/raid1/www/Hosts/bankrupt/CAR_Public/020809.mbx
C L A S S A C T I O N R E P O R T E R
Friday, August 9, 2002, Vol. 4, No. 157
Headlines
ABERDEEN ASSET: Lawsuit Over Collapsed Trust To Include More Investors
ADAMS MANUFACTURING: Recalls 2,740 Folding Chairs Due To Injury Hazard
APARTHEID LITIGATION: Leading Lawyer Has Other Views About Reparations
BELLSOUTH CORPORATION: Faces Racial Discrimination Suit in N.D. AL
CRATE & BARREL: Voluntarily Recalls 5,000 Media Carts For Injury Hazard
DPL INC.: Ordered To Preserve Data Related To Lawsuit Allegations
FAX.COM: FCC Issues Record Fine of $5.4M For Unsolicited Junk Faxes
FLORIDA: Lawyer Warns Lawsuits Against Special School Tests Likely
GEORGIA: Trial Starts in Fulton County Suit Over Atlanta's Water Rates
HUDSON'S BAY: Employees Sue Alleging Diversion of Pension Plan Assets
LOCKERBIE BOMBING: Minister Says Libya Ready To Compensate Victims
PERDUE FARMS: DE Court Grants Preliminary Approval to $10M Settlement
PHARMACEUTICAL COMPANIES: Knew Pharmacist Was Diluting Cancer Drugs
POTTERY BARN: Recalls 3.8T Star Clacker Wooden Toys Over Choking Hazard
RR DONNELLEY: Prevails As Jury Finds No Pattern of Age Discrimination
TELECOMMUNICATIONS COMPANIES: Settlement Expected In Phone Leases Suit
TEXAS: Officials Find Toxic Chemical Residue in Mexican Border Areas
VERISIGN INC.: FTC Investigating Firm's Internet Marketing Activities
XEROX CORPORATION: EEOC Says Cincinnati Facilities Hostile To Blacks
New Securities Fraud Cases
AMERICA ONLINE: Two Law Firms Commence Securities Fraud Suit in E.D. TX
CHARTER COMMUNICATIONS: Milberg Weiss Lodges Securities Suit in E.D. MO
CHARTER COMMUNICATIONS: Rabin & Peckel Lodges Securities Suit in CA
HPL TECHNOLOGIES: Berman DeValerio Commences Securities Suit in N.D. CA
JOHNSON & JOHNSON: Stull Stull Commences Securities Fraud Suit in NJ
MERCK & CO.: Berman DeValerio Commences Securities Fraud Suit in NJ
MERCK & CO.: Weinstein Kitchenoff Lodges Securities Suit in New Jersey
NICOR INC.: Berman DeValerio Commences Securities Fraud Suit in N.D. IL
VIVENDI UNIVERSAL: Milberg Weiss Commences Securities Suit in C.D. CA
XCEL ENERGY: Cauley Geller Commences Securities Fraud Suit in MN Court
XCEL ENERGY: Kaplan Fox Commences Securities Fraud Suit in MN Court
*********
ABERDEEN ASSET: Lawsuit Over Collapsed Trust To Include More Investors
----------------------------------------------------------------------
A legal action against Aberdeen Asset Management (AAM) is to be widened
to include investors in its collapsed Aberdeen High Income (AHI) split
capital trust, a firm of solicitors said, The Scotsman reports.
London-based solicitors group Leon Kaye said it planned to take legal
action on behalf of those who lost money in the trust, which went into
receivership earlier this week. Mr. Kaye, one of the solicitors in the
group, said earlier that preliminary letters of claims already have
been sent to fund managers AAM, BFS and Exeter, on behalf of 1,300
clients involved in a class action against firms that have sold the
split trusts.
About 50,000 investors have lost money in the GBP13 billion sector hit
by the combination of falling markets, high gearing and cross
investment.
Investors in AHI were warned that it was unlikely they would get any
money back after the trust went into receivership. The trust has
plunged in value from GBP190 million to less than GBP30 million in
assets - with Bank of Scotland owed almost that total amount, AHI's
receivers Ernst & Young said.
However, Leon Kaye plans to launch a class action in an attempt to
recover some cash for investors, many of whom had seen the value of
their holding dive by 90 percent before the receivers were called in.
The solicitor claims that Aberdeen High Income Trust was a high-risk
investment but was not marketed as such.
He added that because the trust came under the umbrella of Aberdeen
Asset Management, the fund manager and any other holding company could
be pursued for compensation as the promoter of the fund under the
Financial Services Act of 1986.
Mr. Kaye said he was moving forward with other claims from the action
group he has set up, called SPLIT, to try to get compensation for
people who have lost money in split trusts.
Split trusts have multiple classes of shares, some benefiting from
growth and others from income. The investments are often taken to
finance school fees or retirement, but the sector has come under fire
recently after around 40 of the 120 trusts ran into difficulties. It is
now being investigated by the Financial Services Authority amid
allegations of collusion between fund managers and misleading
advertisements of splits as low risks.
ADAMS MANUFACTURING: Recalls 2,740 Folding Chairs Due To Injury Hazard
----------------------------------------------------------------------
Adams Manufacturing Corporation in cooperating with the US Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 2,740
plastic folding chairs. Some of the legs on these chairs were mis-
assembled by the installer and a piece of the chair could be bent out
of shape. This can allow the chair to collapse during use causing
consumers to suffer injuries from falls.
The Company has received two reports of folding chairs collapsing. No
injuries have been reported.
The folding chairs have the brand names Adams Quik Fold Chair (as
individual chairs) and Quik Fold Caf, Set (as a set, including a table
and two chairs). The recalled individual chairs include item numbers
8575-48-3750, 8575-16-3750 and 8575-38-3750. The recalled chair sets
include item numbers 8590-48-3600, 8590-16-3600 and 8590-38-3600. The
chairs are made of white, green or sandstone molded plastic. A label
on the backrest of the chair reads "Adams Quick Fold Chair."
Discount department, hardware and home stores nationwide sold the
folding chairs from February 2002 through March 2002 for about $20 for
the individual chair and about $100 for the set.
For more information, contact the Company by Phone: 800-237-8287
between 8:00 am and 5:00 pm ET Monday through Friday, or visit the
firm's Website: http://www.adamsmfg.com
APARTHEID LITIGATION: Leading Lawyer Has Other Views About Reparations
----------------------------------------------------------------------
Jubilee South Africa is still defining the contours of its
international legal action on apartheid reparations, leading holocaust
lawyer Michael Hausfelt said in Johannesburg recently, according to a
report by the South African Press Association.
Mr. Hausfelt was in Johannesburg at the invitation of the Apartheid
Debt and Reparations Campaign to discuss legal strategies for seeking
apartheid reparations that are broader and approached in a different
way than are the apartheid reparations cases brought by US attorney
Edward Fagan.
Apartheid, said Mr. Hausfelt, is a crime against humanity, and it is
under this heading, he said, that the organization will decide how to
seek reparation for present, past and future victims that against
corporations and countries that aided and abetted the apartheid system.
Jubilee South Africa is part of the international Jubilee movement for
debt cancellation and economic justice. It is a broad-based coalition
of NGOs, trade unions, religious communities and popular movements.
Meanwhile, the class action against various banks and corporations that
profiteered from apartheid will start in New York on August 9, the
leader of the legal team, US attorney Ed Fagan, announced from
Capetown. Mr. Fagan said that on August 9, the legal team would
explain to the judge the "universe of known defendants and potential
claimants."
After that date, the lawyers still would be able to include new
defendants they "discovered," but the judge still wanted to "put a
timetable" on it, so it was not an open-ended process, Mr. Fagan said.
BELLSOUTH CORPORATION: Faces Racial Discrimination Suit in N.D. AL
------------------------------------------------------------------
BellSouth Corporation faces a class action filed by five African-
American employees in the United States District Court for the Northern
District of Alabama.
The complaint alleges that the Company discriminated against current
and former African-American employees with respect to compensation and
promotions in violation of Title VII of the Civil Rights Act of 1964
and 42 U.S.C. Section 1981. Plaintiffs purport to bring the claims on
behalf of two classes:
(1) a class of all African-American hourly workers employed by the
Company at any time since April 29, 1998; and
(2) a class of all African-American salaried workers employed by
the Company at any time since April 29, 1998 in management
positions at or below Job Grade 59/ Level C.
At this early stage of the litigation, the likely outcome of the case
cannot be predicted, nor can a reasonable estimate of the amount of
loss, if any, be made, the Company said in a disclosure to the
Securities and Exchange Commission.
CRATE & BARREL: Voluntarily Recalls 5,000 Media Carts For Injury Hazard
-----------------------------------------------------------------------
Crate & Barrel is cooperating with the United States Consumer Product
Safety Commission, (CPSC) by voluntarily recalling about 5,000 media
carts. The media cart has metal and plastic casters that can break,
causing a television or other objects on the cart to fall and injure
consumers nearby.
The Company has received seven reports of casters breaking, all of
which involved property damage. No injuries have been reported.
The recalled media carts have the model name "Elements Media Carts."
They have an ash wood veneer with a dark brown stain and measure 31.75"
x 19" x 23.5". The media carts contain a VCR shelf and a second
compartment shelf for CD's. These media carts were manufactured in
Denmark.
The Company's retail stores, catalogues and website sold the carts
nationwide from January 2001 through March 2002 for about $180.
For more information, contact the Company by Phone: 877-477-0653
between 8 am and 5 pm CT Monday through Friday, or visit the firm's
Website: http://www.crateandbarrel.com/customer.
DPL INC.: Ordered To Preserve Data Related To Lawsuit Allegations
-----------------------------------------------------------------
A Hamilton County judge recently issued a restraining order against DPL
Inc., following the filing of a second class action against the
company, alleging that it refused to tell shareholders about high-risk
investments made by the company, the Dayton Daily News reports.
The restraining order, issued by Judge Norbert Nadel of Hamilton County
Common Pleas Court, prevents the directors and officers of DPL and
PricewaterhouseCoopers, the Company's accountants, from altering or
destroying any paper or electronic records related to the securities
fraud and corporate waste allegations contained in the second lawsuit
brought by the Company's shareholders.
The class action, filed recently by Cincinnati attorneys James Cummins
and Stanley M. Chesley on behalf of two shareholders, claims that the
Company, its officers, directors and accountants misrepresented,
disguised and refused to tell shareholders about the true nature of
high-risk investments made with more than $1.3 billion of DPL's money.
Mr. Cummins and Mr. Chesley filed a similar class action against DPL,
the parent of the Dayton Power and Light Co., on behalf of the Buckeye
Electric Co. Retirement Plan and DPL investors on July 15, in
Montgomery County Common Pleas Court. That lawsuit is pending.
Both lawsuits stem from DPL's announcement last month that it had
written off $155 million in failed Latin American investments during
the second quarter. The announcement prompted DPL's stock price to
fall and led to a second-quarter net loss of $71.4 million because of
failed dealings in Latin America. This was DPL's first quarterly loss
in more than a decade.
In a conference call with stock analysts, DPL Chairman Peter H. Forster
declined to divulge details about the companies in which DPL has
invested. Mr. Forster said that "In terms of identifying underlying
companies, we have discussed that with you over the years, and the fact
that it is a pool of private companies, and our obligations for the
people that invest this money are such that they stay private."
Mr. Forster also said that the pool changes from day to day and week to
week. Therefore, the details of an ever-changing pool really are not
that helpful, he said.
FAX.COM: FCC Issues Record Fine of $5.4M For Unsolicited Junk Faxes
-------------------------------------------------------------------
Fax.com, Inc. was ordered by the Federal Communications Commission to
pay a record fine of almost $5.4 million, for sending "junk faxes" to
several businesses and consumers, in violation of the Telephone
Consumer Protection Act, the Associated Press reports.
"Fax.com appears to have founded its business on the practice of
sending unsolicited faxes in flagrant violation of the TCPA," Kathleen
Q. Abernathy, an FCC commissioner, said in a statement. "Despite
repeated warnings from the commission and numerous consumer complaints,
the company appears to have made no effort to mend its ways."
The FCC also said that it believes the Company "engaged in a pattern of
deception to conceal its involvement in sending the prohibited faxes,
and that the company has not been forthcoming in its dealings with the
agency."
A call by The Associated Press seeking comment from Fax.com was not
immediately returned. The company now has 30 days to either pay the
fine or file a response with the FCC. The fine calls for the company to
pay the maximum penalty of $11,000 per violation.
FLORIDA: Lawyer Warns Lawsuits Against Special School Tests Likely
------------------------------------------------------------------
An attorney who has represented more than 4,500 families in lawsuits
against dozens of school systems has warned a state committee that the
high-stakes Florida Comprehensive Assessment Test (FCAT) could be
fodder for litigation by the parents of disabled students, The Palm
Beach Post reports.
Such a lawsuit, attorney Reed Martin said, would likely argue that some
special education students have been "tracked" into low-level programs
that provide scant preparation for the FCAT, which all students must
pass to graduate. It is a question of "equal protection," and those
students may have been unconstitutionally denied it, Mr. Martin said.
Mr. Martin had some questions to place before the state committee. He
asked if there has been constant assessment so that parents can
anticipate their children's performance on the FCAT, if the students
got reasonable accommodations, such as the use of a calculator, on the
test and if the students have a "transition plan," as required by
federal law, in order to anticipate graduation issues.
"I don't want anyone to think I am picking on Florida. Blame it on
Texas. We learned how not to do it, and we want you to learn from us,"
Mr. Martin told the committee. He said he filed two class actions in
Texas.
The committee, The Governor's Blue Ribbon Task Force on Accommodations
and Access for Students with Disabilities, was formed by Governor Jeb
Bush to review and recommend ways to accommodate disabled students who
take the FCAT. Its members, who include Boynton Beach parent Karen
Brill, met for the third time on Monday.
Last year, 90 percent of the state's disabled students failed the 10th-
grade FCAT, according to figures provided to the committee on Monday.
That includes about 88 percent of emotionally handicapped students,
about 92 percent of deaf students and about 96 percent of autistic
students.
The committee's recommendations will be finished by October, and they
will likely be put into place for the spring test. They might include
new accommodations, such as allowing blind students to use talking
calculators or some students to use computers, but they might also
include the use of alternative assessments for some students.
More than a dozen Central Florida parents and students also appeared
before the group on Monday, pleading for fairness. Kristie Edwards, an
incoming senior at an Orlando High School, told the task force about
her anxiety disorder and her memory problems. During class, Ms.
Edwards uses cards to prompt her memory, but those cards are not
allowed on the test. She has failed three times, and it is unlikely
she will pass in the next two tries.
"Please look at the 12 years a student has spent in school, rather than
the results of one test," Ms. Edwards said. She pleaded that the FCAT
results not sentence her to a life of low-paying jobs.
Parents shared their ideas - the parent of a dyslexic child wants the
test read to her child, another suggested they needed other ways, such
as a student portfolio, to measure whether students have learned all
they should. Several mentioned the possibility of litigation.
Mr. Martin has not been contacted by any parents about an FCAT-related
lawsuit. However, in Texas, he represented a girl who had earned
straight A's in high school and won a college scholarship, before
failing that state's new graduation test.
GEORGIA: Trial Starts in Fulton County Suit Over Atlanta's Water Rates
----------------------------------------------------------------------
Testimony in a water dispute against the City of Atlanta is due to
start today in Atlanta Superior Court, the Atlanta Journal-Constitution
reports. The suit was filed, alleging the City cheated residents of
Fulton County by charging them 34 percent more for water than other
Atlanta residents.
The suit was filed together with a group from Sandy Springs, on behalf
of other unincorporated county water customers. The suit seeks to
equalize water rates and to recover US$31 million in overcharges for a
five-year period.
"The city is going to say if you folks out in the county don't like it,
take it or leave it," Pitts Carr, a lawyer for the Committee for Sandy
Springs and individuals who brought the class action, told the Journal-
Constitution. "That's outrageous."
The City countered the suit by saying that it can charge nonresidents
more to recoup costs going back to when it established the water system
in 1875. It also claims murkier expenses to maintain the water system.
For instance, one reason the city charges non-Atlantans 34 percent more
for water is to offset the lawsuit's cost, Atlanta lawyer Robert Caput
told jurors Tuesday, according to the Atlanta Journal-Constitution.
He added that the law didn't require fairness in water rates as long as
the city can justify the higher rates, and noted the 1950s agreements
with the county allowed the city to charge nonresidents twice as much
as their city counterparts.
The trial will be set out before a jury dominated by North Fulton
residents, because the county supplies them with water from a plant it
operates jointly with the City near Roswell. Willie Lovett, a lawyer
for the plaintiffs, expressed support for the jury, saying "In my
opinion, that's a good jury."
HUDSON'S BAY: Employees Sue Alleging Diversion of Pension Plan Assets
---------------------------------------------------------------------
Canadian retailer Hudson's Bay faces a class action suit filed by
participants of one of its subsidiaries' pension plan, alleging the
Company diverted cash from the plan, BBC reports.
Employees of the department store chain, Simpsons, filed the $47M suit,
charging the Company with diverting surplus assets from their
retirement funds into the pension plans of other subsidiaries, Kmart
and Zellers.
"I was upset to discover that my pension money is being used to pay for
somebody else's pension," Ronald Sutherland, a former Simpsons employee
and one of the plaintiffs, told BBC.
A Hudson's Bay statement released late on Wednesday said that it
"intends to mount a vigorous defense through proper legal channels, and
will seek early dismissal of this claim."
LOCKERBIE BOMBING: Minister Says Libya Ready To Compensate Victims
------------------------------------------------------------------
Libya's foreign minister Mohammed Abderrahmane Chalgam said that Libya
was now ready in principle to compensate victims of the 1988 airliner
bombing over Lockerbie, Scotland, that killed 270 people and to address
UN demands it accept responsibility for the attack, Reuters reports.
Foreign Minister Mohammed Abderrahmane Chalgam, speaking after
attending unprecedented talks between Libyan leader Muammar Gaddafi and
Britain's junior Foreign Office Minister Mike O'Brien, also said Libya
wanted to formalize relations with the United States.
"Regarding compensation, as a principle, yes we are going to do
something on that topic," he said, according to a Reuters report.
"Regarding responsibility, we are discussing this issue . we are ready
to get rid of this obstacle," Jim Swire, a spokesman for families of
victims of the Lockerbie bombing, cautiously welcomed Libya's comments.
"I think we should regard it as a significant step forward, but of
course, paying compensation is only one of the things that Libya has to
do if she wants to get the U.N sanctions permanently removed," he told
Sky News.
The talks cap a cautious re-engagement between the former foes after
years of hostility following the fatal shooting of a British
policewoman outside Libya's London embassy, British-backed US raids on
Libya and the Lockerbie bombing, Reuters reports.
UN sanctions imposed on Libya have been suspended. British officials
said Minister Chalgam's comments were the clearest signal yet that
Libya would comply with remaining obligations to ensure their final
lifting, according to Reuters.
Libya has also expressed interest in kindling relations with the United
States but Washington has remained skeptical of Libyan intentions and
says it is still seeking to acquire chemical weapons. Minister Chalgam
denied the allegations, saying his country was too busy fighting
poverty in Africa to dabble in weapons of mass destruction. "We don't
have time or money to spend in such silly work," he said, Reuters
reports. "We are ready to comply with international law and with
international efforts, especially in this (issue)."
PERDUE FARMS: DE Court Grants Preliminary Approval to $10M Settlement
---------------------------------------------------------------------
Perdue Farms, Inc. agreed to settle for US$10 million the class action
filed on behalf of over 60,000 Perdue Farms chicken processing workers,
alleging wage and hour violations, in the United States District Court
for the District of Delaware. Judge Mary Pat Thynge has granted
preliminary approval to the suit.
Filed in 1999, the lawsuit alleged that the Company requires its hourly
chicken processing employees to work "off-the-clock" without
compensation or retirement benefit contributions in violation of the
Employee Retirement Income Security Act, the federal Fair Labor
Standards Act, and various state wage and hour laws.
The Company required its poultry processing workers to be ready to
work, with work clothing and protective safety gear on, when the
production line commenced, but failed to pay workers or provide credit
under its pension plan for the time spent putting on the gear or
cleaning up at the end of day.
Under the settlement, over 60,000 hourly wage employees who work or
worked on the assembly line in the Company's chicken processing plants
are eligible to submit claims for unpaid wages. The Company's 18
chicken processing plants are located in:
(1) Alabama,
(2) Delaware,
(3) Florida,
(4) Kentucky,
(5) Maryland,
(6) North Carolina,
(7) South Carolina,
(8) Tennessee,
(9) Virginia, and
(10) West Virginia
This new settlement is in addition to the $10 million settlement
between the Department of Labor and the announced on May 9, 2002.
Payment by Perdue in the two settlements together will be approximately
$20 million.
Under the new settlement, tens of thousands of workers who will not
receive money pursuant to the Department of Labor settlement will now
receive payments for time spent "donning and doffing" - obtaining,
putting on, sanitizing and removing protective clothing and gear.
Thousands of employees will also receive payments in addition to those
they will receive under the Department of Labor settlement.
In addition, unique to the new settlement, the Company is required to
issue retroactive credit under one of its retirement plans for "donning
and doffing" work if the credit would improve employees' or former
employees' eligibility for pension benefits.
James M. Finberg from Lieff, Cabraser, Heimann & Bernstein, LLP, which
served as co-lead counsel for the workers, commented, "The chicken
plant workers at Perdue Farms are among the most dedicated and hardest
working employees in the nation. They deserve to be paid for each and
every hour of work they perform. We are gratified to have been able to
obtain significant additional compensation for them."
"This settlement brings to a close a three-year campaign to end
Perdue's unlawful pay practices and obtain lost wages for its aggrieved
chicken processing workers. It also marks the dawn of a new era in
which Perdue's new wage practices will make it a leader in the poultry
industry," stated Joseph M. Sellers of Cohen, Milstein, Hausfeld &
Toll, which also served as co-lead counsel for the workers, along with
the Public Justice Center, Sigman, Lewis & Feinberg, P.C., and others.
For more details, visit the Websites: http://www.cmht.comor
http://www.lieffcabraser.com/perdue.htm
PHARMACEUTICAL COMPANIES: Knew Pharmacist Was Diluting Cancer Drugs
-------------------------------------------------------------------
Internal company documents show two pharmaceutical companies knew that
Robert Courtney was diluting drugs as early as 1998, according to a
motion filed recently by attorneys for patients who received drugs from
Mr. Courtney, the St. Louis Post-Dispatch reports.
Neither Eli Lilly Company nor Bristol-Myers Squibb contacted any
federal or state officials about their discovery. Because Mr. Courtney
was not arrested until last year, "countless cancer patients" suffered
untimely deaths, the motion says. The motion also claims that both
companies have known of other potential tampering cases and have done
nothing to prevent them.
Mr. Courtney pleaded guilty in February to 20 federal criminal charges
of tampering with, adulterating and misbranding chemotherapy
medications. He has since admitted diluting 72 drugs, dating back to
at least 1992.
The filing by plaintiffs was a procedural move that does not change any
of the counts alleged against Mr. Courtney in hundreds of wrongful
death and injury civil lawsuits filed against him.
Last week, the Jackson County Circuit Court rejected a request by
Bristol-Myers to require the plaintiffs to keep specific facts in the
case under seal to keep the details from the public record. In
response to that order, Monday's motion by the plaintiffs gives much
greater details of plaintiffs' case against the two pharmaceutical
companies than had been made public before.
The motion says both companies used separate but detailed tracking
systems to determine exactly where their drugs are being sold, how much
is being sold, in part to uncover counterfeiting schemes like Mr.
Courtney's.
According to the motion:
(1) Darryl Ashley, an Eli Lilly sales representative, noticed in
April 1998, that there was a huge difference between the
amount of Gemzar, a cancer drug, that Mr. Courtney was buying
from Eli Lilly and the amount oncologists said they were
buying from Mr. Courtney's pharmacy;
(2) Mr. Ashley complained to his district sales manager. Eli
Lilly then used its tracking system to confirm Mr. Ashley's
claims and ordered him to gather invoices from oncologists who
were buying Gemzar from Mr. Courtney;
(3) Eli Lilly then conducted a year-end audit of the amount of
Gemzar Mr. Courtney dispensed in 1998, and compared that with
the amount of the drug the pharmacy bought;
(4) The comparison revealed that Mr. Courtney's pharmacy was
dispensing twice as much Gemzar to patients of Kansas City
Internal Medicine as Eli Lilly was selling to all retail
pharmacists in all of Kansas and the western half of Missouri.
The motion revealed similar facts were uncovered in relation to the
Bristol-Myers drugs Taxol, Paraplatin and Platinol, which were sold
directly to Mr. Courtney. In January 2001, Bristol-Myers contacted Dr.
Verda Hunter's office about discrepancies in Mr. Courtney's drug
orders.
According to internal Brisol-Myers documents, a sales representative
passed his concerns onto company management, which took no action about
the discrepancies of amount of drugs purchased from the drug company
and the amount dispensed to the oncologists.
The motion claims that the companies' lack of action makes them liable,
along with Mr. Courtney and his pharmacy, for 12 civil complaints,
including wrongful death, lost chance of recovery, fraud, failure to
warn of product liability and negligent infliction of emotional
distress.
POTTERY BARN: Recalls 3.8T Star Clacker Wooden Toys Over Choking Hazard
-----------------------------------------------------------------------
Pottery Barn Kids is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 3,800 Star Clacker
wooden toys and about 3,000 Ride-On Duck wooden riding toys. The
wooden peg can come off of the Star Clacker toy and pose a choking
hazard. The Ride-On Duck's wheel cap can break, allowing the wheel to
come off and release small parts, also presenting a choking hazard to
young children. The Star Clacker wooden toys, also does not comply
with the Federal Hazardous Substance Act for design and construction of
baby rattles, due to the handle length.
The Company has received one report of a wheel coming off of the Ride-
on Duck toy. No injuries have been reported for either product.
The clackers are made of three wooden star shapes, tied together, with
the two outside stars painted red, white or blue. The center star and
handle are made of natural wood. The toys measure about 6-inches long.
The handle has a gold "Made in China" label and a white label reading,
"Intended for Children over 6 months of Age."
The Ride-On Duck is a yellow wooden duck-shaped toy with orange wheels
and bill that measures 12-inches high by 20-inches long. It has a gold
"Made in China" label on the bottom.
Pottery Barn Kids stores nationwide sold the Star Clacker toys from
April 2002 through July 2002 for about $6. Pottery Barn Kids stores
nationwide, catalogs and Internet site sold the Ride-On Duck toys from
September 2001 through June 2002 for about $49.
For more details, contact the Company by Phone: 866-428-6467 between 8
am and 5 pm PT Monday through Saturday, or visit the firm's Website:
http://www.potterybarnkids.com.
RR DONNELLEY: Prevails As Jury Finds No Pattern of Age Discrimination
---------------------------------------------------------------------
A federal jury ruled that there was no pattern of age discrimination at
R.R. Donnelley & Sons Co., stemming from the Company's 1993 closure of
a Chicago plant, the Chicago Tribune reports. A class action, charging
the Company with race discrimination and stemming from circumstances
relating to the same plant closure, seeks at least $500 million and is
not expected to go to trial before November.
Older workers had accused the Company of finding alternative jobs for
many of the plant's younger workers, but not for them. The Chicago-
based Company shut down the plant on the city's Near South Side after
losing a contract to print a mail-order catalog for Sears, Roebuck and
Co.
The plaintiffs' attorneys contended during a two-week trial that ended
last Friday, that the Company had unlawfully focused on placing younger
workers, thereby discriminating against a class of 342 former
employees, whose average age was 53 at the time of their termination.
The Company denied any wrongdoing, arguing that older workers had not
applied for the alternative jobs at other facilities that were posted,
for anyone's use, at the plant.
"This affirms what we already know - that R.R. Donnelley is committed
to diversity and inclusion," the Company said in a statement. "We do
not tolerate any kind of discrimination."
The verdict does not mean, however, that the case is over, said the
plaintiffs' lead attorney, H. Candace Gorman. The plaintiffs will now
file 342 individual cases of age discrimination. "This was just a
middle step that tried to circumvent 342 individual cases," Ms. Gorman
said. "Now, we shall have to do individual trials, and prove that each
one was discriminated against, but we'll do it."
Even if the older employees, or some of the older employees, lose their
individual cases, all is not lost for them. In June, US District Court
Judge Matthew Kennelly ruled that the Company had denied these workers
retirement and separation pay, to which they were entitled under the
Company's benefit plans, in violation of the Employee Retirement Income
Security Act (ERISA).
The Company had told the retirement-eligible employees who lost their
jobs during the plant shutdown that they were entitled to either
pension benefits or separation pay, but not both, Ms. Gorman said. She
estimates that the former employees could be owed more than $50 million
in pension and severance.
Ms. Gorman is also trying a separate class action, which stems from the
same plant closure, in which a group of plaintiffs claim the Company
practiced racial discrimination. They say the Company found
alternative jobs for about 31 percent of the plant's white workers, but
only one percent of the hundreds of black workers at the plant.
The suit, in which the plaintiffs are seeking at least $500 million, is
not expected to go to trial before November. The Company denies any
wrongdoing in the racial discrimination suit. Unlike a number of other
major companies that have opted to settle discrimination suits rather
than take the risk a jury might issue a big award, the Company has
refused to settle these lawsuits.
TELECOMMUNICATIONS COMPANIES: Settlement Expected In Phone Leases Suit
----------------------------------------------------------------------
A settlement is imminently expected to be formalized in the class
action that accuses AT&T and Lucent of cheating customers by not
telling them they were leasing old telephones, according to a report by
the Belleville News-Democrat (IL).
A trial was set to begin Monday, but did not start. Lawyers'
assistants spent hours setting up computerized audio-visual equipment
for courtroom presentations, but they packed up the equipment Monday.
Attorneys for AT&T and Lucent asked the Illinois Supreme Court to put
the case on hold, but Supreme Court Justice Moses Harrison issued an
order Friday denying the request. Defense attorneys stated in their
request that a trial could "potentially result in a $10 billion
judgment with far-reaching effects in the telecommunications industry."
Lawyers for the plaintiff class initially asked for a jury trial but
dropped the request in mid-July. While the defense had argued for a
jury trial, the defense was now claiming that a "gross abuse of the
Illinois court system will be permitted" if the Supreme Court did not
intervene. Circuit Judge Andy Matoesian ruled in recent weeks for a
trial by judge.
The plaintiff class in this lawsuit consists of customers nationwide
who have leased telephones. The suit claims customers have unknowingly
leased telephones since the breakup of AT&T into regional phone
companies in the mid-1980s. Lucent, one of AT&T's spinoff companies,
now owns the phones and mails the lease bills to customers under AT&T's
name. Stephen Tillery, attorney for the class of customers, has said
that some individuals unknowingly spent more than $1,300 leasing a
phone at a monthly cost of about $6.
The defendants deny any wrongdoing and argue that customers were
informed of their leases. The companies claim customers enjoy leasing
phones because they can get the phones repaired or replaced at no cost.
Mr. Tillery has been expecting a big judgment against the defendants.
He has a separate suit pending against AT&T, in which he asked the
judge to stop the company from spinning off its Broadband division,
because AT&T won't be able to pay a judgment in the class action if it
unloads the Broadband division's $103 billion in assets.
TEXAS: Officials Find Toxic Chemical Residue in Mexican Border Areas
--------------------------------------------------------------------
State environmental officials said recently that they had found toxic
chemical residue in 17 predominantly Hispanic areas of the community of
Mission, Texas, near the Mexican border, EFE News Service reports.
The announcement was made during a news conference in the local town
hall, and officials from the Texas Natural Resources Conservation
Commission said they plan to carry out more tests in the future. The
officials expressed their hope that residents would approve cleanup
tasks in the zone once the final results of the study are released.
Last April, residents of the affected area refused to allow the workers
from the Conservation Commission to enter their properties because they
wanted an independent company to carry out the tests.
This report ended the pre-trial stage of the class action some 2,500
people have filed against 28 chemical and pharmaceutical companies
which manufactured all the ingredients pesticide-maker Hayes-Sammons
used before closing in 1972.
The claimants, who live south of the train tracks in an area known as
the Mexican side, allege that the 28 companies were aware that Hayes-
Sammons allowed the toxic substances they manufactured to leak into the
air and the soil. According to Ester Salinas, a spokeswoman for the
plaintiffs, the result of many years of environmental contamination has
been cancer, tumors, deformities and miscarriages.
Residents also allege that prior attempts by two companies hired by the
Environmental Protection Agency (EPA) to clean up the neighborhood as
part of a 1982 agreement were unsuccessful. Although attorneys for the
companies declined to comment on the case, one of them said that the
plaintiffs must prove that the chemical contamination was the cause of
their illnesses.
A private toxologist hired by one of the plaintiffs' lawyers, Linda
Laurent, issued a report on July 12, this year, regarding samples taken
in May, in which he noted that three of the seven homes analyzed
contains dangerous levels of pesticides.
According to Ms. Salinas, the plaintiffs' spokeswoman, residents want
to be awarded enough compensation to be able to move out of their
contaminated neighborhood.
VERISIGN INC.: FTC Investigating Firm's Internet Marketing Activities
---------------------------------------------------------------------
The United States Federal Trade Commission (FTC) is investigating
Verisign, Inc.'s practices with regard to transferring Web addresses,
deleting domain names and sending direct mail solicitations to
customers of competitors in the marketing campaign that ended in May,
MSNBC reports. The Company already faces several class actions due to
its marketing practices.
The FTC also is asking the company whether it had any role in approving
Web hosting company Interland Inc.'s solicitation for domain name
services, VeriSign spokesman Brian O'Shaugnessy confirmed. No one was
available at Atlanta-based Interland to comment.
"We've been asked by the FTC not to comment on their request for
information regarding our marketing activities in the domain name
business," Mr. O'Shaughnessy told MSNBC. "VeriSign has always taken its
responsibility under the law seriously and we will of course cooperate
fully with the FTC."
The FTC has also not commented on this matter, according to MSNBC.
XEROX CORPORATION: EEOC Says Cincinnati Facilities Hostile To Blacks
--------------------------------------------------------------------
The Equal Employment Opportunity Commission (EEOC) said that Xerox
Corporation's Cincinnati facilities are "racial hostile" to African
Americans, the Wall Street Journal reports. The EEOC found employees
were "subjected to a racially hostile environment," including:
(1) racial slurs,
(2) display of black dolls with nooses around their necks, and
(3) more frequent disciplining than white co-workers.
The EEOC had its findings available in late June, but they were not
made public because it does not release information about its handling
of individual complaints, the Journal said. While concluding that the
black employees as a group suffered discrimination, the federal agency
also upheld complaints by four individual Xerox workers covering the
period from the late 1990s to the present.
Xerox officials were not immediately available to comment to Reuters.
The four employees are expected to be the lead plaintiffs in a class
action that lawyers say they expect to file against the Company in US
District Court in Cincinnati within the next few weeks.
New Securities Fraud Cases
AMERICA ONLINE: Two Law Firms Commence Securities Fraud Suit in E.D. TX
-----------------------------------------------------------------------
Patton, Haltom, Roberts, McWilliams & Greer, LLP and Nix Patterson &
Roach, LLP initiated a securities class action in the United States
District Court for the Eastern District of Texas, Texarkana Division on
behalf of all persons who purchased, converted, exchanged or otherwise
acquired the securities of America Online (AOL) between July 19, 1999
and January 10, 2001 and all persons who purchased, converted,
exchanged or otherwise acquired the securities of AOL Time Warner, Inc.
(NYSE:AOL) between January 11, 2001 and July 17, 2002, inclusive,
against defendants AOL Time Warner and certain of its officers and
directors.
The complaint alleges that defendants violated the federal securities
laws. The complaint alleges that throughout the class period, among
other things, defendants made material misrepresentations and/or
omitted to state material facts relating to AOL's online advertising
revenues.
The complaint further alleges that AOL and AOL Time Warner booked
revenue from one-time payments received from online advertising clients
as advertising revenue in order to artificially inflate their revenues
derived from online advertising.
When the truth was revealed regarding AOL in an article in The
Washington Post on July 18, 2002, AOL Time Warner stock dropped to as
low as $11.75, down from its class period high of $58.51. As a result
of Defendants' false and misleading statements, investors were damaged,
by purchasing AOL and AOL Time Warner securities at artificially
inflated levels during the class period.
For more details, contact Rick Adams of Patton, Haltom, Roberts,
McWilliams & Greer, LLP by Mail: Century Bank Plaza - Suite 400, 2900
St. Michael Drive, Texarkana, Texas 75503 by Phone: 866-546-9959 x404
(Toll Free) or by E-mail: radams@pattonhaltom.com
CHARTER COMMUNICATIONS: Milberg Weiss Lodges Securities Suit in E.D. MO
-----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Charter
Communications Inc. (NASDAQ: CHTR) between November 9, 1999 and July
18, 2002 inclusive, in the United States District Court for the Eastern
District of Missouri against the Company and:
(1) Paul G. Allen, Chairman,
(2) Jerald L. Kent, CEO and President until September 28, 2001,
and
(3) Carl Vogel, CEO and President since November 9, 2001
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between November 9, 1999 and July 18, 2002.
Among other things, the suit alleges that throughout the class period,
the Company issued quarterly press releases touting its rapidly
increasing sales and steadily growing customer base. These
representations, along with quarterly and annual financial reports,
were also included in reports filed with the Securities Exchange
Commission throughout the class period.
The suit further alleges that the quarterly reports were materially
false and misleading because, among other things, the Company was
inappropriately boosting earnings by improperly capitalizing its labor
costs, engaging in questionable transactions with its equipment vendors
which lacked economic substance but appeared to increase the Company's
revenues and artificially inflated its subscriber counts by counting
customers who subscribed only to the Company's Internet services as
subscribers to its mainstay cable services.
On July 18, 2002, Merrill Lynch issued a research note in connection
with its downgrade of the Company's stock to "hold" from "strong buy."
In the note, Merrill Lynch revealed that the Company was aggressively
capitalizing its labor costs, over-counting its subscriber base and
engaging in marketing deals with some of its equipment vendors, among
other things. In reaction to the news, the price of Charter common
stock plummeted by 13% on July 18 and fell another 15% on July 23.
For more details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: (800) 320-5081 by E-mail: chartercase@milbergNY.com or visit the
firm's Website: http://www.milberg.com
CHARTER COMMUNICATIONS: Rabin & Peckel Lodges Securities Suit in CA
-------------------------------------------------------------------
Rabin & Peckel LLP initiated a securities class action in the United
States District Court for the Central District of California on behalf
of all persons or entities who purchased or otherwise acquired
securities of Charter Communications, Inc. (Nasdaq:CHTR) between
November 9, 1999 and July 17, 2002, both dates inclusive. The suit
names as defendants the Company and:
(1) Carl E. Vogel, and
(2) Kent Kalkwarf
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Among other
things, plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the nature of the Company's revenue and earnings caused Company's stock
price to become artificially inflated, inflicting damages on investors.
The suit alleges that defendants overstated the Company's revenue,
failed to appropriately account for installation costs and artificially
inflated the number of subscribers for the Company's basic cable
services. On July 18, 2002, when a Merrill Lynch analyst expressed
concerns about potentially misleading accounting practices, Company
stock fell more than 13%.
Additionally, a subsequent article in Forbes discusses a Credit Suisse
First Boston report that further amplifies these concerns and describes
how Charter handles the impact of "churn" -- labor and advertising
costs -- on the Company's balance sheet, by improperly capitalizing
approximately 30% of its installation labor costs over an extended time
period.
For more details, contact Eric J. 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
HPL TECHNOLOGIES: Berman DeValerio Commences Securities Suit in N.D. CA
-----------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action against HPL Technologies, Inc. (Nasdaq:HPLAE) in the
United States District Court for the Northern District of California,
on behalf of all investors who bought the Company's common stock from
July 31, 2001 through July 18, 2002.
According to the lawsuit, the Company issued a series of false and
misleading financial statements to the public during the class period,
which led investors to believe that the San Jose-based Company had
generated millions of dollars more revenue than it actually had.
The Company's accounting woes began to surface on July 19, 2002 when it
announced that its audit committee was investigating financial and
accounting irregularities involving purported sales to an international
distributor. In its news release, the Company also said it had fired
its chairman and chief executive officer.
The complaint says Company stock fell 72% on the news, dropping from
the previous day's closing price of $14.10 to a low of $4 before Nasdaq
halted trading in its stock. Trading has not yet resumed.
According to the lawsuit, the Company later revealed during a July 22,
2002 conference call with investors that $11 million of the $13.7
million in revenue it had reported in the quarter ended March 31, 2002
was based on "fictitious transactions that were supported by a trail of
falsified documentation."
According to the complaint, all the fictitious transactions were
reported as sales to the Company's distributor. In fact, the
distributor never agreed to enter into those transactions, the
complaint says.
In the conference call, the Company admitted that similar transactions
may have been booked in prior quarters and that the company would have
to restate its financial results for fiscal 2002 and possibly for 2001.
The lawsuit also accuses some company executives of taking personal
advantage of the inflated stock price they allegedly helped to create
by selling 85,500 shares of their individual holdings during the class
period.
For more details, contact Joseph J. Tabacco, Jr. by Mail: 425
California Street, Suite 2025, San Francisco, CA 94104 by Phone:
415-433-3200 by E-mail: law@bermanesq.com or visit the firm's Website:
http://www.bermanesq.com.
JOHNSON & JOHNSON: Stull Stull Commences Securities Fraud Suit in NJ
--------------------------------------------------------------------
Stull, Stull & Brody initiated a securities class action in the United
States District Court for the District of New Jersey, on behalf of all
purchasers of the securities and/or all sellers of the put options of
Johnson & Johnson (NYSE:JNJ) between April 16, 2002 and July 18, 2002,
inclusive against the Company and certain of its officers and
directors.
The complaint charges defendants with issuing false and misleading
statements concerning its business and financial condition.
Specifically, the complaint alleges that in the Company's press release
and during the earnings conference call held that day, defendants
repeatedly attributed the Company's financial performance to the
success of EPREX, stating, for example, that, "This amazing product has
delivered consistent double-digit growth over the past five years. And
in the first quarter of this year, we hit a record sales level of a
billion dollars."
Moreover, defendants discussed the reported incidences of PRCA and
assured investors that EPREX "continues to be a trusted brand that
people are using," and that Johnson & Johnson was "working very closely
with . the experts, as well as health authorities in understanding
(PRCA), why it occurs. And we're doing whatever we can to understand
the risk and mitigate it."
Defendants' statements during the class period, however, were
materially false and misleading because defendants knew but failed to
disclose that by April 2002, the US Food and Drug Administration's
Office of Criminal Investigation, spurred on by the increasing number
of cases of PRCA in EPREX patients, sought a stay of a qui tam
(whistleblower) action in order to investigate the allegations
regarding the Company's EPREX manufacturing facility located in Puerto
Rico.
The whistleblower action was filed in March 2000 by Hector Arce, a
former employee at the Company's EPREX factory. Mr. Arce contends in
the lawsuit that he was pressured to falsify data to cover up
manufacturing lapses at the EPREX manufacturing facility, and then was
suspended a few days before an expected interview with FDA inspectors.
This information, which defendants failed to disclose, was information
a reasonable investor would have wanted to know - especially as the
reported incidences of PRCA continued to climb during the class period
- considering EPREX, and its U.S. version, PROCRIT, accounted for over
10% of the Company's revenues in 2001 and was projected to account for
11% of revenues in 2002.
The true facts concerning the existence of the criminal investigation
of Johnson & Johnson and the allegations of the qui tam action were
first revealed in The New York Times on July 19, 2002. That same day,
Johnson & Johnson admitted that it was aware of the criminal
investigation since April 2002. Once the foregoing information was
revealed, Johnson & Johnson shares fell $7.88 per share to close on
July 19, 2002, at $41.85, a fall of 16%.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York, NY 10017 by Phone: 1-800-337-4983 by Fax: 1-212-490-2022 or by E-
mail: SSBNY@aol.com
MERCK & CO.: Berman DeValerio Commences Securities Fraud Suit in NJ
-------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action that claims Merck & Co., Inc. (NYSE:MRK) and several top
officers overstated revenues by billions of dollars, 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 Merck's
total revenues.
The lawsuit claims that Merck 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 Merck's
accounting practices and estimated that Merck 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 Merck 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, Merck'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, Merck 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.: Weinstein Kitchenoff Lodges Securities Suit in New Jersey
----------------------------------------------------------------------
Weinstein Kitchenoff Scarlato & Goldman Ltd. initiated a securities
class action in the United States District Court for the District of
New Jersey on behalf of purchasers of Merck & Co., Inc. (NYSE: MRK)
common stock between July 1, 1999 and June 21, 2002.
The lawsuit alleges that the Company and certain of its officers and
directors violated the federal securities laws by engaging in a scheme
to artificially inflate the Company's reported revenue numbers during
the class period. Defendants accomplished this scheme by reporting as
revenue consumer co-payments for prescription drugs purchased through
Merck's wholly owned subsidiary, Merck- Medco, even though such co-
payments are paid directly to the pharmacy and are never realized by
Merck.
According to the complaint, this practice violated Generally Accepted
Accounting Procedures (GAAP), and caused Company stock to trade at
artificially inflated prices during the class period.
On June 21, 2002, The Wall Street Journal published an article
describing defendants' deceptive revenue reporting practices, and
estimating that Merck and Merck-Medco may have artificially inflated
2001 revenues by as much as $4.6 billion.
For more details, contact Brian Penny or Paul Scarlato by Mail:
877-805-7200 by E-mail: penny@wksg.com or scarlato@wksg.com or visit
the firm's Website: http://www.wksg.com
NICOR INC.: Berman DeValerio Commences Securities Fraud Suit in N.D. IL
-----------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities
class action against Nicor Inc. (NYSE:GAS) and two top executives,
claiming the company misled investors about its revenue. The complaint
was filed in the US District Court for the Northern District of
Illinois, on behalf of all investors who bought the Company's common
stock from April 18, 2000 through July 18, 2002.
The lawsuit claims that the Company, a holding company for the Northern
Illinois Gas Company doing business as Nicor Gas Company, overcharged
customers by manipulating its performance-based rate plan (PBR). The
PBR plan is designed to give the utility competitive incentives to
purchase cheaper natural gas on behalf of ratepayers.
According to the complaint, a June 13, 2002 news story in Crain's
Chicago Business reported that the Illinois Commerce Commission and
state law enforcement officials were investigating allegations that the
Company had boosted profits and overcharged its customers by
manipulating the PBR. The news story said regulators began looking
into the matter after the Citizen's Utility Board provided it with an
in-depth memorandum believed to be written by a Nicor whistle-blower.
The memo alleges that Nicor shortchanged ratepayers by $133 million
over the last two years.
After the close of trading on July 18, 2002, the Company announced in a
news release that its preliminary results for the second quarter ended
June 30, 2002 were well below the Company's previous projections. The
news release announced a $2.9 million second-quarter charge to reverse
PBR-associated revenue recorded in the first quarter of 2002. The
company also announced that a restatement of prior period earnings may
be required with respect to the PBR program. Finally, Nicor also
revealed accounting irregularities at Nicor Energy L.L.C., a joint
venture with Dynegy, Inc., which resulted in a $10.6 million charge to
earnings for the six months ended June 30, 2002.
These disclosures caused Company stock to plummet to a closing price of
$22.75 per share on July 19, 2002, down $26.25 per share, or 54%, from
its Class Period high of $49 reached on April 22, 2002.
For more details, contact Julie A. Richmond, 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.
VIVENDI UNIVERSAL: Milberg Weiss Commences Securities Suit in C.D. CA
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the Central District of
California on behalf of purchasers of Vivendi Universal, S.A. (NYSE: V)
(Paris Bourse: EX FP) common stock and American Depository Receipts
(ADRs) during the period between April 23, 2001 and July 2, 2002.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that during the class period, defendants' false
statements artificially inflated Vivendi ADRs to as high as $68.80 per
ADR. Defendants reported favorable, but misleading, financial results
to the market and represented that the Company was not as susceptible
to economic problems as competitors and that the Company had the
"highest resiliency and lowest sensitivity to recessionary
environment." The defendants also represented that Vivendi was
successfully implementing recent mergers, which were being reorganized
quickly to generate synergies.
These positive but false statements allowed the Company to complete
additional acquisitions in its $100 billion buying spree between 1998
and 2001. In late June 2002, news leaked from Vivendi that its debt
was at alarming levels, causing Vivendi's ADRs to decline in price from
$28 to $20. Vivendi's ordinary shares declined in similar fashion.
Nonetheless, Vivendi's CEO reassured the market that liquidity was not
a problem and the ADRs did not totally collapse.
However, as ratings agencies continued to downgrade the Company's debt,
the ADRs continued to decline. On July 2,2002, the Company's debt was
downgraded again and the Company was in danger of default. On July
3,2002, Vivendi's CEO was forced to resign. Vivendi ADRs collapsed
upon these revelations, falling to $15-21/32 on July 3,2002 on huge
volume of 8 million shares.
For more details, contact William Lerach or Darren Robbins by Phone:
800-449-4900 by E-mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
XCEL ENERGY: Cauley Geller Commences Securities Fraud Suit in MN Court
----------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the District of Minnesota on
behalf of purchasers of Xcel Energy, Inc. (NYSE: XEL) common stock
during the period between January 31, 2001 and July 26, 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. Specifically, the complaint alleges
that defendants issued numerous statements and filed quarterly and
annual reports with the Securities & Exchange Commission (SEC) which
described the Company's financial performance and the financial
performance of NRG Energy, Inc. (NRG), the Company's majority-owned
subsidiary.
As alleged in the suit, 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 had engaged in "round-trip" energy trades
that provided no economic benefit for the Company;
(2) that the Company's and NRG's credit agreements with lenders
contained cross-default provisions and covenants, the result
of which was that in the event of a default by NRG, among
other adverse effects, the Company would lose access to $800
million in credit;
(3) that the Company lacked the necessary internal controls to
adequately monitor the trading of its power; and
(4) that as a result, the value of the Company's revenues and
financial results were materially overstated at all relevant
times.
After the close of the market on July 25, 2002, the Company issued a
press release announcing its financial results for the second quarter,
the period ended June 30, 2002, and disclosed that its earnings had
declined and that it was revising its earnings expectations for fiscal
2002.
In a conference call the very next day, defendants finally disclosed
the true extent of the Company's liquidity and credit difficulties and
its management's inability to effectively remedy such difficulties
stemming from the operations of NRG.
As reported in several business articles dated July 26, 2002, analysts
were horrified to learn that the liquidity and credit difficulties
extended to the Company itself under the "cross-collateral default"
provisions Xcel and NRG had entered into with lenders.
Market reaction to these revelations was swift and brutal. On July 26,
2002, Xcel stock closed at $7.55, a more than 36% one-day decline, on
extremely heavy trading volume. Subsequently, on July 28, 2002,
defendants disclosed that Xcel was being investigated by the SEC, among
other regulators, for engaging in "round-trip" or "wash" transactions,
which involve the simultaneous buying and trading of power at the same
price and same amount and provide no economic benefit to the Company.
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 or visit the firm's Website:
http://www.classlawyer.com
XCEL ENERGY: Kaplan Fox Commences Securities Fraud Suit in MN Court
-------------------------------------------------------------------
Kaplan Fox & Kilsheimer LLP initiated a securities class action against
Xcel Energy, Inc. (NYSE: XEL) and certain of its officers and
directors, in the United States District Court for the District of
Minnesota. This suit is brought on behalf of all persons and entities
who purchased or otherwise acquired the Company's securities between
January 31, 2001 and July 26, 2002, inclusive.
The complaint alleges that the Company and certain of its officers and
directors violated the federal securities laws by issuing a series of
materially false and misleading statements regarding the Company's
financial performance and the financial performance of NRG, its
majority-owned subsidiary.
The complaint further alleges that during the class period defendants
failed to disclose that the Company participated in so called "round-
trip" transactions which lacked economic substance, had the effect of
artificially inflating the Company's reported financial results, and
also exposed the Company to massive legal liability.
As a result of defendants' failure to disclose the Company's improper
"round-trip" transactions, the Company's stock price was artificially
inflated during the class period, trading as high as $31.00. On July
29, 2002, Company stock fell to $5.66 on trading of more than 17
million shares.
For more details, contact Frederic S. Fox or Joel B. Strauss by Mail:
805 Third Avenue, 22nd Floor, New York, NY 10022 or by Phone:
800-290-1952 by E-mail: mail@kaplanfox.com or visit the firm's Website:
http://www.kaplanfox.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 * * *