/raid1/www/Hosts/bankrupt/CAR_Public/020207.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, February 7, 2002, Vol. 4, No. 27
Headlines
ARIZONA: Revenue Dept To Help Taxpayers Get Refunds Of Illegal Taxes
FORD MOTOR: California Jury Says Explorer SUVs Have Design Defect
HOLOCAUST CLAIMS: Deadline for War Victims Insurance Claims Extended
METRIS COMPANIES: To Settle For US$ 5.5M Cardholder Fraud Suit in MN
PHILADELPHIA: Camden Residents To Sue Due To Water From Superfund Site
SOUTH CAROLINA: Former Residents of Abusive Home Owner Mull Damage Suit
Securities Fraud
ATCHISON CASTING: Settles For $1.8 M Consolidated Securities Fraud Suit
CORNING INC.: Finkelstein Krinsk Commences Securities Suit in New York
CRITICAL PATH: Schiffrin Barroway Initiates Securities Suit in N.D. CA
CRITICAL PATH: Cauley Geller Commences Securities Suit in N.D. CA
DAVIS ADVISORS: Shareholders Sue For Excessive Advisory Fees in IL
DEL GLOBAL: New York Court Approves $6.5M Settlement of Securities Suit
ELAN CORPORATION: Abbey Gardy Commences Securities Suit in S.D. NY
ELAN CORPORATION: Charles Piven Commences Securities Suit in NY, CA
ELAN CORPORATION: Scott Scott Commences Securities Suit in S.D. CA
ELAN CORPORATION: Bernstein Liebhard Commences Securities Suit in NY
ENRON CORPORATION: Investors Who Lost Money Could Join Securities Suit
ENRON CORP.: Tory Peer Lord Wakeham Faces Bankruptcy Over Directorship
GLOBAL CROSSING: Weiss Yourman Initiates Securities Suit in C.D. CA
GLOBAL CROSSING: Wolf Popper Lodges Securities Suit in S.D. New York
HOMESTORE.COM: Harvey Greenfield Initiates Securities Suit in C.D. CA
MCLEODUSA INC.: Wolf Haldenstein Commences Securities Suit in N.D. Iowa
PNC FINANCIAL: Pomerantz Haudek Commences Securities Suit in W.D. PA
REGENERATION TECHNOLOGIES: Charles Piven Lodges Securities Suit in FL
REGENERATION TECHNOLOGIES: Levy Levy Files Securities Suit in N.D. FL
ROTTLUND COMPANY: Shareholders Sue For Breach Of Fiduciary Duty in MN
SKECHERS USA: Plaintiffs Voluntarily Withdraw Securities Fraud Suit
WILLIAMS COMPANIES: Kirby McInerney Lodges Securities Suit in N.D. OK
WILLIAMS COMPANIES: Wolf Haldenstein Initiates Securities Suit in OK
WILLIAMS COMPANIES: Wechsler Harwood Lodges Securities Suit in N.D. OK
*********
ARIZONA: Revenue Dept To Help Taxpayers Get Refunds Of Illegal Taxes
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A report released to Governor Jane Hull shows that Arizona's Department
of Revenue has gathered together all the records required to identify
as many as 750,000 Arizonans who were illegally taxed more than a
decade ago, the Associated Press recently reported. Payout to the
250,000 to 750,000 affected taxpayers could cost the state $600
million.
Department Director Mark Killian said in the recently released report,
"We do have all of the information necessary to assist taxpayers in
receiving their refunds," according to a recent report by the East
Valley Tribune.
The report reverses a position the Department took in Maricopa County
Superior Court last week about the availability of the necessary
records to identify taxpayers who were owed refunds for illegal taxes
paid by certain Arizonans in the late 1980s, a position reversed when
lawmakers threatened to launch an investigation into the destruction of
the tax returns of Arizona residents who had paid those illegal taxes.
The Department now says in the report that it has backup copies of any
records that were destroyed. An official with the Attorney General's
office told the Tribune that state lawyers were unaware of the backup
files when they filed their court documents.
The issue is rooted in a decade-old legal battle over a state law in
the late 1980s that required Arizona residents to pay income tax on
dividends paid from out-of-state companies. The law ran counter to US
protections for interstate commerce, and the practice ended in 1996.
In 1991, Helen Ladewig filed a claim for a refund of the illegal taxes
collected between 1986 and 1989. She also sought to represent anyone
similarly affected. An Arizona tax judge ruled in her favor in 1999.
Attorneys for the state Revenue Department fought the case to the state
Supreme Court, where they lost last year.
Lawmakers are still fuming about the case. "I think the AG (Attorney
General) messed up," said Rep. Laura Knaperek, R-Tempe. "I don't like
the way this case was handled." In the Tribune's two-day attempts to
speak with Attorney General Janet Napolitano, spokeswoman Pati Urias
reiterated the office's stance is that it simply represents the Revenue
Department and did only what that Department wanted it to do.
"You can't downplay this," said Sen. Scott Bundgaard, R-Glendale. "For
a number of years (Arizona) has blown off the taxpayer. Now you find
the AG is representing the agency against the taxpayer and asking (the
court) to eliminate taxpayers' class action status. What is going on
here is absolutely wrong," said the Senator.
FORD MOTOR: California Jury Says Explorer SUVs Have Design Defect
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A California jury's ruling that Ford Motor Company's Explorer sport-
utility vehicles (SUV) built prior to this year's model have a design
defect is the first of several Explorer-related legal decisions
expected this year, USA Today recently reported.
A jury in Barstow, California recently held that the Company was not
responsible for an accident in which an Explorer rolled over, USA Today
recently reported. The jury found that an auto repair shop was liable
for the faulty service on a 1994 Explorer that rolled over in a 1997
crash. The jury did say, however, that the Explorer was shipped from
the factory with a design flaw.
The Explorer, the best-selling SUV in the USA, has been at the center
of controversy for 18 months because of a series of rollover accidents
after Firestone tires on the vehicle lost tread. The Company and
Bridgestone/Firestone have blamed each other for the accidents, which
have caused more than 200 deaths and 800 serious injuries.
Pending action involving the Explorer include:
(1) An appellate court is expected to rule by late spring whether
a class action against the Company and Bridgestone/Firestone,
certified last October by a federal judge in Indianapolis, has
merit. That case is moving forward with pre-trial discovery
and motions despite the appeal. Losing a jury trial could
cost both companies hundreds of millions of dollars;
(2) Both the Company and Bridgestone/Firestone continue to face
personal injury lawsuits around the country related to Ford
Explorers and Firestone tires. Attorneys familiar with the
cases expect that three or four might go to trial this year
rather than being settled out of court. Hundreds of cases
already have been settled;
(3) State Attorneys General, led by Florida, are expected to
decide by midyear whether to take the Company to court on
charges that the automaker concealed known defects in the
Explorer that contributed to deaths and injuries. Company
executives were deposed last month. Bridgestone/Firestone has
settled with the states and agreed to help the attorneys
general in their pursuit of the Company;
(4) The National Highway Safety Administration likely will decide
this month if it will formally investigate Explorer's
design for a defect.
NHSA spokesman Rae Tyson said jury verdicts do not influence the
agency's decision on whether to investigate for defect. "Our work is
conducted independent of outside influences," he said.
In the California case, the jury answered "yes" to a question about
whether the Explorer had a "defect in the design" without, however,
elaborating on its "yes." Plaintiff's attorney Gary Mardirossian gave
as his interpretation that "the jury found that the vehicle was not fit
for transportation."
The Company was quick to call the verdict, that it was not responsible
for the accident, a victory. "This is a win, plain and simple," said
Company spokesman Ken Zino. "A general finding of defect is
meaningless in these cases."
Of the coming months of regulatory decisions and trials involving the
Explorer, Mr. Zino said, "We'll take them one at a time."
HOLOCAUST CLAIMS: Deadline for War Victims Insurance Claims Extended
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The Chairman of an international commission created to resolve
Holocaust-era insurance disputes has extended the deadline for
submitting claims until the end of September 2002, the Los Angeles
Times reported recently.
Lawrence S. Eagleburger, the former Secretary of State who heads the
International Commission on Holocaust Era Insurance Claims, extended
the deadline for filing the insurance claims late last week after
stormy meetings in Washington at which he resigned in frustration and
then agreed to continue serving.
The overall issue involves claims by heirs of people murdered by the
Nazis, who contend that the insurance companies have refused to pay on
life insurance policies written in pre-World War II Europe. In 1998,
about a year after the controversy generated widespread publicity in
the United States, several major insurers, spurred by the filing of a
number of class-action lawsuits, agreed to join the international
Commission in hopes of resolving the conflict outside the U.S. court
system.
Five major insurers agreed to fund the Commission in return for
receiving a "safe harbor" from US litigation. The Companies pledged to
contribute $90 million, but after putting in $30 million, they ceased
providing funds. The five insurers are:
(1) Allianz of Germany,
(2) AXA of France,
(3) Winterthur of Switzerland,
(4) Zurich of Switzerland, and
(5) Assiscurazioni Generali of Italy
At the November congressional hearing, Mr. Eagleburger said the
companies had declined to provide more money to "punish" the Commission
for decisions he had made. The companies said they were concerned the
Commission was spending excessively. Many other German insurance
companies have declined to join the Commission despite repeated
entreaties by Mr. Eagleburger and some German government officials.
Mr. Eagleburger told Commission members at the Washington meeting that
he was extending the deadline eight months, from January 31 until
September 30. "The deadline must be extended in order to allow
adequate time to collects lists (of insurance policyholders) from the
Companies, process them through Yad Vashem (the Holocaust center in
Jerusalem) and publish the names on our Web site with adequate time for
the public to review the lists."
Extending the deadline "creates the possibility that thousands more
valid claims will be honored," said Daniel Kadden of Seattle, a
consultant to a survivors' organization, who attended the Washington
meeting.
Insurance companies have been at odds with the Commission, Jewish
organizations and US regulators for months over releasing information
on policies sold from 1920 to 1945. The companies say there are vastly
fewer valid claims than survivor advocates believe and that producing
the lists would be burdensome and, in some instances, would violate
European privacy laws. Advocates of Holocaust survivors and their
heirs maintain that the insurance companies are attempting to hide the
true magnitude of unpaid claims.
Disclosure of the policyholder lists is the key to a fair process
because nearly all Holocaust victims lost their records when they were
taken to the Nazi death camps, said Nat Shapo, Director of the Illinois
Department of Insurance and chairman of the Holocaust Task Force of the
National Association of Insurance Commissioners.
In addition, the Nazis did not issue death certificates at the camps.
Consequently, hardly any of the survivors or heirs have proper
paperwork for their claims, making them dependent on insurance
companies to search their files and make them public.
So far, the international Commission has run up more than $40 million
in expenses, while the five European insurance companies that are
members of the Commission have made only 1,000 offers of compensation,
according to Commission records. Victims' families have accepted 275
of them, saying many offers were unjustly low.
Extending the deadline was the first move made by Mr. Eagleburger after
he obtained a written agreement from five insurers that gives him
"unfettered authority" to resolve thorny issues that have beset the
Commission. The companies signed the letter last week about 24 hours
after Mr. Eagleburger stormed out of a commission meeting at the Westin
Fairfax Hotel. "Find yourself another chairman," the veteran diplomat
declared to attendees from Israel, the insurance companies, Jewish
organizations and US regulators, according to people who were present.
Over the next two days, after numerous meetings in his hotel suite, Mr.
Eagleburger, 71, was persuaded to keep the job, which pays $350,000 a
year, and was given the greater authority. Mr. Eagleburger has
criticized the insurance companies for failing to honor commitments and
has expressed frustration at the degree of skepticism that survivor
advocates and members of Congress have expressed about the Commission,
which was chartered under Swiss statutes and whose operations are not
subject to U.S. disclosure laws.
"We hope the companies will abide by the decision to give Mr.
Eagleburger more authority," said his aide, Dale Franklin. "Everyone
agrees we have not paid enough claims."
The move to extend the deadline was praised by Rep. Henry A. Waxman,
D-Los Angeles, who had severely criticized the Commission's performance
at a congressional hearing in November and chastised Mr. Eagleburger
for refusing to provide information on certain matters. Rep. Waxman
said he was "cautiously optimistic.This is going to be the last chance
to fulfill the long-standing commitment to victims of the Holocaust who
have insurance coverage."
Extending the deadlines for insurance claims also was praised by
insurance regulator, Nat Shapo, who observed that the extension would
be meaningless unless the insurance companies cooperate. The
Commission, he said, "is dangerously close to becoming a frivolous
exercise," referring to the long-running stalemate on how to resolve
the insurance claims.
While numerous other issues of Holocaust reparations, including
reclaiming Swiss bank accounts and settling slave labor disputes, have
been settled over the last few years, the insurance disputes appear
nowhere close to resolution. More than 16 months ago, negotiators for
the US and German governments linked the insurance and slave labor
issues in a $4.6 billion deal funded by German industry and the German
government. Last year, payments began to some of the thousands of
slave laborers covered by the settlement. About $220 million of the
settlement pot was allocated to cover insurance claims.
However, some key issues, including disclosure of policyholder lists,
have kept the money from being distributed. New York University law
professor Burt Neuborne, who has represented survivors in several class
action Holocaust reparations cases, said he hopes a final agreement is
reached soon after months of "very rocky negotiations."
After the $220 million was set aside for insurance claims, Professor
Neuborne successfully urged a federal judge in New York to dismiss
class action claims against the insurers. However, if Mr. Eagleburger
is unable to reach an accord, Professor Neuborne said he might have to
return to the federal judge and ask him to reopen the cases. "That
might be the only thing that would shake the companies loose," he
added.
METRIS COMPANIES: To Settle For US$ 5.5M Cardholder Fraud Suit in MN
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Minnesota based card issuer Metris Companies Inc. agreed to settle for
$5.5 million the class actions suits pending in the Hennepin County
District Court in Minneapolis, alleging violations of the state's
Consumer Fraud and Deceptive Trade Practices Act.
The suits, which involve more than 4.5 million cardholders, were
commenced in May 2000 against the Company and its wholly owned
subsidiary Direct Merchants Credit Card Bank NA. The suits alleged the
Company:
(1) routinely assessed fees for the purchase of services that
cardholders did not authorize;
(2) charged late fees for payments that were not late;
(3) promised lower interest rates than cardholders received; and
(4) made misleading solicitations.
Under the settlement, the Company agreed that credit card payments
received by 5 pm ET will be credited to the cardholder's account the
same day. The Company also agreed to refund fees to customers who want
to cancel such enhancements as credit card protection. Qualified former
cardholders also will receive a credit card with a 9.9% annual interest
rate for a year and a coupon book good for discounts on a variety of
products and services.
The Court tentatively approved the settlement, which covers cardholders
from Jan. 1, 1995 to Feb. 1, 2002. The agreement also resolves several
other outstanding lawsuits against the Company and Direct Merchants.
The Company did not admit any wrongdoing by entering the settlement.
PHILADELPHIA: Camden Residents To Sue Due To Water From Superfund Site
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Residents of Camden, Philadelphia are mulling a class action against
town officials and the Pennsauken Sanitary Landfill, after they were
supplied drinking water from wells contaminated by the landfill, which
was recently identified as a federal Superfund site.
Attorneys for the residents have sent letters to the officials about
the landfill, which is suspected of being one source among many for the
well pollution, naming them as targets of a projected class action
lawsuit on behalf of residents.
Although no lawsuit has been filed, plaintiff's attorneys are required
to notify government bodies to be named in such actions. No warning is
required for private companies, dozens of which are possible sources
for the hazardous pollutants detected in the early 1970s at the Puchack
Well Field along the Delaware River.
SOUTH CAROLINA: Former Residents of Abusive Home Owner Mull Damage Suit
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Greenville, South Carolina nursing home owner Essie Wright, who is
charged with abusing her residents, could also face possible class
actions from them.
Michael Howard, 55, is a mentally disabled man who was one of Ms.
Wright's residents at the EM Wright Care Center. Mr. Howard had to
have his legs amputated after sores on them became gangrenous and
infested with maggots. Now, his family is considering the filing of a
class action.
"She took away Michael's ability to walk," Mr. Howard's cousin Pat
Stewart told WYFF News 4's Beth Brotherton. "If I hadn't got him out of
there when I did, he would've been dead by that weekend. He had
gangrene and she hadn't taken him to a doctor."
Mr. Stewart's attorney Les Hendricks, said that he plans to file a
lawsuit against Essie Wright later this week. He added that he has
asked Family Court Judge Amy Sutherlin to allow all of Wright's former
patients to sue her collectively. "We can't get his legs back, but our
goal is to stop this kind of abuse from happening at least in this
area," Hendricks told News 4.
Last month, Ms. Wright's license to run a care facility was taken away
after she was charged with seven counts of abuse of a vulnerable adult.
Securities Fraud
ATCHISON CASTING: Settles For $1.8 M Consolidated Securities Fraud Suit
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Atchison Casting Corporation (NYSE:FDY) reached an agreement in
principle to settle the consolidated securities class action suit filed
against it.
The settlement, which is subject to the execution of definitive
settlement documents and Court approval, calls for the establishment of
a settlement fund consisting of $1.8 million, which will be paid by the
Company's insurance carrier. All claims will be dismissed without any
admission of liability or wrongdoing.
The Company's Chief Executive Officer, Hugh Aiken, commented, "Although
we were prepared to defend against the action vigorously, we believe
that it is in the best interests of the Company and its shareholders to
end the expense and distraction of the lawsuit and focus our energy on
the management of our business."
The Company produces iron, steel and non-ferrous castings for a wide
variety of equipment, capital goods and consumer markets.
CORNING INC.: Finkelstein Krinsk Commences Securities Suit in New York
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Finkelstein & Krinsk initiated a securities class action against
Corning, Inc. in the United States District Court at Rochester, New
York, on behalf of all purchasers of the Company's securities between
November 1, 2000 and July 25, 2001.
The suit alleges that the Company made false statements and omitted
material information in order to raise capital and maintain Company
stock at artificial prices. The suit specifically details the alleged
conduct of certain Company officers that failed to disclose growing
problems with the business and large quantities of obsolete inventory.
In fact, according to the lawsuit, a write down of certain assets was
required of the Company and the stock has tumbled. The Company
allegedly misled the public, who deserved the benefit of a level
playing field.
For more information, contact Irina Kushner or Jeffrey R. Krinsk by
Mail: the Koll Center, 501 West Broadway, Suite 1250 San Diego, CA
92101 by Phone: 877-493-5366 (toll-free) or 619-238-1333 by Fax:
619-238-5425 or by E-Mail: fk@class-action-law.com
CRITICAL PATH: Schiffrin Barroway Initiates Securities Suit in N.D. CA
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Schiffrin & Barroway, LLP commenced a securities class action in the
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of Critical Path, Inc.
(Nasdaq: CPTH) from April 21, 2000 through September 25, 2000,
inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statements concerning its business
and financial condition. 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 the Company's
ability to continue to recognize up-front license fees in 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, which were tied to the Company's performance. Thus,
defendants continued to make positive but false statements about the
Company's business and projections for 3rd and 4th quarter 2000 and
beyond.
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
CRITICAL PATH: Cauley Geller Commences Securities Suit in N.D. CA
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Cauley Geller Bowman & Coates 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 through
September 25, 2000, inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statements concerning its business
and financial condition. Critical Path 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 the Company's
ability to continue to recognize up-front license fees in 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, which were tied to its performance. Thus, defendants
continued to make positive but false statements about the Company's
business and projections for 3rd and 4th quarter 2000 and beyond.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Phone: P.O. Box 25438, Little Rock, AR 72221-5438 by
Phone: 1-888-551-9944 or by E-mail: info@classlawyer.com
DAVIS ADVISORS: Shareholders Sue For Excessive Advisory Fees in IL
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Davis Selected Advisers LP faces a class action in the United States
District Court for the District of Illinois, filed on behalf of
individuals who purchased shares issued by a number of different
mutual funds and sold by the Company or their affiliated broker
dealers.
The suit, which also names the Company's distributor, Davis
Distributors LLC, as defendants, claims that both entities approved
payment of excessive distribution and advisory fees in violation of
their fiduciary duties to the plaintiffs and in violation of statutory
law.
The Company believes the action is without merit and intends to
vigorously defend the proceeding.
DEL GLOBAL: New York Court Approves $6.5M Settlement of Securities Suit
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The United States District Court for the Southern District of New York
has approved the agreement proposed by Del Global Technologies
Corporation (NASDAQ: DGTC) to settle a securities class action against
it, concluding that the settlement was fair, reasonable and adequate
and in the best interests of the Company's shareholders and dismissing
all claims against the Company and the other defendants without any
findings of liability or wrongdoing by any party.
Under the Court approved agreement, members of the class will receive
$2 million in cash, $2 million of subordinated promissory notes due in
five years with interest at 6% per annum and 2.5 million shares of the
Company's common stock and warrants to purchase 1 million shares of
common stock exercisable at $2.00 per share, expiring six years from
the date of execution.
If not earlier exercised, the warrants will be callable by the Company
at $0.25 per warrant once its common stock trades at $4 per share, for
ten consecutive trading days. The Company will not be in a position to
consider exercising its call option on these warrants until such time
as it can register the shares of common stock underlying such warrants.
Company president Samuel E. Park says "We are pleased to eliminate the
uncertainty of the class action lawsuits.This settlement effectively
brings closure to this most unfortunate event. The agreement entails no
present cash contribution from the Company, and effectively quantifies
and caps the Company's exposure from this litigation. We look forward
to the future with optimism."
For more information, contact Schoengold & Sporn, PC by Mail: 19 Fulton
Street, New York, NY 10038-2100 or by Phone: (212) 964-0046.
ELAN CORPORATION: Abbey Gardy Commences Securities Suit in S.D. NY
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Abbey Gardy LLP initiated a securities class action on behalf of all
persons who acquired Elan Corporation, plc (NYSE:ELN) common stock
between January 2, 2001 and January 29, 2002, in the United States
District Court for the Southern District of New York.
The suit charges the Company and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges,
among other things, that defendants issued a series of materially false
and misleading statements regarding the Company's financial condition.
The suit further alleges that as part of their effort to boost the
price of Company securities, defendants materially overstated the
Company's revenues by creating entities that were essentially
controlled by the Company for research and development. The Company
immediately took back its investment in the form of a license fee,
which it recorded as revenue. In some instances the joint ventures had
no money left for the development of drugs and the Company ended up
lending money to the entity.
After the market closed on January 29, 2002, The Wall Street Journal
described the Company's accounting as a "charade" and quoted a former
SEC accountant as stating that it is like "taking money out of one
pocket and putting it in another." On this news the price of Company
securities dropped from $35.20 to $29.25.
For more information, contact Jennifer Haas or Nancy Kaboolian by Mail:
212 East 39th Street, New York, New York 10016 by Phone: (800) 889-3701
or by E-mail: Jhass@abbeygardy.com or NKaboolian@abbeygardy.com.
ELAN CORPORATION: Charles Piven Commences Securities Suit in NY, CA
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The Law Offices Of Charles J. Piven, PA initiated securities class
actions on behalf of shareholders who acquired Elan Corporation, PLC
(NYSE:ELN) securities, including American Depository Receipts (ADRs),
during various proposed class periods spanning from December 21, 2000
through February 1, 2002, inclusive.
The suits are pending in the United States District Court for the
Southern District of California and in the United States District Court
for the Southern District of New York and include as defendants the
Company and:
(1) Donald Geaney,
(2) Shane Cooke,
(3) Thomas Lynch,
(4) John Groom,
(5) William Clark and
(6) KPMG, LLP
The suits charge that various of those named in the pending suits
violated the federal securities laws by issuing a series of materially
false and misleading statements to the market between periods spanning
from January 2, 2001 through January 29, 2002, inclusive, which
statements had the effect of artificially inflating the market price of
the Company's securities.
For more information, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-332-0030 or by E-mail:
hoffman@pivenlaw.com
ELAN CORPORATION: Scott Scott Commences Securities Suit in S.D. CA
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Scott + Scott LLC initiated a securities class action in the United
States District Court for the Southern District of California on behalf
of purchasers of Elan Corporation, PLC (NYSE: ELN) publicly traded
securities during the period between April 23, 2001 and January 29,
2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The suit
alleges that, during the class period, defendants reported favorable
financial results for the Company. They did this while concealing
expenses through joint ventures, recognizing income from companies in
which the Company had invested (round-trip revenue) and concealing
material related-party transactions. As a result, Company stock traded
as high as $65.
The Wall Street Journal on January 30, 2001, published an article on
the Company's accounting entitled, "Research Partnerships Give Irish
Drug Maker Rosy Financial Glow." The article quoted Lynn Turner, a
former chief accountant for the SEC, as saying "What's the real
substance?. I'm taking money out of one pocket and putting it in
another. That is a charade." The article went on to describe several
transactions in which the Company had recognized revenue where it had
funded the entire purchase price.
On this news, Company stock dropped to as low as $22.40, before closing
at $29.25 on volume of 37.1 million shares.
For more information, contact David R. Scott or James E. Miller by
Phone: 800-404-7770 by E-mail: drscott@scott-scott.com or
jmiller@scott-scott.com or visit the firm's Website: http://www.scott-
scott.com
ELAN CORPORATION: Bernstein Liebhard Commences Securities Suit in NY
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Bernstein Liebhard and Lifshitz initiated a securities securities class
action on behalf of all persons who acquired Elan Corporation, plc
(NYSE: ELN) securities between April 23, 2001 and February 4, 2002,
inclusive, in the United States District Court for the Southern
District of New York against the Company and:
(1) Donald J. Geaney,
(2) Shane M. Cooke, and
(3) Thomas G. Lynch
The suit alleges that throughout the class period, defendants issued to
the investing public false and misleading financial statements and
press releases concerning its publicly reported revenues and earnings.
Moreover, the Company omitted to state material information necessary
in order to make prior statements not misleading.
The suit additionally alleges that the Company engaged in improper
accounting practices that:
(i) artificially inflated the Company's reported revenues;
(ii) artificially increasing the asset side of its balance sheet;
and
(iii) improperly reduced its reported expenses.
On January 30, 2002, the Wall Street Journal first reported on some of
the Company's accounting practices and on February 4, 2002, the Company
issued a press release providing information about two "qualified
special purpose entities," or QSPEs, which it said were not
consolidated in its final results as presented under US accounting
principles.
It is said that the value of the investment of the two QSPEs was
"insufficient to pay the indebtedness of the entities." In response to
these revelations, the market price of Company stock dropped
precipitously from a class period high of $65 to below $15 on February
4, 2002.
For more information, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or 212-779-1414 or by E-mail: ELN@bernlieb.com.
ENRON CORPORATION: Investors Who Lost Money Could Join Securities Suit
----------------------------------------------------------------------
Investors who have lost money investing in Enron Corporation but have
not yet hired a lawyer may already be part of a class action suit
recently filed in Federal Court in Houston against the officers and
directors of the Company and its auditor, Arthur Andersen, according to
a recent report by the Pittsburgh Post Gazette.
Investors who bought the Company's stock between October 1998 and
November 27, 2001, are automatically part of the lawsuit, legal experts
say, according to the Pittsburgh Post Gazette. "It's not that
complicated, really," said Pittsburgh securities lawyer Dave Manogue of
Specter Specter Evans & Manogue. "A class action is a device that
allows people who have similar claims against a party to bring them all
together," he added.
The suit does not name the Company as a defendant, because the
Company's bankruptcy filing, the biggest in history, protects it from
being sued. However, says the Pittsburgh Post Gazette, "there are
plenty of deep pockets to dig into." Lawyers are likely to go after
the substantial assets of former insiders, the insurance policies that
covered them and Arthur Andersen, the company's auditor.
The suit charges that Company insiders and Arthur Andersen engaged in
"massive insider trading while issuing false financial statements and
making false and misleading statements" about the Company's
profitability, all conduct which is in violation of the Securities Acts
of 1933 and 1934.
Mr. Manogue thinks these claims have a chance at being successful at
trial. "It's a real stretch to think that (the board) was unaware of
what was going on," he said.
Company stock was selling at $90 a share when insiders were able to
sell it. When it was revealed that the Company's income was actually
nearly $600 million less than reported, the stock price came tumbling
down to 26 cents a share. On December 2, 2001, the Company filed for
bankruptcy.
So, what should the lone investor actually do? Sit tight, says Larry
Elliot, a Director of Cohen & Grigsby, a firm specializing in the
defense of securities class actions. The Court has to "certify" the
class, he explained, a process which could take as long as two years.
When the class is certified, class members will receive a notice
informing them of the class-action lawsuit and giving them the
opportunity to "opt out," that is, to decline to be part of the class,
and bring their own lawsuit, if they so desire.
"Assuming that the action is certified to proceed as a class action,
there will be notices sent out, and unless the individual chooses to
opt out of the class, they'll be members," Mr. Elliot said.
How long before the investor will see any money? Unless the case is
settled or dismissed, it will go to trial, said Mr. Elliot, probably,
about two or three years from now. If the plaintiffs win, members of
the class will receive yet another notice telling them they're entitled
to compensation.
If your investments were managed by a brokerage firm, you may also be
able to go against the brokerage firm, said Mr. Manogue, but then you
probably can't collect in a class action. Most claims against
brokerage firms are resolved by arbitration, a much quicker process
than going to court.
For further information on the class-action lawsuit, contact Milberg
Weiss by Phone: (800) 449-4900 or visit the firm's Website:
http://www.milberg.com/enroncorp
ENRON CORP.: Tory Peer Lord Wakeham Faces Bankruptcy Over Directorship
----------------------------------------------------------------------
Lord Wakeham, the former Conservative Cabinet Minister, is facing
potential financial ruin over his role as a director of Enron
Corporation, which has been hit by lawsuits running into billions of
dollars, The Sunday Telegraph recently reported. Lord Wakeham has been
named as a defendant in the litigation by 430 former Company employees,
who have filed a class action, seeking to recover hundreds of
millions of dollars lost from their retirement funds.
Lord Wakeham's name appears with those of other directors and
executives on the court documents of this litigation, The Sunday
Telegraph reports. The litigation could bankrupt the millionaire peer,
he sat on the all-important audit committee at the Company, which,
according to the allegations of a number of lawsuits, should have
spotted any accounting irregularities as debts of US$ 55 billion piled
up.
Lord Wakeham stepped down last week from his position as Chairman of
the Press Complaints Commission in order to turn his attention to the
investigations in America, although he retained his US$156,000 salary.
He flew to America to consult the Company's lawyers over his possible
liability in the face of such suits.
Randy McClanahan, chief attorney for the former Enron employees, said,
"We will seek to take Lord Wakeham's deposition and find out to what
extent he was involved in activities that give rise to liability." Any
defendant found personally liable "will theoretically be liable to the
extent of his or her personal wealth."
Claims against the Company and its directors are likely to total tens
of billions of dollars following its collapse in December, the world's
biggest bankruptcy. The claims will far exceed the Company's $435
million insurance cover. That is thought to include $350 million in
directors' and officers' insurance, according to legal documents filed
by the Company last month. It has a further $85 million policy to
cover breaches of "fiduciary duty" connected to employees' pension
funds.
There is no suggestion that Lord Wakeham, a non-executive director, was
involved in illegal activity, but the liability cover could prove
worthless if any director was convicted of concealing the true state of
the finances. Lawyers say it is highly likely that Lord Wakeham, who
joined the Company after leaving front-line politics in 1994, will be
called to give evidence to some of the 14 investigations into Enron's
collapse, The Sunday Telegraph reported.
In the past week, investigators have alleged that the Company's Board
suspended its code of ethics to approve the creation of its complex web
of financial partnerships. Revelations about these "off-balance sheet
partnerships," which sought to keep hundreds of millions of dollars in
debt out of the company's books, triggered the spiral into bankruptcy.
The situation for the directors became more critical recently when
leaked minutes of Board meetings revealed directors had been given
information more than two years ago about at least one of the
partnerships. At a Board meeting, on June 28, 1999, in which Lord
Wakeham took part, according to the minutes, there was discussion on
the complex "accounting treatment of off-balance sheet transactions"
and how Enron had been "analyzing new types of financing vehicles."
The suit, filed by the 430 employees, also names as defendants:
(1) Kenneth Lay, former chairman who resigned last month,
(2) Jeffrey Skilling, former chief executive officer,
(3) other company executives and board members,
(4) Arthur Andersen LLP, and
(5) the consulting company that oversaw employees' pension
investments
It claims that those named broke their "fiduciary duty" to employees
investing in the company-sponsored retirement accounts, and also broke
rules governing the way such accounts are set up and managed.
The suit also accuses the defendants of "structuring financial dealings
in such a complicated and impenetrable manner that the plaintiffs were
unable to know the true financial status of the company." It says,
further, that the named defendants continued to encourage employees to
invest in the stock despite knowing the Company had severe financial
problems.
Lord Wakeham was paid $110,000 a year as a director and is also thought
to have received about $72,000 for providing consulting services to the
Company's European arm. He is not considered, however to be one of the
29 senior executives who made $1.1 billion by selling Company shares
while urging employees to buy more.
GLOBAL CROSSING: Weiss Yourman Initiates Securities Suit in C.D. CA
-------------------------------------------------------------------
Weiss and Yourman commenced a securities class action against Global
Crossing (NYSE: GX) in the United States District Court for the Central
District of California, on behalf of all persons who acquired Company
stock between January 2, 2001 and October 4, 2001, inclusive.
The suit charges that certain officers and directors of the Company
violated Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10-b(5) by, among other things:
(1) violating generally accepted accounting principles to
artificially inflate the Company's revenues and earnings; and
(2) issuing false and misleading statements releases regarding the
Company's past financial performance, the global market for
bandwidth on its fiber optic network and the Company's
anticipated future revenues.
According to the suit, the full extent of the Company's cash flow
crisis, and its failure to compete in the market for customized
communications services, began to emerge on October 4, 2001 with a
string of stunning announcements. As a result of these announcements,
the price of Company stock plunged almost 50%.
Due to its recent bankruptcy filing, the Company is not named as a
defendant in the action.
For more information, contact Weiss and Yourman by Phone: 888-593-4771
or (800-437-7918 by E-mail: info@wyca.com or visit the firm's Website:
http://www.wyca.com
GLOBAL CROSSING: Wolf Popper Lodges Securities Suit in S.D. New York
--------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of purchasers of Global Crossing Ltd. common stock (OTCBB: GBLXQ
(formerly NYSE:GX)) during the period February 14, 2001 through January
28, 2002.
The suit names as defendants several of the Company's former and
present senior officers:
(1) Gary Winnick,
(2) John J. Legere,
(3) Thomas J. Casey and
(4) Dan J. Cohrs
The Company is not named as defendant due to its filing of Chapter 11
Bankruptcy in the US Bankruptcy Court in the Southern District of New
York.
The suit charges the defendants with violations of the federal
securities laws. The suit alleges that during the class period,
defendants caused the Company to issue materially false and misleading
statements concerning its financial condition, publicly portraying the
Company as financially healthy and growing.
Contrary to the positive impressions created by these false and
misleading representations, the Company's financial results were
materially inflated and its financial condition was rapidly
deteriorating, culminating in its bankruptcy filing.
For example, defendants caused the Company to misleadingly include in
"Cash Revenue" and "Adjusted EBITDA" (earnings before interest, taxes,
depreciation and amortization) amounts for which cash was not received
or where there had been non-monetary exchanges of capacity.
This was accomplished through the use of instruments called
"indefeasible rights of use" or "IRUs." IRUs are 20 year contracts used
to sell network bandwidth on the Company's fiber optic network. Using
IRUs, the Company would sell bandwidth on its fiber optic network to a
carrier, and record a portion of the 20-year revenue up-front as a lump
sum. Simultaneously, the Company would purchase or "swap" similar
bandwidth in another area from the same carrier, and book the costs as
capital expenses, which would be spread over a number of future years.
This technique allowed the Company to show false and misleadingly large
and impressive "Cash Revenue" increases with little or no operating
expenses.
In addition, defendants knowingly or recklessly ignored that based on
the Company's projected level of operations, its cash flows from
operations would not be adequate to meet its requirements for working
capital, capital expenditures, acquisitions and other discretionary
investments, interest payments and scheduled principal payments for the
foreseeable future.
For more details, contact Michael A. Schwartz or Ken Chang by Mail: 845
Third Avenue New York, NY 10022-6689 by Phone: 212-451-9668 or 212-451-
9667 or 877-370-7703 by Fax: 212-486-2093 or 877-370-7704 by E-mail:
IRRep@wolfpopper.com or visit the firm's Website:
http://www.wolfpopper.com
HOMESTORE.COM: Harvey Greenfield Initiates Securities Suit in C.D. CA
---------------------------------------------------------------------
Harvey Greenfield lodged a securities class action against
Homestore.com Inc. (NASDAQ: HOMS) and its top officers in the United
States District Court for the Central District of California on behalf
of purchasers of the Company's common stock during the period between
July 20, 2000 and December 21, 2001 inclusive.
The suit alleges that the defendants issued false and misleading
statements relating to the Company's revenues and earnings from the
second quarter of 2000 through the third quarter of 2001. Following the
release of its 3rd Quarter 2001 results, on December 21, 2001 the
Company announced that it would restate certain financial statements.
As a result of this news, trading in the Company's stock was halted.
On January 2, 2002, the Company announced that it had overstated
revenues for the first three quarters of 2001 by between $54 million
and $95 million due to the improper accounting of certain advertising
transactions as barter transactions. The Company also announced that
transactions were under review that went back to 2000, and that there
may be additional material restatements of its financial results.
For further details, contact Harvey Greenfield by Mail: 60 East 42nd
Street, Suite 2001, New York, NY, 10165 by Phone: (212) 949-5500 by
Fax: (212) 949-0049 or by E-mail: harvey.greenfield@verizon.net.
MCLEODUSA INC.: Wolf Haldenstein Commences Securities Suit in N.D. Iowa
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit
in the United States District Court for the Northern District of Iowa
on behalf of purchasers of the securities of McLeodUSA Incorporated
(Nasdaq: MCLDQ) between January 30, 2001 and December 3, 2001,
inclusive against defendants Clark E. McLeod, Stephen C. Gray and Chris
A. Davis. The Company is not a defendant in this action because it has
recently filed for protection under Federal Bankruptcy laws and is
accordingly protected by the operation of the bankruptcy stay.
The suit alleges that defendants violated the Securities Act of 1933
and the Securities Exchange Act of 1934 by issuing a series of
materially false and misleading statements to the market during the
class period. The complaint alleges that the defendants issued a series
of materially false and misleading statements regarding its business,
operations and financial statements.
Specifically, the complaint alleges that the defendants, as officers
and/or directors of the Company, issued a series of materially false
and misleading statements regarding the Company and its business,
operations and financial statements that failed to disclose that:
(i) the Company was failing to timely and properly recognize
hundreds of millions of dollars in impairment losses in
connection with certain acquisitions, such as Splitrock
Services, Inc. and Caprock Communications Corp.;
(ii) the Company did not have the funds necessary to complete its
national network and that it would soon have to abandon its
plans to finish the network; and
(iii) the Company was unable to service its substantial debt and
lacked the financial flexibility necessary to avoid a
restructuring.
During the class period, prior to the disclosure of the true facts
about the Company, the Company purchased Intelispan for $40 million in
stock.
For more information, contact Fred Taylor Isquith, Gregory M. Nespole,
Katherine B. DuBose or George Peters by Mail: 270 Madison Avenue, New
York, New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com, whafh@aol.com, dubose@whafh.com or visit the
firm's Website: http://www.whafh.com.
PNC FINANCIAL: Pomerantz Haudek Commences Securities Suit in W.D. PA
--------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP filed a securities class
action against PNC Financial Services Group, Inc. (NYSE: PNC), on
behalf of all those persons or entities who purchased the securities of
PNC during the period between May 15, 2001 and January 28, 2002,
inclusive.
The suit, filed in the United States District Court for the Western
District of Pennsylvania, alleges that the Company, one of the largest
diversified financial services and banking institutions in the United
States, three of its senior officials, and Ernst & Young, an accounting
firm which provided the Company with auditing and consultant work
throughout the Class Period, violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 by issuing materially false and
misleading statements to the market concerning its earnings prospects,
results and reductions in loans, which mislead investors and concealed
the Company's true financial condition.
In particular, it is alleged that during the class period, defendants
failed to recognize the impairment of certain loans or charges related
to the Company, and instead shifted these problem loans off its books
and into three separate investment entities created by the American
International Group (AIG) for the sole purpose of receiving such loans
during each of the quarters during the class period.
As a result, defendants misrepresented the Company's earnings as well
as its ability to reduce its liabilities related to non-performing
assets. In fact, defendants' failure to conform with Generally Accepted
Accounting Standards (GAAP) produced inflated earnings and misled
investors as to the Company's true financial condition.
The suit further alleges that while acting as auditor and a consultant
for PNC, Ernst & Young was also acting as a consultant for AIG. In
fact, as the Company's auditor, Ernst & Young approved its transactions
with AIG and issued a written statement approving the accounting for
them.
On January 29, 2002, the Company announced that the Federal Reserve
Board had demanded that the Company consolidate its financial results
with the investment entities created by AIG, effectively requiring it
to reflect the true nature of these loans. In addition, the Company
announced that the FRB and the Securities and Exchange Commission were
making inquiries about its transactions.
As a result of the FRB's actions, the Company was compelled to reduce
its 2001 net income by approximately $155 million. In addition, the
Company further announced that it will revise fourth quarter 2001
results and restate earnings for the second and third quarters of 2001.
Following the news of these disclosures, Company stock fell
dramatically to close on January 29, 2002 at $56.08, down $5.79 or
nearly 10%, from its close on January 28, 2002 at $61.87
For more information, contact Andrew G. Tolan by Phone: 888-476-6529
(or (888) 4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomlaw.com.Those who inquire by e-mail are
encouraged to include their mailing address and telephone number.
REGENERATION TECHNOLOGIES: Charles Piven Lodges Securities Suit in FL
---------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Regeneration
Technologies, Inc. (Nasdaq:RTIX) securities between July 25, 2001 and
January 31, 2002, inclusive, in the United States District Court for
the Northern District of Florida against Regeneration Technologies,
Inc. and certain of its officers and/or directors.
The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10(b)(5) promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market throughout the class period, which statements
had the effect of artificially inflating the market price of the
Company's securities.
For more information, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
REGENERATION TECHNOLOGIES: Levy Levy Files Securities Suit in N.D. FL
---------------------------------------------------------------------
Levy and Levy PC commenced a securities class action in the United
States District Court, Northern District of Florida Gainesville
Division, on behalf of purchasers of the securities of Regeneration
Technologies, Inc. (Nasdaq: RTIX) between July 25, 2001 and January 31,
2002, inclusive. The suit names as defendants the Company and:
(1) Richard Allen,
(2) James Grooms and
(3) Brian Hutchinson
The suit alleges the defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by issuing materially false and misleading statements to
the market. Specifically, throughout the class period, defendants made
highly positive statements regarding the Company's financial results.
RTI reported quarter after quarter of "record" financial results and
strong revenue growth, which caused the price of Company securities to
trade as high as $12.82 per share during the class period. These
statements were allegedly false and misleading because the Company
failed to take a charge to earnings to recognize worthless inventory.
On February 2, 2002, the Company shocked the market by announcing that
it was delaying its fourth quarter and year-end results for fiscal year
2001 while "management completes its evaluation of certain inventory
issues." The Company also announced that its Chief Financial Officer
Richard Allen and Vice President of Marketing and Sales James Abraham
are leaving the Company, effective immediately.
The Company further announced that it is "evaluating whether these
issues may affect RTI's previously reported financial results" and
although "RTI's annual results have not been finalized, company
officials expect to report a loss for both the quarter and the year."
In response to the news the price of Company stock plunged more than
50% from $10.15 on January 31, 2002 to $5.19 on February 1, 2002.
For more information, contact Stephen G. Levy by Mail: One Stamford
Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone:
866-338-3674 (toll free), 203-564-1920 by E-mail: LLNYCT@aol.com or
visit the firm's Website: http://levylawfirm.com
ROTTLUND COMPANY: Shareholders Sue For Breach Of Fiduciary Duty in MN
---------------------------------------------------------------------
Rottlund Company, Inc. faces a class action filed in Hennepin County
District Court in Minneapolis, Minnesota by a Company shareholder
alleging breach of fiduciary duty against the Company and the members
of its Board of Directors.
The suit, filed on behalf of all Company shareholders, alleges that the
Company's Board of Directors breached their fiduciary duties by:
(1)failing to take reasonable steps to maximize shareholder value;
(2) favoring their own interests and/or the interests of certain
of the defendants; and
(3) disseminating materially misleading and incomplete tender
offer materials to the Company's shareholders.
The Company believes this litigation is without merit and intends to
vigorously defend against it.
SKECHERS USA: Plaintiffs Voluntarily Withdraw Securities Fraud Suit
-------------------------------------------------------------------
The plaintiffs in the securities class action against Skechers USA,
Inc. (NYSE: SKX) and its top officers have voluntarily dismissed the
suit charging them with violation of sections 11 and 12(a)(2) of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934. Claims for violation of the Securities Act were also asserted
against DeutscheBanc, Alex.Brown and Prudential Securities.
The suit was filed on behalf of putative class consisting of purchasers
of the Company's common stock in its June 9, 1999 IPO or thereafter in
the open market on or before June 15, 1999. The suit alleged that the
prospectus and registration statement issued in connection with
Company's IPO was materially false and misleading for failing to
describe threats that had been made by R. Griggs, a Skechers
competitor, to bring a trademark infringement claim against Skechers.
The lawsuit was first filed on December 29, 1999. Thereafter, several
similar lawsuits were filed by Company shareholders. On June 12, 2000,
the United States District Court for the Central District of California
consolidated the actions, and pursuant to the Private Securities
Litigation Reform Act of 1995 (PSLRA) appointed lead plaintiffs and
lead counsel.
By order dated June 22, 2001, the Court granted, without prejudice,
defendants' motion to dismiss the lawsuit for failure to state a claim.
Plaintiffs agreed to voluntary dismissal after determining, following
further investigation by counsel, that they would be unable to prove
materiality.
For more information, contact Ira M. Press by Mail: 830 Third Avenue,
10th Floor, New York, New York 10022 by Phone: (212) 371-6600 by Fax:
(212) 751-2540 or visit the firm's Website: http://www.kmslaw.com
WILLIAMS COMPANIES: Kirby McInerney Lodges Securities Suit in N.D. OK
---------------------------------------------------------------------
Kirby McInerney & Squire LLP initiated a securities class action in the
United States District Court for the Northern District of Oklahoma on
behalf of all purchasers of Williams Companies, Inc. (NYSE:WMB) stock
and all purchasers of Williams Communications Group, Inc. (NYSE:WCG)
during the period from July 24, 2000 and January 29, 2002.
The suit charges Williams Companies, Inc. (WMB), Williams
Communications Group, Inc. (WCG), the chief executive officers of both
Companies, and the chief financial officer of WCG with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
These violations, the complaint alleges, stem from a series of material
misrepresentations, which were made by defendants to the market between
July 24, 2000 and January 29, 2002 and which misled investors and the
market and acted to artificially inflate the price of WMB and WCG
common stock during the class period.
In general, the complaint alleges in detailed fashion that the
defendants, in their public statements and through certain accounting
mechanisms, misrepresented:
(1) the reasoning behind, the effects of, and the accounting
mechanisms involved in the spin-off of WCG from WMB;
(2) the precarious financial state of WCG; and
(3) WMB's multi-billion dollar liability for WCG's debt
obligations.
On January 29, 2002, investors became suddenly and more fully aware of
WMB's potential liability when WMB, rather than announcing its earnings
for 2001, delayed the release of its 2001 earnings "pending an internal
assessment of William's contingent obligations to Williams
Communications."
The market responded to this surprise by devaluing the allegedly
artificially inflated price of WMB common stock, which fell from
approximately $24 per hare to as low as $18.70 per share. The stock of
WCG, whose problems were now precipitating those of WMB, had already
declined substantially throughout the class period.
For more information, contact Ira M. Press or Orie Braun by Mail: 830
Third Avenue, 10th Floor, New York, New York 10022 by Phone:
(212) 317-2300 or (888) 529-4787 or by E-Mail: obraun@kmslaw.com
WILLIAMS COMPANIES: Wolf Haldenstein Initiates Securities Suit in OK
--------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class
action in the United States District Court for the Northern District of
Oklahoma, on behalf of purchasers of Williams Companies, Inc. (NYSE:
WMB) and/or Williams Communications Group, Inc. (NYSE: WCG) between
July 24, 2000 and January 29, 2002, inclusive, against both companies
and certain of their officers and directors.
Specifically, the suit alleges that the two Companies 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 but the primary
motivation for the WCG spin-off was to allow WMB to shore up
its balance sheet so that it could then issue more stock
and/or debt to acquire companies and protect its debt rating;
(2) that WCG was operating well below company-sponsored
expectations, such that revenue projections were overstated,
and costs and expenses were understated, and 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, not collectible 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 Fred Taylor Isquith, Gregory Nespole,
Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail:
270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735
by E-mail: classmember@whafh.com or visit the firm's Website:
http://www.whafh.com.All e-mail correspondence should make reference
to WILLIAMS.
WILLIAMS COMPANIES: Wechsler Harwood Lodges Securities Suit in N.D. OK
----------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action against Williams Companies, Inc. (NYSE: WMB), Williams
Communications Group, Inc. (NYSE: WCG), and certain individuals
associated with those companies, in the United States District Court
for the Northern District of Oklahoma on behalf of investors who
purchased WMB or WCG securities between July 24, 2000 and January 29,
2002, inclusive.
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, alleging that defendants issued
materially false and misleading statements and failed to disclose
material information to their shareholders regarding the spin-off of
WCG from WMB, the accounting and financial impact of the contingent
liabilities retained by WMB, and the nature of the assets and
liabilities of WCG, causing the common stock of both companies to trade
at artificially inflated prices.
For more information, contact David Leifer by Mail: 488 Madison Avenue
8th Floor, New York, New York 10022 by Phone: 877-935-7400 (Toll Free)
or by E-mail: dleifer@whhf.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.
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