/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020218.mbx C L A S S A C T I O N R E P O R T E R Monday, February 16, 2002, Vol. 4, No. 34 Headlines BARR LABORATORIES: Sued For Agreement With Zeneca Over Tamoxifen Drug BARR LABORATORIES: Sued For Antitrust Practices Over Anthrax Drug Cipro BOSTON CHICKEN: Underwriters Agree To Settle Securities Suit For $19M CALIFORNIA: Los Angeles County Faces Suit For Detaining Teens Too Long CHRYSLER CORPORATION: Recalls 1.6M Jeeps Due to Transmission Defect COUNTRYWIDE HOME: Appeals Court Certification of Consumer RESPA Suit COVERDELL COMPANY: Faces Suit For Consumer Law Violations in E.D. MI FIRST UNION: Investors File Suit For Losses Due To Broker's Misconduct INDIAN FUNDS: Interior Secretary Defends Self Against Contempt Charges MALLINCKRODT INC.: Settles Pollution Suit Filed By Mapleton Residents MEMBERWORKS INC.: Ohio State Court Denies Certification To Fraud Suit MEMBERWORKS INC.: Mounting Vigorous Defense Against Consumer Suits MERRILL LYNCH: FL Court Dismisses Fraud Suits Over Growth Fund Shares OXYCONTIN LITIGATION: Plaintiffs Decide Not To Pursue Class Action Securities Fraud DYNACQ INTERNATIONAL: Schiffrin Barroway Lodges Securities Suit in TX GLOBAL CROSSING: Weiss Yourman Commences Securities Suit in C.D. CA GLOBAL CROSSING: Spector Roseman Commences Securities Suit in W.D. NY GLOBAL CROSSING: Schatz Nobel Commences Securities Suit in S.D. NY GLOBAL CROSSING: Milberg Weiss Commences Securities Suit in C.D. CA HI/FN INC.: Sued For Federal Securities Violations in N.D. California HOMESTORE.COM: Neiman Garland Commences Securities Suit in C.D. CA IMCLONE SYSTEMS: Leo Desmond Lodges Securities Suit in S.D. New York MCLEODUSA INC.: Abraham Paskowitz Files Securities Suit in N.D. Iowa OPENWAVE SYSTEMS: Denies Allegations in Securities Suit in S.D. NY PNC FINANCIAL: Marc Henzel Files Securities Suit in W.D. Pennsylvania REGENERATION TECHNOLOGIES: Collins Truett Lodges Securities Suit in FL RHYTHMS NETCONNECTIONS: Glancy Binkow Commences Securities Suit in CO RICA FOODS: Leo Desmond Commences Securities Fraud Suit in S.D. FL RICA FOODS: Spector Roseman Commences Securities Suit in S.D. Florida SUPREMA SPECIALTIES: Harvey Greenfield Lodges Securities Suit in NJ SUPREMA SPECIALTIES: Pomerantz Haudek Initiates Securities Suit in NJ TALX CORPORATION: Missouri Federal Court Consolidates Securities Suits TYCO INTERNATIONAL: Wechsler Harwood Lodges Securities Suit in S.D. NY WILLIAMS COMPANIES: Spector Roseman Lodges Securities Suit in N.D. OK WILLIAMS COMPANIES: Emerson Firm Commences Securities Suit in N.D. OK ********* BARR LABORATORIES: Sued For Agreement With Zeneca Over Tamoxifen Drug --------------------------------------------------------------------- Barr Laboratories faces 30 consumer or third party payor class action suits, filed in various state and federal courts against the Company and Zeneca, Inc. and AstraZeneca Pharmaceuticals LP over the breast cancer drug, Tamoxifen. The suits allege, among other things, that the 1993 settlement of patent litigation between Zeneca, Inc. and the Company insulates them from generic competition and enables Zeneca, Inc. to charge artificially inflated prices for Tamoxifen citrate. The Company believes that each of its agreements with Zeneca, Inc., respectively, is a valid settlement to a patent suit and cannot form the basis of an antitrust claim. Although it is not possible to forecast the outcome of these matters, the Company intends to vigorously defend itself. The Company, however, asserts that an adverse judgment could have a material adverse impact on its consolidated financial statements. BARR LABORATORIES: Sued For Antitrust Practices Over Anthrax Drug Cipro ----------------------------------------------------------------------- Barr Laboratories faces 39 class action complaints filed in various state and federal courts early this month by direct and/or indirect purchasers of anti-anthrax drug, Ciprofloxacin (better known as Cipro) from 1997 to present. The suits name as defendants: (1) Barr Laboratories, (2) Aventis SA, (3) Hoechst Marion Roussel, Inc., (4) Rugby Laboratories, Inc. and (5) Watson Pharmaceuticals, Inc. The plaintiffs in these suits allege that they are direct or indirect purchasers of Cipror who were damaged because the Company's settlement of the Barr ANDA (IV) litigation prevented generic manufacturers from selling a generic version of Cipror. The plaintiffs allege that the defendants violated various federal antitrust and state business, antitrust, unfair trade practices and consumer protection statutes. These proceedings are at an early stage. None of the relevant courts has certified a class. The Judicial Panel for Multidistrict Litigation Panel, transferred 35 of these cases to the US District Court for the Eastern District of New York for coordinated pre-trial proceedings. The Company intends to vigorously defend against this suit, and expects that it will take several years before litigation is resolved. It also said that an adverse outcome in this litigation could materially harm their business. BOSTON CHICKEN: Underwriters Agree To Settle Securities Suit For $19M --------------------------------------------------------------------- Boston Chicken's auditor, Arthur Andersen LLP and its underwriters have agreed to settle for $19.4 million the class action filed against them by the Company's shareholders. The suit alleges that the firms helped Boston Chicken to hide its true financial condition. Also named in the suit are Merrill Lynch & Co., Alex Brown & Sons and Morgan Stanley & Co. Shareholders filed the suit after the fast-food Company filed for Chapter 11 bankruptcy in 1998. Prior to the bankruptcy, the Company recruited hundreds of franchisers as part of an aggressive expansion plan, loaning the entrepreneurs money to start their restaurants. Kip Shuman, lawyer for the plaintiffs, told The Denver Post Online, that the suit alleges the Company never told shareholders about the liabilities attached to the franchisers. The suit also alleges Arthur Andersen and the underwriters knew Boston Chicken was hiding losses through off-balance-sheet financing arrangements with franchisers. Mr. Shuman added, "This is similar to the Enron case, in that the existence of these entities were disclosed, but the huge liabilities weren't." The suit states that auditors had a responsibility to alert shareholders, but instead issued misleading opinions. Arthur Andersen and the other underwriters refused to admit any liability in entering the settlement, which, if approved, will give the plaintiffs a total of $19.4 million. CALIFORNIA: Los Angeles County Faces Suit For Detaining Teens Too Long ---------------------------------------------------------------------- A lawsuit seeking class action status recently was filed in Los Angeles County Superior Court, on behalf of 19 juveniles, alleging that Los Angeles County has repeatedly violated Court orders by detaining teenagers too long, sometimes weeks after they are supposed to be freed, the Associated Press reported recently. Sanford Jossen, a Manhattan Beach attorney for the plaintiffs, claims that youths as young as 13 were wrongfully imprisoned in violation of their civil rights. "When a judge says that you get out of custody, you are supposed to get out, but that is not happening," Mr. Jossen said. Officials with the L.A. County Department of Children and Family Services and the County Probation Department deferred comment to Principal Deputy Counsel Roger Granbo, who said he had not seen the lawsuit. He also said he would not comment on pending litigation. In one cited instance, a 16-year-old girl was allegedly held at a juvenile hall for five days after she was supposed to be released. She was taken into custody for allegedly breaking into her foster mother's home and taking a computer game. In still another case, a 14-year-old male teenager spent seven days at a juvenile hall despite a judge's order that he be immediately released, according to the lawsuit. CHRYSLER CORPORATION: Recalls 1.6M Jeeps Due to Transmission Defect ------------------------------------------------------------------- Chrysler Corporation initiated a recall of 1.6 million Jeep Grand Cherokee, after hundreds of owners alleged the vehicle tended to roll backward when in "park", USA Today reports. The recall, which covers 1993 through 1998 model Grand Cherokees in North America, is the industry's largest vehicle recall since 1999, when General Motors recalled 3.5 million trucks and vans to fix brake problems. There have been a handful of recalls for mechanical problems since then involving more than 1 million vehicles. Chrysler denied responsibility for the problem, saying "driver's error" caused the accidents. Reportedly, the accidents resulted from owners misplacing the gearshift or getting out of the vehicle while it was still running. The Company also asserts that it found no defect in the transmission. The Company said it conducted the recall to appease federal regulators and angry customers. Additionally, the Company volunteered to install a device inside the floor shifter to help ensure the vehicle's transmission is firmly placed in park. Chrysler spokeswoman Angela Spencer Ford told USA Today, "We're confident this recall will be resolved based on our actions." However, the National Highway Traffic Safety Administration said it will proceed with its investigation into a wider range of Grand Cherokees linked to 364 crashes, 159 injuries and five fatalities. Last November, NHTSA said one of its investigators was able to replicate the problem on a Grand Cherokee three times. Chrysler said the government had gone to unusual lengths to test the vehicle, and said any vehicle might be susceptible to the problem under NHTSA's conditions. Sean Kane, head of Strategic Safety, welcomed the action, telling USA today, "I'm glad to hear DaimlerChrysler is taking this action because there's a whole host of people who have been injured." A class action has already arisen over the transmission problem. Some attorneys and investigators have said the Grand Cherokee's transmission was designed so that it indicates it is in "park" even though it is actually halfway between "park" and "reverse." COUNTRYWIDE HOME: Appeals Court Certification of Consumer RESPA Suit -------------------------------------------------------------------- Countrywide Home Loans appealed a Texas trial court's decision granting class certification to a lawsuit filed against it by consumers, alleging the Company violated the Texas Unauthorized Practice of Law statute and the federal Real Estate Settlement Procedures Act by illegally obtaining fees for the preparation of legal documents. The suit was filed on behalf of all individuals in Texas who, as part of a residential real estate loan agreement with the Company from January 10, 1996, through the present, were charged a "Document Preparation Fee" on their HUD-1 Settlement Statement. The suit alleges that the Company, which originates and services mortgage loans, illegally charged consumers for preparing legal documents that affected titles to property. The class claims that the Company engaged in the unauthorized practice of law by preparing the documents and then referring the loan documents to a law firm for final review. In this way, consumers maintain, Countrywide was able to charge for clerical services, charges which were paid by the law firm to Countrywide from the preparation fee that the law firm received from consumers. Discovery in the case is suspended while the appeal is pending. COVERDELL COMPANY: Faces Suit For Consumer Law Violations in E.D. MI -------------------------------------------------------------------- Coverdell & Company, subsidiary of Memberworks, Inc. faces a class action pending in the United States District Court for the Eastern District of Michigan, Southern Division, filed by Teresa McClain. The suit also names other defendants, most notably Monumental Life Insurance Company. The suit, which seeks unspecified monetary damages, alleges that Coverdell and the other defendants violated the Michigan Consumer Protection Act and other applicable Michigan laws in connection with the marketing of Monumental Life Insurance Company insurance products. The suit includes a claim that it should be certified as a class action. The plaintiff has filed a motion for class certification to which all of the defendants have filed opposing papers regarding the same. The Court has not ruled on the motion. The Company believes that the claims asserted in the suit are unfounded and will vigorously defend their interests against this suit. FIRST UNION: Investors File Suit For Losses Due To Broker's Misconduct ---------------------------------------------------------------------- First Union Securities faces a purported class action suit filed in Nashville, Tennessee on behalf of its clients, alleging they sustained losses after doing business with broker Francis H. Phillips. The suit, filed on behalf of Tennessee residents who had accounts with First Union Securities after Dec. 31, 1996 and who had dealt with Phillips, alleges that he made excessive trades in the plaintiffs' accounts and placed their money in risky investments such as certain technology stocks that didn't fit their investment profiles, Tennessean.com reports. The plaintiffs further alleged that the Company was aware of Mr. Phillips misconduct, but failed to take action against him. Lawyer H. Naill Falls filed the suit for the plaintiffs. He also represented plaintiffs in a complaint that ended in 1998 with Morgan Keegan & Co. agreeing to pay $525,000 to seven elderly investors who had put money into failed nightclub, Cowboys LaCage. Tennessean.com reports that Mr. Phillips was a co-owner of the club, which featured female impersonators doing country songs and comedy. He had been a Morgan Keegan broker before joining First Union Securities. Mr. Phillips denies the allegations in a statement, saying "I assure you nothing was out of the ordinary and the clients' investments objectives were well measured, discussed and selected by the client and placed in firm-recommended investments at First Union Securities." Hugh Sloan, Managing Director at the Nashville office of First Union Securities, which will become Wachovia Securities this spring, declined to comment on the suit. INDIAN FUNDS: Interior Secretary Defends Self Against Contempt Charges ---------------------------------------------------------------------- Interior Secretary Gale Norton recently appeared in court before US District Judge Royce Lamberth and asked him for more time to fix a flawed system that handles $500 million annually in royalties from Indian-owned land, the Associated Press reported recently. However, after five years of presiding over a class action brought on behalf of some 300,000 Indians, alleging the mismanagement of $10 billion in Indian money, Judge Lamberth voiced his skepticism, noting that he had heard similar reform promises from Secretary Norton's predecessor. After weeks of testimony about the Department's efforts to set up an effective system, Judge Lamberth has scheduled closing arguments for February 21. During the course of Secretary Norton's testimony, Judge Lamberth said, "Secretary (Bruce) Babbitt sat right in that chair where you are and assured me of a great plan, and all this was going to happen, and none of it happened. How do I rely on what you.are telling me now, and how is it different from what Secretary Babbitt told me?" Ms. Norton said that her Department has hired outside consultants to help speed reform efforts. She said that she is seeking an $84 million increase in spending on trust reform and that her top deputies are devoted to fixing the system. "We are very dedicated to doing this," the Secretary said. "I would really like to see this change take place.during my time as Secretary." Ms. Norton was on the stand defending herself against a contempt of court charge for allegedly concealing the failure of key Indian accounting systems and not complying with Judge Lamberth's order to account for how much the Indians are owed. She said progress has been made on both these fronts, but problems remain. Dennis Gingold, the attorney for the 300,000 Indians in the class action said the Secretary's promises do not change the fact that the trust fund is in crisis despite the Interior Department spending $614 million to fix it. Ms. Norton said her Department deserves a "passing grade" in some reform areas, but needs improvement in others. Elouise Cobell, an Indian from the Blackfeet Nation, who began the showdown by suing the Interior Department in 1996, said that "passing" should not be good enough when it comes to managing the Indians' money. She said that Secretary Norton should be jailed as punishment for failing to fix the trust fund and that Judge Lamberth should assign someone outside the Interior Department with the expertise to fix the system. Although much of the alleged wrongdoing occurred during Mr. Babbitt's tenure, and according to reports the "mess" has been growing for decades, Secretary Norton and Assistant Secretary of Indian Affairs, Neal A. McCaleb, are on trial as the current officials in charge of the trust fund. In 1999, Judge Lambert held Mr. Babbitt and then-Treasury Secretary Robert Rubin in contempt and fined them $600,000 for failing to turn over documents in the five-year-old class action brought by the Indian landowners. Any fines imposed against Secretary Norton will be paid by the Department, as were those imposed against Mr. Babbitt and Mr. Rubin. The trust accounts were created in 1887 when Congress assigned plots of land to individual Indians. The federal government holds that land, about 11 million acres, in trust for the Indians, meaning it cannot be taxed or sold, and the government must approve any leases for use of the land. Mr. Gingold, said the government mismanagement cost the 300,000 Indian account holders more than $10 billion in lost mining, grazing and timber royalties. The government has acknowledged that money intended for the Indian beneficiaries was lost, misappropriated, stolen or never collected. MALLINCKRODT INC.: Settles Pollution Suit Filed By Mapleton Residents --------------------------------------------------------------------- Mallinckrodt, Inc. has reached a settlement in the class action filed against it by Mapleton, Utah residents over personal injuries caused by the Company's explosives manufacturing plant in the area. The suit alleges that the plant leaked chemicals that caused them to develop cancer. As a result, the residents allegedly suffered personal injuries from the ingestion of various chemicals that seeped into their private well water from the plant. The class includes a number of present or former residents of Mapleton who have been diagnosed with non-Hodgkin's lymphoma. According to the residents, in June 1986 the explosives manufacturing plant, which is located at the mouth of Spanish Fork Canyon, one mile south of Mapleton, released hundreds of thousands of gallons of nitric acid into the ground when one of the plant's disposal pond liners failed. The residents claim that three years after the nitric acid leak Mapleton was forced to close one of its municipal water wells due to high levels of nitrates. Prior to 1986, other contaminants allegedly seeped into the Mapleton groundwater as a result of the defendants' improper hazardous waste disposal practices. The plant has been in operation since the 1940's. From 1967 through 1982, the IMC Group, which later became defendant Mallinckrodt, Inc., owned and operated the plant. In 1982, the Trojan Corporation (which is not a defendant) purchased the plant and continued operating it. Defendant Ensign-Bickford Industries, Inc. acquired the stock for the plant from Trojan in 1987. The Ohio State Court denied the defendants' motion to dismiss the case. On February 5, 2002, the parties told the Court that they had reached a settlement, although details have not yet been released. MEMBERWORKS INC.: Ohio State Court Denies Certification To Fraud Suit --------------------------------------------------------------------- The Court of Common Pleas in Cuyahoga County, Ohio refused to grant class certification to a class action filed against Memberworks, Inc. by plaintiff Brandy L. Ritt on behalf of the Company's customers. The suit, which seeks unspecified monetary damages, alleges that the Company and the other defendants violated various provisions of Ohio's consumer protection laws in connection with the marketing of certain membership programs offered by the Company. The Company believes that the claims asserted against it are unfounded and Memberworks will vigorously defend its interests against this suit. MEMBERWORKS INC.: Mounting Vigorous Defense Against Consumer Suits ------------------------------------------------------------------ Memberworks, Inc. labeled "without merit" several class actions pending against it in Florida and California state courts, charging it with violating the respective states' consumer protection laws with regard to the marketing of its membership programs. In June 2001, actions were instituted by plaintiffs Judith Jeselskis and Marcia Walters against the Company and other defendants in the Circuit Court of the Tenth Judicial District, Highlands County Civil Division, Florida, and Circuit Court of the Sixth Judicial Circuit, Pinellas County Civil Division, Florida, respectively. The suits allege that the Company and the other defendants violated the Florida Deceptive and Unfair Trade Practices Act, in connection with the marketing of certain membership programs offered by the Company. While the respective complaints include claims that the suits should be certified as class actions, the plaintiffs have not filed motions for class certification. In July 2001, an action was instituted by Alan Stone against the Company and other defendants in Superior Court of the State of California, County of Orange. The suit alleges that the Company and the other defendants violated California business practices law. While the complaint includes a claim that the suit should be certified as a class action, the plaintiff has not filed a motion for class certification. The Company believes that the allegations made in these lawsuits are unfounded and will vigorously defend its interests against the suits. MERRILL LYNCH: FL Court Dismisses Fraud Suits Over Growth Fund Shares --------------------------------------------------------------------- The US District Court for the Middle District of Florida dismissed the consolidated class action filed against The Merrill Lynch Fundamental Growth Fund, Inc. on behalf of all persons and entities who sold or purchased the Growth Fund in Florida through Merrill Lynch or any related entity at any time from November 1,1997 through April 30,1999, inclusive. The consolidated suit arose from two suits, the first of which was commenced in November 2000 in the US District Court in the Middle District of Florida against the Growth Fund and: (1) Merrill Lynch Investment Managers LP, (2) certain present and former individual board members of Growth Fund and (3) Merrill Lynch, Pierce, Fenner & Smith, Inc. The plaintiffs, trustees of and participants in two 401(k) profit sharing plans, purport to assert claims against the defendants on their own behalf and on behalf of the plans, the plans' participants and all similarly situated shareholders who purchased Growth Fund shares in Florida. The suit alleges violations of the Florida Securities and Investor Protection Act and the Florida Deceptive and Unfair Trade Practices Act. The defendants allegedly induced Florida investors to purchase shares of Growth Fund through untrue statements and omissions of material fact regarding the true nature of the Fund and its holdings. A second, nearly identical action was filed in Florida State Court by one of the named plaintiffs in the federal action. Defendants removed this lawsuit to Federal Court pursuant to the Securities Litigation Uniform Standards Act (SLUSA). The Federal Court denied plaintiffs' motion to remand, consolidated the two actions and in September 2001, granted defendants' motion to dismiss the consolidated action on the ground that plaintiffs claims were preempted by SLUSA. The plaintiffs have appealed the District Court's decisions. The defendants believe that the lawsuits are without merit and intend to continue to defend vigorously against the claims. OXYCONTIN LITIGATION: Plaintiffs Decide Not To Pursue Class Action ------------------------------------------------------------------ Plaintiffs in the class action lawsuit against the makers of the painkiller Oxycontin have decided not to represent others who may have been harmed by the drug, saying the litigation could be "time consuming" and expensive. Four Virginia residents filed the suit, alleging patients who took Oxycontin for legitimate medical reasons became addicted to it afterwards. The suit names as defendants Purdue Pharma, a group of related companies and a doctor who "over-prescribed" the drug. According to the Associated Press, the pain killer was designed to be released slowly over 12 hours to control the kind of severe pain associated with cancer or back injuries. However, federal authorities have said OxyContin abuse was the probable cause of 296 deaths in 31 states in the past two years. However, the four plaintiffs filed a request before Federal Judge James Jones, saying they no longer want to proceed as a class action, but instead want to file individual lawsuits. Attorney for the plaintiffs Dawn Stewart told the Judge, "Their circumstances have changed.One plaintiff has been incarcerated, and we are having extreme difficulty getting in touch with her." Judge Jones granted the plaintiffs' request. Earlier, the defendants asked the Judge not to certify the case as a class action, but he had not ruled on the motion. Securities Fraud DYNACQ INTERNATIONAL: Schiffrin Barroway Lodges Securities Suit in TX --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the U.S. District Court for the Southern District of Texas, alleging that Dynacq International, Inc. (Nasdaq:DYII) misled shareholders about its business and financial condition. The suit seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of all investors who bought the Company's securities between November 29, 1999 and January 16, 2002. The suit alleges that during the class period, 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." Essentially, the article exposed many of the Company's problems that, in the days that followed, caused its share price to crumble. These disclosures shocked the market, causing Company stock to decline to less than $15 per share before closing at $15.20 per share on Jan. 17, 2002, on volume of more than 2.6 million shares, and later plummeting to less than $12 per share. For more information, contact Marc A. Topaz or Stuart L. Berman by Phone: (888) 299-7706 (toll free) or (610) 822-2221 or by E-mail: info@sbclasslaw.com GLOBAL CROSSING: Weiss Yourman Commences Securities Suit in C.D. CA ------------------------------------------------------------------- Weiss and Yourman initiated 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 the Company's common stock between January 2, 2001 and October 4, 2001, inclusive. The suit charges that certain officers and directors of Global Crossing violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) by violating generally accepted accounting principles to artificially inflate the Company's revenues and earnings and issuing false and misleading statements regarding its past financial performance, the global market for bandwidth on its fiber optic network and its 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: Spector Roseman Commences Securities Suit in W.D. NY --------------------------------------------------------------------- Spector, Roseman & Kodroff, PC initiated a securities class action against Global Crossing, Ltd. (NYSE:GX) (OTCBB: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 specifically 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 its 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, Global Crossing 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 price 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 further details, contact Robert M. Roseman by Phone: 888-844-5862 by E-mail: classaction@srk-law.com or visit the firm's Website: http://www.srk-law.com. GLOBAL CROSSING: Schatz Nobel Commences Securities Suit in S.D. NY ------------------------------------------------------------------ Schatz and Nobel PC initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased securities of Global Crossing, Ltd. (Nasdaq: GX) between August 13, 1998, and January 28, 2002, inclusive. The suit alleges that the Company, a worldwide telecommunications provider, several members of its top management, and Arthur Andersen, LLP, its auditor, misled the investing public during the Class Period regarding its financial condition. In particular, the Company engaged in barter transactions in which it contracted to share capacity on its network with other telecommunications providers in exchange for similar use of theirs. The "sale" side of the barter transaction was booked as current revenue while the "purchase" was booked as capital expense, thus enabling the Company to report the transaction as revenue enhancing when in fact it was revenue neutral. The suit alleges such reporting violated the most basic accounting principles. Nevertheless, Arthur Andersen, LLP provided unqualified audit opinions throughout the class period. For more information, contact Andrew M. Schatz, Patrick A. Klingman, Wayne T. Boulton or Nancy A. Kulesa by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit the firm's Web site: http://www.snlaw.net GLOBAL CROSSING: Milberg Weiss Commences Securities Suit in C.D. CA ------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Global Crossing Ltd. (NYSE: GX) publicly traded securities during the period between February 14, 1999 and October 4, 2001. The suit charges certain of the Company's officers and directors with violations of the Securities Exchange Act of 1934. Due to its recent bankruptcy filing, the Company is not named as a defendant in the action. The suit alleges that during the class period, defendants issued false and misleading statements and press releases concerning the Company's financial statements, their 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. During the class period, before the disclosure of the true facts, the individual defendants and certain Company insiders sold their personally held Company stock generating more than $1.5 billion in proceeds and the Company raised over $7 billion in debt and equity offerings. However, 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. On that date, the Company issued a string of stunning announcements, such as cash revenues in the third quarter would be approximately $1.2 billion, $400 million less than the $1.6 billion expected by a consensus of analysts surveyed by Thomson Financial/First Call. The cash revenue shortfall was purportedly the result of a sharp falloff in wholesale IRU sales to carrier customers. The Company further announced that it expected recurring adjusted EBITDA to be "significantly less than $100 million" compared to forecasts of $400 million. Following these announcements, the Company's share price plunged by 49% to $1.07 per share. For more information, contact William Lerach or Darren Robbins by Phone:1-800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Web site: http://www.milberg.com HI/FN INC.: Sued For Federal Securities Violations in N.D. California --------------------------------------------------------------------- Hi/fn, Inc. faces a consolidated class action pending in the United States District Court for the Northern District of California on behalf of purchasers of the Company's stock from July 26 through October 7,1999. The suit arose from six class actions commenced in October and November 1999 against the Company and certain of its officers and directors. These complaints were later consolidated. The suits allege that the defendants violated federal securities laws in connection with various public statements made by the defendants during the class period. In August 2000, the Court dismissed the complaint as to all defendants, other than Chairman and Chief Executive Officer Raymond J. Farnham and the Company. Mr. Farnham and the Company answered the complaint in September 2000. Discovery has commenced, and a trial date has been tentatively scheduled for January 2003. The Company believes that the allegations contained in the complaint are without merit and intends to defend the action vigorously. However, due to the nature of the allegations, management cannot estimate the possible loss, if any, or range of loss that may ultimately be incurred in connection with the allegations. The Company is confident, thought that the litigation will not have a material adverse effect on its financial position. HOMESTORE.COM: Neiman Garland Commences Securities Suit in C.D. CA ------------------------------------------------------------------ Neiman Garland and Urbach initiated a securities class action against Homestore.com, Inc. (Nasdaq:HOMS), and certain of its officers and directors, claiming the Company misled the public about its financial results. The lawsuit, pending in the U.S. District Court for the Central District of California, seeks damages for violations of federal securities laws on behalf of all investors who bought Homestore stock from July 20, 2000 through December 21, 2001. The suit accuses the Company, an online provider of home and real estate information, products and services, of improperly recording revenue and artificially inflating its financial results. On July 19, 2000 (after the close of the market), the Company issued a release of positive 2nd Quarter 2000 results, which caused its stock price to soar by more than $7 (or 25%) the following trading day. As part of their effort to boost the price of Company stock, the suit alleges, defendants misrepresented the Company's true prospects, concealing its improper acts until they were able to sell at least $27.9 million worth of their own stock. In overstating revenues and assets in 2nd, 3rd, and 4th Quarters 2000 and 1st, 2nd and 3rd quarters 2001, the Company violated generally accepted accounting principles (GAAP) and SEC rules by engaging in improper "roundtrip" transactions. These transactions had the effect of dramatically overstating revenues and assets. This came to an end (though unbeknownst to the public) in the Company's 3rd Quarter 2001 as its main roundtrip partner stopped doing these transactions with the Company. Following the release of the Company's 3rd Quarter 2001 results, the Company also slashed its revenue projections for 2002 from $563 million to $375-$425 million as a result of a material decline in its business with its main "roundtrip" partner. On this news Company shares plummeted by more than 50% the following trading day. On December 21, 2001 (after the close of the market), the Company partially admitted that its past accounting for its prior results was inaccurate. On this news, trading in its shares was halted. When trading resumed on January 7, Company stock fell to a low of $1.24 before closing at $2.46, down 32% from its last close and far below the class period high of $54.62. For more information, contact Jeffrey Neiman by Phone: 866/539-3788 or by E-mail: jeffreyneiman@aol.com IMCLONE SYSTEMS: Leo Desmond Lodges Securities Suit in S.D. New York -------------------------------------------------------------------- The Law Offices of Leo W. Desmond initiated a securities class action on behalf of shareholders who acquired ImClone Systems, Inc. (Nasdaq:IMCL) securities between May 12, 2001 and January 4, 2002, inclusive, in the United States District Court for the Southern District of New York against the Company and: (1) Samuel D. Waksal, (2) Harlan W. Waksal and (3) Robert F. Goldhammer It is alleged 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 Leo W. Desmond by Mail: 2161 Palm Beach Lakes Blvd., Suite 204, West Palm Beach, Florida 33409 by Phone: 888-337-6663 by E-mail: Info@SecuritiesAttorney.com or visit the firm's Web site: http://www.SecuritiesAttorney.com. MCLEODUSA INC.: Abraham Paskowitz Files Securities Suit in N.D. Iowa -------------------------------------------------------------------- Abraham & Paskowitz initiated a securities class action lawsuit in the United States District Court for the Northern District of Iowa on behalf of all persons and entities who acquired the common stock of McLeodUSA Inc. (Nasdaq: MCLD) during the period from January 30, 2001 through and including December 3, 2001. The suit charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 30, 2001 and December 3, 2001. The complaint alleges that the Company issued a series of materially false and misleading statements regarding its business, operations and financial statements that failed to disclose: (1) that 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.; (2) that 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 (3) that 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 Company stock. For more information, contact Laurence Paskowitz or Jeffrey Abraham by Mail: One Pennsylvania Plaza, Suite 1910 New York, NY, 10119 by Phone: (800) 938-0015 by E-mail: classattorney@aol.com or visit the Website: http://www.classactionsonline.com OPENWAVE SYSTEMS: Denies Allegations in Securities Suit in S.D. NY ------------------------------------------------------------------ Openwave Systems, Inc. faces a securities class action pending in the US District Court for the Southern District of New York against the Company, certain of its current and former officers and the underwriters of its initial public offering and secondary offering. The suit generally alleges that the defendants made material misrepresentations and/or omissions in prospectuses, dated June 10 and November 16, 1999, regarding certain alleged excessive and undisclosed commissions received by the underwriters in connection with the allocation of common stock in the Company's initial public offering and secondary offering. The suit also alleges that the underwriters entered into agreements with customers whereby the underwriter agreed to allocate shares of the Company's stock sold in the offerings to those customers in exchange for which the customers agreed to purchase additional shares of stock in the aftermarket at pre-determined prices. The Company is aware that similar allegations have been made in lawsuits relating to more than 300 other initial public offerings conducted in 1999 and 2000. Those cases have been consolidated for pretrial purposes before the Honorable Judge Shira A. Scheindlin. Defendants' time to respond to the complaints has been stayed pending a plan for further coordination. Based upon the Company's current understanding of the facts, the Company believes that the complaint is without merit, and does not believe resolution of this matter will have a material adverse effect on its financial condition of the Company. PNC FINANCIAL: Marc Henzel Files Securities Suit in W.D. Pennsylvania --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Western District of Pennsylvania on behalf of purchasers of the securities of PNC Financial Services Group, Inc. (NYSE: PNC) from July 19, 2001 through January 29, 2002, inclusive. The suit charges the Company, certain of its officers and directors, and its auditor and consultant Ernst & Young, LLP (E&Y) with violations of the Securities Exchange Act of 1934. The suit alleges that during the Class Period, defendants misrepresented the Company's financial results and issued false and misleading statements with regard to its financial condition. The defendants also failed to properly consolidate liabilities associated with three subsidiaries the Company had established with American Insurance Group (AIG). Throughout the class period, defendants misrepresented the Company's earnings as well as its ability to reduce its liabilities related to non-performing assets. In fact, the defendants' failure to conform with proper accounting standards 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 the Company, E&Y was also acting as a consultant for AIG. In fact, as the Company's auditor, E&Y approved its transactions with AIG while at the same time acting as an "accounting adviser" to AIG. E&Y drew up the financial structure for the subsidiaries in question and approved them for implementation by AIG. E&Y also issued a letter that helped AIG pitch its product to banks. On January 29, 2002, the Company announced that the Federal Reserve Board had contacted the Company about accounting inaccuracies and as a result, its financial results for 2nd Quarter and 3rd Quarter 2001 would be restated and its financial results for 4th Quarter 2001 would be revised. The Company also stated that the updated financials would result in year-end earnings being reduced $155 million to approximately $412 million, or $1.38 a share. The Company also revealed that these accounting adjustments would cause its non-performing assets to rise by $125 million to $393 million. In addition, the Company announced that the Federal Reserve Board and the SEC were making inquiries about its transactions and that it would cooperate with their investigations. These disclosures shocked the market, causing Company stock to close on January 29, 2002 down $5.79 or nearly 10% at $56.08 in extremely heavy trading volume of 6,305,100 shares. For further details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: (888) 643-6735 or (610) 660-8000 by Fax: (610) 660-8080 by E-mail: Mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. REGENERATION TECHNOLOGIES: Collins Truett Lodges Securities Suit in FL ---------------------------------------------------------------------- Collins & Truett PA commenced a securities class action in the United States District Court for the Northern District of Florida on behalf of all purchasers of Regeneration Technologies, Inc. (Nasdaq:RTIX) during the period from May 2, 2001 and January 31, 2002. The suit charges the Company as well as its chief financial officer and its vice-president of sales and marketing, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The violations, as the complaint alleges, stem from the issuance of allegedly false and misleading financial statements and financial projections during the class period, which had the effect, during the class period, of artificially inflating the price of Company shares. On February 1, 2002, Regeneration issued a press release disclosing a number of surprises, including: (1) that it would be delaying its planned announcement of its financial results for the fourth quarter and full year of 2001; (2) that, rather than reporting a profit for the fourth quarter and year of 2001 (as defendants had led the market to expect), the Company expected to report a loss for both the fourth quarter and full year of 2001; (3) that the delay in releasing these surprising and worse-than- expected financial results was a result of "certain inventory issues that were identified in the process of completing the preparation of the Company's annual financial statements for the year ended December 31, 2001;" (4) that release of the Company's fourth quarter and full-year financial results could be delayed several weeks "while management completes its evaluation" of the inventory issues; (5) that the Company was also "evaluating whether these issues may affect its previously reported quarterly financial results;" and (6) that the Company's Chief Financial Officer and its Vice President for Sales and Marketing had left employment with the company, effective immediately. After disclosure that the Company's current financial results would not be as expected (i.e., a loss rather than a profit), and that previously-reported financial results might not be what they seemed (i.e., an accurate financial summary of the company's operations), its shares swiftly lost more than 50% of their value before Nasdaq halted trading in the stock several hours later, falling $5.19 per share (from the previous day's closing price of $10.15 per share) to last trade at $4.96 per share on February 1, 2002. For more information, contact Don Rett or Ryan Garrett by Mail: 2804 Remington Green Circle, Suite 4, Tallahassee, Florida 32308 by Phone: (850) 386-6060 by Fax: (850) 385-8220 or by E-Mail: rgarrett@collinsfirm.com RHYTHMS NETCONNECTIONS: Glancy Binkow Commences Securities Suit in CO --------------------------------------------------------------------- Glancy & Binkow LLP initiated a securities class action in the United States District Court for the District of Colorado on behalf of all persons who purchased securities of Rhythms Netconnections, Inc. (Nasdaq:RTHMQ) between January 6, 2000 and April 2, 2001, inclusive. The suit charges the Company and certain of its officers and directors with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and the dissemination of materially false and misleading statements caused the Company's stock price to become artificially inflated, inflicting enormous damages on investors. For more details, contact Michael Goldberg or Lionel Z. Glancy by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 by Phone: 310-201-9150 or 888-773-9224 or by E-mail: info@glancylaw.com. RICA FOODS: Leo Desmond Commences Securities Fraud Suit in S.D. FL ------------------------------------------------------------------ The Law Offices of Leo W. Desmond initiated a securities class action on behalf of shareholders who acquired Rica Foods, Inc. (AMEX:RCF) securities between January 16, 2001 and December 28, 2001, inclusive, in the United States District Court for the Southern District of Florida against the Company and: (1) Calixto Chaves, (2) Jose Pablo Chaves, (3) Randall Piedra and (4) Monica Chaves It is alleged 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 further details, contact Leo W. Desmond by Mail: 2161 Palm Beach Lakes Blvd., Suite 204, West Palm Beach, Florida 33409 by Phone: 888-337-6663 by E-mail: Info@SecuritiesAttorney.com or visit the firm's Website: http://www.SecuritiesAttorney.com. RICA FOODS: Spector Roseman Commences Securities Suit in S.D. Florida --------------------------------------------------------------------- Spector Roseman & Kodroff PC initiated a securities class action on behalf of all persons who acquired Rica Foods, Inc. (Amex: RCF) common stock between January 16, 2001 and December 28, 2001, in the United States District Court for the Southern District of Florida. Named as defendants in the suit are the Company and: (1) Calixto Chaves, Chairman and CEO, (2) Randall Piedra, CFO and 93) Jose Pablo Chaves, COO. The suit charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges, among other things, that throughout the class period defendants filed documents with the SEC, which failed to disclose that the Company was not in compliance with the credit agreement entered into with Pacific Life Insurance Company on January 16, 2001. The suit alleges that defendants knew that the Company's SEC filings were false and misleading, and further asserts that defendants' misrepresentations caused the price of the Company's common stock to be artificially inflated throughout the class period. For more information, contact Robert M. Roseman by Phone: 888-844-5862 by E-mail: classaction@srk-law.com or visit the firm's Website: http://www.srk-law.com. SUPREMA SPECIALTIES: Harvey Greenfield Lodges Securities Suit in NJ ------------------------------------------------------------------- The Law Firm of Harvey Greenfield initiated a securities class action on behalf of purchasers of the securities of Suprema Specialties, Inc. (NASDAQ:CHEZ) between August 15, 2001 and December 21, 2001, inclusive, in the United States District Court for the District of New Jersey against the Company, its senior management, and its underwriters. 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, and Section 11 of the Securities Act of 1933, by improperly issuing public statements containing materially false and misleading statements and/or omissions concerning the Company's business and financial performance. Such false and misleading statements and/or omissions were contained in, among other things, Company press releases and filings with the Securities and Exchange Commission. The statements were false and misleading because the Company was using questionable accounting practices in its financial reporting, which distorted the reported financial statements. On November 8, 2001, the Company commenced a secondary offering pursuant to a prospectus and registration statements filed with the SEC and containing allegedly misleading financial statements. The complaint alleges that the underwriter defendants participated in the false and misleading offering by purchasing the Company's stock for resale to the public and by engaging in other acts constituting participation, giving rise to liability. Subsequently, the Company issued a press release on December 21, 2001 announcing the resignation of Steven Venechanos and stating that an investigation into its financial reporting was underway. The NASDAQ halted trading in Company stock in response to this report. For more details, contact Harvey Greenfield or Laura Perrone 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. SUPREMA SPECIALTIES: Pomerantz Haudek Initiates Securities Suit in NJ --------------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP commenced a securities class action against Suprema Specialties, Inc. (Nasdaq:CHEZ) on behalf of all persons or entities who purchased the Company's common stock during the period between August 8, 2001 and December 21, 2001, inclusive. The suit, filed in the United States District Court for the District of New Jersey, also names as defendants: (1) Mark Cocchiola, Chairman, President, and Chief Executive Officer and (2) Steve Venechanos, Chief Financial Officer The suit alleges that the Company, a manufacturer and seller of gourmet Italian cheese, and two of its senior officials, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by their manipulation of the Company's financial statements in which defendants misrepresented its earnings and artificially inflated its stock price by improper accounting practices. In particular, it is alleged that during the class period, defendants issued press releases, and filed reports with the Securities and Exchange Commission (SEC), announcing quarter-to-quarter increases in the Company's revenues and earnings that often exceeded analysts' estimates and which favorably portrayed its business and financial performance. These representations were, according to the allegations in the complaint, materially false and misleading because the Company was engaged in improper accounting practices, which inflated its revenues and earnings. On December 21,2001, the Company shocked the market when it announced: (i) that defendant Venechanos had resigned from his position as the Company's CFO, and (ii) that the Company had initiated an internal investigation into its previously filed financial statements and accounting practices. Immediately following this announcement, the Nasdaq Stock Market halted trading on the Company's common stock and stated that trading would remain halted until the Company fully complied with Nasdaq's request for information. The Company's stock has not resumed trading over the Nasdaq. 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 TALX CORPORATION: Missouri Federal Court Consolidates Securities Suits ---------------------------------------------------------------------- The United States District Court for the Eastern District of Missouri, Eastern Division has consolidated various securities class action lawsuits on behalf of purchasers of Talx Corporation (NASDAQ: TALX) common stock between July 18, 2001 and October 1, 2001, inclusive. The suit names as defendants the Company and certain of its officers and directors. The various complaints charge the Company, and certain of its officers and directors, with violations of the federal securities laws. In August 2001, the Company completed a secondary offering of 3.245 million shares of its stock (including over-allotments, and also including the sale of 253,000 shares by the Company's CEO), raising gross proceeds of approximately $100 million for the Company, pursuant to a registration statement and prospectus dated August 2, 2001. The suits allege that the registration statement/prospectus was false and materially misleading for the following reasons: (1) Defendants had failed to disclose that the Company had improperly capitalized significant amounts of software related to the Company's customer premised systems line of business, which assets were already substantially impaired and which would have to be written off in the near term; (2) Defendants failed to properly account for the true value of the Company's inventory, such that the overstated value of the Company's impaired inventory would have to be written down in the near term; (3) Defendants misrepresented that the Company's business was expanding, when it was not, and at which time defendants were already planning on reducing staff and closing offices; (4) Defendants were already planning to take at least $2.8 million in write-offs; and (5) the outsourced benefits enrollment business was not operating according to the expectations that had been promoted by defendants, and this line of business was not a significant growth-driver as represented by the Company. The complaints further allege that, throughout the class period, the same factors that were not properly disclosed in its secondary offering registration statement/prospectus were also hidden by defendants from the Company's public shareholders. Defendants misled investors and analysts by issuing a series of false and materially misleading public statements, which were designed to and which did artificially inflate the value of Company shares. This inflation allowed Talx and its CEO to reap almost $100 million from the sale of stock. Then, on October 1, 2001, weeks after Defendants had sold almost $100 million worth of Company stock and used over $11 million in Company stock to acquire Ti3, Defendants issued a press release which revealed that the Company's fiscal 2002 earnings would be only $0.58-$0.62, excluding charges, on revenues of less than $50 million and that second quarter fiscal 2002 revenues would be less than $12 million. The Company also announced it would recognize charges of $2.8 million to write off capitalized software costs, inventory and to close offices. As a result of defendants' shocking disclosures, Company stock declined to less than $17 per share, representing a loss to investors of over 50% of the value of their investment by the end of the class period. For further details, contact Fred T. Isquith, Gregory Nespole, Michael Miske, Thomas Burt, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575-0735 or by E-mail: classmember@whafh.com. E-mail should refer to TALX. TYCO INTERNATIONAL: Wechsler Harwood Lodges Securities Suit in S.D. NY ---------------------------------------------------------------------- Wechsler Harwood Halebian & Feffer LLP initiated a securities class action on behalf of all purchasers of the common stock of Tyco International Ltd. (NYSE:TYC), between February 1, 2000 through February 1, 2002, inclusive, 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 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, the Company stock fell allegedly by more than 40 plus percent. For more information, contact David Leifer by Mail: 488 Madison Avenue, New York, New York 10022 by Phone: 877-935-7400, by E-mail: dleifer@whhf.com or visit the firm's Website: http://www.whhf.com WILLIAMS COMPANIES: Spector Roseman Lodges Securities Suit in N.D. OK --------------------------------------------------------------------- Spector Roseman & Kodroff PC initiated 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 (5) 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. On January 29,2002, 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 William's 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 more information, contact Robert M. Roseman by Phone: 888-844-5862 or by E-mail: classaction@srk-law.com or visit the firm's Web site: http://www.srk-law.com. WILLIAMS COMPANIES: Emerson Firm Commences Securities Suit in N.D. OK --------------------------------------------------------------------- The Emerson Firm initiated a securities class action in the United States District Court for the Northern District of Oklahoma on behalf of purchasers of the common stock of Williams Companies, Inc. (NYSE:WMB) (WMB) and/or Williams Communications Group, Inc. (NYSE:WCG) (WCG) during the period between July 24, 2000 and January 29, 2002, inclusive. The suit charges both Companies and executives Keith E. Bailey, Howard E. Janzen and Scott E. Schubert with violating 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. On January 29, 2002, as alleged in the complaint, the Company shocked the market by announcing that it would be delaying the release of its 2001 earnings "pending an internal assessment of William's 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 more information, contact Anne Bond by Phone: (501) 907-2555 or by E-mail: jge@emersonfirm.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *