/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020403.mbx C L A S S A C T I O N R E P O R T E R Wednesday, April 3, 2002, Vol. 4, No. 65 Headlines CALIFORNIA: Fairfield City Faces Suit Over Undeveloped Property Tax LYNN UNIVERSITY: FL Resident Sues Over Unauthorized Use of Corpses MARYLAND: $4 Million Settlement Reached in Juvenile Camp Beatings Suit SASKATCHEWAN GOVERNMENT: Sued By Car Owners Over Automobile Insurance Securities Fraud ACTRADE FINANCIAL: Marc Henzel Commences Securities Suit in S.D. NY ADVANCED SWITCHING: Marc Henzel Commences Securities Suit in E.D. VA ANDRX CORPORATION: Robbins Umeda Commences Securities Suit in S.D. FL ANDRX CORPORATION: Schiffrin Barroway Lodges Securities Suit in S.D. FL APROPOS TECHNOLOGY: Marc Henzel Initiates Securities Suit in N.D. IL ARIAD PHARMACEUTICALS: Settles Securities Suit in S.D. NY for $620,000 BANK OF AMERICA: Court Refuses Reinstatement of State Securities Suit CALPINE CORPORATION: Schoengold Sporn Launches Securities Suit in CA COMPUTER ASSOCIATES: Marc Henzel Initiates Securities Suit in E.D. NY DYNACQ INTERNATIONAL: Marc Henzel Commences Securities Suit in S.D. TX EAGLE BUILDING: Weiss Yourman Commences Securities Fraud Suit in Nevada ENTERASYS NETWORKS: Marc Henzel Files Securities Suit in New Hampshire FOAMEX INTERNATIONAL: DE Court Approves Securities Suit Settlement FUND ASSET: Third Circuit Yet To Decide on Appeal of Suit Dismissal GILAT SATELLITE: Stull Stull Commences Securities Suit in E.D. NY GLOBAL CROSSING: Marc Henzel Launches Securities Fraud Suit in C.D. CA HA-LO INDUSTRIES: Marc Henzel Commences Securities Suit in N.D. IL HUB GROUP: Marc Henzel Commences Securities Fraud Suit in N.D. IL IOS BRANDS: Faces Suit Over Planned Merger With FTD.Com in DE Court IPO LITIGATION: Appeals Court Rules NY Federal Judge Will Remain IRVINE SENSORS: Marc Henzel Launches Securities Fraud Suit in C.D. CA JDS UNIPHASE: Schiffrin Barroway Lodges Securities Suit in N.D. CA JDS UNIPHASE: Robbins Umeda Initiates Securities Fraud Suit in N.D. CA JP MORGAN: Marc Henzel Commences Securities Fraud Suit in S.D. New York KPMG PEAT: Fairness Hearing For $13.5M Settlement Set For May 2002 MCLEODUSA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. Iowa MORTON'S RESTAURANTS: Bull Lifshitz Commences Securities Suit in DE NATIONAL GOLF: Marc Henzel Commences Securities Fraud Suit in C.D. CA NVIDIA CORPORATION: Marc Henzel Commences Securities Suit in N.D. CA RALLY'S HAMBURGERS: KY Court Yet To Rule On Summary Judgment Motions SAF T LOK: Milberg Weiss Commences Securities Fraud Suit in S.D. FL THQ INC.: Trial in Amended Securities Suit Set For November 2002 in CA VIROPHARMA INC.: Sued For Securities Law Violations in Philadelphia ********* CALIFORNIA: Fairfield City Faces Suit Over Undeveloped Property Tax ------------------------------------------------------------------- Judge R. Michael Smith allowed the filing of a class action against Fairfield City, California over the city's "reimbursement agreement," a fee it collected from land owners whose properties were located near city-initiated infrastructure improvements like roads, sewers and storm drainages. For 27 years, the city has billed landowners millions of dollars in taxes for the costs associated with public works projects near their undeveloped land parcels. The agreement is purportedly the landowner's "fair share" of the benefits to their property, the Imperial Valley Press reports. The suit alleges that the city has violated the law by trying to collect the money before plans for the vacant parcels are approved. The suit called the agreement "an oppressive practice of forcing numerous land owners to pay for the cost of projects through a reimbursement agreement." The suit said the tax was "immoral and unscrupulous" and "fraudulent." The lawsuit has crept through the court system for nearly three years. It seeks a judge's ruling on whether the city has for decades illegally passed on the cost of the improvements, the Imperial Valley Press reports. No future hearings have been set. LYNN UNIVERSITY: FL Resident Sues Over Unauthorized Use of Corpses ------------------------------------------------------------------ Florida's Lynn University faces a class action filed in Broward Circuit Court charging it with colluding with a funeral home chain and subcontractors in a scheme to direct corpses meant for cremation to the university for use by students learning embalming, the Florida Sun- Sentinel reports. Broward resident Jeffrey Post filed the suit, alleging that Levitt- Weinstein funeral services delivered his wife, Madeleine's body to the university where it was embalmed. Mrs. Post was Jewish and specified in her burial contract with Levitt-Weinstein that she did not want to be embalmed because it is forbidden by her religion. Attorney for the plaintiffs David Charlip told the Sun-Sentinel that there are indications that as many as 600 bodies were fraudulently delivered to Lynn University beginning in the mid 1990s. "We have statements from drivers.that they would take bodies between three to five times a week to Lynn University," Mr. Charlip said. Dr. Donald E. Ross, president of Lynn University, declined to comment on the lawsuit Monday. A phone message left with Levitt-Weinstein was not immediately returned Monday, according to the Sun-Sentinel. MARYLAND: $4 Million Settlement Reached in Juvenile Camp Beatings Suit ---------------------------------------------------------------------- The state of Maryland will settle for US$4 million the class action filed in the US District Court in Baltimore on behalf of 900 former participants in the state's juvenile justice program who were allegedly beaten by the "boot camp's" guards. The suit was commenced after a series of articles in the Baltimore Sun revealed that since the time the Western Maryland camps opened in 1996 until they closed in December 1999, the guards routinely beat up teens. Some while handcuffed and shackled. "It was pretty brutal, and we did not want to wrap this up and let it go away with some Wizard of Oz settlement where you get a heart and a diploma," John P. Coale, a Washington lawyer who helped a dozen attorneys representing the juveniles negotiate with the state, told the Sun. "We wanted real change, and we think we achieved that." The settlement covers all 890 males, many of them now adults and in prison, who passed through the three Allegany County boot camps; the Savage Leadership Challenge, Meadow Mountain Leadership Challenge and Backbone Leadership Challenge, the Sun reports. Ten former delinquents who were injured most severely during the beatings, suffering broken bones and teeth and severe cuts, will share $1 million, which will be paid in four annual installments. Fifty who were less severely beaten will get $15,000 each. All 890 former boot camp inmates will also be eligible to draw from a $2.1 million education fund. Ten former inmates can use money from the fund to pay for four years of college, with those who were most seriously injured given first opportunity at the full tuition. If anyone from that group decides not to attend a four-year college, the full tuition could then go to those individuals among the 50 who were less seriously injured. SASKATCHEWAN GOVERNMENT: Sued By Car Owners Over Automobile Insurance --------------------------------------------------------------------- Saskatchewan Government Insurance faces a class action lawsuit filed by car owners in Calgary, Toronto and Vancouver who held policies with the Company, alleging the Company retained the salvage obtained from the vehicles, but did not pay the car owners the actual cash value of the vehicle, having withheld the deductible. A Supreme Court of Canada ruling states that car owners must be paid the actual cash value of their car, not the actual cash value less the deductible. Lawfirms McNally Cuming Allchurch of Calgary, Koskie Minsky of Toronto and Klein Lyons, based in Vancouver and Toronto, jointly filed the lawsuit against the government insurer. Bill McNally of McNally Cuming Allchurch stated that "the Supreme Court of Canada has decided that they do not want to tinker with an Ontario decision on the same issue. It means that for all intents and purposes, it's the law of the land." For more information, contact Bill McNally of McNally Cuming Allchurch by Phone: 403-261-1555, Kirk Baert of Koskie Minsky by Phone: 416-977-8353 or David Klein of Klein Lyons by Phone: 604-874-7171 Securities Fraud ACTRADE FINANCIAL: Marc Henzel Commences Securities 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 against Actrade Financial Technologies, Inc. (NASDAQ: ACRT) and certain of its officers and directors, on behalf of all persons who purchased the Company's common stock during the period March 11, 1999 through February 8, 2002, inclusive. The suit alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of press releases and public filings containing materially false or misleading statements representing that the Company provided short-term loans to businesses to finance commercial transactions. The suit alleges that these statements were false and misleading because defendants knew, or recklessly disregarded, that the Company also: (1) loaned millions of dollars to individuals for non-commercial purposes; (2) defrauded its sureties into providing coverage for these loans; and (3) overstated its financial results based on these fraudulent lending practices. The suit further alleges that defendants' actions artificially inflated the price of the Company's common stock during 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 ADVANCED SWITCHING: Marc Henzel Commences Securities Suit in E.D. VA -------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, Eastern District of Virginia on behalf of purchasers of the securities of Advanced Switching Communications, Inc. (NASDAQ: ASCX) between October 5, 2000 and February 12, 2002, inclusive, against the Company and: (1) Asghar D. Mostafa, (2) Harry J. D'Andrea, (3) Robert Ted Enloe, III, (4) Betsy S. Atkins, (5) Ronald S. Westernik, and (6) Morgan Stanley Dean Witter The suit alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933 by issuing a materially false and misleading prospectus and registration statement in connection with the Company's initial public offering, and 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 Company securities. On October 5, 2000, the Company completed its IPO pursuant to a prospectus in which it represented that it had signed a $24 million contract with Qwest Communications, Inc., that its A-4000 product was being shipped and that its A-4500 product would be available in 2001. In fact, as alleged in the complaint, at the time of the IPO, the prospectus concealed that the Company's largest customer was having significant problems with products, another significant customer had informed the Company it was over-inventoried and that the agreement with Qwest was contingent on the Company complying with terms it could not complete. Moreover, the Company had not even started on the A-4500 such that it was impossible that this product would be available in 2001. Later, subsequent to the IPO, defendants issued statements which asserted that customers were deploying the A-4000, which, as alleged in the complaint, did not occur, and that the Company offered DS-O to OC-192 capability which, in fact, it had not been able to offer. On February 5, 2001, the Company issued a press release announcing that it would be liquidated, which as alleged in the suit, was essentially an admission that it had been a complete failure as a public company because the A-4500 had not been made available in 2001 and the Qwest contract had failed due to its inability to meet the terms of the contract. Finally, on February 12, 2002, the Company announced that a major customer had asked for a $17 million refund after receiving a defective product. 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 ANDRX CORPORATION: Robbins Umeda Commences Securities Suit in S.D. FL --------------------------------------------------------------------- Robbins Umeda & Fink, LLP initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of purchasers of the securities of Andrx Corporation (Nasdaq:ADRX) between April 30, 2001 and February 21, 2002, inclusive. The suit charges the Company and certain of its officers and directors with violations Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The suit alleges that the Company and certain of its officers and directors issued a series of material misstatements concerning its generic version of the drug Tiazac, including that the only thing holding up the drug from reaching the market was continuing patent litigation with Biovail Corporation in connection with Tiazac. The defendants failed to disclose that in fact, the Company had difficulty making a stable version of generic Tiazac, including that it had amended its original application to the FDA thirteen times. When the Company announced on February 21, 2002 that the FDA had raised "certain issues" concerning the generic Tiazac, its stock price dropped from $42.61 per share on February 21, 2002 to $34.96 per share on February 22, 2002, on volume of 15,767,100 - over seven times the prior day's volume. For more 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 ANDRX CORPORATION: Schiffrin Barroway Lodges Securities Suit in S.D. FL ----------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of Florida on behalf of all purchasers of the common stock of Andrx Corporation (Nasdaq: ADRX) from April 30, 2001 through February 21, 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 charges that the Company and certain of its officers and directors 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 suit alleges that the Company issued a series of statements concerning its generic version of the drug Tiazac that the only thing holding up the drug from reaching the market was continuing patent litigation with Biovail Corporation in connection with Tiazac. The defendants failed to disclose that in fact, the Company had difficulty making a stable version of generic Tiazac, including that it had amended its original application to the FDA thirteen times. When the Company announced on February 21, 2002 that the FDA had raised "certain issues" concerning the generic Tiazac, its stock price dropped from $42.61 per share on February 21, 2002 to $34.96 per share on February 22, 2002, on volume of 15,767,100 -- over seven times the prior day's volume. 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 APROPOS TECHNOLOGY: Marc Henzel Initiates Securities Suit in N.D. IL -------------------------------------------------------------------- The Law Offices of Marc S. Henzel commenced a securities class action in the United States District Court for the Northern District of Illinois, Eastern Division on behalf of purchasers of Apropos Technology, Inc. (NASDAQ: APRS) common stock in its February 17, 2000 initial public offering or in the open market during the period between February 17, 2000 through May 15, 2000, inclusive. The suit charges that the Company, a technology driven customer interaction management solution company, its top directors and the underwriters who helped take the Company public, violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. Specifically, the suit charges that the registration statement and prospectus for the Company's IPO contained material misrepresentations and omissions regarding the role that two of the Company's co-founders, Patrick K. Brady and William W. Bach, played in the Company at that time. Specifically, it is alleged that the Company's prospectus misrepresented that both Mr. Brady and Mr. Bach were active members of its executive management team and the Company's most senior officers. Mr. Brady was listed as "Chief Technology Officer" and Mr. Bach was listed as "Vice President, Technology" when both had stopped playing important roles within the Company months before the prospectus was issued. It is further alleged that Company President and Chief Executive Officer Kevin G. Kerns had effectively pushed Mr. Brady out of the Company after a power struggle that culminated in July 1999. Mr. Brady no longer maintained a company office, had no employees who reported to him, and had no further ongoing involvement in the daily affairs of the Company. Similarly, Mr. Kerns demoted Mr. Bach and stripped him of his managerial responsibilities and involvement in shaping the Company's core technology. At the time of the IPO, the Company's technology and development departments were in disarray. Mr. Kerns, who took on the CTO's functions, attempted to hire a replacement for Mr. Brady before the prospectus was issued, but was unsuccessful. Thereafter, both Mr. Brady and Mr. Bach were listed in the prospectus and falsely portrayed as active participants in the executive management of the Company and its senior technology officers. The Company issued nearly 4 million shares of common stock, raising more than $87 million, to thousands of investors based on offering materials that falsely stated that its founders who designed its key technological product were managing the Company. 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 ARIAD PHARMACEUTICALS: Settles Securities Suit in S.D. NY for $620,000 ---------------------------------------------------------------------- Ariad Pharmaceuticals has agreed to settle for $620,000 a class action pending in the US District Court for the Southern District of New York alleging federal securities violations relating to the Company's initial public offering. The suit names as defendants the Company and: (1) the underwriter of its initial public offering, (2) D. Blech and Co., a market maker in the Company's stock, (3) David Blech, managing director and sole shareholder of D. Blech & Co. and one of the Company's former directors (4) certain of the Company's other directors, and (5) Shoenberg Hieber, Inc., the qualified independent underwriter for the initial public offering The proposed settlement, in substance, contemplates a payment of $620,000 as consideration for plaintiffs' consent to entry of a judgment dismissing the action with prejudice and barring contribution- type claims against the Company defendants by non-settling parties. The settlement further is subject to the court's s approval of that stipulation as fair, adequate and reasonable, and to entry of an appropriate judgment of dismissal in the action and in a related action entitled In re: Blech Securities Litigation, 94 Civ. 7696 (RWS), from which the court previously ordered the Company dismissed as a defendant. BANK OF AMERICA: Court Refuses Reinstatement of State Securities Suit --------------------------------------------------------------------- The US Supreme Court refused to reinstate a securities class action against Bank of America Corporation in California State Court, after a lower court ordered proceedings in the suit halted pending the approval of a US$490 million settlement in a similar federal securities suit. Shareholders sued the Company after it was compelled to write-off US$372 million from its third quarter 1998 earnings due to a loan the BankAmerica Corp., a corporate predecessor of the current company, made to New York hedge fund D.E. Shaw & Co. A week after the bank revealed a 50% plunge in its earnings, its president David Coulter tendered his resignation. The suits further allege that the Company's top executives hid the losses to avoid derailing NationsBank Corporation's purchase of BankAmerica in 1998, according to a Bloomberg report. The Company agreed in February to settle the federal suit for $490 million and the settlement is awaiting approval from a St. Louis federal court. Pending the approval, the federal judged stayed similar proceedings in California state court. Attorney for the plaintiffs Milberg Weiss Bershad Hynes and Lerach promptly filed an appeal with the US 8th Circuit Court, asking that the state suit be allowed to proceed. The appeal states, "California law held the prospect of substantially greater damages for the class." The firm also pointed to a federal law called the Anti-Injunction Act, which bars such orders except in limited circumstances. The appeals court later upheld the federal order, saying the state suit might have undermined the aims of another law that requires appointment of a lead plaintiff in federal securities suits, Bloomberg reports. The lawfirm then asked the Supreme Court to review the appellate court's decision. The Company urged the Supreme Court not to hear the appeal, saying the issue is "unlikely to arise in future cases" because a 1998 law now requires most securities suits to be filed in federal court. CALPINE CORPORATION: Schoengold Sporn Launches Securities Suit in CA -------------------------------------------------------------------- Schoengold & Sporn, PC initiated a securities class action on behalf of the Laborers International Union of North America Local 1298 Pension Fund against Calpine Corporation (NYSE: CPN) and certain key officers and directors in the United States District Court for the Northern District of California. The suit names as a class all purchasers of Company securities during the period between January 5, 2001 and December 31, 2001, inclusive. The suit charges defendants with violations of Sections 10(b) and 20(a) the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that during the class period, defendants issued to the investing public false and misleading financial statements and press releases concerning the Company's publicly reported earnings, net income and liabilities, and that the Company failed to disclose material information necessary to make its prior statements not misleading. On December 13, 2001 when the New York Times ran a story explaining in part why the Company's financial statements were misleading, the Company stock price plummeted. At the same time, the Company's debt was downgraded to junk status. Before this disclosure, corporate insiders sold more than $34 million worth of stock at artificially inflated prices. For more information, contact Ashley Kim by Mail: 19 Fulton Street, Suite 406, New York, New York 10038 by Phone: 212-964-0046 by Fax: 212- 267-8137 or by E-mail: Shareholderrelations@spornlaw.com COMPUTER ASSOCIATES: Marc Henzel Initiates Securities Suit in E.D. NY --------------------------------------------------------------------- The Law Offices of Marc S. Henzel commenced a securities class action in the United States District Court for the Eastern District of New York on behalf of purchasers of Computer Associates, Inc. (NYSE: CA) securities between May 28, 1999, and February 25, 2002. The suit alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing materially false and misleading statements to the market. Specifically, beginning prior to May 1999, the Company falsely indicated that it had penetrated the distributed systems market when, in fact, it was giving away its distributed system software free, or at nominal additional cost, to customers who were also extending mainframe software licenses, and attributed large portions of the resulting revenue to the non-mainframe products. Also, beginning prior to May 1999, and ending in October 2000, when the Company extended a license during its term, it recognized revenue for the entire new license. Until June 2000, when the Company began using new auditors, it did not "back out" the revenue from the unexpired portion of the old license, double-counting this revenue. After June 2000, the Company began backing out this figure in an obscure line item. It never disclosed that this caused revenue to be overstated by more than one hundred million dollars each quarter prior June 2000. The defendants, in order to hide a severe drop in revenue as measured by generally accepted accounting principles (GAAP), announced a "new business model," which they represented involved offering more flexible licensing terms to customers. In fact, the "new business model" was a cover to institute new, non- GAAP compliant accounting (which the Company called "pro forma, pro rata"), and to obscure the fact that the switch from long-term licenses to flexible subscriptions was not a pro-active move, but a symptom of the obsolescence of the Company's main product line. While the stated goal of the "new business model" was to provide customers more flexible terms, the real purpose was to cover up the fact that the Company could no longer get many of their mainframe customers to purchase the long-term licenses for mainframe software, which were the Company's mainstay. After the announcement of the "new business model" in October 2000, the Company issued press releases heralding moderate growth, though the GAAP figures showed a revenue decrease of nearly 60 percent. The "pro forma, pro rata" method counted revenue from old license sales in current and future periods, using old revenues to buttress the current, deteriorating sales. Defendants have attempted to have their cake and eat it, too. In a strong economy, the Company recognized all the revenue from its sales immediately, even double-counting some revenue, showing impressive numbers. Now, in a sagging economy, they have obscured the real loss of sales by changing to a method of accounting so back-loaded that it does not conform to GAAP. The "pro forma, pro rata" method also did not make the distinctions between product and service revenue required by GAAP, obscuring the distinction and further hiding the deterioration in sales. The Company has continued to report its GAAP figures, as it is required by the Securities and Exchange Commission (SEC) to do. Incredibly, the defendants have falsely stated that the GAAP figures are not reflective of the Company's financial position, and that the "pro forma, pro rata" figures do accurately reflect the Company's financial position. The Company's true condition, however, is shown by the conduct of defendants during the class period. After announcing the "new business model" but before reporting under it for the first time, and contrary to the Company's representations that the rosy picture created by the "pro forma, pro rata" figures was an accurate portrayal of its position, the defendants engineered a clandestine, firm-wide layoff, hiding the terminations as individual performance-based firings. They fired possibly as many as a thousand employees with no severance package, and continue to deny that the firings were a layoff, even though executives involved in the layoff have confirmed it to the New York Times (as reported on March 20, 2001). More recently, the Company was forced to withdraw a planned debt offering after Moody's questioned the quality of the Company's credit. As a result, the Company admits, it was forced to draw down $600 million on one credit line to pay another. The desperate cost-cutting by secret layoff, use of its new unrecognized accounting just when its revenue has dropped sharply, and the use of credit lines to service existing debt, demonstrate that defendants are keenly aware of the precarious financial condition of the Company, and have deliberately mislead the investing public. The misleading picture the Company has presented has not gone unquestioned. On February 22, 2002, the Company confirmed that it was aware that both the Securities Exchange Commission and the Federal Bureau of Investigation were investigating the Company's accounting for civil, and in the case of the FBI, criminal violations. News of the criminal and civil probes, which began to surface on February 20, caused investors to flee the stock, which fell from a February 19 closing price of $25.31 to a February 22 close of $15.99, a drop of 36.8%. 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 DYNACQ INTERNATIONAL: Marc Henzel Commences Securities Suit in S.D. TX ---------------------------------------------------------------------- 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 Dynacq International Inc. (Nasdaq: DYII) publicly traded securities during the period between Nov. 29, 1999 and Jan. 16, 2002. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is engaged in the ownership and management of an acute care hospital, the operation of two outpatient surgical facilities, the operation of a medical office complex, the management of physician practices (all located in the Vista medical center campus in Pasadena, Texas) and the business of providing home infusion healthcare services to patients in their homes. The complaint alleges that during the class period, defendants represented that the Company's favorable financial results were due to its commitment to quality and cost-effective care. Throughout the class period, defendants repeatedly stated that the Company's financials were strong and that it was consistently achieving "record results." The defendants actually knew that the quality of the Company's balance sheet was eroding, that it was violating federal law in the maintenance of its facilities and that it improperly cared for patients. On January 16, 2002, TheStreet.com ran an article on the Company entitled, "Dynacq's Doubtful Accounts Send Distress Signals." Essentially, the article exposed many of the Company's problems, which in the days that followed caused the Company's share price to crumble. These disclosures shocked the market, causing the Company's stock to decline to less than $15 per share before closing at $15.20 per share on Jan. 17, 2002, on volume of more than 2.6 million shares, and later plummeting to less than $12 per share. For more information, contact Marc 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 EAGLE BUILDING: Weiss Yourman Commences Securities Fraud Suit in Nevada ----------------------------------------------------------------------- Weiss and Yourman LLP initiated a securities class action against Eagle Building Technologies, Inc., previously known as Eagle Capital International, Ltd. (OTC:EGBT.PK) and certain of its officers and directors in the United States District Court for the District of Nevada, on behalf of purchasers of Company securities between April 18, 2001 and February 14, 2002. The suit names as defendants the Company and: (1) Anthony D'Amato, (2) Paul-Emile Desrosiers and (3) Tanner & Co. The suit asserts claims against the defendants for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit alleges that as a result of materially false and misleading statements concerning the Company's products, operations and financial results, Company securities traded at artificially inflated prices during the class period. The suit further alleges that the artificial inflation continued until the time the Company acknowledged that its prior financial results, from December 31, 2000 to September 30, 2001, were overstated and that certain press releases issued by the Company concerning post-September 11th security measures marketed by the Company may have been false and misleading. For more details, contact David C. Katz and/or Mary A. Nastasi by Mail: The French Building, 551 Fifth Avenue, Suite 1600 New York, NY 10176 by Phone: 888-593-4771 or 212-682-3025 or by E-mail: info@wynyc.com ENTERASYS NETWORKS: Marc Henzel Files Securities Suit in New Hampshire ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action 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. The suit is pending against the Company, 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 the Company's 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 its accounting policies and generally accepted accounting principles. As a result, its operating results were materially misrepresented and overstated; (2) the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; 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. The Company 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, its shares 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 FOAMEX INTERNATIONAL: DE Court Approves Securities Suit Settlement ------------------------------------------------------------------ The Delaware Chancery Court approved the proposed settlement to a purported derivative and class action filed against Foamex International on behalf of the Company and its stockholders for violations of federal securities laws. The suit names as defendants the Company, certain of its current and former directors and officers, its principal stockholder Trace International Holdings, Inc., and a Trace International affiliate. In early January 2002, two shareholders filed objections to the settlement. The settlement hearing was held on February 15, 2002 but was not concluded. On March 20, 2002, the Delaware court concluded the hearing and approved the settlement. The settlement involves no admissions or findings of liability or wrongdoing by the Company or any individuals. The terms of the settlement were confidential. FUND ASSET: Third Circuit Yet To Decide on Appeal of Suit Dismissal ------------------------------------------------------------------- The United States Third Circuit Court of Appeals has yet to decide on the plaintiff's motion appealing a federal court's dismissal of the securities class action against Fund Asset Management, L.P. and seven of the leveraged closed-end municipal bond funds for which it serves as investment adviser. The suit was initially commenced in June 1996 in the United States District Court for the District of Massachusetts. In addition to the named defendants, the suit also asserts claims against a defendant class consisting of all other publicly traded, closed-end investment companies for which the Company serves as investment adviser and which, among other things, have issued auction market preferred stock (AMPS). The suit was brought on behalf of all holders of the common stock of the subject funds. The suit alleges that the registration statements, annual reports and other documents filed by the funds with the SEC were misleading because such documents allegedly failed to disclose that proceeds arising from the issuance of AMPS would be included in a fund's net assets for the purposes of calculating the investment advisory fee payable to the Company. In addition, plaintiffs allege that a conflict of interest existed because it would always be in the defendants' interest to keep the funds fully leveraged to maximize the advisory fees and collateral compensation notwithstanding adverse market conditions. The suit further claims an additional conflict of interest arising from the receipt by such affiliates of underwriting discounts, or other revenues in connection with the sale of the AMPS by the funds. The suit attempted to assert claims under Sections 8(e), 34(b), 36(a) and 36(b) of the Investment Company Act and the common law. The suit was later transferred on defendants' motion to the United States District Court for the District of New Jersey. In September 1997, defendants moved to dismiss the suit on the ground that plaintiffs had failed to state a claim upon which relief could be granted. The Court granted defendants' motion in substantial part and dismissed plaintiffs' claims under Sections 8(e), 34(b) and 36(a) of the Investment Company Act with prejudice, but declined to dismiss plaintiffs' claims under Section 36(b) and state law. The defendants denied the allegations in the suit and moved to dismiss plaintiffs' state law claims for breach of fiduciary duty and deceit on the ground that they are preempted by Section 36(b) of the Investment Company Act. The court granted defendants' motion and dismissed the plaintiffs' state law claims. At the same time, the court granted plaintiffs permission to immediately file an interlocutory appeal to the United States Court of Appeals for the Third Circuit. On March 16, 2001, the Third Circuit reversed the federal court's decision and reinstated plaintiffs' state law claims. While plaintiffs' appeal before the Third Circuit was still pending, defendants moved in the federal court for summary judgment as to plaintiffs' remaining federal claim under Section 36(b). The plaintiffs countered by moving for partial summary judgment on liability. The federal court later granted defendants' motion for summary judgment, denied plaintiffs' motion for partial summary judgment, and dismissed the case in its entirety. In doing so, the court refused to exercise supplemental jurisdiction over plaintiffs' remaining (and recently reinstated) state law claims. The plaintiffs promptly filed an appeal with the Third Circuit, seeking review of the federal court's decision. Oral argument was heard on March 4, 2002 and a decision is pending. The Company believes that the plaintiffs' allegations are without merit and intends to continue to defend the action vigorously. GILAT SATELLITE: Stull Stull Commences Securities Suit in E.D. NY ----------------------------------------------------------------- Stull Stull and Brody initiated a securities class action in the United States District Court for the Eastern District of New York, on behalf of purchasers of the securities of Gilat Satellite Networks, Ltd. (NASDAQ:GILTF) between November 13, 2000 and October 2, 2001, inclusive against the Company and certain of its officers, including Yoel Gat and Yoav Libovitch. The suit alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. Specifically, the complaint alleges that, prior to and throughout the class period, the Company issued a series of materially false and misleading statements, which materially misrepresented its financial condition and results. Among other things, the Company was improperly delaying the write-down of tens of millions of dollars of inventory and investments that were impaired and of diminishing value. In addition, the Company failed to disclose that its StarBand division was experiencing significant difficulties attracting customers and was not generating the revenues for the Company that defendants had caused the market to expect. On October 2, 2001, the last day of the class period, the Company issued a press release announcing that its financial results for the third quarter of 2001 would be below previously announced guidance and that it was taking additional charges. The Company reported that revenues for the third quarter were expected to be $80 million - as compared to the $150 million announced on and that it expected to report a loss of $267 million or approximately $11.40 per share. Following this announcement, the price of Company shares dropped from $5.38 per share to $3.32 per share, a decline of more than 38% on heavy trading volume. For more details, contact Tzivia Brody by Mail: 6 East 45th Street New York NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 or by E-mail: SSBNY@aol.com GLOBAL CROSSING: Marc Henzel Launches Securities Fraud Suit in C.D. CA ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of Global Crossing Ltd. (NYSE: GX) common stock during the period between Jan. 2, 2001 and Oct. 4, 2001. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The suit contends that during the class period, defendants issued false and misleading statements and press releases concerning the Company's financial statements, their ability to offset declining wholesale demand for bandwidth capacity with higher-margin, customized data services and its ability to generate sufficient cash revenue to service its debt. During the class period, before the disclosure of the true facts, the individual defendants and certain Company insiders sold their personally held common stock generating more than $149 million in proceeds and the Company raised $1 billion in an offering of senior notes. However, the full extent of the Company's cash flow crisis, and its failure to compete in the market for customized communications services, began to emerge on October 4, 2001. On that date, the Company issued a string of stunning announcements: cash revenues in the third quarter would be approximately $1.2 billion, $400 million less than the $1.6 billion expected by a consensus of analysts surveyed by Thomson Financial/First Call. The cash revenue shortfall was purportedly the result of a "sharp falloff" in wholesale IRU sales to carrier customers. The Company further announced that it expected recurring adjusted EBITDA to be "significantly less than $100 million" compared to forecasts of $400 million. Following these announcements, the Company's share priced plunged by 49% to $1.07 per share 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 HA-LO INDUSTRIES: Marc Henzel Commences Securities Suit in N.D. IL ------------------------------------------------------------------ The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Illinois on behalf of purchasers of the securities of HA-LO Industries Inc., (NYSE: HMK) between February 18, 1999 and November 23, 2001 inclusive, against: (1) Lou Weisbach, President and CEO until November 1999, Chairman of the Board, (2) John R. Kelley Jr., President and CEO from November 1999 until February 15, 2001, (3) Marc S. Simon, CEO since February 15, 2001, and (4) Gregory J. Kilrea, CFO The Company has filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code and is not a defendant in this lawsuit. The suit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 18, 1999 and November 23, 2001, concerning its financial performance for the Company's fiscal year 1998, 1999 and 2000 and the first quarter of 2001. Throughout the class period, defendants issued press releases reporting the Company's quarterly and year-end financial performance, and filed reports confirming such performance with the United States Securities and Exchange Commission. These reports positively portrayed the Company's performance during the class period. These statements, as alleged in the complaint, were materially false and misleading because the Company had, throughout the class period, improperly recognized revenues, thereby inflating its reported sales and earnings. On November 23, 2001, the Company issued a press release announcing the restatement of its previously filed financial statements for the period 1998 to 2000, and that the Company "may also restate its first quarter 2001 Form 10-Q." According to the press release, the restatement will have the effect of decreasing the Company's reported class period pretax income by a total of $15 million, including $1.2 million if the restatement includes the first quarter of 2001. 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 HUB GROUP: Marc Henzel Commences Securities Fraud Suit in N.D. IL ----------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court, Northern District of Illinois by an institutional investor plaintiff, on behalf of purchasers of the securities of Hub Group, Inc. (NASDAQ: HUBGE) between April 21, 1999 and February 12, 2002, inclusive. The suit names as defendants the Company and: (1) William L. Crowder, (2) Philip C. Yeager, (3) Jay E. Parker, (4) David P. Yeager, (5) Thomas L. Hardin and (6) Arthur Andersen, LLP 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 April 21, 1999 and February 12, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued statements regarding the Company's quarterly and annual 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: (i) the Company's 65% owned subsidiary, Hub Group Distribution Services, which represented a material portion of its revenues, was improperly recognizing revenues in violation of the Company's accounting policies and GAAP. As a result, the Company's operating results were materially misrepresented and overstated; (ii) the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) based on the foregoing, defendants' statements concerning the prospects of the Company were lacking in a reasonable basis at all times. On February 12, 2002, after the close of the market, the Company shocked the market when it announced that it had discovered certain accounting irregularities at its 65% owned subsidiary, Hub Group Distribution Services. As a result of this discovery, the Company estimates that it had overstated its earnings on an after-tax, post minority interest basis by between approximately $3 million to $4 million since 1999. The Company further stated that its investigation is ongoing and once it has been completed, the Company will restate its financial results for the appropriate periods. In response to these disclosures, the price of Company stock dropped from $10.52 per share to $8.03 per share, a one-day loss of more than 31% on volume of more than 153,700 shares traded - more than ten times the average trading volume. 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 IOS BRANDS: Faces Suit Over Planned Merger With FTD.Com in DE Court ------------------------------------------------------------------- Ios Brands Corporation faces four securities class actions pending in the Court of Chancery for New Castle County in Wilmington, Delaware relating to its proposed merger with FTD.com. The suit, filed on behalf of all public stockholders of FTD.com, names as defendants the Company and: (1) FTD Corporation, (2) FTD.COM and (3) the directors of FTD These lawsuits were filed beginning on March 5, 2002, shortly after the press release announcing the merger was released. The complaints generally make essentially the same allegations, namely that: (1) the Company's offer to exchange 0.26 shares of its Class A common stock for each share of FTD.COM common stock is inadequate; (2) the individual defendants breached the fiduciary duties they owed in their capacity as directors by, among other things, failing to conduct an auction or otherwise check the market value of FTD.COM before voting to accept the merger proposal; (3) its Board of Directors prevented the FTD.COM Board from conducting a meaningful review of the transaction, and (4) FTD.COM and certain of the individual defendants timed the merger to deny public stockholders the full potential increase in FTD.COM's stock price following the merger. The Company believes that these lawsuits are without merit and intends to defend vigorously against them. IPO LITIGATION: Appeals Court Rules NY Federal Judge Will Remain ---------------------------------------------------------------- The 2nd Circuit Court of Appeals refused to prevent Federal Judge Shira Scheindlin from presiding over hundreds of securities suits pending in the United States District Court for the Southern District of New York. The lawsuits accuse several underwriters and companies that over the last two years conducted their initial public offerings (IPOs) of manipulating them. The suits, presently consolidated for pre-trial purposes under Judge Scheindlin, name more than 40 investment banks and 300 companies. The suits similarly allege that the banks secretly allocated IPO shares to investors who agreed to pay higher prices later when the shares were made available to the public. That practice created an artificial demand for the stock, the suits contend, Bloomberg.com reports. Thirty nine investment banks, including Goldman Sachs Group, Inc., Deutsche Banc Alex Brown, Inc. and Credit Suisse First Boston Corporation, then asked the appeals court to force Judge Scheindlin to remove herself from the suits. Judge Scheindlin allegedly invested in 14 of the IPOs, losing money in several of them. The appellate court ruled that the judge's investments were a minor issue that didn't justify removal. In its ruling, the court stated, "Congress did not consider judges with minor interests in a class action to be parties to a proceeding once they have divested themselves of said financial interest." Four other investment banks named as defendants in the suits, Morgan Stanley Dean Witter and Co., Dain Rauscher, Legg Mason Wood Walker, Inc. and William Blair & Co., refused to join the motion, however. The companies named in the suits also refrained from joining. Lawyer Fred Isquith of Wolf Haldenstein Adler Freeman & Herz LLP told Bloomberg, "We never had any doubt about Judge Scheindlin's integrity." IRVINE SENSORS: Marc Henzel Launches Securities Fraud Suit in C.D. CA --------------------------------------------------------------------- The Law Offices of Marc S. Henzel 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 complaint alleges that the Company and certain of its officers and directors violated the Securities Exchange Act of 1934. The Company 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 (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, the Company announced that SFI had suspended operations and was considering bankruptcy, sounding a death-knell for the EFS-1 project. Due to defendants' deceptive and illegal conduct, plaintiff and the other class members purchased their Company 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 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 JDS UNIPHASE: Schiffrin Barroway Lodges Securities Suit in N.D. CA ------------------------------------------------------------------ Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of all purchasers of the common stock of JDS Uniphase Corp. (Nasdaq: JDSU) from July 27, 1999 through July 26, 2001, 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 further alleges that during the class period, defendants were motivated to inflate the value of Company stock so that the Company could make acquisitions using stock and so the individual defendants, who are the Company's top officers and directors, could sell their shares. During the class period, defendants represented that demand was accelerating and the Company's only problem was its ability to manufacture enough product to meet demand. Defendants represented that they had outstanding visibility, including demand for the Company's products through the end of fiscal 2001 and that the Company had 80 engineers whose job it was to monitor customers and their inventory levels and as a result, the Company would learn about any slowdown in demand early. The Company also misrepresented the success of its largest acquisitions, including Optical Coating Labs, Cronos Integrated Microsystems, E-Tek Dynamics and SDL Inc. As a result of these positive statements, Company stock traded as high as $146.32. The individual defendants, all of whom were top officers and directors of the Company, and its controlling shareholder took advantage of the inflation, selling or disposing of 25.2 million shares of their stock for proceeds of $2.1 billion. Then, on July 2001, the Company announced the restatement of its 3rd Quarter 2001 results, the write-off of $44 billion in goodwill associated with its acquisitions, inventory write-downs and that F01 EPS would be only $0.16 and that it would incur a loss of $0.15 in F02. On this news, Company shares dropped to as low as $7.90, over 94% lower than the class period high of $146.32. 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 JDS UNIPHASE: Robbins Umeda Initiates Securities Fraud Suit in N.D. CA ---------------------------------------------------------------------- Robbins Umeda & Fink, LLP commenced a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of the securities of JDS Uniphase Corp. (Nasdaq:JDSU) between July 27, 1999 and July 26, 2001, inclusive. The suit charges the Company, certain of its officers and directors and its controlling shareholder with violations of the Securities Exchange Act of 1934. The suit alleges that during the class period, defendants were motivated to inflate the value of Company stock so that the Company could make acquisitions using stock and so the individual defendants, who are its top officers and directors, could sell their shares. During the class period, defendants represented that demand was accelerating and the Company's only problem was its ability to manufacture enough product to meet demand. The defendants represented that they had outstanding visibility, including demand for the Company's products through the end of fiscal 2001 (FY01, ended on June 30,2001), and that the Company had 80 engineers whose job it was to monitor customers and their inventory levels and as a result, the Company would learn about any slowdown in demand early. The Company also misrepresented the success of its largest acquisitions, including Optical Coating Labs, Cronos Integrated Microsystems, E-Tek Dynamics and SDL Inc. As a result of these positive statements, Company stock traded as high as $146.32. The individual defendants, all of whom were top Company officers and directors, and its controlling shareholder took advantage of the inflation, selling or disposing of 25.2 million shares of their stock for proceeds of $2.1 billion. Then, on July 26,2001, the Company announced the restatement of its 3rd Quarter F01 results, the write-off of $44 billion in goodwill associated with its acquisitions, inventory write-downs and that F01 EPS would be only $0.16 and that it would incur a loss of $0.15 in F02. On this news, Company shares dropped to as low as $7.90 or more than 94% lower than the class period high of $146.32. For more 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 JP MORGAN: Marc Henzel Commences Securities Fraud Suit in S.D. New York ----------------------------------------------------------------------- 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 securities of J.P. Morgan Chase & 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, the suit claims that defendant's material omissions and the dissemination of materially false and misleading statements caused Company stock price to become artificially inflated, inflicting enormous damages on investors. More specifically, on the first day of the class period, the Company 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. The Company 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, the Company 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 KPMG PEAT: Fairness Hearing For $13.5M Settlement Set For May 2002 ------------------------------------------------------------------ The United States District Court for the District of Oregon will hold a fairness hearing in the settlement of a class action filed against KPMG Peat Marwick LLP on behalf of purchasers of: (1) common stock of Assisted Living Concepts, Inc. from March 27,1997 through January 29,1999, inclusive, (2) Assisted Living Concepts, Inc.'s convertible subordinated debentures due November 2002 (6% Debentures) from October 21,1997 through January 29,1999, inclusive, and (3) Assisted Living Concepts, Inc.'s 5-5/8% convertible subordinated debentures due May 2003 (5-5/8% debentures) from July 22,1998 through January 29,1999, inclusive The $13.5 million settlement has been reached by the suit's plaintiffs with the defendant KPMG Peat Marwick LLP, in addition to a $30 million partial settlement previously reached with former defendants: (i) Assisted Living Concepts, Inc., (ii) William McBride III, (iii) Keren Brown Wilson, (iv) Stephen J. Gordon, (v) Rhonda S. Marsh (nka, Rhonda S. McBride), (vi) Bradley G. Razook, (vii) Richard C. Ladd, (viii) Gloria Cavanaugh, (ix) Schroder & Co., Inc., (x) Morgan Stanley Dean Witter, and (xi) SmithBarney, Inc. The proposed settlement resolves all claims, rights, causes of action, suits, matters and issues, whether known or unknown arising out of or related to the subject matter of the suit or claims asserted by or on behalf of plaintiffs or any member of the Class, whether individual, class, derivative, representative, legal, equitable or any other type or in any other capacity, against KPMG. A hearing will be held by the court on May 23, 2002 to determine whether: (a) the proposed settlement is fair, reasonable, and adequate and should be approved and, therefore, whether this class action should be dismissed on the merits and with prejudice and without costs; (b) the plan of distribution of the net settlement fund is fair, reasonable and adequate and should be approved; and (c) to consider the reasonableness of an application of plaintiffs' counsel for the payment of attorneys' fees and reimbursement of expenses incurred in prosecuting the class action. For more information, contact David Kessler or Stuart L. Berman of Schiffrin Barroway LLP by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 or the The Garden City Group, Claims Administrator by Mail: P.O. Box 9414, Garden City, NY 11530-9414 by Phone: 800-222-4095 or visit the firm's Web site: http://www.alcsecuritieslit.com MCLEODUSA INC.: Marc Henzel Lodges Securities Fraud Suit in N.D. Iowa --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Iowa on behalf of purchasers of the securities of McLeodUSA Inc. (NASDAQ: MCLD) between January 30, 2001 and December 3, 2001 inclusive, against the Company and: (1) Clark McLeod, Chairman and Co-CEO, (2) Steve Gray, President and Co-CEO, and (3) Chris Davis, Chief Operating and Financial Officer since August 1, 2001 The suit charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 30, 2001 and December 3, 2001. The suit alleges that the Company issued a series of materially false and misleading statements regarding its business, operations and financial statements that failed to disclose: (i) that the Company was failing to timely and properly recognize hundreds of millions of dollars in impairment losses in connection with certain acquisitions, such as Splitrock Services, Inc. and Caprock Communications Corp.; (ii) that the Company did not have the funds necessary to complete its National network and that it would soon have to abandon its plans to finish the network; and (iii) that the Company was unable to service its substantial debt and lacked the financial flexibility necessary to avoid a restructuring. During the class period, prior to the disclosure of the true facts about the Company, the Company purchased Intelispan for $40 million in Company stock For more information, contact 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 MORTON'S RESTAURANTS: Bull Lifshitz Commences Securities Suit in DE ------------------------------------------------------------------- Bull & Lifshitz, LLP initiated a securities class action in the Court of Chancery of the State of Delaware pursuant to Rule 23 of the Rules of the Court of the Chancery, on behalf of all common stockholders of Morton's Restaurant Group, Inc. (NYSE:MRG), or their successors in interest, who are being and will be harmed by defendants' fraudulent actions. The suit charges that the individual defendants have breached and/or aided abetted breaches of fiduciary duties owed to the Company and its stockholders by entering into a definitive merger agreement, on March 26, 2002, providing for the acquisition of the Company by an affiliate of Castle Harlan, Inc. Under the terms of the agreement, the Company's stockholders will receive $12.60 in cash for each share of common stock. Indeed, as recently as May 1, 2001, the Company received a proposal by BFMA Holding Corp., a large shareholder in the Company, to acquire all of its common stock for $28.25 per share in cash in a fully financed offer. Unless enjoined by the court, defendants will breach their fiduciary duties owed to plaintiff and the other members of the class and may benefit themselves, all to the irreparable harm of the class. For more details, contact Peter D. Bull or Joshua M. Lifshitz by Phone: 212-213-6222 by Fax: 212-213-9405 or by E-mail: counsel@nyclasslaw.com NATIONAL GOLF: Marc Henzel Commences Securities Fraud Suit in C.D. CA --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Central District of California on behalf of purchasers of National Golf Properties, Inc. (NYSE: TEE) common stock during the period between April 1, 1999 and November 14, 2001 (including all purchases in or pursuant to the Company's May 17, 2001 secondary offering). The suit charges the Company and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, and alleges that David G. Price misappropriated funds from a publicly traded company and funneled them to himself via a scheme of complicated financial dealings involving the Company and a variety of Price-controlled entities. Price-controlled entities conduct substantial business with the Company, to the detriment of the Company's shareholders. Mr. Price's plan culminated in a May 2001 secondary offering that generated over $31 million from plaintiff and other Class members, which went to a Price-controlled entity, Oaks Christian High School. Defendants allegedly violated the Securities Act of 1933 by issuing a false and misleading registration statement and prospectus, which became effective May 17, 2001, and included materially false and misleading financial statements, and other false and misleading statements, pursuant to which 1.175 million shares of the Company's common stock were sold to plaintiff and other members of the Class. Defendants allegedly violated the Securities Exchange Act of 1934 by making a series of materially false and misleading statements concerning the business and financial operations of the Company with the intent and having the effect of substantially inflating the trading price of its common stock. 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 NVIDIA CORPORATION: Marc Henzel Commences Securities Suit in N.D. CA -------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of NVIDIA Corporation (Nasdaq: NVDA) common stock during the period between Feb. 15, 2000 and Feb. 14, 2002. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The suit alleges that as part of their effort to boost the price of Company stock, defendants misrepresented the Company's true prospects in an effort to conceal its improper acts until they were able to sell at least $66 million worth of their own stock. In order to overstate revenues and assets in its 4th Quarter 2000 and 1st to 3rd Quarter, 2001, the Company violated generally accepted accounting principles and SEC rules by engaging in an illegal accounting scheme. This scheme had the effect of dramatically overstating revenues and assets. Then, on February 14, 2002 after the close of the market, the Company partially admitted that its past accounting for its prior results may be inaccurate in a press release entitled, "NVIDIA Corporation Conducting Review of Certain Transactions at the Request of the SEC." On this news the Company's shares plummeted the following day. 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 RALLY'S HAMBURGERS: KY Court Yet To Rule On Summary Judgment Motions -------------------------------------------------------------------- The United States District Court for the Western District of Kentucky, Louisville has yet to decide on the motion for summary judgment filed by the parties in the securities class action against Rally's Hamburgers, Inc. The suit, filed on behalf of purchasers of the Company's stock from July 20, 1992 to September 29,1993, also names as defendants: (1) Burt Sugarman, company director, (2) Giant Group, Ltd., (3) certain of the Company's former officers and directors, and (4) its auditors The suit alleges that the defendants violated the Securities Exchange Act of 1934, among other claims, by issuing inaccurate public statements about the Company in order to arbitrarily inflate the price of its common stock. In April 1994, the Company filed a motion to dismiss and a motion to strike. The court later struck certain provisions of the suit but otherwise denied the Company's motion to dismiss. In addition, the court denied plaintiffs' motion for class certification. The plaintiffs renewed this motion, and despite opposition from the defendants, the court granted such motion for class certification in April 1996. In September 2000, both parties in the suit filed motions for summary judgment. The defendants deny all wrongdoing and intend to defend themselves vigorously in this matter. Management is unable to predict the outcome of this matter at the present time. SAF T LOK: Milberg Weiss Commences Securities Fraud Suit in S.D. FL ------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Saf T Lok Corporation (OTC BB: LOCK.OB) between April 14, 2000 and April 16, 2001, inclusive, in the United States District Court, Southern District of Florida against the Company and: (1) Franklin W. Brooks, (2) Jeffrey W. Brooks, (3) William Schmidt, (4) James E. Winner, Jr., (5) John Hornbostel, Jr. and (6) Goldberg Wagner Stump and Jacobs LLP 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 April 14, 2000 and April 16, 2001, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants filed materially false and misleading financial statements with the US Securities & Exchange Commission, which, among other things, did not comply with generally accepted accounting principles. Specifically, at the start of the class period, defendants disclosed that the Company had terminated its exclusive consumer market distribution agreement with United Safety Action, Inc. (USA) and that the Company itself would now be permitted to market its products to retail customers. The suit alleges that the financial statements filed by defendants failed to disclose, among other things, that: (i) a catalog retailer had previously obtained Company products from USA at a sharply reduced price and was now selling these products at extremely low prices, thereby limiting the market opportunity for the Company; (ii) the Company's earnings, assets and shareholder equity were overstated by at least $3.2 million; and (iii) the Company's inventories were not stated at the lower of cost or market, as represented When this information was finally disclosed on April 16, 2001, the last day of the class period, the Company's stock price fell to under $0.30 per share. Subsequently, on May 15, 2001, the Company's securities were delisted from the NASDAQ Small Cap Market and are currently traded on the OTC (Over The Counter) Bulletin Board. For more details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th Fl. New York, NY, 10119-0165 by Phone: 800-320-5081 or Kenneth J. Vianale or Tara Isaacson by Mail: 5355 Town Center Road, Suite 900 Boca Raton, FL 33486 by Phone: 561-361-5000 by E-mail: SafTLokcase@milbergNY.com or visit the firm's Web site: http://www.milberg.com THQ INC.: Trial in Amended Securities Suit Set For November 2002 in CA ---------------------------------------------------------------------- Trial in the amended securities class action pending against THQ, Inc. and certain of its officers and directors in the United States District Court for the Central District of California will commence on November 12, 2002. The third amended suit was filed on behalf of purchasers of the Company's stock from October 26,1999 through May 24,2000. The suit alleges that defendants violated Rule 10b-5 and Section 20(a) of the Securities Exchange Act of 1934, including allegations that the defendants: (1) manipulated the Company's stock price; (2) distributed false and misleading information concerning revenue recognition, forecasts and earnings estimates; (3) selectively disclosed material information; and (4) engaged in insider trading. The suit is currently in discovery. The defendants have denied all of the material allegations of the suit and asserted legal and factual defenses. The Company and all of the individual defendants believe the lawsuit is without merit. However, they cannot, at this early stage, predict the likely outcome of this litigation. VIROPHARMA INC.: Sued For Securities Law Violations in Philadelphia ------------------------------------------------------------------- Biotechnology company Viropharma, Inc. vowed to mount a vigorous defense against several securities class actions filed in the United States District Court in Pennsylvania on behalf of purchasers of the Company's shares between July 13,1999 and March 19,2002. 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 throughout the class period, the defendants made highly positive statements regarding the Company's drug Picovir. On March 19, the Antiviral Drugs Advisory Committee of the Food and Drug Administration voted to not recommend Picovir for approval at this time for the treatment of the common cold in adults. ********* 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. 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