CAR_Public/020919.mbx              C L A S S   A C T I O N   R E P O R T E R
  
           Thursday, September 19, 2002, Vol. 4, No. 186

                          Headlines
                     
ADVANCED LIGHTING: Settles Securities, Derivative Suits For $8.4M
AOL TIME: Minneapolis Public Pension Files Securities Fraud Lawsuit
AOL TIME: Amalgamated Requests Lead Plaintiff Post in Securities Suit
BAXTER INTERNATIONAL: FDA Probes Product Defects' Link to New Deaths
CLAIMS DIRECT: Second Suit Filed, Seeking Compensation For Shareholders

EV GLOBAL: Voluntarily Recalls 2T Lithium Batteries For Fire Hazard
HEALTHCARE RECOVERIES: TX Court Delays Summary Judgment For Discovery
HEALTHCARE RECOVERIES: Plaintiffs Appeal Dismissal of Consumer Suit
HEALTHCARE RECOVERIES: FL Court Refuses To Certify Consumer Fraud Suit
HEALTHCARE RECOVERIES: Court Refuses To Amend Ruling Dismissing Claims

INDIAN FUNDS: Secretary Norton Found in Contempt Over Trust Fund Suit
LEGATO SYSTEMS: CA Court Grants Final Securities Settlement Approval
MCDONALD'S CORPORATION: Recalls Bobble-head Toys For Poisoning Hazard
NEW HAMPSHIRE: Prisoners' Families' Suit V. Phone Companies Dismissed
RESOURCE AMERICA: Agrees To Settle Securities Fraud Suit in E.D. PA

ROCK HILL: Faces Second Shareholder Suit After Firing of Head Exec
SAFEGUARD SCIENTIFICS: Asks PA Court To Dismiss Securities Fraud Suit
SMITHFIELD FOODS: Unit Recalls Meat Suspected of E.coli Contamination
SONICBLUE INC.: Settles Securities Fraud Suits in Federal, State Courts
SONICBLUE INC.: Agrees To Settle Securities Fraud Suits in CA Courts

SONICBLUE INC.: Faces Consumer Fraud Suit Over MP3 Player in IN Court
TREMONT CORPORATION: Faces Suits Opposing Valhi Merger in DE Court
UTAH: Audit Committee Reports Changes Child Welfare Workers Should Make
VISX INC.: Appeals Court Upholds Dismissal of Securities Fraud Suit
WESTERN WASHINGTON: Court Upholds Ruling For Mold Suit Plaintiffs

WESTPOINT STEVENS: Asks Court To Dismiss Consolidated Securities Suit

*Threat of Lawsuits Affects Manufacture of Children's Vaccine Supplies

                     New Securities Fraud Cases

AON CORPORATION: Wechsler Harwood Commences Securities Suit in N.D. IL
BELLSOUTH CORPORATION: Wechsler Harwood Commences Securities Suit in AL
CUTTER & BUCK: Schiffrin & Barroway Commences Securities Suit in WA
HEALTHSOUTH CORPORATION: Wechsler Harwood Lodges Securities Suit in AL
HEALTHSOUTH CORPORATION: Carr Tabb Commences Securities Suit in N.D. AL

HPL TECHNOLOGIES: Wechsler Harwood Commences Securities Suit in CA
INTERPUBLIC GROUP: Wolf Haldenstein Launches Securities Suit in S.D. NY
MERRILL LYNCH: Schiffrin & Barroway Commences Securities Suit in NY
MORGAN STANLEY: Wechsler Harwood Commences Securities Suit in S.D. NY
UNDERWRITERS LITIGATION: Schiffrin & Barroway Files NY Securities Suit

WALT DISNEY: Schatz & Nobel Commences Securities Fraud Suit in S.D. NY

                            *********


ADVANCED LIGHTING: Settles Securities, Derivative Suits For $8.4M
-----------------------------------------------------------------
Advanced Lighting Technologies, Inc. (Nasdaq: ADLT) reached an
agreement in principle to settle a pending shareholder class action
lawsuit against the Company and its chief executive officer in the
United State District Court for the Northern District of Ohio.  

The agreement also covers two similar derivative actions pending in the
same court against the Company and certain of its current and former
officers and directors.

The agreement to settle these lawsuits calls for payment of $8.4
million in cash, all of which will be paid by the Company's insurance
carriers.  The agreement for both lawsuits is subject to execution of
definitive settlement documents and court approval. The agreement for
settlement does not constitute any admission of wrongdoing on the part
of the Company or the individual defendants.

Wayne Hellman, Chairman and CEO commented, "We are very pleased to
reach an agreement to put these actions behind us.  Management can now
focus completely on ADLT's future and the achievement of ADLT's
strategic goals."


AOL TIME: Minneapolis Public Pension Files Securities Fraud Lawsuit
-------------------------------------------------------------------
The Minneapolis State Board of Investment filed a securities class
action against AOL Time Warner, seeking damages on $249 million lost by
the state's public pension, the Associated Press reports.  The suit,
filed in Minneapolis federal court, alleges the Company artificially
inflated its stock prices by engaging in fraudulent practices.  

The investment board took a much larger hit from the drop in AOL's
stock prices than from other stocks which have lost value recently,
including Enron which only cost it $20 million.  The board manages
assets of more than $50.8 billion, the Minneapolis Business Journal
states.

In court papers, the investment board said it believes it has the
"largest financial interest" of any plaintiffs who have sued to recover
losses from The Company's stock drop.  The Company traded for more than
$60 a share in 2000.  Today it trades for less than $13 per share.


AOL TIME: Amalgamated Requests Lead Plaintiff Post in Securities Suit
---------------------------------------------------------------------
Amalgamated Bank's Longview Fund filed a motion in federal court
seeking lead plaintiff status in a federal securities class action
alleging illegal accounting practices at AOL Time Warner Inc.  The
lawsuit charges Company insiders artificially inflated the price of AOL
Time Warner (NYSE: AOL) securities by knowingly issuing material
misrepresentations about the company's finances.
  
All told, shareholders lost more than $125 billion as the Company's
stock collapsed from over $50 to as low as $9.50 per share.  As
America's oldest labor-owned bank, with assets under custody totaling
over $22 billion, Amalgamated has suffered a loss of approximately $56
million due to the massive drop in the Company's stock price.  The
losses in the Company represent the largest single loss ever for the
Bank.

The Company will pursue the lawsuit on behalf of AOLTW investors
seeking judgment against defendants Stephen Case, Michael Kelly,
Richard Parsons and Gerald M. Levin.  The suit was originally filed on
July 18, 2002, by the law firm Milberg Weiss Bershad Hynes & Lerach
LLP, the lead counsel in the Enron shareholder litigation.  

The law firm is currently continuing its investigation into the
Company's accounting practices, and intends to file with the Court
additional detailed evidence of insider trading and massive accounting
manipulations in the near future.  The suit is currently pending in the
US District Court for the Southern District of New York.

"We are going to court to recoup losses that resulted from improper
accounting practices," said Bruce Raynor, Vice Chair of Amalgamated
Bank.  "We will do what it takes to make sure this can't happen again
and that the people who committed this fraud are forced to pay."

The federal class actions allege that between July 1999 and April 2002
"defendants issued a series of material misrepresentations to the
market thereby artificially inflating the price of AOL Time Warner
securities."

The complaint further alleges that AOL Time Warner executives issued
numerous materially false and misleading statements concerning the
Company, the synergies derived from the merger of America Online Inc.
and Time Warner, Inc. and the Company's prospects and earnings
projections.  These statements were materially false and misleading
because they failed to disclose:

     (1) that the Merger was not generating the synergies as
         represented by defendants;

     (2) that the Company was experiencing declining advertising
         revenues; and

     (3) that the Company had failed to properly write down the value
         of more than $54 billion of goodwill, thereby artificially
         inflating its reported financial results and rendering its
         published financial statements materially false and misleading
         and in violation of Generally Accepted Accounting Principles.

"Based on our own ongoing investigation, we believe this case may turn
out to be as big a scandal or bigger than the Enron and WorldCom
debacles," said lead attorney William Lerach, a partner in the firm of
Milberg Weiss Bershad Hynes & Lerach, LLP, representing Amalgamated

The Company has publicly admitted to accounting improprieties and
public media reports indicate that AOLTW is currently under
investigation by the SEC and the DOJ.


BAXTER INTERNATIONAL: FDA Probes Product Defects' Link to New Deaths
--------------------------------------------------------------------
Five more deaths, linked to Baxter products, have prompted the US Food
and Drug Administration to issue a warning and conduct a probe, says
the Chicago Tribune.

"The FDA is alerting the public and the medical community to this
problem in an effort to prevent other deaths and injuries," FDA Deputy
Commissioner Dr. Lester Crawford said in a statement.  " Although
details are still sketchy, in the interest of patient safety, FDA wants
to make certain that dialysis patients and the wider medical community
are aware of these incidents."

The deaths occurred in late August at dialysis centers in Mishawaka,
Ind., and Grand Rapids, Mich., where Baxter's Meridian dialysis
machines and tubing sets made by Medisystems Corp. were used.  These
deaths come less than a month after Baxter settled with most of the
remaining families of patients who died last year after using certain
of the company's dialysis filters.

More than 50 patients in seven countries who used certain of the
company's filters have died, the report says.  Following these deaths,
Baxter stopped making the filters in question, closed plants in Florida
and Sweden that made the products and held the company's top executives
accountable by cutting their pay.

In earlier cases, the Deerfield-based medical products giant admitted
that its products may have contributed to these deaths.  In these
latest deaths, however, the company only said that it was unclear
whether its products are to blame.  The Company however clarified the
Meridian machines had a good track record for safety.

"The Meridian machine has been used widely for several years without
any incidents reported," Baxter spokeswoman Debbie Spak told the
Chicago Tribune.  "The investigation is in its early stages, and it's
unclear at this point whether the deaths were due to the underlying
disease of the patients or the treatment of the patient."

Meanwhile, Mishawaka-based Nephrology Inc. said it doesn't know whether
the four deaths and illness of a fifth patient at its center are
related, or "whether the equipment or supplies used in the dialysis
treatment played a role."


CLAIMS DIRECT: Second Suit Filed, Seeking Compensation For Shareholders
-----------------------------------------------------------------------
Personal injury company Claims Direct became the subject of a second
potential class action, seeking redress for its shareholders and
franchisees, over misleading information given by the Company, The
Times of London reports.

Judica, a privately owned claims management company, said that it had
written to 7,000 shareholders and franchisees with the aim of pursuing
action against the Company, its insurers, and directors including Colin
Poole and Tony Sullman, the founders.

Judica is working with Betesh Fox & Co., a law firm based in
Manchester.  Richard Fields, the US lawyer who is managing director of
Judica, said that they were working on the basis that misleading
information was given in the Company's share prospectus in 2000.

Class Law, the London law firm, has been working on a case against the
Company for several months.  Stephen Alexander, a Class Law
partner, said, "Our action continues."


EV GLOBAL: Voluntarily Recalls 2T Lithium Batteries For Fire Hazard
-------------------------------------------------------------------
EV Global Motors Co. is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about 2,000
lithium batteries in Mini E-Bike electric bicycles.  The lithium ion
batteries in these bicycles can overheat and pose a fire hazard.  The
Company has received five reports of the batteries overheating, three
of which caught fire, though no injuries have been reported.
        
The recalled lithium ion batteries are used to power the Company's
folding Mini E-Bike.  The battery, which is located in the battery
compartment just in front of the seat, is supplied with most models of
the Mini E-Bike.  The words "mini e-bike" are printed on the side of
the bicycle near the steering column.  These bicycles are manufactured
in Taiwan and the battery packs are assembled in the United States.
        
Bicycle, automobile and Internet retailers nationwide sold the electric
bikes from February 2001 through July 2002 for between $1,400 and
$1,700.
        
For more details, contact the Company by Phone: 888-875-4545 between
8:30 am and 5 pm PT Monday through Friday, or visit the firm's Website:
http://www.EVGlobal.com.


HEALTHCARE RECOVERIES: TX Court Delays Summary Judgment For Discovery
---------------------------------------------------------------------
The District Court for the 15th Judicial District, Bexar County, Texas
granted the plaintiffs' motion asking for a delay in the consideration
of summary judgment in the class action against Healthcare Recoveries,
Inc. and Prudential Health Care Plan, Inc to allow the plaintiffs to
complete additional discovery.

The suit commenced in October. Joseph R. Cajas filed suit on behalf of
himself and all others similarly situated.  The plaintiff asserts that
the Company's subrogation recovery efforts on behalf of its client
Prudential Health Care Plan, Inc. violated a number of common law
duties, as well as the Texas Insurance Code and the Texas Business and
Commerce Code.

The suit alleges that the Company, as the subrogation agent for
Prudential, made fraudulent misrepresentations in the course of
unlawfully pursuing subrogation and reimbursement claims that
plaintiffs assert are unenforceable because:

     (1) prepaid medical service plans may not exercise rights of
         subrogation and reimbursement;

     (2) the subrogation and reimbursement claims asserted by the
         Company are not supported by contract documents that provide
         enforceable recovery rights and/or do not adequately describe
         the recovery rights; and

     (3) the sums recovered pursuant to such claims unlawfully exceed
         the amount Prudential paid for medical goods and services.

The Company has denied all allegations.  The court has not yet
addressed the question of whether to certify the putative class.  After
the defendants filed a motion for summary judgment during January 2002,
the plaintiff moved the court to delay consideration of the motion
until plaintiff could complete additional discovery.  The plaintiff's
motion to delay consideration was granted and discovery is in progress.


HEALTHCARE RECOVERIES: Plaintiffs Appeal Dismissal of Consumer Suit
-------------------------------------------------------------------
Plaintiffs in the consumer class action against Healthcare Recoveries,
Inc. appealed a lower court's decision dismissing the suit without
prejudice in the United States Fifth Circuit Court of Appeals.

The suit was initially commenced in March 2001 against the Company in
the United States District Court for the Eastern District of Louisiana.  
The suit alleges that that the Company's subrogation recovery efforts
on behalf of its clients violate certain Louisiana state laws, the
federal Fair Debt Collection Practices Act and the Louisiana Unfair
Trade Practices Act.

The suit further alleges that the Company intentionally and negligently
interfered with the plaintiff's and the putative class members' rights
to settle certain personal injury claims, and that the Company
unlawfully pursued subrogation and reimbursement claims that plaintiff
asserts are unenforceable because the clauses in the Company's clients'
coverage documents that create such recovery rights are rendered null
and void by Louisiana statutes that generally prohibit coordination of
benefits with individually underwritten insurance coverages.

Plaintiff purports to represent a class consisting of all persons
covered under group health policies that were issued or delivered in
the State of Louisiana and who received any communication from the
Company attempting to enforce any clauses that allegedly were rendered
null and void by Louisiana law.

In July 2001, the court granted a motion for summary judgment filed by
the Company as concerned the plaintiff's Fair Debt Collection Practices
Act claim, dismissing those claims with prejudice.  The court denied
the Company's motion for summary judgment, without prejudice to the
right of the Company to reassert its motion, with respect to the
plaintiff's state law claims.  The court also ordered that the parties
submit memoranda addressing whether the court still had subject matter
jurisdiction, given dismissal of the federal claim.

On August 21, 2001, the court ruled that it lacked subject matter
jurisdiction, thus dismissing the remaining claims, without prejudice.  
Plaintiff then appealed the decision.  The parties completed appellate
briefing in January 2002 and oral arguments were heard on May 9, 2002.


HEALTHCARE RECOVERIES: FL Court Refuses To Certify Consumer Fraud Suit
----------------------------------------------------------------------
The United States District Court for the Southern District of Florida
refused to grant class certification to a lawsuit filed against
Healthcare Recoveries, Inc.

The suit, commenced in October 1999, asserts that the Company's
subrogation recovery efforts on behalf of its clients violate a number
of state and federal laws, including the Fair Debt Collection Practices
Act and the Florida Consumer Collection Practices Act.

The suit seeks a declaratory judgment that the Company, as the
subrogation agent for various healthcare payors, is not entitled to
assert and recover upon subrogation or reimbursement liens it asserts
on settlements obtained from third party tortfeasors when the
settlement is in an amount less than the amount required to fully
compensate the injured party for all elements of damage caused by the
tortfeasor.

Plaintiffs purport to represent a class consisting of all participants
or beneficiaries of ERISA plans nationwide whose net recovery of
damages through judgments, settlements or otherwise against liable
third parties has been reduced or potentially reduced by the Company's
alleged assertion and/or recovery of unlawful subrogation/reimbursement
rights of its clients.

Each count of the suit seeks compensatory and/or statutory damages as
well as exemplary and punitive damages.  Plaintiffs also seek
injunctive relief, prejudgment interest, costs and attorneys' fees.

In November 1999, the Company filed a motion to dismiss the suit.  On
June 29, 2001, the court issued a decision dismissing plaintiffs'
common law claims for fraud and unjust enrichment as well as
plaintiffs' claims under the federal Fair Debt Collection Practices Act
and the Florida Consumer Collection Practices Act.  

The court did not, however, dismiss the remaining count of the suit,
which seeks a declaratory judgment and damages under ERISA based on the
Company's alleged violation of the "make whole" rule.  The Company has
now filed an answer with respect to Count I of the suit.

Plaintiffs' motion to certify a nationwide class, which the Company
opposed, was submitted to the court in September 2000.  In an order
entered January 8, 2002, the court referred the class certification
motion to the Chief Magistrate Judge for a report and recommendation.

In a report dated March 20, 2002, the Chief Magistrate Judge
recommended denial of the motion to certify a class.  Plaintiffs filed
timely objections in the court to the report and the Company filed a
response.  On June 5, 2002, the court entered an order adopting the
Chief Magistrate Judge's report and recommendation in its entirety and
denying class certification.  Plaintiffs' time to seek leave to file an
interlocutory appeal from that ruling has expired.


HEALTHCARE RECOVERIES: Court Refuses To Amend Ruling Dismissing Claims
----------------------------------------------------------------------
The United States District Court for the Western District of Texas, San
Antonio Division refused plaintiffs' motion to amend or alter its
ruling, dismissing all of the plaintiffs claims with the exception of
one in the class action against Healthcare Recoveries, Inc.

The suit was commenced in December 1999 against the Company and
Prudential Health Care, Inc., one of the Company's clients, asserting
claims on behalf of members of Employee Retirement Income Security Act
(ERISA) governed health plans.  The suit alleges that the Company's
subrogation recovery efforts on behalf of Prudential violated a number
of common law duties, as well as the terms of:

     (1) certain ERISA plan documents,

     (2) the Racketeer Influenced and Corrupt Organizations Act (RICO),

     (3) the federal Fair Debt Collection Practices Act,

     (4) the Texas Insurance Code and

     (5) the Texas Business and Commerce Code

The suit alleges that the Company, as the subrogation agent for
Prudential, made fraudulent misrepresentations in the course of
unlawfully pursuing subrogation and reimbursement claims that
plaintiffs assert are unenforceable because:

     (i) prepaid medical service plans may not exercise rights of
         subrogation and reimbursement;

    (ii) the subrogation and reimbursement claims asserted by the
         Company are not supported by contract documents that provide
         enforceable recovery rights and/or do not adequately describe
         the recovery rights; and

   (iii) the sums recovered pursuant to such claims unlawfully exceed
         the amount Prudential paid for medical goods and services.

The suit further alleged that the Company unlawfully pursued
subrogation and reimbursement claims by:

     (a) failing to pay pro rata attorney's fees to attorneys who
         represented purported class members with respect to tort
         claims underlying the subrogation and reimbursement claims;
         and

     (b) recovering subrogation and reimbursement claims from purported
         class members who have not been fully compensated for their
         injuries.

Plaintiffs, on behalf of the purported class, demanded compensatory
damages, punitive damages, and treble damages under RICO, costs and
reasonable attorneys' fees.

In January 2000, the defendants filed a motion to dismiss the suit.  In
response to the defendants' motion, on February 28, 2001, the court
rendered its opinion and entered an order dismissing all of the
plaintiff's claims with the exception of the plaintiff's claim for
attorney fees, which remains pending before the court for disposition.

In March 2001, the Company filed an answer to the suit denying all of
the plaintiff's allegations.  The plaintiffs also filed a motion to
alter or amend the court's ruling on the motion to dismiss.  On July
15, 2002, the court denied plaintiff's motion to alter or amend the
court's ruling on the motion to dismiss.  The court has not addressed
the issue of class certification.


INDIAN FUNDS: Secretary Norton Found in Contempt Over Trust Fund Suit
---------------------------------------------------------------------
United States District Judge Royce Lamberth found United States
Interior Secretary Gale Norton and Assistant Secretary of Interior for
Indian Affairs, Neal McCaleb, in contempt of court in his angry 267-
page opinion relating to the 1996 class action filed by American
Indians over the mismanagement of their trust funds, Reuters reported.

Judge Lamberth wrote that Secretary Norton failed to comply with his
orders to fix oversight problems with the funds.  He wrote, "In
February of 1999, at the end of the first contempt trial in this
matter, I stated that `I have never seen more egregious misconduct by
the federal government'. Now at the conclusion of the second contempt
trial in this action, I stand corrected. The Department of Interior has
truly outdone itself this time."

Earlier, Judge Lamberth had held then-Interior Secretary Bruce Babbitt
and then-Treasury Secretary Robert Rubin in contempt for failing to
comply with orders regarding the trust funds.  

The six-year-old class action charged the Interior Department with
mismanaging trust accounts set up in the late 19th century to handle
proceeds from oil, gas and minerals extracted from Indian lands.  

Judge Lamberth said Norton and McCaleb led the court to believe they
were taking steps to comply with his orders to implement a thorough
accounting of the trust funds.  Instead, he found that the department
did "virtually nothing" and said the department has "indisputably
proven" that it is either unwilling or unable to competently administer
the Individual Indian Money trust, Reuters reports.

Judge Lamberth also issued special orders naming Joseph Kieffer as the
new special master-monitor to monitor the status of trust reform as
ordered by the court.  Mr. Kieffer was charged with keeping the court
informed about the status of reform, according to Reuters.  

Judge Lamberth also ordered the Interior Department to pay the
attorneys' fees incurred in the contempt trials by the group of Indians
who sued the department in 1996, and ordered the defendants to file a
plan for conducting an accounting of the trust funds.

The Interior Department said in a statement that it was disagreeing
with the court's decision and saying the government was considering an
appeal.  It said the agency had inherited some of the problems with the
trust funds from the previous administration, but said it would
continue to work to improve the trust management system.


LEGATO SYSTEMS: CA Court Grants Final Securities Settlement Approval
--------------------------------------------------------------------
The United States District Court for the Northern District of
California granted final approval to a settlement proposed by Legato
Systems, Inc. to settle a class action pending against it.  The Company
has already settled related shareholder derivative suits pending in the
San Mateo County Superior Court.

Both the securities class action and the derivative action arose from
events that caused the Company to restate its results for the first
three quarters of 1999.  

The federal suit generally alleged that, between April 22, 1999 and May
17, 2000, the defendants made false or misleading statements of
material fact about the Company's prospects and failed to follow
generally accepted accounting principles in violation of the federal
securities laws, according to an earlier Class Action Reporter story.

Additionally, the derivative suit charges that the defendants breached
their fiduciary duties by issuing false and misleading statements about
the Company's business prospects and engaged in improper insider
trading.

The settlements in the federal and state litigation called for the
Company to pay a total of $87.7 million, which included attorneys'
fees, in May 2002.  The settlements do not constitute any admission of
wrongdoing on the part of the Company or the individual defendants.

On May 3, 2002, the state court approved the settlement in the
derivative litigation.  On May 6, 2002, the federal court granted
preliminary approval to the class action.  On July 31, 2002, the court
finally approved the settlement.


MCDONALD'S CORPORATION: Recalls Bobble-head Toys For Poisoning Hazard
----------------------------------------------------------------------
McDonald's Corporation is cooperating with the United States Consumer
Product Safety Commission (CPSC) by voluntarily recalling about
100,000 bobble-head figurines.  The paint on some of the figurines
contains excess levels of lead.  If ingested over time by children, the
lead from the paint may present a lead poisoning hazard.
        
The Company has not received any reports of injuries or incidents
involving these figurines.  This recall is being conducted to prevent
the possibility of injury.
        
The recalled bobble-head figurines are designed in the likeness of
NFL players, Brian Urlacher and Anthony Thomas.  The 7-inch tall
figurines have heads on springs that cause them to bobble from side to
side.  The figurines are dressed in Chicago Bears' uniforms.  The
McDonald's logo and the player's name are printed across the front of
the base.  Labels on the bottom of the figurine read, "BOBBLE DREAMS
USA" and "MADE IN CHINA," and "OFFICIAL NFL LICENSED PRODUCT."
        
McDonald's restaurants sold the figurines in the greater Chicago
area, Northwest Indiana, Central Illinois and Rockford as part of a
promotion that ran from August 19, 2002 through September 12, 2002 for
about $5.00.
        
For more information, contact McDonald's by Phone: 800-244-6227 to
receive return and refund instructions.


NEW HAMPSHIRE: Prisoners' Families' Suit V. Phone Companies Dismissed
---------------------------------------------------------------------
The state Supreme Court has dismissed claims of monopoly and consumer
fraud against the telephone companies that handle state prisoners'
long-distance phone calls, ruling the state claims are precluded by
federal law, the Associated Press Newswires reports.

The class action, Michael Guglielmo Sr. v. WorldCom Inc., ILD
Teleservices Inc. and ILD Telecommunications Inc., was brought on
behalf of friends and family members of state prisoners who receive and
pay for the prisoners' collect calls.

The named telephone companies have exclusive contracts with the state
to provide long-distance, collect telephone services for inmates, but
their rates are much higher than those charged to ordinary customers.

Prisoners must use the contracted services, and their family members
have no choice about paying the companies' rates, because prisoners are
not allowed to use calling cards or collect calling services such as
1-800-COLLECT.

Telephone company and state corrections officials say the high rates
and exclusive contracts are justified because the telephone companies
must deal with special security considerations when handling prisoner
calls.

Nonetheless, several families decided to sue in February 2000, arguing
that the phone companies charged rates higher than specified in a 1997
agreement with the state, and that they failed to warn inmates and
their families about higher rates, delaying their bills for several
months.  A Rockingham County Superior Court judge dismissed those
claims.

The families also claimed the companies were violating the state's
anti-monopoly and consumer protection laws through their exclusive
contracts, and they sought money damages. The lower court judge refused
to dismiss those claims, but referred the question about juridisction
to the state Supreme Court.

In a 4-0 decision on Monday, the high court said that under the federal
filed rate doctrine, telephone companies can and must charge the rates
they have filed with the Federal Communications Commission.

Customers cannot use state laws or regulations to change those rates,
even if they seem unreasonable or excessive, because federal law
ensures that the rates are applied equally to all members of the same
class, the court said.

Even if the companies misrepresent their rates, they cannot be sued for
money damages, because customers are responsible for knowing the
published tariffs, Associate Justice Linda Dalianis wrote for the
court.  The filed rate doctrine "is undeniably strict and it obviously
may work hardship in some cases, but it embodies the policy which has
been adopted by Congress," the court said.


RESOURCE AMERICA: Agrees To Settle Securities Fraud Suit in E.D. PA
-------------------------------------------------------------------
Resource America, Inc. agreed to settle a securities class action
pending in the United States District Court for the Eastern District of
Pennsylvania against it, certain of its officers and directors
and our independent auditor, Grant Thornton LLP.

The suit, filed on behalf of purchasers of the Company's common stock
between December 17, 1997 and February 22, 1999, seeks damages in an
unspecified amount for losses allegedly incurred as the result of
misstatements and omissions allegedly contained in the Company's
periodic reports and a registration statement filed with the SEC.

The Company has agreed in principle to settle this matter for a maximum
of $7.0 million, of which $5.0 million will be paid by two of its
directors' and officers' liability insurers.  The Plaintiffs have
agreed in principle to reduce the settlement amount by 50% of the
amount by which the $2.0 million exceeds the net recovery from the
insurer.


ROCK HILL: Faces Second Shareholder Suit After Firing of Head Exec
------------------------------------------------------------------
Rock Hill Bank & Trust faces another shareholder class action, just a
week after a Lesslie, South Carolina resident filed a similar suit, the
Herald Tribune reports.

Six shareholders who own a combined 35,428 shares filed their suit in
York County Court in South Carolina on behalf of any shareholder who
will lose more than $100 following the firing of bank President Rob
Herron on July 3.  Mr. Herron and two other men have been charged by a
federal grand jury with 12 counts of bank fraud on loans totaling $1.02
million.

The bank attributed first-quarter losses of $13.3 million to Mr.
Herron, the Herald Tribune states.  RHB&T stock was delisted from the
Nasdaq National Market System earlier this month.  The suit names as
defendants, RHB&T, eight board members and RHB&T's accounting firm,
Tourville Simpson & Caskey of Columbia.


SAFEGUARD SCIENTIFICS: Asks PA Court To Dismiss Securities Fraud Suit
---------------------------------------------------------------------
Plaintiffs in the consolidated securities class action pending against
Safeguard Scientifics, Inc. asked the United States District Court in
Philadelphia to dismiss the suit.  The suit also names as defendants
Warren V. Musser, the Company's former Chairman.

The consolidated suit alleges that defendants failed to disclose that
Mr. Musser had pledged some or all of his Company stock as collateral
to secure margin trading in his personal brokerage accounts.  The suit
further alleges that defendants' failure to disclose the pledge, along
with their failure to disclose several margin calls, the loan to Mr.
Musser, the guarantee of certain margin debt and the consequences
thereof on the Company's stock price, violated the federal securities
laws.  Plaintiffs allege claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934.

The suit further alleges that the defendants failed to disclose
possible or actual manipulative aftermarket trading in the securities
of the Company's partner companies, the impact of competition on
prospects for one or more of the Company's partner companies and the
Company's lack of a superior business plan.

On May 23, 2002, the defendants filed a motion to dismiss the suit for
failure to state claim upon which relief may be granted.  While the
outcome of this litigation is uncertain, the Company believes that it
has valid defenses to plaintiffs' claims and intends to defend the
lawsuit vigorously.


SMITHFIELD FOODS: Unit Recalls Meat Suspected of E.coli Contamination
---------------------------------------------------------------------
Moyer Packing Co., a meat plant of Smithfield Foods Inc., recalled
early this week some 203,600 pounds of fresh ground beef products for
fear that they may be contaminated with E. coli bacteria.

According to Reuters, the products, which bear an August 31 stamp and
the establishment code "EST. 1311" inside the USDA seal of inspection,
were distributed to 11 U.S. states, mostly in the Northeast.

The report says the products were initially distributed to a
manufacturer in Pennsylvania and retail distributors in Connecticut,
Florida, Georgia, Maryland, Massachusetts, New Jersey, New York,
Pennsylvania, Rhode Island, Virginia, West Virginia and the District of
Columbia.

Company spokesman David Bartlett told the news agency there have been
no reports of illnesses associated with the recalled products.  
Smithfield, the nation's largest pork producer, acquired Moyer Packing
last year.

"If you did buy your beef from one of these states, it probably doesn't
affect you, but you should check with your retailer," Mr. Bartlett
said.

E. coli O157:H7, typically contracted through contaminated food or
water, causes bloody diarrhea, vomiting and cramps, the report says.  
In severe cases, usually involving the elderly and young children, it
can lead to kidney failure and death.

In July, ConAgra Foods Inc. recalled nearly 19 million pounds of ground
beef products because of E. coli concerns.  Thirty-four people in 10
states became ill after consuming tainted ConAgra meat.  The recall was
the second largest in US history, the report said.


SONICBLUE INC.: Settles Securities Fraud Suits in Federal, State Courts
-----------------------------------------------------------------------
Sonicblue, Inc. settles several securities class actions pending in a
number of federal and state courts seeking unspecified damages on
behalf of purchasers of the Company's common stock at various times
between April 18,1996 and November 3,1997.

The suits were commenced in November 1997 against the Company, certain
of its officers and former officers, certain of its directors, and
Deloitte & Touche, the company's former auditors.  The suits asserted
that they violated federal and state securities laws by misrepresenting
and failing to disclose certain information about the Company's
business.

In addition, certain stockholders filed derivative actions in the state
courts of California and Delaware seeking recovery on behalf of the
Company, alleging, among other things, breach of fiduciary duties by
such individual defendants.  The plaintiffs in the derivative action in
Delaware took no steps to pursue their case.  The derivative cases in
California State court were consolidated, and plaintiffs filed a
consolidated amended suit.

The court entered a stipulated order in those derivative cases
suspending court proceedings and coordinating discovery in them with
discovery in the class actions in California State courts.

In late 2001, the derivative plaintiffs gave notice terminating that
stay, and the parties stipulated that a second amended consolidated
complaint might be filed in April 2002.  On plaintiffs' motion, the
federal court dismissed the federal class actions without prejudice.  
The class actions in California State court were consolidated, and
plaintiffs filed a consolidated amended complaint.  The Company
answered that complaint and discovery proceeded.

In January 2001, four of the insurance carriers which issued directors
and officers insurance to the Company filed suit against all parties
named as defendants in the securities litigation, claiming that the
carriers have no obligation to provide coverage under the California
Insurance Code.  In May 2001, the court entered an order staying the
insurance action pending resolution of the securities litigation.

In February 2002, the California Superior Court for Santa Clara County
entered its preliminary approval of an agreement to settle the
consolidated state court class action.  Under the terms of the class
action settlement, the Company will contribute 2,401,501 shares of
stock and Deloitte & Touche will contribute up to $250,000 in full
settlement of all claims.  In April 2002, the Superior Court granted
final approval to that settlement, dismissing the case.

In May 2002, the Superior Court also approved the settlement of the
related California derivative litigation.  The derivative settlement
calls for the defendants to contribute to the settlement their
respective benefits under certain directors and officers insurance
policies in an amount of approximately $4.6 million which, net of
attorneys' fees and litigation costs, would be paid to the Company,
which payments have been made.  The total net cost of these settlements
to the Company, net of insurance, is expected to approximate $8.6
million.

The judgments in the class action and the derivative litigation are
both final, and the insurance litigation has been dismissed.


SONICBLUE INC.: Agrees To Settle Securities Fraud Suits in CA Courts
--------------------------------------------------------------------
Sonicblue, Inc. agreed to settle several securities class actions
pending against it and its subsidiary Diamond Multimedia Systems, Inc.
in the California Superior Court for Santa Clara County and the United
States District Court for the Northern District of California.

The plaintiffs alleged that Diamond and the other defendants made
various material misrepresentations and omissions during the class
period.

The parties have agreed to settle this matter for a payment of US$15.0
million, and final court approval of that settlement was obtained, and
the cases dismissed, in April 2002.  The Company funded $4.5 million of
the settlement in November 2000.

The arbitration tribunal issued an order in April 2002, stating that
the California state law claim in the class action was uninsurable, but
that factual questions were presented as to the allocation of the
settlement amount as between the state law claim and other claims
included in the settlement documents.  Further proceedings are
contemplated before the tribunal, but no schedule has as yet been set.


SONICBLUE INC.: Faces Consumer Fraud Suit Over MP3 Player in IN Court
---------------------------------------------------------------------
Sonicblue, Inc. faces a class action pending in the Circuit Court of
Monroe County, State of Indiana, alleging violations of the California
Business and Professions Code section 17200 and the California Song-
Beverly Act, which covers consumer warranties.

The lawsuit, which also names Company subsidiary Diamond Multimedia
Systems, Inc. as defendant, alleges that certain of the Company's Rio
300 MP3 player retail boxes, which were discontinued in approximately
1999, are misleading because the boxes indicate that computer software
included in the package allows the purchaser to convert audio tracks on
CDs to the MP3 audio format, but the software included with the product
permitted only 50 conversions.  The Company has denied the plaintiff's
allegations.

Discovery has commenced in the suit. No class has been certified, but
the briefing on the plaintiff's motion for class certification is
expected to be completed by Fall 2002, with a hearing on class
certification issues to be scheduled thereafter.  

The Company intends to contest the certification of the purported
class, dispute the lawsuit's allegations and defend this action
vigorously.


TREMONT CORPORATION: Faces Suits Opposing Valhi Merger in DE Court
------------------------------------------------------------------
Tremont Corporation faces three class actions commenced in late July
2002 in the Court of Chancery of the State of Delaware, New Castle
County, against the Company, Valhi, Inc. and members of the Company's
board of directors.

The suits generally allege, among other things, that the terms of the
proposed merger of Valhi and the Company are unfair, and that
defendants have violated their fiduciary duties.  The complaints seek,
among other things, an order enjoining consummation of the proposed
merger and the award of unspecified damages, including attorney's fees
and other costs.  

The Company believes that the complaints are without merit and intends
to defend against the actions vigorously.


UTAH: Audit Committee Reports Changes Child Welfare Workers Should Make
-----------------------------------------------------------------------
Utah's Division of Child and Family Services (DCFS) has been under
court-ordered supervision for more than eight years as a result of a
class action filed in 1993, and is under pressure to produce
improvements in the care of the state's needy children.  

To this end, the Legislature, through its Audit Subcommittee, sent
auditors out into the field with the caseworkers, and the report of the
auditors, recently released, takes an optimistic view of improvements
that the agency can make, the Associated Press Newswires reports.

First, the members of the Legislature's Audit Subcommittee heard the
audit's conclusions and then heard a response from agency director
Richard Anderson.  The probe of the agency was meant to determine how
resources are allocated within the agency's five geographical regions.  
The DCFS can take steps to reduce its workload for caseworkers and
improve certain inconsistent practices, the Legislative audit
concluded.

The recommendations included reducing the amount of paperwork for
caseworkers and eliminating the second monthly visit in out-of-home
care visits.  The audit found caseworkers spend about 68 percent of
their time on assigned caseloads and the rest on administrative duties
and training.

The audit noted that during an eight-year period, state funding of DCFS
has increased 243 percent, helping to reduce caseloads.  Despite that,
the workload of about 12 to 15 cases per employee continues to be so
demanding that caseworkers are unable to complete all the necessary
tasks.

The audit also said the required administrative oversight leads many
caseworkers to perform case management on their own time, since
overtime is generally not allowed.

While the audit acknowledged more money to hire more caseworkers would
be one way to address the problem, the recent budget crunch makes that
option impractical.  Another option, said the auditors' report, is to
pursue different strategies to reduce the workload.  "DCFS needs to
determine which tasks and activities are essential for good casework
and eliminate those tasks and activities which are not essential," the
report concluded.

In his response, included in the report, agency director Richard
Anderson said the agency, overall, agreed with the audit's
recommendation.  Mr. Anderson agreed that the administrative
requirements of a caseworker's job impose continuing challenges.  "We
want to make sure that we can take care of our responsibility to the
families without the accountability overwhelming that," said Mr.
Anderson.  Mr. Anderson said he was pleased auditors went out into the
field and spent time with the workers.

The positive tenor of the report, both the auditors' observations and
recommendations, as well as Mr. Anderson's equally positive response,
bodes well for a the drafting of an effective program of improvement
that can be agreed to and implemented.


VISX INC.: Appeals Court Upholds Dismissal of Securities Fraud Suit
-------------------------------------------------------------------
The United States Court of Appeals for the Ninth Circuit upheld in
August 2002, a lower court's dismissal of a securities class action
filed against Visx, Inc. and certain of its officers and directors.

The suit was filed on behalf of all persons who purchased the Company's
common stock between March 1, 1999 and February 22, 2000. The complaint
alleged that the defendants made misleading statements in violation of
the federal securities laws, including Section 10(b) of the Securities
Exchange Act of 1934.  


WESTERN WASHINGTON: Court Upholds Ruling For Mold Suit Plaintiffs
-----------------------------------------------------------------
The Washington Court of Appeals upheld a Grays Harbor County Superior
Court Order holding Western Washington Behr in default for their
willful and deliberate failure to disclose outdoor exposure test
results showing their product failed to resist mildew within three to
six months.  A jury verdict and award of punitive damages followed.

The Court of Appeals ruling affirmed the state court's default judgment
and further ruled that Judge David Foscue did not commit an error in
certifying the class of Behr consumers in western Washington.  

In May of 2000, a Grays Harbor County jury awarded damages to all class
members who could prove their wood surfaces contained mildew.  The
damages awarded class representatives ranged from $13,000 to $75,000
depending on the size of the wood surfaces.  Plaintiffs claimed the
Behr products failed to resist mildew growth as advertised and
contained linseed oil, a food source for mildew.

In addition, the court remanded the case to allow Judge Foscue to award
punitive damages under the Consumer Protection Act in favor of all
class members, not merely the nine families who brought the class
action in the first place.  Judge Foscue had awarded $10,000 punitive
damages to each class representative.

The ruling has implications for a nationwide class action against the
Behr Process Corporation and its corporate parent, Masco, also
certified in Grays Harbor Superior Court.  Appeals from the nationwide
class certification order of the Hon. Gordon Godfrey are now before the
state Court of Appeals.

For more information, contact Paul Stritmatter and Mike Withey of
Stritmatter Kessler Whelan Withey Coluccio by Mail: 200 Second Avenue
West, Seattle, WA 98119 or by Phone: 206-448-1777 or 1-888-879-8383


WESTPOINT STEVENS: Asks Court To Dismiss Consolidated Securities Suit
---------------------------------------------------------------------
Westpoint Stevens, Inc. asked the United States District Court for the
Northern District of Georgia to dismiss a consolidated securities class
action pending against the Company and certain of its officers and
directors.

The consolidated suit alleges that, during the putative class period
(i.e., February 10, 1999 to October 10, 2000), the Company and certain
of its officers and directors caused false and misleading statements to
be issued regarding, inter alia, alleged overcapacity and excessive
inventories of the Company's towel-related products and customer demand
for such products.

The suit refers to the Company's press releases and quarterly and
annual reports on Securities Exchange Commission Forms 10-Q and 10-K,
which discuss the Company's results and forecasts for the Fiscal years
1999 and 2000.

Plaintiffs allege that these press releases and public filings were
false and misleading because they failed to disclose that the Company
allegedly "knew sales would be adversely affected in future quarters
and years."  Plaintiffs also allege in general terms that the Company
materially overstated revenues by making premature shipments of
products.

The suit asserts claims against all defendants under Section 10(b) of
the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and
against the Company and its chief executive officer as "controlling
persons" under Section 20(a) of the Exchange Act.

The Company and individual defendants moved for dismissal of the suit
on June 4, 2002.  The Company believes that the allegations are without
merit and intends to contest the action vigorously, on behalf of itself
and its officers and directors.

On March 11, 2002, a shareholder derivative action, was filed against
certain of the Company's directors and officers in the Superior Court
of Fulton County, Georgia.  The suit alleges that the named individuals
breached their fiduciary duties by acting in bad faith and wasting
corporate assets. The suit also asserts claims under Georgia Code Ann.
"14-2-740 to 14-2-747, and 14-2-831."  The claims are based on the same
or similar facts as are alleged in the federal suit.  By agreement of
the parties the answers to the suit will not be due until the
defendants' Motion to Dismiss, filed in the federal suit is resolved.

On July 1, 2002, another shareholder derivative action was filed
against certain of the Company's other directors in the Court of
Chancery in the State of Delaware in and for New Castle County.  The
suit alleges that the named individuals breached their fiduciary duties
and knowingly or recklessly failed to exercise oversight
responsibilities to ensure the integrity of the Company's financial
reporting.

The suit also asserts that certain of the named individuals used
proprietary Company information in selling or pledging Company stock at
inflated prices for their benefit.  The claims are based on the same or
similar facts as are alleged in the federal suit.  By agreement of the
parties the answers to the suit will not be due until the defendants'
Motion to Dismiss, filed in the federal suit is resolved.


*Threat of Lawsuits Affects Manufacture of Children's Vaccine Supplies
----------------------------------------------------------------------
The threat of lawsuits and huge liabilities has prompted some companies
to consider withdrawing from the manufacture of children's vaccines,
and one already has withdrawn.  A shortage already is in place and
states have begun rationing vaccines for children, including those for
measles, rubella and chicken pox, according to a report by The New York
Times.

In order to prevent this kind of crisis, Congress, in 1986, created a
no-fault system to compensate people injured by childhood vaccines.  
For more than a decade, that system, under which the government reviews
and pays claims for injuries, helped ensure that the manufacturers
would not find the provision of vaccines burdensome, thereby assuming
that the vaccines would be available.

However, Wayne F. Pisano, executive vice president of Aventis Pasteur
North America, one of four companies that produce almost all the
routine childhood vaccines for the United States market, said the
industry again faced "a surge in lawsuits with potentially devastating
financial exposure."

More than 100 class actions have been filed by parents who contend that
their children suffered nerve damage from Thimerosal, Mr. Pisano said.  
Thimerosal, which contains mercury, was used as a preservative in some
vaccines for more than 60 years.

The General Accounting Office (GAO), the investigative arm of Congress,
has examined the problem at the request of six senators and two
representatives.  In the last year, the accounting office said,
children were endangered by shortages of five vaccines that protect
against eight diseases - diphtheria, tetanus, whooping cough, measles,
mumps, rubella, chicken pox and pneumococcal disease, which can cause
meningitis and pneumonia.

The GAO found that threat of lawsuits was one of the substantial
problems, but said many other factors contributed to the shortages of
the vaccines.  For example, some manufacturers experienced production
problems, some had difficult complying with federal standards.  Some
companies had problems reformulating some vaccines to remove a
preservative that might contain unsafe amounts of mercury.

The supply is easily disrupted said GAO, because "five of the eight
recommended childhood vaccines have only one manufacturer each."  
Manufacturers need a year or more to produce some vaccines, so the
industry cannot immediately increase output if the supply runs short.  
Production requires the use of viruses and bacteria, which do not
always grow or respond on demand.

The accounting office also pointed out that the federal government has
the authority and the money to stockpile childhood vaccines, but had
reserves for only two of the eight standard vaccines.  Federal health
officials do not have a strategy for creating such stockpiles and do
not know how much vaccine to set aside or where to store it, the report
said.

Senator Jack Reed, Democrat of Rhode Island, said. "It is clear from
this report (the GAO's) that we have a system that cannot guarantee a
stable supply of vaccines and is inadequate to handle a potential
outbreak of any of a number of routine childhood diseases."  Mr. Reed
is scheduled to preside over a hearing on the issue this week by the
Senate Committee on Health, Education, Labor and Pensions.

Deferring immunizations, because of the shortages, increases the risk
of outbreaks of disease and undermines the years of effort to alert
parents to the importance of vaccinating their children within the
times lines set by authorities within the health community.  The
imminence of this risk assumes reality as the sober reports from the
Centers for Disease Control and Prevention are saying that it could
take four or five years to build stockpiles of the recommended
vaccines.

"The system is a lot more fragile than we thought," said Dr. Timothy F.
Doran, chairman of the department of pediatrics at the Greater
Baltimore Medical Center, as he commented on the vaccine crisis.  "In
my 22 years of practicing pediatrics, I have never witnessed a vaccine
shortage such as we have seen over the last year."


                    New Securities Fraud Cases


AON CORPORATION: Wechsler Harwood Commences Securities Suit in N.D. IL
----------------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action in the United
States District Court for the Northern District of Illinois on August
12, 2002, on behalf of purchasers of the securities of Aon Corporation
(NYSE:AOC) between May 4, 1999 and August 6, 2002, inclusive.

The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between May 4, 1999 and August 6, 2002, thereby artificially
inflating the price of Company securities.

Throughout the class period, as alleged in the complaint, defendants
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's earnings and financial
performance.  

The complaint alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:

     (1) that the Company had materially overstated its net income by
         $27 million in 1999, $24 million in 2000, and $5 million in
         the first quarter of 2002;

     (2) that the Company lacked adequate internal controls and was
         therefore unable to ascertain the true financial condition of
         the Company; and

     (3) that as a result, the value of the Company's net income and
         financial results were materially overstated at all relevant
         times.

On August 7, 2002, before the market opened for trading, the Company
shocked the market when it announced, among other things, that:

     (i) it had failed to meet analysts' expectations on its earnings
         for the second quarter by a wide margin;

    (ii) because of the slumping financial markets, it had canceled a
         spinoff of its insurance underwriting businesses to
         shareholders; and

   (iii) the SEC had began an investigation of its accounting and was
         questioning several items in the Company's accounts, including
         the reporting of investment write-downs, the timing of some
         costs and a reinsurance recoverable item and the decision not
         to consolidate certain special purpose vehicles.

The Company also stated that, if the SEC says it is necessary, it will
have to restate its earnings for the past three years.  Following this
report, shares of Aon fell $6.43 per share to close at $14.77 per
share, a one-day decline of 30.3%, on volume of more than 20 million
shares traded, or more than twenty times the average daily volume.

For more details, contact Patricia Guiteau by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
pguiteau@whhf.com or visit the firm's Website: http://www.whhf.com  


BELLSOUTH CORPORATION: Wechsler Harwood Commences Securities Suit in AL
-----------------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action in the United
States District Court for the Northern District of Alabama, on behalf
of persons who purchased or otherwise acquired the securities of
HealthSouth Corp. (NYSE:HRC) during the period from January 14, 2002,
through August 26, 2002.

The suit names the Company as a defendant, along with:

     (1) Richard M. Scrushy, CEO and Chairman of the Board of
         Directors,

     (2) Weston L. Smith, CFO and

     (3) William T. Owens, President and COO

The complaint asserts securities fraud claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder.

The complaint alleges that the Company and its officers made materially
misleading statements and omitted to disclose material adverse
information about the Company's operations and prospects during the
class period.

In particular, in addition to other facts, the complaint alleges that
the Company misled the market concerning expectations for revenues and
earnings by failing to disclose the impact on its operations of certain
Medicaid reimbursement policies and, thereby, reimbursement rates to
the Company.

Due to facts known to the Company concerning the Medicaid reimbursement
policies and rates, the Company knew throughout the class period that
it was in no position to meet the revenue and earnings guidance it had
given to investors.  Thus, those claims were knowingly or recklessly
made without any reasonable basis.  Meanwhile, during the class period,
Company insiders, and in particular Mr. Scrushy, sold nearly $100
million worth of Company stock.

As a result of defendants' allegedly deceptive acts, the market price
of Company securities was allegedly artificially inflated during the
class period.

For more details, contact David Leifer by Mail: Wechsler Harwood LLP
Shareholder Relations Department, re:HealthSouth Corp., 488 Madison
Avenue, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
dleifer@whhf.com or visit the firm's Website: http://www.whhf.com


CUTTER & BUCK: Schiffrin & Barroway Commences Securities Suit in WA
-------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Western District of Washington on
behalf of all purchasers of the common stock of Cutter & Buck, Inc.
(Nasdaq: CBUKE) from June 23, 2000 through August 12, 2002, inclusive.

The complaint charges the Company and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition.  Specifically, the complaint alleges
that defendants caused Company shares to trade at artificially inflated
levels.

On August 12, 2002, the Company issued a press release entitled,
"Cutter & Buck Announces Discovery of Accounting Irregularities in
Fiscal Years 2000 and 2001; Reports Resignation of Chief Financial
Officer; Announces Preliminary First Quarter Fiscal Year 2003 Operating
Results."  On this news, the stock dropped to below $4 per share on
volume of more than 468,000 shares.

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
or visit the firm's Website: http://www.sbclasslaw.com


HEALTHSOUTH CORPORATION: Wechsler Harwood Lodges Securities Suit in AL
----------------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action in the United
States District Court for the Northern District of Alabama, on behalf
of persons who purchased or otherwise acquired the securities of
HealthSouth Corp. (NYSE:HRC) during the period from January 14, 2002,
through August 26, 2002.

The suit names the Company as a defendant, along with:

     (1) Richard M. Scrushy, CEO and Chairman of the Board of
         Directors,

     (2) Weston L. Smith, CFO and

     (3) William T. Owens, President and COO

The complaint asserts securities fraud claims under sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder.

The complaint alleges that the Company and its officers made materially
misleading statements and omitted to disclose material adverse
information about the Company's operations and prospects during the
class period.

In particular, in addition to other facts, the complaint alleges that
the Company misled the market concerning expectations for revenues and
earnings by failing to disclose the impact on its operations of certain
Medicaid reimbursement policies and, thereby, reimbursement rates to
the Company.

Due to facts known to the Company concerning the Medicaid reimbursement
policies and rates, the Company knew throughout the class period that
it was in no position to meet the revenue and earnings guidance it had
given to investors.  Thus, those claims were knowingly or recklessly
made without any reasonable basis.  

Meanwhile, during the class period, Company insiders, and in particular
Mr. Scrushy, sold nearly $100 million worth of Company stock.

As a result of defendants' allegedly deceptive acts, the market price
of Company securities was allegedly artificially inflated during the
class period.

For more details, contact David Leifer by Mail: Wechsler Harwood LLP
Shareholder Relations Department, re:HealthSouth Corp., 488 Madison
Avenue, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
dleifer@whhf.com or visit the firm's Website: http://www.whhf.com


HEALTHSOUTH CORPORATION: Carr Tabb Commences Securities Suit in N.D. AL
-----------------------------------------------------------------------
The law firm of Carr, Tabb, Pope & Freeman, LLP initiated a securities
class action against HealthSouth Corporation and several of the
Company's senior executives on behalf of all persons who purchased the
Company's common stock during the period between January 14, 2002 to
August 27, 2002, inclusive.  The suit is pending in the United States
District Court for the Northern District of Alabama.

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
the individual defendants to sell (collectively) millions of shares of
the Company's stock at artificially inflated prices.

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

For more details, contact Pitts Carr or Render C. Freeman by Phone:
888-755-1649 by E-mail: pcarr@ctpflaw.com or visit the firm's Website:
http://www.ctpflaw.com. Inquiries by e-mail should include mailing  
address and telephone number.


HPL TECHNOLOGIES: Wechsler Harwood Commences Securities Suit in CA
------------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action has been
commenced in the United States District Court for the Northern District
of California on behalf of purchasers of HPL Technologies, Inc.
(Nasdaq:HPLAE) securities between July 31, 2001 and July 18, 2002,
inclusive against the Company and certain of its officers.

The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, and Sections 11, 12(a)(2) and 15 of the Securities Act of
1933 by issuing a series of material misrepresentations to the market
during the class period, thereby artificially inflating the price of
HPL securities.

The suit further alleges that HPL and certain of its officers and
directors with issuing false and misleading statements concerning its
business and financial condition.  Specifically, on July 31, 2001, HPL
completed its initial public offering (IPO) of 6.9 million shares
(including the over allotment) at $11.00 per share, raising net
proceeds of $69.1 million.  

The IPO was accomplished pursuant to a Prospectus and Registration
Statement filed with the SEC.  These documents represented that the
Company recognized revenue on sales to distributors only when the
distributors sold the software license or services to their customers.  
Later, HPL reported favorable financial results for the 1stQ, 2ndQ,
3rdQ and 4thQ of F02.

The suit further alleges that as a result of HPL's favorable but false
financials and false and misleading statements, its stock traded as
high as $17.85 per share.  Defendants took advantage of this inflation,
selling 85,500 shares of their individual holdings.

Then, on July 19, 2002, before the markets opened, HPL shocked the
market with news that it was investigating accounting irregularities
with respect to revenue recognition on shipments to distributors in
prior quarters that its CEO had been fired and its CFO had been
reassigned.  On this news, HPL's stock collapsed 72% to as low as $4
per share, before trading was halted.

For more details, contact Craig Lowther by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
clowther@whhf.com or visit the firm's Website: http://www.whhf.com  


INTERPUBLIC GROUP: Wolf Haldenstein Launches Securities Suit in S.D. NY
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York, on behalf of purchasers of the common stock of Interpublic
Group of Companies (NYSE: IPG) between October 28, 1997 and August 13,
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 released various statements and
filed quarterly and annual reports with the SEC describing the
Company's rising net income and financial performance.  The suit
alleges that these statements were materially false and misleading
because unfavorable facts were omitted and/or misrepresented, such as
that certain charges should have been expensed, but were not, allowing
the Company's net income to be overstated.

It is further alleged that the Company was incapable of determining the
correct financial status of the Company, due to inadequate internal
controls, which resulted in the value of its net income and financial
results being materially overstated throughout the class period.

On August 5, 2002, the Company publicized the rescheduling of its
second quarter 2002 earnings release "to accommodate the Audit
Committee of its Board of Directors," leading the market to construe
that the Company's accounting was involved.  

The Company later announced, on August 13, 2002, that it had
"identified $68.5 million of charges, principally in Europe, which had
not been properly expensed," causing the Company to restate the
previously issued financial statements starting at 1997 and prior.

For more details, contact Fred Taylor Isquith, Gregory M. Nespole,
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 Interpublic.


MERRILL LYNCH: Schiffrin & Barroway Commences Securities Suit in 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 CMGI (Nasdaq: CMGI)
between March 23, 1999 and October 6, 2000, inclusive.

The complaint charges Merrill Lynch & Co., Inc. and its former star
Internet research analyst, First Vice President Henry M. Blodget with
knowingly issuing false and misleading analyst reports regarding CMGI
during the class period.

Based on e-mails and other internal Merrill Lynch communications, which
were made public as a result of the investigation conducted by the New
York State Attorney General, the suit alleges that defendants failed to
disclose a significant conflict of interest between their investment
banking and research departments.

Specifically, the suit alleges that Henry Blodget and other Merrill
Lynch analysts issued very favorable analyst reports regarding CMGI to
the public when they allegedly knew that the positive recommendations
were unwarranted and false.

The suit further alleges that, unbeknownst to the investing public,
Merrill Lynch's buy recommendations and price targets were driven by
its efforts to attract lucrative investment banking business rather
than by the companies' fundamental merits.

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
or visit the firm's Website: http://www.sbclasslaw.com


MORGAN STANLEY: Wechsler Harwood Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Wechsler Harwood LLP initiated a securities class action on behalf of
all persons who purchased any of all four classes of shares of Morgan
Stanley Dean Witter Technology Fund (Nasdaq:TEKAX) from the public
offering for the Fund on September 25, 2000 through July 31, 2002,
inclusive.

The suit alleges claims against Morgan Stanley Dean Witter & Co.
(MSDW), Morgan Stanley Dean Witter Technology Fund and others for
violations of Sections 11, 12 and 15 of the Securities Act of 1933 and
of Section 10(b) and Rule 10b-5 promulgated thereunder of the
Securities Exchange Act of 1934.  The Morgan Stanley Dean Witter
Technology Fund recently changed its name to the Morgan Stanley
Technology Fund.

The defendants were:

     (1) the underwriters for the common stock of certain of the
         companies in the Technology Fund's portfolio;

     (2) the investment bankers and corporate finance specialists for
         certain of the companies whose securities are in the Fund's
         portfolio;

     (3) seeking to obtain additional investment banking business from
         these present and former clients and from other companies
         whose shares also were/are in the Fund's portfolio;

     (4) the issuers of the shares in the Fund;

     (5) preparing and publicly disseminating research reports and
         recommendations on many of the companies whose shares were in
         the Fund's portfolio; and

     (6) the broker for certain members of the class

This action arises as a result of the issuance by the defendants of
shares in the Fund, and concerns material misstatements and omissions
by defendants in the Prospectus, relating to defendants' conflicts of
interest, which include but are not limited to the following:

     (i) defendants failed to disclose and omitted material information
         that MSDW had investment banking relationships with, including
         having brought public, certain of the companies whose
         securities were part of the Fund's portfolio.  Defendants
         disclosed neither this general fact nor the identities of the
         particular companies with which it had investment banking
         relationships;

    (ii) defendants failed to disclose and omitted material information
         concerning that MSDW was continuing to seek investment banking
         relationships with many of the companies whose securities were
         part of the Fund's portfolio; and

   (iii) defendants failed to disclose and omitted material information
         concerning that a material part of the total compensation paid
         to MSDW research analysts was based upon obtaining investment
         banking business for MSDW and not upon the accuracy of their
         research about a given company.

Hence, MSDW and its affiliated companies, including the Fund,
recommended investments in and/or invested in companies in order to
enhance MSDW's opportunity to obtain investment banking business from
those companies (without regard to whether they were good investments
for the investors including plaintiffs and the Class).

For more details, contact Ramon Pinon IV by Mail: 488 Madison Avenue,
8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail:
rpinoniv@whhf.com or visit the firm's Website: http://www.whhf.com


UNDERWRITERS LITIGATION: Schiffrin & Barroway Files NY Securities Suit
----------------------------------------------------------------------
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 Inktomi Corporation
(Nasdaq: INKT) common stock between June 10, 1998 and April 3, 2001,
inclusive.

The complaint charges Merrill Lynch & Co., Inc., Morgan Stanley Dean
Witter & Co., Inc., Henry Blodget and Mary Meeker with issuing
misleading analyst reports about Inktomi.  Specifically, the complaint
alleges that defendants urged investors to purchase Inktomi stock when
defendants knew or should have known that such purchases were not a
good investment.

The complaint alleges that defendants:

     (1) issued "Buy" recommendations about Inktomi 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 interests 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 or visit the firm's Website:
http://www.sbclasslaw.com


WALT DISNEY: Schatz & Nobel Commences Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of all persons who purchased or otherwise acquired the securities of
Walt Disney Corporation (NYSE: DIS) from August 15, 1997 through May
15, 2002, inclusive.  Also included are all those who acquired Company
shares through its acquisition of Disney Internet Group (DIG) and
Infoseek Corporation (SEEK).

The suit alleges that the Company and certain of its officers and
directors failed to disclose the existence and potential effects of a
pending lawsuit concerning merchandising rights for Winnie the Pooh.  
If the plaintiffs are successful in the Pooh litigation, the Company
could be forced to pay hundreds of millions of dollars in potential
royalty payments or possibly terminate the Company's merchandising
agreement for Pooh products, representing a loss of several billion
dollars a year in revenue.

Throughout most of the class period, the Company's SEC filings avoided
all disclosure of the eleven year old litigation.  On May 15, 2002, the
Company disclosed the existence of the litigation and the amount of the
potential liability.  As this news was circulated, the price began a
decline of more than 25% and has continued to fall.

For more details, contact Nancy A. Kulesa by Phone: 800-797-5499 or by
E-mail: sn06106@aol.com or visit the firm's Website:
http://www.snlaw.net


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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
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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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