/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020205.mbx C L A S S A C T I O N R E P O R T E R Tuesday, February 5, 2002, Vol. 4, No. 25 Headlines AMERITRADE INC.: Appeals Court Allows Stock Quote Suit To Continue APPLE COMPUTER INC.: Lawsuit Charges Firm With "Planned Obsolescence" COMMONWEALTH EDISON: Faces Suit For 1999 Service Interruptions in IL CONSECO INC.: Groups Say Settlement in PA Insurance Suit "Inadequate" DOW CORNING: Australian Women To Sue After US Court Rejects Settlement DVT LITIGATION: 20 New Zealanders To File Damage Suit Against Airlines FOX ENTERTAINMENT: Extras Sue For Exposure To Carcinogenic Powder in CA INDIANA: State Supreme Court Refuses To Hear Special Education Case LOUISIANA: To Settle For $291M Suit Due To Program Damaging Oyster Beds MICROSOFT CORPORATION: Lawyer's Group Asks Judge To Block Settlement NEW YORK: Irondequoit Retirees Ask Federal Court To Rule In Their Favor OKLAHOMA: Woman Sues Tulsa Police Department For Racial Discrimination PRUDENTIAL LIFE: Escapes Damages, Ordered To Pay $66T To Settle Suit SIX FLAGS: Denies Allegations in Racial Bias Suit in California SULZER MEDICA: Texas City Sues Subsidiary Over Aborted Move To Suburb SULZER MEDICA: Expects Positive Settlement Development in Implants Suit TELECOMMUNICATIONS COMPANIES: Firms Join Forces In "Right-Of-Way" Suit TUBE TURNS: Faces Suit Relating To LA Exxon Mobil Coker Plant Explosion Securities Fraud COMPUTER ASSOCIATES: Settling Shareholder Derivative Suits in DE, NY CRITICAL PATH: Milberg Weiss Commences Securities Suit in N.D. CA DECODE GENETICS: Sued For Securities Laws Violations in S.D. New York DYNACQ INTERNATIONAL: Charles Piven Lodges Securities Suit in S.D. TX ENRON CORPORATION: Two Employees Sue Andersen, Former Enron Executives ENRON CORPORATION: Collapse Costs Hawaii's Pension System $11.3 Million GLOBAL CROSSING: Green Fauth Files Securities Suit in LA Court IMMUNEX CORPORATION: Shareholders Sue Over American Homes Merger in WA PNC FINANCIAL: Shareholder Files Suit After 2001 Earnings Restatement SAGENT TECHNOLOGY: Asks CA State Court To Dismiss Derivative Suits SAGENT TECHNOLOGY: CA Suits Could Adversely Affect Business Operations TALARIAN CORPORATION: To Vigorously Oppose CA Suit Over Tibco Merger TALX CORPORATION: Vigorously Opposing Securities Suit in E.D. Missouri WILLIAMS COMPANIES: Federman Sherwood Lodges Securities Suit in N.D. OK ********* AMERITRADE INC.: Appeals Court Allows Stock Quote Suit To Continue ------------------------------------------------------------------ The 8th US Circuit Court of Appeals ruled recently that a Los Angeles man's class action charging Omaha-based online discount brokerage Ameritrade, Inc., with breaking its promises to provide customers with "real-time" stock quotes, could continue in State Court. The suit potentially could involve thousands of customers across the country, the Associated Press recently reported. The 8th Circuit upheld an earlier ruling by US District Court Judge Richard Kopf of Lincoln, who rejected the Company's argument that The Securities Litigation Uniform Standards Act of 1998 prohibits such lawsuits against brokers. Judge Kopf ruled that the lawsuit was a contractual dispute and therefore not covered by the federal law. Los Angeles resident Mitchell Green filed the suit. Mr. Green agreed in 1998 to pay $20 a month for a Company service in order to get real-time information on stocks and quotes. He alleges that the information on the options, agreements to buy or sell a stock at a certain time or price, was "stale." "Ameritrade tells people it provides this service, and it's not provided," said attorney Mark Ozzello of Los Angeles, who is helping represent Mr. Green. "With respect to certain options, the quotes given by Ameritrade are thousands of trades behind." Attorneys representing Ameritrade and company spokesman Matt Ord did not immediately return telephone calls seeking comment. Founded by Joe Ricketts of Omaha, Ameritrade exploded in growth in 1997, when it began offering rates as low as $8 a trade during the market's heyday. It is now among the top 10 online brokers in numbers of trades. APPLE COMPUTER INC.: Lawsuit Charges Firm With "Planned Obsolescence" --------------------------------------------------------------------- Four named plaintiffs recently filed a lawsuit seeking class action status in Los Angeles Superior Court, alleging that Apple Computer Inc. misled customers and made low-quality software upgrades for older computers in order to "accelerate a deliberate policy of planned obsolescence," the Associated Press reported recently. According to the lawsuit, the Cupertino-based Company, encouraged customers in 1998 and 1999, to buy their latest Power PC G3 computers, while promising the units would be capable of running its next- generation operating system called OS X. Apple also said, the lawsuit further stated, that OS X would be "fully optimized" to run on those G3 models. However, the Company, which released Mac OS X last year, broke both promises, the lawsuit alleges. Thomas Ferlauto, one of the four named plaintiffs and a Los Angeles attorney in the case, said, "Computers have a short life span compared to other assets, that's for sure. But when a company makes claims to spur sales, they ought to live up to their claims." COMMONWEALTH EDISON: Faces Suit For 1999 Service Interruptions in IL -------------------------------------------------------------------- Commonwealth Edison Company faces a consolidated class action pending in the Circuit Court of Cook County, Illinois, seeking damages for personal injuries, property damage and economic losses related to a series of service interruptions that occurred in the summer of 1999. The combined effect of these interruptions resulted in over 168,000 customers losing service for more than four hours. The Court granted class certification for the sole purpose of exploring settlement talks. However, the Company filed a motion to dismiss the suits and in April 2001, the Court dismissed four of the five counts of the consolidated complaint without prejudice and the sole remaining count was dismissed in part. In June 2001, the plaintiffs filed a second amended consolidated complaint. Settlement discussions between the parties in the suit are ongoing. CONSECO INC.: Groups Say Settlement in PA Insurance Suit "Inadequate" --------------------------------------------------------------------- Several consumer advocates and state officials are saying that a class action settlement insurance company Conseco Inc. has offered to about 700,000 current and former holders of its nursing-home and home- care policies is inadequate to compensate the elderly consumers for unexpected premium increases, The Wall Street Journal recently reported. The suit, filed in the Court of Common Pleas for Philadelphia County in Philadelphia, alleges the Company misled policyholders about the likelihood of premium increases on its long-term-care insurance policies. Company marketing material implied, the lawsuit contends, that rates would remain stable as a person aged. However, the premiums for hundreds of thousands of elderly consumers shot up by as much as 10 percent to 40 percent at a time and in some cases, several years in a row. The Company's sales practices were the subject of a Page One Wall Street Journal article in June 2000. The Company has said that it disclosed the risk of rate increases and is settling to avoid further litigation. A judge will hold a hearing on approval of the settlement February 13. The settlement covers policyholders of about a dozen smaller insurers the Company acquired over the past several years. It offers policyholders three main options: (1) keeping their present policy and taking their chances with future rate increases; (2) a five percent discount on current Company long-term care insurance or other products; or (3) a credit for future coverage, equal to the premiums paid, less any claims already paid on their behalf. People who dropped their policies within 60 days of a rate increase can also ask for this credit. Objectors to the proposed settlement include: (i) the AARP, the national group formerly known as the American Association of Retired Persons, (ii) the Consumer Protection Division of the Texas Attorney General, which has a separate suit pending against the Company, and (iii) other senior-citizens groups. They have criticized the proposed settlement because the proposal offers no cash settlement to the plaintiffs, and gives people several untenable options, including buying new policies at potentially much higher rates based on their current health and age or a credit toward future medical care that shrinks significantly if they already have collected some benefits. "The settlement confers little, if any, real benefit," says an objection and motion to intervene filed by an attorney retained by AARP to represent two policyholders. Critics also contend that elderly plaintiffs were given too little time to review the terms. Many class members did not get settlement notices in the mail until early January, and policyholders had to notify the court by January 22 if they wished to opt out and reserve the right to sue separately. Plaintiffs have until next Monday to select any of the other options. "At the least, these people should have had three months" to review terms, says Bonnie Burns, a member of a consumer board with the National Association of Insurance Commissioners. Company spokesman Mark Lubbers said that objection to the proposed settlement constitutes "pretty obvious grandstanding by people who don't get it that Conseco would win this case if it went to trial. We'd rather spend money on benefits for customers than on legal expenses to win. And as a leader in the long-term-care market, we'd rather do something positive than negative." No less harsh is a statement by one of the plaintiffs' own attorneys, Allan Kanner of New Orleans, who calls the settlement fair given "Conseco's deteriorating financials." For the third quarter, the Company reported a loss of $407.5 million, or $1.21 a share, and several ratings agencies have downgraded the Company's debt, citing concerns over its liquidity. Mr. Kanner also pointed to the fact that Conseco could have argued that many policyholders effectively consented to future rate increases by continuing to pay their premiums. Mr. Kanner even defended the short decision period given the policyholders in the proffered settlement, saying his "experience has been.that with old people, if you give them a short deadline, it sits and they forget about it." Further, when Sylvia Levine, an 86-year-old widow from South Florida, objected to the proposed legal fees and costs of $4.5 million, Mr. Kanner called the fees "pretty reasonable" and said, "I think we've earned it." Evidencing concern about the elderly policyholders, Kevin Hennosy, a former National Association of Insurance Commissioners spokesman, who now publishes an insurance newsletter, said that he, and regulators he has spoken with, worry that the settlement leaves those, who keep their old policy, in a group "laden with unhealthy policyholders and doomed to either huge premium increases leading to lapses, or insolvency." DOW CORNING: Australian Women To Sue After US Court Rejects Settlement ---------------------------------------------------------------------- Hundreds of Australian women may be suing the local subsidiary of Dow Corning, United States breast implant manufacturer, after a US court rejected the Company's worldwide compensation plan, AAP News (Australia) recently reported. About 1,000 women, who allege injuries due to ruptured breast implants, are asking the New South Wales Supreme Court to consider whether Australian women have the right to pursue action for compensation against Dow Corning's Australian subsidiary. This course of action was opened to the women after a US appeals court refused a Dow Corning settlement plan that would have stopped any further legal action against it or its subsidiaries. The lawyer for the Australian women, Peter Cashman, said Dow Corning's settlement offer also had discriminated against them, because it offered foreign claimants just 60 percent of what American women were offered. The worldwide settlement plan has been referred back to a lower court for further consideration, where it still could be approved after changes made in accordance with the appeal court's ruling. Mr. Cashman said the "door is still open" for Australian women to litigate their claims in Australia. "There are still hurdles to be overcome, but at least one of the hurdles is out of the way," Mr. Cashman added. The announcement about the appeal court's disapproval of the worldwide settlement came on the eve of the first compensation payments being made to some 2,400 Australian women who settled with the US parent company in a separate class action last year. The compensation comes after a 10-year legal battle. Melbourne law firm Slater & Gordon said 300 women would receive their share of more than $38.4 million in compensation in February, while the remaining women would receive payments by the middle of the year. The Australian women are the first in the world to receive compensation from the company, and are expected to receive lump sum payments of up to $50,000 each. The Company initially agreed to this compensation deal three years ago, but payment was delayed as the company restructured its finances to raise the necessary funds. Slater & Gordon spokesman Andrew Grech said the compensation was a breakthrough for Australian women, because it offered larger settlements than those offered to many other foreign claimants, and much faster. Mr. Grech said American and foreign claimants would be paid over a 15-year program. Some 200,000 women worldwide allegedly have suffered auto-immune and other disorders as a result of the silicone implants, 80 percent of which were for cosmetic purposes. DVT LITIGATION: 20 New Zealanders To File Damage Suit Against Airlines ---------------------------------------------------------------------- About 20 New Zealand individuals and families are suing airlines for damages after suffering DVT, or deep-vein thrombosis, as a result of air travel, the Associated Press reported recently. Roger Chapman of the Wellington law firm Johnston Lawrence said some of the claims involve significant damages from DVT after long-haul air travel "We also represent a small number of families of people who died as a result of their travel," Mr. Chapman said. DVT, also dubbed economy class syndrome, is caused by blood clots forming in the legs because of immobility. A clot can be deadly if it moves to the lungs. The condition has been linked to long-haul airline flights and claimants allege that airlines knew it was a problem, but did not warn passengers of the risks or take measures to prevent it. Sufferers and the families of people who allegedly have died from the condition have commenced legal action in different parts of the world. Mr. Chapman said that about a dozen claims already have been filed in New Zealand courts to protect the claimants from time limits. A claim must be filed within two years of the flight to be accepted by an airline as valid. Seven or eight airlines involved will be served with claims in the next few months, Mr. Chapman said, but he declined to name them until they had been informed of the cases. Developments in other countries would affect how New Zealand claims proceed, Mr. Chapman continued. "What we are doing is keeping a close eye on developments overseas, especially in Australia," he said. In Great Britain, a court cleared the way for a class action over DVT, against up to 30 airlines worldwide. Lawyers representing both sides effectively agreed on a draft order to open the class action at the High Court in London. The Court will seek approval of the draft order from the Lord Chief Justice of England before the legal battle begins later this year. FOX ENTERTAINMENT: Extras Sue For Exposure To Carcinogenic Powder in CA ----------------------------------------------------------------------- Hundreds of movie extras in the Tim Burton movie "Planet of the Apes" commenced a suit against Fox Entertainment Group, alleging that they were exposed to "Fuller's Earth," an allegedly cancer-causing powder used in the movie. Actors were allegedly exposed to the dust for six to eight hours a day, without the use of masks recommended by the powder's manufacturers. The suit includes claims of fraud and deceit, battery and intentional infliction of emotional distress. Jeffrey Clark filed the suit in Los Angeles last week, on behalf of other extras. The suit demands unspecified compensation and punitive damages, as well as any profits made from the movie. INDIANA: State Supreme Court Refuses To Hear Special Education Case ------------------------------------------------------------------- The Indiana Supreme Court, in a recent 4-1 decision, has declined to hear a class action suit challenging the state requirement that learning-disabled students pass a graduation exam before earning a high school diploma, the Associated Press recently reported. The decision, with Justice Frank Sullivan Jr. as the lone dissenter, involved the ISTEP-Plus graduation exam and came one day after the justices heard preliminary arguments. "I'm extremely disappointed," said Indiana Civil Liberties Union (ICLU) Attorney Kenneth J. Falk, who filed the suit on behalf of the state's special-education students. The ICLU has not yet decided whether to appeal to the US Supreme Court, said Mr. Falk. Before reaching the State's Supreme Court, the Indiana Court of Appeals upheld a trial court ruling in favor of the state. Some parents of learning-disabled children hope the ICLU continues pursuing the suit. The ICLU has said that Indiana's requirement of a graduation examination for students with learning disabilities violates a 1975 federal law on special education and due-process rights in the US and state constitutions. State officials, on the other hand, have argued that special-education students are afforded plenty of remedial learning opportunities, and can retake the test. The case was originally filed against Suellen Reed, the State Superintendent of Public Instruction, on behalf of a Marion County student and several others with learning disabilities. The lead plaintiff, Meghan Rene, now 20, was on track to graduate from Ben Davis High School, but she did not because she could not pass the graduation test. The exam, based on ninth-grade standards, is given to 10th graders under the Indiana Statewide Testing for Educational Progress-Plus. High school students have five chances to pass the test to earn their diplomas. The ICLU has argued that this requirement for students with learning disabilities is unfair, and that they should be exempt from taking the exam until they have been properly prepared. LOUISIANA: To Settle For $291M Suit Due To Program Damaging Oyster Beds ----------------------------------------------------------------------- Thirty-six plaintiffs were awarded $291 million by State District Court Judge Manuel Fernandez of St. Bernard Parish, Louisiana, for Breton Sound oyster beds allegedly ruined by a fresh-water diversion program. The judgment, which attorneys for the state plan to appeal, involved thousands of acres of oyster beds harvested through leases awarded by the State. The largest individual award, more than $56 million, went to Peter J. Tesvich for more than 2,600 acres of oyster leases in Breton Sound in St. Bernard Parish, allegedly ruined by the Louisiana's 1991 Caernarvon Freshwater Diversion Program. Judge Fernandez likened his recent decision to that of the December 2000 case involving five plaintiffs awarded $48 million by a Plaquemines Parish jury for oyster leases rendered worthless in Breton Sound due to sediment and freshwater stemming from the Caernarvon Project. Plaintiffs' attorneys Glenn Diaz, J. Wayne Mumphrey, Carlos Zelaya, Daniel Vidrine and David Vidrine sought the judgment from Judge Fernandez, amounting to more than $21,000 per acre, the same amount awarded in the Plaquemines Parish case. Andy Wilson, lead plaintiff for the State, said that Louisiana opposed simply awarding the $291 million on the assumption that the St. Bernard plaintiffs were in the same situation as the Plaquemines plaintiffs. "We felt each plaintiff should have to go through the burden of proof to show damages," he said. A separate lawsuit being argued in Judge Fernandez's court, involving oyster beds in Lake Borgne in St. Bernard Parish, could cost the state millions more if it is found responsible. Louisiana also opposes the damages in the Lake Borgne case, Mr. Wilson said. After the Lake Borgne case started, the State asked that Judge Fernandez disqualify himself because he had worked for then-Governor Buddy Roemer's office in the late 1980s on State oyster leases. However, State District Court Judge Robert Buckley of St. Bernard Parish, turned down Louisiana's request, saying it did not file the objection in time. The Plaquemines jury judgment is already on appeal to a state court. If that judgment is upheld, it could translate into a total of more than $700 million plus interest and attorneys' fees for the remaining 125 claimants in the Plaquemines class action suit. The suit claimed that a total of 35,000 acres of Breton Sound oyster beds were damaged. The Louisiana Department of Natural Resources insists the Caernarvon Freshwater Diversion Project, designed to create new wetlands, did not harm productive oyster-fishing areas and contends there is evidence of oyster production in southern Breton Sound. State officials also have said that leases at risk from the project were identified before construction began and were not renewed. More than 144 billion gallons of water and silt per year are pumped into the marsh by the freshwater-diversion project. The project allows Mississippi River water and sediment to enter Breton Sound east of the river. The diversion is designed to reduce saltwater intrusion and funnel sediment into the Sound to create new wetlands. It is also supposed to increase oyster production on the Sound's eastern and southern shores. MICROSOFT CORPORATION: Lawyer's Group Asks Judge To Block Settlement -------------------------------------------------------------------- The American Antitrust Institute is asking Federal Judge Colleen Kollar-Kotelly to stop the settlement process in the antitrust class action against Microsoft Corporation, until she decides whether the company disclosed all relevant lobbying contacts with the government, the Associated Press reported. The institute charges that the Company didn't comply with a federal statute called the Tunney Act, which covers how federal settlements should be determined to be in the public interest. Former Sen. John Tunney, author of the act, says that he intended the law to cover all employees of the US government including congressional members and aides, according to the Associated Press. The Company has lobbied extensively with Congress, spending considerable time and money on the antitrust suit. The institute claims the Company listed only contacts with the executive branch, which was a possible violation of the Tunney Act. The Company said it has not violated the act, saying the disclosure portion applies only to the executive branch. It cited communications giant AT&T who took the same position in its settlement that resulted in its breakup. Company spokesman Jim Desler said "We feel the process should move forward, and we look forward to the judge's review of this settlement." Albert Foer, President of the Institute, expressed his confidence in an interview with Associated Press, saying "I think we've made a very strong argument that the law has not been complied with." The request for an injunction and hearing within 20 days will serve as a preliminary indication of whether Judge Kollar-Kotelly is willing to consider the institute's position, he added. Judge Kollar-Kotelly will decide in March whether to approve the Company's settlement of antitrust charges with nine states and the Department of Justice. Nine other states and the District of Columbia have opposed the settlement and are fighting for stronger penalties against the Company. NEW YORK: Irondequoit Retirees Ask Federal Court To Rule In Their Favor ----------------------------------------------------------------------- Retirees from Irondequoit, New York have asked the US District Court for the Western District of New York, to issue an immediate ruling in their favor in the suit filed against the town. The suit alleges the City breached an agreement with its non-union retirees when its Board voted last March to change retirees' health coverage from Blue Cross/Blue Shield Blue Million Preferred to Blue Choice Senior plan, according to the Democrat and Chronicle. The suit, which also alleges age discrimination, currently names retirees Hubert Lawrence, Amelia Fontana, Roger Fox and John Magin as lead plaintiffs. However, another motion requests that the suit be reclassified as a class action to cover all 33 affected retirees. The Democrat and Chronicle further reports that under the terms of the town's new health benefits package, retirees 80 or older were allowed to keep their existing coverage, Preferred Blue Million. Retirees 65 to 80 were switched to Blue Choice Senior, and retirees 64 and under were given Blue Choice Select. The suit alleges that the biggest change for the retirees would be the new out-of-pocket costs for prescription drugs. With Preferred Blue Million, the retirees had been paying a $5 co-pay per 34-day supply for drugs. Blue Choice Senior pays only 50 percent of drug costs up to $1,000 per calendar year, with a $200 deductible. Retirees can keep the Blue Million coverage if they pick up the $90-per-month premium difference. Attorney for the plaintiffs, J. Nelson Thomas, told the Democrat and Chronicle the suit was troubling because, "these retirees are all older people and are not in a position to get jobs to make up for the benefit they lost." Town Attorney Stacey Romeo said she cannot comment. OKLAHOMA: Woman Sues Tulsa Police Department For Racial Discrimination ---------------------------------------------------------------------- A woman and her son are suing the police department and two officers, claiming they use excessive force against blacks, according to a recent Associated Press report. Louis Bullock represents Clara Jackson and her son DaMon Jackson, who claim they were pulled over because they are black. The mother and son were stopped in their blue Jeep by Officers Paul Downe and Harold Goad, who were searching for the driver of a stolen green Jeep. Officer Downe allegedly hurt Mrs. Jackson's arm, pushed her against the vehicle and applied handcuffs too tightly. Court documents also say the officer then pepper-sprayed Mrs. Jackson and pushed her onto a curb. Officer Goad handcuffed DaMon Jackson, a high school student, and searched him for weapons. The Jacksons were allowed to go home after the officers realized they had no basis to arrest them. The complaint says, "This incident and the city's treatment of it is part of a pattern of incidents of excessive force by Tulsa police officers involving African-American citizens." Tulsa Police Chief Ron Palmer said the timing of the lawsuit is odd, because the attorney who filed it also represents a group of black officers who are trying to settle a class action with the City. Mrs. Jackson's husband is Officer Dwight Jackson, one of the black officers suing the city. In Mr. Bullock's other suit, the City's black officers allege that the police department has created a racially segregated and hostile environment for blacks and has discriminated against them in promotions and "other professional opportunities." Mr. Bullock said the officers' suit and the Jackson case are "separate matters." "They're just different," he said. "They're apples and oranges. One doesn't relate to the other." Chief Palmer said, "It's a little bit disconcerting" that Mr. Bullock is trying to settle one lawsuit against the city at the same time he has filed another one. "You have to question Mr. Bullock's motives in bringing the new lawsuit during a `critical stage' of negotiations in the class-action case." The parties are in negotiations and have a February 12 court date. PRUDENTIAL LIFE: Escapes Damages, Ordered To Pay $66T To Settle Suit -------------------------------------------------------------------- A federal jury ordered Prudential Life Insurance Company to pay $66,105 to two families who charged the Company with deceptive sales practices. However, the Court refused to award punitive damages to the two families who sought billions of dollars. The decision was a setback for the plaintiffs who filed the suit to highlight the "deceptive" sales practices the Company said were flawed but had been eliminated long ago, according to an Associated Press report. The suit claims policyholders were misled in a variety of ways. Many complained they were offered pension plans requiring payments for only a few years when they actually were exchanging existing life insurance policies for costlier ones. One plaintiff who lost claimed she was promised nursing home coverage, but her policy didn't cover it. The plaintiffs have asked for stiff punitive damages to punish the Company, seeking at least $101,000 in damages and an unspecified amount in punitive damages. The plaintiffs had claimed $15 billion in customer losses nationally. Company spokesman Robert DeFillippo hailed the verdict, saying "We're very pleased with the verdict, especially given the excessive demands of the plaintiffs.We're particularly pleased that the jury rejected the allegations of fraud." The plaintiffs plan to appeal the suit. Plaintiff Edward Cohen calls the ruling "a miscarriage of justice." He was awarded $64,288 after rejecting $500,000 in mediation, Associated Press reports. "I waited 15 years to get back my own money," he adds. SIX FLAGS: Denies Allegations in Racial Bias Suit in California --------------------------------------------------------------- Theme park operator Six Flags Theme Parks, Inc. faces a class action in the California Superior Court for Los Angeles County, commenced in November 2001. The suit alleges that security and other practices at the Company's theme park in Valencia, California, discriminates against visitors on the basis of race, color, ethnicity, national origin and/or physical appearance, and assert claims under California statutes and common law. The named plaintiffs purport to represent seven "subclasses" of visitors to the Valencia park. One of the plaintiffs, 1984 Olympic boxing bronze medalist Israel Cole, claims he was allegedly assaulted, battered, falsely imprisoned, falsely arrested and threatened by a park security workers in October last year. He also claims he was subjected to racial slurs during the incident, which included "disparaging remarks about his African tribal heritage." The Company has denied the allegations, arguing that the lawsuit cannot appropriately be maintained as a class action, and intends to vigorously defend this case. SULZER MEDICA: Texas City Sues Subsidiary Over Aborted Move To Suburb --------------------------------------------------------------------- Sulzer Medica, Ltd. faces another legal battle as residents of Cedar Park, Texas sued subsidiary Sulzer Biologics, alleging that the Company has defaulted on a deal to move its headquarters from Denver to the Austin suburb, the Austin American-Statesman recently reported. Cedar Park is asking a Williamson County District Court to declare the Company in default on its $3 million incentive agreement, City Attorney Leonard Smith said. The city spent about $3 on 26 acres at La Jaita Business Park, in 2000, with the understanding that Sulzer Biologics would invest $25 million to build on the site by December 31, 2003, or repay the City. However, the company scrapped plans to expand to Cedar Park in October because of corporate restructuring. The City has been waiting for a resolution to the incentive agreement ever since, Mr. Smith said. "We don't think this (lawsuit) should be a big surprise," the City Attorney said. "They have had more than 90 days to come up with a plan. Their proposal thus far has just been `Give us more time.' They should be building a plant right now. If the Company doesn't propose an acceptable resolution.Cedar Park may ask for $3 million plus interest and lawyers' fees," he said. The Company has suggested that a sister company, Sulzer Carbomedics might want the land, but city officials said they need a concrete agreement and that the agreement may not be good enough. The Company's lawyers said they had not seen the suit and had no comment. The Company has indicated it is not yet in default because of the 2003 deadline, Mr. Smith said. However, the City's lawsuit says that the Company already is in default because Sulzer Biologics Vice President, T.C. Selman, told the American-Statesman the Company was not coming to Cedar Park. Meanwhile, in a Cleveland courtroom, Sulzer and lawyers representing thousands of patients who received faulty hip and knee implants recently spent the day attempting to agree on a settlement of the class action against Sulzer, without which the hundreds of individual lawsuits for faulty implants will be allowed to proceed. The Company has offered $783 million in cash and stock in settlement over the defective hip and knee implants made by the company's Austin-based Sulzer Orthopedics division. SULZER MEDICA: Expects Positive Settlement Development in Implants Suit ----------------------------------------------------------------------- A breakthrough is expected in the settlement negotiations between Sulzer Medica and plaintiffs in the class action over defective hip and knee implants, according to Company spokesman, Andy Bateln. The suits commenced after the Company recalled 40,000 hip implants and withdrew some knee implants last year. The implants allegedly were not bonding properly to their bones. Later, the Company determined that oil residue on the hip and knee implants caused the problem. Later, Sulzer proposed a $783 million agreement to settle the class actions. Under the settlement, the Company will pay patients who needed surgery after receiving the faulty hip or knee implants between $57,500 and $97,500 in cash and stock. Attorneys for the plaintiffs, however, criticized the proposed settlement, saying it was not enough. Attorney for the plaintiffs Luke Ellis explains that under the proposed settlement, patients who had serious medical complications after they underwent "revision" surgery to fix the problem got the same amount of money, $60,000, as patients who had no medical problems after the procedure. The proposal also included compensation in the form of one-third of the Company's stock, which experts criticized, saying the Company's assets would be protected by a series of liens that would keep the money out of the reach of plaintiffs who opt out of the settlement. "A break through is expected in a very short time," Mr. Bateln said, ahead of a new meeting in the US this week. According to an AFX report, discussions now focus on a term sheet, with the final fairness hearing still scheduled for May 14 in California State Court. The injunction against individual claims meanwhile remains in place, until a settlement is reached, Mr. Bateln added. TELECOMMUNICATIONS COMPANIES: Firms Join Forces In "Right-Of-Way" Suit ---------------------------------------------------------------------- A newly formed coalition of law firms have joined forces to consolidate 35 class actions valued at more than a billion dollars against telecommunications companies MCI WorldCom, Sprint, Qwest, Level 3 and Williams. The firms released papers that were filed here earlier this week asking the Judicial Panel for Multidistrict Litigation to transfer and consolidate all of the class actions in a single federal court. More than 50 class actions have been filed nationally on behalf of landowners on pre-existing railroad, pipeline and utility rights of way, which often are preferred by telecom companies. In many cases courts have held that adjacent landowners own the land under railroads and other utilities, and only they can grant rights to fiber optic cable companies. Washington attorney Nels Ackerson said the development creates a big advantage for landowners who filed the suit against the Companies. "Fourteen law firms will now be acting as one.Plaintiffs' lawyers are rarely this well organized on a national scale. The hardball tactics of these defendants brought us together. They have told different stories in different courts and have tried to make a sweetheart settlement without our involvement and to shop it around secretly to different federal courts for approval." The attorneys said that the defendants worked for five months on a settlement before a judge in Chicago. After he expressed skepticism about the fairness of the defendants' proposal, the defendants now have decided to start over with a new judge in Oregon who is not as familiar with their history, they said. "Consolidation will eliminate the defendants' ability to use procedures in one court to delay and frustrate the landowners while misleading other courts," Chicago attorney William Gotfryd, another plaintiffs' lawyer, said. "We are now pooling information and sharing responsibilities, and if our motion is granted we can focus on a single court." The defendants' recently proposed settlement with a "compliant" plaintiffs' lawyer in Federal Court in Eugene, Oregon, is an example of the conduct which the coalition hopes to stop, according to Minneapolis attorney Daniel Millea. "One defendant's lawyer told me a year ago that he would rather settle with `a greedy plaintiffs' lawyer' than an `ideologue' such as Nels Ackerson," he said. "That can only mean the defendants would rather pay large attorneys fees to lawyers who would accept lower payments to the landowners they are supposed to represent." The amount at issue is large for all parties. The landowners believe the exposure of these defendants is at least a billion dollars, even if the liability is only $10,000 per mile. That figure per mile is lower than other similar class action settlements with AT&T and some other telecom companies, according to the landowners. Yet several of the companies appear not to have disclosed the liability to stockholders or to the public. For more information, contact Nels Ackerson or Kathleen Kauffman of the Ackerson Group, Chartered by Mail: 1666 K Street, NW, Ste 1010, Washington, D.C. 20006-1217 by Phone: 202-833-8833 by E-mail: nackerson@ackersonlaw.com or visit the firm's Website: http://www.ackersonlaw.com TUBE TURNS: Faces Suit Relating To LA Exxon Mobil Coker Plant Explosion ----------------------------------------------------------------------- Tube Turns Technologies, Inc., a subsidiary of Sypris Technologies, is named as co-defendant in two lawsuits, one of which is a class action, arising out of an explosion at a coker plant owned by Exxon Mobil Corporation located in Baton Rouge, Louisiana. These suits allege that a carbon steel pipe elbow that the Company manufactured was improperly installed and, the failure of which caused the explosion. The class action suit was filed in 1994 in the United States District Court in Louisiana on behalf of the residents living around the plant. The suit names as defendants the Company and Exxon Mobil, the fabricator and general contractor of the plant. The Company maintains that the carbon steel pipe elbow at issue was appropriately marked as carbon steel and was improperly installed, without its knowledge, by the fabricator and general contractor in circumstances that required the use of a chromium steel elbow. The Company believes the above defense is meritorious but cannot give any assurance that it will not be found liable for some or all of the alleged damages. It also stated that a negative outcome in the suit could materially affect their business and financial position. Securities Fraud COMPUTER ASSOCIATES: Settling Shareholder Derivative Suits in DE, NY --------------------------------------------------------------------- Computer Associates International, Inc. settled three shareholder derivative class actions pending in Delaware and New York alleging securities laws violations. The suits arose from a pending consolidated class action in the United States District Court for the Eastern District of New York. The suit, filed on behalf of purchasers of the Company's stock from January 20,1998 to July 22,1998, names as defendants the Company and: (1) Charles B. Wang, (2) Sanjay Kumar and (3) Russell M. Artzt The suit alleges that the defendants' misleading statements, representations and omissions regarding the Company's future financial performance harmed the members of the class. The court refused to dismiss the suit, as requested by the defendants and the parties currently are engaged in discovery. Although the ultimate outcome and liability, if any, cannot be determined, management, after consultation and review with counsel, believes that the facts in this suit do not support the plaintiffs' claims and that the Company and its officers and directors have meritorious defenses. The first derivative suit was filed in July 1998, alleging misleading statements and omissions similar to those alleged in the shareholder action. An additional derivative action on behalf of the Company, alleging that the Company issued 14.25 million more shares than were authorized under the 1995 Key Employee Stock Ownership Plan was also filed in the New York federal court. The court later ordered these two suits consolidated. Another derivative action was filed in the Chancery Court in Delaware in September 1998 alleging that 9.5 million more shares were issued to the three 1995 Plan participants than were authorized under the 1995 Plan. The defendants later announced that they have agreed to settle the three derivative suits. Under the terms of the proposed settlement, which is subject to dismissal of related claims by the New York Federal Court, the 1995 Plan participants returned 4.5 million shares of Computer Associates stock to the Company. The Delaware Chancery Court has approved the settlement and both the Delaware Court and the New York Federal Court have dismissed the Derivative Action. One plaintiff has filed a notice of an appeal from the order of the New York Federal Court dismissing the action, while the other parties to the litigation have filed a motion to dismiss the appeal. The Company believes that it has meritorious defenses in connection with the above claims and lawsuits and intends to vigorously contest each of them. In the opinion of the Company's management, the results of these other claims and lawsuits, either individually or in the aggregate, are not expected to have a material effect on the Company's results of operations, financial position or cash flows. CRITICAL PATH: Milberg Weiss Commences Securities Suit in N.D. CA ----------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Critical Path, Inc. (NASDAQ:CPTH) common stock during the period between April 21, 2000 and October 19, 2000. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company provides e-mail hosting services to a variety of organizations, including Internet service providers, Web hosting companies, Web portals, and corporations. Many of these types of companies were new and were suffering from a downturn in Internet-related funding which began in the spring of 2000. The suit alleges that the problems many of these companies were having raising money had reached crisis levels and were impacting the Company's ability to collect receivables. Defendants had also known for months that new accounting regulations would negate its ability to continue to recognize up-front license fees in the 4th Quarter 2000. Defendants knew this would severely impair the Company's future revenue growth and impair their ability to make future stock sales and extract future bonuses that were tied to the Company's performance. Thus, defendants continued to make positive but false statements about the Company's business and projections for the 3rd and 4th Quarters of 2000 and beyond. As a result, Company stock traded as high as $77-3/4. For more information, contact William Lerach by Phone: 800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Website: http://www.milberg.com DECODE GENETICS: Sued For Securities Laws Violations in S.D. New York --------------------------------------------------------------------- Decode Genetics faces a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the Company's stock from July 7, 2000 to December 6, 2000. The suit names the Company, two of its current executive officers and the two lead underwriters for its initial public offering in July 2000 as defendants. The suit alleges: (1) violations of Section 11 of the Securities Act of 1933 against the Company and the two current executive officers; (2) violations of Section 15 of the Securities Act of 1933 against the two current executive officers; and (3) violations of Sections 11 and 12(a)(2) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (and Rule 10b-5 promulgated thereunder) against the two lead underwriters Generally, the suit alleges that the two lead underwriters: (i) solicited and received excessive and undisclosed commissions from certain investors in exchange for which the two lead underwriters allocated to those investors material portions of the shares of stock sold in the IPO; and (ii) entered into agreements with customers whereby the two lead underwriters agreed to allocate shares of the Company's stock sold in the IPO to those customers in exchange for which the customers agreed to purchase additional shares of the Company's stock in the aftermarket at pre-determined prices. The suit further alleges that the prospectus incorporated into the registration statement for the IPO was materially false and misleading in that it failed to disclose these arrangements. The Company labels the allegations against it and its officers "without merit" and stated its intention to contest them vigorously. The Company also believes it is possible that further lawsuits alleging substantially similar claims will be filed against it and its officers. DYNACQ INTERNATIONAL: Charles Piven Lodges Securities Suit in S.D. TX --------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA commenced a securities class action on behalf of shareholders who acquired Dynacq International, Inc. (Nasdaq:DYII) securities November 29, 1999 and January 16, 2002, inclusive, in the United States District Court for the Southern District of Texas, against the Company and certain of its officers and/or directors, namely, Chiu Moon Chan and Philip S. Chan. The suit charges that defendants violated the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the market throughout the class period. For more information, contact Charles J. Piven by Mail: 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com ENRON CORPORATION: Two Employees Sue Andersen, Former Enron Executives ---------------------------------------------------------------------- Two former Enron Corporation employees recently filed a class-action lawsuit in a Texas court against three former company executives, Arthur Andersen and the former head of the accounting firm's Houston branch, the Associated Press recently reported. Michael McCown and Daniel Shultz claim in the lawsuit that former chief executive officers of the Company, Kenneth Lay and Jeff Skilling along with former chief financial officer Andrew Fastow, participated in a civil conspiracy with Arthur Andersen and the head of its Houston office, David Duncan, to misrepresent the worth of company stock to employees. Attorney Steve Berman, who is representing the two former employees, said Company employees who earned bonuses often accepted stock options instead of a cash payment because of their belief in the company. "It was called `Phantom Stock,'" he said. "It turned out to be a good name for it." The lawsuit also claims negligent misrepresentation and a violation of the Texas Deceptive Trade Practices Act through false financial representations and omissions in press releases, annual reports, SEC filings and other documents. ENRON CORPORATION: Collapse Costs Hawaii's Pension System $11.3 Million ----------------------------------------------------------------------- Hawaii may join other states in a class-action lawsuit against Enron Corporation and its auditor Arthur Andersen LP, the Associated Press recently reported. Hawaii's Employment Retirement System lost $11.3 million in pension funds due to the energy trader's collapse, a state official said. The losses in Enron stocks and bonds represent 0.13 percent of the fund, which is valued at about $8.4 billion, system Administrator David Shimabukuro said. He added that the State's retirees need not worry, saying "The pension fund is sound. We really are long-term investors, and even though our investment managers, like others, were caught by surprise, they still have a good track record." Hawaii, like the other states already joined in a class action, would be bringing its lawsuit under the federal Private Securities Litigation Reform Act, which allows litigation in cases where financial losses result from fraud or criminal conduct. "We are talking to the Attorney General's office to determine what legal course of action can be taken," said Mr. Shimabukuro. Representative Marcus Oshiro, D-Wahiawa, said he was relieved to hear the retirement system did not suffer greater losses. "It's terrible that it strikes so close to home, $11.3 million is a lot of money, and it shows you how close some of these national catastrophes can strike," he said. "But we are just fortunate that we didn't put the entire pot into one investment. There are a lot of people out there with larger holes in their pockets." The fund has diminished in the past year and a half, largely because it paid out more in benefits than it traditionally has, and because it lost money in the volatile stock market. The fund, at $9.9 billion in June 2000, fell to $8.8 billion in June 2001. GLOBAL CROSSING: Green Fauth Files Securities Suit in LA Court -------------------------------------------------------------- Green Fauth & Jigarjian LLP initiated a securities class action on behalf of investors in the publicly traded common stock of Global Crossing, Ltd. (NYSE: GX) in Los Angeles County Superior Court, relating to a preliminary agreement entered into by the Company's directors with Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. Under the agreement, Hutchison and Singapore Technologies, will invest $750 million in the Company, subject to a restructuring through bankruptcy which will wipe out the equity of current shareholders, essentially transferring billions of dollars of valuable assets, including a state-of-the-art intercontinental fiber optic network, to those entities at bargain-basement prices. Current shareholders have been told that their entire equity stake in the Company will be wiped out by this transaction. The suit names as defendants the Company's directors, including founder and Chairman Gary Winnick, and Chief Executive Officer John Legere. The suit alleges that the defendants' actions, including the attempted transaction, breached fiduciary duties Company directors owed its shareholders. The suit further alleges that the defendants breached fiduciary duties of loyalty and good faith by: (1) acting to deprive shareholders of equity in the Company; (2) failing to allow shareholders to vote on the contemplated transfer of assets; and (3) failing to pursue alternatives to the transaction which would have maximized value for shareholders. According to the suit's allegations, there was no need for a restructuring destroying shareholder equity, and the defendants failed adequately to explore alternatives, including the divestiture of "non- core" assets such as Global Marine, estimated to be worth some $500 million alone. The suit quotes a company spokesperson as saying in August 2001, that "Our cash position remains solid. Based on our reconfirmed guidance we expect to end 2001 with approximately $1.7 to 2.1 billion in cash and liquidity. In addition, our capital expenditures will continue to decrease significantly in 2002, reflecting the completion of our core network." The suit also quotes CEO Legere as saying, in a November 7, 2001 interview that, "We exceeded every bit of guidance.It's all on track.the Global Crossing team could not have done better.Shareholders should feel confident that we do what we say." The complaint says that, when asked about bankruptcy, Mr. Legere stated that, "Global Crossing has no situation pending where that's something we have to worry about." The action is brought on behalf of all persons who owned Company securities as of January 28, 2002. Excluded from the class are the Company, Hutchison Whampoa and Singapore Technologies Telemedia, the defendants and members of the immediate families of the Defendants. For more information, contact Robert A. Jigarjian, Gordon M. Fauth, Jr. or Warren A. Jackson by Phone: (415) 477-6700 by E-mail: gfj@classcounsel.com or visit the firm's Website: http://www.classcounsel.com. IMMUNEX CORPORATION: Shareholders Sue Over American Homes Merger in WA ---------------------------------------------------------------------- Immunex Corporation and its Board of Directors faces several securities class action in the King County Superior Court of Washington, alleging breach of fiduciary duty relating to the Company's merger with American Home Products. Company shareholder David Osher filed the first suit in December 2001 against the Company, American Home Products and the Company's Board of Directors: (1) Edward V. Fritzky, (2) Kirby L. Cramer, (3) Robert J. Herbold, (4) John E. Lyons, (5) Joseph M. Mahady, (6) Edith W. Martin, (7) Peggy V. Phillips, (8) Lawrence V. Stein and (9) Douglas E. Williams The suit alleges that American Home Products and the Company's Board of Directors breached their fiduciary duties owed to Company shareholders by stalling the merger discussions as a result of positions taken by American Home Products in the negotiations relating to its control of the Company and its marketing rights in future products. The suit further alleges that American Home Products and the Company's board of directors are favoring their own interests and not acting in good faith toward the plaintiff and other members of the purported class. Another shareholder, Adele Brody filed a suit in December 2001 against the Company and: (i) Edward V. Fritzky, (ii) Douglas E. Williams, (iii) Peggy V. Phillips, (iv) Mann and Pea, and (v) the marital community of the named defendants in the first suit The suit, filed on behalf of several Company shareholders, alleges, among other things, that the defendants breached their fiduciary duty to the purported class by failing to take all reasonable steps to assure the maximization of shareholder value, including the implementation of a bidding mechanism to foster a fair auction of the Company to the highest bidder, or the exploration of strategic alternatives which would return a greater value to plaintiff and the other members of the class. The suit further alleges that defendants are continuing to breach their fiduciary duties in order to entrench themselves in office and to receive the benefits of negotiating only with American Home Products. Another suit was filed in the same Court against the same defendants by stockholder Edwin Weiner. The allegations and the relief requested in this complaint are substantially identical to those in the second complaint described above. While these cases are in their early stages, the Company believes that the cases are without merit and intends to contest them vigorously. PNC FINANCIAL: Shareholder Files Suit After 2001 Earnings Restatement --------------------------------------------------------------------- PNC Financial Services Group and its auditor, Big Five accounting firm Ernst & Young, recently were named in an investors' lawsuit, alleging that the Company, Pennsylvania's largest bank, misrepresented its 2001 earnings, the Associated Press reported. The class action was filed recently in US District Court in Pittsburgh. Company earnings changed because regulators required the bank to change how it accounted for the sale of $550 million in corporate loans. American Insurance Group issued preferred shares to the Company in exchange for the loans, which the insurance company then assigned to three subsidiaries in 2001. Federal Reserve Board staff told the Company that, under generally accepted accounting principles, the subsidiaries should be consolidated in preparing bank holding company reports. The Company said its independent Auditors, Ernst & Young, had advised them differently. When federal regulators required the Company to return the loans to its balance sheet, the Company also had to book their depreciation, how much the loans' value decreased, causing it to lower its income by $155 million. "Defendant's (PNC's) failure to conform with proper accounting standards produced inflated earnings and misled investors as to PNC's true financial condition," according to a statement issued by Schiffrin & Barroway, the Philadelphia firm that filed the lawsuit. Ernst & Young spokesman Larry Parnell told the Associated Press that he is aware of the lawsuit, but declined comment because company officials have not yet seen it. Company spokesman Jeep Bryant said that the Company reported its earnings the way it did on the advice of Ernst & Young. He said, however, that the bank does not comment on litigation. SAGENT TECHNOLOGY: Asks CA State Court To Dismiss Derivative Suits ------------------------------------------------------------------ Sagent Technology, Inc. asked two California state courts to dismiss two derivative shareholder suits filed against several of its officers and directors, alleging that the defendants breached their fiduciary duty to the Company. The derivative suits arose from several securities class actions commenced in October 2000 in the United States District Court in California on behalf of purchasers of the Company's common stock between October 21, 1999 and April 18, 2000. The suits alleged that the Company misrepresented its prospects for 1999 and the first quarter of 2000. The Court later ordered the suits consolidated and the plaintiffs filed a consolidated amended suit in April 2001. The Court dismissed the suits in September 2001, but gave the plaintiffs leave to amend the complaint. The first derivative suit was filed in November 2000 in the Superior Court of California for the County of San Mateo, and the second was commenced in February 2001 in the Superior Court of California for the County of Santa Clara. The suits named the Company's present and former officers and directors and tagged the Company as a nominal defendant. The suits primarily alleged that the defendants breached their fiduciary duties to the Company. In July 2001, the two cases were coordinated for pretrial purposes in the Superior Court of California for the County of Santa Clara. The Company asked the Court to dismiss both suits, on the grounds that, among other things, the plaintiff had failed to make a pre-suit demand on the board of directors as required by Delaware law. The officer and director defendants joined in that motion, and also moved to dismiss on the grounds that the complaint fails to allege the asserted causes of action against the individual defendants. These motions are now pending. SAGENT TECHNOLOGY: CA Suits Could Adversely Affect Business Operations ---------------------------------------------------------------------- Sagent Technology, Inc. denies the allegations in the securities class actions pending against it in the United States District Court for the Northern District of California on behalf of purchasers of the Company's common stock between May 11, 2001 and November 28, 2001. The suit accuses the Company and certain of its officers and directors with violating the Securities Exchange Act of 1934. During the class period, defendants caused Company shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. As a result of this inflation, the Company was able to complete a private placement offering of 9.1 million shares, raising net proceeds of $16.8 million on August 1, 2001. In November 2001, just months after this offering was completed, the Company revealed that its 3rd Quarter results, and possibly other quarters, were false when issued. The stock dropped below $.70 per share on this news. Then, on November 28, 2001, after the market closed, defendants revealed that the Company's 1st to 3rd Quarter results had been materially misstated and would have to be restated The Company intends to defend itself against the suit, which it says could adversely affect its business operations and financial position. TALARIAN CORPORATION: To Vigorously Oppose CA Suit Over Tibco Merger -------------------------------------------------------------------- Talarian Corporation labeled "without merit" the class action pending in the Superior Court of the State of California for the County of Santa Clara, relating to its merger with Tibco Software, Inc. The suit was filed on behalf of all of the Company's public stockholders. The suit alleges, among other things, that: (1) the Company and the members of its board of directors breached their fiduciary duties to its stockholders in approving the merger with Tibco; (2) the directors engaged in self-dealing in connection with their approval of the merger; and (3) the directors failed to take steps to maximize the value of the Company to its stockholders. The Company intends to vigorously contest the action, but cannot give assurance that it will be successful in the defense of the action. TALX CORPORATION: Vigorously Opposing Securities Suit in E.D. Missouri ---------------------------------------------------------------------- Talx Corporation vowed to mount a vigorous defense against three securities class actions commenced in December 2001 in the United States District Court for the Eastern District of Missouri by Matt L. Brody, an alleged Company shareholder. The suit names as defendants the Company and: (1) William W. Canfield, (2) Craig N. Cohen, (3) Richard F. Ford, (4) Stifel, Nicolaus & Company, Incorporated and (5) AG Edwards & Sons, Inc. The suit, brought on behalf purchasers of the Company's shares between July 18, 2001 and October 1, 2001, alleges, among other things, that the registration statement and prospectus for the Company's 2001 common stock offering, as well as other statements made by the defendants, were materially false and misleading because they allegedly did not properly account for certain software and inventory, did not reflect certain write-offs, and did not accurately disclose certain business prospects. The suit alleges violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder by the Company and the individual defendants, Section 11 of the Securities Act of 1933, and, in the case of Mr. Canfield, Section 15 of the Securities Act of 1933. Two additional securities class actions were filed in the same Court, against the same defendants and making substantially the same allegations. The Company believes it has meritorious defenses to the claims. However, due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of the litigation. An unfavorable outcome could have a material adverse impact on the Company's business, financial condition and results of operations. WILLIAMS COMPANIES: Federman Sherwood Lodges Securities Suit in N.D. OK ----------------------------------------------------------------------- Federman & Sherwood initiated a securities class action on behalf of purchasers of the common stock of Williams Companies, Inc. (NYSE: WMB) (WMB) and/or Williams Communications Group, Inc. (NYSE: WCG) (WCG) between July 24, 2000 and January 29, 2002, inclusive in the United States District Court for the Northern District of Oklahoma. 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 July 24, 2000 and January 29, 2002, thereby artificially inflating the price of WMB common stock and WCG common stock. Specifically, the complaint alleges that WMB and WCG issued a series of statements concerning their businesses, financial results and operations which failed to disclose: (1) that the spin-off of WCG from WMB was not in the best interests of both WMB and WCG shareholders as the primary motivation for the spin-off of WCG was to allow WMB to shore up its balance sheet so that it could then issue more stock and/or debt to acquire companies using its common stock as currency and protect its debt rating; (2) that WCG was operating at levels well below company-sponsored expectations, such that revenue projections were overstated, and costs and expenses were understated, and also such that, in an effort to control costs, defendants would soon have to take actions which would have a further adverse impact on WCG's profitability; (3) that approximately $2 billion of WCG debt that was guaranteed for payment by WMB around the time of the spin-off was improperly footnoted by WMB as a mere contingent obligation of WMB, which was materially false and misleading because the declining financial condition of WCG made it increasingly certain that WMB would be forced to pay on such guaranties, for which it did not adequately reserve; (4) that WCG's assets were permanently impaired and had to be written-off and that WCG avoided taking such write-offs on its own books through the series of financial machinations described in the complaint; (5) that WMB was carrying on its financial statements receivables from WCG that were impaired, uncollectible and should have been written-off in whole or in substantial part. Rather than writing off these impaired assets, which amounted to tens of millions of dollars, WMB agreed to extend up to $100 million of WCG's receivables with an outstanding balance due on March 31, 2001, to March 15, 2002; and (6) that the sale and leaseback of WCG's office properties in or about September of 2001 was a non-arm's length transaction at an inflated value for the properties whose motive and intent was to funnel monies to WCG and avoid forcing WMB to perform its guaranties and thereby adversely affect its results and debt ratings. For more information, contact William B. Federman by Mail: 120 N. Robinson, Suite 2720 Oklahoma City, OK 73102 by Phone: (405) 235-1560 by Fax: (405) 239-2112 or by E-mail: wfederman@aol.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 2002. 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 * * *