/raid1/www/Hosts/bankrupt/CAR_Public/020301.mbx
C L A S S A C T I O N R E P O R T E R
Friday, March 1, 2002, Vol. 4, No. 43
Headlines
ARIZONA: Settles Tax Overcharge Suit, Taxpayers To Receive $1T Each
AT&T CORPORATION: To Settle Consumer Suit Over Cable Price Discrepancy
AUTO INSURANCE: Insurance Firms To Comply With Diminished Value Ruling
CARD PAYMENT: Settles Unsolicited Fax Advertisement Suit in Texas Court
CREMATORY LITIGATION: Customers File New Suit in Walker County, GA
EFS NATIONAL: Attempts To Settle Suit Over "Improper" Rate, Fee Changes
ILLINOIS: Joliet Prisoners File Suit Against State Human Services Dep't
INDONESIA: Islamic Council To Launch Suit V. Media Over Pornography
KANSAS CITY: Prevails as MO Federal Court Dismisses Race Bias Suit
LOUISIANA: 1983 Flood-Related Damages Suit Finally Gets Underway
MARYLAND: School Bus Driver To Sue Board After Being Fired For Praying
NRG ENERGY: Pre-trial Conference in Antitrust Suit Set For March 2002
TALISMAN ENERGY: Sudan Gov't Named as Co-Defendant in Human Rights Suit
TCE LITIGATION: Companies Settle Arizona Contamination Suit For $60M
VERIZON COMMUNICATIONS: Settles Pregnancy Discrimination Suit With EEOC
WASHINGTON: ACLU Files Suit Over Living Conditions at Jefferson Jail
YAHOO! INC.: French Court Sets Trial For Nazi Survivors Legal Action
Securities Fraud
ENTERASYS NETWORKS: Marc Henzel Lodges Securities Suit in New Hampshire
ENTERASYS NETWORKS: Berger Montague Commences Securities Suit in NH
HANOVER COMPRESSOR: Marc Henzel Commences Securities Suit in S.D. TX
HANOVER COMPRESSOR: Scott Scott Commences Securities Suit in S.D. TX
HARTMARX CORPORATION: Lincoln Acquisition Suit Dismissal Ruling Pending
IMCLONE SYSTEMS: FDA Allows Re-Filing of Erbitux License Application
IRVINE SENSORS: Stull Stull Commences Securities Fraud Suit in C.D. CA
JP MORGAN: Marc Henzel Commences Securities Fraud Suit in S.D. NY
JUNIPER NETWORKS: Marc Henzel Initiates Securities Suit in N.D. CA
NEWPOWER HOLDINGS: Abraham Paskowitz Initiates Securities Suit in NY
NEWPOWER HOLDINGS: Cauley Geller Commences Securities Suit in S.D. NY
REGENERATION TECHNOLOGIES: Marc Henzel Lodges Securities Suit in FL
RHYTHMS NETCONNECTIONS: Holzer Holzer Commences Securities Suit in CO
RICA FOODS: Marc Henzel Commences Securities Fraud Suit in S.D. Florida
SPECTRALINK CORPORATION: Marc Henzel Commences Securities Suit in CO
SUPREMA SPECIALTIES: Marc Henzel Lodges Securities Suit in New Jersey
SYNSORB BIOTECH: Marc Henzel Commences Securities Suit in S.D. NY
TALX CORPORATION: Marc Henzel Commences Securities suit in E.D. MO
TERADYNE INC.: Marc Henzel Commences Securities Suit in Massachusetts
TYCO INTERNATIONAL: Marc Henzel Commences Securities Suit in S.D. NY
WILLIAMS COMPANIES: Marc Henzel Commences Securities Suit in N.D. OK
*********
ARIZONA: Settles Tax Overcharge Suit, Taxpayers To Receive $1T Each
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Arizona's Department of Revenue will settle a class action brought by
hundreds of taxpayers, after they were allegedly charged too much in
income taxes from 1986 to 1989.
According to The Arizona Sun, the suit was commenced by a woman who
challenged a state law, under which Arizona residents are not required
to pay income tax on dividends they receive from corporations that do
at least half of their business in the state. Dividends from other
corporations, however, remain fully taxable.
A tax court judge eventually ruled the differential treatment was
unconstitutional, which resulted in the State giving a refund for taxes
paid for the prior four years to the deceased woman's estate. However,
the State fought her claim to represent all taxpayers who were
overcharged until the Arizona Supreme Court ruled in her favor last
year.
Under the settlement, taxpayers could receive refunds amounting to
$1,000. The Department of Revenue has come up with the names of around
600,000 individuals who paid the illegal taxes in at least one of the
four years, Stephen Shiffrin, the Department's Deputy Director told The
Sun. If all goes as planned, the State expects the checks to be mailed
out by summer.
However, officials believe the settlement could sink Arizona's already
unbalanced budget, and lawmakers are looking at whether the State can
spread the payments out over several years to avoid a one-time blow to
the budget.
Attorney for the plaintiffs, Randall Wilkins, says Arizona can't make
that decision independently. Tax refunds are a direct draw on the State
and do not require legislative approval. He told the Arizona Sun, he
believes the State has to make full payments immediately rather than
spread them out over several years.
AT&T CORPORATION: To Settle Consumer Suit Over Cable Price Discrepancy
----------------------------------------------------------------------
AT&T Corporation will settle a class action lawsuit filed by its
customers in New Hampshire, Maine and Massachusetts, alleging that the
Company and prior owners of its broadband cable system misrepresented
programming "packages" sold in the late 1990s, the Union Leader
reports.
The suit alleges that the customers paid more for a basic package that
included the same channels available for a cheaper package. The Basic
3 or Total Package costs $26 to $28 per month, but allegedly had the
same channels as the Basic 2 package, which costs around $10 to $12.
The suit was originally filed in 1999 against the prior owners of the
system, Mediaone and Continental Cablevision. The Company acquired
these two entities in 2000, and the plaintiffs in the suit alleged the
Company was aware of the problems, but did not correct the error.
Attorney for the plaintiffs, Fredric L. Ellis, told the Union Leader
that the Companies knew about the technical problem but did not correct
it. Because they knew and did not correct it, their advertising and
marketing material included misrepresentations and errors, he said.
"It's not like they wanted to put their stations out there for free,"
Mr. Ellis continues.
The Company expects to spend around $15 to $20 million to compensate
more than 1 million people affected by the suit. According to Company
spokeswoman Jennifer Khoury, the Company denies any wrongdoing, but
entered the settlement to avoid expensive and prolonged litigation.
"The Company prefers to compensate customers rather than spend
resources on litigation," she said.
Under the agreement, current eligible AT&T customers would receive a
credit of $10 or $13 on a future bill, or a coupon worth between $20
and $65 for new service such as digital cable, local phone service or
high-speed Internet access. Former customers who qualify will receive
a $10 check. In order to qualify, a person has to have paid for Total
Basic or Basic 3 from MediaOne or Continental Cablevision between 1996
and 1999 and live in one of the communities where the system was not
secured.
For more information, contact the Company by Phone: 888-271-3392 or
visit the Web site: http://www.basic3litigation.com
AUTO INSURANCE: Insurance Firms To Comply With Diminished Value Ruling
----------------------------------------------------------------------
Five automobile insurance companies are looking for possible diminished
value on previous claims in order to comply with a recent Georgia
Supreme Court's ruling that diminished value must be paid in accident
claims, Insure.com reports.
Early this year, the Georgia Supreme Court ruled in a class action
against State Farm Mutual Automobile Insurance Company that it must pay
for the diminished value of cars damaged in collisions, as well as
their repairs. The Supreme Court also ruled that the insurer must
begin compiling the information needed to begin reimbursing clients for
the diminished value of their repaired cars. Last year, Progressive
Casualty Insurance Co. also settled for $19.4 million to $20 million a
similar diminished value class action.
The five companies are part of the Sentry Mutual Group:
(1) Dairlyand Insurance Co.,
(2) Middlesex Insurance Co.,
(3) Patriot General Insurance Co.,
(4) Sentry Insurance, and
(5) Sentry Select Insurance (formerly John Deere Insurance Co.)
The Companies have adopted a methodology for determining diminished
value and are all looking for consumers who filed an auto-damage claim
with any of them since February 1996. In order to submit a claim for
examination, potential claimants should write the Companies and include
their name, address and phone number, policy number, date of loss, and
any claim number assigned to their original claim.
CARD PAYMENT: Settles Unsolicited Fax Advertisement Suit in Texas Court
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Card Payment Systems settled, for an undisclosed amount, a class action
commenced in April 2001 in the District Court, Harrison County, Texas,
over unsolicited fax advertisements.
The suit alleges violations of Section 227(b)(1)(C) of the Telephone
Consumer Protection Act, 47 U.S.C. Section 227 et seq., and Section
35.47(9) of the Texas Business and Commerce Code by sending unsolicited
advertisements by facsimile.
As a result, the Court dismissed claims against CPS on January 25,
2002.
CREMATORY LITIGATION: Customers File New Suit in Walker County, GA
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The gruesome discovery of bodies intended for cremation, but dumped
instead near the Tri-State Crematory grounds, has touched off a string
of lawsuits against several funeral homes that dealt with the
crematory.
Plaintiffs D. Dwayne Lee, Charles Griffin, Delores Hampton, Linda Vess
and "others similarly situated" filed the latest suit in Walker County
State Court. The suit, which requests class certification, also names
Ray, Clara, Brent and Samuel Marsh, family members who operated Tri-
State, where hundreds of decaying bodies have been found.
Mr. Lee is the grandson of Alma Sykes, who died in September 1998. Mrs.
Sykes' body was entrusted to Turner Funeral Home, while Mrs. Griffin's
body was under the care of Buckner-Rush Funeral Home of Cleveland. The
suit states the bodies were sent to Tri-State.
Defendants in the suit include funeral homes such as:
(1) Prime Succession Holdings,
(2) Buckner-Rush Funeral Homes,
(3) Turner Funeral Homes,
(4) Burt Funeral Homes,
(5) Ewton Funeral Homes,
(6) Franklin-Strickland,
(7) J. Avery Bryan,
(8) Chattanooga Funeral Homes,
(9) SCI Tennessee Funeral Services,
(10) Hooper Funeral Homes,
(11) Kerby,
(12) J.D. Hill,
(13) Erwin Pettitt,
(14) Carriage Services,
(15) Williamson and Sons,
(16) Lane,
(17) Jesse Jones,
(18) Layne,
(19) Putnam,
(20) Sequatchie Valley Memorial,
(21) Taylor,
(22) Wann,
(23) Love,
(24) R.D. Moore,
(25) Wilson and Sons,
(26) Ryan,
(27) Gilmore,
(28) Vanderwall,
(29) Pikeville,
(30) Covenant,
(31) Patton,
(32) Pinkard and Mee and
(33) Julian Peeples
EFS NATIONAL: Attempts To Settle Suit Over "Improper" Rate, Fee Changes
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EFS National Bank has entered into settlement discussions with
plaintiffs in the amended class action commenced in September 2000 in
the Circuit Court of Tennessee for the Thirtieth Judicial District at
Memphis.
The suit alleges that certain of the Company's rate and fee changes
were improper under Tennessee law due to allegedly deficient notice and
asserts claims on behalf of at least 60,000 merchants that were
subjected to the improper rate and fee changes over a several-year
period.
A substantial amount of discovery has taken place in this case, and EFS
has advised the Court that they are attempting to resolve this matter.
Ongoing discussions continue, and substantive issues remain that
preclude achieving a settlement at this time. The parties anticipate
further discussions in an attempt to address and resolve the remaining
issues.
A similar class action is pending against EFS in St. Charles County,
Missouri, but there has not been a substantial amount of activity in
this case.
Although these matters are in the preliminary stages, the Company
believes it has various defenses to the claims against it, and if these
matters cannot be resolved by settlement, EFS National Bank intends to
vigorously defend against all claims.
ILLINOIS: Joliet Prisoners File Suit Against State Human Services Dep't
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The Illinois Department of Human Services faces a class action filed in
the US District Court in Chicago, by four individuals currently held in
Joliet under the Sexually Violent Persons Commitment Act (SVP Act). The
lawsuit challenges the inadequacy of the mental health care provided to
them by the Illinois Department of Human Services. The suit names as
defendants:
(1) Linda Baker, Secretary of the Illinois Department of Human
Services,
(2) Mary Bass, Head Facility Administrator for the Illinois
Department of Human Services,
(3) Timothy Budz, Facility Director of the Sexually Violent
Persons Unit at the Joliet Correctional Center,
(4) Raymond Woods, Clinical Director and Travis Hinze, Associate
Clinical Director
The suit alleges that the Department has not properly developed and
implemented the mental health treatment required by law. It also notes
that while scores of individuals have been committed to the Joliet
facility under the law, only a few, if any, have completed successfully
a treatment course making them eligible for release.
The lawsuit, filed by lawyers for the American Civil Liberties Union of
Illinois, specifically notes that the Department has failed to carry
out the SVP Act in a manner consistent with the United States
Constitution. Specifically, the plaintiffs note that the Department has
failed:
(i) to properly train staff regarding the treatment of sexual
deviance;
(ii) to provide a coherent and meaningful individualized treatment
program for each detainee, complete with a series of steps
necessary for treatment and release;
(iii) to develop and make available fair and reasonable grievance
procedures for persons held in the Joliet Correctional Center
under terms of the SVP Act;
(iv) to allow residents reasonable access to educational,
religious, vocational and educational materials;
(v) to end the practice of compelling - as part of treatment -
that patients admit to a list of real or imagined criminal
acts; and
(vi) to protect basic therapist/patient confidentiality
"If these persons are in detention because they have a treatable mental
disability, the State must provide reasonable mental health care
treatment for each individual," said Benjamin Wolf, Director of the
ACLU's Institutionalized Persons Project. "The inadequacy of the care
currently being provided, coupled with the overly-restrictive
conditions of confinement, for these detainees suggests that the State
is using civil confinement only as a means of further punishing these
individuals. This punishment stands in direct contradiction to the
original purpose of the SVP Act [which is] to provide treatment, and
violates their constitutional rights."
More than 150 persons currently are detained in Joliet under the SVP
Act. Under terms of that statute, an individual is committed to the
custody of the Department of Human Services if they:
(a) have been convicted, or acquitted by reason of insanity, of
certain sexual offenses; and
(b) are found to have a mental disorder that creates a substantial
possibility that they will engage in future acts of sexual
violence.
The suit also notes that conditions for the detainees under the SVP Act
are more restrictive than conditions that the four named plaintiffs
faced when they were in prison for their criminal acts.
The suit alleges that detainees are routinely stripped searched before
and after all visits, regularly shackled with heavy restraints, denied
freedom of movement, including trips to the commissary, without an
escort, barred from purchasing various products including nail
clippers, aspirin, vitamins or eye drops, and subjected to constant
surveillance by personnel from the Department of Human Services.
"Major national mental health groups, including the American
Psychiatric Association, have warned against the misuse of civil
commitment for persons convicted of sexual offenses, particularly if
there is a lack of meaningful treatment," Mr. Wolf said. "To continue
to lock someone up after they have completed a prison sentence, and
deny these individuals access to adequate mental health care,
grievously defy constitutional principles. This situation needs to be
addressed."
For more information, contact Edwin C. Yohnka of ACLU of Illinois by
Phone: 312-201-9740 ext. 305 or by Pager: 312-851-283
INDONESIA: Islamic Council To Launch Suit V. Media Over Pornography
-------------------------------------------------------------------
The Indonesian Ulemas Council (MUI), along with a number of Islamic
organizations, has threatened to launch a class action against members
of the press which continue to indulge in pornography, the Antara
reports.
MUI Secretary General Din Syamsuddin said, "We have asked the mass
media, print and electronic alike, to curb their pornographic content,
so as not to undermine further the nation`s morality."
Mr. Syamsuddin stressed that, in the absence of any positive response
by the press, his council and Islamic organizations would consider a
class action or filing a lawsuit. He said the Indonesian Press Council
has strongly endorsed the MUI move.
KANSAS CITY: Prevails as MO Federal Court Dismisses Race Bias Suit
------------------------------------------------------------------
The US District Court for the Western District of Missouri dismissed,
on summary judgment, the class action pending against Kansas City Power
and Light Company on behalf of its current and former African-American
employees. The suit alleges that the employees:
(1) were subjected to a hostile and offensive working environment;
(2) denied promotional opportunities;
(3) compensated less than similarly or less qualified Caucasian
employees; and
(4) were disciplined and/or terminated for complaining about
allegedly racially discriminatory practices by the Company
In March 2001, the Court refused to grant class certification to the
suit. Plaintiff promptly appealed the decision to the US Court of
Appeals for the 8th Circuit, but the Court upheld the lower Court's
decision in April 2001.
On January 11,2002, the Federal Court dismissed the suit on summary
judgment. Early this month, the plaintiff appealed both the decision
dismissing her individual case on summary judgment and the order
denying her motion for class certification to the 8th Circuit Court of
Appeals.
LOUISIANA: 1983 Flood-Related Damages Suit Finally Gets Underway
----------------------------------------------------------------
Trial in the class action brought by Louisiana residents against the
State's Department of Transportation and Development (DOTD) relating to
the 1983 flood allegedly caused by the Department's faulty design of
the I-12 Tangipahoa River crossing, commenced this week in the 21st
Judicial District Court.
The 20-year-old suit was brought on behalf of 1,300 people who lived
north and south of Interstate 12 at that time, who allege they lost
almost all their property when the flood, considered the worst in state
history, occurred.
In 1999, a district court judge in 1999 ruled that the Department's
design restricted the flood plain and caused the flood. The State
filed an appeal, claiming that while the design backed up the water,
the State shouldn't be held liable for damages since the interstate was
federally funded and approved, according to the Daily Star. The 1st
Circuit Court of Appeals upheld the decision, and brought it to
Judicial Court.
Six witnesses related their experiences to the Court this week, the
first of thirty randomly chosen plaintiffs, who seek compensation for
damaged or lost possessions, lost wages, diminished property value and
medical costs associated with the flood. Plaintiffs' attorney Jean-
Paul Layrisson told the Star that, while they could not disclose the
range of individual claims, the total sum would be "significant.
MARYLAND: School Bus Driver To Sue Board After Being Fired For Praying
----------------------------------------------------------------------
A Maryland school bus driver is considering the filing of a class
action against the Carroll County School Board, after it allegedly
fired her for leading her young passengers in the Lord's Prayer after
the September 11 terrorist attacks, the Baltimore Sun reported.
Stella N. Tsourakis, 37, said that she was told at the end of her shift
last week that she was suspended, but she said she didn't know why.
Her attorney, Steven L. Tiedemann, said he plans to file a federal
lawsuit alleging a violation of her First Amendment rights, perhaps a
class action to include at least two children who want to pray on the
bus.
Ms. Tsourakis was moved by the terrorist attacks of September 11, and
sometime after she began driving full time in mid-October, told the
Shiloh Middle School passengers on her Finksburg route that they would
recite the Lord's Prayer. She said she stopped leading the prayer
after she was reprimanded by school officials November 16 and warned
that she could lose her job.
However, the kids have continued to say the prayer and the students on
her North Carroll High School route have joined in. She said the prayer
is recited after the bus pulls into school and stops, with the bus door
open to allow anyone who doesn't want to participate to leave.
"Steve and I are going to take it to the Supreme Court. I'm done with
them," she told the Baltimore Sun. "Not only I'm being harassed, but
the kids have been harassed, [by] questioning whether I gave them
candy, whether I go joy riding, whether there are other kids on the
bus."
Charles I. Ecker, the District's interim school Superintendent,
dismissed the allegations, telling the Sun, "I can tell you she was
suspended, but not because of praying." He said he could not discuss
the matter further because it is a private personnel matter, but the
School Board's attorney is developing a form that Tsourakis or any
other affected individual could sign that would allow the school system
to answer such questions. "Then, we could tell you why she was
suspended," he said.
NRG ENERGY: Pre-trial Conference in Antitrust Suit Set For March 2002
---------------------------------------------------------------------
The San Diego County Superior Court scheduled for March 2002, the pre-
trial conference in the consolidated class action against NRG Energy
and other power generators and power traders, alleging violations of
antitrust laws.
The consolidated suit arose from several class actions filed in various
California State courts, alleging that by underbidding forward
contracts and exporting electricity to surrounding markets, the
defendants, acting in collusion, were able to drive up wholesale
prices on the Real Time and Replacement Reserve markets, through the
Western Coordinating Council and otherwise. The suits further allege
that the conduct violated California antitrust and unfair competition
laws.
NRG does not believe that it has engaged in any illegal activities, and
intends to vigorously defend against the suit. However, the Company
warned that if the suit was ultimately resolved adversely to the
defendants it could have a material adverse effect on its results of
operations and financial condition.
TALISMAN ENERGY: Sudan Gov't Named as Co-Defendant in Human Rights Suit
-----------------------------------------------------------------------
Plaintiffs in the class action against Talisman Energy, Inc. relating
to its operations in Sudan have amended the suit to include the Islamic
Government as Sudan as defendant. The suit alleges that the Company
and the Sudanese government are violating the human rights of Christian
and other non-Muslim minorities in Southern Sudan by conducting a
deliberate campaign of ethnic cleansing to clear the land for oil
exploitation.
In 1997, the U.S. Government classified Sudan as a State sponsor of
international terrorism. On October 31, 2001, President Bush extended
sanctions against Sudan declaring "the actions and policies of the
Government of Sudan continue to pose an unusual and extraordinary
threat to the national security and foreign policy of the United
States."
The United States State Department announced on February 21, 2002 that
it was suspending its efforts to mediate peace in Sudan because of the
Sudanese government's recent helicopter gunship attack on a United
Nations food distribution center which killed 26 civilians, most of
them women and children.
The complaint alleges that Talisman and the government are deploying
military force against the non-Muslim civilian population in an effort
to create a "cordon sanitare" around the oil concessions.
More than 25,000 Christian and other non-Muslim Sudanese refugees now
live in the United States. "We are demanding justice for the non-Muslim
people of Southern Sudan," explains Dak Thong, President of the Nuer
Community Development Services in USA, one of the lead plaintiffs.
"Talisman Energy finances and directs the Government of Sudan's ethnic
cleansing campaign and must be stopped before all of our villages are
destroyed and all of the people are killed," charges Taban Deng, the
former Governor of Unity State in Southern Sudan, who is advising
plaintiffs' counsel.
For more information, contact Carey R. D'Avino by Phone: 212-278-1382
or Stephen A. Whinston by Phone: 215-875-3097.
TCE LITIGATION: Companies Settle Arizona Contamination Suit For $60M
--------------------------------------------------------------------
More than 30 companies and city governments, including
telecommunications company Motorola, Inc. will pay almost $61 million
to Arizona homeowners to settle a ten-year-old class action over
groundwater contaminated by trichloroethylene (TCE), according to the
Arizona Reporter.
The class action was commenced in 1992 on behalf of Scottsdale and
Phoenix homeowners, alleging that the Companies improperly disposed
TCE, which is a carcinogenic chemical. This caused TCE to spread
through the groundwater, putting the residents' lives at risk. The
suit also alleged that the reported TCE contamination caused the values
of their properties to decrease. Wells were shut down in 1981, the
year that the TCE was discovered, and a federal Superfund site was
established to clean up the contaminant.
Half of the $61 million settlement will be allotted to legal fees and
costs, while the remaining amount will be earmarked for property
damage, personal-injury claims and medical monitoring, the plaintiffs'
attorney, Tony Lucia, told the Arizona Reporter.
However, the plaintiffs might not get a lot of money, although $61
million sounds formidable. Amy Amari, now a north Scottsdale resident,
discovered that she would receive $370. She told the Reporter, "We
wish it was more, but we are glad we recovered something.It's been a
long 10 years."
Jeff Gorin, media relations manager for Motorola's Semiconductor
Products Sector said the Company settled to avoid future litigation,
"By offering a financial settlement, it certainly does not indicate
that we have accepted any of the claims by the other parties," he said.
Motorola was the last to settle among the companies in the suit, and
was absolved by a jury last year of paying homeowners in south
Scottsdale.
VERIZON COMMUNICATIONS: Settles Pregnancy Discrimination Suit With EEOC
-----------------------------------------------------------------------
The Equal Employment Opportunity Commission (EEOC) and Verizon
Communications settled a class action alleging pregnancy discrimination
against the Company's predecessor, Nynex and Bell Atlantic Corporation,
The Wall Street Journal reported recently.
The EEOC said that under the settlement, thousands of current and
former female employees in 13 states and the District of Columbia will
receive benefits estimated in the millions of dollars related to
pregnancy or maternity leave. Under the settlement, plaintiffs will be
given two to seven weeks of additional service credit per pregnancy,
depending on when the leave was taken.
The EEOC said the size of the class and the estimated value of the
monetary benefits make this one of the largest EEOC settlements of its
kind involving pregnancy-related service-credit adjustments.
"After years of litigation, extensive negotiations and investigations,
we agreed the settlement is in the best interests of the Company and
the women involved," a Verizon spokeswoman said. "We denied the
allegations because our policy complied with applicable laws." The
spokeswoman said the Company expects no material effect to its
financial condition as a result of the settlement.
The settlement, in the form of a consent decree, covers all women
employed at any time since January 8, 1994, by any former Bell Atlantic
or Nynex company, who took a pregnancy or maternity-related leave of
absence between July 2, 1965 and April 28, 1979. The settlement also
covers leave of absence for the care of a newborn child between July 2,
1965 and December 31, 1983.
WASHINGTON: ACLU Files Suit Over Living Conditions at Jefferson Jail
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The Jefferson County Jail in Seattle, Washington faces a class action
filed in the U.S. District Court in Tacoma by The American Civil
Liberties Union (ACLU), alleging the jail's living conditions are "so
far below acceptable standards as to constitute cruel and unusual
punishment." The suit alleges that:
(1) health-care staff members are not available to inmates when
needed;
(2) a routine ban on psychiatric medication has resulted in
seizures and panic attacks;
(3) inmates are denied basic necessities, such as running water
and working showers and toilets; and
(4) the jails are overcrowded.
Doug Honig, member of the ACLU's Washington chapter, told the Seattle
Times, "Jails aren't supposed to be comfortable.But they have to have
basic levels of humane treatment." The County's Deputy Administrator,
David Goldsmith, countered this, saying operations there are based on
the state's Jail Standards Commission. He added, "We'll take a look at
the allegations.and make sure we're not operating outside the
standards."
YAHOO! INC.: French Court Sets Trial For Nazi Survivors Legal Action
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A French court set a trial date on May 7,2002 for the legal action
filed against Yahoo! Inc. by France's Union of Jewish Students and the
International Anti-Racism and Anti-Semitism League for allowing Nazi
collectibles to be sold on their auction website, the Associated Press
reports.
The action was commenced in 2000 against the Company and its former
chief executive, Tim Koogle, after the Company displayed flags with
swastikas and other Nazi paraphernalia on its website. Yahoo! banned
the items from its website, after it started charging users for auction
listings, saying it did not want to profit from the sale of those
items.
French Holocaust survivors were not mollified, and the Association of
Deportees of Auschwitz and Upper Silesia proceeded to file a lawsuit
against Yahoo! and Mr. Koogle in 2001 for "justifying war crimes and
crimes against humanity." The group sued Mr. Koogle for a symbolic one
French franc, about 15 cents, singling him out because French law
stipulates that such charges must be brought against a person,
according to an Associated Press report.
US courts have ruled that the French courts do not have jurisdiction
over a US-based site.
Yahoo spokeswoman Joanna Stevens declined to comment on the
development, saying it is an ongoing legal matter, according to
Associated Press.
Securities Fraud
ENTERASYS NETWORKS: Marc Henzel Lodges Securities Suit in New Hampshire
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel commenced a securities class action
lawsuit in the United States District Court, District of New Hampshire
on behalf of purchasers of the securities of Enterasys Networks, Inc.
(NYSE: ETS) between September 26, 2001 and February 1, 2002, inclusive,
against the Company and officers Enrique P. Fiallo and Robert J.
Gagalis.
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 September 26, 2001 and February 1, 2002, thereby
artificially inflating the price of Company securities.
Throughout the class period, as alleged in the complaint, defendants
issued statements regarding Enterasys' quarterly financial performance
and filed reports confirming such performance with the United States
Securities and Exchange Commission (SEC).
The suit alleges that these statements were materially false and
misleading because, among other things:
(1) the Company's Asia Pacific region operations, which
represented a material portion of its revenues, was improperly
recognizing revenues in violation of the Company's accounting
policies and generally accepted accounting principles. As a
result, the Company's operating results were materially
misrepresented and overstated;
(2) the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) based on the foregoing, defendants' statements concerning the
prospects of the Company were lacking in a reasonable basis at
all times.
On February 1, 2002, after the close of the market, the Company shocked
the market when it announced that it would be delaying the release of
its fourth quarter and fiscal year financial results because it was
reviewing the revenue recognition practices of its Asia Pacific
operations. Enterasys also announced that it was under investigation by
the SEC.
In response to these disclosures, on February 4, 2002, the first day of
trading following the Company's announcement, shares of the Company
closed at $4.20 per share, a loss of more than 61% since its previous
close of $10.80 on February 1, 2002, on volume of more than 35 million
shares traded.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
ENTERASYS NETWORKS: Berger Montague Commences Securities Suit in NH
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Berger & Montague, PC initiated a securities class action against
Enterasys Networks, Inc. (NYSE:ETS) and certain of the officers and
directors in the United States District Court for the District of New
Hampshire, on behalf of all who purchased the Company's common stock
during the period from September 26, 2001 through February 1, 2002.
The suit charges the Company and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and SEC Rule 10b-5. The suit further alleges that the
defendants issued public statements and releases and filed documents
with the SEC reporting financial results and revenues for Enterasys
without disclosing that revenues were materially overstated as a result
of the improper recognition of revenue in the Company's Asia-Pacific
region in violation of generally accepted accounting principles (GAAP)
GAAP and its own revenue recognition policies.
It was not until the close of trading on February 1, 2002 that the
Company disclosed that the release of its fourth quarter and fiscal
year ended December 29, 2001 financial results would be delayed in
order to complete a review of a $4 million sales contract recorded by
its Asia-Pacific operations which did not comply with the Company
policies or GAAP.
The Company's auditor KPMG, LLP had reviewed the same contract, but the
one KPMG reviewed had different terms and conditions which purportedly
complied with Company policies and GAAP. As a result, the Company hired
the Boston firm of Ropes & Gray and the accounting firm of Deloitte &
Touche, LLP to review revenue recognition and sales practices in the
Asia Pacific region. Three out of 120 employees in the Asia-Pacific
region have been put on leave as a result.
In addition, the Company has received an order of investigation from
the SEC, purportedly relating to it and certain affiliated companies.
Moreover, preliminary un-audited results in Latin America were $7
million below internal expectations.
Following the February 1, 2002 announcement, Enterasys shares fell
$6.59 to $4.21 in trading of 35.1 million shares or 22 times the 3
month daily average, sinking to the lowest closing price since May
1991. The Company's stock suffered the second largest percentage
decline in US markets, reducing its market value to $855.4 million from
$2.9 billion.
For more information, contact Sherrie S. Savett, Barbara A. Podell or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
HANOVER COMPRESSOR: Marc Henzel Commences Securities Suit in S.D. TX
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of Texas
on behalf of purchasers of Hanover Compressor Company (NYSE: HC)
publicly traded securities during the period between Nov. 8, 2000 and
Jan. 28, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The suit
alleges violations of the federal securities laws arising out of
defendants' issuance of false financial statements and other false and
misleading statements about its operating performance.
The true facts, which were known by the defendants during the class
period but concealed from the public, were:
(1) the $16 million in revenue and $2.6 million in net income
recognized in the 3rd and 4th Quarter associated with the
Hampton Roads fabrication project should not have been
recognized as it did not reflect the percentage of the
project's completion;
(2) the Company's "former majority partner" in the Hampton Roads
project was actually replaced on March 19, 2001, not July
2001;
(3) defendants "paid off" the investor in Hampton Roads the sum of
$1 million in exchange for the investor's signature on the
sham transaction documents on or before Sept. 30, 2000, in
order for the Company to use the same to inflate its revenue
and earnings as early as 3rd Quarter 2000;
(4) defendants issued a "side letter" to the Hampton Roads
investor offering to loan up to $40 million to the joint
venture in order to induce the investor to enter into the
agreement by Sept. 30, 2000;
(5) in winter 2000, defendants actually knew that the Hampton
Roads project completion date had been pushed out to 2003 or
2004, not 2001;
(6) the registration statement omits the Hampton Roads project and
incorporates the Company's false and misleading 3rd and 4th
quarter 2000 financial results;
(7) the Company's financial statements for Q1-Q3 2001 were false
in that the revenue and EPS were overstated and they failed to
disclose the impact of the dubious Hampton Roads project.
Moreover, these statements (in addition to the registration
statement/prospectus) concealed the fact that the investor in
the transaction advised defendants in February 2001 that it
sought to back out of the venture; and
(8) on Feb. 6, 2001, the investor in Hampton Roads demanded a
refund of his $4 million. Further, in a secret "behind-the-
scenes" type transaction, the Company refused to refund the
money directly to the investor. Instead, defendants forwarded
the money to a company related to the investor so that the
transaction would go uncovered. Finally, defendants arranged
for the "related company" to issue a promissory note to the
Company in the amount of $4 million (the same amount as the
refund) which it agreed in an oral "side agreement" not to
insist upon payment
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
HANOVER COMPRESSOR: Scott Scott Commences Securities Suit in S.D. TX
--------------------------------------------------------------------f
Scott + Scott, LLC initiated a securities class action in the United
States District Court for the Southern District of Texas on behalf of
purchasers of Hanover Compressor Company (NYSE:HC) publicly traded
securities during the period between Nov. 8, 2000 and Jan. 28, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Hanover is a
provider of natural gas compression, gas handling and related services
in the United States and selected international markets.
The suit alleges violations of the federal securities laws arising out
of defendants' issuance of false financial statements and other false
and misleading statements about the Company's operating performance.
For more information, contact Neil Rothstein, David R. Scott or James
E. Miller by Phone: 800-404-7770 by E-mail: nrothstein@scott-scott.com,
drscott@scott-scott.com or jmiller@scott-scott.com or visit the firm's
Website: http://www.scott-scott.com
HARTMARX CORPORATION: Lincoln Acquisition Suit Dismissal Ruling Pending
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Hartmarx Corporation faces several class actions pending in Illinois
and Delaware Chancery Court, over the termination of a proposed
acquisition of the Company by The Lincoln Company, alleging breaches of
fiduciary duty.
Following the announcement of the failed acquisition, these actions
were filed in the Chancery Court of the State of Delaware:
(1) Harbor Finance Partners v. Samaual A.T. Bakhsh, et al.,
(2) Sandra Summerfield v. Elbert O. Hand, et al.,
(3) Boris Dorfman v. Elbert O. Hand, et al., and
(4) Miriam Thurm v. Elbert O. Hand, et al.,
The suits uniformly alleged that Hartmarx's directors breached their
fiduciary duties by:
(i) refusing to accept Lincoln's offer or negotiate with Lincoln,
(ii) refusing to solicit other offers or put the Company up for
auction, and
(iii) erecting and/or refusing to remove barriers to the acquisition
of the Company
Following these actions, another suit captioned Robert Crockett v.
Hartmarx Corporation, et al., was filed in Circuit Court of Cook
County, Illinois, County Department, Chancery Division, against the
Company and its directors, making the same allegations as the Delaware
actions.
After consultation with counsel, management believes that there are
meritorious defenses to the claims asserted in the suits, and that the
resolution of these actions will not have a material adverse effect on
the Hartmarx's business, financial position or results of operations.
The Company intends to defend these actions vigorously.
The Company filed motions to dismiss the Harbor Finance Partners and
Summerfield actions in September 2001 and plans to move for the
dismissal of the Dorfman, Thurm and Crockett actions once they are
properly served on the named defendants.
IMCLONE SYSTEMS: FDA Allows Re-Filing of Erbitux License Application
--------------------------------------------------------------------
The US Food and Drug Administration (FDA) granted beleaguered
pharmaceutical company Imclone Systems, Inc. a reprieve by allowing it
to resubmit its Erbitux data along with data collected by its strategic
partner, European drugmaker Merck KgaA, according to a CNN Money
report.
The FDA had rejected the Company's license application for Erbitux,
which it had touted as a breakthrough cancer drug. The development
caused the Company's shares to plummet, as it had represented to
shareholders that it was confident the FDA would approve their
application for Erbitux. An article early this year from the Cancer
Letter revealing that the FDA had repeatedly warned ImClone about the
defects in their application caused share prices to drop even lower.
This development spurred several class actions pending in the New York
federal court, accusing the Company of its officers of violating
federal securities laws by alleging misleading shareholders and
artificially inflating the Company's stock price.
The Company announced that the FDA might require them to conduct new
clinical trials on Erbitux, which would seriously delay the drug's
launch and further disrupt the Company's partnership with Bristol-Myers
Squibb.
However, in a meeting with Company officials, the FDA allowed the
Company to resubmit their Erbitux application, without conducting new
clinical trials. Company CEO Sam Waksal called the meeting, "very
productive." He added, "We assured the FDA that we are committed to
working closely with them to resolve issues raised in the Refusal to
File letter, and on our approach moving forward.
It is unclear what stage the clinical trials are at, and the Companies
have not estimated when Erbitux might be approved. Moors Cabot
analyst, Jim McCamant, said if an application is filed in December or
January, then marketing approval would come about mid-2003, about 15
months after approval originally was expected, according to a CNN Money
report. He added, "My sense is that the FDA's response to all this
publicity is to slow down and be even more careful.And that's
absolutely the wrong thing to do."
IRVINE SENSORS: Stull Stull Commences Securities Fraud Suit in C.D. CA
----------------------------------------------------------------------
Stull Stull and Brody initiated a securities class action in United
States District Court for the Central District of California, Southern
Division on behalf of purchasers of Irvine Sensors Corporation
(Nasdaq:IRSN) common stock between January 6, 2000 and September 15,
2001, inclusive.
The suit alleges that the Company and certain of its officers and
directors violated the Securities Exchange Act of 1934. Irvine purports
to be a developer of proprietary technologies to produce compact
packages of solid state micro-circuitry. Silicon Film Technologies,
Inc. (SFI) was a majority owned subsidiary of ISC whose primary purpose
was to design and market the Electronic Film System or "EFS-1." EFS-1
purportedly interfaced with a conventional camera to enable the camera
to take digital pictures.
During the class period, defendants repeatedly promised the investing
community that the EFS-1 was near completion and would be ready for
release shortly. These promises never materialized because defendants
knew, but did not disclose to the public, among other things, that EFS-
1 suffered from serious and insurmountable technical design flaws.
On September 15, 2001, after nearly two years of touting the EFS-1
technology, Irvine announced that SFI had suspended operations and was
considering bankruptcy, the result being the death-knell of the EFS-1
project. Due Irvine's deceptive and illegal conduct, plaintiff and the
other class members purchased their securities at inflated prices. Had
plaintiff and the other class members been aware of the truthful
condition of the Company and the adverse impact that defendants'
statements and omissions were having on the Company, they would not
have purchased their shares, or at least not at artificially inflated
prices.
For more details, contact Marc L. Godino by Phone: 888-388-4605 or by
E-mail: mgodino@secfraud.com or visit the firm's Web site:
http://www.secfraud.com.
JP MORGAN: Marc Henzel Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York on behalf of a class consisting of all persons who purchased
securities of JP Morgan Chase and Co.,Inc. (NYSE: JPM) between November
28, 2001 and January 28, 2002, inclusive.
The suit charges the Company with violations of federal securities
laws. Among other things, plaintiff claims that defendant's 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.
More specifically, on the first day of the class period, JP Morgan
recklessly issued a public statement, which did not fully disclose its
risk and loss exposure related to its transactions and dealings with
the Enron Corporation, the company notorious for its financial
collapse.
At the time, the Company listed its total exposure in this regard at
approximately $900 million. It later announced that, in fact, its
total Enron related exposure was actually about $2.6 billion, or almost
three times the earlier figure. Shortly thereafter, JP Morgan wrote
down $1.13 billion in non-performing assets, specifically related to
losses generated by its dealings with Enron.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
JUNIPER NETWORKS: Marc Henzel Initiates Securities Suit in N.D. CA
------------------------------------------------------------------
The Law Offices of Marc S. Henzel filed a securities class action in
the United States District Court for the Northern District of
California on behalf of purchasers of Juniper Networks, Inc. (NASDAQ:
JNPR) publicly traded securities during the period between April 12,
2001 and June 7, 2001.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934, alleging that
during the class period, defendants stated that Juniper was on track to
have 2nd Quarter 2001 revenues of $330+ million and earnings per share
(EPS) of $0.25, and that deferred revenue (i.e., revenue not yet
recognized because customers had not yet accepted products) had
declined because customer acceptance cycles were shorter than in the
past.
The defendants also represented the Company was on track to report 2001
EPS of $0.90-$1.00, pro forma, causing its stock to trade as high as
$69.50. Defendants took advantage of this inflation selling 747,463
shares, for proceeds of $42.9 million.
Then, June 8, 2001, Juniper disclosed that its 2nd Quarter 2001
revenues would be much lower than previously represented and earnings
would be less than half of prior estimates. Defendants also admitted
that customer acceptance cycles were in fact much longer than in the
past, stretching from days to months. One analyst noted that the
Company's announcement was matched in "severity by its tardiness."
On this news, Company shares dropped to $38.02, or more than 46% lower
than the class period high of $69.50. Ultimately, the Company reported
a loss for 2001 and pro forma EPS of just $0.50, half what defendants
represented, and its stock has declined to $13.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
NEWPOWER HOLDINGS: Abraham Paskowitz Initiates Securities Suit in NY
--------------------------------------------------------------------
Abraham & Paskowitz commenced a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons and entities who acquired the common stock of NewPower
Holdings (NYSE: NPW) during the period from October 5, 2000 through and
including December 5, 2001.
The suit alleges that the registration statement and prospectus for the
Company's public offering on October 5, 2000 was false and misleading
in several ways, including misrepresentations and omissions concerning
the adequacy of risk management systems put in place in conjunction
with NewPower affiliate, Enron Energy Services, Inc. (EES), and the
true nature and purpose of certain related party transactions,
including transactions pursuant to which Enron attempted to hedge its
investment in the Company through use of a partnership known as "Raptor
III," which was conceived and designed by Enron CFO Andrew Fastow.
Claims regarding these misrepresentations and omissions have been
asserted under Section 11 of the Securities Act against the
underwriters of the October 5, 2000 initial public offering and against
those persons who were directors (or about to become directors) of the
Company at the time of that offering, including top executives, CEO H.
Eugene Lockhart, Chairman Lou L. Pai and CFO William I. Jacobs.
The suit also alleges claims against certain of these same defendants
for violations of 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
October 5, 2000 and December 5, 2001. The suit alleges in this regard
that NewPower and certain of its officers and directors misrepresented
or failed to disclose:
(1) that the Company had not adopted effective and appropriate
hedging strategies against volatility of commodity prices;
(2) that the Company was on course to achieve its financial goals
and had sufficient liquidity to do so; and
(3) that certain forward contracts with EES posed little risk of
loss when in truth and in fact they were driving the Company
toward insolvency, and were largely structured to protect and
enrich Enron, the Company's controlling shareholder.
For more information, contact Laurence Paskowitz or Eva Chatty 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 firm's Web
site: http://www.classactionsonline.com
NEWPOWER HOLDINGS: Cauley Geller Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
on behalf of all individuals and institutional investors that purchased
the common stock of NewPower Holdings, Inc. (NYSE: NPW) between October
5, 2000 and December 5, 2001, inclusive. The suit is pending in the
United States District Court for the Southern District of New York
The suit charges the Company and its officers and directors with
violations of the Securities Exchange Act of 1934. In addition, the
Company, its officers and directors, as well as underwriters of its
October 5, 2000 initial public offering, are also charged with
violations of the Securities Act of 1933.
The suit alleges that NewPower, a nationwide provider of electrical
power and natural gas formed by Enron in 1999, engaged in a pattern of
misleadingly described policies and transactions throughout the class
period that served to mask the true nature of the Company's business,
and its financial condition.
Specifically, the complaint alleges that the defendants made numerous
false and misleading statements concerning the NewPower's ability to
succeed in a volatile energy market through sophisticated risk
management strategies conceived and largely managed by its affiliate,
Enron Energy Services, Inc. (EES), an Enron subsidiary.
The suit asserts that neither EES nor the Company had identified any
hedging strategies that could enable the Company to operate profitably
under market conditions prevailing at the time of the IPO or, indeed,
at any time thereafter.
Moreover, as the complaint details, despite representations in the IPO
prospectus designed to portray Enron and its affiliates as long-term
investors in NewPower and believers in its prospects for success,
Enron, through its CFO, Andrew Fastow, had set up a partnership known
as "Raptor III," whose purpose was to hedge Enron's position against
such an anticipated decline in the Company's stock.
Although the prospectus purported to describe fully the relationship
between Enron, its affiliates, and the Company, and all of their
related party transactions, it failed to fully disclose the extremely
troubling and material Raptor transactions. As a result of these
various misrepresentations and omissions, the IPO garnered net proceeds
to the Company of $543 million.
In addition, certain defendants made numerous statements concerning the
Company's financial performance throughout the class period that
falsely attributed disappointing results to factors beyond the
Company's control.
As the complaint charges, they schemed to omit mention of the true
reasons the Company was drastically cutting costs - i.e., that it did
not have its claimed hedging system against high prices in place
(either independently or with the aid of Enron), and that collateral
obligations carried a material risk of loss, thereby sapping the
Company's ability to tap enough resources to successfully carry out its
business plan.
Thereafter, in connection with the collapse of Enron amid scandal in
the fall of 2001, the Company and other defendants belatedly began to
disclose that they had no substantial hedges in place, and that,
contrary to their repeated representations, a substantial portion (and
perhaps all) of the enormous collateral they had posted was at risk of
loss.
The suit alleges that defendants have now admitted in filings made by
them with Securities and Exchange Commission that the registration
statements were false and misleading in that they failed to disclose
that, contrary to defendants' prior representations, the collateral
postings were not guaranteed to return to the Company completely or
even substantially (as had been previously represented), but were at
risk of being seized by the creditor, Enron.
NewPower misrepresented the true risk the Enron forward contracts
presented because the revelation of the truth would have led to
investor suspicions about the very viability of its business plan, its
ability to hedge against higher prices, the adequacy of its liquid
resources, and the fairness of its dealings with Enron.
For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Phone: P.O. Box 25438, Little Rock, AR 72221-5438 by
Phone: 888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Web site: http://www.classlawyer.com
REGENERATION TECHNOLOGIES: Marc Henzel Lodges Securities Suit in FL
-------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, Northern District of Florida
Gainesville Division on behalf of purchasers of the securities of
Regeneration Technologies, Inc. (NASDAQ: RTIX) between July 25, 2001
and January 31, 2002, inclusive, against the Company and:
(1) Richard Allen,
(2) James Grooms and
(3) Brian Hutchinson
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.
Specifically, throughout the class period, defendants made highly
positive statements regarding Regeneration's financial results. RTI
reported quarter after quarter of "record" financial results and strong
revenue growth, which caused the price of Company securities to trade
as high as $12.82 per share during the class period. These statements
were allegedly false and misleading because the Company failed to take
a charge to earnings to recognize worthless inventory.
On February 2, 2002, the Company shocked the market by announcing that
it was delaying its fourth quarter and yearend 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 NewPower, effective immediately.
The Company further announced that it is "evaluating whether these
issues may affect RTI's previously reported financial results" and
although "RTI's annual results have not been finalized, company
officials expect to report a loss for both the quarter and the year."
In response to the news the price of Company stock plunged more than
50% from $10.15 on January 31, 2002 to $5.19 on February 1, 2002.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
RHYTHMS NETCONNECTIONS: Holzer Holzer Commences Securities Suit in CO
---------------------------------------------------------------------
Holzer & Holzer filed a securities class action in the United States
District Court for the District of Colorado on behalf of purchasers of
Rhythms NetConnections, Inc. (OTCBB:RTHMQ) publicly traded securities
during the period between January 6, 2000 and April 2, 2001, inclusive.
The suit alleges that the Company and certain of its officers and
directors issued a series of material misrepresentations to the market.
Throughout the class period, the suit alleges, the Company portrayed
itself as a fast-growing provider of DSL services and repeatedly
represented that it could continue to expand its broadband network
throughout the United States and reassured investors that it was
financially able to continue this expansion.
As alleged in the suit, defendants' statements issued throughout the
class period were materially false and misleading when made as they
failed to disclose the following adverse facts which were then known to
defendants or recklessly disregarded by them:
(1) that the Company lacked the financial resources necessary to
execute its business plan of a full national network
expansion;
(2) that the Company's efforts to scale back its expansion plans
were not meeting with success as the Company was unable to
generate the necessary financing;
(3) that the Company was not well-funded or well-positioned to
continue its growth, as the Company's expenses, including its
ongoing debt payment obligations, were far outpacing its
revenues and rapidly depleting the Company's cash reserves;
(4) that the Company did not have adequate cash reserves and was
not sufficiently "stable" and "financially strong" that it
would be able to fund its operational needs into the first
quarter of 2002, as defendants repeatedly promised investors -
defendants were not even able to keep the Company running
through 2001, as it had earlier guaranteed; and
(5) that without the influx of additional capital, the Company
would be forced to seek bankruptcy protection, which would
render its common stock essentially worthless.
The complaint further alleges that while in possession of the true
facts about the Company and its business, the individual defendants and
other insiders collectively sold 600,000 shares of common stock for
gross proceeds in excess of $16 million.
For further details, contact Michael I. Fistel, Jr., by Phone:
404-847-0085 if in Atlanta, or 888-508-6832 if outside Atlanta or by E-
mail: michaelfisteljr@msn.com
RICA FOODS: Marc Henzel Commences Securities Fraud Suit in S.D. Florida
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of
Florida on behalf of all persons who acquired Rica Foods, Inc. (Amex:
RCF) common stock between January 16, 2001 and December 28, 2001
against the Company and:
(1) Calixto Chaves, the Company's Chairman and CEO,
(2) Randall Piedra, the Company's CFO and
(3) Jose Pablo Chaves, the Company's 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 suit alleges, among other things that throughout the
class period, defendants filed documents with the SEC, which failed to
disclose that Rica 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 that defendants' misrepresentations
caused the price of Rica's common stock to be artificially inflated
throughout the class period.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
SPECTRALINK CORPORATION: Marc Henzel Commences Securities Suit in CO
--------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Colorado on
behalf of purchasers of SpectraLink Corporation (Nasdaq: SLNK) publicly
traded securities during the period between July 19, 2001 and January
11, 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 19, 2001 and January 11, 2002, thereby artificially
inflating the price of Spectralink securities.
Throughout the class period, as alleged in the complaint, 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 common stock to the unsuspecting public.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
SUPREMA SPECIALTIES: Marc Henzel Lodges Securities Suit in New Jersey
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of New Jersey on
behalf of all persons or entities who purchased Suprema Specialties,
Inc. (Nasdaq: CHEZ) during the period from August 15, 2001 through and
including December 21, 2001, inclusive.
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. Additionally, the suit alleges a violation of Section 11 of
the Securities Act of 1933, on behalf of those investors who purchased
Suprema stock pursuant to the Company's secondary Offering of November
8, 2001.
The suit alleges, among other things, that throughout the class period
defendants knowingly or recklessly disseminated materially false and
misleading statements regarding the Company's financial condition. On
December 21, 2001, the Company announced the resignation of Mr.
Venechanos, Suprema's CFO and disclosed that it had launched an
investigation into the Company's prior reported financial results. In
response to this report the Nasdaq halted trading of Company stock.
The following statements, among others, are alleged to have been
materially deceptive:
(1) August 15, 2001, press release announcing the Company's 2001
year end financial results;
(2) 2001 Form 10-K filed with the SEC on September 28, 2001;
(3) the Company's registration statement filed with the SEC on
November 6, 2001 for the public offering of over 4 million
shares of stock at $12.75 of which 500,000 shares were sold by
by, among others, defendants Cocchiola and Venechanos;
(4) the Company's Form 10-Q for its first quarter ended September
30, 2001.
In each of its SEC filing, Suprema assured the public that its
financials were in conformity with generally accepted accounting
principles. The suit alleges that the Company's financial statements
were not in conformity with GAAP and that defendants'
misrepresentations caused the price of its common stock to be
artificially inflated throughout the class period.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
SYNSORB BIOTECH: Marc Henzel Commences Securities Suit in S.D. NY
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York, on behalf of purchasers of Synsorb Biotech Inc. (Nasdaq: SYBB)
between April 4, 2001 and December 10, 2001, 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 Synsorb's securities.
The complaint alleges that throughout the Class Period, defendants
touted the successful progression of its SYNSORB Cdr Phase III clinical
trials while concealing from the public that:
(1) defendants had "concerns about enrollment;"
(2) defendants knew that "the completion of the trial would reach
out years beyond" what they had forecast;
(3) the FDA had directed defendants to use a more stringent
protocol in its Phase III trials;
(4) defendants had repeatedly failed to increase enrollment in the
Phase III trials during the class period;
(5) defendants had been experiencing "unacceptably high drop out
rates;" and
(6) defendants could not afford to continue to finance the Phase
III clinical trials
After the market close on December 10, 2001, the Company issued a press
release announcing the termination of its SYNSORB Cdr development
program, and in a conference call the next morning, revealed the true
facts concerning the Phase III clinical trials. These shocking
revelations made in the press release and in the conference call had a
dramatic effect on the price of Company stock, causing it to plummet
over 52% and causing plaintiff and the class to suffer damages.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
TALX CORPORATION: Marc Henzel Commences Securities suit in E.D. MO
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The Law Offices of Marc S. Henzel lodged a securities class action in
the United States District Court for the Eastern District of Missouri,
Eastern Division, on behalf of purchasers of Talx Corporation (Nasdaq:
TALX) common stock between July 18, 2001 and October 1, 2001,
inclusive, against the Company and certain of its officers and
directors.
The suit charges the Company, and certain of its officers and
directors, with violations of the federal securities laws. On August
3, 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 suit alleges that the registration statement/prospectus was false
and materially misleading for these reasons:
(1) defendants had failed to disclose that the Company had
improperly capitalized significant amounts of software related
to its 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 complaint further alleges that throughout the class period the same
factors, which were not properly disclosed in the Company's secondary
offering registration statement/prospectus, were also hidden by the
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 the Company and its CEO to reap almost $100 million from the
sale of stock.
Then, on October 1, 2001, weeks after the defendants had sold almost
$100 million worth of Talx stock and used over $11 million in Company
stock to acquire Ti3, that they 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 the 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 more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
TERADYNE INC.: Marc Henzel Commences Securities Suit in Massachusetts
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Massachusetts
on behalf of purchasers of the common stock of Teradyne, Inc.
(NYSE:TER) between July 14, 2000 and October 17, 2000, inclusive,
against the Company and officers George Chamillard and Michael A.
Bradley.
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 14, 2000 and October 17, 2000, thereby artificially
inflating the price of the Company's common stock.
The suit alleges that the Company was experiencing declining orders in
its semiconductors testing systems division, which would cause the its
growth rate to slow from historical levels. Defendants concealed this
adverse fact from investors, so that the Company could complete the
acquisition of Herco Technology Corporation and Perception Laminates,
Inc., d/b/a/ Synthane Taylor, using artificially inflated stock as
currency.
When the truth about the Company's business was revealed to the public,
the price of the Company's common stock dropped precipitously, causing
plaintiff and the members of the class to suffer substantial damages.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
TYCO INTERNATIONAL: Marc Henzel Commences Securities Suit in S.D. NY
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The Law Offices of Marc S. Henzel 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 or otherwise acquired the
common stock of Tyco International Ltd. (NYSE: TYC) between February 1,
2000 and February 1, 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 during the class period, thereby artificially inflating the
price of the Company's common stock.
The complaint alleges that Tyco'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 Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
WILLIAMS COMPANIES: Marc Henzel Commences Securities Suit in N.D. OK
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
Oklahoma on behalf of investors who purchased Williams Companies, Inc.
(NYSE: WMB), Williams Communications Group, Inc. (NYSE: WCG) securities
between July 24, 2000 and January 29, 2002, inclusive.
The suit charges defendants with violations of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934. The complaint alleges that
defendants issued materially false and misleading statements and failed
to disclose material information to their shareholders regarding:
(1) the spin-off of WCG from WMB,
(2) the accounting and financial impact of the contingent
liabilities retained by WMB, and
(3) the nature of the assets and liabilities of WCG
These statements allegedly caused the common stock of both companies to
trade at artificially inflated prices.
For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or
visit the firm's Web site: http://members.aol.com/mhenzel182
*********
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
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Information contained herein is obtained from sources believed to be
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