/raid1/www/Hosts/bankrupt/CAR_Public/020906.mbx
C L A S S A C T I O N R E P O R T E R
Friday, September 6, 2002, Vol. 4, No. 177
Headlines
AIRGATE PCS: Up Against Numerous Securities Suits in N.D. Georgia
ARIBA INC.: Asks NY Court To Dismiss Consolidated Securities Fraud Suit
ASCENDANT SOLUTIONS: Plans To File Motion To Dismiss TX Securities Suit
BACKWEB TECHNOLOGIES: Asks NY Court To Dismiss Securities Fraud Suit
CHARTER COMMUNICATIONS: Shareholders Commence Securities Suits In DC
CHECK INTO CASH: Defense Lawyer Under Attack in Kentucky Consumer Suit
ESSO AUSTRALIA: Consumer Suit Over 1998 Gas Explosion Launched In Court
FLORIDA: State, Counties Settle NAACP Suit Over Presidential Elections
GEORGIA: Peanut Growers Signing Up for $1.3 Billion Quota Buyout
INDIANA: Civil Group Sues Over Tough Driver's License Requirements
INTERNET CAPITAL: Asks NY Court To Dismiss Consolidated Securities Suit
LAWN-BOY INC.: Voluntarily Recalls 36T Lawn Mowers Over Injury Hazard
MICROSOFT CORP: Judge Says Florida Consumers Antitrust Suit May Proceed
MM COMPANIES INC.: Reaches Settlement in Securities Suit in C.D. CA
NETWORK COMMERCE: Oral Arguments For Suit Dismissal Set September 2002
REDBACK NETWORKS: Plaintiffs File Consolidated Securities Suit in CA
RUBIO'S RESTAURANTS: Labels "Without Merit" Two Overtime Suits in CA
TEAM BEANS: Voluntarily Recalls 8T Bear Key Chains For Choking Hazard
XL MACHINE: Voluntarily Recalls 3,300 Toy Chests For Injury Hazard
Asbestos Alert
AK STEEL: Enters Settlement Agreements in Pending Asbestos Liabilities
AMERICAN LOCKER: Faces Suits Over Asbestos Containing Products in WA
ARMSTRONG WORLD: Estimates $800 Million in Costs over Asbestos Claims
ASHLAND INC.: Reports US$28 Million in Asbestos Liabilities, Expenses
GOODYEAR TIRE: Receives More than 6,000 New Asbestos Claims For 2Q2002
New Securities Fraud Cases
AMERICAN EXPRESS: Wechsler Harwood Lodges Securities Suit in S.D. NY
AON CORPORATION: Wechsler Harwood Commences Securities Suit in N.D. IL
BAXTER INTERNATIONAL: Much Shelist Initiates Securities Suit in N.D. IL
BELLSOUTH CORPORATION: Wechsler Harwood Lodges Securities Suit in GA
CAPITAL ONE: Wechsler Harwood Commences Securities Suit in E.D. VA
FIRST HORIZON: Schatz & Nobel Commences Securities Fraud Suit in GA
FIRST HORIZON: Charles Piven Commences Securities Fraud Suit in N.D. GA
FLEMING COMPANIES: Charles Piven Commences Securities Fraud Suit in TX
HEALTHSOUTH CORPORATION: Cohen Milstein Lodges Securities Suit in AL
HPL TECHNOLOGIES: Wechsler Harwood Lodges Securities Suit in N.D. CA
UNIROYAL TECHNOLOGY: Wechsler Harwood Lodges Securities Suit in M.D. FL
*********
AIRGATE PCS: Up Against Numerous Securities Suits in N.D. Georgia
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Airgate PCS, Inc. faces several securities class actions pending in the
United States District Court for the Northern District of Georgia
against the Company and:
(1) Thomas M. Dougherty,
(2) Barbara L. Blackford,
(3) Alan B. Catherall,
(4) Credit Suisse First Boston,
(5) Lehman Brothers,
(6) UBS Warburg LLC,
(7) William Blair & Company,
(8) Thomas Wiesel Partners LLC and
(9) TD Securities
The suits allege that the prospectus used in connection with the
secondary offering of Company stock by certain former iPCS shareholders
on December 18, 2001 contained materially false and misleading
statements and omitted material information necessary to make the
statements in the prospectus not false and misleading. The alleged
omissions included:
(i) failure to disclose that in order to complete an effective
integration of the iPCS, drastic changes would have to be made
to the Company's distribution channels;
(ii) failure to disclose that the sales force in the acquired iPCS
markets would require extensive restructuring; and
(iii) failure to disclose that the "churn" or "turnover" rate for
customers would increase as a result of an increase in the
amount of sub-prime credit quality customers the Company added
from its merger with iPCS.
On July 15, 2002, certain plaintiffs and their counsel filed a motion
seeking appointment as lead plaintiffs and lead counsel. The Company
believes the plaintiffs' claims are without merit.
ARIBA INC.: Asks NY Court To Dismiss Consolidated Securities Fraud Suit
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Ariba, Inc. asked the United States District Court for the Southern
District of New York to dismiss the consolidated securities class
action pending against it, certain of its officers or former officers
and directors and three of the underwriters of its initial public
offering.
The suit, filed on behalf of purchasers of the Company's common stock
in the period from June 23, 1999, the date of the Company's initial
public offering, to December 23, 1999 (or in some cases, to December 5
or 6, 2000), made certain claims under the federal securities laws,
including Sections 11 and 15 of the Securities Act of 1933 and Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, relating to the
Company's initial public offering.
Specifically, among other things, these actions alleged that the
prospectus pursuant to which shares of common stock were sold in the
Company's initial public offering, which was incorporated in a
registration statement filed with the SEC, contained certain false and
misleading statements or omissions regarding the practices of the
Company's underwriters with respect to their allocation to their
customers of shares of common stock in the Company's initial public
offering and their receipt of commissions from those customers related
to such allocations, and that such statements and omissions caused the
Company's post-initial public offering stock price to be artificially
inflated.
In August 2001, the consolidated suit was further consolidated before a
single judge with cases brought against over a hundred additional
issuers and their underwriters that make similar allegations regarding
the initial public offerings of those issuers. The latter
consolidation was for purposes of pretrial motions and discovery only.
In February 2002, the parties signed and filed a stipulation dismissing
the consolidated action without prejudice against the Company and
certain individual officers and directors, which the court approved and
entered as an order on March 1, 2002.
On April 19, 2002, the plaintiffs filed an amended complaint in which
they dropped their claims against the Company and the individual
officers and directors under Sections 11 and 15 of the Securities Act
of 1933, but elected to proceed with their claims against such
defendants under Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934.
On July 15, 2002, the Company and the officer and director defendants,
along with other issuers and their related officer and director
defendants, filed a joint motion to dismiss based on common issues.
Opposition and reply papers are yet to be filed.
ASCENDANT SOLUTIONS: Plans To File Motion To Dismiss TX Securities Suit
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Ascendant Solutions, Inc. intends to file a motion to dismiss the
consolidated securities class action pending in the United States
District Court for the Northern District of Texas, against the Company,
certain of its directors, and a limited partnership of which a director
is a partner.
The suit asserts causes of action under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, for an unspecified amount
of damages on behalf of a putative class of individuals who purchased
the Company's common stock between various periods ranging from
November 11, 1999 to January 24, 2000. The consolidated suit claims
that the Company and the individual defendants made misstatements and
omissions concerning the Company's products and customers.
The Company denies the plaintiffs' allegations and intends to
vigorously defend against the lawsuits. The Company intends to file a
motion to dismiss the suit on or before September 9, 2002.
BACKWEB TECHNOLOGIES: Asks NY Court To Dismiss Securities Fraud Suit
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Backweb Technologies, Ltd. asked the United States District Court for
the Southern District of New York to dismiss the consolidated
securities class action pending against it and six of its officers and
directors. The complaint also names as defendants the underwriters for
the Company's initial public offering.
The suit asserts that the prospectus from the Company's June 8, 1999
initial public offering failed to disclose certain alleged improper
actions by the underwriters for the offering, including the receipt of
excessive brokerage commissions and agreements with customers regarding
aftermarket purchases of shares of the Company's stock.
The complaint alleges claims against the Company and its officers and
directors under Section 11 of the Securities Act of 1933, as amended
and alleges claims against the officers and directors under Section 15
of the 33 Act and pursuant to Rule 10b-5 and Sections 10b and 20(a) of
the Securities Exchange Act of 1934.
The suit is similar to lawsuits filed against over 300 companies who
initiated their initial public offerings in the past years in the same
court. The suits were later consolidated for pre-trial proceedings
under Judge Shira Scheindlin of the Southern District of New York.
In July 2002, an omnibus motion to dismiss was filed in the coordinated
litigation on behalf of the issuer defendants, of which the Company and
its named officers and directors are a part, on common pleadings
issues.
The Company believes it has meritorious defenses against this action.
However, the results of any litigation are inherently uncertain and can
require significant management attention, and the Company could be
forced to incur substantial expenditures, even if it ultimately
prevails.
CHARTER COMMUNICATIONS: Shareholders Commence Securities Suits In DC
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Charter Communications, Inc. faces several securities class actions
pending in the United States District Court for the District of
Columbia against it and certain of its officers and directors, on
behalf of all persons who purchased the Company's securities 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 the Company's revenue and earnings caused the Company's
stock price to become artificially inflated, inflicting damages on
investors.
The suit alleges that defendants overstated Company's revenue, failed
to appropriately account for installation costs and artificially
inflated the number of subscribers for the Company's basic cable
services.
The Company believes that the suits are without merit and intends to
vigorously defend the actions.
CHECK INTO CASH: Defense Lawyer Under Attack in Kentucky Consumer Suit
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A recent filing in US District Court in Lexington, Kentucky, is
following a growing trend in class actions in which the lawyers
themselves, and not the legal issues of the case, are the targets,
according to a report by Associated Press Newswires.
Lexington lawyer John O. Morgan, Jr. represents bankruptcy trustees and
former customers who are suing Check Into Cash, a cash advance service.
However, in a counter-filing by attorneys representing Check Into Cash,
Mr. Morgan finds himself accused of "gross malpractice," "ethical
defalcations," enriching himself at his client's expense and abuse of
the legal system.
The lead attorney for Check Into Cash, Barbara B. Edelman, questions,
in the filing, whether Mr. Morgan is the best attorney to represent the
class, based on the "unconscionable" fees he had charged in six other
cases.
She cites as an example of her charges as to fees, the example that Mr.
Morgan had received a total of $1.32 million in fees, and 49 of the 52
clients who represent the classes in the six cases had received
nothing. Three others received a total of $2,206.66 and eight will get
"an unknown amount in the future."
Ms. Edelman charged, in general terms, that these results reveal an
unabashed abuse of the class action and bankruptcy process in order to
enrich a lawyer but bring no benefit, or very little benefits to the
clients they are serving.
The tactic of attacking the character of lawyers in cases has actually
been endorsed by the US Supreme Court, said Mary J. Davis, professor
of law at the University of Kentucky. The Court said the ability of
the attorneys representing the plaintiffs was "a primary concern" in
class-action lawsuits because two or three lawyers might be
representing dozens or hundreds of plaintiffs.
Ms. Davis indicated that the Supreme Court became more concerned when
the number of class actions began soaring in the 1980s. The High Court
then began saying it is proper for defense attorneys to challenge the
ability of plaintiffs' attorneys and proper for the lower courts to
consider the issues they raised.
While Ms. Davis emphasizes that the Supreme Court talks about the
legitiamcy of questioning the plaintiffs' abilities, it does seem that
they are calling Mr. Morgan a thief. Mr. Morgan himself calls it "mud
slinging."
The lawsuit against Checks into Cash received a boost when the Kentucky
Supreme Court ruled that "deferred deposit" companies like Check Into
Cash actually were making short-term loans. The mechanics of
converting a deferred deposit into a loan works thus - customers write
checks that will be held by the company for a specified period before
being deposited. When the deposit is made, the customer gets the cash
immediately, minus a small fee.
State usury laws limit interest to an annual percentage rate of eight
percent. However, some deferred-deposit companies were, in effect,
charging 496 percent, according to filings in the case. Mr. Morgan is
again asking the US District Court in Lexington to certify the class of
the plaintiffs so the action can proceed. Mr. Morgan also said that Ms
Edelman neglected to say in her filing that each of the 52 clients in
the six cases received $5,000 to $10,000, plus recoveries for illegal
fees charged by the deferred deposit company.
Mr. Morgan said that the legal costs are accrued as the cases move
slowly through the courts toward settlement. There is relatively
little legal expense associated with distributing the money once
settlement is reached.
"These (Check Into Cash) attorneys are sophisticated people, and they
understand all of this," Mr. Morgan said. "They are looking at having
to pay a huge amount of money, and we have not lost one (case) yet."
ESSO AUSTRALIA: Consumer Suit Over 1998 Gas Explosion Launched In Court
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Attorneys for 1.5 million gas consumers commenced one of Australia's
largest class actions against an Australian arm of US company Exxon-
Mobil, seeking compensation for a halt in gas supplies after a fatal
explosion in 1998, the Associated Press Newswires reports. The
hearings before Justice William Gillard are expected to last about
eight weeks.
The gas consumers in Victoria state want compensation from Esso
Australia for the two weeks they went without gas following the blast
at the company's Longford plant on September 25, 1998. The explosion
also killed two people and injured eight. Businesses, workers and
consumers say they lost more than 1.4 billion Australian dollars
(US$770 million) during the period without gas after the explosion.
Julian Burnside, a lawyer for the plaintiffs, told Victoria's Supreme
Court that as the state's sole gas supplier, Esso had repeatedly
assured consumers that their supply was secure and reliable. When the
gas was severed, the state was thrown into crisis for weeks, with
businesses forced to shut down and households unable to cook and wash,
he said. Mr. Burnside said the company had a duty to ensure a
continuous supply of gas, and should be forced to compensate those
affected.
The Company has denied it had a duty of care to Victorian gas
consumers. "Under Australian law, the company has no legal
responsibility for the losses being claimed and will be arguing this
vigorously in court," said Esso chairman Robert Olsen in a statement
released early Wednesday. Mr. Olsen said that if the class action was
successful, such a result would threaten all Australian manufacturers
that supply raw materials or services.
A Supreme Court jury convicted Esso Australia in June on 11 criminal
charges arising from the explosion, which killed two men and injured
eight others. The Company was fined two million Australian dollars
(US$1.1 million).
FLORIDA: State, Counties Settle NAACP Suit Over Presidential Elections
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Ending a dispute over the 2000 presidential election, the state and two
counties filed papers recently to settle a lawsuit brought by civil
rights groups over the widespread voting problems, the Associated Press
Newswires reports.
Hillsborough and Orange counties, as well as the state, were the only
other remaining defendants in the case, which ended without trial.
Five other counties settled earlier.
"It is a good thing for voters; it gives a lot more accountability to
the voters," said voters' attorney Anita Hodgkiss. The agreement will
probably result in the downplaying, during the re-election drive of
Governor Jeb Bush, of election practices that came to light during the
2000 presidential election.
Voters claimed in the federal class action that they were
disenfranchised during the election ultimately decided by the courts.
President Bush's 537-vote margin over Al Gore in Florida swung the
outcome.
Some of the key provisions are:
(1) Creation of a state coordinator for election law compliance;
(2) Correction of mistakes in a purge of convicted felons;
(3) Reporting on future election day problems;
(4) Expansion of voter rights on provisional ballots.
There were no admissions of wrongdoing.
Voters' attorneys said the settlement goes beyond laws adopted since
the state became the butt of jokes over the infamous butterfly ballot
and antiquated punch card voting equipment.
The new coordinator would devote at least three-quarters of his time to
looking for election problems and solutions and producing reports
before and after elections.
In the purge of voters only 9,000 of the 54,000 removed from the voting
lists matched name, date of birth, race, gender, driver's license and
Social Security numbers on the Removal List. "The agreement places
careful parameters about how to implement the process of matching up
people so you don't end up removing people wrongfully," said Ms.
Hodgkiss.
Ms. Hodgkiss said she does not expect the settlement to be in effect
before the November general election because the US Justice Department
likely will be required to review it for compliance with federal
election law.
GEORGIA: Peanut Growers Signing Up for $1.3 Billion Quota Buyout
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Peanut quota owners began signing up Tuesday for a $1.3 billion buyout,
bringing an end to a Depression-era program that guaranteed some
farmers substantially more than others for peanuts grown from Georgia
to Texas, the Associated Press Newswires reports.
Opponents of the buyout have threatened a class action, as many are
widows and retirees who feel they are being robbed of the investments
they made to purchase peanut quotas and to improve their farms so that
they could enjoy a comfortable retirement.
The sign-up, announced by Agriculture Secretary Ann M. Veneman last
month, will run through November 22. Those who owned peanut quotas as
of May 13, 2002, are eligible to participate in the buyout. The US
Department of Agriculture will pay quota holders 55 cents per pound,
which they can collect in a lump sum payment or spread out over five
years.
Georgia quota holders stand to receive about $520 million. Georgia's
congressional delegation opted for the buyout because their colleagues
from other states would not support a continuation of the quota system.
The quota system has been replaced with a new system of direct
subsidies to growers - similar to those now handed out to corn, wheat
and cotton farms. Only those who have been growing peanuts, not
landowners who rented land for peanut production, qualify for the
subsidies.
The quota system guaranteed farmers $610 ton for peanuts, leaving those
without quotas to settle for much less - less than $150 per ton last
year. Critics claimed the quota system made it difficult for US
producers to compete with cheaper imported peanuts from China and
Japan.
Many of the 70,000 quota holders were people, and even corporations,
who did not actually grow peanuts, retirees, heirs of peanut farmers or
corporations, such as the John Hancock Insurance Co., which owned a 4.3
million-pound quota in Georgia.
INDIANA: Civil Group Sues Over Tough Driver's License Requirements
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The Indiana Civil Liberties Union (ICLU) has filed a lawsuit against
the Bureau of Motor Vehicles (BMV) over its new, tougher requirements
for getting a driver's license, the Associated Press Newswires reports.
The class action, filed in Marion County Superior Court, alleges that
the new policy violates the state and US constitutions by determining
who is and who is not a legal Indiana resident, which is a federal
responsibility.
"The prior requirements were designed so that people who got licenses
had to provide documentation to prove who they are. The new rules
shifted that to an immigration check," said ICLU attorney Ken Falk.
Mr. Falk said he will ask for a preliminary injunction next week that
would prevent the BMV from using the new requirements, which were
adopted to make identity theft more difficult and guard against
terrorism.
The lawsuit, which names BMV Commissioner Gerald Coleman as a
defendant, has two plaintiffs, but the ICLU hopes to certify it as a
class action, which could clear the way for many others to join the
complaint.
State officials declined to comment on the pending litigation, but said
they are working with some groups on revising the requirements, which
were designed by the BMV and the Indiana Counter Terrorism and Security
Council.
The new policy, which went into effect July 15, requires six documents
for people getting new Indiana drivers' licenses; proof of a social
security number, a primary document, such as a birth certificate to
verify identity, two secondary pieces of identification and two
residency documents.
However, some immigrants who live and work in Indiana legally do not
have a Social Security number or other required documents. One of the
plaintiffs, who is using the pseudonym Mary Roe, entered the country
illegally in 2000. She then married a United States citizen and is
waiting for a green card. Because she has no Social Security card, Ms.
Roe has been unable to obtain a driver's license, according to the
lawsuit.
BMV spokeswoman Media Trent said, "We are open to suggestions. When we
set the policy out, we said from the very beginning that it is not
carved in stone." BMV officials have met with several community groups
to discuss their concerns, said Ms. Trent.
INTERNET CAPITAL: Asks NY Court To Dismiss Consolidated Securities Suit
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Internet Capital Group, Inc. asked the United States District Court for
the Southern District of New York to dismiss the consolidated
securities class action pending against it, certain of the Company's
present directors, present and former officers and underwriters.
The suit generally alleges violations of Sections 11 and 12 of the
Securities Act of 1933 and Rule 10b-5 promulgated under the Securities
Exchange Act of 1934, based on, among other things:
(1) the dissemination of statements allegedly containing material
misstatements and/or omissions concerning the commissions
received by the underwriters of the initial public offering
and follow-on public offering of the Company; and
(2) failure to disclose the existence of purported agreements by
the underwriters with some of the purchasers in these
offerings to buy additional shares of the Company's stock
subsequently in the open market at pre-determined prices above
the initial offering prices.
The claims in these cases have been consolidated with similar cases
against other companies for pre-trial purposes before one judge in the
Southern District of New York. In April 2002, a consolidated, amended
complaint was filed against these defendants, which generally allege
the same violations and also refer to alleged misstatements or
omissions that relate to the recommendations regarding the Company's
stock by analysts employed by the underwriters.
In June and July 2002, defendants, including the Company defendants,
filed motions to dismiss plaintiffs' complaints on numerous grounds.
That court should hear that motion by this fall. There have been no
other material developments in these cases to date.
LAWN-BOY INC.: Voluntarily Recalls 36T Lawn Mowers Over Injury Hazard
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Lawn-Boy, Inc. is cooperating with the United States Consumer Product
Safety Commission (CPSC) by voluntarily recalling about 36,000 Lawn-Boy
walk-behind mowers. The vendor who manufactured the mulch plates for
the Company used the wrong material, making the plates brittle and easy
to crack or break if struck by a stone or stick while mowing. Objects
coming through a broken plate or pieces of the plate could possibly
injure the operator or bystanders. The Company has received five
reports of broken mulch plates. No injuries or property damage have
been reported.
The recall includes 21-inch Lawn Boy Easy Mulch Silver, Silver Pro and
GoldPro Series walk-behind lawn mowers. The mowers have the words
"EASY MULCH" printed on the top of the mulch cover plate in bold black
letters. A model and serial plate is located on the right rear of the
mower housing. The recall includes:
(1) Model Number 10247 Serial Number 220004832-220009307,
(2) Model Number 10247C (Int'l) Serial Number 220000001-220000899,
(3) Model Number 10323 Serial Number 220012370-220022449,
(4) Model Number 10324 Serial Number 220004926-220015029,
(5) Model Number 10324C (Int'l) Serial Number 220000001-220000300,
(6) Model Number 10360 Serial Number 220002506-220004005,
(7) Model Number 10360C (Int'l) Serial Number 220000001-220000300,
(8) Model Number 10361 Serial Number 220003798-220005795,
(9) Model Number 10424 Serial Number 220001738-220003521,
(10) Model Number 10550 Serial Number 220001896-220005900, and
(11) Model Number 10552 Serial Number 220001572-220002569,
Lawn-Boy dealers, department and home center stores sold the mowers
nationwide from February 2002 to August 2002 for between $250 and
$580.
For more details, contact the Company by Phone: 866-336-5207 between
8:30 am and 9:00 pm ET Monday through Friday, 8:30 am to 5:00 pm
Saturday, and 10:00 am to 6:30 pm Sunday, or visit the firm's Website:
http://www.lawnboy.com.
MICROSOFT CORP: Judge Says Florida Consumers Antitrust Suit May Proceed
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Microsoft Corporation users in Florida can band together in a single
class action to pursue antitrust claims against the software company,
Circuit Judge Bernard Shapiro of Miami ruled, according to a report by
Associated Press Newswires.
The lawsuit claims Microsoft Corporation violated Florida state law
against unfair trade practices with an anticompetitive approach to
sales of its operating system and applications software. The lawsuit
seeks monetary damages, but the amount will not be specified until the
end of the trial.
Robert Parks, an attorney for Florida Microsoft users, said all were
hurt "by the same anticompetitive actions that Microsoft took to
maintain monopolies." Judge Shapiro rejected Microsoft challenges to
the ability to quantify alleged overcharges, the adequacy of named
plaintiffs and whether they share common issues.
He concluded in a 31-page order that the issue of Microsoft's monopoly
position, market definition and the alleged violation of state law "are
ideally suited for class-wide determination."
The lawsuit covers anyone in Florida who bought a personal computer
with MS-DOS, Windows 95, Windows 98, Microsoft Office, Microsoft Word
or Microsoft Excel, after November 15, 1995.
The federal government and nine states have settled their antitrust
cases against Redmond, Washington-based Microsoft. Other class actions
are being pursued against Microsoft in California, Kansas, Minnesota,
North Dakota and South Dakota. A case in Michigan was rejected last
week.
Earlier this year, Microsoft lost its bid to settle dozens of private
antitrust lawsuits by donating $1 billion worth of computers and
software to the nation's poorest public schools. US District Judge J.
Frederick Motz in Baltimore ruled that the proposal was unacceptable
because it would give Microsoft an unfair advantage over rival Apple
Computer, a major player in the education market.
MM COMPANIES INC.: Reaches Settlement in Securities Suit in C.D. CA
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MM Companies, Inc. reached a memorandum of understanding to settle the
consolidated securities class action pending in the United States
District Court for the Central District of California. The suit names
as defendants the Company and:
(1) EMI Group, PLC,
(2) EMI Recorded Music,
(3) EMI Recorded Music North America,
(4) Virgin Holdings, Inc.,
(5) Robert P. Bernardi,
(6) Devarajan S. Puthukarai,
(7) Irwin H. Steinberg,
(8) Jay A. Samit,
(9) Jonathan A.B. Smith, and
(10) John A. Skolas
The suit alleges that the Company violated Sections 11 and 12(a)(2) of
the Securities Act of 1933 and Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder, by making false and
misleading statements in the Company's filings with the SEC and in
press releases concerning the Company's access to recordings pursuant
to certain licensing agreements during the period from July 7, 1999,
through November 15, 1999.
The claims are purportedly brought on behalf of all persons who
purchased the Company's stock during that period, including investors
who purchased stock during the Company's initial public offering as
well as those who purchased stock thereafter.
On September 27, 2000, the defendants filed a motion to dismiss the
suit, but the court denied the motion in part and granted it in part.
In August 2001 the court denied a subsequent motion for reconsideration
with respect to the motion to dismiss. The plaintiffs then refiled the
suit, asserting the same causes of action against the Company as were
alleged in the original suit.
On January 21, 2002, the parties participated in mediation in an
attempt to settle matters set forth in the suit. On May 14, 2002 the
parties participated in a second mediation session. That mediation led
to all of the parties to this litigation entering into a Memorandum of
Understanding (MOU) setting forth the material terms of a settlement of
all plaintiffs' claims.
Under the terms of the MOU, the Company's directors and officers
insurance carriers will contribute to a settlement fund and the Company
will not be obligated to contribute to the settlement. The MOU is
conditioned upon, inter alia, the execution of a comprehensive
Stipulation of Settlement and the approval of that Stipulation by the
district court and the acceptance of the terms of the settlement by
plaintiffs- shareholders comprising a material part of the class of the
Company's shareholders. The parties are presently negotiating the
terms of the Stipulation of Settlement.
The Company believes the allegations contained in the lawsuit are
without merit and intends to defend against them vigorously. However,
these lawsuits could materially and adversely affect the Company's
financial condition and results of operations based on a number of
factors, including legal expenses, diversion of management's time and
attention, and payment of judgments or settlements in excess of
available insurance.
NETWORK COMMERCE: Oral Arguments For Suit Dismissal Set September 2002
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Oral arguments for the motion to dismiss the consolidated securities
class actions pending against Network Commerce, Inc. are scheduled for
September 4, 2002, in the United States District Court for the Western
District of Washington in Seattle. The suit also names as defendants:
(1) Dwayne M. Walker,
(2) Dain Rauscher Inc.,
(3) US Bancorp Piper Jaffray,
(4) SoundView Technology Group, Inc.,
(5) JP Morgan Chase & Co.,
(6) CIBC World Markets Corp. and
(7) PaineWebber Inc.
The consolidated suit purports to allege claims on behalf of all
persons who purchased the Company's common stock during the period that
begins on September 28, 1999 and ends on April 16, 2001. The
consolidated complaint alleges violations of the federal securities
laws based on alleged misrepresentations and omissions made by
defendants to the market.
On January 28, 2002, the Company and Mr. Walker filed a motion to
dismiss the consolidated suit for failure to state a claim on which
legal relief can be granted. The Company and Mr. Walker intend to
vigorously defend the suits, but unfavorable resolution of these suits
could have a material adverse effect on the Company in one or more
future periods.
REDBACK NETWORKS: Plaintiffs File Consolidated Securities Suit in CA
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Plaintiffs in the securities class actions against Redback Network,
Inc. and its former officers filed a consolidated amended securities
suit in the United States District Court for the Southern District of
New York. The suit also names as defendants the underwriters of the
Company's initial public offering.
The consolidated suit asserts violations of the federal securities laws
relating to how the Company's underwriters of the initial public
offering allegedly allocated IPO shares to the underwriters' customers.
Although the outcome of this lawsuit cannot be predicted with
certainty, management does not believe that it will have a material
adverse effect on the Company's financial condition.
RUBIO'S RESTAURANTS: Labels "Without Merit" Two Overtime Suits in CA
--------------------------------------------------------------------
Rubio's Restaurants faces two class actions pending in the California
Superior Court for Orange County, on behalf of former employees who
worked in the positions of general manager and assistant manager in the
Company's California stores.
The suits involve the issue of whether employees and former employees
in the general and assistant manager positions who worked in the
California restaurants during specified time periods were misclassified
as exempt and deprived of overtime pay.
The Company believes these cases are without merit and intends to
vigorously defend against the related claims. These cases are in the
early stages of discovery and the status of the class action
certification is yet to be determined for both suits. It is probable
that the latter action may either be stayed pending resolution of the
previously described action or consolidated into the former action.
The Company is presently unable to predict the probable outcome of
these matters and the amounts of damages at issue are also unknown.
TEAM BEANS: Voluntarily Recalls 8T Bear Key Chains For Choking Hazard
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Team Beans LLC is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 8,000 "Bottle Cap
Bear" key chains. A miniature "Coca-Cola" bottle that attaches to the
body of the plush bear key chain can come off, posing a choking hazard
to young children. The Company imported the key chains as part of a
licensing agreement with The Coca-Cola Co.
The Company has not received any reports of bottles attached to the key
chains coming off. This recall is being announced to prevent the
possibility of injuries.
The 4-inch "Bottle Cap Bear" key chains feature an auto-racing theme.
The bears have white heads and tails, and hold a miniature "Coca-Cola"
bottle in their left paws. The bears' outfits contain colors and
insignia associated with selected professional racecar drivers. The
featured driver's racing number is written on a bottle cap design on
the bear's front. The back of each bear has a patch that contains the
words, "THE COCA-COLATM RACING FAMILY," and a black and white
checkered "Coca-Cola" bottle in the middle.
Select auto racing souvenir shops and collectibles stores nationwide
sold the key chains from January 2002 through July 2002 for about $10.
For more details, contact Geoff Geruso by Mail: Team Beans Forever
Collectibles, Attention: Geoff Geruso - cc, 11 Elkins Road, East
Brunswick, NJ 08816, or by Phone: 800-450-5585 between 9 am and 5
pm ET Monday through Friday.
XL MACHINE: Voluntarily Recalls 3,300 Toy Chests For Injury Hazard
------------------------------------------------------------------
XL Machine Ltd. is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 3,300 toy chests.
Screws in the chests' lid support hinges can loosen over time, and come
out from the base of the toy chests. If this happens, the lids of the
toy chests can collapse suddenly, possibly causing injuries to
children's head, neck, fingers or hands.
The Company has received one report of screws in the lid support hinge
of a toy chest coming out, resulting in one injury, a bruise to the
neck.
These blue toy chests measure 18.5-inches by 12-inches by 12-inches,
and were sold under the Playskool brand name. On the toy chest lid top
are depictions of "Mr. and Mrs. Potato Head" characters and the
"PLAYSKOOL" logo. The front panel has a "Glow Worm" figure and a dog.
The bottom of the toy chests contains "DISTRIBUTED BY: XL MACHINE LTD,
MINNEAPOLIS, MN 55347." The chests were made in China.
Target stores sold the toy chest nationwide from October 2001
through December 2001 for about $50.
For more details, contact the Company by Phone: 866-746-8097 anytime or
visit the firm's Website: http://www.target.com.
Asbestos Alert
AK STEEL: Enters Settlement Agreements in Pending Asbestos Liabilities
----------------------------------------------------------------------
During the quarter ended June 30, 2002, AK Steel Holding Corp. entered
into settlement agreements with certain of its insurance carriers
covering past and future environmental and asbestos liabilities in an
amount, net of legal fees and increases to environmental liabilities,
of approximately $23.9 million.
Of the total settlement amount, $8 million was received in the second
quarter. The net balance is due to be received in the second half of
2002. Several insurance policies have been commuted as a result of the
settlement agreements. One of the settlements with a former insurer,
however, provides AK Steel with continued partial coverage for defense
and indemnity costs arising from non-employee asbestos claims.
A number of lawsuits alleging asbestos exposure are pending and
continue to be filed against AK Steel. The majority of these lawsuits
were filed in Texas and relate to the former Houston works facility.
The cases typically involve a large number of plaintiffs claiming
against a large number of defendants. AK Steel is normally named as a
defendant by a small percentage of the plaintiffs who typically were
frequenters (independent contractors, delivery personnel) claiming that
they were exposed to asbestos while they were on the premises. AK Steel
is defending the cases.
COMPANY PROFILE
AK Steel Holding Corp. (NYSE: AKS)
703 Curtis St.
Middletown, OH 45043
Phone: 513-425-5000
Fax: 513-425-2676
Website: http://www.aksteel.com
Employees : 11,300
Revenue : $3,994,100,000
Net Income (Loss) : ($92,400,000)
Assets : $5,225,800,000
Liabilities : $4,192,500,000
Estimated Insurance Recoveries : $23,900,000
(For the year ended December 31, 2001)
AK Steel Holding Corporation, through its wholly owned subsidiary, AK
Steel Corp. and, together with AK Holding, is a fully integrated
producer of flat-rolled carbon, stainless and electrical steels. Its
operations include those previously conducted by Armco Inc., which
merged with and into AK Steel on September 30, 1999. In addition to its
steel operations, the company owns and operates a snow and ice control
products company as well as pipe and tubing businesses and an
industrial park.
AMERICAN LOCKER: Faces Suits Over Asbestos Containing Products in WA
--------------------------------------------------------------------
American Locker Group Inc. reports that in June 2002 it was named
defendant in a lawsuit titled "ALFRED TODAK AND STEPHANIE TODAK V.
ALLEN-BRADLEY COMPANY, ET AL" filed in King County Superior Court, King
County, Washington.
The plaintiffs assert that the company, together with multiple
additional named and unnamed defendants, manufactured and sold products
containing asbestos exposure. The plaintiffs are seeking unspecified
economic damages.
The Company's insurance carrier has assumed the case's defense.
COMPANY PROFILE
American Locker Group Inc. (Nasdaq: ALGI)
608 Allen St.
Jamestown, NY 14701-3966
Phone: 716-664-9600
Fax: 716-483-2822
Website: http://www.americanlocker.com
Business Description: American Locker Group Inc. is an engineering,
assembling, manufacturing and marketing enterprise. It is engaged
primarily in the sale and rental of lockers. This includes coin, key-
only, and electronically controlled checking lockers and related locks
and plastic and aluminum centralized mail and parcel distribution
lockers.
Employees : 198
Revenue : $39,627,216
Net Income : $3,060,361
Assets : $10,358,767
Liabilities : $29,735,420
Estimated Asbestos Liabilities : Unknown
(For the year ended December 31, 2001)
ARMSTRONG WORLD: Estimates $800 Million in Costs over Asbestos Claims
---------------------------------------------------------------------
Armstrong World Industries Inc., the main operating subsidiary of
Armstrong Holdings Inc., reports that there are 600 proofs of asbestos-
related claim, totaling about $800 million, pending against it with the
bankruptcy court.
AWI has filed a voluntary petition for relief under Chapter 11 of the
U.S. Bankruptcy Code in the Bankruptcy Court for the District of
Delaware in order to use the court-supervised reorganization process to
achieve a resolution of its asbestos liability. Also filing under
Chapter 11 were two of Armstrong's wholly-owned subsidiaries, Nitram
Liquidators Inc. and Desseaux Corporation of North America, Inc.
The court will conduct an initial hearing on September 26-27, 2002 to
decide the type of scientific testing that will determine whether AWI's
asbestos-containing resilient floor covering products give rise to
property damage liability.
Three creditors' committees, one representing asbestos personal injury
claimants, one representing asbestos property damage claimants, and the
other representing other unsecured creditors, have been appointed in
the Chapter 11 case.
AWI intends to address all prepetition claims, including all asbestos-
related claims, in a plan of reorganization in its Chapter 11 case. AWI
has the exclusive right to file a plan of reorganization until October
4, 2002.
COMPANY PROFILE
Armstrong Holdings Inc. (NYSE: ACK)
2500 Columbia Ave.
Lancaster, PA 17603
Phone: 717-397-0611
Fax: 888-446-8061
Website: http://www.armstrong.com
Employees : 16,700
Revenue : $3,135,400,000
Net Income : $92,800,000
Assets : $4,034,400,000
Liabilities : $5,631,600,000
Estimated Asbestos Claims : $800,000,000
(For the year ended December 31, 2002)
Business Description: Armstrong World Industries Inc., the main
operating unit of Armstrong Holdings Inc., makes interior finishing
building materials such as floor coverings and acoustical ceiling and
grid systems.
ASHLAND INC.: Reports US$28 Million in Asbestos Liabilities, Expenses
---------------------------------------------------------------------
Oil refiner Ashland Inc. reports that at June 30, 2002 it has reserves
of $28 million for asbestos liabilities that it does not expect to
recover from its insurance carriers. The company spent $37 million
from fiscal 1999 to 2001 defending against or settling asbestos claims
and it has spent $5 million through three quarters in fiscal 2002.
Ashland expects to be reimbursed by insurance carriers for most of the
litigation defense and claim settlement costs that have been or will be
incurred for open claims, the company said in a Securities and Exchange
Commission filing.
The company faces 154,000 asbestos claims as of June 30, mostly related
to Riley Stoker Corp., a boiler-making unit sold in 1990. About 47,000
of claims against the company have been settled or dismissed, and more
than two-thirds of those were without payment.
The company has never lost an asbestos-damage case in trial, Chief
Financial Officer Marvin Quin said. About 85 percent of asbestos costs
have been covered by insurance and the average expenditure for settling
an individual claim over the past four years was $1,000, he said.
COMPANY PROFILE
Ashland Inc. (NYSE: ASH)
50 E. RiverCenter Blvd.
Covington, KY 41012-0391
Phone: 859-815-3333
Fax: 859-815-5053
Website: http://www.ashland.com
Employees : 25,100
Revenue : $5,648,000,000
Net Income : $70,000,000
Assets : $6,683,000,000
Liabilities : $4,421,000,000
Estimated Asbestos Claims : 154,000
(For the nine months ended June 30, 2002)
GOODYEAR TIRE: Receives More than 6,000 New Asbestos Claims For 2Q2002
----------------------------------------------------------------------
The Goodyear Tire & Rubber Co. reports that it received 6,500 new
asbestos claims and resolved 565 claims during the second quarter of
2002. The amount spent on asbestos litigation defense and claim
resolution (before recovery of insurance proceeds) was about $1.8
million during the second quarter and $4.2 million during the first
half of the year.
Goodyear is a defendant in numerous lawsuits involving, at June 30,
2002, 73,900 claimants alleging various asbestos related personal
injuries purported to result from exposure to asbestos in certain
rubber coated products manufactured by Goodyear in the past or in
certain Goodyear facilities.
The company has disposed of approximately 22,800 cases either by
settlement or by court dismissal. Goodyear says it has policies and
coverage-in-place agreements with certain of its insurance carriers
that cover a substantial portion of estimated indemnity payments and
legal fees for the pending claims.
At June 30, 2002, Goodyear has an asset in the amount it expects to
collect under the policies and coverage-in-place agreements related to
its estimated asbestos liability. Goodyear has also commenced
discussions with certain of its excess coverage insurance carriers to
establish arrangements in respect of their policies.
COMPANY PROFILE
The Goodyear Tire & Rubber Co. (NYSE: GT)
1144 E. Market St.
Akron, OH 44316-0001
Phone: 330-796-2121
Fax: 330-796-2222
Website: http://www.goodyear.com
Employees : 96,430
Revenue : $6,790,000,000
Net Income (Loss) : ($34,300,000)
Assets : $13,626,300,000
Liabilities : $10,782,500,000
Estimated Asbestos Claims : 73,900
(For the six months ended June 30, 2002)
New Securities Fraud Cases
AMERICAN EXPRESS: Wechsler Harwood Lodges Securities Suit in S.D. NY
--------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of all persons who purchased or acquired the common
stock of American Express Company (NYSE:AXP) between July 18, 1999 and
July 17, 2001, inclusive in the United States District Court for the
Southern District of New York.
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder and seeks to recover damages. Specifically, the complaint
alleges that the Company and certain of its officers and directors made
misstatements and omissions of material fact, including:
(1) failing to disclose that the Company was investing in a risky
portfolio of high-yield or "junk" bonds with ratings as low
as "single-B" that carried the potential for substantial
losses if default rates in the junk bond market increased;
(2) failing to disclose the true extent of the Company's total
exposure as a result of the foregoing after American Express
wrote down $182 million of its junk bond portfolio in April
2001; and
(3) failing to disclose that American Express was taking a
substantial and unnecessary risk by investing in high-yield
securities involving complex risk factors that American
Express management and personnel did not fully comprehend.
The complaint further alleges that after the full truth regarding the
Company's unnecessarily risky and imprudent investment strategy began
to become known to the market on July 18, 2001 when American Express
announced a surprise charge against earnings of $826 million, its third
consecutive write-down of high-yield or "junk" bonds, American Express
stock traded as low as $37.17, down from a class period high of over
$62.00.
For more details, contact Wechsler Harwood Halebian & Feffer LLP by
Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone:
877-935-7400 or visit the firm's Website: http://www.whhf.com
AON CORPORATION: Wechsler Harwood Commences Securities Suit in N.D. IL
----------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action in the US District Court for the Northern District of Illinois
on August 12, 2002, on behalf of purchasers of the securities of Aon
Corporation (NYSE:AOC) 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, $24 million in 2000, and $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.
On 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. 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 Wechsler Harwood Halebian & Feffer LLP by
Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022, by
Phone: 877-935-7400 or visit the firm's Website: http://www.whhf.com
BAXTER INTERNATIONAL: Much Shelist Initiates Securities Suit in N.D. IL
-----------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC initiated a
securities class action in the United States District Court for the
Northern District of Illinois, on behalf of all persons and entities
who purchased Company securities during the period January 24, 2002
through July 18, 2002, inclusive. The suit names as defendants the
Company and:
(1) Harry M. Jansen Kraemer, Jr., Chairman of the Board and Chief
Executive Officer and
(2) Brian P. Anderson, Chief Financial Officer and Senior Vice
President,
The defendants allegedly 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 during the class period. These alleged misstatements had
the effect of artificially inflating the price of Company securities.
For more details, contact Carol V. Gilden by Phone: 800-470-6824 or by
E-mail: investorhelp@muchshelist.com
BELLSOUTH CORPORATION: Wechsler Harwood Lodges Securities Suit in GA
--------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action in the United States District Court for the Northern District of
Georgia on behalf all persons who purchased or acquired BellSouth Corp.
(NYSE:BLS) securities between the period of January 22, 2001 and July
19, 2002, inclusive against the Company and certain of its officers and
directors.
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 reported quarter after quarter of "record" financial
results and financial growth despite a rapidly deteriorating market for
telecommunications companies.
However, unbeknownst to the investing public:
(1) the Company had been recognizing advertising and publishing
revenues, purportedly in connection with the performance of
services for customers who had not been billed (phantom
customers), and that $163 million of this revenue was required
to be reversed;
(2) Generally Accepted Accounting Principles were violated because
the transactions with "phantom customers" were not complete
and there was not an "appropriate provision for uncollectible
accounts."
On July 22, 2002, defendants revealed that the Company's earnings had
dropped by 67% for the second quarter of 2002, missing Wall Street
estimates. The Company revealed that weak economic conditions in
Central and Latin America had been, and were continuing to have a
material, adverse impact on the Company's earnings and profitability.
In response to the Company's July 22, 2002 revelation, Company stock
dropped by more than 18% to $22 per share. Company executives, privy
to the truth regarding the Company's financial condition, did not share
in these losses, having sold millions of dollars of stock.
For more details, contact Ramon Pinon by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
rpinoniv@whhf.com or visit the firm's Website: http://www.whhf.com
CAPITAL ONE: Wechsler Harwood Commences Securities Suit in E.D. VA
------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of all persons who purchased, exchanged or otherwise
acquired the common stock of Capital One Financial Corp. (NYSE:COF)
between January 15, 2002 and July 16, 2002 inclusive in the United
States District Court for the Eastern District of Virginia against the
Company and:
(1) Richard D. Fairbank, Company CEO and Chairman,
(2) Nigel W. Morris, Company President and COO and
(3) David M. Willey
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder and seeks to recover damages. Specifically, the complaint
alleges that the Company issued numerous press releases regarding its
performance during the class period which represented that the Company
was experiencing quarter after quarter of record earnings and revenue
growth while maintaining "stringent risk management practices" and
adequate loan loss reserves.
The complaint further alleges that these, and other, representations
were materially false and misleading because they failed to disclose
that the Company was in violation of federal guidelines regarding
adequate levels of capitalization and loan loss reserves and that it
was not effectively managing its rapid growth.
On July 16, 2002, the Company revealed that it had entered into an
agreement with regulators, which required it to boost reserves by $247
million in the second quarter of 2002, tie-up additional capital and
institute infrastructure reforms in order to deal adequately with its
high rate of growth, especially in the subprime market.
In reaction to the announcement, Capital One's stock plummeted by 39%,
falling from a $50.60 per share close on July 16 to $30.48 per share by
the close of July 17, on extremely heavy trading volume. During the
class period, as alleged in the complaint, Capital One insiders,
including Mr. Willey, profited by selling a total of over $8.2 million
in Capital One common stock at artificially inflated prices and the
Company undertook a convertible debt offering for $650 million on April
19, 2002.
For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
dleifer@whhf.com or visit the firm's Website: http://www.whhf.com
FIRST HORIZON: Schatz & Nobel Commences Securities Fraud Suit in GA
-------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Northern District of Georgia on behalf of
all those who purchased or otherwise acquired the publicly traded
securities of First Horizon Pharmaceutical Corp. (Nasdaq: FHRX)
pursuant to or traceable to the April 24, 2002 secondary public
offering. The suit names as defendants the Company and:
(1) six of its top corporate officers,
(2) Banc of America Securities, LLC,
(3) JP Morgan,
(4) Thomas Weisel Partners, LLC and
(5) LaSalle Capital Markets
The defendants allegedly violated the federal securities laws by
allegedly including false and misleading information in the Prospectus
and Registration Statement issued as part of the Company's April 24,
2002, secondary offering.
Specifically, those documents contained optimistic statements touting
the market for two of the Company's products Tanafed Suspension and
Prenate GT. Then after the offering, on July 2, 2002, the Company
drastically lowered its full year guidance due mainly to a "greater
than expected erosion of sales in the second quarter" of Tanafed and
Prenate GT.
On this news, the price of the Company's common stock plummeted by 81%
from $18.25 to $3.51 per share.
For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 by E-
mail: sn06106@aol.com or visit the firm's Website: http://www.snlaw.net
FIRST HORIZON: Charles Piven Commences Securities Fraud Suit in N.D. GA
-----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired First Horizon
Pharmaceutical Corporation (Nasdaq:FHRX) securities between April 24,
2002 and July 2, 2002, inclusive, in the United States District Court
for the Northern District of Georgia, against the Company and:
(1) Mahendra G. Shah,
(2) John N. Kapoor,
(3) Balaji Venkataraman,
(4) Jon S. Saxe,
(5) Pierre Lapalme,
(6) Jerry N. Ellis,
(7) Banc of America Securities LLC,
(8) JP Morgan Thomas Weisel Partners LLC and
(9) Lasalle Capital Markets
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-9846-0036 or by E-mail:
hoffman@pivenlaw.com
FLEMING COMPANIES: Charles Piven Commences Securities Fraud Suit in TX
----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who acquired Fleming Companies, Inc.
(NYSE:FLM) securities between February 27, 2002 and July 30, 2002,
inclusive, in the United States District Court for the Eastern District
of Texas, Texarkana Division, against the Company and:
(1) Mark Hansen,
(2) Neal J. Rider and
(3) Thomas G. Dahlen
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
HEALTHSOUTH CORPORATION: Cohen Milstein Lodges Securities Suit in AL
--------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the US District Court for the Northern District of Alabama,
on behalf of persons who purchased or otherwise acquired the securities
of HealthSouth Corporation (NYSE:HRC) during the period from Jan. 14,
2002, through Aug. 26, 2002. The suit names as defendants the Company
and:
(1) Richard M. Scrushy, CEO and Chairman of the Board of
Directors,
(2) Weston L. Smith, CFO and
(3) William T. Owens, President and COO
The complaint asserts securities fraud claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. The complaint alleges that the Company and its
officers made materially misleading statements and omitted to disclose
material adverse information about the Company's operations and
prospects during the class period.
In particular, in addition to other facts, the complaint alleges that
the Company misled the market concerning expectations for revenues and
earnings by failing to disclose the impact on its operations of certain
Medicaid reimbursement policies and, thereby, reimbursement rates to
the Company.
Due to facts known to the Company concerning the Medicaid reimbursement
policies and rates, the Company knew throughout the class period that
it was in no position to meet the revenue and earnings guidance it had
given to investors. Thus, those claims were knowingly or recklessly
made without any reasonable basis. Meanwhile, during the class period,
Company insiders, and in particular Mr. Scrushy, sold nearly $100
million worth of Company stock.
As a result of defendants' allegedly deceptive acts, the market price
of Company securities was allegedly artificially inflated during the
class period.
For more details, contact Steven J. Toll or Angela Wallis by Mail: 1100
New York Avenue, NW West Tower, Suite 500, Washington DC by Phone:
888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
awallis@cmht.com or visit the firm's Website: http://www.cmht.com
HPL TECHNOLOGIES: Wechsler Harwood Lodges Securities Suit in N.D. CA
--------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of HPL Technologies, Inc.
(Nasdaq:HPLA) securities between July 31, 2001 and July 18, 2002,
inclusive against the Company and certain of its officers.
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, and Sections 11, 12(a)(2) and 15 of the Securities Act of
1933 by issuing a series of material misrepresentations to the market
during the class period, thereby artificially inflating the price of
Company securities.
The suit further alleges that the Company and certain of its officers
and directors with issuing false and misleading statements concerning
its business and financial condition. Specifically, on July 31, 2001,
HPL completed its initial public offering (IPO) of 6.9 million shares
(including the over allotment) at $11.00 per share, raising net
proceeds of $69.1 million. The IPO was accomplished pursuant to a
Prospectus and Registration Statement filed with the SEC.
These documents represented that the Company recognized revenue on
sales to distributors only when the distributors sold the software
license or services to their customers. Later, HPL reported favorable
financial results for the 1stQ, 2ndQ, 3rdQ and 4thQ of F02.
The suit further alleges that as a result of HPL's favorable but false
financials and false and misleading statements, its stock traded as
high as $17.85 per share. Defendants took advantage of this inflation,
selling 85,500 shares of their individual holdings.
Then, on July 19, 2002, before the markets opened, HPL shocked the
market with news that it was investigating accounting irregularities
with respect to revenue recognition on shipments to distributors in
prior quarters that its CEO had been fired and its CFO had been
reassigned. On this news, HPL's stock collapsed 72% to as low as $4
per share, before trading was halted.
For more details, contact Craig Lowther by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
clowther@whhf.com or visit the firm's Website: http://www.whhf.com
UNIROYAL TECHNOLOGY: Wechsler Harwood Lodges Securities Suit in M.D. FL
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Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action in the United States District Court for the Middle District of
Florida on behalf of purchasers of Uniroyal Technology Corp.
(Nasdaq:UTCI) between February 8, 2000 and May 13, 2002, inclusive
against the Company and certain of its officers.
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 February 8, 2000 and May 13, 2002.
According to the complaint, defendants issued a series of press
releases touting its financial stability and its acquisition of
Sterling Semiconductor, while strategically positioning Uniroyal to
increase its participation in the explosive compound semiconductor
industry via internal growth.
However, unbeknownst to the investing public that purchased Uniroyal
stock during the class period:
(1) Uniroyal was not a financially stable company;
(2) its acquisition of Sterling was not lucrative at all; and
(3) it was not strategically positioning Uniroyal to increase its
participation in the explosive compound semiconductor industry
via acquisition and internal growth. But for Uniroyal's
financial support, Sterling would probably have been forced to
seek protection under the bankruptcy laws.
Sterling was a development stage company and not, as defendants touted,
"a leading developer of silicon carbide technology and materials."
Moreover, in order to materially inflate Uniroyal's net worth and
further foster the illusion of growth, defendants agreed to pay an
inflated price for Sterling with materially overvalued stock serving as
currency.
On December 31, 2001, eighteen months after having acquired Sterling in
exchange for stock, with a purported value of more than $40 million,
the Company shocked the market by announcing that it recorded a write-
down of Sterling goodwill of approximately $9,816,000. On January 2,
2002, Uniroyal stock closed at $1.69 down from $3.20 the previous day
and substantially down from its class period high of $71.125 reached on
February 23, 2000.
For more details, contact Craig Lowther by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
clowther@whhf.com or visit the firm's Website: http://www.whhf.com
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