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/raid1/www/Hosts/bankrupt/CAR_Public/021022.mbx C L A S S A C T I O N R E P O R T E R Tuesday, October 22, 2002, Vol. 4, No. 209 Headlines ABC MORTGAGE: Businessman Files Suit Over Unsolicited Advertisements AUSTRALIA: Fishing Lobby Group's Appeal Over Fishing Havens Rejected AUSTRALIA: Bali Massacre To Spawn Some Suits Over Intelligence Failure BODY SOLUTIONS: Woman's Suit Delayed As Firm Gets Bankruptcy Protection CANADA: Quebec Consumers Group Files Antitrust Suit About Beer Prices CANADIAN NATIONAL: Suits Over Derailment in Amite, Louisiana Commence CATHOLIC CHURCH: Abuse Victims Criticize Vatican Rejection of US Policy CONTINENTAL AIRLINES: Trial in Travel Agents Suit Set For April 2003 EL PASO: Major Stockholder Declared Lead Plaintiff in Securities Suit ENRON CORP.: Judge Refuses To Drop Female Worker From Creditors' Suit ENRON CORPORATION: WA State Agencies File Suit Over Securities Losses FLORIDA: New Nassau County Jail Constructed After Years of Litigation GEORGIA: Fulton County Seeks End Of Jail Oversight, Despite Objections METROPOLITAN LIFE: 98T Ohio Residents Eligible For Bias Suit Settlement NEW JERSEY: Prison Faces Suit Over Handling Of Inmates With Hepatitis C SEARS, ROEBUCK & CO.: Securities Suit Alleges Firm Misled Investors SOUTH CAROLINA: Suit Filed Over Painkiller Linked To Meningitis Cases SYMBOL TECHNOLOGIES: Reveals Investigation, Plan to Restate Earnings TACO BELL: To Appeal OR Jury's Verdict for Plaintiffs in Overtime Suit TEXAS: Orange County Sued Over $15 County Court-At-Law Filing Fees UNDERWRITER LITIGATION: Small Investors Blame Underwriters For Losses UNITED KINGDOM: Residents To File Suit For Losses After Lorry Crash UNITED STATES: Residents To Sue U.S. Commander Over Noise From Air Base WILLIAMS COMPANIES: Lawsuit Alleges Firm Inflated Energy Trading Book New Securities Fraud Cases ATLAS AIR: Wolf Popper Commences Securities Fraud Suit in S.D. New York DPL INC.: Cauley Geller Commences Securities Fraud Suit in S.D. OH ELECTRONIC DATA: Spector Roseman Files Securities Fraud Suit in S.D. NY FIRST HORIZON: Lockridge Grindal Commences Securities Suit in N.D. GA KINDRED HEALTHCARE: Charles Piven Commences Securities Suit in W.D. KY LIBERATE TECHNOLOGIES: Brodsky & Smith Files Securities Suit in N.D. CA QUINTILES TRANSNATIONAL: Beatie and Osborn Begins Securities Suit in NC SCHERING-PLOUGH: Brodsky & Smith Launches Securities Suit in New Jersey SEARS ROEBUCK: Milberg Weiss Commences Securities Fraud Suit in N.D. IL TXU CORPORATION: Bernstein Liebhard Launches Securities Suit in N.D. TX TXU CORPORATION: Nixon Patterson Commences Securities Suit in E.D. TX TXU CORPORATION: Spector Roseman Commences Securities Suit in N.D. TX TXU CORPORATION: Emerson Firm Lodges Securities Fraud Suit in N.D. TX TXU CORPORATION: Wolf Haldenstein Commences Securities Suit in N.D. TX TXU CORPORATION: Charles Piven Lodges Securities Fraud Suit in N.D. TX TXU CORPORATION: Diamond McCarthy Commences Securities Suit in N.D. TX UNDERWRITERS LITIGATION: Rabin & Peckel Commences Securities Suit in NY ********* ABC MORTGAGE: Businessman Files Suit Over Unsolicited Advertisements -------------------------------------------------------------------- Saying consumers need to fight back against unwanted advertising faxes, a businessman, formerly from Shrewsbury, Massachusetts, has filed a lawsuit against a mortgage company, claiming it violated a 1991 federal law prohibiting such intrusions, Associated Press Newswires reports. Thomas Mulhern is seeking class action status for his suit, filed recently in Worcester Superior Court. Mr. Mulhern, who operated a software business out of his home, claims ABC Mortgage Company sent him at least 14 unwanted faxes after he sent the company a certified letter asking it to stop. "When you get several businesses doing it to you every day, and you start to run out of paper and toner, and you are trying to run a small business, it gets pretty disruptive," he told the Telegram & Gazette in Worcester. "And it's illegal." Lawyers for Mr. Mulhern said they believed the case was the first to be brought in Massachusetts under the federal law. The statute, which requires individuals to bring suit in state courts and state attorneys general to sue in federal court, has had mixed results. The statute has been used in Texas and other states to win hefty class action judgments against bulk faxers. However, a federal judge in Missouri ruled, in a case now under appeal, that unsolicited fax ads amount to constitutionally protected free speech. Matthew McCue of Worcester, a lawyer who represents Mr. Mulhern, along with Edward Broderick, a Brookline lawyer, called the issue a classic one for class action consumer litigation. "These companies fight back very aggressively and force litigation that incurs costs," Mr. McCue said. "For an individual that is difficult. But when you can aggregate a number of small claims into one mass, consumers can obtain more leverage." A Massachusetts law, which takes effect in January, will provide additional protections for consumers by allowing them to place their names and numbers on a "Do Not Call" list that telemarketers will be required to buy. However, said Mr. McCue, unsolicited faxes "are already illegal." AUSTRALIA: Fishing Lobby Group's Appeal Over Fishing Havens Rejected -------------------------------------------------------------------- The commercial fishing lobby group Profish has ended its long legal battle with the New South Wales Fisheries Minister Eddie Obeid in the High Court, The Canberra Times reports. Profish, acting on behalf of New South Wales fisherman, had argued that Mr. Obeid should have done an environmental assessment before he closed 30 lakes and estuaries along the New South Wales coast to commercial fishing and created recreational fishing havens. However, said Profish spokesman Graeme Hillyard, the High Court's decision to reject their appeal against an earlier court decision meant it was now "a dead issue." Mr. Hillyard said commercial fishing would not now resume in these areas in the foreseeable future, but he was hopeful the closures would be reviewed at some future time. Mr. Obeid welcomed the High Court's decision, saying it upheld New South Wales Fisheries' reforms and ended the possibility of commercial fishing ever being renewed in the recently created fishing havens. This was Profish's third defeat after similar decisions in two separate courts. "The various court decisions clearly indicate the New South Wales Government has acted appropriately in protecting 27 percent of the state's estuarine waters from commercial fishing," Mr. Obeid said. "It is now time for Profish to put an end to their differences and to work with the New South Wales government to ensure we manage the resource in the best way possible." Mr. Hillyard said he and others were more than happy to sit down and talk with the minister, but alleged that Mr. Obeid had shown no interest so far in doing so. "Now we will contact members who left the industry about the possibility of class action over compensation payments that were either inadequate or non-existent." Whether or not Mr. Hillyard's interpretation of the invitation sent forth by Mr. Obeid is the one intended by the Fisheries Minister, will be determined by future events. AUSTRALIA: Bali Massacre To Spawn Some Suits Over Intelligence Failure ---------------------------------------------------------------------- Australia's Prime Minister John Howard has been in politics long enough to know that his concession, made recently in Parliament, that Australia did not act on information that Bali was a possible terrorist target, presents a political problem, the Australian Financial Review reports. The reality is that intelligence failure will be an important factor in the class actions that are almost certain to emerge from the Bali terrorist massacre. Analysts of the political scene say it is one of the requirements of an accountable Westminster system that questions be asked of and answered by the relevant authorities. Some of these questions are: (1) Was there in fact an intelligence failure? (2) Should agencies, notably the Office of National Assessments, which received warnings about Bali and other locations in Indonesia, have been more energetic in passing on this information? (3) Why was such information not incorporated in travel advisories? (4) Did concerns about giving offense to Indonesia, not to mention harming commercial interests involved in tourism to Indonesia, over-ride the need to be prudent? The analysts say that although the Prime Minister attributed responsibility for the threat assessments relating to Bali in particular, and Indonesia generally, to the "relevant intelligence agencies," in the end the government itself is responsible for the actions of the component parts. It seems that, at the very least, Australia was not as pro-active as it might have been regarding potential threats in Indonesia, say the analysts. They conclude that if there is a less in Bali, it is that no purpose is served by understating the dangers involved in a patently uncertain environment. BODY SOLUTIONS: Woman's Suit Delayed As Firm Gets Bankruptcy Protection ----------------------------------------------------------------------- The class action filed against Body Solutions, Inc. by a woman from Dade City, Florida, has been placed on indefinite hold, as the Company seeks bankruptcy protection, the St. Petersburg Times reports. The lawsuit was filed in Pasco-Pinellas Circuit Court, where the plaintiff is seeking class action status for the lawsuit in order to represent everyone in Florida who bought the product. The attorneys of Body Solutions, which markets an overnight weight loss formula, filed the company's official notice of bankruptcy with Pasco courts, upon which the court stayed the lawsuit, blocking any new actions. All new action in the near future will take place in a Dallas bankruptcy court, where Body Solutions has sought protection from creditors while it reorganizes, attorney Kendra Mancusi said. Ms. Mancusi is representing the plaintiff, who earlier this year sued the makers of the weight-loss product, which is heavily advertised on radio stations. Plaintiff Janet Makinen said she bought the product, but she never lost weight and could not get her money back. CANADA: Quebec Consumers Group Files Antitrust Suit About Beer Prices --------------------------------------------------------------------- A Quebec consumers group is seeking class action status for a suit against a beer distributor managed by Sleeman Breweries Ltd., who recently admitted it tried to prevent retailers in the province from offering discounts on its products, The Globe and Mail reports. Option Consommateurs said yesterday, in a news release, that "several thousand" Quebec consumers ended up paying more then they should have for such brands as Old Milwaukee, Red Bull and Colt 45, in the 12 months from April 1999, to April 2000. The Montreal-based advocacy group is seeking damages of $400,000, in Quebec Superior Court. Cie Brasserie Stroh (Quebec) Ltee of Laval was recently fined $250,000 after pleading guilty in the Federal Court of Canada to charges of price maintenance. The charges followed an investigation by the Competition Bureau of Canada that began in 2001. According to an agreed statement of facts, Brasserie Stroh offered volume discounts to the retailers on the condition that they maintain a minimum retail price set by the company. The practice had an impact on more than $2 million of beer sales in the 12-month period. "There is a presumption that the price maintenance resulted in supplementary costs to consumers," said Pierre Sylvestre, one of the Montreal lawyers retained by Option Consommateurs. Brasserie Stroh is owned by City Brewing of Lacrosse, Wisconsin, and managed by Sleeman of Guelph, Ontario. Sleeman Breweries, which owns the Canadian rights to Stroh brands, paid the $250,000 fine as per its management agreement with City Brewing. CANADIAN NATIONAL: Suits Over Derailment in Amite, Louisiana Commence --------------------------------------------------------------------- Less than a week after a recent train derailment and chemical spill in Amite, Louisiana, forced mass evacuations, class actions already are being filed, the Associated Press Newswires reports. The suits are alleging that the railroad failed to maintain the track and that the train's crew failed to properly warn people of danger. No serious injuries were reported. The spill forced 794 families to leave their homes and closed 40 businesses from a Saturday to a Tuesday. The Louisiana State Bar Association Disaster Response Team began monitoring the situation in Amite and will provide "free legal advice for individuals regarding non-fee generating matters directly related to the disaster," a spokeswoman said. Officials with the Tangipahoa Parish Clerk of Court's Office said that various attorneys had filed four lawsuits in connection with the derailment. Judges have combined attorneys from those lawsuits into a committee. So far, all 14 members of that committee are Louisiana lawyers, and most of them practice law in the Florida Parishes. Mr. Thompson said the railroad will set up a claims office next Tuesday, October 22, at the Amite City Hall. CATHOLIC CHURCH: Abuse Victims Criticize Vatican Rejection of US Policy ----------------------------------------------------------------------- Victims of sexual abuse by Roman Catholic clergy expressed dismay over the Vatican's rejection of an American bishops' policy formulated to punish guilty members of the clergy, the Associated Press reports. Mark Serrano, a national board member of the Survivors Network of Those Abused by Priests, called the Vatican response "a victory for Vatican bureaucrats and recalcitrant bishops." He said victims should lobby for changes in US law that would make it easier to prosecute offenders, according to an AP report. However, defenders for the church attest that the Vatican was simply trying to develop a policy that protected children while also preserving the rights of accused priests. Russell Shaw, a former spokesman for the United States Conference of Catholic Bishops and the Knights of Columbus, told AP it would be wrong to conclude that the bishops' policy was dead. He urged rank-and-file Catholics to recognize the difficulties of implementing a plan that was fair to both victims and clergy. "This is not the end of the game," Mr. Shaw said. "Everyone would like it to be overnight but it's too large and complex." The Vatican rejected the policy saying, there were conflicts between the policy and church law, and expressed concern that some language in the plan was imprecise and difficult to interpret. Rev. Robert Bullock, an organizer of the Boston Priests Forum, an advocacy group of more than 100 priests, told AP he hoped church leaders would respond to the Vatican statement by working to heal the rifts the new policy created between bishops and diocesan clergy. Rev. Bullock added that the US policy "did all the things necessary for victims, but the question is what does it do to due process for priests." Many priests have complained that bishops have been scapegoating clergy to placate victims. In Rome, a cardinal who reviewed the policy said preserving the bond between bishops and priests was indeed a Vatican concern. A commission of Holy See officials and US bishops is being established to resolve the problems. CONTINENTAL AIRLINES: Trial in Travel Agents Suit Set For April 2003 -------------------------------------------------------------------- Trial in the antitrust class action pending against Continental Airlines, Inc. and other airlines will commenced in April 29,2003 in the United States District Court for the Eastern District of North Carolina. The suit challenges the reduction and ultimate elimination of travel agent base commissions by certain air carriers, including the Company and other domestic and international air carriers. The amended complaint alleges an unlawful agreement among the airline defendants to reduce, cap or eliminate commissions in violation of federal antitrust laws during the years 1997 to 2002. The court certified the class on September 18, 2002. Factual discovery has been completed and expert witness depositions will commence soon. The Company believes the plaintiffs' claims are without merit and is vigorously defending this lawsuit. Although the Company cannot at this time predict the outcome of this case, it does not believe the outcome will have a material adverse effect on its financial position or results of operations. EL PASO: Major Stockholder Declared Lead Plaintiff in Securities Suit --------------------------------------------------------------------- Texas natural gas tycoon Oscar Wyatt, a major stockholder and public critic of El Paso Corporation's management and accounting, is now the lead plaintiff in a class action accusing the Company - the biggest US natural gas firm - of misleading investors, Reuters English News Service reports. US District Judge Lynn Hughes, in an order recently made public, named Mr. Wyatt the lead plaintiff in the suit, a position Mr. Wyatt had sought. Mr. Wyatt is a major Company shareholder and has become a public nemesis of the Houston Company's management, whom he blames for the plummeting of the Company's stock. Mr. Wyatt, 77, became one of the Company's biggest shareholders when he sold Coastal Corp. to the Company for $17.4 billion in January 2001, and acquired about four million shares. Since then, its stock has declined about 90 percent, trimming more than $200 million off the value of Mr. Wyatt's holdings. The Company has seen its stock destroyed since the demise of Enron Corp., which disintegrated into bankruptcy over questions about off- balance sheet partnerships that hid debt and artificially boosted profits. The Company's huge debt and a recent decision by a Federal Regulatory Commission judge, blaming the company for withholding natural gas from California during its energy crisis have aggravated the fall. Mr. Wyatt has told Reuters that he wants a wholesale management shake- up and a return to more conservative bookkeeping at the Company. It was Mr. Wyatt who sent a letter critical of a certain power transaction involving the Company to the U.S. Securities and Exchange Commission and congressional leaders. ENRON CORP.: Judge Refuses To Drop Female Worker From Creditors' Suit --------------------------------------------------------------------- A woman's request to be dropped from a lawsuit brought by the creditors of fallen energy giant Enron Corporation, because she claims she is "broke" was denied recently, when the judge learned she had pocketed $500,000 in one partnership transaction, according to a report by the Houston Chronicle. The Company's creditors won final approval to proceed with their lawsuit against nine former Enron employees, after the judge denied Anne Yeager Patel's request to be dropped. The lawsuit against nine defendants, including former Chairman Kenneth Lay, former Chief Executive Officer Jeffrey Skilling and former Chief Financial Officer Andrew Fastow, was filed recently in a Montgomery County State Court. The bankruptcy creditors seek punitive damages for defrauding the Company from all the defendants except Mr. Lay, whom they accuse only of being inattentive to company activities. Much of Thursday's hearing was devoted to Ms. Patel's efforts to be dropped from the suit. A junior partner of Enron and its LJM partnership in her first job out of graduate school, Ms. Patel earned $500,000 from an investment of a few thousand dollars in the Southampton partnership in the year 2000. Of those funds, Ms. Patel's lawyer said, only $28,000 remained, and that was seized by the federal government as part of its criminal probe, although she has not been charged with any wrongdoing. "The mere fact that the government obtained an order to seize her funds speaks volumes about her actions in the transaction," said Luc Despins, a lawyer for the creditors committee, arguing for her to remain a defendant. However, Ms. Patel's lawyer, Bruce Baird said his client should not have been named in the lawsuit, because she did not know there was anything illegal about participating in Southampton. "What is not alleged, and could not be alleged, is that my client knew anything about a scheme," Mr. Baird said. "She was told this was a bonus." In approving the committee's lawsuit, and its inclusion of Ms. Patel, Judge Arthur Gonzalez said he questioned whether a junior employee anywhere could expect a $500,000 bonus. Other former Enron employees named in the creditors' 31-page complaint are: (1) Treasurer Ben Glisan Jr., (2) Chief Risk Officer Richard Buy, (3) Chief Accounting Officer Richard Causey, (4) company lawyer Kristina Mordaunt and (5) Vice President Kathy Lynn Meanwhile, the lawyers for Mr. Lay have asked federal judge Melinda Harmon, who is hearing two class actions, to move the creditors' lawsuit into her court. In their papers, the lawyers say moving the case to Judge Harmon's court would simplify the discovery process in all the related Enron lawsuits, as well as make it easier for any settlement talks. ENRON CORPORATION: WA State Agencies File Suit Over Securities Losses --------------------------------------------------------------------- Washington state agencies have filed claims totaling more than $100 million in the $63.3 billion Enron Corp. bankruptcy - Tuesday of last week being the last day for filing claims with the US Bankruptcy Court in New York, that is handling the Enron case, the largest ever bankruptcy in the United States when it was filed last December, according to a report by The Spokesman Review. Scott Huntley, a spokesman for the State Investment Board, said that Washington's claim will be pooled with those of other states that filed class action against the Company. An open-ended claim on behalf of the state's electricity consumers could dwarf the total sought by the Washington agencies, however. The unknown in the consumers' claim is the losses suffered by customers of Washington utilities that spent hundreds of millions for electricity in 2000 and 2001, when Enron and other energy companies were manipulating prices at the wholesale level. Cheryl Reed, a spokeswoman for the attorney general's office, said that almost all of Washington's known loss was suffered by the State Investment Board, which owned Enron stock and bonds and filed a $100 million claim. Ms. Reed said the Department of Labor and Industries is seeking $278,571.01, and the Department of Revenue also is seeking a small amount. Mr. Huntley said that since the state is joining up with other states filing class actions, Washington state will divide whatever amount is set aside for the class, one of many involved in the massive case. FLORIDA: New Nassau County Jail Constructed After Years of Litigation --------------------------------------------------------------------- Ten years and several lawsuits later, Sheriff Ray Geiger hopes that next month he will be opening a new Nassau County, Florida, jail, The Florida Times-Union reports. The new jail is the result of a court order, issued in a federal class action, brought by inmates at the old Nassau County jail. Sheriff Joe Geiger is pleased and excited that he is finally getting the jail he has been asking for since 1993. However, it was not until after the court order had been issued, that a sense of reality settled on the issue, and it began to inch forward. In those ten years, Mr. Geiger has been sued twice over overcrowding and unsanitary conditions, including chronic leaking problems, at the old jail. However, there is still some waiting - Sheriff Geiger does not expect to get the final OK to start re-housing prisoners before November 15. What makes the Sheriff so enthusiastic? The old jail's 153 beds cannot handle the 215 prisoners Nassau averages each month. The new jail can accommodate a maximum of 314 prisoners. The new jail will have 68 employees; the old jail had 51. This new policy is grounded in the court order that was issued as a result of the federal class action. The old jail was smoke-free and TV-free, and that policy will continue in the new jail, said Sheriff Geiger, even though the new jail comes equipped with shelves high up on the walls in the cell blocks to hold television sets. A number one priority that was kept in mind during the design of the new jail was "officer safety and public safety," said Sheriff Geiger. GEORGIA: Fulton County Seeks End Of Jail Oversight, Despite Objections ---------------------------------------------------------------------- Lawyers for Fulton County recently told a federal judge he should cease his oversight of the jail because conditions there no longer violate civil rights laws, the Atlanta Journal-Constitution reports. However, a lawyer representing HIV-positive inmates who have sued the problem-plagued facility asserted otherwise. They say enough problems remain to imperil the inmates' health and safety. US District Judge Marvin Shoob, who has presided over the three-year- old case, did not issue an immediate ruling. When the class action was filed in 1999, the jail was severely crowded and medical care was abysmal, according to findings by a court-appointed monitor. Some HIV- positive inmates, Judge Shoob learned, had died because of the neglect. At the recent hearing, Judge Shoob acknowledged that the county has made "substantial progress" improving jail conditions. Its population has dropped from 4,300 inmates to about 2,500 - a savings to the county of more than $50,000 a day. More to the point of the oversight, medical care to HIV-positive inmates also has improved markedly, the court-appointed monitor testified. "There has been tremendous positive change," said the monitor, Robert Greifinger, a former medical director of the New York State Department of Corrections. However, Dr. Greifinger also testified that problems remain at the jail. Earlier this summer, he said, an inmate suffering from bleeding ulcers was taken to Grady Memorial Hospital, where he lay for 11 hours without being checked by a doctor. The inmate later died. Dr. Greifinger said there needs to be better communication between the jail and the hospital, which treats county inmates. Among his other concerns are that: (1) the jail is not giving mentally ill HIV-positive inmates all the medications they need upon release; (2) the county's medical vendor is not operating without a contract; and (3) the jail's heating and ventilation system is inadequate. Tamara Serwer, a lawyer for the HIV-positive inmates, said these types of deficiencies require Judge Shoob to continue his oversight. "The inmates in this jail have a constitutional right to basic living conditions and basic medical care," Ms. Serwer said. "We have not had enough time to see the risk eliminated." However, county lawyer Steve Rosenberg told Judge Shoob that it is time for him to terminate the case. "Fulton County is of the opinion there are no longer any constitutional violations going on at the jail," he said. METROPOLITAN LIFE: 98T Ohio Residents Eligible For Bias Suit Settlement ----------------------------------------------------------------------- Metropolitan Life Insurance Company will pay $8.6 million to nearly 98,000 Ohio customers who were discriminated against because of their race, under a recently signed agreement by the director of the Ohio Department of Insurance, the Associated Press Newswires reports. The agreement settles a five-state class action that accused the New York-based insurer of charging blacks and other minority customers higher premiums for less insurance coverage than it charged whites. Minority customers who bought policies from 1901-1972, or their families, may be eligible for cash awards, said Insurance Director Lee Covington. MetLife also is making a $5 million donation to the United Negro College Fund and is conducting a $6 million outreach campaign to let people who may be eligible for compensation know about the settlement, the Ohio insurance department said. NEW JERSEY: Prison Faces Suit Over Handling Of Inmates With Hepatitis C ----------------------------------------------------------------------- The state of New Jersey faces a federal class action, alleging that it failed to test prison inmates in high risk groups for hepatitis C infection and likewise test for the disease in those inmates found to have symptoms consistent with liver ailments, the Associated Press Newswires reports. The lawsuit, filed recently in US District Court, also alleges the state and its prison medical contractors failed to promptly inform inmates who tested positive and provide follow-up counseling. The lawsuit was brought on behalf of Walter Bennett, an inmate released in August after serving 10 years for armed robbery. The lawsuit names the Department of Corrections and medical contractors Spectrum Healthcare Services Inc., Correctional Medical Services and officials from the Department and two companies. It was confirmed by February 2002 that Mr. Bennett was infected with hepatitis C, after having been tested for hepatitis C in June 2000, because a routine blood test revealed he had elevated liver enzymes, an indicator of liver ailments. However, he was not informed of the test results or given any follow-up until just before his release in August 2002, said Laura Feldman, one of Mr. Bennett's lawyers. "They did not impress upon him the gravity of the situation," Ms. Feldman said. The lawsuit seeks class-action status. Ms. Feldman was unable to estimate the number of New Jersey inmates a class action would affect. "But it is not a small problem by any means," she said. Ms. Feldman said a similar problem with hepatitis C occurred among the Pennsylvania prison population - prison officials there estimated 25 percent of the inmate population was affected. Chris Cardin, spokesman for the Department of Corrections, said about the extent of the hepatitis problem, that "We are assessing that and addressing the situation." People unaware they have hepatitis C can spread it through drug paraphernalia, sex and possibly blood on shared toothbrushes. About a third of hepatitis C patients clear the disease on their own. Of the rest, one in every five will develop liver disease. By the time a patient shows serious symptoms, it is usually too late for treatment. SEARS, ROEBUCK & CO.: Securities Suit Alleges Firm Misled Investors ------------------------------------------------------------------- A New York City law firm filed a securities class action against Sears, Roebuck & Co. and its executives, accusing the department store operator of making false, misleading statements last year about its financial outlook, Reuters English News Service reports. The law firm is seeking class-action status for the lawsuit. The law firm, Milberg Weiss Bershad Hynes & Lerach LLP, alleges that the Company and its executives made "materially false and misleading statements" to the market between January 17 and October 17, last year. The Company issued statements saying its earnings would grow 22 percent in 2002 from the prior year. The statement, which also said the Company had adequate provisions for non-collectable accounts, did not disclose that the Company's risk for non-collectable accounts had increased during the period in question, the law firm said in a statement. The law firm also said that Sears inflated its earnings and balance sheet by neglecting to earmark enough reserves for non- collectable accounts. Milberg Weiss said that on October 17, 2001, Sears said it would increase 2002 earnings by 15 percent instead of the 22 percent it maintained, and that its third-quarter earnings would decline. The announcement led to a 32 percent drop in Sears' stock price, the law firm said. The complaint by Milberg Weiss is the first class action brought against the Company. SOUTH CAROLINA: Suit Filed Over Painkiller Linked To Meningitis Cases --------------------------------------------------------------------- A class action has been filed against the South Carolina Urgent Care Pharmacy in Spartanburg, South Carolina over the death from meningitis linked to the painkiller methylprednisolone, as well as over the two other patients afflicted with illness. Patients want a fund established by the defendant to pay for medical treatment, Associated Press Newswires reports. A fourth case of fungal meningitis has been linked to the painkiller. The latest patient was hospitalized and is receiving anti-fungal therapy, North Carolina's Department of Health and Human Services said in a news release. Pharmacy owner Ray Burns said tests of returned vials of the drug showed no contamination. The company has been in business since 1988, and provides pain management and sexual dysfunction compounds to doctors who call in orders. SYMBOL TECHNOLOGIES: Reveals Investigation, Plan to Restate Earnings -------------------------------------------------------------------- Symbol Technologies Inc. said that it may restate two and a half years of revenue and earnings and acknowledged that the United States Department of Justice has launched a "related investigation," according to a report by Newsday. The Company is the subject of numerous shareholder lawsuits, including an amended class action recently filed in New York, alleging that it engaged in improper revenue recognition involving transactions with its largest partners, including Kmart, Sears and Barnes & Noble. Symbol has said it would defend itself against accounting-related lawsuits. The Holtsville bar-code scanner company said in a statement that it has been told it is "not currently" a target of a probe. The Company has been the subject of a US Securities and Exchange Commission into its revenue recognition practices since earlier this year. The possibility of a financial restatement, first broached in the Company's second-quarter financial report with the SEC this summer, is the result of a preliminary internal inquiry at the Company, being conducted by an outside law firm and an accounting firm. The Company's finances had been the subject of a preliminary inquiry by the SEC since the spring of 2001, involving two transactions amounting to less than $5 million, it said. In February, a series of stories in Newsday outlined charges of accounting irregularities at the Company, though officials denied these reports. In April, the Company acknowledged the SEC inquiry had been advanced to a full-scale investigation. The Company in the quarter took a $2.5 million charge related to the hiring of William Nuti, its new president and chief operating officer. TACO BELL: To Appeal OR Jury's Verdict for Plaintiffs in Overtime Suit ---------------------------------------------------------------------- Taco Bell Corporation intends to appeal an Oregon jury's verdict stating that it failed to pay for certain meal breaks and/or off-the- clock work for 86 of 93 claimants in a class action filed on behalf of approximately 17,000 its current and former hourly employees in the whole state. The suit, commenced in August 1997 in the Circuit Court of the State of Oregon of the County of Multnomah, alleges violations of state wage and hour laws, principally involving unpaid wages including overtime, and rest and meal period violations, and seeks an unspecified amount in damages. Under Oregon class action procedures, the Company was allowed an opportunity to "cure" the unpaid wage and hour allegations by opening a claims process to all putative class members prior to certification of the class. In this cure process, the Company has paid out less than US$1 million. On January 26, 1999, the court certified a class of all current and former shift managers and crewmembers who claim one or more of the alleged violations. A trial date of November 2, 1999 was set. However, on November 1, 1999, the court issued a proposed order postponing the trial and establishing a pre-trial claims process. The final order regarding the claims process was entered on January 14, 2000. The Company moved for certification of an immediate appeal of the court-ordered claims process and requested a stay of the proceedings. The court denied this motion, and the Company appealed this decision to the Supreme Court of Oregon. However, the Supreme Court denied the Company's Writ of Mandamus. A court-approved notice and claim form was mailed to approximately 14,500 class members on. The court ordered pre-trial claims process went forward, and hearings to determine potential damages were held for claimants employed or previously employed in four selected Taco Bell units. After the initial hearings relating to these four units, the damage claims hearings were discontinued. Trial began on January 4, 2001. On March 9, 2001, the jury reached verdicts on the substantive issues in this matter. A number of these verdicts were in favor of the Company, however, certain issues were decided in favor of the plaintiffs. In April 2002, a jury trial to determine the damages of 93 of those claimants found that the Company failed to pay for certain meal breaks and/or off-the- clock work for 86 claimants. However, the total amount of hours awarded by the jury was substantially less than that sought by the claimants. In July and September 2002, the court ruled on several post-trial motions, including fixing the total number of potential claimants at 1,031 (including the 93 claimants for which damages have already been determined) and holding that claimants who prevail are entitled to prejudgment interest and penalty wages. The court has indicated that it will likely schedule a damages trial for the remaining 938 claimants sometime in 2003. TEXAS: Orange County Sued Over $15 County Court-At-Law Filing Fees ------------------------------------------------------------------ Orange County, Texas faces a class action filed against 64 counties statewide, relating to the implementation of US$15 county court-at-law filing fees. The suit also challenge a 1991 state law allowing counties to supplement the salaries of county court-at-law's judges by charging the said fee, the Orange Leader reports. Residents convicted in misdemeanor trials that the courts oversee pays the fine, which is used to supplement the salaries of the judges, according to state law. Part of Orange County Court at Law Judge Michael Shuff's salary is paid by collection of the fees, Orange County Judge Carl Thibodeaux told commissioners during Monday's meeting. "The papers were served last week," Thibodeaux said. Commissioners approved the recommendation of the Texas Association of Counties to hire the law firm of Allison, Bass and Associates to defend the 64 counties named in the suit. The association has put up $25,000 as a retainer, Judge Thibodeaux said. Of the 254 counties in Texas, 77 have statutory or county courts at law mandated by state law. The suit names the 64 counties which have decided to charge the $15 fee. The suits seek to have the fees declared unconstitutional and requires the counties to pay the money back to the residents who paid, which legal documents filed with the county estimates at 5,000 people, the Orange Leader states. It also requests the counties pay any "reasonable attorneys fees," she incurred in filing the suit. The suit also names state comptroller Carole Keeton Rylander, who administers the funds as a defendent, as well as Liberty, Harris, Nacogdoches, Polk and Galveston counties. UNDERWRITER LITIGATION: Small Investors Blame Underwriters For Losses --------------------------------------------------------------------- A growing number of small investors "burned" in the stock market are deciding to fight back, not against the companies whose shares they hold, but against the brokerage houses that handled their accounts, according to a report by The Tampa Tribune. Recently, in Tampa, a pair of Merrill Lynch clients said they would file claims against the New York brokerage house for offering upbeat reports on stocks that Merrill Lynch's analysts knew were in trouble. Their attorney, James Newcomer, said the two were among hundreds of Merrill Lynch clients who have contacted his office after losing millions of dollars. Mr. Newcomer is pinning the cases on the settlement of an investigation brought by New York Attorney General Eliot Spitzer against Merrill Lynch. In May, Merrill Lynch agreed to a $100 million fine after the Attorney General accused the brokerage of misleading investors about certain companies' performance to protect lucrative investment banking business with those companies. Mark Herr, a Merrill Lynch spokesman in New York, said the company made no admissions of liability or guilt in the settlement in May. "We have maintained throughout that we have strong defenses that we will vigorously assert in any litigation that grows out of this," Mr. Herr said. Attorney James Richard Hooper, who has an office in Tampa, said he has more than 2,000 clients targeting Merrill Lynch, Credit Suisse First Boston, Salomon Smith Barney and other major brokerages. Nationally, class actions have been filed against Merrill Lynch and its Internet analyst, Henry Blodget. Recently, another class action was filed in New York on behalf of Exodus Communications shareholders, accusing the Company and Mr. Blodget of violating federal securities law by issuing analyst reports on Exodus "without any reasonable factual basis." Tampa attorney James Hooper said, "There were a lot of retail investors that were buying junk paper from the major Wall Street investment houses, and they have been left holding the bag," Mr. Hooper said. "In Florida, it is a particularly horrible situation. Many of those retail investors were retired." The New York attorney general's office alleged that Merrill Lynch's ratings for Internet stocks were misleading and that there was "a serious breakdown of the separation between the Merrill Lynch banking and research departments." An affidavit in that case contrasted internal company e-mails regarding certain stocks with Merrill Lynch's official rating of the stock. Examples are: (1) Regarding Excite@home stock - analyst comment: "Such a piece of crap." (June 3, 2000); published Rating: Intermediate accumulate; long term buy (2) Regarding InfoSpace stock - analyst comment: "This stock is a powder keg, given how aggressive we were on it earlier this year and given the "bad smell" comments that so many institutions are bringing up." (July 13, 2000); Published Rating: Intermediate buy; long-term buy UNITED KINGDOM: Residents To File Suit For Losses After Lorry Crash ------------------------------------------------------------------- Residents who say they suffered losses worth thousands of pounds after a lorry (a kind of motor truck) laden with chemicals crashed into their homes recently, are planning to sue for compensation, according to the Western Morning News. Barnstaple-based Samuels Solicitors, have been approached about the possibility of taking a class action against the owners of the lorry. People living in Slade Valley, Ilfracombe, were evacuated from their homes, after a driverless lorry crashed into a block of flats, triggering a large chemical scare. As a result of the crash, electricity to hundreds of homes was cut off as a safety measure, as emergency services tried to prevent the lorry from exploding. Residents are claiming that food in their freezers was spoiled when the electricity was cut off, costing them money through no fault of their own. Personal property, such as carpets and belongings, were damaged as well. Ilfracombe's Mayor, Coun Keith Thompson, has undertaken the fight for compensation, and he confirmed that the residents are seeking legal advice. "We had a meeting with the residents and it was unanimously agreed that they should seek legal action over money which is owed to them," Mayor Thompson said. "The company involved is clearly responsible for the crash, which has caused a great deal of distress to the people of Slade." The lorry belonged to a chemical distribution company, Ellis & Everard, based in Exeter, which has fired the driver over the crash and has launched a full investigation into what happened. Mark Hughes, services director for the company has said that the Company will not shirk its responsibilities, but that it is unable to speculate as to the exact cause of the collision with the residential flats until a full investigation has been carried out into the accident. Mr. Hughes said that the company will continue to assist the emergency services and other relevant authorities with regard to any inquiries they make, and he noted that the company also looking into the cause of the crash. Alan Scobie, loss adjuster for Ellis and Everard's insurers, Bristol- based Cunningham Lindsey UK, said he was awaiting instructions from the insurers over whether the lorry company would pay out anything to the Slade Valley residents. Eddie Mills, a Slade Valley resident, and coordinator of the compensation claims, said he was not convinced that the insurers would pay out. "They seem to be passing the buck to one another," said Mr. Mills. "We have decided to stick together on this and tackle them all at once . We deserve to get compensation, especially as no one asked for a lorry to come into their homes." He said several people had lost a lot of money. UNITED STATES: Residents To Sue U.S. Commander Over Noise From Air Base ----------------------------------------------------------------------- A group of residents near the US Marine Corps' Futemma Air Station in Ginowan, Okinawa Prefecture, is planning to file a class action against the commander of the base as well as the Japanese government over "intolerable" noise from the base, members of the group said recently, according to the Kyodo News (Japan). The residents said in a news conference that they are expecting the number of plaintiffs in the class action to number around 200, including some 20 minors. The group says the commander has authority over the base's flights and as such should be subject to a demand for damages. The reason for choosing the commander as defendant lies in the Japanese courts' rejection of similar suits previously filed against the United States government. The courts said that suits against foreign governments are beyond the jurisdiction of the Japanese courts. Therefore the latest suit aims to pursue US accountability by bringing the US commander into the Japanese court. The lawsuit will seek damages caused by the noise, but will demand first that the measuring points for determining the noise pollution be increased in order to get an accurate measurement of the noise pollution endured. In its proposed suit, the group will seek suspension of helicopter flights and drills near residential areas due to noise levels that exceed the permitted maximum. The lawsuit will also seek to suspend take-offs and landings of aircraft in the early morning and in the evening as well. Weighted Equivalent Continuous Perceived Noise Level (WECPNL) is an international environmental index for gauging noise from airplanes. Previous court rulings have recognized those who live in areas with a WECPNL of more than 75 as qualifying for state compensation. These rulings no doubt will be a factor in determinations made in the residents' lawsuit. Residents have said that the noise from the base affects people both physically and mentally, and that the situation is no longer tolerable. Under a 1996 agreement, the heliport functions of the Futemma base will be relocated to the city of Nago in the northern part of the prefecture, and the United States will then return the land to local residents sometime in 2003. WILLIAMS COMPANIES: Lawsuit Alleges Firm Inflated Energy Trading Book --------------------------------------------------------------------- A shareholder lawsuit filed against Williams Companies alleges executives inflated profits, revenue and assets in the Company's marketing and trading unit by billions of dollars through questionable accounting tactics, Dow Jones Business News reports. The Seymour Law Firm recently filed the lawsuit in the United District Court in Tulsa, Oklahoma. Named plaintiffs include HGK Asset Management and Teamsters Local 854 and Local 710 pension funds. However, the complaint was brought as a class action on behalf of all who bought the Company's securities from July 24, 2000, to July 22, 2002. Attorneys, as of last Thursday, had not yet filed a motion seeking the court's determination that the lawsuit is a proper class action, said Samuel Sporn, plaintiffs' co-counsel in New York. Plaintiffs are seeking unspecified compensatory and punitive damages, costs and expenses. Mr. Sporn, however, declined to quantify the shareholders' losses, characterizing them generally as "very substantial." The complaint alleges that the Company used questionable mark-to-market accounting in estimating profits from long-term contracts as part of a larger plan to inflate the company's stock price from mid-2000 through mid-2002. Plaintiffs' allegations are based in part on attorneys interviews with former Company employees, said the complaint. The lawsuit also names as defendants the Company's longtime auditor, Ernst & Young, for signing off on financial, and various underwriters for misleading investors by omitting material terms. Underwriters named include: (1) Merrill Lynch & Co., (2) Citigroup Inc.'s Salomon Smith Barney, (3) Lehman Brothers, (4) Credit Suisse First Boston, (5) Banc of Americas Securities, (6) CIBC World Markets, (7) Goldman, Sachs & Co., and (8) UBS Warburg LLC. New Securities Fraud Cases ATLAS AIR: Wolf Popper Commences Securities Fraud Suit in S.D. New York ----------------------------------------------------------------------- Wolf Popper LLP initiated a securities class action against Atlas Air Worldwide Holdings, Inc. (NYSE:CGO), five senior officers of Atlas, and Morgan Stanley Dean Witter, on behalf of purchasers of Atlas common stock from April 18, 2000 through October 15, 2002, inclusive, including shares purchased pursuant or traceable to May 2000 and September 2000 Prospectuses for public offerings of Company shares, in the US District Court for the Southern District of New York. Plaintiff alleges in the class action that during the class period, defendants reported materially false and misleading earnings. At the same time, Atlas sold 3 million shares of Atlas common stock for $31.75 per share in the May 2000 offering, and controlling shareholders sold 1.5 million shares of Atlas common stock at $43.50 per share in the September 2000 offering. The true facts began to be disclosed on October 16, 2002 when Atlas announced that it would be required to restate its financial results for fiscal years 2000 and 2001, in the areas of obsolescence, maintenance expense, and allowance for bad debt. Preliminary indications were that the cumulative impact of the restatement of fiscal 2000 and 2001 will reduce after-tax income for fiscal 2000 and 2001 by roughly $60 million to $65 million. Shares of Atlas common stock, which had traded at a high of $45.69 per share during the Class Period, fell to as low as $1.70 after announcement of the restatement. For more details, contact Robert C. Finkel by Mail: 845 Third Avenue, New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax: 212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit the firm's Website: http://www.wolfpopper.com DPL INC.: Cauley Geller Commences Securities Fraud Suit in S.D. OH ------------------------------------------------------------------ Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of Ohio, Western Division, on behalf of purchasers of DPL, Inc. (NYSE: DPL) publicly traded securities during the period between March 30, 1999 and August 14, 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, during the class period, defendants falsely represented that the Company's portfolio of financial assets, comprising approximately 25% of DPL's total assets, were "highly diversified both in terms of geography and industry" and were a hedge against the Company's energy business. Defendants failed to disclose that the Company's investment portfolio was highly concentrated in Argentinean debt securities and other securities that were highly risky. The facts began to be revealed after the close of regular trading on July 1, 2002, when DPL issued a press release announcing that it was revising downward its estimate of earnings for the full year 2002, largely as a result of a $110 million, or $0.92 per share, write-down of its financial assets. The write-down related primarily to investments in Latin America. The Company's results for the second quarter of 2002 were subsequently reported on July 29, 2002 precipitating a review of DPL's debt for possible downgrading. On August 14, 2002, DPL revealed further information concerning DPL's investment portfolio and a contingent obligation to fund up to another $430 million of investments. The plaintiff alleges that defendants engaged in this scheme to enrich themselves. For example, in 2000 defendant Forster received $1.2 million for managing the company's financial assets and $2.1 million when the price of DPL common stock reached $26 per share. During the class period, shares of DPL common stock closed at as high as $33.68 per share. When the truth about the losses in DPL's portfolio of financial assets was revealed after the close of regular trading on July 1, 2002, the price of DPL common stock fell to $21.57 per share. DPL common stock continued to decline as additional information was revealed. DPL common stock closed on October 2, 2002 at $16.60 per share. For more details, contact Jackie Addison, Heather Gann or Sue Null 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 ELECTRONIC DATA: Spector Roseman Files Securities Fraud Suit in S.D. NY ----------------------------------------------------------------------- Spector, Roseman & Kodroff, PC initiated a securities class action on behalf of purchasers of the securities of Electronic Data Systems Corporation (NYSE: EDS) between April 19, 2002 and September 24, 2002, inclusive in the US District Court for the Southern District of New York. 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 April 19, 2002 and September 24, 2002, thereby artificially inflating the price of Company securities. The complaint alleges that defendants issued numerous statements which highlighted the Company's strong financial performance and reassured investors that the Company's "business and financial fundamentals are sound" and the Company's balance sheet is "rock solid." These statements were materially false and misleading because they failed to disclose and/or misrepresented: (1) that the Company's program to "manage" its future stock issuance under its employee stock option program was essentially an unhedged bet on the price of EDS common stock, which was exposing the Company to substantial liabilities which were not reflected in the Company's financial statements; (2) that the Company was recording and reporting as assets (e.g. accounts receivable) and as revenue, purported receipts from contracts structured as percentage-of-completion payment arrangements where the requirements of Generally Accepted Accounting Principles (GAAP) for such recording were not met and where sufficient evidential matter did not exist to support the claimed positive impact on EDS's books; (3) that the Company improperly recorded revenue on contracts for software that did not meet GAAP requirements for such revenue recognition; (4) that the Company was experiencing difficulties with certain of its European contracts such that these contracts were not performing according to the Company's expectations; and (5) as a result of the foregoing, defendants' statements concerning the Company, its earnings, accounting practices and prospects were lacking in a reasonable basis at all relevant times. On September 18, 2002, EDS announced that it expects "revenues and earnings for its third quarter of 2002 to be lower than company guidance." On September 24, 2002, certain analysts downgraded their rating on EDS stock, citing the Company's obligations on certain put contracts and that in order to close out the position, EDS would have to pay $225 million. In response, EDS issued a press release in which it acknowledged that it had borrowed money in the commercial paper markets to close out the put contracts. In later public comments, an EDS spokesperson confirmed that the Company borrowed $225 million. In response to these announcements, the price of EDS common stock plunged further, falling from the previous day's close of $16.52 per share to close at $11.68 per share. For more details, contact Robert M. Roseman by Phone: 888-844-5862 or visit the firm's Website: http://www.srk-law.com FIRST HORIZON: Lockridge Grindal Commences Securities Suit in N.D. GA --------------------------------------------------------------------- Lockridge Grindal Nauen PLLP initiated a securities class action in the United States District Court for the Northern District of Georgia on behalf of purchasers of First Horizon Pharmaceutical Corporation (Nasdaq:FHRX) publicly traded securities during the period between April 24, 2002 and July 2, 2002, inclusive. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933, by issuing a series of materially false and misleading statements to the market. On April 24, 2002, the Company completed a public offering of securities, selling 6.5 million shares of common stock at an offering price of $21.75 per share, pursuant to a Prospectus declared effective by the SEC on April 18, 2002. The Company failed to disclose material information in the Prospectus relating to two products, Tanafed Suspension (a pediatric and allergy product) and Prenate GT (a prescription prenatal vitamin). The Company touted the market for these products in its Prospectus. However, the market for these products was severely declining and defendants had flooded wholesalers with Prenate GT inventory in the first quarter of 2002 in order to report strong sales prior to the secondary offering. Belatedly, defendants disclosed that due to price erosion arising from generic competition, the Company's products had not been widely accepted by the market. In addition, sales growth from the Company's newly acquired "Sular" drug line had failed to yield strong results, and a promised redevelopment of the Company's sales force similarly failed to boost its bottom line. As a result of the Company's misrepresentations, Company investors have sustained enormous losses, and stand to lose much more as the Company's financial condition continues to decline. On July 2, 2002, the Company shocked the market by revealing that for the second quarter of 2002, the Company expected to report revenues of between $25 and $26 million, and earnings per share between $0.00 and $0.02, excluding a $2.2 million debt write-off. For the full year, the Company revised its guidance to $0.34 a share, a far cry from its earlier guidance of $0.56 to $0.57 a share. A July 2, 2002 press release attributed the massive shortfall mainly to "greater than expected erosion of sales in the second quarter" of Tanafed and Prenate GT, as well as "distraction" arising out of a sales force "realignment." In response to the Company's devastating news concerning the lack of acceptance of two of the Company's key products, Company stock price plummeted by 81%, or by $14.74 to $3.51, on volumes of 16.4 million shares (about 30 times the daily average). For more details, contact Karen M. Hanson by Mail: 100 Washington Avenue South, Suite 2200, Minneapolis, MN 55401 by Phone: 612-339-6900 by E-mail: kmhanson@locklaw.com KINDRED HEALTHCARE: Charles Piven Commences Securities Suit in W.D. KY ---------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired Kindred Healthcare, Inc. (Nasdaq:KIND) securities between August 14, 2001 and October 10, 2002, inclusive, pending in the United States District Court for the Western District of Kentucky, against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven, PA by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com LIBERATE TECHNOLOGIES: Brodsky & Smith Files Securities Suit in N.D. CA ----------------------------------------------------------------------- The Law offices of Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who acquired Liberate Technologies (Nasdaq:LBRT) securities between September 20, 2001 and October 15, 2002, inclusive, in the United States District Court for the Northern District of California, against the Company and some of its officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Jason L. Brodsky or Evan J. Smith by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-90 or by E-mail: esmith@Brodsky-Smith.com QUINTILES TRANSNATIONAL: Beatie and Osborn Begins Securities Suit in NC ----------------------------------------------------------------------- The Law Firm of Beatie and Osborn LLP initiated a securities class action in Durham County, North Carolina on behalf of shareholders and optionholders of Quintiles Transnational Corp. (Nasdaq NM: QTRN) seeking to enjoin the proposed transaction by Pharma Services Company to take the Company private for $11.25 per share. The lawsuit names as defendants Dennis B. Gillings and the members of the Company's Board of Directors as well as the Company itself. The suit alleges breaches of fiduciary duty and failure of the Company's Directors to act in good faith with regard to the proposed going private transaction. For more details, contact Eduard Korsinsky or Benjamin D. Coleman by Mail: 521 Fifth Avenue, 34th Floor New York, New York 10175 by Phone: 800-891-6305 by Fax: (212) 888-9664 by E-mail: clientrelations@bandolaw.com or visit the firm's Website: http://www.bandolaw.com SCHERING-PLOUGH: Brodsky & Smith Launches Securities Suit in New Jersey ----------------------------------------------------------------------- The Law Offices of Brodsky & Smith, LLC initiated a securities class action on behalf of shareholders who acquired Shering Plough Corp. (NYSE:SGP) securities between October 1, 2002 and October 3, 2002, inclusive, in the United States District Court for the District of New Jersey, against the Company and some of its officers and directors. The action charges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Jason L. Brodsky or Evan J. Smith by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by Phone: 877-LEGAL-90 or by E-mail: esmith@Brodsky-Smith.com SEARS ROEBUCK: Milberg Weiss Commences Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Sears, Roebuck & Co. (NYSE:S) between January 17, 2002 to October 17, 2002, inclusive, in the United States District Court for the Northern District of Illinois, Eastern Division, against the Company and: (1) Alan Lacy (CEO, President and Chairman), (2) Glenn Richter (CFO from October 4, 2002, Senior V.P., Finance since inception of class period), (3) Paul J. Liska (CFO until October 4, 2002) and (4) Thomas E. Bergmann (Chief Accounting Officer) The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between January 17, 2002 to October 17, 2002. According to the complaint, defendants, throughout the class period, represented that Sears was growing its earnings strongly, driven by its Credit and Financial Products segment and that it would achieve earnings growth of 22% in 2002 over 2001. In addition, in each of its press releases and SEC reports filed during the class period, Sears reported its provisions for non-collectible accounts and in, its 2001 annual report represented that such reserves were "adequate." These, and other statements detailed in the complaint, were allegedly false and misleading because, according to the complaint, they did not disclose that the Company's risk for non-collectible accounts had increased materially throughout the class period and, in addition, that the Company was under-reserving for its non-collectible accounts which inflated its earnings and balance sheet. On October 17, 2002, the Company reported in a press release that it will grow its 2002 earnings by 15%, rather than the 22% it reaffirmed as recently as ten days previously, because of a "$222 million increase in the domestic provision for non-collectible accounts." In addition, according to the press release, earnings for the third quarter were 26% less than the previous year. In reaction to the press release, the price of the Company's common stock plummeted, falling 32%, from an October 16 close of $33.95 per share to close at $23.15 per share on October 17, on extremely heavy trading volume. For more details, contact Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165 by Phone: 800/320-5081 by E-mail: sears@milbergNY.com or visit the firm's Website: http://www.milberg.com TXU CORPORATION: Bernstein Liebhard Launches Securities Suit in N.D. TX ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of all persons who purchased or acquired TXU Corporation (NYSE:TXU) publicly traded securities between April 25, 2002 and October 11, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with violations of the federal securities laws arising out of defendants' issuance of false and misleading statements about the Company's business, operating performance and prospects. The complaint alleges that during the class period, defendants represented that the Company could succeed in the competition created by deregulation. Defendants then represented that the Company6;'s European operations were improving, it would succeed competition in the U.K. market and it was on track to report EPS of $4.35+ and $4.60+ in 2002 and 2003, respectively. As a result of these allegedly false statements, Company stock traded at artificially inflated levels, as high as $56 per share. Due to this inflation, defendants were able to complete a secondary offering of 11.8 million shares of common stock, priced at $51.15 per share and 8.8 million units of FELINE PRIDES (equity linked debt securities), raising nearly a billion dollars in much needed financing. Subsequent to the offering, defendants needed to maintain a high stock price to avoid triggering additional debt and the conversion of preferred stock into common stock pursuant to a partnership agreement. On October 4, 2002, the Company issued an earnings warning, indicating that due to customer attrition and ongoing problems in Europe the Company would report 2002 EPS of only $3.25. On this news, the Company's stock price declined to $27 per share, from more than $40 per share the prior week. However, the stock remained inflated as defendants concealed the extreme liquidity problems from which the Company was suffering. Defendants even assured the market that the Company was strong financially and that the dividend was "sound and secure." Then, on October 14, 2002, before the market opened, the Company stunned the market with news that it was cutting its dividend 80%, to $0.125 per share and would no longer support its European operations. The Company's stock price immediately collapsed on this news to as low as $10.10 per share before closing at $12.94, a one day drop of 31%, on volume of 39 million shares. For more details, contact Linda Flood by Mail: 10 East 40th Street, New York, New York 10016 by Phone: 800-217-1522 or 212-779-1414 by E-mail: TXU@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. TXU CORPORATION: Nixon Patterson Commences Securities Suit in E.D. TX --------------------------------------------------------------------- Nixon, Patterson & Roach LLP initiated a securities class action in the United States District Court for the Eastern District of Texas, Lufkin Division on behalf of purchasers of TXU Corp. (NYSE:TXU) publicly traded securities during the period between April 25, 2002 and October 11, 2002. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company provides electric and natural gas services, merchant energy trading, energy marketing, telecommunications and energy-related services. The complaint alleges that during the class period, defendants represented that the Company could succeed in the competition created by deregulation. Defendants then represented that the Company's European operations were improving, it would succeed competition in the U.K. market and it was on track to report EPS of $4.35+ and $4.60+ in 2002 and 2003, respectively. As a result of these allegedly false statements, TXU's stock traded at artificially inflated levels, as high as $56 per share. Due to this inflation, defendants were able to complete a secondary offering of 11.8 million shares of common stock, priced at $51.15 per share and 8.8 million units of FELINE PRIDES (equity linked debt securities), raising nearly a billion dollars in much needed financing. Subsequent to the offering, defendants needed to maintain a high stock price to avoid triggering additional debt and the conversion of preferred stock into common stock pursuant to a partnership agreement. On October 4,2002, TXU issued an earnings warning, indicating that due to customer attrition and ongoing problems in Europe the Company would report 2002 EPS of only $3.25. On this news, the Company's stock price declined to $27 per share, from more than $40 per share the prior week. However, the stock remained inflated as defendants concealed the extreme liquidity problems from which the Company was suffering. Defendants even assured the market that the Company was strong financially and that the dividend was "sound and secure." Then, on October 14,2002, before the market opened, TXU stunned the market with news that it was cutting its dividend 80%, to $0.125 per share and would no longer support its European operations. The Company's stock price immediately collapsed on this news to as low as $10.10 per share before closing at $12.94, a one day drop of 31%, on volume of 39 million shares. For more details, contact Brad Beckworth by Mail: 205 Linda Drive Daingerfield, Texas by Phone: 75638 903-645-7333 (ext. 221) by Fax: 903-645-4415 or by E-mail: bbeckworth@nixlawfirm.com TXU CORPORATION: Spector Roseman Commences Securities Suit in N.D. TX --------------------------------------------------------------------- Spector, Roseman & Kodroff, PC initiated a securities class action in the United States District Court for the Northern District of Texas, Dallas Division, against defendants TXU Corporation (NYSE:TXU), and certain of its officers and directors, on behalf of purchasers of the stock of TXU during the period from January 31, 2002 through October 11, 2002, inclusive. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the lawsuit claims that the defendants artificially inflated the Company's stock price by misrepresenting the condition of the Company's European operations throughout the class period. The complaint alleges that the Company lacked a reasonable basis for its earning projections for fiscal 2002 and 2003. Specifically, the defendants failed to disclose to investors that: (1) TXU's operations in Europe and, specifically, those in the United Kingdom were plagued with deficient, inadequate, and faulty internal and financial controls; (2) TXU's risk management in Europe was virtually non-existent, and there was no means of addressing the risk to TXU from the UK's unregulated electricity market; (3) at least one credit facility worth approximately $500 million contained "cross-default" provisions between TXU Europe and TXU; (4) TXU's UK operations used wholesale electricity "structured transactions" to meet earnings goals in violation of Generally Accepted Accounting Principles by shifting earnings and profits from one quarterly period to another; (5) the Company's UK operations had entered into and carried long- term electricity purchase contracts that were "out of the money" by some $700 million; and (6) European operations were impaired and overvalued by billions of dollars On October 4, 2002, the Company announced that it was revising its earnings expectations for fiscal 2002 and 2003. Company stock plummeted as a result of this disclosure and subsequent negative disclosure in an October 7, 2002 analyst meeting, falling from a close of $32.90 per share on October 3, 2002 to $13.85 on October 8, 2002. For more details, contact Robert Roseman by Phone: 888-844-5862 or visit the firm's Website: http://www.srk-law.com TXU CORPORATION: Emerson Firm Lodges Securities Fraud Suit in N.D. TX --------------------------------------------------------------------- The Emerson Firm initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of all persons or entities who purchased or otherwise acquired securities of TXU Corporation (NYSE:TXU) on or before October 14, 2002 of this year. The Company, Erle Nye and Michael McNally are named as defendants in the complaint. The complaint alleges that defendants violated Section 10(b) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements and omitting to disclose material adverse information about the Company's operations and prospects during the class period. Specifically, the complaint alleges that defendants issued several statements that the dividend was stable and they saw nothing that would reduce amount of the dividend. On October 11, 2002, Mr. Nye stated, "I believe the dividend is secure ... I don't know anything today that would make me think otherwise." Three days later, the Company announced that it would reduce its dividend by 80 percent. For more details, contact Tanya Autry by Phone: 800-663-9817 by Fax: (281) 488-8867 or by E-mail: tanya.autry@worldnet.att.net TXU CORPORATION: Wolf Haldenstein Commences Securities Suit in N.D. TX ---------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class action in the United States District Court for the Northern District of Texas, on behalf of purchasers of the securities of TXU Corp. (NYSE: TXU; Nasdaq: TEGpa) between April 25, 2002 and October 11, 2002, inclusive against the Company and certain of its officers and directors. The complaint alleges that during the class period, defendants issued to the investing public false and misleading statements and press releases concerning the Company's and TXU Europe's earnings and credit quality, and the safety of their dividends. The complaint further alleges that on October 4, 2002, before the opening of the market, the Company partially disclosed the true state of its fiscal affairs. Despite having maintained its 2002 and 2003 guidance to this point, the Company shockingly disclosed that it expected materially lower earnings than had been previously predicted. Specifically, in addition to revising and lowering its guidance for the third and fourth quarters of 2002, the Company also lowered its guidance for the year 2002 to a range of $3.20 to $3.25 instead of $4.35 to $4.45 per share of common stock and further lowered its guidance for the year 2003 to a range of $3.45 to $3.55 instead of $4.80 to $4.90 per share. These revelations caused the Company's common stock to decline over 55%, and knocking approximately $5 billion from its stock market value in the subsequent four trading days. On this news, the Company's stock price declined to $27 per share, from more than $40 per share the prior week. However, the stock continued to be inflated as defendants concealed the extreme liquidity problems form which the Company was suffering. Defendants even assured the market that the Company was strong financially and that the dividend was "sound and secure." Then, on October 14, 2002, before the market opened, TXU stunned the market with news that it was cutting its dividend 80% to $0.125 per share and was selling all of its European assets. The Company's stock price immediately collapsed on this news to as low as $10.10 per share before closing at $12.94, a one day drop of 31%, on volume of 39 million shares. Likewise, TXU Europe's stock price (of TXU Europe Capital I preferred stock) fell from approximately $26 per share to approximately $2.50 per share after October 4, 2002. For more details, contact Lawrence Kolker, Kate Dubose, 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 TXU. TXU CORPORATION: Charles Piven Lodges Securities Fraud Suit in N.D. TX ---------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired TXU Corp. (NYSE:TXU) securities between April 25, 2002 and October 11, 2002, inclusive, in the United States District Court for the Northern District of Texas, against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com TXU CORPORATION: Diamond McCarthy Commences Securities Suit in N.D. TX ---------------------------------------------------------------------- Diamond McCarthy Taylor Finley Bryant & Lee initiated a securities class action against TXU Corporation (NYSE: TXU) and two of its top officers, accusing the energy company of defrauding its shareholders. The complaint was filed in US District Court for the Northern District of Texas, Dallas Division, on behalf of all investors who bought the Company's securities from Jan. 31-Oct. 11, 2002. The lawsuit alleges that the defendants "pumped up" the company's stock price by misrepresenting to the investing public the condition of the Company's European operations throughout the class period. The complaint says the Company lacked a reasonable basis for its earning projections for fiscal 2002 and 2003. Specifically, the defendants misled or failed to tell investors that: (1) the Company's operations in Europe and, specifically, those in the United Kingdom were plagued with deficient, inadequate, and faulty internal and financial controls; (2) the Company's risk management in Europe was virtually non- existent, and there was no means of addressing the risk to TXU from the UK's unregulated electricity market; (3) At least one credit facility worth approximately $500 million contained "cross-default" provisions between TXU Europe and TXU; (4) TXU's UK operations used wholesale electricity "structured transactions" to meet earnings goals in violation of Generally Accepted Accounting Principles by shifting earnings and profits from one quarterly period to another; (5) The company's UK operations had entered into and carried long- term electricity purchase contracts that were "out of the money" by some $700 million; and (6) The European operations were impaired and overvalued by billions of dollars. According to the lawsuit, the truth about the Company began to emerge on Oct. 4, 2002, when the company said it was revising its earnings expectations for fiscal 2002 and 2003, and in the spate of news articles and analyst reports that followed. The Company revealed more problems in an Oct. 7, 2002, conference call with analysts. Company stock plummeted following these disclosures, falling from a close of $32.90 per share on Oct. 3, 2002, to $13.85 on Oct. 8, 2002. For more details, contact Rhonda Reddick by Phone: 800-559-4534 or Melody Townsel by Phone: 214-948-2000, or visit the Website: http://www.bermanesq.com UNDERWRITERS LITIGATION: Rabin & Peckel Commences Securities Suit in NY ----------------------------------------------------------------------- Rabin & Peckel LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired securities of Covad Communications, Inc. (OTCBB:COVD) between January 27, 1999 through December 18, 2000, both dates inclusive. The suit names as defendants: (1) Goldman, Sachs & Co., (2) Credit Suisse First Boston Corporation and (3) Morgan Stanley Dean Witter & Co. The complaint charges defendants with violating section 10(b) of the Securities Exchange Act of 1934 by issuing a series of false and misleading statements concerning Covad. The complaint alleges that Goldman Sachs, CSFB, and Morgan Stanley urged investors to purchase Covad stock when defendants knew or should have known that such purchases would not have been good investments. Specifically, the complaint alleges that defendants: (i) issued "Buy" recommendations about Covad without any rational economic basis; (ii) failed to disclose that they were issuing "Buy" recommendations to obtain investment banking business; and (iii) concealed significant, material conflicts of interests that prevented them from providing independent objective analysis. For more details, contact Eric J. Belfi or Sharon Lee by Phone: 800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail: email@rabinlaw.com or visit the firm's Website: http://www.rabinlaw.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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. * * * End of Transmission * * *