CAR_Public/020916.mbx                C L A S S   A C T I O N   R E P O R T E R

               Monday, September 16, 2002, Vol. 4, No. 183

                              Headlines

ACCEPTANCE INSURANCE: Grants Certification to Securities Suit in NE
ACXIOM CORP.: Appeals Court Upholds Dismissal of Securities Suits in AK
ALPHARMA INC.: NJ Court Affirms Dismissal of Securities Fraud Lawsuit
ARKANSAS: Suit Over Delays In Child-Support Payments Gets Class Status
ATMOS ENERGY: Sues To Declare Texas Gas Users Act "Unconstitutional"

BLUE CROSS: Advocates State Surplus Needed For Financial Stability
CHARGETEK INC.: Voluntarily Recalls Battery Chargers for Fire Hazard
FISHING INDUSTRY: Sockeye Salmon Price-Fixing Lawsuit Set For Trial
FLORIDA: Insurance Department Faces Lawsuit Over Consumer Fraud Scheme
GOODYEAR TIRE: Ends Performance Ratings Systems Ahead Of Employee Suit

GOODYEAR TIRE: Employees' Age Bias Suit To Continue Despite Changes
HAWAII: Attorneys Accuse Agency Of Mishandling Child Support Funds
HPL TECHNOLOGIES: Faces Allegations of Securities Fraud in Lawsuits
INDIANA: Motor Vehicle Bureau May Soften Requirements To Get Licenses
LEISURE HOMES: Trial Starts in Consumer Fraud Lawsuit Filed in NV Court

MAGNA INTERNATIONAL: Suit Over Donnelly Merger Voluntarily Withdrawn
MONTANA POWER: Employees File Suit Over Retirement Fund Losses in KY
NORTHERN TOOL: Recalls 3,400 Electric Air Compressors For Fire Hazard
OAK HILLS: Faces Lawsuit Over Merger With Provident Financial in OH
OVERHILL CORPORATION: Appeals Court Rules on Suit Summary Judgment

OVERSEAS PARTNERS: NY Court Partially Grants Dismissal of Consumer Suit
RARE MEDIUM: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
RARE MEDIUM: Plaintiffs Appeal Dismissal of Securities Suit in S.D. NY
WELLS REAL: Asks GA Court To Dismiss Securities Charges in Lawsuit
XCEL ENERGY: Denies Allegations in Securities Fraud Suits in MN Court

                      New Security Fraud Cases

CROSS MEDIA: Stull Stull Commences Securities Fraud Suit in S.D. NY
HEALTHSOUTH CORPORATION: Cauley Geller Launches Securities Suit in AL
HEALTHSOUTH CORPORATION: Schiffrin & Barroway Files AL Securities Suit
PEMSTAR INC.: Chitwood & Harley Commences Securities Suit in MN Court
WALT DISNEY: Wolf Haldenstein Commences Securities Suit in C.D. CA


                              *********

ACCEPTANCE INSURANCE: Grants Certification to Securities Suit in NE
-------------------------------------------------------------------
The United States District Court for the District of Nebraska certified
as a class action a lawsuit against Acceptance Insurance Companies,
Inc.

The suit alleges that the Company knowingly and intentionally
understated its liabilities in order to maintain the market price of
its common stock at artificially high levels and made untrue statements
of material fact, and sought compensatory damages, interest, costs and
attorney fees.

The suit, filed on behalf of all persons who purchased either Company
common stock between March 10, 1998 and November 16, 1999, or AICI
Capital Trust Preferred Securities between the July 29, 1997 public
offering and November 25, 1999, alleges:

     (1) violation of Section 11 of the Securities Act of 1933 through
         misrepresentation or omission of a material fact in the
         registration statement for the trust preferred securities; and

     (2) violation of Section 10b of the Securities Exchange Act of
         1934 and Rule 10b-5 of the US Securities and Exchange
         Commission through failure to disclose material information
         between March 10, 1998 and November 16, 1999.

The Company, three of its former officers, the Company's directors and
independent accountants and other individuals, as well as the financial
underwriters for the Company's preferred securities, were defendants
in the consolidated action.

In March 2001, the court entered an order dismissing all claims
alleging violations of Section 11 of the Securities Act, and dismissing
the Company's Directors, financial underwriters, independent
accountants and others as defendants in this action.

The court also ruled that certain of plaintiffs' allegations regarding
the remaining defendants' alleged failure to properly report contingent
losses attributable to Montrose did not state a claim under Section 10b
and Rule 10b-5.  In two subsequent rulings, the Court and Magistrate
Judge clarified the March 2 ruling to specify which of plaintiffs'
Montrose-related allegations failed to state a Section 10b and Rule
10b-5 claim.

As a result of these three rulings, the litigation has been reduced to
a claim the Company and three of its former officers, during the period
from August 14, 1997 to November 16, 1999, failed to disclose
adequately information about various aspects of the Company's
operations, including information relating to the Company's exposure
after January 1, 1997 to losses resulting from the Montrose decision.

Plaintiffs' fact discovery was concluded July 31, 2002 in accordance
with a schedule established by the Court.  A tentative trial date has
not been established.

The Company intends to vigorously contest this action and believes the
plaintiffs' allegations are without merit.  Nevertheless, the ultimate
outcome of this action cannot be predicted at this time and the Company
currently is unable to determine the potential effect of this
litigation on its financial position, results of operations or cash
flows.


ACXIOM CORP.: Appeals Court Upholds Dismissal of Securities Suits in AK
-----------------------------------------------------------------------
The United States Eighth Circuit Court of Appeals upheld a lower
court's dismissal of several securities class actions pending against
Acxiom Corporation and certain of its officers and directors.

The suit was commenced in September 1999 in the United States District
Court for the Eastern District of Arkansas, alleging that the
defendants violated Section 11 of the Securities Act of 1933 in
connection with the July 23, 1999 public offering of 5,421,000 shares
of the common stock of the Company.  In addition, the action seeks to
assert liability against the Company Leader pursuant to Section 15 of
the 1933 Act.  Two additional suits were subsequently filed in the same
venue against the same defendants and asserting the same allegations.

The defendants moved to dismiss the suits, which the court granted in
March 2001.  The plaintiffs appealed the decision to dismiss to the
United States Court of Appeals for the Eighth Circuit.

On July 15, 2002, the Eighth Circuit upheld the Court's motion to
dismiss.  Subsequent to the Eighth Circuit's decision, the plaintiffs
have filed a petition for rehearing, which is currently pending.


ALPHARMA INC.: NJ Court Affirms Dismissal of Securities Fraud Lawsuit
---------------------------------------------------------------------
The United States District Court for the District of New Jersey
affirmed its securities class action dismissal. The suit was filed
against Alpharma, Inc. on behalf of all persons who acquired the
Company's securities between April 28, 1999 and October 30, 2000.  The
Company is named as a defendant along with two of its board members,
one of whom is an officer, and two of its former officers.

The suit alleges that, among other things, the plaintiffs were damaged
when they acquired the Company's securities because, as a result of:

     (1) alleged irregularities in the Company's animal health business
         in Brazil,

     (2) allegedly improper revenue recognition practices and

     (3) the October 2000 revision of its financial results for 1999
         and 2000

The suit alleges that the Company's previously issued financial
statements were materially false and misleading, thereby artificially
inflating the price of the Company's securities.  The complaint alleges
violations of Sections 10(b), 20(a) and Rule 10b-5 of the Securities
and Exchange Act of 1934.

The Company moved to dismiss the complaint on legal grounds, which the
court granted with prejudice.  The plaintiffs then filed a motion for
reconsideration, but the court affirmed its earlier dismissal.  The
plaintiffs, may appeal the court's decision to the Third Circuit Court
of Appeals.

The Company intends to vigorously defend the further actions of the
plaintiffs.  Based upon the facts as presently known, the Company does
not believe that it is likely that the class action will result in
liability which will be material to the Company's financial position.
However, it is not possible for the Company to conclude that resolution
of the lawsuit will not be material to the Company's financial position
or its results of operations or cash flows in the quarter or year in
which it occurs.


ARKANSAS: Suit Over Delays In Child-Support Payments Gets Class Status
----------------------------------------------------------------------
Thousands who get child support will be represented in a class action
filed against state officials over delays in child-support payments,
because US District Judge Moody granted class action status to a
lawsuit filed by nine parents, reports the Associated Press Newswires.

Plaintiffs' attorney Theresa Caldwell comments, "That is great news; we
are forging ahead.  This is a great thing for us and for all the
custodial parents in the state of Arkansas."

After state officials switched to a new computer system in July 2001
and took on about 50,000 more support cases, thousands of support
checks were delayed.  Parents brought suit and Judge Moody denied the
state's request to dismiss the lawsuit.

Judge Moody also denied the parents' request for a preliminary
injunction to order the state Office of Child Support Enforcement to
follow federal regulations, including a two-day processing limit, in
distributing the checks.

The plaintiffs also asked the judge to order the state to give parents
an adequate monthly accounting of how the state manages their money.
Some parents claim the state is illegally withholding support checks in
order to recover losses when a check from a non-custodial parent
bounces or when other errors occur.

Judge Moody said earlier that he was sensitive to the plight of the
custodial parents, but he also said that the child-support office was
trying to address their needs and had made substantial progress.


ATMOS ENERGY: Sues To Declare Texas Gas Users Act "Unconstitutional"
--------------------------------------------------------------------
Atmos Energy filed a lawsuit in Travis County, Texas to have the Texas
Agricultural Gas Users Act of 1985 to be declared unconstitutional, in
response to a class action filed against it for violations of the said
act.

The suit was commenced in February 2002 in the 287th District Court of
Parmer County, Texas by Anderson Brothers, alleging a breach of
contract by the Company and by a number of its divisions and
subsidiaries concerning the sale of natural gas used in irrigation
activities since 1998 and an alleged violation of the Texas
Agricultural Gas Users Act of 1985.  The court has ruled proper venue
to be in Parmer County, Texas.

The Company has been responding to numerous discovery requests from the
plaintiffs.  The Company further denies any liability.


BLUE CROSS: Advocates State Surplus Needed For Financial Stability
------------------------------------------------------------------
Blue Cross organizations need to maintain a surplus that rises
proportionately with risk and subscribers if the insurers are to
guarantee coverage in the face of a catastrophe, officials from the
accredited nonprofit insurance companies told state officials at a
recent hearing in front of Pennsylvania's state Insurance Commissioner
M. Diane Koken and other insurance department officials.

The hearing was held as concern has risen as to why the nonprofit
insurers are stockpiling surpluses above and beyond what the state
requires.  Class actions have been filed in state courts attacking the
surpluses as excessive, and seeking to force the nonprofit Blues to
"disgorge" excess funds and redistribute the money to subscribers, who
have faced annual premium increases of 10 percent to 15 percent a year.

Critics of the large surpluses, including lawmakers and the lawyers in
the class actions, say that they suspect that the nonprofit insurers
are setting themselves up to become for-profit entities.  Two of the
Blue Cross insurers in Pennsylvania, Highmark and Independence Blue
Cross, already have for-profit subsidiaries.

Ms. Koken asked the insurers what kind of effect the surplus would have
if it were used to reduce the premiums of the non-profits' subscribers
in southeastern Pennsylvania and outside the state.  "Not significant,"
Independence Blue Cross chief executive G. Fred Dibona Jr., asserted,
saying the amount would reduce the average member premium by $108 a
year.

"We make no apologies for what we believe is an appropriate level of
financial strength," said John Brouse, president and chief executive of
Highmark, during the hearing.  Highmark, which covers 4.8 million
people mostly Pennsylvanians through its nonprofit plans, has a surplus
of more than $2 billion, or nearly four times the state's minimum
requirement based on an industry calculating risk.

Still, that amount is slightly less than the level at which the Blue
Cross Blue Shield Association presumes that the provider "is strong
enough to meet its financial obligations to its customers well into the
future," said Highmark's chief financial officer, Robert J. Gray.

Blue Cross officials at the hearing said they build their surpluses
through investment and underwriting gains.  They blamed sharply rising
premiums on prevailing market conditions, including the increased cost
of prescription drugs and the increased usage of costly medical
procedures and drugs in treatment.

Blue Cross organizations in Pennsylvania include:

     (1) Independence Blue Cross of Philadelphia;

     (2) Highmark Inc. in Camp Hill, which operates Pennsylvania Blue
         Shield and Blue Cross of Western Pennsylvania;

     (3) Capital Blue Cross of Harrisburg; and

     (4) Blue Cross of Northeastern Pennsylvania in Wilkes-Barre


CHARGETEK INC.: Voluntarily Recalls Battery Chargers for Fire Hazard
--------------------------------------------------------------------
Chargetek, Inc. is cooperating with the United States Consumer Product
Safety Commission (CPSC) by voluntarily recalling about 200 CT-2000
battery chargers used with recreational vehicles, such as boats.  A
manufacturing defect inside the charger can cause overheating of
internal connections or external wiring, presenting a fire hazard.

The Company has received three reports of fires involving the CT-2000.
The fires were contained to the charger with minor soot damage to
nearby materials.  No injuries have been reported.

The chargers were made in the USA and the words "Chargetek CT2000"
are printed across the front of the charger's black housing.  Indicator
lights for charge mode, battery polarity and charge current are also
located on the front.  Wires for the AC power and three batteries
extend from the bottom of the unit.  Only models with a serial number
in the range of 030260 to 030603 and/or a day code between "Jan 01
2001" and "June 30 2002" are included in the recall.  The serial number
is written on the top of the charger and the day code is stamped on the
bottom.

Specialty product dealers sold the chargers nationwide from January
1998 to June 2002 for between $220 and $260.

For more details, contact the Company by Phone: 888-453-4135 between 9
a.m. and 5 p.m. PT Monday through Friday, or visit the firm's Website:
http://www.chargetek.com.


FISHING INDUSTRY: Sockeye Salmon Price-Fixing Lawsuit Set For Trial
-------------------------------------------------------------------
Superior Court Judge Peter A. Michalski recently set a February 3 trial
date for a class action, which alleges price fixing in the Bristol Bay,
Alaska, sockeye salmon fishery, the Associated Press Newswires reports.

Judge Michalski's move to set the trial follows an Alaska Supreme Court
ruling May 31, that overturned a 1999 decision granting collective
summary judgments to dismiss to the defendants.  The higher court found
that "the plaintiffs have presented evidence that raises material
issues of fact as to the existence of an antitrust conspiracy involving
some or all of the defendants."

The Supreme Court also ruled that damages in the case be limited to the
four years prior to filing of the lawsuit.  Justices also ruled to
allow liability on those who use the corporation as an instrument in
conducting their personal business.

The trial is expected to last at least three months.  Judge Michalski
allotted 15 days for plaintiff commercial fishermen to present their
case.  The defense, representing 12 processors and importers, will have
45 days for presentation.

"We look forward to justice for the thousands of fishermen victims,"
said Anchorage attorney Phillip Weidner, whose firm filed the lawsuit
in 1995.  Lawyers for the fishermen allege that large Japanese
corporations and Seattle-based processors conspired to depress salmon
prices.

Plaintiffs plan to argue that defendant importers are liable for the
actions of their subsidiaries:

     (1) Marubeni Corp. owns North Pacific Processors Inc.;

     (2) Nippon Suissan Kaisha Ltd. owns Unisea Inc.; and

     (3) Nichiro Corp. owns Peter Pan Seafoods Inc.

The defense had asked the court to set the trial for January 19, 2004,
and to allow additional discovery to include seafood marketing
conditions for several years after the lawsuit was filed.  "While we
were somewhat disappointed, the defendants should be able to work with
Judge Michalski's ruling as we prepare for trial," said defense
attorney Douglas Serdahely.


FLORIDA: Insurance Department Faces Lawsuit Over Consumer Fraud Scheme
----------------------------------------------------------------------
Investors who lost millions of dollars in a fraudulent life-insurance
scheme filed suit against the Florida Department of Insurance, alleging
the department failed to protect them when it knew of improprieties at
a Florida company, The Wall Street Journal reports.  The accusations
are the latest to call into question the effectiveness of the state's
insurance regulation.

The complaint, filed in state court in Palm Beach County, Florida,
contends that even though the insurance department determined that "the
plaintiffs were being targeted and harmed by deceitful insurance
practices" of American Benefits Services Inc. (ABS) in 1998 and 1999,
the department "took no action to halt ABS's dishonest conduct."

The lawyers for the three named lead plaintiffs are asking for class
action status for the lawsuit, which seeks $117 million in compensatory
damages.  The lawsuit also maintains that, even as American Benefits
was swindling investors, it was currying the favor of the insurance
department.

Long after the department had discovered the wrongdoing, according to
the lawsuit, "ABS employed lawyers and professional lobbyists who were
closely tied to high-ranking Department of Insurance (DOI) officials,
and who arranged frequent private meetings with them to advance the
company's interests."

While banks and brokerage firms nationwide are regulated at the federal
level, insurance firms answer to state regulators with varying levels
of authority.  Critics charge that in states such as Florida, where the
insurance commissioner is elected, regulators are more likely to be
swayed by insurers operating in their states.  Frequently, former
insurance commissioners have gone to work for the insurance companies
they once were supposed to regulate.

American Benefits sold viatical-settlement agreements.  Viaticals are
largely unregulated investment vehicles in which investors buy the
life-insurance benefits of dying individuals.  The terminally ill
receive cash equal to a percentage of their benefits.  When they die,
their full benefits are paid to the investors.

In July 1999, The Wall Street Journal documented how American Benefits
and a related company, Financial Federated Title & Trust, collected
more than $100 million from individual investors.  However, instead of
buying the life-insurance policies from the terminally ill, the
companies' top executives spent much of the money on luxury cars,
private jets, boats and mansions.

The lawsuit states that it was not until after the article appeared
that the insurance department took action, even though by February
1999, at the latest, the department had found American Benefits to be
unsafe, dishonest and hazardous to investors.  An internal department
of insurance memo, dated Feb. 26, 1999, according to the lawsuit, noted
that the company's operations appeared "to constitute hazardous methods
of business and put the investors at risk."

The lawsuit further contends that in its marketing materials, ABS
encouraged investors to check its record with the Florida Insurance
Department.  At the same time that it distributed these materials, the
company was "initiating a concerted program to curry favor with high-
ranking officials" in the department.  That included hiring lawyers
and political consultants well-connected to the department and
arranging meetings with top department officials.


GOODYEAR TIRE: Ends Performance Ratings Systems Ahead Of Employee Suit
----------------------------------------------------------------------
Goodyear Tire & Rubber Co. abandoned a performance-rating system for
salaried employees just as discrimination attorneys were planning to
file a class action over it, the Wall Street Journal reports.

The Company said it was dropping major parts of its program, including
its so-called "10-80-10" feature, which essentially graded all salaried
employees on a curve.  The top percent were rated A, the middle 80
percent were rated B and the bottom 10 percent were rated C.  Those in
the bottom 10 percent were not eligible for raises or bonuses and were
warned they might lose their jobs.

Keith Goodman, a Company spokesman, said that the program was
"definitely misunderstood and a distraction for people."  He denied,
however, that the company was changing course as a result of legal
pressure, noting that the Company has yet to see the lawsuit.

The lawsuit is likely to be filed in state court in Akron, Ohio, on
Thursday.  It alleges that the workers who received C ratings were
humiliated and stigmatized among their peers and managers.  The legal
arm of the AARP, formerly known as the American Association of Retired
Persons, has joined the lawsuit as co-counsel.  Most of the plaintiffs
in the case are Goodyear employees who are over 50-years-old and who
got C ratings.  "This case will send a clear message that performance
rating schemes that target older workers for unfair treatment are
illegal and will not be tolerated," said Laurie McCann of the AARP.

The complaint in the class action illustrates how the performance
ratings program operated to target older workers.  Jack McGilvrey, 59,
was routinely receiving ratings of at least "good/effective performer"
in his performance reviews up through the late 1990s.  In the year
2000, he was ranked "highly effective."  However, in February 2001, he
was transferred to a new department and shortly thereafter was given a
C rating in his performance review, which included the "10-80-10"
feature for rating.

The lawsuit asserts that Mr. McGilvrey did not deserve the rating and
received it as part of the Company's plan to discriminate against older
employees.  He was later dismissed, one of the results of landing in
the C group.

In modifying its white-collar ranking system, the Company said it would
replace the A, B, C rankings with the terms, exceeds expectations,
meets expectations and unsatisfactory.  There will be no requirement to
assign those ratings to set percentages of employees.  The company also
said it was stepping up training for managers so they learn to do a
better job of conducting performance reviews.

The lawsuit against Akron, Ohio-based Goodyear, with about 28,000
salaried employees around the world, has many parallels to one filed
last year against Ford Motor Co.  In that case, also joined by the
AARP, the Company modified its plans in the face of a legal challenge.
The Ford case eventually was settled.


GOODYEAR TIRE: Employees' Age Bias Suit To Continue Despite Changes
-------------------------------------------------------------------
Although Goodyear Tire & Rubber Co. is revising its employee evaluation
system, workers say they still plan to sue over the process, claiming
it discriminates against older employees, according to a report by
Associated Press Newswires.

Retiree-advocacy AARP and several lawyers representing an undisclosed
number of workers are filing a lawsuit in Summit County Common Pleas
Court against the Akron, Ohio-based company.  They plan to seek class
action status for the lawsuit.

Eight workers expect to be plaintiffs in the lawsuit, and attorney
Steven Bell of Cleveland estimates that more than 1,000 other Goodyear
workers over age 40 could join if a judge grants class-action status.

"We applaud Goodyear's action as a good first step to rectifying the
situation," said Laurie McCann, an AARP attorney.  "Unfortunately, a
lot of people already were harmed by it, and we need to get remedies
for them."

A copy of the lawsuit, made available in advance to the media, claims
the Company intentionally uses their performance evaluation system to
discriminate against older employees.

Megan Bonnani, a Royal Oak, Michigan lawyer representing employees,
said in a discussion of the unrevised Goodyear program that "What we
have seen happen is that a disproportionate portion of older workers
are placed in the low-performance category, employees who have a
history of being loyal, good workers."

The kind of program that Goodyear had was "an invitation for
discrimination," said Ms. Bonnani.  "It is designed to rid the company
of older workers."

The company said that it is dropping the most contentious part of its
ABC evaluation system, known as "forced distribution" of grades.  That
method required managers to hand out low marks to the bottom 10 percent
of their employees.  Those workers who received C's were denied raises
and some were fired or demoted.

Under the company's revised system, which will still have three
ratings, evaluations will be used to help low performers improve or
leave the company.  However, there will not be a quota of workers who
must be placed in the low grade category.  Moreover, employees ranked
unsatisfactory, the lowest category, must complete an improvement
program, said Goodyear spokesman Kenneth Price.

About 500 workers sued Ford Motor Co. over a similar ABC evaluation
system.  The lawsuit was settled for $10.6 million.


HAWAII: Attorneys Accuse Agency Of Mishandling Child Support Funds
------------------------------------------------------------------
Poor management within the state of Hawaii's Child Support Enforcement
Agency has led to a buildup of about $7.2 million in unpaid child-
support payments, attorneys suing the department charged in court, the
Associated Press Newswires reports.  The jury-waived trial before
Circuit Court Judge Sabrina McKenna began Tuesday and is expected to
last about a week.

A class action is attempting to determine whether the agency is in
compliance with state and federal laws that require child-support
payments to be mailed within 48 hours of receipt.  Plaintiffs' attorney
Francis O'Brien accused the agency of using the $7.2 million in its
accounts as "a slush fund to cover up the incredible slipshod manner in
which it manages the fund."

Mr. O'Brien said that despite an automated disbursement system
implemented in 1998, the agency has been unable to track the money
belonging to the plaintiffs and has made no effort to find the
individuals entitled to the payments.

State Deputy Attorney General Charles Fell, who is defending the
agency, to the court about the magnitude of the job.  The agency, with
almost 200 employees and an annual appropriation of $18 million, sends
checks to about 35,000 child-support recipients per month, logging an
estimated $90 million to $95 million in child-support payments each
year.

At the end of June, the agency had 100,000 active cases, which amounts
to about 450 cases per full-time employee, Mr. Fell said.


HPL TECHNOLOGIES: Faces Allegations of Securities Fraud in Lawsuits
-------------------------------------------------------------------
Yervant David Lepejian spent 15 years building HPL Technologies Inc. in
San Jose.  His efforts finally began to pay off last year, when the
firm went public and reportedly had millions of dollars in assets,
according to a report by The San Francisco Chronicle.

In fact, the software company's finances were all a sham, said federal
law enforcement and securities officials recently, as they announced
the charges against the firm in one of Silicon Valley's most egregious
cases of accounting fraud in recent years.

The company, which has said it will restate its earnings for years 2000
and 2001, is facing several investor class actions.  Based on financial
results fraudulently inflated by Mr. Lepejian, HPL raised more than $75
million from investors in its IPO, the Securities and Exchange
Commission (SEC) said.

Authorities said Mr. Lepejian, the firm's 41-year-old former president
and chief executive officer, took outlandish actions such as creating
fake customer orders and doctoring bank records.  They said he even had
a friend pose as an HPL customer to confirm purchases.

All told, Mr. Lepejian allegedly created more than $28 million in bogus
sales and overstated HPL's revenue this year by 328 percent.  In the
second quarter this year, 91 percent of HPL's reported revenue was
fictitious, authorities said.

"This case goes far beyond the sort of cooking the books that has
become all too familiar to today's investors," said Helane Morrison,
the SEC's district administrator in San Francisco.  "The defendant here
created the illusion of a successful company almost out of whole cloth,
through a repeated pattern of forged documents and altered records."

Mr. Lepejian was named in separate filings by the U.S. attorney's
office and the SEC.  Without admitting any wrongdoing, Mr. Lepejian has
agreed to settle the civil SEC charges by agreeing to never serve as an
officer or director of a public company and paying undetermined
monetary penalties.  Separately, Mr. Lepejian faces a criminal wire-
fraud charge in a recently filed complaint , which typically precedes a
plea agreement.

Michael Tubach, a San Francisco attorney who is representing Mr.
Lepejian, said his client's actions resulted from a "terribly misguided
effort to make HPL succeed, rather than a desire for personal profit."
Mr. Tubach also said Mr. Lepejian "deeply regrets any harm that he has
caused to others."


INDIANA: Motor Vehicle Bureau May Soften Requirements To Get Licenses
---------------------------------------------------------------------
Indiana's Bureau of Motor Vehicles (BMV) may consider simplifying
identification requirements for new drivers' licenses, an issue that
has triggered a civil rights lawsuit, a state official said, Associated
Press Newswires reports.  BMV Commissioner Gerald Coleman said the
agency will definitely discuss the subject of softening the
requirements with the attorney general.

The Indiana Civil Liberties Union has filed a lawsuit over the policy
that went into effect July 15, requiring people applying for a new
license to show proof of a Social Security number and five other
documents to prove their identities.  The ICLU said some immigrants who
live and work in Indiana legally do not have a Social Security number
or other required documents.

Indiana Attorney General Stephen Carter, who is defending the state
against the lawsuit, urged the BMV to hold a public hearing on the
policy.  "On something as big as this, obviously the public is going to
have its say, whether it is in the form of a class-action lawsuit or a
public hearing" the Attorney General said.


LEISURE HOMES: Trial Starts in Consumer Fraud Lawsuit Filed in NV Court
-----------------------------------------------------------------
Trial in the class action filed against Leisure Homes Corporation (LHC)
has commenced since August 2002 in the Nevada District Court, County of
Clark.

The suit was filed against the Company, its previously wholly owned
subsidiary, Central Nevada Utilities Corporation (CNUC), and certain
other defendants.  The plaintiffs' complaint asked for class action
relief claiming that LHC and CNUC were guilty of collecting certain
betterment fees and not providing associated sewer and water lines.

The court later determined that plaintiffs had not properly pursued
their administrative remedies with the Nevada Public Utilities
Commission (PUC) and dismissed plaintiffs' complaint, as amended,
without prejudice.  Notwithstanding their appeal of the dismissal,
plaintiffs also filed for administrative relief with the PUC.

On November 17, 1999, the PUC found that CNUC, the only defendant over
which the PUC has jurisdiction, was not in violation of any duties owed
the plaintiffs or otherwise in violation of CNUC's approved tariffs.
Subsequent to the PUC decision, plaintiffs voluntarily dismissed their
appeal.

On May 4, 2000, plaintiffs re-filed their complaint in Nevada District
Court, naming all of the above parties with the exception of CNUC.  The
complaint is virtually identical to the amended complaint referred to
above and asserts six claims for relief against defendants:

     (1) breach of deed restrictions,

     (2) two claims for breach of contract,

     (3) unjust enrichment,

     (4) consumer fraud in violation of NRS 41.600 and

     (5) violation of NRS 119.220

The claims arose out of the alleged failure to provide water and sewer
utilities to purchasers of land in the subdivisions commonly known as
Calvada Valley North and Calvada Meadows located in Nye County, Nevada.

In September 2000, the Company filed a motion to dismiss each of the
claims made in the complaint.  The court denied the Company's motion in
an order entered on December 19, 2000.  Plaintiffs then filed a motion
to certify class, which defendants opposed.

In September 2001, the court refused to certify a class for the claims
of:

     (i) breach of contract,

    (ii) unjust enrichment,

   (iii) consumer fraud in violation of NRS 41.600 and

    (iv) violation of NRS 119.220.

Accordingly, the defendants are no longer subject to class claims for
monetary damages.  The defendants' only potential liability is for the
construction of water and sewer facilities.

In July 2002, the defendants filed a motion for summary judgment on
which the court has not yet ruled.  The Company does not believe that
any likely outcome of this case will have a materially adverse effect
on the Company's financial condition or results of operations.


MAGNA INTERNATIONAL: Suit Over Donnelly Merger Voluntarily Withdrawn
--------------------------------------------------------------------
Magna International Inc. (NYSE: MGA; TSX: MG.A; MG.B) and Donnelly
Corporation (NYSE: DON) announced that the purported class action
lawsuit seeking to enjoin Magna's acquisition of Donnelly was withdrawn
by the plaintiff and dismissed with prejudice, without any amount paid
by any of the defendants to the plaintiff and without any change in any
of the terms or provisions of the merger agreement.

Magna and Donnelly continue to expect the merger to close on October 1,
2002, following the special meeting of Donnelly shareholders to be held
on September 30, 2002.  The merger is subject to the satisfaction or
waiver of a number of conditions, including clearance from the
antitrust regulatory authorities in the European Union.

For more details, contact Louis Tonelli at Magna by Phone: 905-726-7035
or Charles Pear at Donnelly by Phone: 616-786-5712


MONTANA POWER: Employees File Suit Over Retirement Fund Losses in KY
--------------------------------------------------------------------
Montana Power Company faces a lawsuit on behalf of its employees,
claiming two of the company's top officers as well as other members of
the retirement plan committee caused employees to lose tens of millions
of dollars in retirement savings during the company's recent and
unsuccessful transformation from a stable gas and electric company to
the highly speculative telecommunications company Touch America Inc.
(NYSE:TAA).

Filed in the United States district court in Missoula, the lawsuit
states that CEO and president Robert Gannon and vice-chairman and CFO
Jerrold Pederson, engineers of MPC's unsuccessful leap to the
telecommunications business, were fiduciaries to the company's pension
plan with a duty to protect employees' investments.

The lawsuit claims these and other yet to be named officers hid crucial
information regarding the company's performance in the
telecommunications field and failed to protect the pension plan in
order to carry out their plan to transform the company and earn
lucrative multi-million-dollar bonuses.

"We intend to prove that the defendants failed to uphold their
fiduciary responsibilities to Montana Power employees," said Steve
Berman, attorney for plaintiffs from the Seattle-based law firm Hagens
Berman. "Our lawsuit shows that thousands of employees lost years worth
of hard-earned savings only to satisfy the defendants' appetite for
"Wall Street"-sized paychecks."

Although MPC employees saw severe losses during the last years, the
lawsuit states Gannon and Pederson recently received bonuses of several
million for the completion of MPC's transformation to Touch America.

Employees claim these change-of-control bonuses created a conflict with
their duty of loyalty to the pension fund and resulted in these and
other members of the retirement plan committee breaching their
fiduciary duty to protect employee retirement accounts, which lost
sizeable amounts during the Touch America's stock plummet from $64 in
March 2000 to the current price of $.69

In the late 1990's MPC began to sell off the majority of its power
plants and use the proceeds to restructure the company into a
standalone telecommunications company known as Touch America. Gannon
and Pederson stood to receive several million dollars in cash and
lucrative stock options if the company completed the restructure, the
lawsuit states.

On June 30, 2000, Touch America agreed to purchase 250,000 customer
accounts from Qwest, as well more than 1,000 miles of fiber optic
networks and connection equipment. These deals quickly went sour due to
problems with Qwest's billing and its failure to address technical
problems, causing MPC to lose significant revenues, according to the
lawsuit.

"Our suit claims these men sold away a solid company, the backbone of
many employees' retirement plans, for a pipe dream," said Berman. "But
even worse, the suit will prove that when these men realized the ship
was sinking, they hid information that could have saved the employees
investments."

The lawsuit charges that Mr. Gannon and Mr. Pederson concealed the
problems with Qwest, the disclosure of which would have prevented the
continuing sale of energy plants and halted their lucrative individual
payouts.

Despite knowing as early as October 2000 that MPC's stock was a risky
investment for employees due to the problems with the Qwest deal,
Gannon and Pederson continued to match employee contributions with
company stock until November 2001, the suit states. The complaint also
claims Gannon and Pederson refused to assess whether the company stock
remained a prudent investment for employees.

The proposed class action lawsuit represents all participant or
beneficiaries of the Montana Power Company Retirement Plan, and seeks
restitution for their retirement plan losses.

For more information, visit the Website: http://www.hagens-berman.com.


NORTHERN TOOL: Recalls 3,400 Electric Air Compressors For Fire Hazard
---------------------------------------------------------------------
Northern Tool & Equipment is cooperating with the United States
Consumer Product Safety Commission (CPSC) by voluntarily recalling
about 3,400 electric air compressors.  The capacitors on these
compressors can overheat, catch fire and ignite the plastic cover above
the capacitor.

The Company has received six reports of capacitors overheating or
igniting.  No injuries have been reported.

The recalled air compressors are Model 191000 and Model 192000.  The
model number on both units can be found on the shipping carton and
invoice.  The Model 191000 is a 2.5 HP air compressor with a red, six-
gallon capacity tank.  A blue "Northern Industrial Tools" label is on
the side of the tank.

The compressor motor sits on top the tank and is covered with a black
plastic shell.  The Model 192000 is a 2.5 HP unit with twin two-gallon
tanks.  The twin tanks are red and stacked vertically on one side of
the unit.  A blue "Northern Industrial Tools" label is on the side of
the top tank.  The motor is located at the base of the unit, adjacent
to the twin tanks, and is partially covered with a black plastic shell.

The Company sold the recalled Model 191000 and 192000 air compressors
through direct mail and Northern Tool specialty stores nationwide from
January 2002 to May 2002 for between $110 and $120.

For more details, contact the Company by Phone: 800-222-5381 between
8 am and 5 pm CT Monday through Friday or visit the firm's Website:
http://www.northerntool.com


OAK HILLS:  Faces Lawsuit Over Merger With Provident Financial in OH
--------------------------------------------------------------------
A class action has been filed in the United States District Court in
Cincinnati, Ohio, alleging fraud in the merger of Oak Hills Savings &
Loan and Provident Financial Group Inc., in the latter part of 1999,
The Cincinnati Post reports.

Gary, Lisa and Lindsey Meier, through their attorney Gene Mesh, filed
the lawsuit on behalf of anyone who held stock in Oak Hills Savings &
Loan between September 27, 1999, and December 3 of that year.

The suit also names as defendants:

     (1) directors of Oak Hills Financial Corp., which owned the
         Savings & Loan;

     (2) Provident Financial Group Inc., which owns Provident Bank; and

     (3) a number of lawyers who played a role in Provident's
         acquisition of the thrift.


OVERHILL CORPORATION: Appeals Court Rules on Suit Summary Judgment
------------------------------------------------------------------
The United States Ninth Circuit Court of Appeals released a ruling on
the motion appealing the granting of summary judgment in the securities
class action against Overhill Corporation and certain of its officers
and directors.

The suit asserts liability based on alleged misrepresentations that the
plaintiffs claimed resulted in the market price of the Company's stock
being artificially inflated.

In March 2000, the district court dismissed the plaintiffs' claims
against one of the Company's officers and directors and restricted the
plaintiffs from pursuing a number of their claims against the other
defendants.  The court also granted the remaining defendants leave to
renew their motions to dismiss in the form of motions for summary
judgment.

After pretrial discovery by plaintiffs, the remaining defendants filed
motions for summary judgment, pointing out that there was no evidence
to support the plaintiffs' claims.  In November 2000, in a lengthy
decision addressing the plaintiffs' claims against each of the
remaining defendants, the district court granted the motions for
summary judgment, thereby disposing of all of the claims asserted by
the plaintiffs.  The plaintiffs then filed a motion for rehearing,
which the district court denied in March 2001.

The plaintiffs appealed those decisions to the United States Court of
Appeals for the Ninth Circuit.  In September 2001, the plaintiffs
requested the Ninth Circuit to enjoin the Company's proposed spin-off
of Overhill Farms.  The Court of Appeals denied the plaintiffs' request
and directed them to address their request to the district court.

The plaintiffs thereafter filed an application with the district court,
which restrained the spin-off for a few days until a hearing could be
conducted.  Following an October 11, 2001 hearing at which counsel for
all parties appeared, the district court dissolved its temporary
restraining order, thereby allowing the Company to proceed with the
proposed spin-off.  The plaintiffs did not appeal that decision by the
district court.

On June 5, 2002, the Ninth Circuit rendered a decision that affirmed
several of the trial court's rulings but reversed other rulings and
remanded portions of the case for further proceedings in the district
court.  Among other things, the Court of Appeals remanded certain
claims against the Company and four individual defendants for further
consideration by the trial court.  Both sides then filed petitions for
rehearing, and on July 18, 2002, the appellate court revised certain
statements in its original opinion.


OVERSEAS PARTNERS: NY Court Partially Grants Dismissal of Consumer Suit
-----------------------------------------------------------------------
The United States District Court for the Southern District of New York
granted in part and denied in part the motion to dismiss the class
action pending against Overseas Partners Ltd. (OPL), on behalf of
customers of United Parcel Services, Inc.

Two suits were commenced in November 19, 1999 and January 27, 2000, in
Montgomery County, Ohio Court and Butler County, Ohio Court,
respectively.  The lawsuits allege, amongst other things, that UPS told
its customers that they were purchasing insurance for coverage of loss
or damage to goods shipped by UPS.  The lawsuits further allege that
UPS wrongfully enriched itself with the monies paid by its customers to
purchase such insurance.

The suits were later removed to federal court and thereafter
transferred to the Southern District of New York and consolidated in a
multidistrict litigation for pretrial discovery purposes with other
actions asserting claims against UPS.

Plaintiffs subsequently amended those claims against all defendants to
join a Racketeer Influenced and Corrupt Organizations (RICO) claim as
well.  On August 7, 2000, the Company and its wholly owned subsidiary,
Overseas Partners Capital Company (OPCC), were added as defendants in a
third class action lawsuit, also consolidated in the multi-district
litigation, which alleges violations of United States antitrust laws,
and state unfair trade practice and consumer protection laws.

The allegations in the lawsuits are drawn from an opinion by the United
States Tax Court that found that the insurance program, as offered
through UPS, by domestic insurance companies, and ultimately reinsured
by OPL, should not be recognized for federal income tax purposes.

In June 2001, the Tax Court opinion was reversed by the United States
Court of Appeals for the Eleventh Circuit and remanded to the Tax Court
for further consideration.  The parties to the Tax Court action filed
Supplemental Briefs on remand on March 18, 2002.  OPL is not a party to
the Tax Court action.

The Company filed or joined in motions to dismiss all of the
consolidated actions on a number of grounds, including that the
antitrust claim fails to state a claim upon which relief can be
granted, and that the remaining claims are preempted by federal law.

In orders dated July 30, 2002, the court granted in part and denied in
part the motions to dismiss.  Pursuant to the court's orders, the
claims remaining against the Company are RICO, antitrust, and common
law interference with contract claims.

The Company believes that it has meritorious defenses to all three
actions and intends to defend them vigorously.  There can be no
assurance, however, that an adverse determination of the lawsuits would
not have a material effect on the Company.


RARE MEDIUM: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Plaintiffs in the securities class action against Rare Medium Group,
Inc. filed an amended suit in the United States District Court for the
Southern District of New York.  The suit names as defendants the
Company, certain of its subsidiaries and certain of their current and
former officers and directors.

The plaintiffs became owners of restricted Company stock when they sold
the company that they owned to the Company.  Plaintiffs assert the
following four claims against defendants:

     (1) common-law fraud,

     (2) violation of Section 10(b) of the Securities Exchange Act of
         1934 and Rule 10b-5 promulgated thereunder,

     (3) violation of the Michigan Securities Act, and

     (4) breach of fiduciary duty

These claims arise out of alleged representations by defendants to
induce plaintiffs to enter into the transaction.  The complaint seeks
compensatory damages of approximately $5.6 million, exemplary and/or
punitive damages in the same amount, as well as attorney fees.

On January 25, 2002, the Company filed a motion to dismiss the
complaint in its entirety, which the court later granted, dismissing
the matter without prejudice.  On July 17, 2002, the plaintiffs filed
an amended complaint asserting similar causes of action to those
asserted in the original complaint.  The Company intends to dispute
this matter vigorously.


RARE MEDIUM: Plaintiffs Appeal Dismissal of Securities Suit in S.D. NY
----------------------------------------------------------------------
Plaintiffs in the class action against Rare Medium Group, Inc. appealed
the dismissal of the suit by the United States District Court for the
Southern District of New York.  The suit names as defendants:

     (1) Rare Medium, Inc.,

     (2) Rare Medium Group, Inc., and

     (3) Rare Medium Texas I, Inc.

The plaintiffs asserted claims for:

     (i) breach of contract,

    (ii) tortuous interference with contractual relations, and

   (iii) tortious interference with prospective advantage

The claims arose out of the plaintiffs' alleged attempt to engage in
transactions involving some or all of the approximately 1,200,000
shares of the Company's common stock (prior to the reverse stock split)
that the plaintiffs obtained in the Company's acquisition of Big Hand,
Inc.

On October 31, 2001, the court dismissed the case without prejudice.
Plaintiffs then filed an amended complaint on December 7, 2001 based on
substantially the same alleged facts.

On June 27, 2002, the court dismissed the case with prejudice. On July
16, 2002, the plaintiffs filed a notice of appeal.  The Company intends
to dispute any appeal vigorously.


WELLS REAL: Asks GA Court To Dismiss Securities Charges in Lawsuit
------------------------------------------------------------------
Wells Real Estate Fund I asked the United States District Court for the
Northern District of Georgia, Atlanta Division to dismiss one of the
claims in the class action pending against it and its general partners
Leo F. Wells, III and Wells Capital, Inc.

The suit, filed on behalf of all Class A limited partners of the
Partnership, alleges, among other things, that:

     (1) the Amended and Restated Consent Solicitation Statement dated
         August 25, 2000 contained material misrepresentations or
         omissions of fact in violation of Rule 14a-3 promulgated under
         Section 14(a) of the Securities Exchange Act of 1934, and

     (2) the defendants had breached the Partnership Agreement and
         breached their fiduciary duties to the plaintiffs by holding
         net proceeds from the sale of the Partnership's properties
         that should be distributed to the Class A limited partners.

In addition to seeking compensatory damages, the plaintiffs are also
seeking an injunction against the Partnership and the General Partners
from:

     (i) issuing consent solicitations for proxies to disburse monies
         in breach of the Partnership Agreement,

    (ii) submitting any further consent solicitations for proxies that
         do not meet the requirements of Rule 14a-3,

   (iii) modifying the Partnership Agreement provisions for cash
         distributions without the approval of 100% of the Class A
         limited partners, and

    (iv) disbursing the proceeds from the sale of the Partnership's
         properties to Class B limited partners.

In addition, the plaintiffs in the suit request specific performance to
require the defendants to perform their obligations under the
Partnership Agreement and that an equitable accounting be made of the
nature and amount of net proceeds from the sale of the Partnership's
properties and the appropriate distribution and time for distribution
of such funds.

On March 13, 2002, the partnership and the general partners filed their
answer to the amended complaint and a motion to dismiss the securities
claims of the suit on the basis that:

     (a) the plaintiffs had failed to comply with the certain
         procedural requirements imposed on litigation of this type,

     (b) the plaintiffs' claims under the first count were time-barred
         because they were not filed within the applicable one-year
         statute of limitations period, and

     (c) the plaintiffs' claims were moot due to the fact that the 2000
         consent solicitation was withdrawn and terminated on January
         17, 2002.

In their answer, the defendants deny that they have breached the
Partnership Agreement or breached their fiduciary duties to the
plaintiffs and oppose all relief sought under the amended complaint.
The plaintiffs have filed a response brief asserting, among other
things, that defendants' motion to dismiss the securities allegations
should be denied.  These matters are currently pending before the
court.


XCEL ENERGY: Denies Allegations in Securities Fraud Suits in MN Court
---------------------------------------------------------------------
Xcel Energy, Inc. faces several securities class actions pending in the
United States District Court in Minnesota on behalf of purchasers of
the Company's common stock between January 31, 2001 and July 26, 2002.
The suit names as defendants the Company and:

     (1) Wayne H. Brunetti, chairman, president and chief executive
         officer,

     (2) Edward J. McIntyre, vice president and chief financial
         officer and former chairman,

     (3) James J. Howard

Among other things, the complaint alleges violations of Section 10b of
the Securities Exchange Act and Rule 10b-5 related to allegedly false
and misleading disclosures concerning various issues, including "round
trip" energy trades and the existence of cross-default provisions in
the Company's and its subsidiary, NRG Energy's credit agreements with
lenders.

The Company denies any liability and maintain it has made disclosures
fully compliant with applicable laws and reporting requirements.

                      New Security Fraud Cases

CROSS MEDIA: Stull Stull Commences Securities Fraud Suit in S.D. NY
-------------------------------------------------------------------
Stull Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of New York, on behalf
of purchasers of Cross Media Marketing Corporation (AMEX:XMM) common
stock between November 5, 2001 and July 11, 2002, inclusive against the
Company and its Chairman and Chief Executive Officer Ronald S. Altbach.

The complaint alleges that defendants 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.

According to the complaint, the Company issued numerous press releases
during the class period touting the Company's performance and
represented that revenues and earnings were increasing.  The truth
regarding the Company was not fully disclosed until July 12, 2002, when
defendants finally revealed that the Company would have a loss for the
second quarter of 2002, and that revenues for the year would be
significantly less than previously predicted.  Company stock dropped to
$2.71 per share from $4.88 the previous day.

The defendants had, prior to that date, among other things
misrepresented the impact and nature of FTC proceedings brought against
the Company and others.

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


HEALTHSOUTH CORPORATION: Cauley Geller Launches Securities Suit in AL
---------------------------------------------------------------------
Cauley Geller Bowman & Coates, LLP initiated a securities class action
in the United States District Court for the Northern District of
Alabama, Southern Division, on behalf of purchasers of Healthsouth
Corporation (NYSE: HRC) publicly traded securities during the period
between January 14, 2002 and August 26, 2002, inclusive.  The suit
names as defendants the Company and:

     (1) Richard M. Scrushy (CEO, Chairman),

     (2) Weston L. Smith (CFO, Executive VP),

     (3) William Owens (Chief Operating Officer) and

     (4) George Strong (director)

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 between January 14, 2002 and August 27, 2002.

According to the complaint, throughout the class period, the Company
issued press releases and filed reports with the SEC announcing
impressive revenue and earnings growth and repeatedly assuring the
market that the Company was well on its way to meeting its financial
targets for the year 2002 and that its fundamentals were strong.

According to the complaint, these and other statements were materially
false and misleading because they failed to disclose that the Centers
for Medicare and Medicaid Services (CMS) had issued directives
reclassifying certain categories of reimbursements, which would have a
materially negative impact on Healthsouth's business.

The suit further alleges that defendants failed to disclose these
facts, which had been known to them for many months, in order to allow
Mr. Scrushy and Mr. Strong to sell (collectively) millions of shares of
the Company's stock at artificially inflated prices and so that the
Company could commence a $998 million note exchange/offer on more
favorable terms than if the truth regarding the CMS directives and
their impact on the Company was known publicly.  The note
exchange/offering was commenced on August 27, 2002, one-day before the
Company disclosed the negative developments for the first time.

According to the complaint, on August 27, 2002, the Company shocked the
market by issuing a press release announcing that CMS directives issued
on July 1, 2002 concerning reimbursements may result in a $175 million
shortfall in EBITDA from previously issued financial guidance for 2002
and that it could not provide further guidance for 2002 and 2003
because of uncertainties posed by the directives.

In addition, the Company announced that it would spin-off its surgery-
center division as part of a massive restructuring undertaken to deal
with the developments and that Mr. Scrushy would be replaced as CEO by
Mr. Owens.

In response to this disclosure, Company stock plummeted by over 43% to
close at $6.71 per share in a single day on extremely high trading
volume.

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


HEALTHSOUTH CORPORATION: Schiffrin & Barroway Files AL Securities Suit
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Alabama,
Southern Division on behalf of all purchasers of the common stock of
HealthSouth Corporation (NYSE: HRC) from January 14, 2002 through
August 26, 2002, inclusive.

The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition.  Specifically, the complaint alleges
that the Company issued press releases and filed reports with the SEC
announcing impressive revenue and earnings growth and repeatedly
assuring the market that the Company was well on its way to meeting its
financial targets for the year 2002 and that its fundamentals were
strong.

According to the complaint, these and other statements were materially
false and misleading because they failed to disclose that 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
facts, which had been known to them for many months, in order to allow
Mr. Scrushy and Mr. Strong to sell (collectively) millions of shares of
the Company's stock at artificially inflated prices and so that the
Company could commence a $998 million note exchange/offer on more
favorable terms than if the truth regarding the CMS directives and
their impact on the Company was known publicly.

The note exchange/offering was commenced on August 27, 2002 -- one day
before the Company disclosed the negative developments for the first
time.

According to the complaint, on August 27, 2002, the Company shocked the
market by issuing a press release announcing that CMS directives issued
on July 1, 2002 concerning reimbursements may result in a $175 million
shortfall in EBITDA from previously issued financial guidance for 2002
and that it could not provide further guidance for 2002 and 2003
because of uncertainties posed by the directives.

In addition, the Company announced that it would spin-off its surgery-
center division as part of a massive restructuring undertaken to deal
with the developments and that Mr. Scrushy would be replaced as CEO by
Mr. Owens.

In response to this disclosure, Company stock plummeted by over 43% to
close at $6.71 per share in a single day on extremely high trading
volume.

For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com


PEMSTAR INC.: Chitwood & Harley Commences Securities Suit in MN Court
---------------------------------------------------------------------
Chitwood & Harley LLP initiated a securities class action in the United
States District Court for the District of Minnesota on behalf of all
persons who purchased or otherwise acquired the securities of PEMSTAR,
Inc. (Nasdaq:PMTR) between June 8, 2001 through May 3, 2002, inclusive.

The lawsuit asserts securities fraud claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, and alleges that the Company and certain of its
officers and directors caused PEMSTAR's shares to trade at artificially
inflated levels through the issuance of false and misleading
statements.

The complaint charges that the Registration Statement and Prospectus
for the Secondary Offering and other public statements were materially
false and misleading when issued, as they misrepresented and/or omitted
one or more of the following adverse facts which then existed and
disclosure of which was necessary to make the statements made not false
and/or misleading.

Principally, in order to attract and maintain the appearance of a
diverse customer base, the Company:

     (1) executed orders from customers without industry track records
         or acceptable financial conditions; and

     (2) had a liberal policy of accepting and holding inventory for
         and from existing and prospective customers (often without
         ever obtaining a written contract), increasing its costs and
         forcing it to write down obsolete inventory.

In addition, due to a lack of internal controls, the Company's "cash
conversion cycle" and its "days of sales outstanding," were much longer
than its competitors, meaning that the Company had to wait a long time
between the time it sold inventory until it collected payment.

During this extended time, the Company carried the totals as accounts
receivables, hiding the fact that payment was unlikely and delaying
disclosure of that fact until the Company finally did write down
material amounts of accounts receivables.

The complaint further claims that the facts, which were known to the
defendants but concealed from the public following the Secondary
Offering, include:

     (i) The Company was in violation of its financial loan covenants;

    (ii) The Company's inventory and accounts receivables valuations
         were grossly overstated; and,

   (iii) Defendants needed to keep the Company's shares artificially
         inflated to complete the Company's convertible offering.

On May 3, 2002, the Company issued a press release entitled, "PEMSTAR
Revises Estimates for Fourth Fiscal Quarter 2002 Results and Announces
Private Placement of Up to $50 Million."  On this news, the Company's
share price plunged more than 60% on May 6, 2002.

For more details, contact Nikole Davenport by Mail: 2900 Promenade II,
1230 Peachtree Street, N.E., Atlanta, Georgia 30309 by Phone:
888-873-3999 or 404-873-3900 by E-mail: nmd@classlaw.com or visit the
firm's Website: http://www.classlaw.com


WALT DISNEY: Wolf Haldenstein Commences Securities Suit in C.D. CA
------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Central District of
California, Western Division, on behalf of purchasers of the securities
of Walt Disney Company (NYSE: DIS) between December 19, 1997 and May
15, 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 failed to disclose a lawsuit
(hereinafter referred to as the "Pooh Litigation") involving hundreds
of millions of dollars in potential royalty payments and the potential
loss of $2 - $6 billion in future licensing revenue relating to a
beloved character in a well-known children's book, Winnie the Pooh (or
Pooh).  At risk is the Company's merchandising agreement for Pooh
character products, which could be terminated as early as February
2003. Throughout the class period, Company SEC filings omitted all
disclosure of the Pooh Litigation.

On May 15, 2002, defendants finally revealed the number of claims
involved and the possible results of the Pooh litigation.  The
Company's stock price fell on this news, decreasing 28% in the
following two months.

For more details, contact Fred Taylor Isquith, 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 Disney.


                              *********

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
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Information contained herein is obtained from sources believed to be
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The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at 240/629-3300.

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