/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020322.mbx C L A S S A C T I O N R E P O R T E R Friday, March 22, 2002, Vol. 4, No. 58 Headlines AG-BAG INTERNATIONAL: Sued For Conspiring to Fix Bag Prices in MN AK STEEL: Employee Challenges "Improper" Retirement, Benefits Plans AUDIOVOX CORPORATION: Consumers Sue Over Harmful Telephone Radiation BIG 5: Reaches Agreement to Settle California Managers' Wage Suit COOPER TIRE: NJ Court Yet to Approve Settlement of Defective Tire Suit DIAMOND OFFSHORE: Settling Offshore Workers Wage Suit for $625,000 DOLLAR TREE: Voluntarily Recalls 165T Paperweights for Fire Hazard GENERAL MOTORS: Minority Workers File $10 Million Racial Bias Suit JADE PRODUCTS: Voluntarily Recalls 7,200 Gas Ranges for Burn Hazard PASCAL PRODUCTS: Recalls 600 Fireplace Screens for Serious Fire Hazard PENNSYLVANIA: Pittsburgh Officers Still Face Backlog of Complaints STORAGE USA: Sued Over Disposition of Assets to Security Capital Group *Supreme Court to Decide if Disparate Impact Means Age Discrimination Securities Fraud AK STEEL: OH Court Yet to Decide on Motion to Dismiss Securities Suit ARTHUR ANDERSEN: Cuts Settlement Offer to Enron Shareholders By Half BIOPURE CORPORATION: Asks MA Court to Dismiss Securities Fraud Suits BIOPURE CORPORATION: Pomerantz Haudek Lodges Securities Suit in MA CMGI INC.: Shareholders Sue to Block Subsidiary's Reverse Stock Split CROSSROADS SYSTEMS: TX Court Refuses to Dismiss Securities Fraud Suit GILAT SATELLITE: Cohen Milstein Initiates Securities Suit in E.D. VA GLOBAL CROSSING: Johnson Perkinson Lodges Securities Suit in S.D. NY GLOBAL CROSSING: Schoengold Sporn Commences Securities Suit in S.D. NY HARMONIC INC.: CA Court Yet to Decide on Securities Suit Dismissal INFORMATICA CORPORATION: Sued for Securities Violations in S.D. NY LUMENIS LTD.: Bernstein Liebhard Commences Securities Suit in S.D. NY MARKET AMERICA: Shareholders Sue to Block Atlantic Ventures Merger MEASUREMENT SPECIALTIES: Kaplan Fox Commences Securities Suit in NJ MEASUREMENT SPECIALTIES: Brian Felgoise Files Securities Suit in NJ MERCATOR SOFTWARE: CT Federal Court Refuses to Dismiss Securities Suit METAWAVE COMMUNICATIONS: Cauley Geller Lodges Securities Suit in WA METAWAVE COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in WA OPTICAL CABLE: Faces Suits for Securities Act Violations in W.D. VA PARKER DRILLING: Subsidiaries Await Approval of Wage Suit Settlement PRE-PAID LEGAL: Lieff Cabraser, Dunn Swan File Securities Suit in OK SABRE HOLDINGS: $1.9M Travelocity Merger Suit Settlement Reached TYCO INTERNATIONAL: Robbins Umeda Initiates Securities Suit in S.D. NY USINTERNETWORKING INC.: Denies Allegations in NY Securities Suits VERSATA INC.: Asks CA Court to Dismiss Suit for Securities Violations XOMA LTD.: CA Federal Court Dismisses Suits for Securities Violations ********* AG-BAG INTERNATIONAL: Sued for Conspiring to Fix Bag Prices in MN ----------------------------------------------------------------- Ag-Bag International, faces two class actions pending in the US District Court for the District of Minnesota, along with other silage bag manufacturers and vendors, charging them with conspiring to fix prices and sales quotas. Class certification was denied in one suit and no class has been certified in the other. The defendants have briefed and argued motions for summary judgment in both cases. The Court currently has the motions under advisement. If the plaintiffs were to obtain a judgment against the defendants, the Company could be held jointly and severally liable. The Company believes that the plaintiffs' claims have no merit, and the Company is vigorously defending itself against these claims. The Company believes that the outcome of the litigation will not have a material adverse impact on its financial condition or results of operations. AK STEEL: Employee Challenges "Improper" Retirement, Benefits Plans ------------------------------------------------------------------- AK Steel Corporation faces a class action suit filed by former employee, John D. West, in the United States District Court for the Southern District of Ohio, against the AK Steel Corporation Retirement Accumulation Pension Plan (AK RAPP) and the AK Steel Corporation Benefit Plans Administrative Committee (AK BPAC). The suit alleges that that the method used under the AK RAPP to determine lump sum distributions is improper and that, as a result, the benefits previously paid to plaintiff and putative class members from the AK RAPP were understated in violation of the Employment Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986. The AK RAPP is the cash balance plan component of the AK Steel Noncontributory Pension Plan (AK NCPP). The AK NCPP provides that the Company will indemnify members of AK BPAC from any liability and expense incurred by reason of serving as a member of AK BPAC. The defendants have not yet responded to the Complaint and discovery has yet to commence. The defendants intend to contest this matter vigorously. AUDIOVOX CORPORATION: Consumers Sue Over Harmful Telephone Radiation -------------------------------------------------------------------- Audiovox Corporation faces a consolidated class action pending in the US District Court for the District of Maryland charging the Company and other suppliers, manufacturers and distributors of hand-held wireless telephones with damages relating to exposure to radio frequency radiation from hand-held wireless telephones. There are various procedural motions pending in the suit and no discovery has been conducted to date. The Company has asserted indemnification claims against the manufacturers of the hand-held wireless telephones, and is vigorously defending against the suit. The Company does not expect the outcome of any pending litigation to have a material adverse effect on its consolidated financial position. BIG 5: Reaches Agreement to Settle California Managers' Wage Suit ----------------------------------------------------------------- Big 5 Sporting Goods Corporation agreed to settle a class action suit commenced in August 2001 on behalf of its California store managers and first assistant store managers, alleging violations of the California Labor Code and the Business and Professions Code. The suit alleges that the Company improperly classified its store managers and first assistant store managers as exempt employees not entitled to overtime pay for work in excess of forty hours per week. They seek, on behalf of the class members: (1) back pay for overtime allegedly not paid; (2) statutory penalties in the amount of an additional thirty days; (3) wages for each employee whose employment terminated in the four years preceding the complaint; and (4) injunctive relief to require the Company to treat its store management as non-exempt On February 8, 2002, the Company filed a joint settlement with the court for this complaint. The Company agreed to pay each class member who submits a valid and timely claim form for the covered period of August 8, 1997 through December 31, 2001, $32.46 per week of active employment as store manager, and $25.50 per week of active employment as first assistant store manager. The Company also agreed to pay attorneys' fees, plus costs and expenses, in the amount of $690, as well as up to $40 for the cost of the settlement administrator. In addition, the Company agreed to pay the class representatives an additional aggregate amount of $32.50 for their service as named plaintiffs. The settlement is subject to court approval. Once approved, the settlement will constitute a full and complete settlement and release of all claims related to the lawsuit. In addition, the Company admits no liability or other wrongdoing with respect to the claims set forth in the lawsuit. The Company intends to defend the case vigorously if the court does not approve the settlement agreement. COOPER TIRE: NJ Court Yet to Approve Settlement of Defective Tire Suit ----------------------------------------------------------------------- The Superior Court of New Jersey, Middlesex County has not issued a decision regarding the settlement proposed by Cooper Tire and Rubber Company to settle several class actions charging it with manufacturing unsafe radial tires. The 32 separate class actions were initially filed in 30 separate state courts, plus the Commonwealth of Puerto Rico, with one purporting to represent a nationwide class. The lawsuits, all of which were filed under the auspices of the same group of plaintiffs and attorneys, assert claims under the respective states' consumer protection and deceptive trade practices statutes, and comparable commercial law and other theories. The suits allege that the Company used certain materials and procedures in its process of manufacturing steel-belted radial tires, which could have rendered a portion of the tires unsafe, and failed to disclose those practices to purchasers of its tires. The suits were brought on behalf of all persons (excluding those who have sustained personal injury and/or property damage as a result of the alleged unlawful practices) in the respective states who purchased steel-belted radial tires manufactured by the Company from 1985 to the present, and still retain those tires. The Company removed each of the actions to Federal Court. Certain of the actions have been remanded to state courts, while others have been transferred by the Federal Judicial Panel on Multidistrict Litigation to the US District Court for the Southern District of Ohio for consolidated pre-trial handling. In October 2001, the Company entered into a settlement and release of all of the class action lawsuits, without any admission of liability, resulting in a charge of $54.6 million ($33.9 million net of tax). According to the terms of the settlement and release, the Company will provide: (1) a five-year Enhanced Warranty Program offering a free replacement tire for an adjustable separation on an eligible Cooper Tire or an alternative dispute resolution system; (2) some modifications to final tire inspections; and (3) a consumer education program to promote tire safety. In addition, the Company has agreed to pay plaintiffs legal expenses as part of the settlement. Out of potentially millions of class members, only 156 chose to opt out of the settlement. Those who opted out can pursue any legal rights they may have against the Company in separate individual lawsuits, any one of which the Company believes is unlikely to have a material adverse effect on the Company's results of operations, cash flow or financial position. Preliminary judicial approval of the Settlement has been received. If final approval is received, the litigation will be fully resolved, unless appealed. There were 18 objectors to the Settlement. None objected to the structure of the settlement, but only to the content, coverage and amount of attorney's fees. A fairness hearing regarding the settlement was held in the Superior Court of New Jersey, Middlesex County on January 29 and 30, 2002. DIAMOND OFFSHORE: Settling Offshore Workers Wage Suit for $625,000 ------------------------------------------------------------------ Diamond Offshore Drilling, Inc. will settle for $625,000 the class action pending in the US District Court for the Southern District of Texas, Houston, Division against it and other offshore drilling contractors in the Gulf of Mexico over workers wages. The suit was filed on behalf of offshore workers against all of the major offshore drilling companies, including persons hired in the United States by the companies to work in the Gulf of Mexico and around the world. The suit alleges that the companies, through trade groups, shared information in violation of the Sherman Antitrust Act and various state laws. In July 2001, the Company filed a stipulation of settlement with the Court, in which it agreed to settle the plaintiffs' outstanding claims. In December 2001, the Court entered an order preliminarily approving the proposed class action settlement, preliminarily certifying the settlement class, and setting a fairness hearing for April 18, 2002 to determine whether to give the settlement final approval. The Company expressed confidence, in a disclosure to the Securities and Exchange Commission, that the settlement will not have a material adverse effect on the financial position, results of operations, or cash flows of the Company. DOLLAR TREE: Voluntarily Recalls 165T Paperweights for Fire Hazard ------------------------------------------------------------------ Dollar Tree Stores, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 165,000 paperweights. The paperweights can leak petroleum distillates, which can pose ingestion and flammability hazards to consumers. The Company has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The recalled paperweights were sold in four varieties: (1) Pyramid shaped, 3 inches long, 3 inches wide and 3 inches high, interiors: Sailboats floating in blue and clear liquid or hearts floating in clear liquid; (2) Pyramid shaped with a heart, 2 1/2 inches long, 2 1/2 inches wide and 2 1/2 inches high, interiors: Sailboats floating in blue and clear liquid or multicolored hearts floating in clear liquid; (3) Heart shaped, 2 1/2 inches long, 2 1/2 inches wide and 1 1/2 inches high, interior: Sailboats floating in blue and clear liquid or multicolored hearts floating in clear liquid; (4) Double Heart shaped, 3 1/2 inches long, 2 1/2 inches wide and 1 1/2 inches high, interior: Sailboats floating in blue and clear liquid or multicolored hearts floating in clear liquid; All four varieties of paperweights have a label on their bases that reads, "817718*** OFSC3*** DOLLAR TREE DIST. *** MADE IN CHINA ***K's Collection." Dollar Tree, Only One Dollar, Only $1, Dollar Express, and Dollar Bills retail stores nationwide sold the paperweights from August 2000 through September 2000 for about $1. For more information, contact the Company by Phone: 800-876-8077 between 9 am and 5 pm ET Monday through Friday. GENERAL MOTORS: Minority Workers File $10 Million Racial Bias Suit ------------------------------------------------------------------ General Motors Corporation faces a $10 million racial discrimination lawsuits filed by minority workers at two of their plants, alleging that their co-workers made racial slurs and behaved in a hostile manner, citing an incident where a white co-worker once dressed in Ku Klux Klan garb and nooses were hung near workstations, the Associated Press reports. The suit, filed on behalf of 14 black, Hispanic and American Indian workers at the Pontiac plants, and one person whose job application was rejected, also alleged that the Company discriminated in hiring. The Company suspended the worker who dressed in Klan garb for thirty days, and said it went over its nondiscrimination and diversity policies with all its plant workers. Company spokesman Tom Wickham told AP, "GM does not condone these acts which are not indicative of the work environment of Pontiac or elsewhere at GM." He added the Company believes some incidents cited in the suit did not occur. JADE PRODUCTS: Voluntarily Recalls 7,200 Gas Ranges for Burn Hazard ------------------------------------------------------------------- Jade Products, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling, and offering to repair, about 7,200 Dynasty gas ranges. The ranges can tip-over if a heavy weight is placed on an open oven door, posing a risk of burn injuries from hot food or liquids in cooking containers. The Company has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The Dynasty gas ranges included in this program are all 30, 36, and 48- inch units with the model number DGRSC. The model number is located on the serial plate that is accessed by lifting the right hand cooking module from the range top. The brand name "Dynasty" appears on the front of the range. Appliance and retail stores nationwide sold these ranges from January 1996 through December 2001 for between $3,000 and $7,400. For more information, contact Jade Product by Phone: 888-607-5694 between 8 am and 5 pm ET Monday through Friday or visit the firm's Web site: http://www.dynastyrange.com PASCAL PRODUCTS: Recalls 600 Fireplace Screens For Serious Fire Hazard ---------------------------------------------------------------------- Pascal Products Company, Ltd. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 600 two-paneled fireplace screens. The paint on the metal mesh can ignite when exposed to a direct flame, posing a serious fire hazard to consumers. The Company has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The recalled screens are Wal-Mart Home Trends 2-Paneled Fireplace Screens with model number 500RR. The 500RR model screens have a light rust color and use standard Phillips-head hinge pins. Wal-Mart stores nationwide sold the fireplace screens from September 2001 through December 2001 for about $30. For more information, contact the Company by Phone: 601-362-6813 between 10 am and 5 pm ET Monday through Friday. PENNSYLVANIA: Pittsburgh Officers Still Face Backlog of Complaints ------------------------------------------------------------------ An office created to investigate cases of alleged abuse by police officers continues to have a backlog of cases that could threaten Pittsburgh's efforts to end federal oversight of its police department, the Associated Press recently reported. The City agreed to the consent decree establishing the federal oversight in 1997, after the Justice Department found that Pittsburgh had a "pattern and practice" of tolerating civil rights abuses by its officers. The Justice Department ruling was the result of a class action filed on behalf of 66 people who claimed the city, its highest officials and 75 officers condoned a pervasive pattern of abuse. The consent decree also required the Department to revamp police oversight, training and supervision. Among its reforms: (1) a computerized system to track officers' behavior; (2) a requirement that officers document all traffic stops and arrests; and (3) a requirement that officers take annual training in cultural diversity, integrity and ethics. The backlog at the City's Office of Municipal Investigations, which handles citizen complaints against police, continues to grow, according to an audit by James Ginger, a San Antonio, Texas-based consultant. The office, created as part of a 1997 federal consent decree, had 409 pending cases as of November 2001. At least 164 of the complaints are four years or older, and 10 of these are more than eight years old, according to the audit. The backlog and office under-staffing could endanger the City's efforts to lift the five-year-old agreement stemming from alleged widespread civil rights abuses. City and police officials are striving to have the decree lifted by April. Some persons say the backlog is enough to lead to extension of the agreement. "This report is the nail in the coffin, and given the additional problems we have identified, there is now way federal supervision can or should be ended at this point," said Witold Walczak, Executive Director of the Pittsburgh chapter of the American Civil Liberties Union. Mr. Walczak has alleged that some investigators have worked for a year without being trained at the police academy and have quotas to clear one case a week, which would undermine investigations. Susan Malie, an attorney for the City's Law Department, disputed Mr. Walczak's comments, saying all employees have been trained and the office has no quotas. "The quality and integrity of each investigation are paramount and the only priorities," Ms. Malie said. STORAGE USA: Sued Over Disposition of Assets to Security Capital Group ---------------------------------------------------------------------- Storage USA, Inc. faces a class action challenging the disposition of the Company's assets, including its interests in their operating partnership, SUSA Partnership, LP (SUSA), to Security Capital Group, Inc. The suit was filed by a group of limited partners in SUSA on behalf of all limited partners of SUSA and on behalf of a subclass of those limited partners who are parties to tax deferral agreements with SUSA. The suit, which also names Security Capital Group, Inc. as defendant, purports to state causes of action against some or all of the defendants for: (1) breach of fiduciary duty, (2) violation of the Tennessee Revised Uniform Limited Partnership Act, (3) breach of the existing partnership agreement and (4) breach of the tax deferral agreements, and (5) interference with contractual relations and interference with economic advantages, against Security Capital Group. The relief sought in the complaint includes preliminarily and permanently enjoining the transactions or, in the event that they are completed, rescinding and setting aside the transactions. The Company labeled the suit as "without merit." *Supreme Court to Decide if Disparate Impact Means Age Discrimination --------------------------------------------------------------------- Can a corporation be sued for age discrimination on the grounds that a corporate layoff has a disproportionate impact on older workers? Lawyers for 117 laid-off Florida Power Corporation workers, along with the lawyers for the utility, will argue that question before the Supreme Court tomorrow, The Wall Street Journal reported recently. In any sort of bias claim, proving that discrimination is intentional is difficult. Therefore, winning a lawsuit often depends on proving that a company's action has had an unintended, or disparate, impact on one group of workers. The use of the "disparate-impact" theory in such cases is still in question. The Supreme Court has allowed minority groups protected under the 1964 Civil Rights Act to bring such claims under Title VII, which bars job discrimination based on race, color, religion, sex and national origin. Last year, the Court ruled that plaintiffs could not bring disparate- impact claims under another part of the same law, Title VI, which bars discrimination by recipients of federal funds. Now, the Supreme Court will decide whether the disparate-impact theory may be used in age- discrimination cases. The Florida Power workers are asking to be allowed to use that theory under the 1967 Age Discrimination in Employment Act, a federal law designed to protect workers who are 40 and older from being treated differently because of their age. Those workers now make up nearly half of the work force. If the Court rules in the plaintiffs' favor, they could pursue a class action against Florida Power, rather than their dozens of individual lawsuits now pending in US District Court in Ocala, Florida. Such a ruling could make it easier for other groups of older workers to get class action claims certified as well, "which typically puts added pressure on the defendant to settle rather than run the risk of a class action determination," said Eugene Ulterino, a partner at Nixon Peabody LLP, in Rochester, New York, who represents employers. If the Supreme Court rules against the plaintiffs, "it would become almost impossible to prove age discrimination in this country, because it would mean that in every case, an age-discrimination victim is going to have to prove that an employer intended to discriminate against them (her or him)," said Laurie McCann, a senior attorney with AARP Foundation Litigation, part of the group formerly known as the American Association of Retired Persons. "If the employer itself is not aware that a seemingly neutral policy is instigated by stereotypes against older workers, which is what the academic literature shows, how can we expect an older worker to prove what was going on in the employer's head?" The Supreme Court arguments come amid a surge of age-discrimination complaints, as older workers desiring to stay on the job longer meet employers' resistance. The Equal Employment Opportunity Commission (EEOC) said last month that the number of age-bias claims against private-sector employers jumped 8.7 percent to 17,405 in the fiscal year that ended September 30, 2001, compared with the previous year. They accounted for 22 percent of all EEOC claims filed last year. The Florida Power case was sparked by a Congressional move in the early 1990s to open up competition in the utilities business. In response, Florida Power reorganized its staff, slashing 1,200 jobs. The cuts prompted a series of lawsuits by former employees, who claimed that more than 70 percent of the laid-off employees were 40 or older, according to a brief filed to the Supreme Court on their behalf. The US Appeals Court for the Eleventh Circuit in Atlanta, in July, affirmed a federal district court ruling that the 1967 age- discrimination law does not allow the workers to sue using the "disparate-impact" theory. Other US appeals courts have disagreed, however, leading to the Supreme Court's agreement to review the matter. The plaintiffs plan to argue that the Title VII and age-discrimination laws are "closely related statutes" in which "the prohibitions are identical except for the word `age;' so, they should be read identically," said John G. Crabtree, the Key Biscayne, Florida attorney arguing the plaintiffs' case before the Supreme Court. Congress, although it has amended the age-discrimination law several times, never acted "to restrict or otherwise undermine disparate-impact analysis" in age-discrimination cases, according to the plaintiffs' pleadings. The age-discrimination law "does not use the word `discriminate,' but instead imposes liability for employment practices that adversely affect an employee's status." Florida Power contends that the age-discrimination law "does not allow the disparate-impact theory to be used, because it does not set it out. The bottom line on all this. is that Florida Power did not discriminate against its employees based on their age," said Suzanne Ennis, Associate General Counsel for the utility's parent company, Progress Energy Inc., Raleigh, North Carolina. Securities Fraud AK STEEL: OH Court Yet to Decide on Motion to Dismiss Securities Suit --------------------------------------------------------------------- The United States District Court for the Southern District of Ohio has yet to decide on the motion filed by AK Steel Holdings Corporation to dismiss the securities class action charging the Company and certain of its directors with federal securities violations. The suit alleges violations of the Securities Act of 1934, charging the defendants with issuing material misstatements and omissions about the Company's business and financial position, in its public disclosure statements filed with the US Securities and Exchange Commission. The defendants are vigorously defending against this action, and have filed a motion to dismiss the suit, which currently is pending. Discovery is stayed pending resolution of the motion to dismiss. No trial date has been scheduled. ARTHUR ANDERSEN: Cuts Settlement Offer to Enron Shareholders by Half --------------------------------------------------------------------- With Andersen Worldwide's future uncertain, and efforts to sell parts of its business facing legal and regulatory problems, Arthur Andersen's US arm recently reduced by half the amount of money it is offering to reach a universal settlement with Enron Corporation's shareholders, unsecured creditors and employees, The Wall Street Journal recently reported. The controversial firm made an offer in mid-February of $750 million for a settlement of all civil claims related to Enron, which was rejected by the lead plaintiffs' lawyer for shareholders. The firm recently slashed the offer to around $375 million, a reflection of the firm's dimming long-term revenue prospects as more clients leave daily. It is unclear whether talks are continuing between Andersen and lawyers for its adversaries, or whether the latest offer is still on the table. Andersen officials could be reached for comment on the offers. The original settlement offer comprised $250 million of insurance money, plus $100 million a year from Andersen's revenue, for five years. More recently, Andersen's advisers have said the firm is unable to offer more than one year's worth from its revenue. "It simply reflects their recognition that they can only deliver on the first year's installment," said Trey Davis, a spokesman for the University of California Board of Regents, the lead plaintiff in a class action against Andersen by Enron shareholders. These potential liabilities continue to cast a cloud over negotiations by Andersen to sell its overseas business to rival KPMG LLP and to sell its tax and consulting businesses in the US to Deloitte Touche Tohmatsu or another rival, or to spin them off. The firm is scrambling to secure a deal before its overseas partners start breaking off and striking more attractive deals on their own. Yet even a global deal may not yield additional new cash available for a settlement with groups suing Andersen. Under terms being discussed, Andersen's non-US affiliates would transfer the partners, and the partners' capital, to KPMG, according to people close to the talks. An Andersen partner in Germany, for instance, with $1 million in capital in the firm, would transfer those funds to KPMG, and such moves would leave Andersen's non-US operations with little working capital. Such an agreement likely would result in objections by plaintiffs. "Any transaction or business combination or sale that seeks to shield Andersen from its liabilities in this case is unacceptable to the plaintiffs," said Mr. Davis, adding that the University had not yet taken a positive position on whether Andersen's Enron-related liability should be extended overseas. Andersen partners said, however, that any deal would take months to work through and may not be resolved until the third or fourth quarter. Even if all or many of Andersen's 83 units outside the US can agree on final deals, each will then have to put it to the unit's partners for approval. Both sides have played down the possibility of job cuts. However, a person familiar with the talks said, "we would have to be naive to think there won't be any." It is unclear whether Andersen's Enron-related liabilities could extend to partners in other countries. The firm's executives play down that threat. "We are quite separate legally and organizationally from the US firm," said John Omerod, managing partner of the British partnership, at a recent news conference. However, the threat remains strongest in Britain, where Andersen has acknowledged that some documents from Enron audits were shredded last year. Mr. Omerod has said that no "material" documents were destroyed and nothing improper was done by the British firm. Complicating matters, both for a settlement with plaintiffs and for a possible sale, is the fact that Andersen continues to lose audit clients on a daily basis as its troubles have deepened. The pace of client defections has picked up since its indictment last week on a criminal obstruction-of-justice charge in the United States for destroying Enron-related audit documents. Andersen is scheduled to be arraigned before a federal magistrate in Houston on this charge and plans to enter a plea of not guilty. A separate hearing is scheduled before Federal Judge Melinda Harmon, who will preside over the trial dealing with the obstruction-of-justice charge. Dynegy Corporation, a Houston-based energy company, disclosed recently in a regulatory filing, that it had dismissed Andersen as its auditor and hired PricewaterhouseCoopers LLP. Rayonier Inc., a Stamford, Connecticut, wood-products company, also said it had "rescinded the appointment of Andersen." Nathan's Famous Inc., a fast-food restaurant chain based in Westbury, New York, also disclosed that it has decided to replace Andersen as its auditor, but did not say which accounting firm it would hire. BIOPURE CORPORATION: Asks MA Court to Dismiss Securities Fraud Suits -------------------------------------------------------------------- Biopure Corporation has asked the US District Court for the District of Massachusetts to dismiss several class actions charging the Company and its Chairman and Chief Executive Officer of violations of federal securities laws. The suit, filed on behalf of purchasers of the Company's stock from May 8,2001 through December 6,2001, alleges that the Company violated the federal securities laws by publicly disseminating materially false and misleading statements regarding the anticipated timing of a biologic license application for it expected to make to the US Food and Drug Administration, resulting in the artificial inflation of the Company's common stock price during the class period. The Company believes that the lawsuits are without merit and intends to defend them vigorously. At this time, the Company cannot estimate what impact, if any, these cases may have on the financial statements BIOPURE CORPORATION: Pomerantz Haudek Lodges Securities Suit in MA ------------------------------------------------------------------ Pomerantz Haudek Block Grossman and Gross LLP initiated a securities class action against Biopure Corporation (Nasdaq:BPUR) in the United States District Court for the District of Massachusetts on behalf of shareholders who purchased the Company's common stock during the period between May 8, 2001 and December 6, 2001, inclusive. The suit alleges that during the class period, the Company issued materially false and misleading statements concerning the likely timing of its filing with the US Food and Drug Administration (FDA) of its Biologic License Application (BLA) to market Hemopure, its experimental blood substitute for patients undergoing elective surgery. In particular, defendants led investors to believe that the BLA was on track to be filed by year-end 2001. As alleged in the suit, these statements were materially false and misleading because, by commencement of the class period, defendants knew or recklessly ignored the fact that the data collected from the Hemopure trial (which had been completed in August 2000) was significantly deficient and failed to demonstrate that the trial had been conducted in an "adequate and well-controlled" manner. As such, plaintiff asserts that the data lacked reliability, thereby making any application unlikely to be accepted for filing, much less approved, by the FDA. It is further alleged that defendants also knew that the FDA would not allow a BLA to be filed where the data lacked "prima facie" reliability. On December 6, 2001, the Company announced that it would not file the Hemopure application until mid-2002, contrary to repeated prior assertions that the BLA would be filed in 2001. The Company blamed the delay on "additional facility and process validation requirements" for its Cambridge, Massachusetts manufacturing plant. Plaintiff asserts that this was merely a pretext for the delay, which in fact was occasioned by the data deficiencies that had arisen during the clinical trial. As a result of the postponement, the price of Company stock fell to less than $15 per share, well below the $20 plateau above which the stock traded throughout most of the class period. 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.pomerantzlaw.com CMGI INC.: Shareholders Sue to Block Subsidiary's Reverse Stock Split --------------------------------------------------------------------- CMGI, Inc. and subsidiary Engage, Inc. faces a class action in the Court of Chancery of the State of Delaware, challenging a planned Engage reverse stock split. The suit names as defendants the Company, Engage and the individual members of Engage's Board of Directors, namely: (1) David S. Wetherell, (2) George A. McMillan, (3) Christopher M. Cuddy, (4) Edward M. Bennett and (5) Peter J. Rice The suit alleges, among other things, breaches of fiduciary duties by the Company and the individual defendants, and violations of Delaware law, and requests, among other things, that the court: (i) enjoin Engage from effecting a proposed reverse stock split; (ii) enjoin the issuance of shares of Engage common stock to the Company upon conversion of promissory notes previously issued by Engage to the Company; (iii) award rescissory relief if the reverse stock split and stock issuances are consummated; and (iv) award the plaintiff compensatory damages, attorneys' fees and expenses. In February 28, 2002, the Delaware Court of Chancery denied a request by the plaintiffs for the scheduling of a preliminary injunction hearing, and denied a request to allow expedited discovery in the lawsuit. The Company and Engage each believe these claims are without merit and plan to vigorously defend against these claims. CROSSROADS SYSTEMS: TX Court Refuses to Dismiss Securities Fraud Suit --------------------------------------------------------------------- The US District Court for the Western District of Texas refused to dismiss a consolidated securities class action pending against Crossroads Systems, Inc. and several of its officers. The suit, filed on behalf of purchasers of the Company's common stock during various periods ranging from January 25, 2000 through August 24, 2000, alleges violations of federal securities laws. The Company also faces a derivative shareholder class action pending in the 261st District Court of Travis County, Texas on behalf of the Company against several of its officers and directors. The derivative suit is based upon the same general set of facts and circumstances outlined in connection with the purported securities class action litigation. The derivative suit alleges that certain of the individual defendants sold shares while in possession of material inside information in purported breach of their fiduciary duties to the Company. The suit also alleges waste of corporate assets. The Company believes that the state and federal suits are without merit and intends to defend itself vigorously. Because the suits are at an early stage, it is not possible at this time to predict whether the Company will incur any liability or to estimate the damages, or the range of damages, if any, that it might incur in connection with the suits. GILAT SATELLITE: Cohen Milstein Initiates Securities Suit in E.D. VA -------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC commenced a securities class action against Gilat Satellite Networks, Inc. in the United States District Court for the Eastern District of Virginia, where the Company's US headquarters are located, on behalf of investors who purchased Company securities between August 14, 2000 and March 9, 2001. Other class action suits were thereafter filed in New York on behalf of purchasers of the Company between November 13, 2000 and October 2, 2001, so there is an overlap of the two cases. The cases will eventually be coordinated and/or consolidated in one federal court, most likely in Virginia. The complaint charges the Company and certain of its officers and directors with violations of federal securities laws. Among other things, plaintiff claims that the defendants knew or recklessly disregarded, yet covered up the fact: (1) that the demand for and acceptance of the Company's products and the products of its subsidiary, StarBand Communications, Inc., were greatly overstated; (2) that the Company was having difficulty manufacturing and selling its chief product, Very Small Aperture Terminal (VSAT) profitably; (3) that the Company's purported gross profit margins were false; (4) that the Company was materially understating its costs and expenses; and (5) that the Company, accordingly, would have to take massive charge-offs, numbering in the hundreds of millions of dollars in the future. The suit 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 information, contact Steven J. Toll or Lisa Polk by Mail: 1100 New York Avenue, NW Suite 500, West Tower, Washington, DC 20005 by Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or lpolk@cmht.com or visit the firm's Web site: http://www.cmht.com GLOBAL CROSSING: Johnson Perkinson Lodges Securities Suit in S.D. NY -------------------------------------------------------------------- Johnson & Perkinson launched a securities class action in the US District Court for the Southern District of New York on behalf of all acquirers of Global Crossing Ltd. (NYSE: GX) common stock during the period from February 1, 1999 through October 4, 2001, including a subclass of those who acquired the Company's stock in the September 28, 1999 merger between Frontier Corporation and the Company. The suit asserts claims against the Company's officers and directors and Arthur Andersen LLP for violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 and 14a-9 promulgated thereunder by the Securities and Exchange Commission and Sections 11 and 15(a) of the Securities Act. The defendants allegedly failed to disclose material adverse information, therefore artificially inflating the Company's reported results on its financial statements published during the class period. This caused the plaintiff and other members of the class to purchase or acquire Company stock at artificially inflated prices. For more details, contact Dennis J. Johnson or Jacob B. Perkinson by Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone: 866-276-5446 or by E-mail: JPLAW@adelphia.net. GLOBAL CROSSING: Schoengold Sporn Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- Schoengold & Sporn, PC initiated a securities class action in the US District Court for the Southern District of New York on behalf of all persons or institutions who acquired common shares of Global Crossing, Ltd. (NASDAQ: GBLXQ) between September 28, 1999 through and including October 4, 2001 at artificially inflated prices due to the defendants' materially false and misleading statements concerning its net income and inventories. 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. Specifically, the complaint alleges that the Company issued a series of statements concerning their businesses, financial results and operations, which failed to disclose: (1) that the Company was experiencing declining demand for bandwidth; (2) its operating performance was artificially inflated through erroneous accounting with other telecom companies; (3) its managed network outsourcing services were declining; (4) the company was operating at levels well below company- sponsored expectations, such that revenue projections were overstated and costs and expenses were understated; (5) individual defendants and certain Company insiders sold their personally held stock generating more than $1.5 billion in proceeds; and (6) the Company raised over $7 billion in debt and equity offerings. The Company issued announcements on October 4, 2001 overstating cash revenues and expected recurring adjusted EBITDA to be "less than $100 million," compared to forecasts of $400 million. As a result, Company shares plummeted to $1.07 per share, a decline of 49%. For more information, contact Jay P. Saltzman or Ashley Kim by Mail: 19 Fulton Street, Suite 406, New York, New York 10038 or by Phone: 212-964-0046 HARMONIC INC.: CA Court Yet to Decide on Securities Suit Dismissal ------------------------------------------------------------------ Harmonic, Inc. asked the US District Court for the Northern District of California to dismiss an amended consolidated class action alleging federal securities violations, on behalf of persons who purchased its publicly traded securities between January 19, 2000 and June 26, 2000, and on behalf of a subclass of persons who purchased C-Cube Microsystems, Inc. securities between January 19 and May 3, 2000. The suit alleged that, by making false or misleading statements regarding the Company's prospects and customers and its acquisition of C-Cube Microsystems, Inc., certain defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit also alleged that certain defendants violated section 14(a) of the Exchange Act and sections 11, 12(a)(2), and 15 of the Securities Act of 1933 by filing a false or misleading registration statement, prospectus, and joint proxy in connection with the C-Cube acquisition. The suit names the Company, certain of its officers and directors, C-Cube Microsystems Inc. and several of C-Cubes' officers and directors as defendants. In July 2001, the consolidated suit was dismissed, with leave to amend. An amended complaint alleging the same claims against the same defendants was filed in August 2001, but the defendants again moved to dismiss the amended complaint. A hearing on the motions has not been set yet. The Company also faces a derivative shareholder suit purporting to be on behalf of the Company, against its then-current directors. The suit named the Company as a nominal defendant, and is based on allegations similar to those found in the federal securities suits. The suit alleges that the defendants breached their fiduciary duties by, among other things, causing the Company to violate federal securities laws. The derivative suit, which was originally filed in the Superior Court for the County of Santa Clara, was removed to the United States District Court for the Northern District of California in September 2000. All deadlines in this action have been stayed pending resolution of the motions to dismiss the securities actions. A case management conference is scheduled for April 5, 2002. Based on its review of the complaints filed in the securities class action, the Company believes that it has meritorious defenses and intends to defend itself vigorously. There can be no assurance, however, that the Company will prevail. An unfavorable outcome of this litigation could have a material adverse effect on the Company's business, operating results, financial position and liquidity. INFORMATICA CORPORATION: Sued For Securities Violations in S.D. NY ------------------------------------------------------------------ Informatica Corporation faces a securities class action filed in the US District Court for the Southern District of New York against it, certain of its officers and directors and six underwriters of its initial public offering of common stock on April 28, 1999 and its follow-on offering of common stock on September 27, 2000. The suit, filed on behalf of purchasers of the Company's common stock between April 28,1999 and December 2000, alleges violations of Section 11 of the Securities Act of 1933 against all defendants, a violation of Section 15 of the Securities Act against the individual defendants, and violations of Section 12(a)(2) of the Securities Act and Section 10(b) of the Securities Exchange Act (and Rule 10b-5, promulgated thereunder) against the underwriters. Specifically, the suit alleges that the prospectuses incorporated in the registration statements for one or both offerings failed to disclose, among other things, that: (1) the underwriters had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the shares of the common stock the Company sold in the offerings, and (2) the underwriters agreed to allocate shares of the common stock the Company sold in the offerings to those customers in exchange for which the customers agreed to purchase additional shares of the Company's common stock in the aftermarket at pre-determined prices. The Company said that they are aware that similar allegations have been made in lawsuits relating to more than 300 other initial public offerings conducted in 1999 and 2000, which have been consolidated for pretrial purposes before the Honorable Judge Shira A. Scheindlin. The Company believes that it has meritorious defenses to the claims against it, and intends to defend against the suit vigorously. LUMENIS LTD.: Bernstein Liebhard Commences Securities Suit in S.D. NY --------------------------------------------------------------------- Bernstein Liebhard and Lifshitz initiated a securities class action on behalf of all persons who acquired Lumenis Ltd. securities between January 7, 2002 and February 28, 2002, in the United States District Court for the Southern District of New York. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the suit alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. The suit alleges that throughout the class period, defendants discounted and disputed marketplace rumors about its operations even as it knew it was being investigated by the Securities and Exchange Commission (SEC) and that its distributors had been contacted by the SEC. Additionally, even after announcing in a press release that it was subject to an SEC investigation, the Company continued to hide the fact that it had been aware of the SEC investigation and had been providing information to the SEC for several weeks. On February 28, 2002, the Company revealed the facts concerning the SEC investigation in a conference call. These shocking revelations caused the stock to plummet 30% in one day and more than 69% from its class period high, resulting in damages to plaintiff and members of the class. For further details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: LUME@bernlieb.com or visit the firm's Web site: http://www.bernlieb.com MARKET AMERICA: Shareholders Sue to Block Atlantic Ventures Merger ------------------------------------------------------------------ Market America, Inc. and its directors face a securities class actions filed in Superior Court in Guilford County, State of North Carolina, challenging the planned merger between the Company and Atlantic Ventures, Inc. The suit was filed on behalf of all of the Company's public shareholders whose shares would be converted into the right to receive $8.00 in cash per share in connection with the merger. The suit asserts that the $8.00 per share price to be paid to public shareholders in connection with the merger is inadequate, and alleges that the director defendants are engaged in self-dealing and are not acting in good faith toward the class members. The suit further asserts that the directors have breached their fiduciary duties to class members, and seeks an order certifying the class and remedies including injunctive relief that would, if granted, prevent the completion of the merger. The Company denies the allegations of the suit, and believes the pending litigation will not have a material effect on its financial position or results of operations. MEASUREMENT SPECIALTIES: Kaplan Fox Commences Securities Suit in NJ ------------------------------------------------------------------- Kaplan Fox and Kilsheimer initiated a securities class action against Measurement Specialties, Inc. (AMEX: MSS) and certain of its officers and directors in the United States District Court for the District of New Jersey, on behalf of all persons or entities who purchased the Company's common stock between August 1, 2001 and February 14, 2002, including all persons and entities who purchased or otherwise acquired the Company's common stock pursuant, or traceable to, a public offering, which became effective on or about August 1, 2001. The suit charges the Company's and certain of its officers and directors with violations of the federal securities laws. The complaint alleges, among other things, that during the class period defendants issued a series of false and misleading statements regarding the Company's financial condition. In addition, the registration statement and prospectus issued in connection with the offering misrepresented and omitted material facts concerning the Company's financial results. Furthermore, during the class period, and in violation of generally accepted accounting principles, defendants caused the Company to falsely report favorable financial results by, among other things, improperly recognizing revenues and improperly overstating inventories. As a result, Company stock traded at artificially inflated levels during the class period. For more information, contact Frederic S. Fox, Jonathan K. Levine or Hae Sung Nam by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 by E-mail: mail@kaplanfox.com or visit the firm's Web site: http://www.kaplanfox.com MEASUREMENT SPECIALTIES: Brian Felgoise Files Securities Suit in NJ ------------------------------------------------------------------- Brian M. Felgoise, PC commenced a securities class action on behalf of shareholders who acquired Measurement Specialties, Inc. (AMEX:MSS) securities between August 1, 2001 and February 14, 2002, inclusive, in the United States District Court for the District of New Jersey, against the Company and certain of its key officers and directors. The suit charges that defendants violated the federal securities laws 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 Brian M. Felgoise by Mail: 230 South Broad Street, Suite 404, Philadelphia, Pennsylvania, 19102 by Phone: 215-735-6810 or by E-mail: BrianFLaw@yahoo.com MERCATOR SOFTWARE: CT Federal Court Refuses to Dismiss Securities Suit ---------------------------------------------------------------------- The United States District Court for the District of Connecticut refused to dismiss a consolidated securities class action pending against Mercator Software, Inc., alleging violations of federal securities laws. The suit names as defendants the Company and officers: (1) Constance Galley, (2) Kevin McKay, and (3) Ira Gerard The suit, filed on behalf of all persons who purchased the Company's common stock from April 20, 2000 through and including August 21, 2000, alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, through alleged material misrepresentations and omissions. In January 2001, the lead plaintiffs filed an amended complaint in the consolidated matter with substantially the same allegations. The Company filed a motion to dismiss the amended complaint in March 2001. The court heard oral arguments on the motion to dismiss in July 2001, and later denied the motion. The Company believes that the allegations in the amended complaint are without merit and intends to contest them vigorously. However, the Company cannot give any guarantee as to the ultimate outcome of this proceeding or whether the ultimate outcome may have a material adverse effect on its consolidated financial position or consolidated results of operations. METAWAVE COMMUNICATIONS: Cauley Geller Lodges Securities Suit in WA ------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Western District of Washington on behalf of purchasers of Metawave Communications Corporation (Nasdaq: MTWV) common stock during the period between April 25, 2001 and March 14, 2002, inclusive. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. The suit alleges that during the class period, defendants caused the Company's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. As a result of this inflation, the Company was able to complete private placement offerings, raising net proceeds of $30 million during the class period. On March 14, 2002, just months after the last offering was completed, the Company revealed that its FY 2001 results were false when issued. The stock dropped below $1 per share on this news. For more details, contact Jackie Addison, Sue Null or Shelly Nicholson by Mail: 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 METAWAVE COMMUNICATIONS: Schiffrin Barroway Files Securities Suit in WA ----------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Western District of Washington on behalf of all purchasers of the common stock of Metawave Communications Corporation (Nasdaq:MTWV) from April 25, 2001 and March 14, 2002, inclusive. The suit charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. The suit alleges that during the class period, defendants caused the Company's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. As a result of this inflation, the Company was able to complete private placement offerings, raising net proceeds of $30 million during the class period. On March 14, 2002, just months after the last offering was completed, the Company revealed that its FY 2001 results were false when issued. The stock dropped below $1 per share on this news. For more information, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Web site: http://www.sbclasslaw.com OPTICAL CABLE: Faces Suits for Securities Act Violations in W.D. VA ------------------------------------------------------------------- Optical Cable Corporation expects that the US District Court for the Western District of Virginia will consolidate four securities class actions pending against it, former Chairman and President Robert Kopstein and unidentified Company officers and/or directors, alleging violations of federal securities laws. The suits, filed on behalf of purchasers of the company's common stock from July 31, 2000, through October 8, 2001, allege that the defendants violated Sections 10(b) and 20 of the federal Securities Exchange Act of 1934 and were negligent in making certain alleged misrepresentations and/or omitting to disclose material facts. The Company intends to vigorously defend against the suits. The Company may, however, incur substantial costs in defending the suits, regardless of their merit or outcome. At this early stage, management cannot make a reasonable estimate of the monetary amount of their resolution, or estimate a range of reasonably possible losses, if any. If the Company is unsuccessful, it could be subject to damages that may be substantial and could have a material adverse effect on the Company's financial position, results of operations and liquidity. PARKER DRILLING: Subsidiaries Await Approval of Wage Suit Settlement -------------------------------------------------------------------- Two subsidiaries of Parker Drilling Company agreed to settle for $625,000 a class action suit pending in the US District Court for the Southern District of Texas, Houston Division, charging the subsidiaries of conspiring with other offshore drilling operators in the Gulf of Mexico to fix their employees wages. The suit, which also names other drilling contractors who conduct operations in the Gulf of Mexico, alleges that the defendants have violated federal and state antitrust laws by agreeing with each other to depress wages and benefits paid to employees working for defendants. Originally, the case was pending in US District Court for the Southern District of Texas, Galveston Division, but was subsequently transferred to the Houston Division. The subsidiaries and certain of the other defendants recently entered into a stipulation of settlement with the plaintiff, pursuant to which the subsidiaries will pay $625,000 for a full and complete release of all claims brought in the case. The settlement received preliminary Court approval on November 8, 2001, and the Court will conduct a fairness hearing on April 18, 2002 to determine whether the proposed settlements should receive final approval. PRE-PAID LEGAL: Lieff Cabraser, Dunn Swan File Securities Suit in OK -------------------------------------------------------------------- Lieff, Cabraser, Heimann & Bernstein, LLP and Dunn, Swan & Cunningham, PC initiate a securities class action in the United States District Court for the Western District of Oklahoma on behalf of all purchasers who at any time, purchased an "opportunity" from Pre-Paid Legal Services, Inc. to sell memberships for "legal insurance plans". The suit name as defendants: (1) Pre-Paid Legal Services, Inc., (2) Harland C. Stonecipher, Chairman and CEO, and (3) Randy Harp, Chief Operating Officer The focus of the complaint is the Company's sale of the ability to join an allegedly unlawful pyramid scheme, the members of which sell "legal insurance plans" and the chance to sell the memberships throughout the United States. The suit alleges that the purchase of the "opportunity" is an investment contract security, and that this security is fraudulently marketed to the purchasers. The suit further alleges that defendants marketed the opportunity through a uniform scripted oral presentation in which sales agents (who were not registered as broker-dealers under applicable federal or Oklahoma law) represented to potential purchasers that they would earn more money and make more sales than they actually could or did. Specifically, defendants represented that the sale of a membership was an easy sale to a desirous audience and that the retention rate by consumers was higher than it was. The suit further contends that the Company operates an unlawful pyramid sales scheme, in that the participants pay money and receive the right to sell products and the right to earn rewards for recruiting and training other participants. The Company did not register the investment contract securities at issue with the Securities and Exchange Commission. The complaint charges the Company and certain of its officers with violations of the Securities Act of 1933, the Securities Exchange Act of 1934, certain Oklahoma statutes, and various common-law claims. For more information, contact Wendy R. Fleishman by Phone: 212-355-9500 by E-mail: wfleishman@lchb.com or visit the firm's Web site: http://www.lieffcabraser.com SABRE HOLDINGS: $1.9M Travelocity Merger Suit Settlement Reached ---------------------------------------------------------------- Sabre Holdings Corporation reached an agreement to settle for $1.9 million all securities class actions over its offer to purchase all outstanding shares of Travelocity.com, Inc. An amended consolidated suit was commenced in the Delaware Court of Chancery, New Castle County, while two suits were commenced in the US District Court of Tarrant County, Texas. The suits names as defendants the Company, Travelocity and the directors of Travelocity, and generally alleges that: (1) the consideration offered by the Company in the original offer undervalues the Travelocity common stock; and (2) the Company failed to disclose all material information needed by the class of plaintiffs to make informed decisions regarding the fairness of the original offer. On March 8, 2002, the plaintiffs in the Delaware suit filed a motion seeking expedited discovery and the scheduling of a hearing for a preliminary injunction to enjoin the consummation of the original offer. The court will hear the motion on March 20, 2002. On March 14, 2002, plaintiffs in the Texas suit filed a similar motion, which will be heard on March 22, 2002. On March 17, 2002, the Company reached an agreement in principle with plaintiffs to settle all pending stockholder litigation with respect to all parties in Delaware and Texas. Under the proposed settlement, the Company would commit to an offer price of no less than $28.00 per share and to pay attorneys' fees and costs to the putative plaintiff class in an aggregate amount not to exceed $1.9 million. The agreement is contingent on the execution of definitive documentation and subject to the approval of both the Delaware and Texas courts. TYCO INTERNATIONAL: Robbins Umeda Initiates Securities Suit in S.D. NY ---------------------------------------------------------------------- Robbins Umeda & Fink, LLP commenced a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the securities of Tyco International, Ltd. (NYSE:TYC) between December 13, 1999 and February 5, 2002, inclusive, against the Company and: (1) L. Dennis Kozlowski, (2) Mark H. Swartz, (3) Michael A. Ashcroft and (4) Mark A. Belnick The suit charges the defendants with issuing a series of material misrepresentations to the market. Specifically, the complaint asserts claims against defendants for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Throughout the class period, as alleged in the complaint, defendants failed to disclose hundreds of acquisitions by the Company and falsely stated that the Company had acquired and would continue to acquire other companies, which would immediately be accretive to its earnings and free cash flow. For further details, contact Marc M. Umeda by Mail: 1010 Second Ave., Suite 2360, San Diego, CA 92101 by Phone: 800-350-6003 or by E-mail: info@ruflaw.com USINTERNETWORKING INC.: Denies Allegations in NY Securities Suits ----------------------------------------------------------------- USInternetworking has labeled "baseless" and "without merit" the securities class action pending in the US District Court for the Southern District of New York on behalf of purchasers of the Company's securities (NASDAQ:USIX) between April 9,1999 and December 6,2000, inclusive. The suit charges defendants with violations of Sections 11 of the Securities Act of 1933, for allegedly misleading investors. The Company's prospectus allegedly failed to disclose or misrepresented the agreements between the Company's underwriters and customers, relating to IPO stock allocations, which artificially inflated the Company's stock price. VERSATA INC.: Asks CA Court to Dismiss Suit for Securities Violations --------------------------------------------------------------------- Versata, Inc. asked the United States District Court for the Northern District of California to dismiss a consolidated securities class action charging the Company, certain of its former officers and a current director with violations of federal securities laws. The suit alleges claims under section 10(b) and section 20(a) of the Securities Exchange Act of 1934 and claims under section 11 and 15 of the Securities Act of 1933. The Company said that it was premature to come to any conclusions as to the allegations and potential damages, and that it intends to defend against these suits vigorously. The Company filed a motion to dismiss the suit, which will be heard by the Court on May 10, 2002. The Company also faces two shareholder derivative actions filed in June 2001 on its behalf against certain current and former officers and directors in Superior Court of Alameda County, California. The suits also name the Company as a nominal defendant. The suits allege that the defendants: (1) breached their fiduciary duties; (2) abused their control of the corporation; and (3) engaged in gross mismanagement of the corporation, by allegedly making or permitting the Company to make false financial statements In November 2001, the State Court issued an order granting the Company's motion to stay proceedings in the consolidated derivative action until the filing of an answer by the Company in the federal suit or dismissal of that suit. The Company said there can be no assurance that the pending actions will be resolved without costly litigation, or in a manner that is not materially adverse to our financial position, results of operations or cash flow. XOMA LTD.: CA Federal Court Dismisses Suits for Securities Violations --------------------------------------------------------------------- The United States District Court for the Northern District of California dismissed several securities class actions against XOMA Ltd. (Nasdaq:XOMA), Genentech, Inc. and certain of the Company's officers. The suits were commenced in November 2001, alleging that material misrepresentations and omissions were made concerning the anticipated timetable for the filing of a Biologics License Application with the Food and Drug Administration in connection with the development of Xanelim(TM). On March 11, 2002, after further investigating the issues, plaintiffs' counsel filed a stipulation and proposed order of voluntary dismissal in all three actions. On March 13, 2002, the Court entered an order dismissing each of the lawsuits without prejudice. No consideration has been exchanged, and neither plaintiffs nor their counsel will receive any compensation or reimbursement of expenses. "We are pleased by the plaintiffs' decision to voluntarily dismiss these lawsuits," said Jack Castello, the Company's Chairman, President and CEO, in a statement. ********* 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 * * *