/raid1/www/Hosts/bankrupt/CAR_Public/020213.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, February 13, 2002, Vol. 4, No. 31
Headlines
CITIGROUP INC.: Employee Sues For Unearned Wages Due To Stock Plan
EASYINFO INC.: Little Chance For Suit Over Publication of Phone Numbers
MENORAH GARDENS: Judge Allows Access To Depositions in Desecration Suit
MICROSOFT CORPORATION: Bill Gates To Testify For Antitrust Settlement
VERIZON WIRELESS: Denies Claims In Injury Suits Over Wireless Phone Use
*Companies Seek Diversity As Internal Racial Bias Suits Increase
Securities Fraud
ACLN LTD.: Much Shelist Commences Securities Suit in S.D. New York
ASHFORD.COM: Mounting Vigorous Defense Against Securities Suits in NY
DYNACQ INTERNATIONAL: Wolf Haldenstein Lodges Securities Suit in TX
E-REX INC.: Faces Suit Due To Misrepresentations Over Printing Device
ELAN CORPORATION: Kaplan Fox Commences Securities Suit in S.D. New York
ELAN CORPORATION: Pomerantz Haudek Commences Securities suit in S.D. NY
ELAN CORPORATION: Wechsler Harwood Commences Securities Suit in S.D. NY
ELAN CORPORATION: Cauley Geller Initiates Securities Suit in S.D. NY
ELAN CORPORATION: Catanzarite Law Commences Securities Suit in S.D. CA
ENRON CORPORATION: Lawyer Asks Court To Replace Pension Plan Trustees
GLOBAL CROSSING: Krause Kalfayan Commences Securities Suit in C.D. CA
GLOBAL CROSSING: Berman DeValerio Commences Securities Suit in S.D. NY
GLOBAL CROSSING: Rabin Peckel Commences Securities Suit in S.D. NY
GLOBAL CROSSING: Charles Piven Commences Securities Suit in S.D. NY
GLOBAL CROSSING: Spector Roseman Commences Securities Suit in W.D. NY
GLOBAL CROSSING: Bernard Gross Commences Securities Suit in W.D. NY
IKOS SYSTEMS: Sued Over Synopsis Merger, Mentor Tender Offer Rejection
MATRIXONE INC.: Labels "Without Merit" Five Securities Suits In S.D. NY
NEXTEL PARTNERS: Strongly Denies NY Securities Suit Allegations
PNC FINANCIAL: Berman DeValerio Initiates Securities Suit in W.D. PA
PNC FINANCIAL: Kaplan Fox Commences Securities Fraud Suit in S.D. PA
REGENERATION TECHNOLOGIES: Schiffrin Barroway Lodges Suit in N.D. FL
SPECTRALINK CORPORATION: Schiffrin Barroway Files Securities Suit in CO
SPECTRALINK CORPORATION: Dyer Shuman Commences Securities Suit in CO
TYCO INTERNATIONAL: Schiffrin Barroway Files Securities Suit in S.D. FL
TYCO INTERNATIONAL: Bernard Gross Initiates Securities Suit in S.D. NY
TYCO INTERNATIONAL: Denies Allegations in Securities Suit in S.D. NY
WILLIAMS COMPANIES: Spector Roseman Files Securities Suit in N.D. OK
WILLIAMS COMPANIES: Schatz Nobel Commences Securities suit in N.D. OK
*********
CITIGROUP INC.: Employee Sues For Unearned Wages Due To Stock Plan
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Citigroup, Inc. faces a class action filed in Manhattan Federal Court
by a former employee, alleging that the Company withheld earned wages
after the employee was terminated, according to a Crain's New York
Business report.
The suit charges the Company of systematically shortchanging departing
employees, creating a windfall of millions of dollars for the Company,
through its stock payment plan. The suit states that the plan
represents as much as 25% of employee pay and can take the Company as
long as two years to pay out. Employees who leave before the stock is
paid out were denied earned wages.
The suit has spawned other similar suits in Massachusetts and
Connecticut.
EASYINFO INC.: Little Chance For Suit Over Publication of Phone Numbers
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Telephone subscribers who wish to commence legal action against
EasyInfo, Inc. for publishing their unlisted phone numbers in its new
EasyPeople directory may have little chance of winning the suit,
Internet law attorney Ryk Meiring of Spoor & Fisher asserted.
The Company's Easypeople directory includes the subscribers' phone
numbers and addresses. The Company is still removing hundreds of
unlisted numbers from its new directory.
Mr. Meiring asserts that an unlisted phone number entails an agreement
only between the telecommunications provider (such as Telkom) and the
subscriber. No other company is bound by this agreement. In addition,
he says, many people happily complete competition entry forms and race
entry forms, giving detailed personal information without checking that
the forms bear warranties protecting the information. The company
collecting these forms is therefore entitled to use this information
any way it wants to, including publishing it on the Internet.
"Privacy is, in general, protected in terms of our Constitution,
though," says Mr. Meiring. "Anyone wanting to take legal action would
probably have to take action in terms of common law, perhaps as a class
action suit, and would also have to prove that damages occurred as a
direct result of their personal details being published online."
Another complicating issue is that of who to sue. Mr. Meiring states
"If EasyInfo believed they acquired the data legitimately, they could
not really be held liable." Consequently, people will have to find the
originators of the database and prove wrongdoing on their part.
MENORAH GARDENS: Judge Allows Access To Depositions in Desecration Suit
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Broward Circuit Court Judge Leonard Fleet refused to seal depositions
in the class action against Menorah Gardens and Funeral Chapels, ruling
that to prevent media access to the depositions would do more harm than
good.
Florida residents who buried their loved ones at the Palm Beach branch
of Menorah Gardens, filed the suit in December, after discovering grave
desecrations at the cemetery. The suit accuses SCI Corporation, owner
of Menorah Gardens and the nation's largest provider of cemetery
services, of burying people in the wrong place, stacking coffins
instead of placing them side by side, and discarding remains in nearby
woods.
The Company asked the Court to prevent media access to the depositions,
stating that the statements would cause "emotional harm" to people who
have loved ones buried at the cemeteries, according to a Miami Herald
report. Judge Fleet disagreed, saying "I think more serious harm is
done by prohibiting dissemination of information than by disseminating
the information, particularly when people want to know where their
loved ones are buried." He added, "This court will not participate in
any prohibition of the opportunity of the general public to have free
and unfettered access to information."
Lawyers for the plaintiffs opposed the move to seal the depositions.
Lawyer Ervin Gonzalez told the Miami Herald, "This is a matter of great
public importance.The media is interested in the case because it will
have an impact on cemetery services in the state of Florida." Other
lawyers asserted that the public has a First Amendment right to follow
the case.
Company attorney Barry Davidson contends that "there is no First
Amendment right of access to pre-trial discovery material." The
Company also presented an affidavit from Rabbi Leonard C. Zucker of
Golden Lakes Temple in West Palm Beach, which owns graves at the
western Palm Beach Gardens cemetery. The rabbi said publicity about
alleged problems is having an "adverse emotional effect" on the
congregants.
Judge Fleet, however, granted the Company's request to allow only
attorneys and witnesses to attend the depositions, which begin Tuesday
in Fort Lauderdale. The Judge also emphasized that the statements
could not be distributed or discussed pending an anticipated appeal by
the Company.
The investigation by the State's Attorney General continues, which may
include visits to SCI cemeteries around Florida this month. The
groundwork may culminate in a lawsuit against the corporation under the
state law prohibiting unfair and deceptive trade practices, the Miami
Herald reports.
MICROSOFT CORPORATION: Bill Gates To Testify For Antitrust Settlement
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Executives of some of the nation's biggest computer firms are set to
testify on Microsoft Corporation's settlement with the US Justice
Department, including Microsoft Chairman William Gates, Associated
Press reports.
The Company is prepared to present witnesses before US District Judge
Colleen Kollar-Kotelly, who will decide in March whether she will
endorse the Company's settlement with the Justice Department and nine
states relating to charges of anticompetitive behavior. Nine other
states have rejected the agreement, saying it is not strong enough, and
are continuing the antitrust litigation.
Mr. Gates did not appear in the earlier 1999 antitrust trial where US
District Judge Thomas Penfield Jackson declared the Company a monopoly.
Instead, excerpts from a videotaped deposition were played.
35 other executives set to appear before the Court, including Microsoft
Chief Executive Officer, Steve Ballmer, and top executives of other
prominent PC companies that could be affected by the nine dissenting
states' proposals. Company spokesman Jim Desler told Associated Press,
"The witnesses represent a broad range of companies, small business and
consumers that are part of the PC industry and would be harmed if the
states' proposals are adopted."
These witnesses include W.J. Sanders III, CEO of chipmaker Advanced
Micro Devices; Howard Elias, Vice President of computer manufacturer
Compaq; and Philip Schoonover, Vice President of the electronics retail
chain, Best Buy. Another is Ken Glueck, Vice President of the business
software publisher Oracle, whom the Company has called as being "one of
the prime movers behind the non-settling states' remedial proposals."
VERIZON WIRELESS: Denies Claims In Injury Suits Over Wireless Phone Use
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Verizon Wireless will mount a vigorous defense against multiple class
actions alleging personal injuries, including brain cancer, from
wireless phone use, pending in various state and federal courts. The
suits are:
(1) Christopher Newman, et al. v. Motorola, Inc., et al., pending
in the US District Court in Maryland;
(2) Gibb Brower, et al. v. Motorola, Inc., et al., filed in
California Superior Court, San Diego, California;
(3) Farina, et al. v. Nokia Inc., et al., Pennsylvania Court of
Common Pleas, Philadelphia County;
(4) Gilliam, et al. v. Nokia Inc., et al., New York Supreme Court,
Bronx County;
(5) Pinney, et al. v. Nokia Inc., et al., Maryland Circuit Court,
Baltimore County; and
(6) Gimpelson et al. v. Nokia Inc., et al., Georgia Superior
Court, Fulton County.
All the suits have been removed to Federal Court.
Plaintiffs in these suits claim that wireless phones were defective and
unreasonably dangerous because the defendants failed to include a
proper warning about alleged adverse health effects, failed to
encourage the use of a headset, and failed to include a headset with
the phone.
The Company believes it is entitled to indemnification by handset
manufacturers in connection with these claims and intends to pursue
those rights. In each of these actions arising out of personal injury
claims, the Company believes that it has, and has asserted, insurance
coverage claims for any losses arising out of the claims asserted
against it. These matters are also covered by the indemnification
provisions in the alliance agreement.
In addition, the Company believes that it has strong defenses that it
has asserted or will assert in these proceedings. An adverse outcome in
this litigation could have a material effect on the Company's results
of operations or financial conditions.
*Companies Seek Diversity As Internal Racial Bias Suits Increase
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To the outside world, Denny's Restaurant was starting to deal with
race discrimination of the black customers who entered its restaurants,
after it was sued for such discrimination in the 1990s, the Houston
Chronicle reported recently.
However, when Ray Hood-Phillips began work as the Chief Diversity
Officer at the parent company of Denny's restaurants after the lawsuit,
she saw the contours of another form of racial discrimination,
unaffected by the lawsuit. The managers, the people in the ads, and the
franchisees still were mostly white.
In the aftermath of the Denny's lawsuit, triggered by allegations that
its restaurants engaged in racial discrimination, and settled for
about $54 million, many other companies have been charged with race
discrimination. The Houston Chronicle says, increasingly, it is the
companies' own workplaces, not the treatment of customers that have
sparked lawsuits. In recent years, industry leaders like Coca-Cola,
Johnson & Johnson and Microsoft Corporation have been hit with internal
discrimination suits.
"We are still trying to overcome past years when there was a lack of
diversity in American corporations, especially at the higher levels,"
said Timothy Bland, a Memphis, Tennessee, employment lawyer. "Some of
these lawsuits are brought either out of frustration that things have
not happened more quickly, or because there genuinely isn't as much
diversity in a particular workplace as there ought to be."
The lawsuit against Coca-Cola was a landmark case with a $192.5 million
settlement in 2000, brought by black workers who said they had been
denied promotions and equal pay. Texaco's 1996 agreement to pay
$176 million in a similar suit, showed that companies would pay a dear
price for discrimination. "What probably encourages discrimination
lawsuits more than anything else is publicity about the successful
case," said Carl Van Horn, Director of the John J. Heldrich Center for
Workforce Development at Rutgers University. "They make people aware
that there are remedies in the courts."
Many lawyers are eager to take on the internal discrimination cases,
aware that a number of big companies would rather settle than endure
negative publicity that can accompany such a suit. The glare of
publicity was something Denny's understood, especially after a boycott
was called to bring attention to the race discrimination charges.
Ms. Hood-Phillips, the Diversity Officer who works for Advantica
Restaurant Group, the owner of Denny's, said the publicity helped make
the Company more receptive to messages to become more diverse. "There
was no acknowledgement of diversity in any of the marketing, the
merchandising, the promotion, who they did business with, who they
franchised to," said Ms. Hood-Phillips, who is black.
Since the initial lawsuit, Denny's has worked to change that by
boosting minority hiring at restaurants and suppliers. The chain has
asked manufacturers who want to supply food and paper to its
restaurants, to use minority suppliers.
Now, the Company looks different, the Houston Chronicle reports. In
1993, Denny's had one African-American franchisee. Now, blacks own 66
Denny's restaurants. In 2000, minority purchasing contracts came to 18
percent of total purchases, a marked change since 1992, when Denny's
had no minority supplier contracts. "We are absolutely convinced that
these changes would not have occurred without the lawsuit," Ms. Hood-
Phillips said.
Changes to US law have made it easier to bring bias claims. In 1991,
for example, Congress passed revisions to the 1964 Civil Rights Act,
which forbids discrimination in the workplace. This allowed workers
with claims of race discrimination, sexual harassment and similar cases
to obtain punitive and compensatory damages from companies.
Companies, also, have made moves to become more diverse, recognizing
that hiring members of various racial groups, not only creates a shield
against lawsuits, but also makes good business sense. "You see more
and more large companies that have at least one or two individuals
whose responsibility is overseeing the diversification of the
workplace," said Timothy Bland, employment lawyer. "There's a
tremendous business case for diversity."
Still, the ranks of minority managers are small compared with whites.
According to the Bureau of Labor Statistics, blacks and Hispanics held
13 percent of executive, administrative and managerial positions at US
companies in 2001. Whites, who make up about 75 percent of the US
population, held 87 percent of such positions.
"There are only three African-American CEOs in the United States at
Fortune 500 companies," said Carl Van Horn, director of the Center for
Workforce Development at Rutgers University. "The fact that I can name
them shows you how rare that is."
In the wake of the Coca-Cola and Texaco suits, minorities have become
more assertive about their treatment at work and more willing to speak
out about perceived unfair treatment. F. Shield McManus, a partner at
a Stuart, Florida firm suing Microsoft over race discrimination, said
inquiries from higher-educated, professional minorities at large U.S.
companies have climbed steadily since his firm began trying bias cases.
"Corporate white-collar African-Americans are expressing that they are
feeling a very subtle but omnipresent racism at work," Mr. McManus
said.
A Rutgers study released last month found that blacks and Hispanics
were more likely than whites to see problems with their treatment at
work. In a poll of 1,000 workers, 28 percent of the blacks and 22
percent of the Hispanic-Americans said they had personally faced unfair
job treatment because of their race, compared with just six percent of
white workers.
While 94 percent of white workers said employment practices in hiring,
promotion and assignment of responsibilities and salaries were fair to
all workers, 46 percent of black workers and 12 percent of workers from
other races said they were not likely to be treated fairly.
Changes for minorities are on the march in the workplace, but "we have
a great deal of work still to be done to achieve feeling of fair
treatment in the workplace," said Mr. Van Horn. Despite the hurdles
involved in proving discrimination suits, such claims serve as
catalysts for corporate change, leading to the formation of outside
task forces to monitor diversity initiatives, or, as in the Denny's
case, actually changing a company's culture.
However, discrimination suits may not necessarily lead to more racial
inclusion in all workplaces. Some say that fears of litigation may
hinder hiring of minorities, particularly at smaller firms. Employment
lawyer Timothy Bland says, fear of racial bias lawsuits has made some
small companies skittish of hiring minorities. "Some very small
employers look at hiring a minority or other member of a protected
group as inviting a potential lawsuit," Mr. Bland added.
Still, Ms. Hood-Phillips, Diversity Officer at Denny's parent company,
Advantica Restaurant Group, said that the feedback she has received
from hundreds of companies signals that more and more corporations are
embracing diversity. "I think corporate America is probably on the
forefront of understanding the dangerous ramifications of trying to
exist and operate within your own cultural and racial silos," she said.
Securities Fraud
ACLN LTD.: Much Shelist Commences Securities Suit in S.D. New York
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Much Shelist Freed Denenberg Ament & Rubenstein, PC commenced a
securities class action on behalf of purchasers of the securities of
ACLN, Ltd. (NYSE:ASW) between June 29, 2000 and December 20, 2001,
inclusive, in the United States District Court for the Southern
District of New York.
The suit is brought against the Company and:
(1) Joseph Bisschops, Chairman and Managing Director,
(2) Aldo Labiad, President, Chief Executive Officer, Chief
Operating Officer and Managing Director and
(3) Alex De Ridder, Chief Financial Officer
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.
The suit alleges that the Company and certain of its officers and
directors issued materially false and misleading statements to the
market during the class period. The truth about these statements did
not come to light until December 20, 2001, when Herb Greenberg
published an article on TheStreet.com. In response to the questions
raised in Greenberg's article, shares of the Company plunged 64%,
falling $16.71 to close at $9.40 per share.
Specifically, the Complaint alleges that during the class period, the
defendants issued multiple press releases and filed quarterly and
annual reports with the Securities and Exchange Commission that
highlighted the Company's growth and strong financial performance.
These statements were materially false and misleading because they
failed to describe the Company's true state of financial affairs by:
(1) failing to disclose certain self-dealing transactions between
director Joseph Bisschops and certain private entities he
controlled;
(2) overstating the Company's assets by listing a shipping vessel,
the Sea Atef, as an asset of the Company when, in fact, the
Company did not own the Sea Atef;
(3) overstating the Company's net income by understating its
selling, general and administrative expenses; and
(4) violating generally accepted accounting principles and the
Company's own stated policy with regard to revenue recognition
by reporting revenue for the cars that it sold as soon as the
ship carrying the cars left the port and not when the shipment
was completed.
For more information, contact Carol V. Gilden by Phone: (800) 470-6824
or by E-mail: cgilden@muchlaw.com
ASHFORD.COM: Mounting Vigorous Defense Against Securities Suits in NY
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Ashford.com, Inc. faces a consolidated securities class actions in the
United States District Court for the Southern District of New York
against the Company, several of its officers and directors, and various
underwriters of its initial public offering.
The suit arose from five suits, brought on behalf of purchasers of the
Company's common stock during various periods beginning on September
22, 1999, the date of its initial public offering.
The suit alleges that the Company's prospectus, incorporated in its
registration statement on Form S-1 filed with the Securities and
Exchange Commission, was materially false and misleading because it
failed to disclose certain fees and commissions collected by the
underwriters or arrangements designed to inflate the price of the
common stock.
The suit further alleges that because of these purchases, the Company's
post-initial public offering stock price was artificially inflated. As
a result of the alleged omissions in the prospectus and the purported
inflation of the stock price, the suits allege violations of Sections
11 and 15 of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934.
The Company believes that it has meritorious defenses against these
actions and intends to vigorously defend against them. The Company
also expressed confidence that the ultimate disposition of these
matters will not have a material effect on its business, financial
condition or results of operations.
DYNACQ INTERNATIONAL: Wolf Haldenstein Lodges Securities Suit in TX
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Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
Texas, Houston Division, on behalf of purchasers of Dynacq
International, Inc. (NASDAQ:DYII) between November 29, 1999 and January
16, 2002, inclusive, against the Company and certain of its officers.
The suit alleges that defendants violated the federal securities laws
by issuing materially false and misleading statements throughout the
class period that had the effect of artificially inflating the market
price of the Company's securities.
Specifically, the complaint alleges defendants represented that the
Company's favorable financial results were due to its commitment to
quality and cost-effective care. Throughout the class period,
defendants repeatedly stated that the Company's financials were strong
and that it was consistently achieving "record results."
Defendants actually knew that the quality of the Company's balance
sheet was eroding, that it was violating federal law in the maintenance
of its facilities and that it improperly cared for patients.
On Jan. 16, 2002, TheStreet.com ran an article on the Company entitled,
"Dynacq's Doubtful Accounts Send Distress Signals," which exposed many
of its problems. These disclosures shocked the market, resulting in
Company stock to immediately tumble 29% and causing plaintiff and class
members to suffer damages thereby. The stock is currently trading below
$7 per share.
For more information, contact Fred Taylor Isquith, Gregory Nespole,
Michael Miske, Gustavo Bruckner 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 Web site:
http://www.whafh.com.All e-mail correspondence should make reference
to DYNACQ.
E-REX INC.: Faces Suit Due To Misrepresentations Over Printing Device
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Miami-based E-Rex, Inc. (OTC BB: EREX) faces a class action suit in the
US District Court in Nevada filed by its shareholders, alleging
violations of federal securities laws relating to the production of its
six-in-one Dragonfly printing device.
The suit names as defendants the Company and:
(1) Donald A. Mitchell, Chairman,
(2) Carl E. Dilley, President/CEO,
(3) Joseph Pacheco, director,
(4) Jeffrey M. Harvey, former director/treasurer,
(5) Brian A. LeBrecht, attorney,
(6) The LeBrecht Group, Mr. Lebrecht's law firm,
(7) DiveDepot.com and
(8) International Investment Banking
The Florida Division of Corporations' online records identify Mr.
Dilley and Mr. Mitchell as directors of DiveDepot.com. Mr. Mitchell is
also listed as President of Longwood-based International Investment
Banking, according to state records.
The suit charges the defendants with:
(i) corporate mismanagement,
(ii) violation of federal securities law,
(iii) material misrepresentations to stockholders,
(iv) breach of fiduciary duty, and
(v) diversion of corporate assets
The Company's managers allegedly failed to produce prototypes of its
six-in-one portable Dragonfly device, which would copy, print, fax,
scan, and send and receive e-mails. The defendants reportedly
represented the device would be available for manufacture by December
2000.
The suit further alleges that the Company failed to pay prototype-maker
Valcom and other creditors on time after diverting the money for Mr.
Dilley's other businesses and entering into agreements with Mr.
Mitchell and International Investment Banking without good cause.
The shareholders ask the Court to rule on:
(a) whether the defendants violated securities laws;
(b) whether they misrepresented material facts about E-Rex and its
business - and did so willfully; and
(c) whether they manipulated and depressed the common stock due to
misrepresentation and/or business practices.
According to the Business Journal, Mr. Dilley wrote in an email, "At no
time did we ever promise anything to anyone. Read the press releases.
The SEC does and that is why there is no action, no civil suits, etc.
Doesn't that strike you as odd if you believed 10 percent of what you
wrote?"
He further said in the email, "My point concerning lawsuits and SEC
action is this. Why, if all these heinous things were true, would none
of them have sued us and/or disciplinary action been taken by the SEC?
It is because none of them individually have a case, and to my
knowledge we are not in violation of any securities legislation and I
am sure it has been looked at since the same half dozen people have
been rattling on for about seven months now."
ELAN CORPORATION: Kaplan Fox Commences Securities Suit in S.D. New York
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Kaplan Fox and Kilsheimer LLP initiated a securities class action in
the United States District Court for the Southern District of New York
against Elan Corporation PLC (NYSE:ELN) and certain of the Company's
officers and directors, on behalf of all persons or entities who
purchased the Company's American Depository Shares (ADSs) between April
23, 2001 and January 30, 2002, inclusive.
The suit alleges that the Company and certain of its officers and
directors violated Sections 10 (b) and 20 (a) of the Securities
Exchange Act of 1934. Specifically, it is alleged that the Company
improperly reported revenues and earnings from entities in which it had
joint ventures and/or invested in.
In a Wall Street Journal article published on January 30, 2002
questioning the propriety of the Company's accounting practices, former
SEC Chief Accountant, Lynn Turner reportedly characterized certain of
the types of accounting practices utilized by the Company referred to
in the article as a "charade."
It is alleged that as a result of the defendants' improper accounting
practices during the class period, the price of Company ADSs traded at
artificially inflated prices.
For further details, contact Frederic S. Fox, Joel B. Strauss or
Shelley Thompson by Mail: 805 Third Avenue, 22nd Floor New York, NY
10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714
or by E-mail: mail@kaplanfox.com or contact Laurence D. King by Mail:
601 Montgomery Street San Francisco, CA 94111 by Phone: (415) 772-4700
by Fax: (415) 772-4707 by E-mail: mail@kaplanfox.com or visit the
firm's Website: http://www.kaplanfox.com
ELAN CORPORATION: Pomerantz Haudek Commences Securities suit in S.D. NY
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Pomerantz Haudek Block Grossman & Gross LLP lodged a securities class
action against Elan Corporation PLC (NYSE:ELN), on behalf of all
persons or entities who purchased the Company's American Depository
Shares (ADRs) between April 23, 2001 and February 4, 2002, inclusive.
The suit, pending in the United States District Court, Southern
District of New York, alleges that the Company 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 revenues
and earnings prospects.
In particular, it is alleged that during the class period, defendants
improperly reported favorable financial results for the Company, which
were artificially inflated. The Company allegedly manipulated its
results by improperly accounting for joint ventures that it entered
into with other companies, the primary purpose of which was to create
the appearance of income growth for the Company. The Company invested
in these joint ventures, which then used the proceeds to fund purchases
from Elan, which the Company then reported as revenues.
In an article published in the Wall Street Journal on January 30, 2002,
former Securities and Exchange Commission (SEC) Chief Accountant Lynn
Turner reportedly questioned the propriety of the Company's accounting
practices. Following this article, the price of Company ADRs fell from
$35.20 to $29.25.
Thereafter, on February 4, 2002, the Company shocked the market by
issuing a Press Release, which detailed the Company's 2001 financial
results and effectively acknowledged the Company's misleading
accounting for "off-balance sheet arrangements." The release stated
that the Company had two QSPEs (Qualified Special Purpose Entities)
which it had not consolidated in its financial results as presented
under generally accepted accounting principles.
The Company further revealed that if these QSPEs had been consolidated,
2001 profit under GAAP would have been $211.4 million, or $0.59 per
share, instead of the reported $347.7 million, or $0.94 per share as
was originally reported. Furthermore, if these QSPEs were included, the
Company's total debt would have been almost $3 billion, approximately
$1 billion more than originally reported.
As a result of this news, Company ADRs fell, closing at $14.85 a share,
a total decline of over 50% from the pre-revelation price.
For more information, contact Andrew G. Tolan by Phone: (888) 476-6529
((888) 4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's Web
site: http://www.pomlaw.com
ELAN CORPORATION: Wechsler Harwood Commences Securities Suit in S.D. NY
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Wechsler Harwood Halebian & Feffer LLP lodged a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of the securities of Elan Corporation PLC
(NYSE: ELN) from January 2, 2001 through and including February 4,
2002.
The suit alleges that defendants violated the Securities Exchange Act
of 1934 by issuing materially false and misleading statements and
failing to disclose material information during the Class Period,
thereby artificially inflating the price of the Company's securities.
Specifically, the complaint alleges that the Company concealed joint
ventures, recognized income from companies in which the Company had
invested (so-called "round-trip" revenue), and concealed material
related-party transactions.
On January 30, 2002, this conduct was revealed by an article in The
Wall Street Journal and in response, Company ADRs dropped to as low as
$22.40 on volume of more than 37 million shares (from a close the
previous day of $35.20) and closed at $29.25.
Thereafter, on February 4, 2002, the Company reported its financial
results for the year ended December 31, 2001, reflecting net charges of
$196.4 million for asset write-downs and rationalization and
integration activities. The Company also disclosed that if certain off-
balance sheet arrangements (pursuant to which it guaranteed the
indebtedness of certain entities) were consolidated as of December 31,
2000 and 2001, the effect on net income would be a loss of $333.4
million (instead of $294.5 million previously reported) and a gain of
only $211.4 million (instead of $347.7 million previously reported) in
those years respectively.
In response, Company ADRs lost over 50% of their remaining value,
dropping to $14.84 per share from a close of $29.95 on volume of over
54 million shares.
For further details, contact Patricia Guiteau by Mail: 488 Madison
Avenue 8th Floor New York, New York 10022 by Phone: 877-935-7400 (Toll
Free) or by E-mail: pguiteau@whhf.com
ELAN CORPORATION: Cauley Geller Initiates Securities Suit in S.D. NY
--------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP commenced a securities class action
in the United States District Court for the Southern District of New
York on behalf of all persons who purchased American Depository
Receipts (ADRs) of Elan Corporation PLC (NYSE: ELN) during the period
between January 2, 2001 and January 29, 2002, inclusive.
The complaint alleges that Elan, an Irish pharmaceutical corporation,
and three of its top officers mislead the investing public during the
class period through improper accounting practices that seriously
distorted the Company's financial results.
Specifically, it is alleged that the Company improperly recorded as
revenue investments it made in joint ventures, which it controlled, and
improperly recorded proceeds from the sales of entire product lines as
product revenue, rather than as one-time gains.
On January 30, 2002, The Wall Street Journal published a detailed
article about the Company's accounting practices, with comments from
the SEC's former chief accountant questioning the legitimacy of its
reported financial condition.
On this news, the Company's ADRs, which had traded as high as $65.00
per ADR during the class period, fell nearly 17% in a single day and
traded as low as $22.50 per ADR.
More recently, on February 7, 2002, the Company revealed an on-going
investigation by the SEC into its accounting practices.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438 Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 or by E-mail: info@classlawyer.com
ELAN CORPORATION: Catanzarite Law Commences Securities Suit in S.D. CA
----------------------------------------------------------------------
Catanzarite Law Corporation initiated a securities class action against
Elan Corporation PLC (NYSE: ELN) on behalf of former security holders
of Liposome, Inc. and Dura Pharmaceuticals, Inc., both of which were
acquired by the Company in stock swap transactions in April and
November of 2000, respectively. The case was filed in the United States
District Court for the Southern District of California, and names as
defendants the Company and certain of its officers and directors.
The suit alleges that:
(1) defendants violated the federal securities laws by issuing
materially false and misleading statements concerning the
Company's publicly reported revenues, earnings and disclosed
liabilities by means of its registration statements filed with
the US Securities and Exchange Commission (SEC);
(2) the Company omitted to state in its registration statements
material information necessary in order to make its statements
not misleading; and
(3) the Company engaged in improper accounting practices that
artificially inflated its reported revenues, artificially
increasing the asset side of its balance sheet, understated
its liabilities and improperly reduced its reported expenses.
On January 30, 2002, the Wall Street Journal first reported on some of
the Company's accounting practices. The Wall Street Journal continued
its reporting of these issues with articles on February 4, 2002 and on
February 6, 2002.
The suit alleges that as a result of the materially false and
misleading nature of the Company's financial condition as reported in
the Wall Street Journal the Company's share price dropped from a class
period high of over $65 per share to below $15 per share on February 4,
2002.
For more information, contact Kenneth Catanzarite by Mail: 2331 W.
Lincoln Avenue, Anaheim CA 92801 by Phone: 1-800-326-3834 by E-mail:
webmaster@catanzarite.com or visit the firm's Web site:
http://www.catanzarite.com.All e-mail correspondence should make
reference to ELAN.
ENRON CORPORATION: Lawyer Asks Court To Replace Pension Plan Trustees
---------------------------------------------------------------------
Eli Gottesdiener, a lawyer who is representing current and former Enron
Corporation workers in a class action lawsuit, said he is filing a
motion with the US District Court for the Southern District of Texas
in Houston, seeking the removal of all of the Company's pension plan
and retirement-saving plan trustees, The Wall Street Journal recently
reported. Mr. Gottesdiener said, "These fiduciaries should have been
removed long ago, and our motion makes that point."
Mr. Gottesdiener said he welcomed a move by the US Labor Department
to replace all the trustees of the Company's three pension and
retirement-savings plans with an independent oversight group, after
thousands of 401(k) plan participants lost their holdings in the wake
of the Company's collapse. The Company offered three plans; besides a
401(k) savings plan, it offered a traditional defined-benefit pension
plan and an employee stock-ownership plan.
Ann Combs, Assistant Secretary for the Agency's Pension and Welfare
Benefits Administration, said the Labor Department began negotiations
last month with Enron to secure removal of the trustees, all of whom
are Enron employees. "Our objective," said Ms. Combs, "is to replace
them with an independent fiduciary, expert in ERISA and experienced in
protecting the interests of participants and beneficiaries in complex
pension plans like Enron's." ERISA, an acronym for Employee Retirement
Income Security Act, is the 1974 law that regulates employee pension
plans.
Ms. Combs said the Labor Department hoped to reach an "advantageous
Agreement" with the Company without engaging in a lengthy court
proceeding. However, "if no agreement is reached in the very near
future, we will seek a court order replacing these people with a
qualified, independent fiduciary."
The Company did not have any comment on the agency's decision.
The negotiations between the Labor Department and the Company are part
of a continuing investigation into the Enron case, begun by the Labor
Department in November. Under ERISA, the Department can seek removal
of pension-plan trustees if it finds they have breached their fiduciary
duties. While the agency can do so by filing a lawsuit, it usually
tries to reach a voluntary agreement with the company in question.
Ms. Combs' and Mr. Gottesdiener's statements came as senior House
Democrat Rep. George Miller (D-California), ranking member on the
House's Education and Workforce Committee, wrote to Labor Secretary
Elaine Chao asking that she immediately remove Cindy Olson, Enron's
Vice President of Human Resources, as a plan trustee.
This request by Rep. Miller, as well as the removal effort by Eli
Gottesdiener, followed recent congressional testimony by Ms. Olson and
James Prentice, the 401(k) plan's top trustee and a senior vice
president at Enron affiliate EOTT Energy. Ms. Olsen's lawyer declined
to comment while Mr. Prentice's lawyer could not be reached for
comment.
In his letter, Mr. Miller alleged that Ms. Olson had violated her
fiduciary duties to protect participants in the 401(k) plan, which was
weighted heavily with Enron stock, by failing to act as the Company's
share price plunged last year amid damaging allegations about its
financial practices.
Besides failing to review whether Enron stock continued to be a prudent
investment option under the plan until November, Mr. Miller said that
Ms. Olson acknowledged in testimony that she missed at least four
plan trustees' meetings last year. Ms. Olson also sold $6.2 million of
her Enron stock from 1996 to the present. Mr. Miller added that Enron
stock remains a 401 (k)-plan investment option.
Thousands of Enron workers lost their pension savings, which were
frozen during a Company lock-down on trading of 401 (k) assets, as
Enron spiraled toward its December 2 bankruptcy filing and its stock
price plunged. Some senior executives, whose holdings were not subject
to the same restrictions, sold millions of dollars of stock and cashed
in deferred-compensation accounts.
GLOBAL CROSSING: Krause Kalfayan Commences Securities Suit in C.D. CA
---------------------------------------------------------------------
Krause and Kalfayan initiated a securities class action in the United
States District Court for the Central District of California, Western
Division on behalf of all investors who purchased Senior Unsecured
Notes of Global Crossing, Ltd. from January 2, 2001 and October 4,
2001, namely:
(1) 9.625% Senior Notes due on May 15, 2008 (issued May 18, 1998),
(2) 9.5% Senior Notes due on November 15, 2009 (issued November
12, 1999),
(3) 9.125% Senior Notes due on November 15, 2006 (issued November
12, 1999),
(4) 8.7% Senior Notes due in August of 2007 (issued January 23,
2001),
The plaintiff, Samuel Dawson, brings this action alleging violations of
securities laws, including Sections 10(b) and 20 of the federal
securities laws. The suit alleges that defendants issued false and
misleading press releases regarding the Company's financial statements.
In particular, the complaint alleges that, among other things,
defendants engaged in an accounting practice known as "round-tripping"
which artificially inflated the Company's revenues and operating
performance.
On January 28, 2002, the Company commenced Chapter 11 bankruptcy
proceedings.
For more information, contact James C. Krause, Eric J. Benink or
Vincent D. Slavens by Mail: 1010 Second Avenue, Suite 1750 San Diego,
CA 92101 by Phone: (619) 232-0331 or visit the firm's Web site:
http://www.krausekalfayan.com.
GLOBAL CROSSING: Berman DeValerio Commences Securities Suit in S.D. NY
----------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo initiated a securities
class acton against the top officers of Global Crossing Ltd. (NYSE:GX)
(OTCBB:GBLXQ), claiming they released false and misleading financial
statements to the public. The suit was filed in the U.S. District
Court for the Southern District of New York and seeks damages for
violations of federal securities laws on behalf of all investors who
bought Company stock from January 2, 2001 through October 4, 2001.
The suit charges five top Company managers with artificially inflating
earnings by improperly recording and reporting cash and revenue from
certain long-term lease contracts for the rights to use the company's
fiber optic cable network.
Simultaneously, the complaint says, the Company entered into
substantially similar agreements with the same companies to purchase
bandwidth capacity from them in a different area. In essence, the
complaint alleges that these swap transactions were improperly recorded
to artificially inflate the Company's financial results.
At the same time, the Company was carrying an increasingly heavy debt
burden that was exacerbated by an ever-shrinking market for bandwidth.
This forced it to drastically lower its prices. The Company was unable
to offset the declining demand for bandwidth capacity with the sale of
customized provider services because, unknown to investors, the
defendants had no viable plan for establishing the Company as a
provider of these services, the complaint says.
During the class period, the complaint says, the individual defendants
and other Company insiders generated more that $149 million from
insider stock sales.
The full extent of the Company's financial crisis began to emerge on
October 4, 2001 when it announced that its third quarter 2001 cash
revenues were $400 million below expectations and that it was selling
off its desktop trading systems division.
The suit says that investors were also stunned by the announcement that
the Company's expected recurring adjusted EBITDA would fall almost $300
million less than analyst expectation. In reaction to these statements,
Company stock plunged 49% to $1.07 per share.
For more information, contact Jeffrey C. Block, Michael G. Lange,
Patrick T. Egan by Mail: One Liberty SquareBoston, MA 02109 by Phone:
(800)516-9926 by E-mail: law@bermanesq.com or visit the firm's Website:
http://www.bermanesq.com.
GLOBAL CROSSING: Rabin Peckel Commences Securities Suit in S.D. NY
------------------------------------------------------------------
Rabin and Peckel LLP initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons or entities who purchased Global Crossing, Ltd. common
stock (NYSE: GX) between January 2, 2001 and October 4, 2001, both
dates inclusive. The suit names as defendants:
(1) Gary Winnick,
(2) Dan J. Cohrs,
(3) Thomas J. Casey,
(4) David A. Walsh, and
(5) Joseph P. Clayton
The suit alleges that defendants violated Section 10(b) and 20(a) of
the Securities and Exchange Act of 1934 by issuing a series of false
and misleading statements, and omissions of material fact during the
class period concerning the Company's financial statements, its ability
to offset declining wholesale demand for bandwidth capacity with
higher-margin customized data services, and its ability to generate
sufficient cash revenue to service its debt.
The suit alleges that as a result of these false and misleading
statements the price of the Company's common stock was artificially
inflated throughout the class period causing plaintiff and the other
members of the class to suffer damages.
For more information, contact Eric Belfi or Maurice Pesso by Mail: 275
Madison Avenue, New York, NY 10016 by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 by E-mail: email@rabinlaw.com or
visit the firm's Web site: http://www.rabinlaw.com
GLOBAL CROSSING: Charles Piven Commences Securities Suit in S.D. NY
-------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased Global Crossing, Ltd.
(NYSE:GX) (OTCBB:GBLXQ) (OTCBB:GBXGQ) shares between August 13, 1998
and January 28, 2002, inclusive against individual directors and
officers of the Company, namely:
(1) Gary Winnick,
(2) Lodwrick Cook,
(3) Jack Scanlon,
(4) David Lee,
(5) Dan Cohrs,
(6) James Gorton, and
(2) Arthur Andersen, LLP
The case has been filed in the United States District Court for the
Southern District Of New York.
The suit alleges that defendants violated sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, by improper recognition of revenue which improperly
inflated reported revenue and earnings.
In particular, the individual defendants caused the Company to book as
revenue the future receipts from contracts to sell rights to use its
fiber optic cable network to Internet and other telecommunication
companies, known as indefeasible rights of use (IRU), while entering
into similar agreements with those same parties to purchase capacity
from them in a different area. In essence, there was a barter
arrangement, which was improperly treated as if there were separate
sale and purchase transactions.
Moreover, the Company's purchase transactions were treated as a capital
expense, thus inflating its assets on its balance sheet. The Company's
statement of its revenue and earnings, therefore, were inflated, and
its financial statements were thus materially misleading in violation
of the federal securities laws.
Defendant Arthur Andersen violated federal securities laws by issuing
unqualified opinions on the Company's materially misleading financial
statements and allowing those opinions to be published.
For more information, contact Charles J. Piven, PA 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: piven@pivenlaw.com
GLOBAL CROSSING: Spector Roseman Commences Securities Suit in W.D. NY
---------------------------------------------------------------------
Spector, Roseman & Kodroff, PC initiated a securities class action
against Global Crossing, Ltd. (NYSE: GX) (OTC Bulletin Board: GBLXQ)
and certain of its officers and/or directors in the United States
District Court for the Western District of New York on behalf of
purchasers of the Company's common stock during the period between
April 28, 1999 through October 4, 2001, inclusive.
The suit alleges that certain of the Company's officers and directors
violated the Securities Exchange Act of 1934. The suit charges that
during the class period, defendants issued false and misleading
statements, press releases and SEC filings concerning the Company's
financial condition, as well as its ability to generate sufficient cash
revenue from new revenue sources considering the failing market for
broadband access.
Prior to the disclosure of the Company's true financial condition, the
individual defendants and other Company insiders sold holdings of
common stock for proceeds of more than $149 million. In addition,
during the class period defendants caused the Company to sell notes on
favorable terms to itself, which generated $1 billion in investor
capital.
On October 4, 2001, the Company announced that cash revenues in the
third quarter would be approximately $1.2 billion, $400 million less
than the $1.6 billion expected by analysts and forecast several times
earlier in the year by defendants. In addition, the Company and the
defendants stated that they expected recurring adjusted EBITDA to be
"significantly less than $100 million" compared to forecasts of $400
million made several times earlier in the year.
Following this series of announcements, the Company's share priced
plummeted nearly 50% to $1.07 per share on extremely heavy trading
volume. Subsequently, with its stock trading at well under a dollar per
share of common stock, the Company filed for Chapter 11 Bankruptcy
protection on January 28, 2002 after becoming unable to service its
debt.
For more details, contact Robert M. Roseman by Phone: 1-888-844-5862,
by E-mail: classaction@srk-law.com or visit the firm's Web site:
http://www.srk-law.com
GLOBAL CROSSING: Bernard Gross Commences Securities Suit in W.D. NY
-------------------------------------------------------------------
The Law Offices of Bernard M. Gross, PC initiated a securities class
action in the United States District Court for the Western District of
New York on behalf of purchasers of Global Crossing, Ltd. (NYSE:GX)
common stock during the period between April 28, 1999 through and
including October 4, 2001.
The suit alleges that certain of the Company's officers and directors
violated the Securities Exchange Act of 1934. The complaint charges
that during the class period, defendants issued false and misleading
statements, press releases and SEC filings concerning the Company's
financial condition, as well as its ability to generate sufficient cash
revenue from new revenue sources considering the failing market for
broadband access.
Prior to the disclosure of the Company's true financial condition, the
individual defendants and other Company insiders sold holdings of
common stock for proceeds of more than $149 million. In addition,
during the class period defendants caused the Company to sell notes on
favorable terms to itself, which generated $1 billion in investor
capital.
On October 4, 2001, the Company announced that cash revenues in the
third quarter would be approximately $1.2 billion, $400 million less
than the $1.6 billion expected by analysts and forecast several times
earlier in the year by defendants. In addition, the Company and the
defendants stated that they expected recurring adjusted EBITDA to be
"significantly less than $100 million" compared to forecasts of $400
million made several times earlier in the year.
Following this series of announcements, the Company's share priced
plummeted nearly 50% to $1.07 per share on extremely heavy trading
volume. Subsequently, with its stock trading at well under a dollar per
share of common stock, the Company filed for Chapter 11 Bankruptcy
protection on January 28, 2002 after becoming unable to service its
debt.
For more information, contact Susan Gross or Deborah M. Gross by Mail:
1515 Locust Street, 2nd Floor Philadelphia, PA 19102 by Phone:
800-849-3120 or 866-561-3600 or visit the firm's Web site:
http://www.bernardmgross.com
IKOS SYSTEMS: Sued Over Synopsis Merger, Mentor Tender Offer Rejection
----------------------------------------------------------------------
Ikos Systems, Inc. faces several securities class action challenging
its merger with Synopsis, Inc. and its rejection of an offer by Mentor
Graphics Corporation to purchase all of the Company's stocks in
Delaware and California courts.
Sheldon Pittlemen, an alleged Company stockholder, commenced the first
suit in early December in the Court of Chancery of the State of
Delaware against the Company and its Board or Directors. The suit
generally alleges that the members of the Company's Board breached
their fiduciary duties in connection with the merger agreement.
Another suit was commenced by Company stockholder Ernest Hack in the
Court of Chancery of the State of Delaware against the Company, the
Company's Board and Synopsys, Inc. While not identified as such in the
caption of the complaint, the body of the complaint also describes
Mentor as a defendant. The suit alleges that the members of the
Company's Board failed to properly consider and act upon the Mentor
tender offer. It also alleges that the Company failed to solicit offers
before entering the merger with Synopsis.
The lawsuit alleges that, as a result of these alleged failures, among
other things, the members of the Company's Board breached their
fiduciary duties and that Synopsys aided and abetted such breaches.
Stockholder Robert Ferronte commenced another suit in the Court of
Chancery of the State of Delaware against the Company and the Company's
Board, alleging that the members of the Company's Board breached their
fiduciary duties by allegedly failing to fully inform themselves about
Mentor's interest in acquiring the Company.
The complaint further alleges that the Company's poison pill permits
its Board to manipulate the Company to the detriment of stockholders
and to perpetuate its control over the Company's business and
operations.
The last suit was commenced in the Santa Clara County, California
Superior Court by stockholder Scott Petler, against the Company, the
members of the Company's Board of Directors, Synopsys and Dr. Aart de
Geus, Chairman and CEO of Synopsys. This suit generally alleges that
the members of the Company board breached their fiduciary duties in
connection with the merger agreement and in its response to the Mentor
tender offer. The suit further alleges that Synopsys and Dr. de Geus
aided and abetted the alleged breach of fiduciary duties.
The Company vehemently denies the allegations in the suit and vows to
mount a vigorous defense.
MATRIXONE INC.: Labels "Without Merit" Five Securities Suits In S.D. NY
-----------------------------------------------------------------------
Matrixone, Inc. faces five securities class actions commenced in July
2001 in the United States District Court for the Southern District of
New York, alleging federal securities violations, on behalf of
purchasers of the Company's stock from February 29,2000 to December
6,2000.
The suits, which are virtually identical, name as defendants the
Company, two of its officers, and certain underwriters involved in its
initial public offering (IPO). The suits allege that the Company's IPO
prospectus and registration statement violated federal securities laws
because they contained material misrepresentations and/or omissions
regarding the conduct of the Company's IPO underwriters in allocating
shares in our IPO to their customers.
The Company labels the allegations in the suit "without merit," stating
that various plaintiffs have filed substantially similar lawsuits
against over one hundred other publicly traded companies in connection
with the underwriting of their initial public offerings. The Company
intends to contest the suits vigorously, but cannot give an assurance
about the ultimate outcome of these lawsuits.
NEXTEL PARTNERS: Strongly Denies NY Securities Suit Allegations
---------------------------------------------------------------
Nextel Partners, Inc. vehemently denies the allegations in the
securities class action pending against them in the United States
District Court for the Southern District of New York, alleging federal
securities violations on behalf of all persons who acquired the
Company's common stock between February 22,2000 and December 6,2000.
The suit names as defendants the Company and:
(1) John Chapple, President, Chief Executive Officer and
Chairman of the Board,
(2) John D. Thompson, Chief Financial Officer and Treasurer,
(3) Goldman Sachs and Co.,
(4) Credit Suisse First Boston Corporation,
(5) Morgan Stanley and Co., Incorporated and
(6) Merrill Lynch Pierce Fenner and Smith, Incorporated
The suit alleges that the defendants violated the Securities Act of
1933 and that the underwriter defendants violated the Securities
Exchange Act of 1934 by issuing a registration statement and prospectus
that were false and misleading in that they failed to disclose that:
(i) the underwriter defendants allegedly had solicited and
received excessive and undisclosed commissions from certain
investors who purchased the Company's common stock issued in
connection with our initial public offering and
(ii) the underwriter defendants allegedly allocated shares of stock
issued in connection with the initial public offering to
investors who allegedly agreed to purchase additional shares
of the Company's common stock at pre-arranged prices.
The Company states in a disclosure to the Securities and Exchange
Commission that they intend to defend the action vigorously and to
pursue all appropriate remedies available to it and its officers.
PNC FINANCIAL: Berman DeValerio Initiates Securities Suit in W.D. PA
--------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo filed a securities
class action against The PNC Financial Services Group, Inc. (NYSE:PNC)
today claiming the Company misled investors about its financial
results, in the US District Court for the Western District of
Pennsylvania. The suit seeks damages for violations of federal
securities laws on behalf of all investors who bought Company stock
from July 19, 2001 through January 28, 2002.
The suit accuses the Company, a Pittsburgh-based financial services
company, of using improper accounting methods to inflate earnings
reports and subsequently releasing those figures to the public. The
complaint also names two top officers and the Company's auditor, Ernst
& Young, as defendants.
On January 29, 2002, the Company revealed that the Federal Reserve
Board had ordered the company to restate its financial results for the
second and third quarters of 2001 and revise its fourth quarter 2001
numbers. According to the suit, the Board ordered the restatement
because of the Company's apparent failure to comply with generally
accepted accounting principles during the class period by failing to
consolidate into its financial reports three financial firms in which
the Company had interests.
The suit further states that the restatements inflated the Company's
net income during the class period by $155 million, or 27%, and reduced
its earnings by that amount for the year ended December 31, 2001.
Company stock quickly fell 12% the day after it announced the
restatement, the complaint added.
For more information, contact Michael G. Lange or Chauncey D. Steele IV
by Mail: One Liberty Square, Boston, MA 02109 by Phone: (800) 516-9926
by E-mail: law@bermanesq.com or visit the firm's Web site:
http://www.bermanesq.com
PNC FINANCIAL: Kaplan Fox Commences Securities Fraud Suit in S.D. PA
--------------------------------------------------------------------
Kaplan Fox and Kilsheimer LLP initiated a securities class action
against PNC Financial Services Group (NYSE: PNC) and certain of the
Company's officers and directors in the United States District Court
for the Southern District of Pennsylvania. The suit is brought on
behalf of all persons or entities who purchased the Company's common
stock between July 19, 2001 and January 29, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges, among other things, that during the class period defendants
made false and misleading statements concerning the Company's financial
results for the second, third and fourth quarters of 2001.
Specifically, defendants improperly stated revenues during those
quarters, in violation of generally accepted accounting principles, and
"manipulated" the Company's books in order to report revenues, profits
and growth rates to the investing public throughout 2001.
As a result of defendants' false and misleading statements, and
improper accounting practices during the class period, the price of the
Company's common stock traded at artificially inflated prices.
For further details, contact Frederic S. Fox, Jonathan K. Levine or
Adam W. Walsh by Mail; 805 Third Avenue, 22nd Floor New York, NY 10022
by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 or by
E-mail: mail@kaplanfox.com or contact Laurence D. King by Mail: 601
Montgomery Street San Francisco, CA 94111 by Phone: (415) 772-4700 by
Fax: (415) 772-4707 by E-mail: mail@kaplanfox.com or visit the firm's
Website: http://www.kaplanfox.com
REGENERATION TECHNOLOGIES: Schiffrin Barroway Lodges Suit in N.D. FL
--------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Florida,
Gainesville Division on behalf of all purchasers of the common stock of
Regeneration Technologies, Inc. (Nasdaq: RTIX) from July 25, 2001
through January 31, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statements concerning the Company's
business and financial condition. Specifically, the suit alleges that
defendants made highly positive statements regarding the Company's
financial results.
The Company reported quarter after quarter of "record" financial
results and strong revenue growth which caused the price of its
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 details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 or by E-mail:
info@sbclasslaw.com
SPECTRALINK CORPORATION: Schiffrin Barroway Files Securities Suit in CO
-----------------------------------------------------------------------
Schiffrin & Barroway, LLP commenced a securities class action in the
United States District Court for the District of Colorado, on behalf of
all purchasers of the common stock of SpectraLink Corporation (Nasdaq:
SLNK) from July 19, 2001 through January 11, 2002, 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. Specifically, the complaint alleges that
defendants issued statements which represented that the Company was
experiencing continued growth and increasing its market share and would
continue to do so in the future.
Unbeknownst to investors, however, the Company was suffering from a
host of undisclosed adverse factors which were negatively impacting its
business and which would cause it to report declining financial
results, materially less than the market expectations defendants had
caused and cultivated.
Specifically, defendants misrepresented or failed to disclose that:
(1) the Company was experiencing declining sales as its business
began to be affected by general market forces. Throughout the
class period, defendants repeatedly emphasized that the
Company was not being affected by the slowdown in the US
economy, when, in fact, that was not true;
(2) the Company was becoming increasingly reliant on end-of-the-
quarter sales to meet its sales forecasts. This sales pattern
necessarily subjected the Company to the increased risk that
it would not meet its sales expectations should it not
successfully complete certain anticipated sales; and
(3) certain of the Company's customers were experiencing financial
difficulty such that it was highly unlikely that they would be
able to complete anticipated sales, thereby causing the
Company to suffer a decline in its revenues.
On January 14, 2002, before the open of the Nasdaq stock market, the
Company issued a press release announcing preliminary financial results
for its fourth quarter of 2001, and disclosed, for the first time, that
its revenue and earnings would in fact be affected by the slowdown in
the overall economy.
In response to this announcement, the price of the Company's common
stock dropped precipitously, falling from $16.02 per share to $10.16
per share, a decline of more than 36%. While the Company was being
adversely affected by the aforementioned factors, but prior to any
disclosure to the market, the individual defendants and other senior
executives sold more than $13.7 million worth of their personally-held
stock to the unsuspecting public.
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:
888-299-7706 (toll free) or 610-667-7706 or by E-mail:
info@sbclasslaw.com
SPECTRALINK CORPORATION: Dyer Shuman Commences Securities Suit in CO
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Dyer & Shuman, LLP initiated a securities class action in the United
States District Court for the District of Colorado on behalf of
purchasers of the securities of SpectraLink Corporation (NASDAQ:SLNK)
from July 19, 2001 through January 11, 2002.
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 materially false and misleading statements to
the market during the class period.
Throughout the class period, the Company and the individual defendants
issued materially false and misleading statements which represented
that the Company was experiencing continued growth and increasing
market share and would continue to do so in the future. However,
investors did not know that the Company was experiencing numerous
undisclosed adverse factors which were negatively impacting its
business and would cause it to suffer and report declining financial
results.
As alleged in the Complaint, defendants misrepresented or failed to
disclose:
(1) that the Company was actually suffering from declining sales
as a result of general market forces;
(2) that the Company was becoming increasingly reliant on end-of-
quarter sales to meet sales forecasts; and
(3) that because some of the Company's key customers were
suffering financial hardship and were, as a result, likely
unable to complete anticipated sales, the Company would suffer
declining revenues.
On January 14, 2002, the Company issued a press release, which
preliminarily announced financial results for the Company's fourth
quarter of 2001. For the first time, the Company disclosed that its
financial performance would in fact be affected by the overall economic
downturn.
Company stock price precipitously dropped 36% on that revelation--from
$16.02 per share to $10.16 per share. Before the Company made its
disclosure to the market and while it was being adversely affected by
the factors mentioned above, the individual defendants and other senior
executives sold personally held stock to an unknowing and unsuspecting
public, reaping over $13.7 million in proceeds.
For more information, contact Jeffrey A. Berens, Trig R. Smith by Mail:
801 East 17th Avenue Denver, Colorado 80218-1417 by Phone: 303-861-3003
or 800-711-6483 or by E-mail: jberens@dyershuman.com
TYCO INTERNATIONAL: Schiffrin Barroway Files Securities Suit in S.D. FL
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Schiffrin & Barroway LLP commenced a securities class action in the
United States District Court for the Southern District of Florida on
behalf of all purchasers of the common stock of Tyco International Ltd.
(NYSE: TYC) from December 13, 1999 through February 1, 2002, inclusive.
The suit alleges that certain of the Company's officers and directors
violated the Securities Exchange Act of 1934. The complaint charges
that during the class period, defendants issued false and misleading
statements, press releases, and SEC filings concerning Tyco's financial
condition. These statements had the effect of artificially inflating
the price per share of the Company's common stock and other securities.
The suit further alleges that the Company's representations were false
and misleading due to defendant's failure to disclose:
(1) hundreds of cash acquisitions during the class period totaling
expenditures of several billion dollars;
(2) that the individual defendants sold in excess of $155,000,000
of their individual stock holdings in the Company;
(3) that the Company's management procedures were to make large
payments to insiders, including a $20,000,000 payment to one
director and his charity for furthering the Company's
interests; and
(4) the Company fostered a corporate atmosphere which encouraged
the individual defendants to work for their personal interests
rather than those of the Company or its shareholders by
offering bonuses to those who acquired companies with high,
but short term, profitability.
As the truth regarding the foregoing false and misleading statements
began to be revealed on January 28, 2002 the Company's stock price
began a rapid decline. Company shares, which closed at $45 on January
27, 2002, had plummeted to $35.63 by the end of the class period and
are currently trading for under $30 per share.
For further details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-
299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com
TYCO INTERNATIONAL: Bernard Gross Initiates Securities Suit in S.D. NY
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The Law Offices of Bernard M. Gross, PC commenced a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of TYCO International Ltd (NYSE:TYC)
common stock during the period between February 1, 2000 through and
including February 1, 2002.
The suit charges 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 during the class period, thereby artificially inflating the
price of the Company's common stock.
The complaint alleges that the Company's representations were rendered
false and misleading by defendants' failure to disclose:
(1) that the Company would achieve its earnings targets only
through undisclosed acquisitions;
(2) that the individual defendants sold in excess of $100,000,000
of their individual stock holdings to the company; and
(3) that the Company's management procedures were to make large
payments to insiders, including a $20,000,000 payment to one
director and his charity for furthering the interests of the
Company.
The suit further alleges that external rule changes required the
Company to cease its allegedly aggressive revenue recognition practices
and recognize the revenues from its security contracts only as the
monies thereunder were received.
Throughout the class period, defendants were allegedly aware that the
adverse financial effect of the rule change by the Securities and
Exchange Commission would be approximately $1,000,000,000. However,
defendants allegedly failed to disclose this adverse financial effect
until partial disclosure was made in October 2001. As defendants
belatedly announced portions of the foregoing material facts between
October 2001 and January 2002, Company stock fell allegedly by more
than 40 plus percent.
For more information, contact Susan Gross or Deborah R. Gross by Mail;
1515 Locust Street, 2nd Floor Philadelphia, PA 19102 by Phone:
800-849-3120 or 866-561-3600 or visit the firm's Website:
http://www.bernardmgross.com
TYCO INTERNATIONAL: Denies Allegations in Securities Suit in S.D. NY
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Tyco International Ltd. (NYSE: TYC) spokeswoman Maryanne Kane labeled
"without merit" the securities class action pending against the Company
in the US District Court for the Southern District of New York for
alleged federal securities violations, the Associated Press reports.
The law firm of Lovell and Stewart commenced the suit on behalf of
purchasers of the Company's common stock between February 1, 2000
through February 1, 2002, inclusive. The suit alleges that the Company
routinely obscured its finances to artificially inflate its stock
price. Paul Geller, an attorney for the shareholders, told AP the
company used accounting tricks and hid its true financial condition.
The suit specifically 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 during the class period.
Ms. Kane said the Company will vigorously defend itself against the
suit.
WILLIAMS COMPANIES: Spector Roseman Files Securities Suit in N.D. OK
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Spector, Roseman & Kodroff, PC lodged a securities class action against
Williams Companies, Inc. (NYSE: WMB) (WMB) and/or Williams
Communications Group, Inc. (NYSE: WCG) (WCG) and certain of its
officers and/or directors in the United States District Court for the
Northern District of Oklahoma on behalf of purchasers of the common
stock of WMB and/or WCG during the period between July 24, 2000 through
January 29, 2002, inclusive.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between 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, 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.
In January 2002, as alleged in the complaint, WMB shocked the market by
announcing that it would be delaying the release of its 2001 earnings
"pending an internal assessment of Williams' contingent obligations to
Williams Communications." According to the press release, WMB "expects
to be able to estimate the financial effect, if any, regarding its
ultimate obligation related to WCG's $1.4 billion debt and network
lease agreement covering assets that cost $750 million."
In response to WMB's shocking announcement, as alleged in the
complaint, the price of WMB common stock, which was already
substantially eroded from its prior year's high, declined sharply,
falling from approximately $24 per share to as low as $18.70 per share
and the already depressed WCG common stock declined to as low as $1.30
per share.
For further details, contact Robert M. Roseman by Phone: 888-844-5862
by E-mail: info@srk-law.com or visit the firm's Web site:
http://www.srk-law.com
WILLIAMS COMPANIES: Schatz Nobel Commences Securities suit in N.D. OK
---------------------------------------------------------------------
Schatz and Nobel PC initiated a securities class action in the United
States District Court for the District of Oklahoma on behalf of all
persons who purchased the common stock of Williams Companies, Inc.
(NYSE: WMB) (WMB) and/or the common stock of Williams Communications
Group, Inc. (NYSE: WCG) (WCG) between July 24, 2000 and January 29,
2002, inclusive.
The suit alleges that WMB, a company engaged in energy-related
activities, WCG, a communications company owning and operating a
nationwide fiber-optic network and three top corporate officers misled
the investing public during the class period in an effort to hide
escalating costs and expenses.
Specifically, during the class period, the defendants consistently and
adamantly contended that WMB was not being adversely effected by over-
capacity in the fiber-optic broadband market. The Defendants spun-off
WMB from WCG representing it was in the best interest of both
companies, when in reality it was an attempt to remove WCG mounting
losses and rising expenses from WMB balance sheet before these problems
became known to the investing public.
However, in order to effect the spin-off, WMB guaranteed approximately
$2.5 billion of WCG debt. On January 29, 2002, WMB announced it was
delaying the release of its 2001 earnings "pending an internal
assessment of Williams contingent obligations to WCG."
As a result, the price of WMB common stock fell from approximately $24
per share to as low as $18.70 per share, and WCG stock declined to as
low as $1.30 per share.
For more information, contact Andrew M. Schatz, Patrick A. Klingman or
Wayne T. Boulton by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or
visit the firm's Web site: http://www.snlaw.net
*********
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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