said, however, that the lack of an international treaty on Internet law means the end result of all the litigation is likely to be sterile. "You have a French decision enforceable in France, and a US decision enforceable in the US, but you can't enforce a decision in a case like this between the two countries." Such a treaty should exist, he added. In the French lawsuit, the Company was ordered to remove the items for sale on the auction pages concerned or face daily fines of around 15,000 euros ($13,500). The Company countered this, saying this was technically impossible to accomplish. The Company has yet to pay the fines levied by the French court. ********* 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. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *