CAR_Public/020717.mbx             C L A S S   A C T I O N   R E P O R T E R
  
            Wednesday, July 17, 2002, Vol. 4, No. 140

                         Headlines

CALIFORNIA: Awarding Firms $1.25B As Part of Tobacco Settlement
ENERGY TRADERS: Snohomish County PUD Commences Suit Over Electric Rates
FINOVA GROUP: Fairness Hearing On Securities Settlement Set For July
FRED HUTCHINSON: Cancer Center Faces Suit Over Protocol 126 Trial Risks
INDIAN FUNDS: House Panel Limits Historic Tracking Of Accounting Errors

MICHIGAN: Builders Won't Join Suit V. Flint County Drain Commissioner
NETSOLVE INC.: Fairness Hearing For Suit Settlement Set for September
PERKINELMER INC.: Cauley Geller Commences Securities Fraud Suit in MA
RJ REYNOLDS: GA Court Dismisses Consolidated Tobacco Antitrust Suit
SCORPION TECHNOLOGIES: Fairness Hearing On Settlement Set For September

SODEXHO INC.: DC Court Grants Class Certification to Race Bias Suit
TIMCO AVIATION: Settlement Fairness Hearing Set for August
UNIFY CORPORATION: CA Court Grants Final Settlement Approval
WILDSIDE ADULT: Strip Club Faces Consumer Suit For ADA Violations in FL
WORLDCOM INC.: Banks Charge $2.5B in Fraud After Accounting Fiasco  

*Catholic Church Called To Change as Survival, Authority In Question

                   New Securities Fraud Cases

CRYOLIFE INC.: Wolf Popper Commences Securities Fraud Suit in N.D. GA
CRYOLIFE INC.: Charles Piven Commences Securities Fraud Suit in N.D. GA
FLEXTRONICS INTERNATIONAL: Schatz & Nobel Lodges Securities Suit in NY
MERCK & CO.: Berman DeValerio Commences Securities Suit in New Jersey
MERCK & CO.: Glancy & Binkow Lodges Securities Fraud Suit in New Jersey

MERRILL LYNCH: Wites & Kapetan Commences Securities Fraud Suit in NY
PERKINELMER INC.: Schiffrin & Barroway Lodges Securities Suit in MA
SUPERVALU INC.: Charles Piven Commences Securities Fraud Suit in MN
UNIROYAL TECHNOLOGIES: Charles Piven Lodges Securities Suit in M.D. FL
                             
                           *********

CALIFORNIA: Awarding Firms $1.25B As Part of Tobacco Settlement
---------------------------------------------------------------
The State of California will award US$1.25 billion in fees to law firms
that helped it get $25.4 billion as part of a national cigarette
litigation settlement four years ago, the Xinhua News Agency reports.

Nearly 60 law firms, including four in California, the most populous
state of the United States, will divide the award with a cap at $125
million dollars or 10 percent of the award per firm, according to the
Los Angeles Times.

Arbitrators John Calhoun Wells and Harry Huge, who formed the majority
on the arbitration panel to decide the size of the award, called the
$1.25 billion dollars "a full, reasonable fee" for the " Davis/Ellis"
case.  They said that if not for the efforts of these lawyers, the $206
billion dollar national tobacco settlement in 1998 would never have
been reached.

The "Davis/Ellis" case by California was one of the cases filed by
various states against the nation's tobacco firms in the mid of 1990s.
The suits were settled jointly in November 1998, with tobacco companies
paying huge monetary award and being restricted in advertising
campaigns.

Of the $25.4 billion awarded in the "Davis/Ellis" case, the state's
share was $12.7 billion and the rest went to cities and counties
representing about 85% of California residents.

The "Davis/Ellis" case grew out of a coordinated assault on the US
tobacco industry, which was launched in 1994 when a group of lawyers
filed the largest class-action suit in US history.

The suit alleged that the major cigarette companies in the United
States fraudulently failed to inform consumers that nicotine is
addictive and that they manipulated the level of nicotine in cigarettes
to sustain their addictive nature.


ENERGY TRADERS: Snohomish County PUD Commences Suit Over Electric Rates
-----------------------------------------------------------------------
The Snohomish County Public Utility District (PUD) today filed suit
against a group of the nation's largest electric power companies,
striking out against the allegedly artificial high prices that forced
large and unpredictable rate increases on customers.

The PUD serves 270,000 residential and commercial customers north of
Seattle, Washington.  This is the first suit in which a Washington
state public utility district has sued power generating and marketing
companies.  According to the PUD, the suit attempts to right some of
the wrongs inflicted on consumers during the recent power crisis in the
Western US.  

"We were forced to impose some very significant rate increases on our
customers, many of whom are seniors and working families, now
struggling just to keep their lights on," Don Berkey, president of the
PUD Board of Commissioners said in a press release.  "We're learning
more every day about how Enron and other power marketers manipulated
the energy market, so we're asking the court to step in to force these
companies to own up to their actions and refund these wrongfully
obtained windfalls."

Filed in California District Court by attorney Steve Berman of the
Seattle-based law firm Hagens Berman, the suit claims that the power
companies conspired to drive up electric prices by creating artificial
shortages during last year's power crisis and reaped billions of
dollars in unjust profits as a result.

"Our mandate was to provide power to customers at a fair price," said
PUD General Counsel Michael Gianunzio.  "We intend to prove that these
power traders created a wildly cynical scam that drove prices through
the roof while cashing in on short-term profits.  Snohomish County PUD
did everything it could to provide low cost, reliable service for its
customers, but found itself in a chaotic market manipulated by the
defendants."

Mr. Gianunzio added, "These energy traders used many strategies to game
the Western energy market, including strategies from Enron with
colorful names such as 'Get Shorty' or 'Death Star'. The 'Get Shorty '
strategy involved traders submitting false information in the energy
grid to their financial advantage."

The defendants include:

     (1) Williams Electric Marketing (NYSE:WMB),

     (2) Mirant Corporation (NYSE:MIR),

     (3) Reliant Energy Services (NYSE:REI),

     (4) Duke Energy Trading (NYSE:DUK),

     (5) Dynegy Power Marketing (NYSE:DYN) and

     (6) Sempra Energy Resources (NYSE:SRE)

According to the complaint, the residents of Snohomish County saw their
electricity rates increase by approximately 60 percent as a result of
the alleged price inflation.  The complaint states that before the
Western energy crisis, wholesale prices for electricity in the Pacific
Northwest averaged about $24 per megawatt hour (MWh). During late 2000
and early 2001, wholesale prices ballooned to $500 per MWh, with prices
on the spot market recorded as high as $3300 per MWh.

Lawyer for the plaintiffs Steve Berman states that the skyrocketing
energy prices cornered the PUD, forcing it to balance the needs of
understandably upset customers and the financial well being of the not-
for-profit public utility.  "Snohomish PUD found itself squarely in the
middle of an economic and political storm," Mr. Berman said.

The suit claims that in addition to withholding power in the longer-
term markets to drive up prices in the short-term markets, the power
companies conspired to set prices, and held those prices by monitoring
one another's trading practices.  It also alleges the defendants
engaged in a series of electric trades designed to artificially inflate
electric prices.

The suit claims the defendants committed violations of California
antitrust laws, committed unlawful and fraudulent business acts or
practices, and violated California's business and professions code.

For more details, contact Steve Berman by Phone: 206-623-7292 or by E-
mail: steve@hagens-berman.com or Mark Firmani by Phone: 206-443-9357 or
by E-mail: mark@firmani.com


FINOVA GROUP: Fairness Hearing On Securities Settlement Set For July
--------------------------------------------------------------------
The fairness hearing for the settlement of the class action against
Finova Group, Inc. has been set for July 26,2002 in the United States
District Court for the District of Arizona.  

The suit was filed on behalf of purchasers of Finova Group, Inc. or
Finova Capital Corporation common stock or debentures between January
14,1999 through and including November 13,2000.  The class includes
persons who exchanged stock in Sirrom Capital Corporation for stock in
the Finova Group, Inc. in March 1999.

The hearing is being held for the purpose of determining:

     (1) whether the proposed settlement of the claims in this action
         for the sum of US$40,280,000 in cash and accrued interest,
         together with any recovery obtained from prosecution of an
         assigned claim for US$7,220,000 should be approved by the
         court as fair, reasonable and adequate;

     (2) whether, thereafter, this action should be dismissed with
         prejudice as set forth in the stipulation and agreement of
         settlement, dated February 19,2002;

     (3) whether the proposed Plan of Allocation is fair, reasonable
         and adequate and therefore should be approved; and

     (4) whether the application of plaintiffs' counsel for the payment
         of attorneys' fees and reimbursement of costs and expenses
         incurred should be approved.

For more details contact Alan Schulman by Mail: Bernstein Litowitz
Berger & Grossman LLP, 12544 High Bluff Drive, Suite 150, San Diego CA
92130.


FRED HUTCHINSON: Cancer Center Faces Suit Over Protocol 126 Trial Risks
-----------------------------------------------------------------------
The Fred Hutchinson Cancer Research Center in Seattle Washington faces
a class action filed by the families of participants in a blood cancer
clinical trial performed at the center.  The suit alleges that the
Center failed to adequately warn patients about the risks involved in
the study in the 1980s and 1990s, the US Medicine, Inc. reports.

The suit, filed on behalf of approximately 82 individuals, relates to a
clinical trial called Protocol 126 that was conducted at the center
between 1981 and 1993 and was aimed at preventing an adverse reaction
called graft-versus-host disease (GVHD) from occurring in patients
receiving bone-marrow transplants.

According to the complaint, 80 of 82 patients have died "from graft
failures and/or leukemic relapse attributable to the treatment."

"Patients who participated in this trial did so because they thought it
was their best chance for success in fighting their cancer," the
plaintiff's attorney Alan Milstein, of the law firm of Sherman,
Silverstein, Kohl, Rose & Podolsky, told US Medicine, Inc.  "It
obviously wasn't."

The named plaintiffs are William Lee Wright, who is suing on behalf of
his wife Becky who went to the center to undergo a bone marrow
transplant and died following the treatment in 1985 and Peggy Draheim,
whose husband Dr. John Draheim came to the center for chemotherapy,
radiation and bone marrow transplants and died after a failed bone
marrow transplant in 1984, the US Medicine, Inc. reports.

The complaint alleges that the defendants failed to follow ethical
standards, misrepresented the risks of participating in the trial, and
failed to disclose their financial interests in the protocol to
patients.

The Seattle Times had earlier reported on the Protocol 126 trials in a
five-part series.  The Center responded in an open letter to the
community, patients and staff, particularly to allegations that
patients were not informed of the treatment risks in the trial.

"We at the Hutchinson center believe our system for informing patients
of the risks and anticipated benefits associated with their treatment
is among the best in the country," the letter said, according to US
Medicine, Inc.  "We also know that we carefully and effectively monitor
patient safety during the conduct of clinical trials."


INDIAN FUNDS: House Panel Limits Historic Tracking Of Accounting Errors
-----------------------------------------------------------------------
The House Appropriations Committee moved to limit a historic, court-
ordered accounting for what are alleged to be multibillion-dollar
errors in payments to Indians through a trust fund managed by the
Interior Department, according to a report by The Wall Street Journal.

While a federal judge has ordered the department to do an accounting of
the trust fund going back to the 19th century, when it originated, the
House committee says it will provide funds for only a search of
computer records, which go back to 1985.  Interior had estimated that
the larger search would cost $2.4 billion.

A committee aide, who asked not to be identified, said members felt the
larger search was "not cost effective."  The more narrow search, the
aide said, could cost as much as $1 billion.  As part of an amendment
to the appropriation bill, the committee also acted to limit fees paid
by the government to two special masters monitoring the Interior
Department's actions in the case for Judge Royce C. Lamberth of the
federal district court in Washington, DC.

The appropriation bill, which must be approved by the full House and
the Senate, would also pay legal fees for a number of current and
former governmental officials charged with contempt of court in the
tangled case, including Interior Secretary Gale Norton and former
Interior Secretary Bruce Babbitt.

The Indians' class action claims they may be owed as much as $10
billion for alleged errors, fraud and losses of monies which were
supposed to be collected as royalties for use of Indian lands, monies,
which then were supposed to be kept in trust funds for individual
Indians by a government-run banking system on reservations.  Judge
Lamberth already has ruled that the Interior Department has violated
its fiduciary duties as trustee.  The remaining question is how much
may be owed to individuals who had accounts in the trust fund.

Eloise Cobell, lead plaintiff in the case, called the House
Appropriations Committee's limitation a "naked abuse of power"
initiated by the Bush administration to protect "corrupt activities" of
public officials.  Interior spokesman Eric Ruff said the committee's
action was self-initiated.  "We did not make the request," he stated.

The department's lawyers have complained that the "magnitude of the
historical accounting is enormous," because the trust fund has handled
at least $13 billion according to records that go back to 1909.  The
amendment goes before the House Rules Committee, where it may face
opposition from members of other committees that deal with Interior
matters.


MICHIGAN: Builders Won't Join Suit V. Flint County Drain Commissioner
---------------------------------------------------------------------
Sixty-six Michigan builders signed affidavits stating they won't join
in a possible class action against county Drain Commissioner Jeff
Wright, relating to his moratorium on new water and sewer permits in
Flint County, the Flint County Journal reports.

The suit basically relates to the new US$1,000 fee on water and sewer
tap-ins, and whether they constitute a violation of the Michigan
Constitution's Headlee Amendment, which requires a public vote on any
new taxes that exceed the rate of inflation, the Flint County Journal
reports.

Attorneys for Wright and developers Gateway Apartments and the Tobin
Group, which filed the suit, talked this week but haven't resolved
their differences, Raymond J. Branch, a county attorney, told the
Journal.  However, Mr. Wright hasn't backed off his moratorium on new
water and sewer permits in most of the county.

Barry Simon, executive vice president of the Builders Association of
Metropolitan Flint, told the Journal he has collected the affidavits,
which should show Wright the suit will not gain class-action status
because most builders are vowing not to join in.  The association's
board of directors also has passed a resolution condemning the lawsuit
and saying it does not represent the views of county builders.

Mr. Simon added that he thinks "we are close to a resolution" on the
moratorium, but Mr. Wright said Wednesday that he still wants the
lawsuit against the county out of the way before he resumes issuing new
subdivision approvals.

The county filed papers this week asking Genesee Circuit Judge Geoffrey
L. Neithercut for a summary disposition in the lawsuit. A hearing on
the county's motion is scheduled for July 31, the Flint County Journal
reports.


NETSOLVE INC.: Fairness Hearing For Suit Settlement Set for September
----------------------------------------------------------------------
The fairness hearing relating to the proposed settlement of the
consolidated securities class action against Netsolve, Inc. is set for
September 13,2002 in he United States District Court for the Western
District of Texas, Austin Division.

The suit alleges violations of federal securities laws on behalf of
purchasers of the Company's common stock from April 18,2000 through
August 18,2000, inclusive.  The hearing is being held to determine
whether the proposed settlement should be court approved as fair,
reasonable and adequate, and to consider the application for attorney's
fees and reimbursement of expenses.

For more information, contact Richard H. Weiss by Mail: Milberg Weiss
Bershad Hynes & Lerach LLP, One Pennsylvania Plaza, New York NY 10119-
0165 by Phone: 212-594-5300 or visit the firm's Website:
http://www.milberg.com


PERKINELMER INC.: Cauley Geller Commences Securities Fraud Suit in MA
---------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the District of Massachusetts
on behalf of purchasers of PerkinElmer, Inc. (NYSE: PKI) common stock
during the period between July 15, 2001 and April 11, 2002, inclusive.

The complaint charges the Company and certain of its officers and
directors with violating Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing
a series of materially false and misleading statements to the market
between July 15, 2001 and April 11, 2002.

According to the complaint, the Company issued numerous press releases
regarding its performance during the class period, which represented
that:

     (1) the Company was successfully growing its revenues and
         earnings;

     (2) the Company's transformation into a provider of health-related
         products and services was proceeding successfully; and

     (3) the Company would meet its financial performance targets for
         2002.

The complaint further alleges that these, and other representations
were materially false and misleading because they failed to disclose
that:

     (i) the Company was experiencing a decline in the demand for its
         products, especially at its Optoeletronics division;

    (ii) the Company was carrying tens of millions of dollars of
         obsolete inventory on its books; and

   (iii) the Company's expenses were soaring due to the spate of
         numerous acquisitions and divestitures it had undertaken.

On March 1, 2002, the Company issued a press release revealing that
first quarter of 2002 revenues and earnings would be materially less
than the Company had represented its figures would be only three weeks
earlier.  In reaction to the announcement, the price of the Company's
common stock plummeted by 31%.

The full truth regarding the Company's business was not fully disclosed
until April 11, 2002, when the Company issued a press release revealing
that its reported earnings will be breakeven, instead of the figure of
$0.16-$0.17 per share that the Company had stated, on March 1, it
expects to earn, and that its revenues will decline in the first
quarter of 2002 because of weakness in all of its divisions.

In reaction to the announcement, Company stock plummeted by another
28%, falling from $16.70 per share on April 10, 2002 to $12.04 by the
close of April 11, on extremely heavy trading volume.  The individual
defendants and other Company insiders sold a total of 595,000
PerkinElmer common stock during the class period, reaping gross
proceeds in excess of $18.4 million and the Company completed a
significant acquisition using its common stock as currency.

For more details, contact Jackie Addison, Sue Null or Ellie Baker by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944
by E-mail: info@classlawyer.com


RJ REYNOLDS: GA Court Dismisses Consolidated Tobacco Antitrust Suit
-------------------------------------------------------------------
The United States District Court for the Northern District of Georgia,
Atlanta Division dismissed a consolidated antitrust class action
against RJ Reynolds Tobacco Company, brought on behalf of wholesalers
across the country.  The court ruled that evidence did not support the
claim that the Company and other cigarette manufacturers conspired to
"fix" the wholesale prices of cigarettes.

Disagreeing with the wholesalers' contention and granting summary
judgment to the cigarette manufacturers, US District Court Judge Owen
Forrester ruled that,  "No reasonable jury could conclude that the
activities in the cigarette industry during the relevant timeframe
reflect a conspiracy to fix prices."

Darryl Marsch, senior counsel for Reynolds Tobacco, said in a press
statement, "As the judge determined, these cases had no merit. Reynolds
Tobacco makes unilateral pricing decisions based on its independent
business judgment."  

"We believe that these cases were manufactured by plaintiffs' lawyers,
not the wholesalers that comprised the class," he continued.  "Our
wholesale distributors understand that Reynolds Tobacco competes
intensely with the rest of the industry.  The bottom line is that these
cases should never have been brought in the first place."


SCORPION TECHNOLOGIES: Fairness Hearing For Settlement Set Sept 2002
--------------------------------------------------------------------
The fairness hearing for the settlement of the securities class action
pending on behalf of purchasers of Scorpion Technologies, Inc.'s common
stock from May 13,1992 through December 31,1994, inclusive has been set
for September 4,2002 in the United States District Court for the
Southern District of New York.

The suit names as defendants:

     (1) Richard Bauer,

     (2) Groupe Scorpion BV,

     (3) Green-Cohn Group,

     (4) Morton Cohn,

     (5) Van D. Greenfield,

     (6) CS First Boston,

     (7) Smith, Benton & Hughes, Inc.,

     (8) Michael Zaman,

     (9) Claudia Zaman,

    (10) Edward Fisch,

    (11) Barry Witz,

    (12) Mario V. Andreade,

    (13) Westfield Financial Corporation,

    (14) Idata, Inc.,

    (15) Robert Bogutski, and

    (16) Kathleen Bogutski

The hearing is being held to determine whether:

     (i) the proposed settlement with Settling Defendants for the
         aggregate sum of US$1.25M with all interest and earnings
         thereon after the delivery of any portion of this amount into
         the escrow account having been established for the benefit of
         the class, should be approved by the court as fair, reasonable
         and adequate;

    (ii) whether, thereafter, this class action should be dismissed on
         the merits and with prejudice as against settling defendants
         as set forth in the stipulation of settlement on file with the
         court; and

   (iii) the reasonableness of the application of class counsel for the
         payment of attorney's fees and reimbursement of costs and
         expenses incurred subsequent to this settlement.

For more information, contact Robert G. Eisler or Daniel P. Chiplock by
Mail: Lieff, Cabraser, Heimann & Bernstein, LLP 780 Third Avenue, 48th
Floor, New York, NY 10017


SODEXHO INC.: DC Court Grants Class Certification to Race Bias Suit
-------------------------------------------------------------------
The United States District Court for the District of Columbia granted
class action status to a racial discrimination suit filed against Food
services company Sodexho, Inc. (formerly known as Sodexho Marriott
Services), Reuters reports.  The suit, filed by 10 current and former
workers, accused the Company of racial discrimination in its hiring and
promoting practices.  

The Company told Reuters that it believes the allegations in the case
"are not supported by the facts."  The Company added in a statement,
"The company is strongly committed to its policy of equal employment
practices, and to promoting diversity."



TIMCO AVIATION: Settlement Fairness Hearing Set for August
----------------------------------------------------------
The fairness hearing for the settlement proposed in the securities
class action pending against Timco Aviation Services, Inc. has been set
for August 20,2002 in the United States District Court for the Southern
District of Florida, Miami Division.

The suit alleges federal securities violations on behalf of all persons
who purchased the Company's common stock from April 30,1997 through and
including April 14,2000.

The settlement hearing is being held to determine:

     (1) whether the proposed settlement of the claims in the
         litigation should be approved by the court as fair, reasonable
         and adequate;

     (2) whether the plan of allocation is fair, reasonable and
         adequate and therefore should be approved;

     (3) whether the application of plaintiff's counsel for an award of
         attorneys' fees and reimbursements of costs and expenses
         incurred in connection with the litigation should be approved;
         and

     (4) whether the litigation should be dismissed with prejudice.

For more information, contact Robert N. Kaplan by Mail: Kaplan Fox
Kilsheimer LLP 805 Third Avenue, 22nd Floor, New York NY 10022 or
contact Kenneth Vianale by Mail: Milberg Weiss Bershad Hynes & Lerach
LLP 5355 Town Center Road, Suite 900 Boca Raton, FL 33486


UNIFY CORPORATION: CA Court Grants Final Settlement Approval
------------------------------------------------------------
The United States District Court for the Northern District of
California granted final approval to a settlement of the consolidated
securities class action against Unify Corporation (OTC System: UNFY).

The suit, filed against the Company in 2000, related to financial
restatements of the Company's financial results for fiscal year 1999
and for the first three quarters of fiscal year 2000, and alleges
violations of federal securities laws.  

The Company reached a settlement in the suit in April 2002.  
Additionally, in May 2002, the Superior Court for the State of
California for the County of San Francisco gave final approval to the
settlement of the consolidated derivative actions filed against the
Company.

The Company's portion of the settlement will be covered by its
insurance carrier and therefore have no negative impact on its earnings
or financial position.  

"We are pleased that the court has given its final approval to the
settlement," Todd Wille, chairman, president and CEO of Unify, said in
a statement. "We have concluded this chapter in the Company's history
and we look forward to continuing to execute on our strategic plan and
build value for our shareholders, customers and employees."


WILDSIDE ADULT: Strip Club Faces Consumer Suit For ADA Violations in FL
-----------------------------------------------------------------------
The Wildside Adult Sports Cabaret faces a lawsuit from a quadriplegic
alleging that it violated the American with Disabilities Act, the
Associated Press reports. The suit alleges that the lap dance room of
the strip club does not have wheelchair access.

Florida resident Edward Law filed the suit after visiting the club on
May 9 and June 14.  The suit alleges that the lap dance room is only
accessible by a short flight of stairs, and that the counter around the
stage where strippers dance is too high, making it difficult for Mr.
Law to see the stage and set down his drinks.

"This is an industry that is high profit and knows about ADA and is
ignoring it," his attorney, Anthony Brady Jr., told the South Florida
Sun-Sentinel.  "I have no sympathy for them violating ADA."

The club's General Manager Bret Rudowsky told AP that he was unaware of
the problems and that Mr. Law could have received a lap dance elsewhere
in the club.

Mr. Law has other suits pending against other establishments, namely
the Landing Strip, an Orlando restaurant and a Daytona Beach Harley-
Davidson motorcycle shop.


WORLDCOM INC.: Banks Charge $2.5B in Fraud After Accounting Fiasco  
------------------------------------------------------------------
A group of 25 banks is accusing WorldCom Inc. of defrauding them of
nearly US$2.5 billion six weeks before publicly disclosing around $4
billion in accounting irregularities, according to a report by the
Sun-News of Myrtle Beach, S.C..

The banks' lawsuit, recently filed in Manhattan's State Supreme Court,
include a request for an order to immediately freeze $2.65 billion of
WorldCom assets.  Justice Helen Freedman, after oral arguments, denied
their request and scheduled a hearing for July 16.

The Company obtained the money from the banks by way of a credit
agreement signed June 8, 2001, including Citigroup.  That agreement
allowed the Company to borrow, repay and re-borrow up to $2.65 billion
within a year, and it was conditioned on certain terms and
representations by the Company.

Two of 27 banks are not part of the lawsuit.  The other 25, whose
$2.49 billion in loans are 93 percent of the total, say in court papers
that "on May 15, 2002, barely six weeks before disclosing a massive
accounting fraud," the Company told the lenders by telephone "that it
intended to draw down the entire $2.65 billion in a single borrowing."

Court papers say that on May 20, the Company assured lenders its
quarterly financial statement for the first quarter of 2002 was
prepared in accordance with generally accepted accounting principles,
and that it presented a fair picture of its financial condition.

The Company, however, issued a press release on June 25 disclosing an
accounting fraud of "staggering proportions," the banks' court papers
say.  They say that if they had known the company's true condition,
they would not have permitted the loans.

The Company admitted it had disguised $3.9 billion in expenses as
capital expenditures so it would appear more profitable.  Court papers
say that Michael Salisbury, the Company's general counsel, "stated that
the fraud had been perpetrated at the highest level of the company."


*Catholic Church Called To Change as Survival, Authority In Question
--------------------------------------------------------------------
The Catholic Church is beset by hundreds of lawsuits, some class
actions, not only against individual priests accused of child abuse,
but against even the bishops, the dioceses and archdioceses.  All have
been called upon to answer charges of cover-up, of indifference to the
sufferings of the victims, of breaking the law by failing to report
commission of crimes, or at the least, of assault.

The Catholic faith is, by its own definition, everlasting, but the
sexual-abuse scandal in the US church has raised the question of how
the American institution will survive, according to a report appearing
recently in The Washington Times.

"Whether the Catholic Church as currently governed and managed can
proclaim the Gospel effectively in this milieu is an open question,"
Scott Appleby, a Notre Dame University professor, recently told the
bishops at the conference in Dallas.  "In the court of public opinion,
the church is now guilty until proven otherwise," he said.

At a time of lost credibility, the 60 million-member church, with its
178 dioceses and 46,000 priests, is facing internal and external
pressures that may change it completely, said The Washington Times.  
Some of those pressures will be applied by what Professor Appleby
called the church's "enemies," who have ranged from secularists
opposing its religious influence to lawyers wanting to sue it to
liberals denouncing its moral stances.

"The current sex-abuse scandal has our society at a crossroads," said
Gloria Feldt, president of Planned Parenthood Federation of America, in
a statement regarding the church's problem.  Without disclosing any new
initiatives, she said her organization will "advance our proactive
agenda for contraceptive equity and increased access to emergency
contraception and medically accurate sexuality education."

More traditional Catholics worry that in the fights over sex education,
abortion, homosexual rights or pornography, the clerical voice may
become meek.  "My greatest fear is that the bishops will be too
intimidated to speak out on matters sexual," said William A. Donohue of
the Catholic League for Religious and Civil Rights.   "That is where
lay Catholics have to fill the gap."

Church foes have not stripped it of its tax exemption, but the sexual-
abuse liability has opened a door to church assets.  A class action
filed early last month has, analysts agree, little hope of success,
while other lawyers have raised the specter of trying to use RICO, or
racketeering, complaints against the church.

Last month, a New York grand jury investigating sexual-abuse charges,
said in a report that the church led an "orchestrated effort to protect
abusing clergy members from investigation, arrest and prosecution."  It
recommended changing laws to make the church authorities accountable.  
A grand jury also has been called in Boston to investigate possible
crimes in the archdiocese there, according to news reports.

Still, says The Washington Times, investigations and lawsuits are
unlikely to dissolve the church financially because the church is
organized into many separate entities such as dioceses, orders and
charities, said Kevin Baine, a Washington lawyer who has defended
church cases.  "There is a misconception that there is some legal
entity called `the Catholic Church,' and that is not true," he said.

Some commentators have noted how little anti-Catholicism has been
spurred by the scandal.  However, what negativity does exist may affect
the fast-growing Hispanic sector of US Catholicism, where evangelical
sects are competing for converts.  Those sects traditionally emphasize
the "corruption" of the church in Rome.

Mainstream evangelicals will not "take advantage of this because we
have problems in our own denominations," said Esdras Betancourt,
chairman of the Hispanic commission for the National Association of
Evangelicals.  However, he said a sectarian minority will always "use
whatever they can get to be anti-Catholic."

Regular churchgoers, meanwhile, are worried about the use of their
donations.  An estimated $7.5 billion is put in collection plates each
year, about $125 per Catholic annually.  Some lay leaders are wondering
whether that number will drop after the disclosure of millions of
dollars in hush money paid to sexual-abuse victims.

Mr. Betancourt's organizations represent donors who give $200 million a
year to church charities and schools.  He said that while the Vatican
publishes every detail on its income and assets, the dioceses do not.
"A policy of transparency will help a great deal," Mr. Betancourt said.  
He said that Catholics at the parish and diocesan level must demand a
precise accounting of everything.

An opinion poll cited during the bishop's deliberations in Dallas said
that about 80 percent of Catholics blamed them for the crisis instead
of questioning their faith.  "But what about the 1 in 10 who does
question it?" said Commonwealth editor Margaret O'Brien Steinfels, who
also addressed the bishops.

The scandal may accelerate a secularization seen in many denominations,
including the Catholic Church, and will be especially hard to explain
to young people who struggle with the church institution, she and Mr.
Appleby said.  An equally harsh effect is expected on the image of the
hierarchy and priesthood and recruitment of new priests.  In Dallas,
the bishops voted to strip abusive priests of clerical activity short
of firing them from the organization.

A committee also was formed to "review the role of bishops themselves"
and consider whether the pope should be advised to dismiss any for
wrongdoing.  That is also expected to be a policy proposal of a
National Review Board, lead by Oklahoma Governor Frank Keating, a
former prosecutor who said some bishops may have been "obstructing
justice or, arguably, accessories to the crime."

Professor Appleby reprimanded the bishops, saying that their "lack of
Accountability" was "fostered by a closed clerical culture that infects
the priesthood."  He and others have urged changes so that lay leaders
can make decisions on money and assigning priests.  Others have urged a
lay role in appointing bishops, which is presently the sole authority
of the pope.

The moral crisis, meanwhile has spared neither the conservative nor
liberal wings of the church.  Boston's Cardinal Bernard Law, a
conservative, shielded one of the more abusive priests on record.  A
leading liberal in the church, Archbishop Rembert Weakland of
Milwaukee, resigned after admitting that he paid $450,000 to a former
seminarian.

Amid the scandal, the Vatican's official spokesman said the church
should not ordain homosexuals.  Traditionalists are calling on the
bishops to "purify" the priestly ranks, even as some of the heirarchy
are themselves homosexual.  Three bishops with such complaints against
them resigned in recent months, according to The Washington Times.

"Serious attention must be given to the problem of active homosexuals
being admitted to the priesthood," said Robert Royal, a Catholic
scholar with Catholics for Authentic Reform, which organized amid the
current crisis.  The church should be "rooting out such men," he said.  
Yet, in Dallas, one conservative bishop's motion to consider the impact
of the "homosexual culture" on the problem was voted down.

                    New Securities Fraud Cases

CRYOLIFE INC.: Wolf Popper Commences Securities Fraud Suit in N.D. GA
---------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action against Cryolife,
Inc. (NYSE:CRY) and two of its senior officers on behalf of purchasers
of the Company's common stock from April 2, 2001 through July 5, 2002,
inclusive.  The suit is pending in the United States District Court for
the Northern District of Georgia against the Company and:

     (1) Steven G. Anderson, and

     (2) David Ashley Lee

The suit alleges violations Section 10(b) of the Securities Exchange
Act of 1934, Rule 10b-5 promulgated thereunder, and Section 20(a) of
the Exchange Act.  These allegations concern false statement made by
the defendants, during the class period concerning the Company's
purported compliance with FDA requirements for preserving and testing
human tissue.

The allegedly false statements defendants are accused of making all
concern the safety of the Company's cryogenically frozen human tissue
products.  After being subjected to questioning concerning the safety
of its products, defendants reiterated their statements about safety
and about compliance with relevant laws and regulations.

The complaint alleges that defendants' statements concerning safety
were false and misleading.  The true facts were disclosed beginning on
June 24, 2002, when the Company acknowledged that it had received an
FDA warning letter criticizing the Company for "significant deviations
from the Quality System Regulation (QSR) . (which) cause your devices
to be adulterated."  

The warning letter also stated that the specific violations noted by
the FDA "may be symptomatic of serious underlying problems in your
firm's manufacturing and quality assurance systems."  However, even
defendants' June 24, 2002 statements were materially false and
misleading and remained uncorrected until July 5, 2002, when defendants
acknowledged a further incidence of infection from Cryolife tissue and
the existence of a prior undisclosed FDA warning letter.

Disclosure of the FDA warning letter, and the other true facts
concerning the Company's operating practices, caused the Company's
common stock to plummet from $26.77 (its closing price on June 18,
2002) to close at $10.50 on July 10, 2002.

For more details, contact Robert C. Finkel, by Mail: 845 Third Avenue,
New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax:
212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit
the firm's Website: http://www.wolfpopper.com


CRYOLIFE INC.: Charles Piven Commences Securities Fraud Suit in N.D. GA
-----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired CryoLife, Inc. (NYSE:CRY)
securities between August 11, 2000 and June 26, 2002, inclusive, in the
United States District Court for the Northern District of Georgia,
Atlanta Division, against the Company and:

     (1) Steven G. Anderson and

     (2) Albert E. Heacox

The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.

For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com


FLEXTRONICS INTERNATIONAL: Schatz & Nobel Lodges Securities Suit in NY
----------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons who purchased Flextronics International, Ltd., (Nasdaq:
FLEX) from October 2, 2001 through June 4, 2002, inclusive.

The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition.  The complaint alleges that the
Company failed to disclose that its business and operations were being
negatively impacted by declining sales.

Specifically it is alleged that throughout the class period, many of
the Company's customers were experiencing enough financial difficulty
that it was highly foreseeable that they would be unable to complete
anticipated sales, thereby causing the Company to suffer a decline in
its revenues.

It is also alleged that the defendants under-reported the amount of
financing needed to complete the Company's restructuring and over-
stated the progress of this reorganization.  On June 4, 2002,
Flextronics announced that it was recording at least an additional $150
million in restructuring charges.

On this news, the Company dropped 23% from $12.32 to $9.50 per share.

For more details, contact Andrew M. Schatz or Nancy A. Kulesa by Phone:
800-797-5499 by E-mail: sn06106@aol.com or visit the firm's Website:
http://www.snlaw.net.  


MERCK & CO.: Berman DeValerio Commences Securities Suit in New Jersey
---------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action, claiming that Merck & Co., Inc. (NYSE:MRK) and several
top officers improperly inflated revenues by billions of dollars.  

The suit is pending in the United States District Court for the
District of New Jersey, on behalf of all investors who bought the
Company's common stock from July 1, 1999 through June 21, 2002.  
According to the complaint, Merck overstated revenues by billions of
dollars from its subsidiary Merck-Medco Managed Care, LLC by including
consumer co-payments for prescription drugs in its revenues.

During the class period, Merck-Medco's revenues made up over 50% of the
Company's total revenues.  The lawsuit claims that the Company violated
Generally Accepted Accounting Principles because neither company bills
for the co-payments, gets billed for them, or otherwise comes into
contact with co-payment money.  Patients make co-payments directly to
pharmacies when they purchase medicine.

On June 21, 2002, The Wall Street Journal reported on the Company's
accounting practices and estimated that the Company and Merck-Medco may
have pumped up their 2001 revenues by as much as $4.6 billion.  Similar
overstatements may have occurred for 1999 and 2000, the complaint says.

That same day, according to the complaint, a Company spokesman admitted
that the company had been recording prescription drug co-payments as
revenue since it acquired Merck-Medco in 1993.  In the wake of these
revelations, the Company's stock immediately dropped 4.25% from its
closing price of $52.20 on June 20, 2002 to a closing price of $49.98
on June 21, 2002, its lowest closing price since late 1997.

After the complaint was filed, Company shares fell again when the
Journal reported that the company admitted, in a regulatory filing,
booking $12.4 billion in Merck-Medco revenue that it had never
collected.

For more details, contact Steven D. Morris or Michael G. Lange by Mail:
One Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E-mail:
law@bermanesq.com or visit the firm's Website:
http://www.bermanesq.com.  


MERCK & CO.: Glancy & Binkow Lodges Securities Fraud Suit in New Jersey
-----------------------------------------------------------------------
Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the District of New Jersey on behalf of a
class consisting of all persons who purchased securities of Merck &
Co., Inc. (NYSE:MRK) between July 1, 1999 and June 21, 2002, inclusive.

The suit charges the Company and certain of its officers and directors
with violations of federal securities laws.  Among other things,
plaintiff claims that defendants had materially overstated the
Company's revenues by improperly including as revenue the value of co-
payments made by consumers to their pharmacy to cover their portion of
the cost of a prescription under an insurance plan.

The complaint alleges that, during the class period, the Company
overstated its revenue by billions of dollars (by approximately $4.6
billion in year 2001 alone) because neither Merck nor its Medco unit
ever received any revenue from the co-payments that were made to
pharmacies.  As a result, during the class period, defendants'
financial statements were materially overstated and failed to comply
with Generally Accepted Accounting Principles (GAAP).

The complaint alleges that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the nature of Merck's revenues and earnings caused the Company's stock
price to become artificially inflated, inflicting damages on investors.

For more details, contact Michael Goldberg by Mail: 1801 Avenue of the
Stars, Suite 311, Los Angeles, California 90067 by Phone: 310-201-9161
or 888-773-9224 or by E-mail: info@glancylaw.com.  


MERRILL LYNCH: Wites & Kapetan Commences Securities Fraud Suit in NY
--------------------------------------------------------------------
The Law Firm of Wites & Kapetan, PA initiated a securities class action
in the United States District Court for the Southern District of New
York, on behalf of purchasers of Merrill Lynch's Internet
Infrastructure Holdrs/SM Trust (AMEX:IIH) during the period between
February 24, 2000 through April 8, 2002, inclusive.  The suit names as
defendants the Company and:

     (1) John L. Steffens,

     (2) E. Stanley O'Neal,

     (3) George A. Schieren,

     (4) Ahmass L. Fakahany

The defendants and the IIH Trust allegedly violated Sections 11,
12(a)(2) and 15 of the Securities Act of 1933 by issuing a series of
false and misleading statements to the market during the class period
about the IIH Trust, which holds 20 publicly traded companies involved
in the internet-infrastructure business.

According to the suit, Merrill and the individual defendants failed to
disclose in the Prospectus for the IIH Trust that Merrill's Internet
research analysts issued inflated ratings and biased reports for many
of the companies in the IIH Trust.

The suit further alleges that Merrill engaged in such conduct despite
knowing that these companies were overvalued and, as a result, the IIH
Trust's value would decline.  The suit's allegations are based, in
part, on the New York State Attorney General's reports on the
activities of Merrill's Internet research practices.

For more details, contact Wites & Kapetan PA by Mail: 1761 West
Hillsboro Boulevard, Suite 403, Deerfield Beach, FL 33442 by Phone:
954-570-8989 by Fax: 954-428-3929 by E-mail: mwites@wklawyers.com or
visit the firm's Website: http://www.wklawyers.com


PERKINELMER INC.: Schiffrin & Barroway Lodges Securities Suit in MA
-------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Massachusetts on
behalf of all purchasers of the common stock of PerkinElmer, Inc.
(NYSE: PKI) from July 15, 2001 through April 11, 2002, inclusive.

The complaint charges the Company and certain of its officers and
directors with violating Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing
a series of materially false and misleading statements to the market
between July 15, 2001 and April 11, 2002.

According to the suit, the Company issued numerous press releases
regarding its performance during the class period, which represented
that:

     (1) the Company was successfully growing its revenues and
         earnings;

     (2) the Company's transformation into a provider of health-related
         products and services was proceeding successfully; and

     (3) the Company would meet its financial performance targets for
         2002.

The complaint further alleges that these, and other representations
were materially false and misleading because they failed to disclose
that the Company was experiencing a decline in the demand for its
products, especially at its Optoeletronics division, the Company was
carrying tens of millions of dollars of obsolete inventory on its books
and the Company's expenses were soaring due to the spate of numerous
acquisitions and divestitures it had undertaken.

On March 1, 2002, the Company issued a press release revealing that
first quarter of 2002 revenues and earnings would be materially less
than the Company had represented its figures would be only three weeks
earlier.  In reaction to the announcement, the price of the Company's
common stock plummeted by 31%.

The full truth regarding the Company's business was not fully disclosed
until April 11, 2002, when the Company issued a press release revealing
that its reported earnings will be breakeven, instead of the figure of
$0.16-$0.17 per share that the Company had stated, on March 1, it
expects to earn, and that its revenues will decline in the first
quarter of 2002 because of weakness in all of its divisions.

In reaction to the announcement, Company stock plummeted by another
28%, falling from $16.70 per share on April 10, 2002 to $12.04 by the
close of April 11, on extremely heavy trading volume.  The individual
defendants and other Company insiders sold a total of 595,000 the
Company's common stock during the class period, reaping gross proceeds
in excess of $18.4 million and the Company completed a significant
acquisition using its common stock as currency.

For more details, 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 Website: http://www.sbclasslaw.com


SUPERVALU INC.: Charles Piven Commences Securities Fraud Suit in MN
-------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Supervalu, Inc.
(NYSE:SVU) securities between July 29, 1999 and June 25, 2002,
inclusive, as well as former shareholders of Richfood Holdings, Inc.
who exchanged their shares for Supervalu common stock.

The case is pending in the United States District Court for the
District of Minnesota, against the Company.  The action charges that
defendant violated federal securities laws by issuing a series of
materially false and misleading statements to the market throughout the
Class Period which statements had the effect of artificially inflating
the market price of the Company's securities.

For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com


UNIROYAL TECHNOLOGIES: Charles Piven Lodges Securities Suit in M.D. FL
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven initiated a securities class action
on behalf of shareholders who acquired Uniroyal Technology Corp.
(Nasdaq:UTCI) securities between February 8, 2000 and May 13, 2002,
inclusive, in the United States District Court for the Middle District
of Florida, against the Company and:

     (1) George Zulanas, Jr. and

     (2) Howard R. Curd

The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.

For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.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-
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Information contained herein is obtained from sources believed to be
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Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
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