/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/020911.mbx C L A S S A C T I O N R E P O R T E R Wednesday, September 11, 2002, Vol. 4, No. 180 Headlines ALLIANCE CAPITAL: Asks Illinois Court To Dismiss Securities Fraud Suit AOL TIME: Faces Numerous Securities Fraud Suits in NY, VA, TX Courts AOL TIME: Shareholders Allege Fiduciary Breaches in NY Courts AVANTGO INC.: Asks NY Court To Dismiss Consolidated Securities Suit COMMERCE ONE: Asks NY Court To Dismiss Consolidated Securities Suit CROWLEY MARITIME: Enters Settlement Negotiations For Securities Suit EASTMAN KODAK: Recalls 75,000 Digital Cameras Due To Shock Hazard ESSO: Evidence Presented in Suit Over Logford Natural Gas Explosion FLUOR CORP.: CA Court Dismisses With Prejudice Securities Fraud Suit GENERAL AMERICAN: Objection to $55 Million Settlement Offer Dismissed HUFFY SPORTS: Recalls 70,000 Basketball Systems Over Injury Hazard ILLINOIS COUNTIES: Appeals Court Overturns Dismissal of "Bail Fee" Suit ILLINOIS: Leaders Express Concern over Madison County Lawsuit Abuse MICROTUNE INC.: Intends To Ask For Dismissal of Securities Suit in NY NTL INC.: Mounting Vigorous Defense V. Securities Suits in S.D. NY SEEBEYOND TECHNOLOGY: Securities Fraud Suits Stacking Up in C.D. CA STIMSON LUMBER: WA Court Certifies Suit Over Composite Wood Siding VALOR HEATING: Voluntarily Recalls 730 Fireplaces Over Injury Hazard WYETH PHARMACEUTICALS: Faces Norplant Side-Effects Suit in MS XO COMMUNICATIONS: Inks Settlement Agreement in Suits in NY, DE Courts New Security Fraud Cases AOL TIME: Johnson & Perkinson Commences Securities Fraud Suit in NY BAXTER INTERNATIONAL: Schatz & Nobel Commences Securities Suit in IL BELLSOUTH CORPORATION: Wolf Haldenstein Lodges Securities Suit in GA HEALTHSOUTH CORPORATION: Abbey Gardy Lodges Securities Suit in N.D. AL HEALTHSOUTH CORPORATION: Wolf Popper Lodges Securities Suit in N.D. AL HEALTHSOUTH CORPORATION: Weiss & Yourman Commences AL Securities Suit HOUSEHOLD INTERNATIONAL: Stull Stull Commences Securities Suit in IL INSIGHT ENTERPRISES: Bernstein Liebhard Commences Securities Suit in AZ MARTHA STEWART: Cohen Milstein Commences Securities Suit in S.D. NY MERRILL LYNCH: Cauley Geller Commences Securities Fraud Suit in S.D. NY MERRILL LYNCH: Schiffrin & Barroway Lodges Securities Suit in S.D. NY PEMSTAR INC.: Weiss & Yourman Commences Securities Fraud Suit in MN SALOMON SMITH: Schiffrin & Barroway Lodges Securities Suit in S.D. NY SALOMON SMITH: Cauley Geller Commences Securities Fraud Suit in S.D. NY VIVENDI UNIVERSAL: Cohen Milstein Commences Securities Suit in S.D. NY XCEL ENERGY: Glancy & Binkow Commences Securities Fraud Suit in MN ********* ALLIANCE CAPITAL: Asks Illinois Court To Dismiss Securities Fraud Suit ---------------------------------------------------------------------- Alliance Capital Management, Inc. asked the United States District Court for the Southern District of Illinois to dismiss a consolidated amended class action pending against it, Alliance Fund Distributors, Inc. and other defendants alleging violations of the federal Investment Company Act of 1940, as amended and breaches of common law fiduciary duty. The allegations concern six mutual funds with which the Company has investment advisory agreements, including: (1) Alliance Premier Growth Fund, (2) Alliance Health Care Fund, (3) Alliance Growth Fund, (4) Alliance Quasar Fund, (5) Alliance Fund, and (6) Alliance Disciplined Value Fund The principal allegations of the suit are: (i) certain advisory agreements concerning these funds were negotiated, approved, and executed in violation of the ICA, in particular because certain directors of these funds should be deemed interested under the ICA; (ii) the distribution plans for these funds were negotiated, approved, and executed in violation of the ICA; and (iii) the advisory and distribution fees paid to the Company and AFD, respectively, are excessive and, therefore, constitute a breach of fiduciary duty. On March 12, 2002, the court issued an order granting defendants' joint motion to dismiss the suit, but allowed plaintiffs up to and including April 1, 2002 to file an amended complaint comporting with its order. On April 1, 2002, plaintiffs filed an amended complaint, with allegations similar to the original suit. On May 1, 2002, defendants filed a motion to dismiss the amended complaint. The Company believes that plaintiffs' allegations in the amended complaint are without merit and intend to vigorously defend against these allegations. At the present time, management of the Company and AFD are unable to estimate the impact, if any, that the outcome of this action may have on the Company's results of operations or financial condition. AOL TIME: Faces Numerous Securities Fraud Suits in NY, VA, TX Courts -------------------------------------------------------------------- AOL Time Warner, Inc. faces twenty securities class actions pending against it, certain of its current and former executives and, in three instances, America Online. Seventeen of these were filed in the United States District Court for the Southern District of New York, two were filed in the United States District Court for the Eastern District of Virginia and one in the United States District Court for the Eastern District of Texas. The complaints purport to be made on behalf of certain shareholders of the Company and allege that the Company made material misrepresentations and/or omissions of material fact in violation of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. Plaintiffs claim that the Company failed to disclose America Online's declining advertising revenues and that the Company and America Online inappropriately inflated advertising revenues in a series of transactions. Certain of the lawsuits also allege that certain of the individual defendants and other insiders at the Company improperly sold their personal holdings of Company stock. Three of the lawsuits, in addition to the above allegations, allege that the Company failed to disclose that the merger was not generating the synergies anticipated at the time of the announcement of the merger and, further, that the Company inappropriately delayed writing down more than $50 billion of goodwill. The Company is unable to predict the outcome of the cases or reasonably estimate a range of possible loss. AOL TIME: Shareholders Allege Fiduciary Breaches in NY Courts ------------------------------------------------------------- AOL Time Warner, Inc. faces two shareholder derivative lawsuits filed in the New York State Supreme Court for the County of New York, and in the United States District Court for the Southern District of New York. Both suits name the directors and certain officers of the Company as defendants, as well as the Company as a nominal defendant. The complaints allege that defendants breached their fiduciary duties by causing the Company to issue corporate statements that: (1) did not accurately disclose that America Online had declining advertising revenues; (2) the merger was not generating the synergies anticipated at the time of the announcement of the merger, and (3) the Company inappropriately delayed writing down more than $50 billion of goodwill, thereby exposing the Company to potential liability for alleged violations of federal securities laws. The lawsuits further allege that certain of the defendants improperly sold their personal holdings of AOL Time Warner securities. The lawsuits request that all proceeds from any improper sales of AOL Time Warner common stock and any improper salaries or payments be returned to the Company. The Company is unable to predict the outcome of the cases or reasonably estimate a range of possible loss. AVANTGO INC.: Asks NY Court To Dismiss Consolidated Securities Suit ------------------------------------------------------------------- Avantgo, 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 and directors, and the underwriters of its initial public offering. The suit, filed on behalf of purchasers of the Company's common stock during the period from September 27, 2000 to December 6, 2000, alleges that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases of stock in the aftermarket at pre- determined prices. Plaintiffs allege that the prospectus for the Company's initial public offering was false and misleading in violation of the securities laws because it did not disclose these arrangements. Over 300 companies involved in an initial public offering have been named as defendants in nearly identical lawsuits filed by some of the same plaintiffs' law firms. A motion to dismiss addressing issues common to the companies and individuals who have been sued in these actions was filed on July 15, 2002. The Company believes that it has meritorious defenses against the action, but due to inherent uncertainties in litigation, management cannot predict accurately the ultimate outcome of the litigation. An adverse judgment in a large monetary amount could have a material adverse impact on the financial position, and consequently the business and results of operations. COMMERCE ONE: Asks NY Court To Dismiss Consolidated Securities Suit ------------------------------------------------------------------- Commerce One, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed against it, several of its company officers and directors, and the three lead underwriters in the Company's initial public offering (IPO) in the United States District Court for the Southern District of New York. The consolidated suit consists of a set of "Master Allegations" (Master File No. 21 MC 92 (SAS)) and individual amended complaints against the various defendants, including the Company and the individual defendants (01 Civ. 5575 SAS (CLP)). The amended complaint alleges violations of Section 11 and Section 15 of the Securities Act of 1933, Section 20(a) of the Securities Exchange Act of 1934 and Section 10(b) of the Exchange Act (and Rule 10b-5, promulgated thereunder). The suit is filed on behalf of purchasers of Company's common stock between July 1, 1999 and June 15, 2001. Various plaintiffs have filed similar actions asserting virtually identical allegations against more than 200 other companies. The lawsuit against the Company and other companies have been coordinated for pretrial purposes with these other related lawsuits. The coordinated pretrial proceedings are presently being overseen by Judge Shira A. Scheindlin. On July 15, 2002, the issuer and individual defendants filed an omnibus motion to dismiss addressing issues generally applicable to the defendants as a group. The Company believes that it has meritorious defenses to these lawsuits. It does not believe that the outcome of any of these disputes or litigation will have a material effect on the Company's financial condition or results of operations. CROWLEY MARITIME: Enters Settlement Negotiations For Securities Suit -------------------------------------------------------------------- Crowley Maritime Corporation has entered settlement negotiations for a class action suit filed in the Superior Court of the State of California for the County of Alameda on behalf of Dennis Wood and a class alleged to consist of certain holders of the Company's common stock. The complaint named the Company and each member of its board of directors as defendants and alleged, among other things, that the defendants undertook certain actions to avoid subjecting the Company to public reporting requirements and caused shares of the Company's common stock to be purchased and sold at artificially low prices in connection with the Company's tender offer announced on April 16, 2001. The plaintiff originally asserted causes of action for breach of contract, breach of fiduciary duty and unjust enrichment and seeks unspecified damages and injunctive relief. The defendants subsequently answered the complaint and moved to dismiss the breach of contract claim on the grounds that, based on the facts of the case, the plaintiff could not properly allege such a claim as a matter of law. On December 6, 2001, the court dismissed the breach of contract claim without leave to amend. On May 24, 2002, a hearing was held on plaintiff's motion to certify this case as a class action. On June 10, 2002, the court denied plaintiff's motion seeking to certify this case as a class action. On June 26, 2002, the parties began settlement negotiations. The Company expects that an agreement may be reached in settlement of this litigation in the third quarter of 2002. The Company does not believe that the ultimate resolution of this proceeding will have a material adverse effect on its financial position or results of operations. EASTMAN KODAK: Recalls 75,000 Digital Cameras Due To Shock Hazard ----------------------------------------------------------------- Eastman Kodak Company is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling about 75,000 DC5000-model digital cameras worldwide. Due to a manufacturing defect, consumers using these cameras can suffer an electrical shock. The Company has received 12 reports, including six in the United States of consumers who experienced an electrical shock while changing batteries, or installing or removing the memory card or USB cable. There have been no reports of serious injury. These are Kodak DC5000-model cameras. The brand name and model number are written on the front of the camera at the bottom right-hand corner. All DC5000 cameras carry a plate on the bottom of the camera containing the Kodak product identifier reading "KJCAA" followed by an eight-digit serial number. The serial number range is 01800001 through 11700825. Department, electronic, computer and camera stores, as well as mail order and web retailers sold these cameras nationwide from June 2000 through August 2002 for between $600 and $700. For more details, contact the Company by Phone: 888-793-2977 between 9 am and 8 pm ET Monday through Friday, or visit the firm's Website: http://www.kodak.com ESSO: Evidence Presented in Suit Over Logford Natural Gas Explosion ------------------------------------------------------------------- An Australian printing company's reliance on natural gas was given as evidence at the $A500 million ($US272.25 million) class action against energy giant Esso. The Victoria based-company, part of the umbrella group PMP Communications (ASX:PMP), is said to have suffered delays to its printing schedule due to the explosion at Esso's Longford plant four years ago, which killed two workers and crippled natural gas supplies around the state for a fortnight. John Nicholls, an engineer with the printing company, Wilkies and Co, told Justice Gillard of how the printing presses were shut down for approximately 24 hours when their supply of natural gas was cut off by the explosion. Operations were resumed only after tedious alterations to the printing machinery allowed it to work on oil instead of gas, Mr Nicholls said. In June 1998, four months prior to the September explosion, the printing company's supply had already been temporarily cut when ice blocked the Longford pipes. Under questioning from Mr Jonathan Beach, QC, for Esso, Mr. Nicholls agreed that based on this June interruption, Wilkies and Co should have foreseen other potential problems with its gas supply and subsequently organized an efficient back-up plan. FLUOR CORP.: CA Court Dismisses With Prejudice Securities Fraud Suit -------------------------------------------------------------------- The United States District Court for the Central District of California, Southern Division dismissed with prejudice the consolidated amended securities class action pending against Fluor Corporation and certain of its officers and directors. The suit alleges the defendants violated the Securities Exchange Act of 1934 by providing false or misleading statements about the Company's business and prospects. These complaints purport to be on behalf of purchasers of the Company's stock during the period from May 22, 1996 through February 18, 1997. The company moved to dismiss the suit, and the motion was granted by the court, with leave to amend. The plaintiffs filed their amended complaint and the Company moved the court to dismiss the new amended complaint. The court has now granted the Company's motion and dismissed plaintiff's action without leave to amend on July 10, 2002. Plaintiffs have filed notice of their intention to appeal the dismissal. GENERAL AMERICAN: Objection to $55 Million Settlement Offer Dismissed --------------------------------------------------------------------- The $55 million settlement offer by General American Life Insurance Company is now effective and binding among class members who opted for the money in August 2000 and settled the suit accusing the company of fraud and material misrepresentations in selling certain insurance policies. In a September 5, 2002 decision, the US Court of Appeals for the Eighth Circuit dismissed an appeal by several unnamed class members, including lead appellant James Henderson, for being moot and ineffectual. The appeal had centered on the scoring of the class members' claim, which appellant, Mr. Henderson, objected to. According to court records, "the settlement offered class members the option of receiving a lump-sum payment or participating in a claims processing system. Class members who chose the claims processing system would have their claims evaluated to identify the extent of their losses and proof of (the company's) wrongdoing. Evaluators scored the claims from `three,' which merited the greatest relief, to `zero,' which provided no compensation from the settlement fund in the event class members presented frivolous claims." Mr. Henderson objected to the inclusion of a zero score because he thought it unfair not to compensate every class member in some form, the records showed. He then moved to intervene in the district court and pressed the scoring objection for rejecting the proposed settlement. The district court and, on appeal, the appellate court dismissed his claim, the latter court citing jurisdictional grounds because he was not a party and he failed to acquire the status of a party by successfully intervening in the district court. The matter reached the Supreme Court, which thereafter vacated the appellate court's judgment and remanded the case for further consideration in light of Devlin v. Scardelletti. This particular case upheld the rights of an unnamed class member to challenge the fairness of a settlement in a mandatory class action and even object on appeal, provided his objection is made in a timely manner. The Supreme Court, in the Devlin case, ruled, thus, "Particularly in light of the fact that petitioner had no ability to opt out of the settlement, appealing the approval of the settlement is petitioner's only means of protecting himself from being bound by a disposition of his rights he finds unacceptable and that a reviewing court might find legally inadequate." Mr. Henderson's appeal, however, became moot "in the months since our first decision," the appellate court said. Accordingly, an affidavit from Christopher Seeger, the Claim Evaluator who administered the claims processing system that disbursed settlement proceeds to thousands of class members, averred that by August 15, 2002, not one class member who declined lump-sum payments had received a zero score. "These facts undercut the basis for Mr. Henderson's appeal. The appeal challenges the fairness of the class settlement because it authorized zero scores. Because no zero scores were awarded, Mr. Henderson's objection to the settlement is effectively moot... We therefore dismiss Henderson's appeal," the appellate court ruled. The court cited the case, Church of Scientology v. United States, which ruled that "if an event occurs while a case is pending on appeal that makes it impossible for the court to grant any effectual relief whatever to a prevailing party, the appeal must be dismissed." Court records show that more than 240,000 current and former policyholders of the company stood to benefit from the settlement, which offers to pay class members at least $55 million in the form of additional policy benefits. HUFFY SPORTS: Recalls 70,000 Basketball Systems Over Injury Hazard ------------------------------------------------------------------ Huffy Sports Company is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling 70,000 portable basketball systems. The basketball hoops can have a sharp protruding bolt on the player's side of the pole that can cause serious leg or body lacerations to consumers. Basketball players can be cut when they collide with the pole as they drive toward the basket or when they fall or are pushed into the pole. The Company has received 11 reports of injuries from protruding bolts that include scrapes and lacerations. Ten consumers required stitches for their injuries. These are portable, vertically mounted Huffy-brand basketball systems that come unassembled with a plastic base that is weighted down by either sand or water that is added during assembly. The basketball poles are painted black and the Huffy brand name appears on the backboard, main pole, or plastic base. The protruding bolt on the player side of the pole is located about 20-inches from the ground. Sporting good, department and toy stores sold the Huffy-brand portable basketball systems from November 2001 through May 2002 for between $100 and $200. For more details, contact the Company by Phone: 800-558-5234 between 8 am and 4:30 pm CST Monday through Friday or visit the firm's Website: http://www.huffysports.com. ILLINOIS COUNTIES: Appeals Court Overturns Dismissal of "Bail Fee" Suit ----------------------------------------------------------------------- Plaintiffs who filed a class action against 19 out of 102 Illinois counties scored a substantial victory last week after the US Court of Appeals for the Seventh Circuit reversed a district court ruling dismissing the suit for lack of standing. The appellate court also remanded the case to the US District Court for the Northern District of Illinois for further proceedings, including class certification. The appellate court noted that the plaintiffs were able to sufficiently prove that the defendants had common liability towards the plaintiffs owing to their "juridical link." Citing lack of standing, the district court, on September 25, 2000, dismissed the suit filed by Delvin C. Payton and five other former arrestees who were charged "bail fees" upon their release on bail or on their own recognizance. This fee varies between $1 and $45, depending on the county, and is collected above any bail amount that is due. The plaintiffs questioned this practice and filed a putative class action with the aim of representing all individuals affected by the procedure in 19 named counties. The disputed practice traces its imprimatur from a 1999 state law passed by the Illinois General Assembly, which provided that bond fees may be added to the required bond. According to court records, this provision was codified as part of the Illinois Bond Statute and became effective on January 1, 2000. The law allowed counties to charge a minimum fee of $1, which could be increased by the county boards through a mere ordinance. Four of the plaintiffs confined in the Kane County jail were granted bail, but were released only upon payment of $11. The two other plaintiffs, who were confined in the DuPage County jail, were released only upon payment of $15. The plaintiffs alleged that other arrestees were charged as high as $45 in other counties. In its decision, the appellate court questioned the dismissal of the case on lack of standing, considering that the plaintiffs had clear and valid individual claims. Seemingly surprised over the decision, the appellate court noted, "The district court did not mention any grounds for the dismissal of the individual claims of these named plaintiffs against Kane and DuPage Counties, nor did it explain why it thought that they lacked standing to sue." "It appears instead that what the district court meant to say was that the plaintiffs lacked `standing' to bring a class action. However, putting to one side the problem inherent in conflating the standing inquiry with the inquiry under Rule 23 about the suitability of a plaintiff to serve as a class representative, the proper remedy for this shortcoming is not dismissal of the entire action, but rather an order denying class certification and permitting the case to continue as an individual suit," the appellate court said. The appellate court then proceeded to establish the common liability of the counties towards the plaintiffs, but stopped short of stating that the action may be certified as class. The court said the issue should be settled by the district court upon remand. The appellate court, however, upheld the "juridical link" theory espoused by the plaintiff, "In our case, given that the bail bond fee is imposed pursuant to a state statute, and that county sheriffs are for this purpose an arm of the state, it is reasonable for the putative plaintiff class to try to hold all counties accountable within one suit. The constitutionality of a bond fee (whether it is $1 or $45) should not differ from one county to the next, when such a fee is imposed pursuant to the same statute." The court concluded its decision with a veiled stand favoring the certification of the class, "These putative representatives were personally injured by the operation of the very same statute that caused the injuries to all other members of the proposed class." ILLINOIS: Leaders Express Concern over Madison County Lawsuit Abuse ------------------------------------------------------------------- Illinois business leaders gathered at an Illinois Senate Judiciary Committee hearing at Southern Illinois University in Edwardsville, IL to voice concerns about the economic harm and national embarrassment caused by class action lawsuit abuse in Madison County. "Madison County has become a sort of free-fire zone for national class action lawsuits, in which actual transgressions or damages may be nil yet settlements are routinely approved that yield substantial plaintiff attorneys' fees but next to nothing for the supposedly victimized class," said Philip R. O'Connell, chairman of the Class Action Reform Task Force of the Illinois Business Roundtable. "Although Madison County has become a good place for the class action lawsuit business, Madison County is also becoming a bad place to do virtually any other kind of business." The group will urge the committee to support legislation to close legal loopholes that allow class action abuse to thrive in Madison County. State Senator Patrick O'Malley, the subcommittee chairman, and State Senator Kirk Dillard, the sponsor of class action reform in Illinois, will chair the hearing. Among those to testify at the hearing is John Beisner, co-author of two Manhattan Institute reports identifying Madison County as one of the three worst asylums nationwide for class action lawsuits. In addition, Stanford Levin, Emeritus Professor of Economics at SIU Edwardsville, plans to discuss the negative effects to Illinois' economy from the unbridled increase of class action lawsuits in Madison County. A report released in June 2002 by the Manhattan Institute revealed that class action litigation has become a blight on the reputations and economic outlooks of Madison County and Illinois: (1) class actions continue to be filed at a rate highly disproportionate to Madison County's population; (2) most of the class actions are filed on behalf of multi-state or nationwide classes; (3) nearly all the Madison County class actions involved non- Madison County defendants; (4) the Madison County class action docket continues to be monopolized by a small cadre of plaintiff's counsel; (5) the court docket in Madison County reflects a strategy of filing separate cases attacking multiple companies in a single industry, with each lawsuit challenging the same industry-wide practice. "Class action abuse is more than simply a county or even a state concern, but an issue of national importance," said Mr. Beisner. "We cannot allow one rogue county to set the pace for class action lawsuits nationwide, thereby undermining Illinois and other states' ability to effectively adjudicate class action lawsuits." For more information, contact Kevin Kutz for the Illinois Coalition for Class Action Reform by Phone: 1-312-596-3451 MICROTUNE INC.: Intends To Ask For Dismissal of Securities Suit in NY --------------------------------------------------------------------- Microtune, Inc. plans to ask the United States District Court for the Southern District of New York to dismiss the consolidated securities class action filed on behalf of all persons who purchased the Company's common stock from August 4, 2000 through December 6, 2000. The suit names as defendants the Company and: (1) Douglas J. Bartek, the Company's Chairman and Chief Executive Officer, (2) Everett Rogers, the Company's former Chief Financial Officer, Vice President of Finance and Administration and current Vice President of Investor Relations, and (3) several investment banking firms that served as underwriters of the Company's initial public offering. The consolidated suit allege liability under Sections 11 and 15 of the Securities Act of 1933 and Section 10(b) and 20(a) of the Securities Exchange Act of 1934, on the grounds that the registration statement for the Company's initial public offering did not disclose that: (i) the underwriters had agreed to allow certain of their customers to purchase shares in the offering in exchange for excess commissions paid to the underwriters; and (ii) the underwriters had arranged for certain of their customers to purchase additional shares in the aftermarket at pre- determined prices. The Company is aware that similar allegations have been made in lawsuits challenging over 180 other initial public offerings conducted in 1998, 1999, and 2000. These cases are subject to the Private Securities Litigation Reform Act of 1995, and have been coordinated before the Honorable Shira A. Scheindlin of the Southern District of New York. The Company believes that the allegations against it are without merit, and intends to contest them vigorously, including by filing a motion to dismiss these cases. NTL INC.: Mounting Vigorous Defense V. Securities Suits in S.D. NY ------------------------------------------------------------------ NTL, Inc. faces several securities class actions filed in the United States District Court, Southern District of New York on behalf of purchasers of the securities of NTL, Inc. (NYSE: NLI) between August 9, 2000 and November 29, 2001, inclusive. The suit is pending against the Company and: (1) George S. Blumenthal, (2) J. Barclay Knapp, (3) Steven Carter and (4) John F. Gregg 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 August 9, 2000 and November 29, 2002, thereby artificially inflating the price of Company securities. The Company does not know of any facts that would support these allegations. SEEBEYOND TECHNOLOGY: Securities Fraud Suits Stacking Up in C.D. CA -------------------------------------------------------------------- Seebeyond Technology Corporation faces several securities class actions pending in the United States District Court for the Central District of California against the Company and several of its officers and directors, on behalf of purchasers of the Company's common stock between December 10, 2001 and April 22, 2002 and between April 23, 2001 and April 22, 2002. The actions generally allege that during the class periods, defendants made false statements about the Company's operating results and business, while concealing material information. The complaints also allege the Company made positive but false statements about its results and business, while concealing material adverse information about customers pushing out orders. As a result, Company stock traded at artificially inflated levels, permitting defendants to complete a secondary public offering of 8.5 million shares (plus 1.2 million of an over allotment) for proceeds of $82 million, including 2 million shares sold by the Company's CEO. The Company believes these lawsuits are without merit. STIMSON LUMBER: WA Court Certifies Suit Over Composite Wood Siding ------------------------------------------------------------------ The King County, Washington Superior Court certified for class action treatment a lawsuit concerning Stimson Lumber Corporation's (Forestex) Hardboard Siding, a composite wood siding product. The lawsuit alleges that the Company committed unfair and deceptive practices in the marketing of Forestex siding, including failure to disclose concerns regarding its performance and reliability. Trial is set for August, 2003. The lawsuit seeks relief for all owners of buildings with Stimson Forestex Series 400 or 500 siding in the states of Washington, Oregon, California, Idaho, Utah, Colorado and Hawaii whose siding was installed after January 1, 1985. Property owners can determine whether they have Forestex siding by asking their builder, checking the manufacturer information stamped on the back of the siding, or taking a sample to a building supply store. For more details, contact Paul L. Ahern, Jr. by Phone: 1-206-346-1750 or visit the Website: http://www.stimsonclaims.com VALOR HEATING: Voluntarily Recalls 730 Fireplaces Over Injury Hazard -------------------------------------------------------------------- Valor Heating Ltd. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 730 direct vent wall mount gas fireplaces. A design defect in the gas control assembly can allow main burner gas to prematurely enter the firebox during lighting. The ignition of this excess gas can cause the glass window to shatter, presenting the risk of burns or cuts from broken glass. The Company has received one report of cuts to the consumer's face when the glass front of the fireplace shattered after excess gas ignited. This recall includes model 837AN (natural gas) and 837AP (propane) direct vent wall mount fireplaces made in the United Kingdom. The fireplaces have a glass front and an imitation wooden log set. The "Valor" logo is printed on the bottom front of the fireplace. The model number is printed on a plate in the lower control area. Specialty fireplace dealers sold these fireplaces nationwide from September 1997 through January 2002 for between $1,700 and $2,400. For more details, contact the Company by Phone: 866-541-0930 between 8 am and 4:30 pm CT Monday through Friday or visit the firm's Website: http://www.valorflame.com. WYETH PHARMACEUTICALS: Faces Norplant Side-Effects Suit in MS --------------------------------------------------------------- A former Norplant user is suing Wyeth Pharmaceuticals, and the Yazoo City Medical Clinic in Mississippi. The clinic provided her with the implanted birth-control device then informed her that various life-altering side-effects she experienced were not the result of the implant. She and her attorneys demand trial by jury and damages of $120 million. The victim's case came to light in a news briefing published by Population Research Institute (PRI), an organization dedicated to ending human rights abuses in family planning programs. The woman's husband is also a plaintiff, because he is now deprived of his wife's society. Their daughter was conceived in 1996 before the Norplant was removed, and born prematurely. This girl suffers serious abnormalities such as underdeveloped lungs and kidneys, and is also a plaintiff. The suit, which lists seven counts of wrongdoing, points out that Norplant directly caused the woman to suffer headaches, dramatic weight gain, facial, chest and stomach hair growth, constant bleeding, blurred vision, heart damage, seizures which render her disabled, and other damage to her mind and body. The suit states the woman "has been caused to suffer . enormous medical costs . loss of enjoyment of life and her normal daily activities and reduction of her life expectancy . She has also suffered a loss of earnings and her earning capacity." "Defendants Wyeth and the Yazoo City Medical Clinic, should have known, and in fact did know, that Norplant potentially causes these and other drastic side effects . also causes additional serious negative effects on the physiology and biochemistry of tissues in many women taking Norplant," the suit also alleges. The suit notes, too, that the woman sought her attending physician at the Yazoo clinic to remove the implant but she was informed that "in no way could her symptoms be attributed to Norplant." The victim's "condition only worsened over the years, until her present attending physician removed the implant; however . she is now permanently disabled from the accompanying seizures." The attorneys see this suit as the first step towards a new major class action against Norplant. XO COMMUNICATIONS: Inks Settlement Agreement in Suits in NY, DE Courts ---------------------------------------------------------------------- XO Communications, Inc. entered into a settlement agreement in several class actions filed in New York and Delaware State Courts, alleging that the members of the Company's board of directors breached certain fiduciary duties in connection with the proposed investments by the investors, and that the investors aided and abetted the directors with respect to such alleged breaches. In July 2002, the Company entered into a settlement agreement pursuant to which the plaintiff class would dismiss and release all claims and causes of action in exchange for one of the following: (1) if the Forstmann/Telmex Investment closes, the Senior Secured Lenders will fund the settlement out of interest payments due to them under the Facility; or (2) if the Forstmann/Telmex Investment does not close, the plaintiff class would share in any recovery received by the Company from the investors through a lawsuit or settlement of any litigation for breach of the Stock Purchase Agreement. The settlement is subject to bankruptcy and state court approvals. While the outcome of these matters is currently not determinable, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows. New Security Fraud Cases AOL TIME: Johnson & Perkinson Commences Securities Fraud Suit in NY ------------------------------------------------------------------- Johnson & Perkinson initiated a securities class action on behalf of all those who purchased AOL Time Warner, Inc. (NYSE: AOL-News) securities during the period April 18, 2001 through August 14, 2002, in the United States District Court, Southern District of New York. The suit names as defendants the Company and: (1) AOL Time Warner, (2) Stephen Case, (3) Michael Kelly, (4) Richard Parsons and (5) Gerald M. Levin Plaintiff 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 materially false and misleading statements concerning the synergies derived from the merger of America Online Inc. and Time Warner, Inc. (the merger) and the Company's prospects and earnings between April 18, 2001 and August 14, 2002, thereby artificially inflating the price of Company securities. The suit further alleges that the Company improperly accounted for as much as $49 million of advertising revenues, which had the effect of overstating revenues and artificially inflating the price of the Company's securities. For more details, contact Dennis J. Johnson or Jacob B. Perkinson by Phone: 888-459-7855 or by E-mail: JPLAW@adelphia.net BAXTER INTERNATIONAL: Schatz & Nobel Commences Securities Suit in IL -------------------------------------------------------------------- Schatz & Nobel PC initiated a securities class action in the United States District Court for the Northern District of Illinois, Eastern Division on behalf of all persons who purchased or otherwise acquired the securities of Baxter International, Inc. (NYSE: BAX) from January 24, 2002 through July 18, 2002, inclusive. Also included are all those who acquired Company shares through its acquisition of Fusion Medical Technologies. The suit alleges that the Company, a diversified healthcare company, and certain of its officers and directors issued materially false and misleading statements during the class period concerning the business potential and earnings growth of the Company's BioScience and Renal divisions. Specifically, it is alleged that the Company failed to disclose that these divisions were experiencing serious problems because demand for products sold by the Renal Division had slowed and the BioScience division was suffering from capacity constraints and a saturated market. On July 18, 2002, the Company announced disappointing sales growth for the BioScience Division and a decline in sales for the Renal Division. In addition, the Company took a $51 million charge in connection with an acquisition and a $70 million impairment charge reflecting a decline in value of certain of the Company's investments. On this news, the price dropped 36.5% to $32 per share from the previous day's close of $43.41 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 BELLSOUTH CORPORATION: Wolf Haldenstein Lodges Securities Suit in GA -------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Northern District of Georgia, Atlanta Division, on behalf of purchasers of the common stock of Bellsouth Corporation (NYSE: BLS) between January 22, 2001 and July 19, 2002, inclusive, against the Company and certain of its officers and directors. The complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements throughout the class period that had the effect of artificially inflating the market price of the Company's securities. During the class period, defendants announced several quarters of "record" financial results and growth even though the market of telecommunications had been drastically declining. The suit alleges that the Company was ultimately forced to reveal that the financial prospects for the Company were far from the Company's representations. The suit further alleges that the Company had been accounting for advertising and publishing revenues, ostensibly related to the performance of services for non-billed customers (phantom customers), and of that revenue, $163 million would be have to be reversed. On July 22, 2002, defendants disclosed that the Company's earnings had declined by 67% for the second quarter of 2002. Declining economic conditions in Central and Latin America had a negative effect on the Company's earnings and profitability, as reported by the Company. The July 22, 2002 news resulted in Company stock decreased by over 18% to $22 per share on trading volumes of over 18 million shares traded, a large increase from the Company's average trading volumes of about 4.3 million shares. For more information, contact Fred Taylor Isquith, Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by E-mail: classmember@whafh.com or visit the firm's Website: http://www.whafh.com. All e-mail correspondence should make reference to Bellsouth. HEALTHSOUTH CORPORATION: Abbey Gardy Lodges Securities Suit in N.D. AL ---------------------------------------------------------------------- Abbey Gardy, LLP initiated a securities class action against HealthSouth Corp. (NYSE:HRC) in the United States District Court for the Northern District of Alabama, on behalf of all persons or entities who purchased Company securities during the period from January 14, 2002 and August 26, 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 during the class period, thereby artificially inflating the price of Company securities. The complaint alleges, that during the class period, the defendants issued numerous statements and filed quarterly reports with the SEC which described the Company's increasing revenues and financial performance and repeatedly assured the market that the Company would meet its financial targets for the year 2002. The complaint alleges that these statements were materially false and misleading because the Centers for Medicare and Medicaid Services (CMS) had issued directives reclassifying certain categories of reimbursements, which would have a materially negative impact on the Company's business. The suit further alleges that defendants failed to disclose these adverse facts in order to allow certain defendants to sell million of dollars of shares of the Company's stock at artificially inflated price and so that the company could commence a $998 million note offer. On August 27, 2002, the Company issued a press release announcing that the Company's 2002 earnings would lower than previously projected. As a result of this news Company stock dropped more than 43% close at $6.71 For more details, contact Nancy Kaboolian by Phone: 800-889-3701 by E- mail: nkaboolian@abbeygardy.com or visit the firm's Website: http://www.abbeygardy.com HEALTHSOUTH CORPORATION: Wolf Popper Lodges Securities Suit in N.D. AL ---------------------------------------------------------------------- Wolf Popper LLP initiated a securities class action against HealthSouth Corp. (NYSE:HCR) and three of its senior officers on behalf of purchasers of the Company's common stock from January 14, 2002 through August 27, 2002, inclusive, in the United States District Court for the Northern District of Alabama. The suit alleges that during the class period defendants failed to disclose the impact to the Company of certain Medicaid/Medicare reimbursement policies on outpatient therapy. The complaint asserts that defendants were aware as of the beginning of the class period that the federal agency responsible for administering healthcare reimbursements required services provided to two or more patients at a single time to be billed as "group" therapy service at a lower rate rather than as separate "individual" services at higher aggregate rates. This federal policy had been in place since the mid-1990s and yet defendants failed to disclose, or to factor into the Company's publicly disseminated projections, the impact of that policy. The federal agency further confirmed its policies in bulletins and directives dated May 17, 2002 and July 1, 2002. At the same time as defendants were disseminating materially false and misleading financial information, the Company's CEO and the Chairman of the Board of Directors, Richard M. Scrushy divested approximately 7.7 million shares (75% of his holdings) of Company stock and options, for a profit of more than $50 million. The true facts began to be disclosed on August 27, 2002 when the Company announced that the federal reimbursement rates would result in a decline in pro forma earnings of $175 million a year, and that it was withdrawing its earnings guidance for 2002 and 2003, as a result of changes in Medicare reimbursements for group outpatient therapy. The Company's announcement of a $175 million shortfall in EBITDA caused its common stock to plummet to a closing price of $6.71 per share on August 27, 2002, down $5.26 per share or 43.9 % from its closing price of $11.97 the day before the announcement. The stock continued to fall and on August 28, 2002, closed at $5.05, hitting a 3-year low. For more details, contact Robert C. Finkel by Mail: 845 Third Avenue, New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax: 212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit the firm's Website: http://www.wolfpopper.com HEALTHSOUTH CORPORATION: Weiss & Yourman Commences AL Securities Suit --------------------------------------------------------------------- Weiss & Yourman initiated a securities class action against HealthSouth Corporation (NYSE:HRC), and certain of its officers and directors in the United States District Court for the Northern District of Alabama, on behalf of purchasers of HealthSouth securities, between December 12, 2001 and August 27, 2002. The complaint charges the defendants with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants 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@wync.com HOUSEHOLD INTERNATIONAL: Stull Stull Commences Securities Suit in IL -------------------------------------------------------------------- Stull Stull & Brody LLP initiated a securities class action in the United States District Court for the Northern District of Illinois, on behalf of purchasers of Household International, Inc. (NYSE: HI) publicly traded securities between October 23, 1997 and August 14, 2002, inclusive against the Company and certain of its senior officers and directors. The complaint alleges that defendants violated the federal securities laws by making misstatements and/or omissions of material facts in the Company's public filings with the Securities and Exchange Commission (SEC) and otherwise. Household is principally a non-operating holding company engaged in three reportable segments: consumer, credit card services and international. The consumer segment includes consumer lending, mortgage services, retail services and auto finance businesses. The credit card services include the domestic MasterCard and Visa credit card business. The Company's international segment includes foreign operations in the United Kingdom and Canada. Specifically, the complaint alleges that throughout the class period, defendants caused the Company's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements by, among other things, failing to properly amortize the Company's co-branding agreements, and failing to record its expenses associated with its marketing initiatives. In addition, the defendants improperly "re-aged" the Company's accounts, thereby concealing the Company's actual delinquency ratios. For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New York NY 10017 by Phone: 800-337-4983 by Fax: 212-490-2022 or by E-mail: SSBNY@aol.com INSIGHT ENTERPRISES: Bernstein Liebhard Commences Securities Suit in AZ ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action on behalf of all persons who purchased or acquired Insight Enterprises, Inc. (Nasdaq: NSIT) securities between April 26, 2002 and July 17, 2002, inclusive, in the United States District Court for the District of Arizona. The complaint names as defendants the Company and: (1) Eric J. Crown (co-founder of the Company, Chairman of the Board of Directors and member of the Executive Committee of the Board of Directors), (2) Timothy A. Crown (co-founder of Insight, Chief Executive Officer, Director, and member of the Executive Committee of the Board of Directors), and (3) Stanley Laybourne (Chief Financial Officer, Secretary, Treasurer and Director) The defendants allegedly violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, by issuing a series of materially false and misleading statements to the market during the class period. On April 25, 2002, after the close of the market, defendants issued Insight's First Quarter 2002 earnings press release for the three months ended March 31, 2002 and held a conference call with analysts. The press release touted the company's accomplishments. During the conference call on April 25, 2002, defendants stated that Insight expected to see substantial growth in sales in the Second Quarter of 2002, the three months which began April 1, 2002, to between $720 million and $760 million with Second Quarter earnings growing to between $0.31 and $0.35 per share. The response from the market to defendants' statements was dramatic. The per share price of Insight common stock jumped 26% from a close of $21.30 on April 25, 2002 to a close of $26.46 on April 26, 2002. Unbeknownst to investors, however, Insight, already one month into the Second Quarter of 2002, was suffering from undisclosed adverse facts which were negatively impacting its revenues and profits and which would cause it to reverse it sequential growth pattern and report earnings per share for the Second Quarter that, at best, would be flat compared to the First Quarter reported in 2002 earnings per share and significantly below the $0.31 to $0.35 cents defendants told the market they were expecting for the Second Quarter of 2002. The truth regarding Insight was not fully disclosed until July 17, 2002, when defendants finally revealed that Insight anticipated Second Quarter earnings per share in the range of only $0.26 and $0.29, flat with the prior year's quarter and the First Quarter of 2002. The press release blamed the lower results on operating losses in its UK operations caused by reduced sales and a lower gross profit percentage. The press release also stated that the president and chief operating officer of the UK operations had resigned. In response to the surprise negative announcement on July 17, 2002, after the close of the market, the price of Insight common stock dropped precipitously, falling from $23.74 per share on July 17, 2001 to close at $13.36 per share on July 18, 2002, a decline of almost 44%, on volume of 12 million Insight shares. 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 or by E-mail: NSIT@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. MARTHA STEWART: Cohen Milstein Commences Securities Suit in S.D. NY ------------------------------------------------------------------- Cohen Milstein Hausfeld & Toll, PLLC initiated a securities class action on behalf of its client in the United States District Court for the Southern District of New York on behalf of persons who purchased the securities of Martha Stewart Living Omnimedia, Inc. (Nasdaq:MSO) during the period from May 6, 2002, through August 8, 2002. The suit names the Company and its founder, Chief Executive Officer and Chairperson, Martha Stewart as defendants. The plaintiff alleges in the class action that during the class period Martha Stewart, both directly and through representatives, speaking for herself and in her capacity as the CEO of MSO, made materially false and misleading statements about the circumstances surrounding her sales of approximately 4000 shares of ImClone Systems, Inc. common stock on December 27, 2001. Those shares were sold immediately prior to ImClone's announcement on December 28, 2001 of an adverse FDA ruling which threw ImClone's common stock into a free-fall. Specifically, Ms. Stewart misrepresented that notwithstanding her close personal relationship with Sam Waksal, the Chairman and CEO of ImClone, her sales of ImClone common share on December 27, 2001 were not based on material non-public information, but rather on a pre-existing agreement with her broker to sell her ImClone shares if they fell below $60 per share. The complaint alleges that Ms. Stewart's statements were made in an effort to escape legal scrutiny and to assure MSO investors that neither Ms. Stewart nor MSO would be embroiled in the burgeoning ImClone insider trading scandal. The suit alleges that once Ms. Stewart chose to speak on the subject of her sales of ImClone shares, she had a legal duty to the public shareholders of MSO to speak the whole truth. The suit alleges that Ms. Stewart failed to speak the truth; rather, it was revealed on August 9, 2002, at the end of the class period, that she sold her ImClone common shares only after being informed by her stockbroker on December 27, 2001 of material non-public information that Sam Waksal and members of his family had sold or were seeking to sell large holdings of ImClone common stock, which was causing a significant decline in the trading price of ImClone common shares on December 27, 2001. According to the complaint, at the end of the class period it was revealed that Ms. Stewart and her broker had concocted the story that the sales were based on a pre-existing agreement in an effort to avoid legal scrutiny of those sales. Contrary to Ms. Stewart's assurances to MSO investors, the suit alleges that Ms. Stewart's conduct, both before and during the class period, has exposed her to insider trading and obstruction of justice charges, with ruinous consequences to her company. For more details, contact Steven J. Toll or R. Joseph Barton by Phone: 888-240-0775 or 202-408-4600 by Fax: 202-408-4609 by E-mail: stoll@cmht.com or jbarton@cmht.com or visit the firm's Website: http://www.cmht.com MERRILL LYNCH: Cauley Geller Commences Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Exodus Communications, Inc. (formerly Nasdaq: EXDS) common stock during the period between December 8, 1999 and June 19, 2001, inclusive. The complaint alleges that Merrill Lynch & Co., Inc. and Henry Blodget urged investors to purchase Company stock when defendants knew or recklessly disregarded that such purchases were not a good investment. The complaint alleges that defendants: (1) issued "Buy" recommendations about Exodus without any rational economic basis; (2) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (3) concealed significant, material conflicts of interest that prevented them from providing independent objective analysis. Between March 24, 2000 and September 26, 2001, Exodus stock dropped from approximately $173.32 per share to less than $1 dollar per share. During this time period, Merrill Lynch repeatedly reiterated its Near- Term Buy/Long-Term Buy recommendation. After the Nasdaq suspended trading in Exodus common stock on April 26, 2001, Exodus voluntarily de-listed from NASDAQ and filed for Chapter 11 bankruptcy shortly thereafter. For more details, contact Jackie Addison, Sue Null or Ellie Baker by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com MERRILL LYNCH: Schiffrin & Barroway Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Exodus Communications, Inc. (EXDS) common stock between December 8, 1999 and June 19, 2001, inclusive. The complaint alleges that Merrill Lynch & Co., Inc. and Henry Blodget urged investors to purchase Exodus stock when defendants knew or recklessly disregarded that such purchases were not a good investment. Specifically, the complaint alleges that defendants: (1) issued "Buy" recommendations about Exodus without any rational economic basis; (2) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (3) concealed significant, material conflicts of interest that prevented them from providing independent objective analysis. Between March 24, 2000 and September 26, 2001, Company stock dropped from approximately $173.32 per share to less than $1 dollar per share. During this time period, Merrill Lynch repeatedly reiterated its Near- Term Buy/Long-Term Buy recommendation. After the Nasdaq suspended trading in Exodus common stock on April 26, 2001, Exodus voluntarily de-listed from Nasdaq and filed for Chapter 11 bankruptcy shortly thereafter. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 1- 888-299-7706 (toll free) or 1-610-667-7706 or by E-mail: info@sbclasslaw.com PEMSTAR INC.: Weiss & Yourman Commences Securities Fraud Suit in MN ------------------------------------------------------------------- Weiss & Yourman initiated a securities class action against PEMSTAR, Inc. (NASDAQ: PMTR), and certain of its officers and directors was commenced in the United States District Court for the District of Minnesota, on behalf of purchasers of Company securities between June 8, 2001 and May 3, 2002. The complaint charges the defendants with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants issued false and misleading statements which artificially inflated the stock. For more details, contact David C. Katz, James E. Tullman, 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 SALOMON SMITH: Schiffrin & Barroway Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Level 3 Communications, Inc. (Nasdaq: LVLT) common stock between January 4, 1999 and June 18, 2001, inclusive. The complaint alleges that Salomon Smith Barney Inc., Jack Grubman and Morgan Stanley Dean Witter & Co., Inc. urged investors to purchase Level 3 stock when they knew or should have known that such purchases were not a good investment. Specifically, the complaint alleges that defendants: (1) issued "Buy" recommendations about Level 3 without any rational economic basis; (2) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (3) concealed significant, material conflicts of interest that prevented them from providing independent objective analysis. For more details, contact Marc A. Topaz or Stuart L. Berman by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone: 888-299-7706 (toll free) or 610-667-7706 or by E-mail: info@sbclasslaw.com SALOMON SMITH: Cauley Geller Commences Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of Level 3 Communications, Inc. (Nasdaq: LVLT) common stock during the period between January 4, 1999 and June 18, 2001, inclusive. The complaint alleges that Salomon Smith Barney Inc., Jack Grubman and Morgan Stanley Dean Witter & Co., Inc. urged investors to purchase Level 3 stock when they knew or should have known that such purchases were not a good investment. The complaint alleges that defendants: (1) issued "Buy" recommendations about Level 3 without any rational economic basis; (2) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (3) concealed significant, material conflicts of interest that prevented them from providing independent objective analysis. For more details, contact Jackie Addison, Sue Null or Ellie Baker by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551- 9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com VIVENDI UNIVERSAL: Cohen Milstein Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class action against Vivendi Universal and certain of its officers and directors (NYSE:V) in the United States District Court for the Southern District of New York on behalf all persons who purchased or otherwise acquired the Company securities between Oct. 30, 2000 and Aug. 13, 2002, inclusive. The suit charges defendants made misrepresentations and/or omissions of material fact, including the following: (1) Misstating the Company's cash position and ability to service its debt obligations; (2) Misstating Vivendi's earnings in its public filings with the SEC and elsewhere as a result of failing to record write-downs of goodwill and other intangible assets associated with, inter alia, the acquisition of U.S. Filter, the equity investment in Elektrim Telekomunikacja, and the merger among Vivendi, Seagram and Canal+ long after it had become apparent that such assets were being carried at values vastly higher than their true values; (3) Failing to disclose that the exchange ratio for the merger between MP3.com, Inc. and Vivendi was distorted due to artificial inflation in the price of Vivendi American Depositary Receipts (ADRs); and (4) Failing to disclose that Vivendi had significant off-balance- sheet liabilities, including undisclosed sales of put options on tens of millions of dollars worth of Vivendi shares during 2001. During the class period, defendants' false statements artificially inflated Vivendi ADRs to as high as $75.00 per ADR. Late in June 2002, news leaked from Vivendi that its debt was at alarming levels, causing Vivendi's ADRs to decline in price from $28 to $20. Vivendi's ordinary shares declined in similar fashion. Nonetheless, Mr. Messier reassured the market that liquidity was not a problem. However, as ratings agencies continued to downgrade the Company's debt, the ADRs and ordinary shares continued to decline. On July 2, 2002, Vivendi's debt was downgraded again and the Company was in danger of default. On July 3, 2002, Mr. Messier was forced to resign. For more details, contact Steven J. Toll or Mary Ann Fink by Mail: 1100 New York Avenue, NW Suite 500, West Tower, Washington, DC 20005 by Phone: 888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or mfink@cmht.com or visit the firm's Website: http://www.cmht.com XCEL ENERGY: Glancy & Binkow Commences Securities Fraud Suit in MN ------------------------------------------------------------------ Glancy & Binkow LLP initiated a securities class action in the United States District Court for the District of Minnesota on behalf of all persons who purchased securities of Xcel Energy, Inc. (NYSE:XEL) between January 31, 2001 to July 26, 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 financial performance and the financial performance of NRG Energy, Inc. (NRG), the Company's majority-owned subsidiary caused its stock price to become artificially inflated, inflicting damages on investors. The suit alleges that defendants failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had engaged in "round-trip" energy trades that provided no economic benefit for the Company; (2) that the Company's and NRG's credit agreements with lenders contained cross-default provisions and covenants, the result of which was that in the event of a default by NRG, among other adverse effects, the Company would lose access to $800 million in credit; (3) that the Company lacked the necessary internal controls to adequately monitor the trading of its power; and (4) that as a result, the value of the Company's revenues and financial results were materially overstated at all relevant times. For more details, contact Michael Goldberg by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 by Phone: 310-201-9161 or 888-773-9224 or by E-mail to info@glancylaw.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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