/raid1/www/Hosts/bankrupt/CAR_Public/020614.mbx
C L A S S A C T I O N R E P O R T E R
Friday, June 14, 2002, Vol. 4, No. 117
Headlines
BAYCOL LITIGATION: British Consumers Await Ruling on Suit Funding
BOTTOMLINE TECHNOLOGIES: Plaintiffs File Consolidated Suit in S.D. NY
CATHOLIC CHURCH: Official Says Confidentiality Agreements Not Binding
CATHOLIC CHURCH: Lawyer Seeks Full Public Disclosure in Manchester Suit
EGAIN COMMUNICATIONS: Will Vigorously Oppose Securities Suits in NY
GEORGIA: Peanut Quota Holders Supporting Suit Against New Farm Bill
GMO LITIGATION: Regulation Opposed, Conditions Sparking Suits Continue
GRACO CHILDRENS: Voluntarily Recalls 152T Toy Tracks For Injury Hazard
INFOSPACE INC.: Plaintiffs Add New Defendants in Amended Suit in WA
INFOSPACE INC.: Asks WA Court To Dismiss Shareholder Derivative Suit
LITTLE TIKES: Recalls 21,400 Ride-On Toys Due to Facial Injury Hazard
LOOKSMART.COM: Intends To Vigorously Oppose CA Suit Over New Listings
NAVAJO TRUST: New Plaintiffs Enter Trust Fund Management Lawsuit
NET PERCEPTIONS: Plaintiffs File Amended Securities Suit in S.D. NY
NEW FREEDOM: Consumers File Suit Over Failure To Pay Insurance Claims
OVERHILL CORPORATION: Appeals Court Reinstates Securities Fraud Suit
PRICELINE.COM: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
PRICELINE.COM: Oral Arguments Conducted on Dismissal Motion For DE Suit
PROTECTION ONE: Reaches Securities Fraud Suit Settlement in C.D. CA
SEQUENOM INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
SPECIALTY SALES: Recalls 6,000 Novelty Lighters Due To Fire Hazards
THESTREET.COM: Vigorously Opposing Securities Fraud Suit in S.D. NY
TOBACCO LITIGATION: FL Jury's $3.7M Verdict Could Spur Similar Suits
UNIVERSAL ACCESS: Faces Suit For Securities Act Violations in E.D. TX
*South Korea Welcomes New Product Liability Law, "Mature Civil Society"
New Securities Fraud Cases
ADELPHIA COMMUNICATIONS: Chimicles & Tikellis Files PA Securities Suit
APPLIED DIGITAL: Kirby McInerney Lodges Securities Suit in S.D. FL
DYNEGY INC.: Milberg Weiss Commences Securities Fraud Suit in S.D. NY
MERRILL LYNCH: Abbey Gardy Commences Securities Fraud Suit in S.D. NY
RAYOVAC CORPORATION: Cauley Geller Commences Securities Suit in W.D. WA
SALOMON SMITH: Stull Stull Commences Securities Fraud Suit in S.D. NY
UNIVERSAL ACCESS: Rabin & Peckel Lodges Securities Fraud Suit in IL
TRITON NETWORK: Stull Stull Lodges Securities Fraud Suit in M.D. FL
*********
BAYCOL LITIGATION: British Consumers Await Ruling on Suit Funding
-----------------------------------------------------------------
British users of Baycol, the anti-cholesterol drug that was withdrawn
after possible links to more than 100 deaths worldwide, should hear
next month whether they have won legal aid to sue Bayer, the German
manufacturer, The Times of London reports.
The first class action in the UK against the manufacturer could
collapse without funding from the Legal Services Commission, the
successor to the Legal Aid Board.
However, the application for legal aid already has been turned down
once, and John Watkins, a solicitor with Hugh James Ford Simey, which
is bringing the action on behalf of 30 users, is appealing against the
original decision in an effort to keep the possibility of suing Bayer
alive.
Mr. Watkins is representing 30 Britons who complained of adverse side
effects, ranging from liver and kidney problems to heart failure. UK
investigators have so far uncovered four suspicious deaths that may be
linked to use of Baycol, known as Lipobay outside the United States.
No link has yet been conclusively proven between the drug and the
deaths.
The case represents the first attempt to bring a multiparty action on
behalf of British patients. So far, Bayer has denied knowledge of any
drug-related British fatalities. It is alleged that the drug gives
rise to a serious muscle-wasting condition known as rhabdomyolysis
that, in some cases, can lead to life-threatening kidney failure.
Writs against Bayer, which analysts suggest could lead to compensation
payouts of $10 billion (Pounds 6.9 billion), have already been lodged
by German and American users of the prescription drug, which was
withdrawn by Bayer in August 2001.
If a British case is launched, the case has repercussions for
GlaxoSmithKline (GSK), the UK pharmaceuticals company, which co-
marketed the drug in the United States.
BOTTOMLINE TECHNOLOGIES: Plaintiffs File Consolidated Suit in S.D. NY
---------------------------------------------------------------------
Plaintiffs in the securities class action against Bottomline
Technologies, Inc. filed an amended consolidated suit in the United
States District Court of New York, naming as defendants the Company
and:
(1) Daniel M. McGurl,
(2) Robert A. Eberle,
(3) Fleetboston Robertson Stephens, Inc.,
(4) Deutsche Banc Alex Brown Inc.,
(5) CIBC World Markets,
(6) JP Morgan Chase & Co., and
(7) BancBoston Robertson Stephens.
The consolidated suit asserts claims under Sections 11, 12(2) and 15 of
the Securities Act of 1933, as amended, and Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, as amended.
The complaint asserts, among other things, that the description in the
Company's prospectus for its initial public offering (IPO) was
materially false and misleading in describing the compensation to be
earned by the underwriters of our offering, and in not describing
certain alleged arrangements among underwriters and initial purchasers
of our common stock from the underwriters.
The Company intends to vigorously defend itself against this complaint.
While this proceeding is in its early stages, the Company does not
currently believe that the outcome will have a material adverse impact
on its financial condition.
CATHOLIC CHURCH: Official Says Confidentiality Agreements Not Binding
---------------------------------------------------------------------
A high-ranking official in the Archdiocese of St. Paul and Minneapolis
said recently that he believes confidentiality agreements silencing
victims of sexual abuse by priests should be withdrawn by archdioceses
and dioceses around the country, according to a report by the Tar
Tribune. The Rev. Kevin McDonough said his archdiocese, where he is
vicar general, no longer binds victims to confidentiality agreements.
The statements came a day after a St. Paul lawyer filed a lawsuit to
get such confidentiality agreements lifted at several Midwest dioceses
and archdioceses. The plaintiffs in the suit held a news conference
last Friday to explain how being forced to stay silent keeps victims
from healing.
Policies governing confidentiality agreements vary among dioceses and
archdioceses, according to Rev. McDonough. The Twin Cities archdiocese
said it had released a statement in March, saying it had not required
abuse victims to sign confidentiality statements "for the past several
years," that victims are free to speak.
A national survivors' network and several people who had signed
agreements with three archdioceses sued recently in Ramsey County
District Court, calling the secrecy provisions "contrary to public
policy." This class action is the latest in a string of clergy abuse
complaints filed by St. Paul attorney Jeff Anderson, and names the as
defendants:
(1) the Archdiocese of St. Paul and Minneapolis,
(2) the Archdiocese of Dubuque, in Iowa,
(3) the Diocese of Jefferson City, in Missouri and
(4) the US Conference of Catholic Bishops
Various victims coming forward to speak, at last, tell how they thought
if they signed the confidentiality agreement, the abusing priest would
be restricted from performing his religious duties. However, they
discovered instead that the priests who abused them or their child were
still performing their functions.
"The secrecy and deception are still there," said Jeffrey Herrity. "We
are not trying to tear down the church, we are trying to make it
safer." Mr. Herrity and his wife came forward, to tell of the abuse of
their late son, and that to their amazement, after they had signed a
confidentiality agreement with the Archdiocese of St. Paul in 1985,
they discovered that Rev. Gil Gustafson was still performing his
duties.
CATHOLIC CHURCH: Lawyer Seeks Full Public Disclosure in Manchester Suit
-----------------------------------------------------------------------
A lawyer who filed a class action against the Roman Catholic Diocese of
Manchester, says he will seek public disclosure of every church
document involving allegations of sex abuse by priests over the last 40
years, Associated Press Newswires reports.
Peter Hutchins, who represents about 50 alleged victims, says he wants
the accusers and the public to know exactly how the New Hampshire
church handled priests who were sexual predators. "I think it is a
public service to make this stuff public," he told The Union Leader
recently. Mr. Hutchins is seeking class action certification for the
lawsuit, and a hearing is set for next month.
Mr. Hutchins, outgoing president of the state bar association, also
said he wants documents and depositions from faculty at Bishop Guertin
High School in Nashua, which is run by the Brothers of the Sacred
Heart. He has filed lawsuits alleging two teachers there molested
students.
Diocesan officials said they were upset to learn of Mr. Hutchins'
change of strategy, because they had been working with him and with
incoming bar association president Martha Van Oot to set up a mediation
process to resolve the class action. "We are really hurt by this
(change of strategy)," said Patrick McGee, spokesman for the Diocese.
"We thought we were all moving toward one direction and that was to
help victims." The mediation process would be voluntary and would
allow victims to maintain confidentiality, he said.
Mr. McGee said that if Mr. Hutchins wants to take it to a more formal
legal process, we will have to use the rules of the game in a legal
court, Mr. McGee said.
Mr. Hutchins acknowledged that he had been working with the Diocese,
seeking an organized way to resolve the claims. However, he said he
had a change of heart after working as local counsel with some of the
lawyers suing the Archdiocese of Boston, where Manchester Bishop John
McCormack previously was in charge of dealing with sexual abuse by
priests.
Mr, Hutchins said he will seek sworn testimony from all officials in
the Manchester Diocese who handled molestation complaints. We will
fight to get every shred of information, he said. We want to get every
complaint that the diocese has had over the last 40 years regarding
sexual abuse by priests, and find out how they handled those.
EGAIN COMMUNICATIONS: Will Vigorously Oppose Securities Suits in NY
-------------------------------------------------------------------
eGain Communications, Inc. faces a securities class action pending in
the United States District Court for the Southern District of New York
on behalf of purchasers of the Company's common stock between September
23,1999 and December 6,2000. The suit names the Company, certain of
its officers, and the lead underwriters for Company's initial public
offering (IPO) as defendants.
The complaint alleges violations of Section 11, 12(a)(2) and Section 15
of the Securities Act of 1933 and Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Specifically, the suit alleges that the prospectus the Company filed in
connection with the IPO was materially false and misleading because it
failed to disclose that:
(1) the underwriter defendants solicited and received excessive
and undisclosed commissions from certain investors in exchange
for shares of Company stock; and
(2) that the underwriters entered into agreements with certain
investors in which these investors agreed to purchase
additional shares of Company common stock in the aftermarket
in exchange for receiving shares of stock in the IPO.
The lawsuit is being now coordinated with hundreds of virtually
identical suits against other companies who made their IPOs in the past
two years, before Judge Shira A. Scheindlin.
The Company believes it has good and valid defenses to these
allegations, and intends to defend the action vigorously. However,
these claims, even if not meritorious, could result in the expenditure
of significant financial and managerial resources.
GEORGIA: Peanut Quota Holders Supporting Suit Against New Farm Bill
-------------------------------------------------------------------
Peanut quota holders, concerned the new farm bill will devalue their
land and rob them of assets, voted overwhelmingly to support a class
action challenging portions of the bill, the Associated Press Newswires
reports.
The new farm bill abolishes a Depression-era quota system that
maintained lofty prices for American peanuts, recently more than double
the world market rate. The new farm bill, signed into law by President
Bush last month, replaces the quota system with a base, which will
determine each grower's federal crop-support payments.
About 170 of the 600-member Peanut Quota Holders Association met at the
Albany Civic Center and agreed to back a lawsuit that challenges the
amount of compensation they would receive for their last quota and the
Government's right to deprive them of the asset. Association officials
have asked attorneys William S. Stone of Blakely and David Boone of
Atlanta to represent the quota holders. Both attorneys addressed the
crowd of mostly elderly quota holders.
Mr. Stoner told the assembly that "the government always has a right
to take property for public purposes, but they have to pay you a fair
price."
Estimates for the value of the peanut quota ranged from .75 to
$1.10 per pound, well above the .55 the government will pay under the
new farm bill. Under the old system, quota-holders were guaranteed
$610 per ton for peanuts produced for domestic consumption. Many
growers did not have quotas. If they wanted to grow the higher-priced
peanuts they had to rent land with the peanut quota.
The alternative to this arrangement was to grow "additional" peanuts
for export or oil at a guaranteed price of only $132 per ton, an unfair
disparity in the opinion of some congressional leaders.
GMO LITIGATION: Regulation Opposed, Conditions Sparking Suits Continue
----------------------------------------------------------------------
The White House is against adopting regulations, already in use in some
countries, that would require companies to label foods that use
genetically engineered ingredients, Health and Human Services Secretary
Tommy Thompson said as he spoke recently at the annual meeting of the
Biotechnology Industry Organization (BIO) in Toronto.
Several class actions are pending, which have stemmed from events
involving genetically engineered food, and some groups are concerned
that the US government views the area of biotech crop safety as
already adequately addressed, Reuters English News Service reported.
Secretary Thompson said labeling foods as genetically altered "puts
fear in the market" and would serve only to stymie innovation in the
rapidly advancing biotechnology food industry. "I do not think it
solves the problem. Mandatory labeling doesn't work," he said at the
meeting in Toronto of the BIO, the trade group representing the fields
of health care, agricultural, industrial and environmental
biotechnology.
Last year, the group's conference, held in San Diego, was targeted by
marchers opposed to so-called "Frankenfoods," but their ranks fell
short of forecasts this year. In Toronto, the scene was even more
subdued as protesters staged a brief rally, and there were no concrete
barriers, although the police presence continued to be noticeable.
Some countries already require labels to state what particular foods
contain; for instance, corn whose genes have been altered to enable it
to resist the corn borer pest. The United States does not have this
requirement. "We are concerned about food safety. None of these crops
have been tested for safety," said Charles Margulis, genetic
engineering specialist for the environmental group, Greenpeace.
The European Union, unnerved by food safety scares, such as mad cow
disease, has banned new biotech crops from other parts of the world for
the past three years. The United States is by far the largest producer
of genetically altered corn-and soy-based food.
No one really knows what happens when plants that have not evolved in
nature are consumed by humans, Mr. Margulis said. "There could be
allergies, increased toxins or other unexpected side effects," he said.
In the United States, weed-and pest-resistant versions of six crops,
soybeans, corn, cotton, papaya, squash and canola, are now being grown,
and many other transgenic plants are being developed.
Last month, a report by the General Accounting Office said the US Food
and Drug Administration has adequately tested the safety of new biotech
foods before allowing them to be sold. Consumers who eat bio-engineered
foods, said the GAO report, are not at a higher risk of allergies or
toxic reactions.
On the other hand, a National Academy of Sciences panel in February
said that the government had allowed food manufacturers to market
biotech crops without fully probing their potential environmental
impact.
There have been instances of farmers claiming their crops have been
infiltrated by genetically engineered counterparts, and these
complaints have found their way to the courts. One of the larger and
more ramified instances of a biotech crop event occurred when a biotech
corn variety, not approved for human consumption, slipped into the food
supply in late 2000, sparking a nationwide recall of more than 300
kinds of corn-based foods. StarLink was approved only for animal feed
due to concern that it might cause allergic reactions in humans.
Several class actions are pending against Aventis CropScience, which
made StarLink.
GRACO CHILDRENS: Voluntarily Recalls 152T Toy Tracks For Injury Hazard
----------------------------------------------------------------------
Graco Children's Products, Inc. is cooperating with the US Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 152,000
toy tracks attached to children's activity centers. The toy track can
break, presenting a cut or pinch hazard and exposed small parts pose a
choking hazard to young children. The Company has received 11 reports
of the toy tracks breaking. Four children received minor scratches and
one child's finger was pinched.
The recalled activity centers include the Tot Wheels V, models 4511 and
4521, and the Convertible Entertainer, models 4652 and 35225. The
model numbers and the words, "made in U.S.A." are printed on a label
on the underside of the tray on the activity centers. The green wavy
toy track sits on the tray of the activity center. Five objects spin
and slide along the toy track.
Discount, department and juvenile product stores sold the activity
centers nationwide from November 2001 through May 2002 for between
$30 and $70.
For more information, contact the Company by Phone: 800-673-0392
anytime or visit the firm's Website: http://www.gracobaby.com.
INFOSPACE INC.: Plaintiffs Add New Defendants in Amended Suit in WA
-------------------------------------------------------------------
Plaintiffs in the consolidated securities class action against
Infospace, Inc. filed an amended suit in the United States District
Court for the Western District of Washington, adding as defendant
Merrill Lynch & Co., Inc. and its star analyst Henry Blodgett.
Several suits were commenced in June 2001 on behalf of purchasers of
the Company's common stock between January 26, 2000 and January
30,2001. The suits uniformly alleged that the Company and its chief
executive officer made false and misleading statements about the
Company's business and prospects during the class period. The suit
alleges violations of the federal securities laws.
The suits were consolidated in January 2002. The consolidated suit
also added the Company's chief financial officer as a defendant. On
April 8, 2002, defendants filed a motion to dismiss the complaint for
failure to state a claim. On April 11, 2002, plaintiffs filed a motion
for leave of the court to amend the consolidated complaint to add
Merrill Lynch & Co., Inc. and Mr. Blodgett as defendants, which the
court granted. The amended complaint was filed on May 9, 2002.
The Company's management believes the Company has meritorious defenses
to these claims but litigation is inherently uncertain and the Company
may not prevail in this matter.
INFOSPACE INC.: Asks WA Court To Dismiss Shareholder Derivative Suit
--------------------------------------------------------------------
Infospace, Inc. asked the Superior Court of Washington for King County
to dismiss a purported shareholder derivative complaint. The suit
names as defendants current and former officers and directors of the
Company and entities related to a few of the individual defendants,
while the Company is named as a "nominal defendant."
The complaint alleges that:
(1) certain defendants breached their fiduciary duties to the
Company and were unjustly enriched by engaging in insider
Trading; and
(2) certain defendants breached their fiduciary duties in
connection with the Go2Net and Prio mergers and that one
defendant converted the Company's assets to his personal use.
The special litigation committee of the Company's Board of Directors,
with the assistance of independent legal counsel, has investigated
the complaint, and on March 22, 2002 filed a motion to terminate this
derivative action.
LITTLE TIKES: Recalls 21,400 Ride-On Toys Due to Facial Injury Hazard
---------------------------------------------------------------------
The Little Tikes Company is cooperating with the US Consumer Product
Safety Commission (CPSC) is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 21,400
Pop `n Scoot Ride-on toys. Young children who lean forward can fall
forward over the handlebars, causing facial injuries.
The Company has received 10 reports of children falling forward over
the toy's handlebars. Seven injuries to children include damaged
teeth, stitches to the chin, cuts and scratches to the mouth and face.
The Pop `n Scoot Ride-on toy is made of molded plastic with a clear
dome filled with colorful beads attached to the handlebars. The riding
toys have a yellow body, a red seat and red handlebars with blue
handgrips. The identification number 32922XX 1 is molded on the
underside of the ride-on body. The model number 1568-01 and "Made In
U.S.A." is molded on the bottom of the storage area below the red seat.
The product was sold for children age 9 months to 36 months old.
Toy stores nationwide sold the riding toys from March 2001 through
May 13, 2002 for about $20.
For more details, contact the Company by Phone: 866-765-6729 or visit
the firm's Website: http://www.littletikes.com
LOOKSMART.COM: Intends To Vigorously Oppose CA Suit Over New Listings
---------------------------------------------------------------------
Internet search service Looksmart.com faces a class action filed by
Legal Staffing Partners, Inc., an express listing customer, in the
Superior Court in San Francisco County, relating to the launch of the
Company's new Small Business Listings product announced on April
10,2002.
The suit states the Company "represented that a `one-time payment'
would satisfy all costs associated with its services.LookSmart breached
that agreement when in 2002 it required additional payments for their
services in the form of a new `pay-per-click' program." The suit
alleges breach of contract, unfair business practices and false
advertising, and The complaint seeks restitution, unspecified
compensatory damages, injunctive relief and attorneys' fees.
The Company believes that the allegations against it are without merit
and intends to contest the allegations vigorously.
NAVAJO TRUST: New Plaintiffs Enter Trust Fund Management Lawsuit
----------------------------------------------------------------
A new generation of San Juan County Navajos has entered the decade-old
lawsuit seeking to recover millions of dollars squandered by Navajo
Trust Fund officials who allegedly received inadequate oversight from
the state, the Associated Press Newswires reports.
Three of the original five Navajo plaintiffs who brought the class
action have died. US District Judge Tena Campbell has allowed the son
of one of the deceased plaintiffs to take his father's place. Five
other Navajos raised on the San Juan County portion of the reservation
joined him. The plaintiffs do not stand to recover any money
individually, said Brian Barnard of Salt Lake City, one of the
plaintiffs' attorneys.
"They are in it for the long haul," Mr. Barnard said of his new
clients. "All the money, if we are successful, will go back into the
trust fund to benefit everyone."
Like their predecessors, the new plaintiffs represent different
geographical areas occupied by the Utah Navajos. Judge Campbell also
has ruled that Mr. Barnard and Attorney John Pace can continue to
represent the class, following former co-counsel Parker M. Nielson's
departure from the case. A dispute among the plaintiffs' attorneys was
among the many delays in the case.
The lawsuit represents a class of about 8,500 Navajos and centers on a
trust fund that Congress established in 1933 to hold royalties from oil
drilled on Navajo tribal land in San Juan County. A 1991 state audit
report prompted the lawsuit. The report said that millions placed into
the fund over the years could not be accounted for and could have been
lost to lax oversight, waste and ill-conceived business ventures.
Among issues in dispute is how much oversight authority the state had
over the fund operation before a state board took it over in 1992. The
Utah Navajos contend the state owes the fund at least $142 million,
including $50 million allegedly misspent from 1960 to 1992, plus
interest. The state disputes these claims. The sides also have argued
over how much documentation the state must produce to prove where
trust-fund money was spent.
NET PERCEPTIONS: Plaintiffs File Amended Securities Suit in S.D. NY
-------------------------------------------------------------------
Plaintiffs in the securities class action against Net-Perceptions, Inc.
have filed an amended suit in the United States District Court for the
Southern District of New York, adding claims relating to the Company's
March 2000 follow-on public offering.
The suit was initially filed in November 2001 against:
(1) Steven J. Snyder, former president and chief executive
officer,
(2) Thomas M. Donnelly, chief operating officer,
(3) FleetBoston Robertson Stephens, Inc., the lead underwriter of
the Company's April 1999 initial public offering,
(4) several other underwriters who participated in the Company's
initial public offering,
The amended suit alleges that the defendants violated federal
securities laws by not disclosing certain actions taken by the
underwriter defendants in connection with the Company's initial public
offering and follow-on public offering.
The amended suit alleges specifically that the underwriter defendants,
with the Company's direct participation and agreement and without
disclosure thereof, conspired:
(i) to and did raise and increase their underwriters' compensation
and the market prices of the Company's common stock following
its initial public offering and in its follow-on public
offering by requiring their customers, in exchange for
receiving allocations of shares of our common stock sold in
the Company's initial public offering;
(ii) to pay excessive commissions on transactions in other
securities,
(iii) to purchase additional shares of the Company's common stock in
the initial public offering aftermarket at pre-determined
prices above the initial public offering price; and
(iv) to purchase shares of the Company's common stock in its
follow-on public offering.
The amended complaint seeks unspecified monetary damages and
certification of a plaintiff class consisting of all persons who
acquired the Company's common stock between April 22, 1999 through
December 6, 2000.
The Company believes that the allegations are without merit, and
intends to vigorously defend against the plaintiff's claims. As this
litigation is in an initial stage, the Company is unable to predict its
outcome or its ultimate effect, if any, on its financial condition.
NEW FREEDOM: Consumers File Suit Over Failure To Pay Insurance Claims
---------------------------------------------------------------------
A proposed class action, filed recently in Utah federal court alleges
Sandy-based health benefits provider, New Freedom Mortgage, failed to
pay claims on behalf of potentially thousands of Utah workers and their
families, the Deseret News reports.
The complaint was filed in US District Court on behalf of Jill Hills,
an employee of New Freedom Mortgage, and a proposed class of fellow
workers. Ms. Hills seeks payment of the medical bills and other
expenses.
According to court documents, the Company contracted with American
Employment Group Inc. to provide benefits. The lawsuit contends that
Ms. Hills and thousands of others covered under health benefits plans
were denied coverage for medical expenses due to inadequate funding of
the plan and/or mismanagement of plan assets.
The suit also claims that American Employment violated both the
Racketeering Influenced and Corrupt Organization Act (RICO) and the
Employment Retirement Income Security Act of 1974 (ERISA).
So far, Ms. Hills is the only alleged victim to step forward against
American Employment, said her attorney Brian S. King. Ms. Hills
maintained she was covered by the health plan when she incurred about
$200,000 in medical expenses. American Employment and Hills' insurance
provider "gave her the runaround," Mr. King said, leaving her family on
the brink of financial ruin.
Mr. King said that he did not know where the problem originated. "I
don't know whether it is American Employment that has made the mistakes
or Meridian or someone higher up in the line. And, frankly I don't
care. These folks should not have to wait around while Meridian or
American Employment or someone higher up the line, stand around and
point fingers at each other. That is exactly the kind of thing that
Congress was trying to make sure did not happen," he said. "They should
be able to count on the claims being paid under the terms of the plan."
Using the RICO Act, which is more commonly associated with allegations
of organized crime, was one way to get the medical clams paid as
quickly as possible, Mr. King said. The act includes a provision
regarding the misuse of employee benefit sums.
OVERHILL CORPORATION: Appeals Court Reinstates Securities Fraud Suit
--------------------------------------------------------------------
The United States Court of Appeals for the Ninth Circuit issued a
ruling that reinstated a securities fraud lawsuit against Overhill
Corporation, formerly known as Polyphase Corporation, and certain of
its current and former officers and directors. The suit was filed in
1997 on behalf of a class of persons who purchased the Company's common
stock between May 21, 1996 and June 17, 1997.
Plaintiffs in the suit alleged that defendants had made material
misrepresentations and omissions about the Company's financial results
and financial condition during the class period.
On November 13, 2000, the United States District Court for the District
of Nevada granted summary judgment to all defendants on all claims and
dismissed the case. At the time the judgment was entered, the district
court had not yet been asked to determine whether or not a plaintiff
class should be certified in the action.
The Court of Appeals affirmed the district court's ruling in part and
reversed it in part. As a result of the appeals court's decision,
certain of plaintiffs' claims will be permitted to go forward in
federal court against the Company and current or former officers and
directors James Rudis, Paul Tanner, George Schrader and Michael Buck.
The appeals court affirmed the dismissal of certain other claims
against these defendants and also affirmed the dismissal of all claims
asserted against defendants PLY Stadium Partners and Pyrenees Group.
For more details, contact Eduard Korsinsky of Beatie and Osborn LLP by
Phone: 212-888-9000 by Fax: 212-888-9664 or by E-mail:
clientrelations@bandolaw.com
PRICELINE.COM: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Plaintiffs in the securities class action against priceline.com, Inc.
filed an amended suit in the United States District Court for the
Southern District of New York, charging the Company, several of its
officers and directors and certain underwriters of its initial public
offering (IPO) with federal securities violations.
The consolidated suit arose from four class actions, alleging, among
other things, that the Company and the individual defendants named in
the complaints violated the federal securities laws by issuing and
selling common stock in the Company's March 1999 IPO without disclosing
to investors that some of the underwriters in the offering, including
the lead underwriters, had allegedly solicited and received excessive
and undisclosed commissions from certain investors.
In August 2001, these cases were consolidated for pre-trial purposes
with hundreds of other cases, which contain allegations concerning the
allocation of shares in the initial public offerings of companies other
than the Company.
On April 19, 2002, plaintiffs filed a consolidated amended suit, making
similar allegations described to those above but with respect to both
the Company's March 1999 IPO and its August 1999 second public offering
of common stock. The amended suit names as defendants the Company and:
(1) Richard S. Braddock,
(2) Jay S. Walker,
(3) Paul E. Francis,
(4) Nancy B. Peretsman,
(5) Timothy G. Brier,
(6) Morgan Stanley Dean Witter & Co.,
(7) Goldman Sachs & Co.,
(8) Merrill Lynch, Pierce, Fenner & Smith, Inc.,
(9) Robertson Stephens, Inc. (as successor-in-interest
to BancBoston),
(10) Credit Suisse First Boston Corp. (as successor-in-interest to
Donaldson Lufkin & Jenrette Securities Corp.),
(11) Allen & Co., Inc. and
(12) Salomon Smith Barney, Inc.
The Company has not responded to the consolidated amended suit and the
time within which to do so has not yet expired. The Company
intends to defend vigorously against these actions.
PRICELINE.COM: Oral Arguments Conducted on Dismissal Motion For DE Suit
-----------------------------------------------------------------------
Oral argument took place regarding the motion for dismissal filed by
priceline.com, Inc. for the shareholder derivative suit, pending
against them in the Court of Chancery in Delaware, New Castle County.
The court, however, has reserved decision on the matter.
The suit alleges breach of fiduciary duty and waste of corporate assets
against certain of the Company's directors, and names the Company as a
nominal defendant.
In February 2001, all defendants moved to dismiss the complaint for
failure to make a demand upon the Board of Directors and failure to
state a cause of action upon which relief can be granted. Pursuant to
a stipulation by the parties, an amended complaint was filed in June
2001. The defendants renewed their motion to dismiss in August 2001.
The Company intends to defend vigorously against this action.
PROTECTION ONE: Reaches Securities Fraud Suit Settlement in C.D. CA
--------------------------------------------------------------------
Protection One, Inc. (NYSE: POI) forged a memorandum of understanding
providing for a settlement of the consolidated securities class actions
pending in the United States District Court for the Central District of
California. The suit filed on behalf of Company shareholders charges
the Company, its indirect parent Western Resources, Inc., and its 87%-
direct parent Westar Industries, Inc., with violations of federal
securities laws.
Under the terms of the memorandum, there would be no finding of
wrongdoing on the part of any of the defendants, or any other finding
that the claims alleged had merit. The $7.5 million settlement would be
fully funded by the Company's existing insurance.
"In our view, this matter is the most significant litigation pending
against the company. We are pleased to have reached a resolution,"
commented Richard Ginsburg, President and Chief Executive Officer of
the Company.
Finalization of the settlement is subject to the execution of
definitive documentation and approval of the district court. It is
expected that the process of finalizing the settlement will take
several months.
SEQUENOM INC.: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Plaintiffs in the securities class action filed against Sequenom, Inc.
filed an amended suit in the United States District Court for the
Southern District of New York, charging the Company and certain of its
current or former officers and directors with federal securities
violations.
The suit alleges that the Company, certain of its officers and
directors, and its IPO underwriters violated the federal securities
laws because the Company's IPO registration statement and prospectus
contained untrue statements of material fact or omitted material facts
regarding the compensation to be received by, and the stock allocation
practices of, the IPO underwriters.
The Company has not been required to answer or respond to either
complaint, and no discovery has been served on the Company. The
Company denies all material allegations and intends to defend the
action vigorously.
SPECIALTY SALES: Recalls 6,000 Novelty Lighters Due To Fire Hazards
-------------------------------------------------------------------
Specialty Sales Co., Inc. is cooperating with the US Consumer Product
Safety Commission (CPSC) by voluntarily recalling about 6,000 novelty
cigarette lighters. These lighters do not have child-resistant
mechanisms, as required by federal law. Young children could ignite
the lighters, posing fire and burn hazards.
The Company has not received any reports of injuries or incidents.
This recall is being conducted to prevent the possibility of injuries.
This recall involves two types of lighters. The first type is a
refillable, liquid-fueled lighter with various decals depicting one of
these - a frog with a banjo sitting on a lily, a man in the moon,
Tweety Bird, a unicorn, and a skull and crossbones. "Made in China" is
written on these lighters's labels.
The second type of lighter is a refillable, gas-fueled, piezo-electric
lighter with a dolphin molded on the side. The dolphin's head serves
as a hinged cover for the ignition button and flame port. There is no
writing on these lighters.
Convenience and liquor stores and gas station food markets in northern
California sold these lighters from March 1999 through April 2002 for
about $4.
For more details, contact the Company by Phone: 510-581-3869 between 8
am and 5 pm PT Monday through Friday.
THESTREET.COM: Vigorously Opposing Securities Fraud Suit in S.D. NY
-------------------------------------------------------------------
TheStreet.com, Inc. faces a securities class action pending in the
United States District Court for the Southern District of New York
naming as defendants the Company, certain of its former officers and
directors and a current director, and certain underwriters of its
initial public (IPO):
(1) The Goldman Sachs Group, Inc.,
(2) Chase H&Q,
(3) Thomas Weisel Partners LLC,
(4) FleetBoston Robertson Stephens, and
(5) Merrill Lynch Pierce Fenner & Smith, Inc.
The complaint alleges, among other things, that the underwriters of the
Company's initial public offering violated the securities laws by
failing to disclose certain alleged compensation arrangements (such as
undisclosed commissions or stock stabilization practices) in the
offering's registration statement.
The Company and certain of its former officers and directors and a
current director are named in the complaint pursuant to Section 11 of
the Securities Act of 1933, and Section 10(b) of the Securities
Exchange Act of 1934.
Similar complaints have been filed against over 300 other issuers that
have had initial public offerings since 1998 and all such actions have
been included in a single coordinated proceeding, including the suit
against the Company, under Judge Shira Scheindlin of the Southern
District of New York.
The Company intends to defend these actions vigorously. However, due
to the inherent uncertainties of litigation, the Company cannot
accurately predict the ultimate outcome of the litigation.
TOBACCO LITIGATION: FL Jury's $3.7M Verdict Could Spur Similar Suits
---------------------------------------------------------------------
A Miami jury hit three tobacco firms with $37.5 million in damages in
the case of a former smoker with cancer, whose individual case was
permitted to be heard outside the normal sequence of the Engle lawsuit,
because he would probably be deceased by the time the entire class
action lawsuit reached the jury-hearing stage, The Wall Street Journal
reports. This was the first of what eventually could be tens of
thousands of similar suits brought as part of a landmark class action
in Florida. The verdict, therefore, carried its meanings to the
various parties.
The plaintiff, 76-year-old John Lukacs, had promised the court during
the hearing on whether he might be singled out for a jury hearing, that
he would not seek to collect any award until after the completion of
what is expected to be a lengthy appeals process for the entire class
action, known as the Engle case.
During a two-year multipart trial that ended in July 2000, a different
Florida jury found that the country's five largest tobacco concerns
conspired to mislead the public about the dangers of smoking and levied
$144.87 billion in punitive damages against them - the largest such
award in US history.
To win compensatory damages, however, smokers who are part of the class
must convince jurors in individual cases that they were addicted to
cigarettes and made ill by smoking. In Mr. Lukacs' case, the jury
agreed that cigarettes had caused his oral and bladder cancer.
All of the other individual cases have been dismissed or put on hold
pending the outcome of the tobacco firms' appeal of the earlier
verdict. The companies argue that the original Engle trial was
unconstitutional and that the case should never have been certified as
a class action. That case is now before a Florida appeals court.
The Lukacs trial "never should have gone forward while the Engle
verdicts are on appeal," said William S. Ohlemeyer, associate general
counsel of Philip Morris Companies, one of the defendants. "This case
was carved into unconstitutional bits and pieces and served to a jury
that simply did not have all the facts."
The jury found that:
(1) Vector Group Ltd.'s Liggett Group unit, maker of the
Chesterfield cigarettes that Mr. Lukacs smoked, was 50 percent
at fault for his injuries; and
(2) Philip Morris and British American Tobacco PLC's Brown &
Williamson subsidiary, each, were found to be 22.5 percent at
fault.
Mr. Lukacs himself was found to be five percent at fault. It is unclear
how much of the damage award each company would have to pay, a Philip
Morris spokesman said.
Jeff Raborn, an attorney for Brown & Williamson, said, "This trial and
verdict only illustrate the unfairness of the Engle decision. We
remain confident the appeals courts will reverse both this veridict and
Engle."
The jury's decision "is highly unlikely to worry investors" since it
will essentially be put on hold until the Engle appeal is over, said
Martin Feldman, a tobacco analyst at Merrill Lynch & Co.
UNIVERSAL ACCESS: Faces Suit For Securities Act Violations in E.D. TX
---------------------------------------------------------------------
Universal Access Global Holdings, Inc. faces several securities class
actions pending in the United States District Court for the Eastern
District of Texas on behalf of purchasers of the Company's common stock
between May 10, 2001 and March 22, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The
defendants allegedly issued a series of material misrepresentations to
the market during the class period, failing to adequately disclose a
change in the company's business model and the risks involved in that
change, and issuing financial statements that violated generally
accepted accounting principles (GAAP), thereby artificially inflating
the price of the Company's publicly traded securities.
The Company expects these complaints, and any similarly filed actions,
to be consolidated into a single case. The Company has not been served
with the complaints, but has reviewed copies of the filings.
Management believes the lawsuits are without merit and intends to
defend the actions vigorously.
*South Korea Welcomes New Product Liability Law, "Mature Civil Society"
-----------------------------------------------------------------------
In seeking compensation for an injury or a loss from a defective
product, the South Korean consumer will soon be freed from the burden
of proving the Manufacturer's intention or negligence with regard to
the defect, The Korea Herald reports.
The new law embodying this principle of product liability will lead to
an increase in the number of lawsuits filed against manufacturers, a
natural and desirable development, because nothing other than lawsuits
will provide an effective remedy for consumers injured by a dangerous
product. The threat of a lawsuit, equally, should provide
manufacturers with a strong incentive to exercise greater care in the
development of a new product.
When the product liability act of January 12, 2000, takes effect on
July 1, 2002, all the consumer will have to do is show that the product
had a defect. It will no longer be relevant to ask whether the
manufacturer exercised great care to make the product safe for
reasonable use. The company will simply be liable if the defect caused
any harm.
The new law, The Korea Herald predicts, will turn out to be the most
effective yet for consumer protection against products that are
dangerous because of faulty design, manufacturing defects or lack of
appropriate warnings. The law's enforcement will be a long-awaited
boon to consumers, whose rights often have been sacrificed in the
course of export-driven industrialization during the past four decades.
This law will, of course, become much more powerful when bolstered by
an effective law providing for class actions.
This legislation should not be too long coming, according to The Korea
Herald. An activist group recently said in a statement, "Our consumers
have long been deprived of natural rights they deserve in choosing safe
and high-quality goods. The act on product liability will now give
them those rights."
The new law will certainly open the floodgate for lawsuits, given the
fact that the heavy burden of proof has been discouraging consumers
from bringing to court even legitimate cases of injury resulting from
defective products. It is reported that the number of lawsuits
demanding compensation for such injury doubled in Japan when a similar
law went into force there in 1995.
The large number of class actions will in itself lead to policies and
practices encouraging the use of care and caution in the development
and manufacture of new products. All executives and employees, from
assembly-line workers and manual-writing officials to the chief
executive officer, will have to pay greater attention to the safety of
the products they are producing.
On top of this, they will have to be prepared for potential legal
proceedings, as well. The threat will be that the company could be
pushed into bankruptcy by damages awarded to a consumer or a group of
consumers. A good example in this regard can be found in the case of
Dow Corning, a manufacturer of silicone breast implants.
Enforcement of this new law will not be all that bad for manufacturers,
because it will provide them with a new opportunity to upgrade the
safety of their products, and sharpen their competitive edge in the
world market. It is true that insurance, litigations and delays in
product development will translate into additional costs. But these
are the price manufacturers will have to share with consumers as
members of a mature civil society.
Because of its impact on the manufacturing industry, the law on product
liability, at the time of enactment, was given a substantial period of
two and a half years until it would go into effect. During this
period, all manufacturers, large or small, are supposed to have
prepared themselves to meet stricter demands for product safety.
The large corporations have been doing well in this regard. Many of
these have been running task forces to enhance awareness of product
safety and others have entered into business alliances with insurance
companies. Some of their industry associations have selected qualified
personnel to provide dispute settlement services of their own.
Apparently, preparation for the requirements the new law will impose on
small and midsize companies has presented difficulties. According to
Small Business Corporation's recent survey of 271 companies employing
from five to 300 workers, only two have established task forces on the
subject of product safety. The Small and Medium Business
Administration, which has hosted seminars on the law in the past, will
have to spend more money to train product liability experts and
arranging consultancy services for small and midsize companies.
New Securities Fraud Cases
ADELPHIA COMMUNICATIONS: Chimicles & Tikellis Files PA Securities Suit
----------------------------------------------------------------------
Chimicles & Tikellis LLP initiated a securities class action in the
United States District Court for the Eastern District of Pennsylvania
on behalf of purchasers of the 6% Convertible subordinated Notes due
2006 issued by Adelphia Communications Corporation.
The complaint alleges that Defendants violated Sections 11, 12(b) and
15 of the Securities Act of 1933 by making untrue statements of
material fact and omitting to state material facts in the registration
statement and prospectus used to sell the 6% Convertible Subordinated
Notes.
The suit names as defendants the Company and:
(1) John J. Rigas,
(2) Timothy J. Rigas,
(3) James P. Rigas,
(4) Michael J. Rigas,
(5) Pete J. Metros,
(6) Dennis P. Coyle,
(7) Leslie J. Gelber,
(8) Peter L. Venetis,
(9) Erland E. Kailbourne,
(10) Deloitte & Touche LLP,
(11) Salomon Smith Barney, Inc. and
(12) Banc of America Securities LLC
The complaint alleges that defendants did not disclose on the Company's
balance sheet over $2.5 billion in loans guaranteed by the Company that
were made to business entities controlled by the family of its former
Chairman, John J. Rigas.
On March 24, 2002, the Company announced that it will restate its
financial results for calendar years 1999, 2001 and 2002. The off-
balance sheet loans were used by the Rigas family for personal
investments including purchasing substantial amounts of the Company's
common stock. The Company has been de-listed by the NASDAQ.
For more details, contact Nicholas E. Chimicles or Denise Davis
Schwartzman by Phone: 888-805-7848 or by E-mail:
deniseschwartzman@chimicles.com
APPLIED DIGITAL: Kirby McInerney Lodges Securities Suit in S.D. FL
------------------------------------------------------------------
Kirby McInerney & Squire, LLP initiated a securities class action in
the US District Court for the Southern District of Florida on behalf of
those who purchased shares of Applied Digital Solutions, Inc.
(Nasdaq:ADSXE) between February 11, 2000 and May 10, 2002, inclusive.
The complaint alleges that the Company and its Chief Executive Officer
violated the federal securities laws by issuing false and misleading
statements during the class period. Contrary to their positive
statements, defendants, according to the complaint, were in possession
of materially adverse information regarding the Company's lack of
proper accounting controls and improper revenue recognition at certain
subsidiaries, but failed to disclose this information to investors for
more than two years.
On April 18, 2002, the Company disclosed that during the fiscal year
ended December 31, 2001, one of the Company's subsidiaries had been
recognizing revenue without "evidence of customer acceptance prior to
the recognition of certain revenue."
The Company also disclosed that during the fiscal year ended December
31, 2000, a second subsidiary "lacked monitoring controls over its
accounts receivable and was unable to provide certain detailed
inventory listings for certain general ledger balances." The April 18,
2002 disclosure of the Company's accounting irregularities caused the
price of its stock to plummet 40%.
Approximately three weeks later, on May 9, 2002, defendants claimed
that nearly every major hospital in the West Palm Beach, Florida area
would be equipped with VeriChip scanners, an indispensable component of
the Company's VeriChip technology. However, one day later on May 10,
2002, the truth was disclosed that no hospital had accepted a scanner,
an essential device for retrieving the VeriChip's information.
Following the May 10, 2002 disclosure, the price of Company stock again
fell sharply, dropping nearly 30% in a single day.
For more details, contact Ira Press or Orie Braun by Phone:
212-317-2300 or 888-529-4787 or visit the firm's Website:
http://www.kmslaw.com
DYNEGY INC.: Milberg Weiss Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the Southern District of
Texas on behalf of purchasers of Dynegy Inc. (NYSE:DYN) publicly traded
securities during the period between April 17, 2001 and May 15, 2002.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that the Company and its top officers inflated the price of the
Company's stock in order to pursue an accelerated securities sale
program.
Defendants knew that concealing the Company's true vehicle, Project
Alpha, for creating cash flow from operations and the true impact it
would have on the Company provided the only way that they could foster
the perception in the business community that the Company's was not
"Enron Corp.," i.e., the only way it could post the revenue and
earnings per share growth claimed by defendants.
Prior to the class period, the individual defendants realized that many
of their complicated deals to generate reported net income did not
generate cash flows. The defendants knew that investors would
eventually discover this discrepancy and the Company's stock price
would collapse.
To prevent this, the Company classified what was essentially a loan
from CitiGroup Inc. as an operating activity rather than as a financing
activity as required by Generally Accepted Accounting Principles. The
defendants' wrongful course of business:
(1) artificially inflated the price of Company stock during the
class period;
(2) deceived the investing public, including plaintiff and other
class members, into acquiring the Company's securities at
artificially inflated prices;
(3) allowed the individual defendants to extract millions of
dollars in bonuses for creating the appearance of the
Company's phenomenal cash flow from operations growth; and
(4) allowed the Company to sell nearly half a billion dollars of
its own securities to the unsuspecting public.
For more details, contact William Lerach by Phone: 800-449-4900 by E-
mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
MERRILL LYNCH: Abbey Gardy Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Abbey Gardy LLP initiated a securities class action lawsuit in the
United States District Court for the Southern District of New York,
against:
(1) the Merrill Lynch Internet Strategies Fund, Inc. (MANTX;
MBNTX; MCNTX; MDNTX; MANTXEMP; MANTXFEE),
(2) Merrill Lynch & Co., Inc. (Merrill Lynch),
(3) Merrill Lynch Funds Distributor (MLFD),
(4) Henry Blodget,
(5) Paul G. Meeks, and
(6) several directors of the Internet Strategies Fund,
The suit was filed on behalf of all persons or entities who purchased
shares of the Internet Strategies Fund during the period from March 14,
2000 through October 15, 2001, inclusive. On October 15, 2001, the
Internet Strategies Fund merged with The Merrill Lynch Global
Technology Fund (MAGTX; MBGTX; MCGTX; MDGTX)
The complaint charges defendants with violations of Sections 11, 12 and
15 of the Securities Act of 1933. The complaint alleges, among other
things, that throughout the class period defendants knowingly or
recklessly disseminated materially false and misleading statements
regarding, among other things, the risk factors and investment
strategies of the Internet Strategies Fund.
Specifically, the complaint alleges that the defendants engaged in a
scheme that was intended to use Mr. Blodget's strong reputation and
bullish ratings on Internet stocks to market the Internet Strategies
Fund to unsuspecting investors. In fact, as a result of defendants'
scheme, over one billion dollars was invested in the Internet
Strategies Fund by investors.
For more details, contact Nancy Kaboolian or Jennifer Haas by Phone:
800-889-3701 by E-mail: jhaas@abbeygardy.com or
nkaboolian@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com
RAYOVAC CORPORATION: Cauley Geller Commences Securities Suit in W.D. WA
-----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Western District of
Wisconsin on behalf of purchasers of Rayovac Corporation (NYSE: ROV)
publicly traded securities during the period between April 26, 2001 and
September 19, 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. Specifically, the Complaint alleges that
these statements were materially false and misleading because they
failed to disclose and/or misrepresented the following adverse facts,
among others:
(1) that the Company was experiencing declining demand for its
products and in order to stimulate demand and create the
impression that the Company was performing according to
analyst expectations, the Company was extending generous
credit terms to customers in order to induce them to purchase
additional products, thereby pulling sales in from the future.
As a result, the Company created the appearance of earnings
growth, when defendants knew, or recklessly disregarded that
future sales would be negatively impacted by the
aforementioned practices;
(2) that the Company's expansion in Latin America was the result
of aggressive sales practices whereby the Company extended
generous payment terms and induced customers to take
additional unneeded inventory; and
(3) based on the foregoing, defendants lacked a reasonable basis
for their statements that the Company would grow by 8-9% in
the third and fourth quarter of 2001.
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
Website: http://www.classlawyer.com
SALOMON SMITH: Stull Stull Commences Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Stull Stull & Brody LLP initiated a securities class action in the
United States District Court for the Southern District of New York, on
behalf of purchasers of Global Crossing Ltd. (NYSE:GX) common stock
between June 15, 1999 and November 10, 2001, inclusive against
defendants Salomon Smith Barney, Inc. and its star telecommunication
analyst Jack Grubman.
The complaint alleges that defendants violated Sections 10(b) of the
Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, by the issuance of analyst reports regarding Global
Crossing which recommended the purchase of Global Crossing common stock
and which set price targets for Global Crossing common stock without
any reasonable factual basis.
Furthermore, when issuing their Global Crossing reports, defendants
failed to disclose significant, material conflicts of interest, which
they had, in light of their use of Mr. Grubman's reputation and his
Global Crossing analyst reports, to obtain investment banking business
for Salomon.
Furthermore, in issuing their Global Crossing reports, in which they
were recommending the purchase of Global Crossing stock, defendants
failed to disclose material, non-public, adverse information which they
possessed about Global Crossing as well as their true opinion about
Global Crossing.
Defendants also failed to disclose that Mr. Grubman, while issuing
reports on Global Crossing recommending that investors purchase Global
Crossing common stock, had been intimately involved in the management
of Global Crossing.
For more details, contact Tzivia Brody by Phone: 800-337-4983, by Fax:
212-490-2022 or by E-mail: SSBNY@aol.com
UNIVERSAL ACCESS: Rabin & Peckel Lodges Securities Fraud Suit in IL
-------------------------------------------------------------------
Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Northern District of Illinois - Eastern
Division, on behalf of all persons or entities who purchased Universal
Access Global Holdings, Inc. securities (Nasdaq:UAXS) between May 10,
2001 and April 24, 2002, both dates inclusive. The suit names as
defendants the Company:
(1) Patrick C. Shutt,
(2) Robert M. Brown,
(3) Robert E. Rainone, Jr.,
(4) George A. King,
(5) Robert J. Pommer,
(6) Scott D. Fehlan, and
(7) Paolo Guidi
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
suit alleges that the Company and its top officers inflated the price
of the Company's stock by failing to disclose a change in the Company's
business model and the risks involved in that change.
Defendants knew that concealing the Company's true vehicle, the CORE
Initiative, for creating cash flow from operations and the true impact
it would have on the Company provided the only means by which that they
could foster the perception in the business community that it had a
viable business plan, i.e., the only way the Company could post the
revenue and earnings per share growth claimed by defendants.
For more details, contact Eric Belfi or Sharon Lee by Phone:
800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail:
email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com
TRITON NETWORK: Stull Stull Lodges Securities Fraud Suit in M.D. FL
-------------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the United
States District Court for the Middle District of Florida, Tampa
Division, on behalf of persons who purchased the securities of Triton
Network Systems, Inc. (NASDAQ:TNSIE.OB) between July 13, 2000 and
August 14, 2001, inclusive against defendants:
(1) Kenneth R. Vines,
(2) Howard "Skip" Speaks,
(3) Brian J. Andrew,
(4) Joseph Antinucci,
(5) Stanley R. Arthur,
(6) Bandel L. Carano,
(7) James F. Gibbons,
(8) Robert P. Goodman,
(9) Arjun Gupta,
(10) James Wei,
(11) Credit Suisse First Boston Corporation,
(12) Deutsche Banc Alex Brown,
(13) U.S. Bancorp Piper Jaffray Inc.,
(14) Ernst & Young, LLP,
(15) U.S. Telesource, Inc. and
(16) Oak Investment Partners
The complaint charges that defendants violated Sections 11 and 15 of
the Securities Act of 1933 and 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 July 13, 2000 and August 14, 2001.
According to the complaint, the Company's July 13, 2000 prospectus
contained false and misleading statements regarding its sales and
revenue. The prospectus also touted a three-year supply agreement with
a customer called Advanced Radio Telecom (ART) representing that this
agreement would account for a significant amount of revenue.
However, defendants revealed on November 14, 2000, that "a key
customer" that had previously been represented in the offering as
having issued "firm purchase orders," had requested that the Company
"postpone delivery" of the orders until after it (ART) obtains
additional financing." ART filed for bankruptcy on March 30, 2001.
Additionally, the complaint alleges that defendants disseminated
materially false financial statements for each of the Company's interim
quarters during the class period and for the year ended December 31,
2000, which materially overstated the Company's revenues and its net
income. Defendants also made a series of other materially false and
misleading statements about the Company and its financial condition and
performance.
The complaint further alleges that during the class period, defendants:
(i) failed to include in its financial statements, all
adjustments, necessary for a "fair presentation" of the
financial results in violation of GAAP;
(ii) applied a non-GAAP accounting method which resulted in a
material $2.7 million under-provision for bad debts;
(iii) failed to write off worthless intangible assets; and
(iv) failed to recognize a provision for loss and inventory
purchase commitments.
During the class period the Company's stock experienced a free fall -
plummeting from a high of over $40 per share in July of 2000 to less
than $0.60 per share on August 14, 2001. On August 21, 2001, it was
reported that Triton decided to close the Company and sell its assets,
pending shareholder approval.
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
*********
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 * * *