/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020814.mbx C L A S S A C T I O N R E P O R T E R Wednesday, August 14, 2002, Vol. 4, No. 160 Headlines AUSTRALIA: Says Court's Asylum Seekers Ruling Controls Only Two Cases CONNECTICUT: Standards & Programs After Suit Bring Child Abuse Decline EFS NATIONAL: TN Court Grants Final Approval To Suit Over Rate Changes GATEWAY INC.: Fairness Hearing For $10M Settlement Set For September GEORGIA: Sect's Voting Lawsuit Against Putnam County, State Dismissed HI/FN INC.: CA Court Grants Preliminary Approval to Suit Settlement Hi/FN INC.: CA Court Grants Demurrer, But Gives Leave To Amend Suit ILLINOIS: Chicago Board of Trade Nears Restructuring As Suit Dismissed INTEL CORPORATION: Court Dismisses Securities Suit Over DSP Acquisition INTEL CORPORATION: Mounting Vigorous Defense V. Consumer Suit in IL JNI CORPORATION: Asks CA Court To Dismiss Consolidated Securities Suit JNI CORPORATION: Faces Shareholder Derivative Suits in CA State Court JNI CORPORATION: Mounting Vigorous Defense V. Securities Suit in NY LOCKHEED MARTIN: CA Court Dismisses Consolidated Securities Fraud Suit PEROT SYSTEMS: Building Vigorous Defense V. Securities Suits in NY, TX PEROT SYSTEMS: Denies Allegations in Securities Fraud Suit in S.D. NY PROTON ENERGY: Plaintiffs File Amended Securities Fraud Suit in S.D. NY UNITED STATES: Navy Chaplains Sue Over Religious Bias, Await Ruling WYETH: Expects Additional Suits To Be Filed Over PREMPRO Hormone Drug New Securities Fraud Cases AOL TIME: Finkelstein Thompson Commences Securities Suit in E.D. VA AON CORPORATION: Levy & Levy Commences Securities Fraud Suit in N.D. IL AON CORPORATION: Howard Smith Commences Securities Suit in N.D. IL CHARTER COMMUNICATIONS: Marc Henzel Commences Securities Suit in CA MSC INDUSTRIAL: Howard Smith Commences Securities Fraud Suit in E.D. NY MSC INDUSTRIAL: Levy & Levy Commences Securities Fraud Suit in E.D. NY PERKINELMER INC.: Bernstein Liebhard Commences Securities Suit in MA RIVERSTONE NETWORKS: Marc Henzel Commences Securities Suit in N.D. CA XCEL ENERGY: Weiss & Yourman Commences Securities Fraud Suit in MN ********* AUSTRALIA: Says Court's Asylum Seekers Ruling Controls Only Two Cases --------------------------------------------------------------------- Australia's federal government has rejected claims that thousands of asylum seekers' cases will have to be reviewed as a result of two High Court rulings, according to a report by The Age (Australia). In two judgments, the High Court found that two ethnic Chinese Indonesian nationals had been denied procedural fairness when their cases went before the Refugee Review Tribunal, the appeal body for asylum claims. Refugee groups and the Federal Opposition yesterday called for an overhaul of the refugee determination system amid claims that the High Court rulings would affect 7,600 asylum seekers who were part of the class actions related to the two cases, as is the usual result in a class action. These people have been living in the community on bridging visas, after arriving as students or tourists, unable to work or receive benefits while the cases are before the courts. Federal attorney General Daryl Williams said the decision was of a technical nature and may not have wider implications. "It is wrong to suggest that the whole system was criticized . It was just in these two cases, particular issues arose as to the way the process was followed," Mr. Williams said. Mr. Williams also observed that the judgments will be reviewed by the Immigration Department to determine whether changes to the refugee determination system were needed. The lawyer behind the class actions, Adrian Joel, said any further legal challenges would face a rocky ride through the courts because the post-Tampa legislation, which passed last year, limits access to judicial reviews. The coordinator of the Refugee and Immigration Legal Center, David Manne, and the Refugee Council of Australia have called for cases to be heard by more than one Refugee Tribunal member, as is currently the case. The Refugee Council wants a judicial inquiry into the whole operation of the tribunal. "We need to know whether this is just the tip of the iceberg," Council spokeswoman Margaret Piper said. CONNECTICUT: Standards & Programs After Suit Bring Child Abuse Decline ---------------------------------------------------------------------- Prevention programs have helped reduce child abuse and neglect by 46 percent in the past few years in Connecticut, state child welfare officials say, according to a report by the Associated Press Newswires. The new programs, incorporating new standards, aim at preventing an environment in which abuse and neglect thrive. The new approach is part of a plan that would allow the state's Department of Children and Families (DCF) to be released from federal oversight. A federal consent decree has been in effect for 11 years following a 1989 class action accusing the state of failing to adequately protect children in its care. State Rep. John Thompson, D-Manchester, a member of the Legislature's Appropriations Committee and the Select Committee on Children, said a recent report by the federal monitor who implements the federal oversight program, showed progress by DCF. "The reduction in child abuse and neglect is good news," Rep. Thompson said. "It could be better." The DCF confirmed 10,908 cases if abuse and neglect in the fiscal year that ended June 30 - that is down from 14,003 cases in fiscal year 2000. In 1997, 20,112 children were abused or neglected. DCF Commissioner Kristine D. Ragaglia credited community-based early intervention and prevention programs for the improvement. DCF's Project SAFE has provided substance abuse treatment to thousands of parents since 1995, Ms. Ragaglia said. She also credited other state programs such as Healthy Families, which teaches young, at-risk parents skills for childcare and parenting. Families can receive up to six months of support after a child is born. An in-home family counseling program that serves youths with substance abuse problems and who are involved in the juvenile justice system also has helped reduce abuse and neglect, the commissioner said. DCF has expanded community services for parents, including helping them manage children with behavior problems. Additionally, DCF-funded clinics and emergency mobile response teams have served more than 40,000 children with behavior problems in the last 21 months. Other prevention programs include SAFE Homes, which provides care and assessment for children removed from their homes for the first time for safety. These programs and statistics give a good face to the concept of prevention. Whether Connecticut's DCF, therefore, is ready to be released, or shortly ready, from federal oversight will be instructive to watch. EFS NATIONAL: TN Court Grants Final Approval To Suit Over Rate Changes ---------------------------------------------------------------------- The Circuit Court of Tennessee for the Thirtieth Judicial District at Memphis granted final approval to a settlement proposed by EFS National Bank relating to the class action filed against it. The suit alleges that certain of the Bank's rate and fee changes were improper under Tennessee law due to allegedly deficient notice. The suit was filed on behalf of over 100,000 merchants who were subjected to the allegedly improper rate and fee changes over a several-year period. In May 2002, the parties entered into a settlement agreement relating to this litigation and received preliminary approval from the trial Court. On August 6, 2002, the trial court rejected the only objection filed against the settlement agreement and gave the settlement agreement its final approval. The objector has not yet indicated whether he will appeal, but he has 30 days from the date of final approval to do so. The maximum amount of the credits and payments by EFS National Bank under the settlement is $37.6 million, payable over a five-year period. A portion of such amount will be used to pay plaintiffs' counsel and certain claims administration expenses. GATEWAY INC.: Fairness Hearing For $10M Settlement Set For September -------------------------------------------------------------------- The United States District Court for the Southern District of California set for September 9,2002, the fairness hearing for the US$10.25 million settlement proposed for the consolidated securities class action pending against Gateway, Inc., one of its former officers, and one director, for alleged violation of federal securities The suit alleges, among other things, that the defendants misrepresented the Company's financial performance in securities filings and in statements to the public, and purport to be class actions on behalf of purchasers of the Company's stock between April 14, 2000 and February 28, 2001. In September 2001, the defendants filed a motion to dismiss the suit, which the court granted on February 2002. The court, however, allowed the plaintiffs to file an amended complaint. Subsequently, the parties and insurance carriers reached a settlement in which the Company denied all allegations and does not admit any liability. The Company's Board of Directors and two of its officers also face two shareholder derivative suits in the Superior Court of the State of California, County of San Diego, and in the United States District Court for the Southern District of California. The suits allege that the defendants breached their fiduciary duties to the Company and wasted corporate assets. Both of these derivative lawsuits have now been dismissed, conditional on the approval of the federal settlement described above. Although the settlement has been preliminarily approved by the court, there can be no assurance the settlement will be finally approved and if it is not, there can be no assurance that the Company will be successful in defending the lawsuits or if unsuccessful, that insurance will be available to pay all or any portion of the expense of the lawsuits. GEORGIA: Sect's Voting Lawsuit Against Putnam County, State Dismissed --------------------------------------------------------------------- A federal class action accusing Putnam County voting officials of selectively purging members of the United Nuwaubian Nation of Moors from the county voting rolls has been dismissed, the Macon Telegraph reports. US District Court Judge Duross Fitzpatrick of the Middle District of Georgia signed a dismissal order stipulated to by the plaintiffs and the Putnam County Board of Registrars. While county officials call the dismissal a victory, the attorney representing the Nuwaubians, David Buffington, said it was a pragmatic decision by his clients who were concerned with the election last year. "They don't see any practical purpose in pursuing it any further," Mr. Buffington said. "It doesn't mean if the same thing happens again during the next big election cycle . that a civil suit might not be brought again." "They are walking away from this case, and we are letting them," said Frank Ford, an attorney representing Putnam County. "It would not be worth it for us to go after costs." The lawsuit threatened to postpone Putnam County's July primary last year, after the county Board of Registrars challenged the residency of 196 people registered to vote in Putnam County. Of those 196 challenged, some 120 were removed from the voter rolls by the board. The purge of the voter rolls took place during several hearings in the weeks prior to the election. However, 27 of the 120 removed were added back to the list and able to vote in the primary. HI/FN INC.: CA Court Grants Preliminary Approval to Suit Settlement ------------------------------------------------------------------- The United States District Court for the Northern District of California granted preliminary approval to the US$9.5 million settlement of the securities class action pending against Hi/FN, Inc. and certain of its officers and directors. The suit, filed on behalf of persons who purchased the Company's stock between July 26, 1999 and October 7, 1999, alleges that the Company and certain of its officers and directors violated federal securities laws in connection with various public statements made during the class period. In August 2000, the court dismissed the complaint as to all defendants, other than Raymond J. Farnham and the Company. In February 2001, the court certified the purported class. On May 15, 2002, the parties entered into a Memorandum of Understanding to settle all claims in the consolidated securities class action. The settlement amount is US$9.5 million, comprised of US$6.8 million in cash that was contributed by the Company's insurers and US$2.7 million to be settled by the Company. The Company will issue a minimum of 270,000 shares of Hifn common stock and make up any shortfall to the extent that the trading price falls below $10.00 at the time of settlement by issuing additional common stock or cash. On June 10, 2002, the court entered an order preliminarily approving the stipulation of settlement and providing for notice and an opportunity to object to the shareholder class. The settlement is subject to final court approval, which is scheduled for August 30, 2002. If the settlement is disapproved or terminated and the action proceeds, the Company intends to defend the action vigorously. Hi/FN INC.: CA Court Grants Demurrer, But Gives Leave To Amend Suit ------------------------------------------------------------------- The Superior Court of California for the County of Santa Clara granted Hi/FN, Inc.'s demurrer asking for the dismissal of a shareholder derivative class action charging the Company and certain of current and former officers and directors of: (1) violations of California Corporations Code Section 25402, (2) breach of fiduciary duty and (3) waste of corporate assets The Company also faced a similar shareholder derivative suit filed in the United States District Court for the Northern District of California. On June 7, 2002, the federal court entered an order granting plaintiff's motion to voluntarily dismiss the federal derivative action without prejudice. The Company later filed a demurrer relating to the state derivative suit, which the state court sustained, with leave to amend, on the ground that plaintiff had failed to plead facts showing that he was excused from making demand on the Company's board of directors. The court also ordered limited discovery relating solely to the issue whether demand is excused. The court did not rule upon the demurrer to the derivative complaint filed by the individual director defendants. The Company and the individual director defendants believe the allegations contained in the complaint are without merit and intend to defend the action vigorously. ILLINOIS: Chicago Board of Trade Nears Restructuring As Suit Dismissed ---------------------------------------------------------------------- A US judge helped clear the way for the Chicago Board of Trade (CBOT) to become a "for-profit" exchange by dismissing a class action brought by some of CBOT's members, the Financial Times reports. The lawsuit, filed two years ago by about 700 "associate" CBOT members, had been holding up the progress of the CBOT towards demutualizing and converting exchange membership into shares. Nick Neubauer, CBOT chairman, said that pending other approvals, including that from the Securities and Exchange Commission, CBOT could be functioning on a for-profit basis by the first quarter of next year. The lawsuit against the CBOT, which trades US Treasury bond futures and grain futures products, alleged that an independent committee recommending how many shares members would get if CBOT demutualized had too much control over the process. The associate members who filed the suit also said they believed their allocation was unfair compared with the number of shares that full members would have received. Under the current plan, full members would effectively retain five times as many votes as associate members. Demutualization long has been seen as a pre-requisite for consolidation among Chicago's three derivatives exchanges. One of the reasons co- operation among the exchanges makes sense, according to CBOT Chairman Neubauer is because "in today's environment some of the things we do, like electronic trading, can be better done in cooperation with others." Chicago's derivative exchanges have lagged behind their European and Asian rivals in moving away from being run in their members' interests. The Chicago Mercantile Exchange, which demutualized in 2000, has made the most progress and plans an initial public offering of shares in the fourth quarter of this year. INTEL CORPORATION: Court Dismisses Securities Suit Over DSP Acquisition ----------------------------------------------------------------------- The United States District Court for the Northern District of California dismissed in its entirety a securities class action filed against Intel Corporation, relating to its acquisition of DSP Communications, Inc. The suit alleges violations of the Securities Exchange Act of 1934 and SEC Rule 14d-10 in connection with the acquisition. The complaint alleged that the Company and its wholly owned subsidiary at that time, CWC, agreed to pay certain DSP insiders additional consideration of $15.6 million not offered or paid to other stockholders. The alleged purpose of this payment to the insiders was to obtain DSP insiders' endorsement of the Company's tender offer in violation of the anti- discrimination provision of Section 14(d)(7) and Rule 14d-10. The Company moved for summary judgment, which the court granted in its entirety on July 8, 2002. INTEL CORPORATION: Mounting Vigorous Defense V. Consumer Suit in IL ------------------------------------------------------------------- Intel Corporation was named as a defendant in a class action filed in the Third Judicial Circuit Court, Madison County, Illinois, alleging that the defendants' advertisements and statements misled the public by suppressing and concealing the alleged material fact that systems that use the Intel Pentium 4 processor are less powerful and slower than systems using the Intel Pentium III processor and competitors' processors. The suit also names as defendants: (1) Hewlett-Packard Co., (2) HPDirect, Inc. and (3) Gateway Inc. The plaintiffs claim that their lawsuit should be treated as a nationwide class action. The plaintiffs seek unspecified damages and attorney's fees and costs. The Company disputes the plaintiffs' claims and intends to defend the lawsuit vigorously. While management, including internal counsel, currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on the Company's financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. JNI CORPORATION: Asks CA Court To Dismiss Consolidated Securities Suit ---------------------------------------------------------------------- JNI Corporation filed a motion to dismiss and a motion to strike the consolidated securities class action pending against the Company and certain of its officers and directors in the United States District Court for the Southern District of California. Six virtually identical suits were commenced in April 2001, on behalf of purchasers of the Company's common stock during the period between October 16, 2000 and January 24, 2001. The suits uniformly alleged that during the class period, the Company made false statements about its business and results causing its stock to trade at artificially inflated levels. Based on these allegations, the cases allege that the Company and the others named in the cases violated the Securities Exchange Act of 1934. The suits were later ordered consolidated in February 2002. On March 25, 2002, the plaintiffs filed a first consolidated and amended complaint, alleging a new class period of July 13, 2000 through March 28, 2001 and adds alleged claims under Securities Act of 1933 arising from the Company's secondary public offering in October 2000. As of July 1, 2002, the motions are under submission with the court for decision. The Company believes that these cases are without merit and intends to defend the cases vigorously. JNI CORPORATION: Faces Shareholder Derivative Suits in CA State Court --------------------------------------------------------------------- JNI Corporation and certain of the present members and former members of its board of directors face two shareholder derivative class actions pending in the San Diego County Superior Court. The first suit was commenced in October 2001 by an alleged stockholder of the Company, Richard Grosset. The suit alleges that the present and former members of the Company's board failed to adequately oversee the activities of management and, as a result, the Company allegedly made false statements about its business and results causing its stock to trade at artificially inflated levels. Based on these allegations, the plaintiff alleges that the present and former members of the Company's board breached their fiduciary duties to the Company. The Company filed a demurrer to the suit, which the court granted in February 2002, but with leave to amend. The plaintiff then filed a first amended complaint in March 2002. On March 22, 2002, the Company filed a demurrer to the first amended complaint and the hearing on the demurrer was set for April 12, 2002. On April 12, 2002, the court entered an order sustaining the demurrer and giving the plaintiff leave to file another amended complaint. On April 29, 2002, the plaintiff filed a second amended complaint. On May 31, 2002, the Company filed a demurrer to the second amended complaint. On the same day, Sik-Lin Huang, an alleged stockholder of the Company, filed a motion to intervene in the case as a plaintiff. On June 21, 2002, the court sustained the Company's demurrer and dismissed Mr. Grosset as a plaintiff because he is no longer a stockholder of the Company. The court, however, granted Mr. Huang's motion to intervene and ordered him to file a complaint in intervention. Mr. Huang filed a complaint in intervention on July 5, 2002. The other lawsuit was commenced in May 30,2002, by an alleged stockholder of the Company, repeating the allegations of Mr. Grosset's lawsuit. The lawsuit also adds allegations that the defendants caused or allowed the Company to falsely reports its results for the fourth quarter of fiscal 2001. These additional allegations relate to the Company's May 20, 2002 announcement that it would restate its financial statements and file an amended report on Form 10-K. The Company believes that these two suits lack merit and intends to defend the case vigorously. JNI CORPORATION: Mounting Vigorous Defense V. Securities Suit in NY ------------------------------------------------------------------- JNI Corporation faces a securities class action pending in the United States District Court for the Southern District of New York. The lawsuit also names as defendants the underwriters on the Company's initial public offering and secondary offering. The plaintiff alleges that defendants violated Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the Company's public offerings. This case is among the over 300 class action lawsuits pending in the United States District Court for the Southern District of New York that have come to be known as the IPO laddering cases. The complaint in this case was served on the Company on June 20, 2002. The Company believes that this case lacks merit and intends to defend the case vigorously. LOCKHEED MARTIN: CA Court Dismisses Consolidated Securities Fraud Suit ---------------------------------------------------------------------- The United States District Court for the Central District of California dismissed the consolidated amended securities class action charging Lockheed Martin Corporation and certain of its officers and directors with violations of federal securities laws. The Company moved for the suit's dismissal and on July 22, 2002, the court granted the motion. In general, the court found that the plaintiffs had failed to plead facts sufficient to demonstrate that the Company knew that the alleged false statements were false when made. Specifically, the court dismissed with leave to amend the suit's allegations that the Company publicly announced false or misleading expectations about anticipated results in a variety of areas, including the sale of F-16 aircraft to a foreign government in 1998, expected deliveries of C-130J aircraft in 1998, and earnings projections. The court also dismissed with leave to amend allegations that certain individual defendants engaged in illegal insider trading, and the suit's allegations that the Company made false statements regarding the expected number of satellite launches in 1998, and anticipated savings projections from cost-cutting programs. PEROT SYSTEMS: Building Vigorous Defense V. Securities Suits in NY, TX ---------------------------------------------------------------------- Perot Systems Corporation faces several securities class actions charging the Company, Ross Perot and Ross Perot, Jr. with violations of Rule 10b-5, promulgated under the Securities Act of 1934, as amended, and, in certain of the cases, allege common law fraud. The suits are: (1) Herbert Condell v. Perot Systems Corp., et al., in the United States District Court for the Southern District of New York, (2) Richard J. Dowling v. Perot Systems Corp., et al., in the United States District Court for the Southern District of New York, (3) Robert Markewich v. Perot Systems Corp., et al., in the United States District Court for the Northern District of Texas, (4) Vincent Milano v. Perot Systems Corp., et al., in the United States District Court for the Northern District of Texas, (5) Lori Will v. Perot Systems Corp., et al., in the United States District Court for the Northern District of Texas, and (6) June Zordich v. Perot Systems Corp., et al., in the United States District Court for the Eastern District of Texas, Sherman Division. These suits allege that the Company's SEC filings contained material misstatements or omissions of material facts with respect to the Company's activities related to the California energy market. The Company believes the claims against it are without merit and will vigorously defend itself in these cases. The Company does not believe that the outcome of this litigation will have a material adverse effect on the Company's financial condition, results of operation or cash flow. PEROT SYSTEMS: Denies Allegations in Securities Fraud Suit in S.D. NY --------------------------------------------------------------------- Perot Systems Corporation faces a consolidated securities class action pending in the United States District Court for the Southern District of New York. The lawsuit involving the Company focuses on alleged improper practices by certain investment banks in connection with the Company's initial public offering in February 1999. The suit charges the Company, as well as certain of its current and former officers and certain investment banks, with violations of Rule 10b-5, promulgated under the Securities Act of 1934, as amended, and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended. The lawsuit alleges that certain investment banks, in exchange for allocations of public offering shares to their customers, received undisclosed commissions from their customers on the purchase of securities and required their customers to purchase additional shares of the Company in aftermarket trading. The lawsuit also alleges that the Company should have disclosed in its public offering prospectus the alleged practices of the investment banks, whether or not the Company was aware that the practices were occurring. The Company believes the claims against it are without merit and will vigorously defend itself in these cases. The Company does not believe that the outcome of this litigation will have a material adverse effect on the Company's financial condition, results of operation or cash flow. PROTON ENERGY: Plaintiffs File Amended Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Plaintiffs in the securities class actions against Proton Energy Systems Corporation filed a consolidated amended suit in the United States District Court for the Southern District of New York against the Company and several of its officers and directors as well as against the underwriters who handled the Company's September 28, 2000 initial public offering (IPO). The consolidated suit, filed on behalf of persons who purchased the Company's common stock from September 28, 2000 through and including December 6, 2000, allege that the Company's IPO registration statement and final prospectus contained material misrepresentations and/or omissions related, in part, to excessive and undisclosed commissions allegedly received by the underwriters from investors to whom the underwriters allegedly allocated shares of the IPO. The Company believes it has meritorious defenses to the claims made in the complaints and intends to contest the lawsuits vigorously. However, there can be no assurance that the Company will be successful, and an adverse resolution of the lawsuits could have a material adverse effect on the Company's financial position and results of operation in the period in which the lawsuits are resolved, the Company stated in a disclosure to the Securities and Exchange Commission (SEC). UNITED STATES: Navy Chaplains Sue Over Religious Bias, Await Ruling ------------------------------------------------------------------- Fifty current and former Navy chaplains across the country are claiming Methodists, Lutherans and other traditional Protestants in leadership positions are using their power to discriminate against other faiths, Associated Press Newswires reports. The chaplains have joined in a federal religious discrimination lawsuit against the Navy, and are waiting for a judge to decide if their lawsuit may be reviewed as a class action, thereby permitting still others with complaints to join the group. Navy chaplain Gary Stewart, stationed at New River Air Station, is a lieutenant commander. He say he believes he was temporarily relieved of his chaplain duties at the Great Lakes, Ill., training base because of the way he said a prayer in his own worship service. "Our motto is cooperation without compromise, but I was told to compromise or I would never see another promotion," chaplain Stewart said. Chaplain Stewart said there is a leadership group, of more senior status, who are more traditional than some of the other Protestant faiths and who are known as liturgical Protestants. They are using their leadership positions "to control accession, promotions, transfers and selections to admiral by placing their representatives on the selection boards," Chaplain Stewart asserted. At least eight local Navy religious leaders, who claim unfair treatment within the Chaplain Corps, have persuaded US Rep. Walter B. Jones, D.- N.C., to investigate their complaints. Lt. Cmdr. Dave Wilder, a chaplain at Camp Lejeune, has said, like chaplain Stewart, that worship services he has led have been scrutinized. For example, when he tried to offer a glass of grape juice as an option to wine for those in his congregation who might not be able to tolerate wine, he was ordered to eliminate the grape juice. Mr. Wilder also alleges that while stationed in Okinawa, Japan, a more senior chaplain interrupted his service and relieved Wilder of his leadership in front of his congregation. The plaintiffs hope to use the Navy's own documents in their court action. They are pursuing a report from an investigation commissioned by former Navy Secretary Richard Danzig, undertaken because of complaints within the Chaplain Corps. Plaintiffs' lawyers have asked for the document but are told that it does not exist, chaplain Stewart said. He says that some high level officers claim to have seen it, however, and will testify to its contents. Mr. Wilder admits that it is embarrassing that the group has had to institute a lawsuit against the Chaplain Corps. "You can't change the Chaplain Corps overnight, but we would like to see a five-year plan. The troops have a right to be ministered according to their faith tradition." WYETH: Expects Additional Suits To Be Filed Over PREMPRO Hormone Drug --------------------------------------------------------------------- Pharmaceutical giant Wyeth faces several class actions relating to its hormone replacement drug PREMPRO. The suits arose after the Women's Health Initiative (WHI) released its findings in July 2002, evaluating hormone replacement therapy and the subset of the study involving use of the Company's PREMPRO product. This subset was stopped early because, according to the predefined stopping rule, the increased risk of breast cancer and cardiovascular events exceeded the specified long- term benefits. Four of the six putative class actions seek to represent a nationwide class of all women who have ever purchased or ingested PREMPRO and seek, on behalf of the class, purchase price refunds, personal injury damage, medical monitoring expenses and an order requiring the Company to inform the public of the reported risks of PREMPRO. The other two putative class actions each seek to represent a class of Pennsylvania women who have ingested the drug and seek purchase price refunds and medical monitoring expenses on behalf of the class. The Company expects that additional PREMPRO cases may be filed in the future. At this time, the Company is unable to determine any possible range of loss relating to the PREMPRO litigation. However, it believes it has meritorious defenses against these claims and intends to vigorously defend any PREMPRO litigation. New Securities Fraud Cases AOL TIME: Finkelstein Thompson Commences Securities Suit in E.D. VA ------------------------------------------------------------------- Finkelstein, Thompson & Loughran initiated a securities class action in the United States District Court for the Eastern District of Virginia, on behalf of purchasers of the securities of AOL Time Warner (NYSE: AOL) between October 18, 2000 and July 17, 2002, inclusive. The suit alleges that during the class period, the Company recognized revenue on a variety of transactions in violation of generally accepted accounting principles in an effort to hide the decline in advertising revenues. When the true facts concerning the Company's recognition of revenue in violation of GAAP were revealed in a Washington Post article on July 18, 2002, Company shares declined an additional 10% to close on July 18, 2002 at $12.45. At the beginning of the class period, the Company's common stock traded at approximately $47 per share. For more details, contact Conor R. Crowley or Donald J. Enright by Phone: 202-337-8000 or by E-mail: crc@ftllaw.com or dje@ftllaw.com. AON CORPORATION: Levy & Levy Commences Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- Levy & Levy PC initiated a securities class action in the US District Court, Northern District of Illinois, Eastern Division, against Aon Corporation (NYSE:AOC), Patrick G. Ryan and Harvey N. Medvin. The suit was filed on behalf of purchasers of the Company's securities between May 4, 1999 and August 6, 2002, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between May 4, 1999 and August 6, 2002, thereby artificially inflating the price of Company securities. Throughout the class period, as alleged in the complaint, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the company's earnings and financial performance. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income by $27 million in 1999, by $24 million in 2000 and by $5 million in the first quarter of 2002; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times. n August 7, 2002, before the market opened for trading, the Company shocked the market when it announced, among other things, that: (i) it had failed to meet analysts' expectations on its earnings for the second quarter by a wide margin; (ii) because of the slumping financial markets, it had canceled a spinoff of its insurance underwriting businesses to shareholders; and (iii) the SEC had began an investigation of its accounting and was questioning several items in the Company's accounts, including the reporting of investment write- downs, the timing of some costs and a reinsurance recoverable item and the decision not to consolidate certain special purpose vehicles. The Company also stated that, if the SEC says it is necessary, it will have to restate its earnings for the past three years, and reduce its net income by $27 million in 1999, by $24 million in 2000 and by $5 million in the first quarter of 2002. Following this report, shares of the Company fell $6.43 per share to close at $14.77 per share, a one- day decline of 30.3%, on volume of more than 20 million shares traded, or more than twenty times the average daily volume. For more details, contact Stephen G. Levy by Mail: One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone: 866-338-3674 (toll-free), 203-564-1920 or by E-mail: LLNYCT@aol.com AON CORPORATION: Howard Smith Commences Securities Suit in N.D. IL ------------------------------------------------------------------ The Law Offices of Howard G. Smith initiated a securities class action on behalf of shareholders who acquired Aon Corporation (NYSE:AOC) between May 4, 1999 and August 6, 2002, inclusive, in the United States District Court for the Northern District of Illinois against the Company and certain of its officers and directors. The suit charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period. These false and misleading statements had the effect of artificially inflating the market price of the Company's securities, inflicting damages on investors. For more details, contact Howard G. Smith by Phone: 215-638-4847 or 888-638-4847 or by E-mail: LEGUL2000@aol.com. CHARTER COMMUNICATIONS: Marc Henzel Commences Securities Suit in CA ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Central District of California on behalf of a class consisting of all persons who purchased securities of Charter Communications, Inc. (Nasdaq: CHTR) between November 9, 1999 and July 17, 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' material omissions and the dissemination of materially false and misleading statements regarding the nature of Company revenue and earnings caused the 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, Charter's 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 Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888-643-6735 or 610-660-8000 by Fax: 610-660-8080 or by E-mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. MSC INDUSTRIAL: Howard Smith Commences Securities Fraud Suit in E.D. NY ----------------------------------------------------------------------- The Law Offices of Howard G. Smith initiated a securities class action on behalf of shareholders who acquired MSC Industrial Direct Co, Inc. (NYSE:MSM) between November 4, 1999 and August 5, 2002, inclusive, in the United States District Court for the Eastern District of New York against the Company and certain of its officers and directors. The Complaint charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period. These false and misleading statements had the effect of artificially inflating the market price of the Company's securities, inflicting damages on investors. For more details, contact Howard G. Smith by Phone: 215-638-4847 or 888-638-4847 or by E-mail: LEGUL2000@aol.com. MSC INDUSTRIAL: Levy & Levy Commences Securities Fraud Suit in E.D. NY ---------------------------------------------------------------------- Levy & Levy PC initiated a securities class action against MSC Industrial Direct Co., Inc. (NYSE: MSM) in the United States District Court for the Eastern District of New York on behalf of purchasers of Company securities during the period between November 4, 1999 and August 5, 2002, inclusive. The suit also names as defendants: (1) Mitchell Jacobson, (2) Sidney Jacobson, (3) Shelley Boxer, (4) Charles Boehlke, (5) David Sandler, (6) James Schroeder, (7) Dennis Kelly, (8) Raymond Langton, (9) Roger Fradin and (10) Philip Peller The complaint alleges that defendants issued materially false and misleading financial statements and press releases concerning the Company's revenues, income and earnings per share during the class period in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. For more details, contact Stephen G. Levy by Mail: One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone: 866-338-3674 (toll-free), 203-564-1920 by E-mail: LLNYCT@aol.com or visit the firm's Website: http://www.levylawfirm.com PERKINELMER INC.: Bernstein Liebhard Commences Securities Suit in MA -------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action on behalf of all persons who purchased or acquired PerkinElmer, Inc. (NYSE: PKI) securities between July 15, 2001 and April 11, 2002. The action is pending in the United States District Court for the District of Massachusetts. 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 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 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 division. 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 Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: PKI@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. RIVERSTONE NETWORKS: Marc Henzel Commences Securities Suit in N.D. CA --------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California, on behalf of purchasers of Riverstone Networks, Inc. (NASDAQ: RSTN) securities between August 20, 2001 and June 5, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is a provider of metropolitan area networking solutions that enable service providers to convert raw bandwidth into profitable services over legacy and next-generation infrastructures. During the class period, defendants desperately sought to create the impression that the Company had the ability to directly enter these markets with a captive client base. Thus, the Company, through, among other things, its relationship with Hutchison Global Crossing, could compete head-to-head with the dominant companies in the industry. Prior to its relationship with Hutchison, the Company was having difficulty gaining operational momentum within these potentially lucrative Asian markets. The complaint alleges that each defendant was aware that the Company would be unable to meet its projected Q2 02 to Q1 03 revenue and earnings per share (EPS) targets unless they manipulated the Company's revenue, earnings and receivables. However, because the "appearance" of growth was so critical to defendants' plan to inflate the price of Company shares and sell their own shares and raise monies via its $150 million debt offer, defendants continued to maintain throughout the class period that the Company would meet revenue projections and EPS when, in reality, defendants knew that the Company could not achieve their projections without attempting to fraudulently record revenue by inducing clients who defendants knew did not have the ability to pay to agree to take delivery of goods and that the Company was, in fact, suffering from greater losses. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by Phone: 888-643-6735 or 610-660-8000 by Fax: 610-660-8080 by E-mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182. XCEL ENERGY: Weiss & Yourman Commences Securities Fraud Suit in MN ------------------------------------------------------------------ Weiss & Yourman initiated a securities class action against Xcel Energy, Inc. (NYSE:XEL) in the United States District Court for the District of Minnesota, on behalf of purchasers of Company securities between January 31, 2001 and July 26, 2002. The complaint charges the defendant with violations of the Securities Exchange Act of 1934. The complaint alleges that defendant issued false and misleading statements, which artificially inflated the stock. For more details, contact James E. Tullman, David C. Katz, and/or Mark D. Smilow by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New York, NY 10176 by Phone: 888-593-4771 or 212-682-3025 by E-mail: info@wynyc.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. 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