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/raid1/www/Hosts/bankrupt/CAR_Public/021223.mbx C L A S S A C T I O N R E P O R T E R Monday, December 23, 2002, Vol. 4, No. 253 Headlines ACCLAIM ENTERTAINMENT: Plaintiffs Appeal Dismissal of Video Game Suit CALICO COMMERCE: Defendants Ask For Dismissal of Securities Fraud Suit CASELLA WASTE: Reaches Agreement to Settle Securities Fraud Suit in NJ CHICO'S FAS: Reaches Agreement To Settle California Overtime Wage Suit DYNACQ INTERNATIONAL: To Ask For Dismissal of TX Securities Fraud Suit DYNACQ INTERNATIONAL: Derivative Suit Proceedings Stayed Pending Report ENTERASYS NETWORKS: Appeals Court Reverses NH Securities Suit Dismissal ENTERASYS NETWORKS: Faces Consolidated Securities Lawsuit in NH Court ENTERASYS NETWORKS: Proceedings in Shareholder Derivative Suit Stayed ENTERASYS NETWORKS: Dismissal of Shareholder Derivative Lawsuit Sought EQUINIX INC.: Court Dismisses Officers, Directors From Securities Suit FINITY HOLDINGS: CA Grants Final Approval To Securities Suit Settlement GEORGIA: Witness Testifies Tri-State Crematory Well Run Before 1996 HASTINGS ENTERTAINMENT: Reaches Settlement in Securities Fraud Lawsuit HOUSEHOLD INTERNATIONAL: States Approve $484M Accord to Consumer Suit IRVINE SENSORS: Plaintiffs File Consolidated Securities Suit in C.D. CA KIA MOTORS: Lawsuit Over Alleged Defective Brakes Gets Class Status MAKITA USA: Voluntarily Recalls 180,000 Circular Saws For Injury Hazard MILWAUKEE ELECTRIC: Recalls 24,000 Electric Grinders For Injury Hazard NETWORK ASSOCIATES: Plaintiffs File Consolidated Securities Suit in CA PEDIATRIC SERVICES: Settlement of Securities Fraud Lawsuit Deemed Final PETCO ANIMAL: Plaintiffs Seek Certification for CA Overtime Wage Suit PILGRIM'S PRIDE: To Oppose Certification of Listeriosis Outbreak Suit PILGRIM'S PRIDE: Appeals Court Upholds Dismissal of Overtime Wage Suit PILGRIM'S PRIDE: Asks For Dismissal of Suit For Packers Act Violations RAMBUS INC.: Asks CA Court To Dismiss Consolidated Securities Lawsuit RAMBUS INC.: Plaintiffs File Amended Consumer Lawsuit in CA State Court SYCAMORE NETWORKS: NY Court Dismisses Officers, Directors From Lawsuit TENET HEALTHCARE: Senior Citizens Commence Consumer Fraud Suit in CA UTAH: Inmates' Suit Opposes Salt Lake Jail's Policy For DNA Test Fees WALT DISNEY: Plaintiffs Ask For Consolidation of Securities Fraud Suit WINNEBAGO INDUSTRIES: Trial in ERISA Suit Set June 2004 in Iowa Court New Securities Fraud Cases ANNUITY AND LIFE: Caldwell & Associates Lodges Securities Lawsuit in CT CYTYC CORPORATION: Milberg Weiss Commences Securities Suit in MA Court SPIEGEL INC.: Pomerantz Haudek Lodges Securities Fraud Suit in N.D. IL ********* ACCLAIM ENTERTAINMENT: Plaintiffs Appeal Dismissal of Video Game Suit --------------------------------------------------------------------- Plaintiffs in the class action against Acclaim Entertainment and other companies in the entertainment industry have appealed the United States District Court for the District of Colorado's dismissal of the suit, which was filed on behalf of all persons killed or injured by the shootings which occurred at Columbine High School on April 20, 1999. The complaint alleges that the video game defendants negligently caused injury to the plaintiffs as a result of their distribution of unidentified "violent" video games, which induced two minors to kill a teacher related to the plaintiff and to kill or harm their high school classmates, thereby causing damages to plaintiffs. The complaint seeks: (1) compensatory damages in an amount not less than $15,000 for each plaintiff in the class, but up to $20 million for some of the members of the class; (2) punitive damages in the amount of $5 billion; (3) statutory damages against certain other defendants in the action; and (4) equitable relief to address the marketing and distribution of "violent" video games to children The court dismissed the suit in March 2002. Following dismissal, the plaintiffs moved for relief and the federal court denied the relief sought by plaintiff. CALICO COMMERCE: Defendants Ask For Dismissal of Securities Fraud Suit ---------------------------------------------------------------------- The United States District Court for the Southern District of New York heard the motions to dismiss the consolidated securities class action filed against Calico Commerce, Inc. and: (1) Alan Naumann, CEO, (2) Art Knapp, Chief Financial Officer, (3) William Unger, director, (4) Bernard LaCroute, director, and (5) William Paseman, former director Plaintiffs allege, among other things, that the investment banks which underwrote the Company's initial public offering of securities, and others, received commissions and made agreements which were not disclosed, but should have been disclosed in the initial public offering prospectus, and which affected the price of Company securities. Plaintiffs attempt to state claims under Sections 11, 12 and 15 of the Securities Act of 1933, and under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated by the Securities Exchange Commission. The lawsuit has been consolidated for pre-trial purposes before Judge Shira A. Scheindlin, United States District Judge for the Southern District of New York, together with more than one thousand actions making virtually identical allegations against the same and additional investment banks, approximately 350 other issuers of securities which conducted initial public offerings in 1998-2000, and numerous individuals associated with such issuers. No specific amount of damages is sought against the Company defendants in the litigation, and no time has been set for the Company defendants to respond to the complaints. The Company believes that the allegations in the litigation are without merit, and intends to vigorously defend the litigation. The Company is now awaiting the outcome of the motion to dismiss. The court has not provided any indication with regard to when it intends to render a decision. CASELLA WASTE: Reaches Agreement to Settle Securities Fraud Suit in NJ ---------------------------------------------------------------------- Casella Waste Systems, Inc. reached a settlement with plaintiffs in the securities class actions filed in the United States District Court, District of New Jersey on behalf of all shareholders who purchased KTI common stock from August 15, 1998 through April 14, 1999. The Company had earlier acquired KTI. The suit names as defendants the Company and: (1) KTI, (2) Ross Pirasteh, (3) Martin J. Sergi, and (4) Paul A. Garrett The complaint alleged that the defendants made unspecified misrepresentations regarding the Company's financial condition during the class period in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. At a settlement conference held on September 27, 2002 the parties reached an agreement, which requires the defendants to pay $3.8 million in return for a full release. The Company's share of the settlement amount is $150,000. Insurers will pay the remainder. Final settlement is pending court approval. CHICO'S FAS: Reaches Agreement To Settle California Overtime Wage Suit ---------------------------------------------------------------------- Chico's FAS, Inc. reached an agreement to settle the class action filed on behalf of the Company's assistant store managers, sales associates and hourly employees in California from September 21,1997 to the present, in the Superior Court for the State of California for the County of Orange. The amended complaint alleged that the Company failed to pay overtime wages and failed to provide rest breaks and meal periods. The action sought "class action" status and sought unspecified monetary damages. Following preliminary settlement discussions, the parties attended a mediation on October 14, 2002, at which the parties reached a settlement on a class-wide basis. The parties are in the process of preparing the settlement documents and intend to diligently pursue final approval of the agreement with the court. The settlement agreement, which is not expected to have a material impact on the Company's financial statements, will recognize that the Company continues to deny that it has engaged in any unlawful behavior. The proposed settlement must first be submitted to the court for preliminary approval. Following such approval, a notice to the class of the settlement must be provided, giving class members the right to opt out. After the expiration of the opt-out period, the court will be asked to provide final approval of the settlement. This entire process is expected to take a number of months to complete. DYNACQ INTERNATIONAL: To Ask For Dismissal of TX Securities Fraud Suit ---------------------------------------------------------------------- Dynacq International, Inc. intends to ask the United States District Court for the Southern District of Texas to dismiss the securities class action pending against it and two of its officers, alleging violations of federal securities laws and regulations. The putative class covers those persons who purchased the Company's shares between November 29, 1999 and January 16, 2002. The suit alleges that the Company violated Sections 10(b) and 20(a) and Rule 10b-5 under the Securities Exchange Act of 1934 by making materially false or misleading statements or omissions regarding revenues and receivables and regarding whether the Company's operations complied with various federal regulations. These actions are at an early stage, and no discovery has taken place at this time. The Company intends to defend these claims vigorously. DYNACQ INTERNATIONAL: Derivative Suit Proceedings Stayed Pending Report ----------------------------------------------------------------------- The 295th District Court of Harris County, Texas stayed proceedings in the shareholder derivative suit filed against Dynacq International, Inc. pending the report by the Company's Special Litigation Committee. In March 2002, the Company accepted service of a shareholder derivative action brought in the 295th District Court of Harris County, Texas brought on behalf of the Company against its officers and directors, outside auditor, and investment bank, and two analysts affiliated with that investment bank. The suit alleges breach of fiduciary duty, aiding and abetting breach of fiduciary duty, negligence and breach of contract. Plaintiff makes general allegations of the defendants' alleged misconduct in: (1) causing or allowing the Company to conduct its business in an unsafe, imprudent and unlawful manner; (2) failing to implement and maintain an adequate internal control system; and (3) exposing the Company to enormous losses," including allegations that various press releases and/or public statements issued between January 1999 and January 2002 were misleading Plaintiffs further allege sales by Company insiders while in possession of material non-public information. The plaintiffs made no demand on either the Company or its Board of Directors prior to filing suit. A separate action was brought in United States District Court for the Southern District of Texas making similar allegations in federal court against only officers and directors of the Company. The plaintiff in this action also did not make a demand on the Company prior to filing suit. Another derivative suit making similar allegations was filed in the 152nd District Court of Harris County, Texas. However, at the plaintiff's request, the court dismissed that action. The Board of Directors has appointed a Special Litigation Committee to conduct an investigation and make a determination as to how the Company should proceed on the claims asserted in the shareholder derivative actions. On October 7, 2002, the 295th district court stayed the state-court shareholder derivative case for 60 days pending the Special Litigation Committee's investigation. On November 12, 2002, the federal district court presiding over the shareholder derivative action filed there stayed that action pending conclusion of the shareholder class action lawsuit. ENTERASYS NETWORKS: Appeals Court Reverses NH Securities Suit Dismissal ----------------------------------------------------------------------- The United States First Circuit Court of Appeals reversed the dismissal of the consolidated securities class action filed against Enterasys Networks, Inc. and certain of its officers and directors. The suit, filed in the United States District Court for the District of New Hampshire, alleges that the Company and several of its officers and directors disseminated materially false and misleading information about our operations and acted in violation of Section 10(b) and Rule 10b-5 of the Exchange Act during the period between March 3, 1997 and December 2, 1997. The complaint further alleges that certain officers and directors profited from the dissemination of such misleading information by selling shares of our common stock during this period. In a ruling dated May 23, 2001, the court dismissed this complaint with prejudice, which the plaintiffs appealed. In a ruling issued on November 12, 2002, the appeals court reversed and remanded the case to the district court for further proceedings. If plaintiffs prevail on the merits of the case, the Company could be required to pay substantial damages. ENTERASYS NETWORKS: Faces Consolidated Securities Lawsuit in NH Court --------------------------------------------------------------------- Enterasys Networks, Inc. faces a consolidated securities class actions filed in the United States District Court for the District of New Hampshire. The suit also names as defendants former chairman and chief executive officer Enrique Fiallo and former chief financial officer Robert Gagalis. The suit alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder. Plaintiffs allege that during periods spanning from as early as August, 2001 through February, 2002, defendants issued materially false and misleading financial statements and press releases that overstated our revenues, income, and earnings per share, because the Company purportedly recognized revenue in violation of Generally Accepted Accounting Principles (GAAP) and the Company's own accounting policies in connection with transactions in the Company's Asia Pacific region. By order of the court, the Company has not yet been required to file a responsive pleading. If plaintiffs prevail on the merits of the case, the Company could be required to pay substantial damages. ENTERASYS NETWORKS: Proceedings in Shareholder Derivative Suit Stayed --------------------------------------------------------------------- The Superior Court of Rockingham County, State of New Hampshire agreed to stay proceedings in the shareholder derivative suit filed on Enterasys Networks, Inc.'s behalf against its former chairman and chief executive officer and certain members of its Board of Directors. Plaintiffs allege that the individual defendants breached their fiduciary duty to shareholders by causing or allowing the Company to conduct its business in an unsafe, imprudent, and unlawful manner and failing to implement and maintain an adequate internal accounting control system. Plaintiffs allege that this breach caused the Company to improperly recognize revenue in violation of generally accepted accounting principles (GAAP) and the Company's own accounting policies in connection with transactions in the Company's Asia Pacific region, and that this alleged wrongdoing resulted in damages to the Company. The defense of these actions may result in the diversion of management's resources from the operation of the Company's business, which could impede the Company's ability to achieve its business objectives. The unfavorable resolution of any specific action could materially harm the Company's business, operating results and financial condition, and could cause the price of the Company's common stock to decline significantly. ENTERASYS NETWORKS: Dismissal of Shareholder Derivative Lawsuit Sought ---------------------------------------------------------------------- Enterasys Networks, Inc.'s officers and directors asked the Court of Chancery of the State of Delaware in and for New Castle County to dismiss the shareholder derivative suit filed on behalf of the Company. The suit alleges that the individual defendants: (1) permitted wrongful business practices to occur which had the effect of manipulating revenues and earnings, (2) inadequately supervised the Company's employees and managers, and (3) failed to institute legal actions against those officers, directors and employees responsible for the alleged conduct The complaint alleges counts for breach of fiduciary duty, misappropriation of confidential information for personal profit, and contribution and indemnification. Plaintiffs seek judgment directing defendants to account to the Company for all damages sustained by the Company by reason of the alleged conduct, return all compensation of whatever kind paid to them by the Company, pay interest on the damages as well as costs of the action. The plaintiff has not yet filed a responsive brief with respect to this motion. EQUINIX INC.: Court Dismisses Officers, Directors From Securities Suit ---------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed certain of Equinix, Inc.'s officers and directors as defendants from the securities class action filed against them, the Company and several investment banks that were underwriters of the Company's initial public offering, as part of an agreement with the suit's plaintiffs. The suit, filed on behalf of investors who purchased Company stock between August 10, 2000 and December 6, 2000, allege that the underwriter defendants agreed to allocate stock in the Company's initial public offering to certain investors in exchange for excessive and undisclosed commissions and agreements by those investors to make additional purchases in the aftermarket at pre-determined prices. The plaintiffs allege that the prospectus for the Company's initial public offering was false and misleading and in violation of the securities laws because it did not disclose these arrangements. The Company states that it is possible that additional similar complaints may also be filed. FINITY HOLDINGS: CA Grants Final Approval To Securities Suit Settlement ----------------------------------------------------------------------- The United States District Court for the Southern District of California granted final approval to the settlement of the securities class actions pending against Finity Holdings, Inc, alleging federal securities violations. The suit was commenced in July 2000 against the Company and: (1) Douglas R. Baetz, (2) Glenn M. Gallant, (3) Columbia Capital Corp. (the Company's predecessor in interest), (4) First Independent Computers and (5) Does 1-100 The suit was filed on behalf of purchasers of the common stock of the Company from January 1, 1998 through and including March 13, 2001, and alleges: (i) violations of the anti-fraud provisions of the Securities Exchange Act of 1934, (ii) violations of California securities laws, (iii) violations of the Racketeer Influenced Corrupt Organizations Act, (iv) fraud, and (v) conspiracy The Company filed a motion in mid-2001 to dismiss the entire case because the plaintiff's attorneys were not pursuing the case, which the court granted with prejudice in July 2001. Pursuant to the terms of the order, the suit was dismissed with prejudice based upon the failure to prosecute and plaintiff's inaction and failure to comply with the court's Order to serve an amended complaint upon the defendants by March 23, 2001, an earlier Class Action Reporter states. This would have ended the litigation, except that in early August of 2001, plaintiffs in this case submitted a motion for reconsideration of the court's ruling. The court ruled in the Company's favor. However, the plaintiffs filed a notice of appeal in April 2002 the 9th circuit Court Of Appeals. The plaintiff's attorneys then filed a second case following their failure in the first matter, in the United States District Court for the Southern District of California naming as defendants: (1) Douglas R. Baetz, (2) Glenn M. Gallant, (3) Finity Holdings, Inc., (4) Finity Corporation, (5) Chuck LaMontagne and (6) Kenneth Klotz The suit is essentially the same case as the first case, with a new lead plaintiff. The Company has not answered the complaint in the case, because it agreed to settle and avoid prolonged litigation. There were no objections to the settlement and no potential class members have opted out of the settlement. Douglas R. Baetz and Glenn M. Gallant have not settled and remain defendants in the action. GEORGIA: Witness Testifies Tri-State Crematory Well Run Before 1996 ------------------------------------------------------------------- LaShea Marsh, 32, the older sister of defendant Ray Brent Marsh, recently gave a taped deposition in US District Court during a civil hearing on the Tri-State Crematory case, to determine whether plaintiffs, the relatives of the poorly treated bodies at the crematory, can seek class action status, the Atlanta Journal- Constitution reports. Ray Brent Marsh is charged with 338 counts of theft by deception and 64 counts of abuse of a corpse. Mr. Marsh took over the business from his father, in 1996, and was operating it when 339 bodies were found, in February of this year, strewn about and buried on the family's property, in Noble, Georgia. There is no evidence that Ms. Marsh was involved in the felonies that are charged to her brother. Ms. Marsh described in detail how she performed the cremations, which she started doing as early as 1986, when her father still operated the crematory. Her description reflected that they were performed with care. She said, "My father always placed the body in the retort in a reasonable amount of time after he received it." Ms. Marsh also said that her father was a reasonably neat and tidy man, who kept the property in good shape. She said she took a group from her church on a tour of Tri-State sometime before 1996. Ms. Marsh ceased doing cremations in 1996. Donald Guinn, a part-time employee at Wilson Funeral Home in Fort Oglethorpe, said he had been in Tri-State Crematory five or six times, from 1992 to 1996, to drop off bodies. He testified that the cremation machine was activated every time he was there. He also said the crematory was neat and clean, and that the building was in good repair. This description is a far cry from those presented by plaintiffs' side the first day of the hearing, which showed pictures, taken in June, of the place in disrepair, widespread debris and a crematory retort caked with soot. The pictures shown by the plaintiffs were taken after the state had occupied the property for four months, clear-cutting 14 acres of forest and bulldozing most of the property. HASTINGS ENTERTAINMENT: Reaches Settlement in Securities Fraud Lawsuit ---------------------------------------------------------------------- Hastings Entertainment, Inc. reaches a settlement of the consolidated securities class action filed against it and certain of its current and former directors and officers in the United States District Court for the Northern District of Texas. Several suits was commenced in 2000 after the Company restated its consolidated financial statements for the first three quarters of fiscal 1999 and the prior four fiscal years. The suits assert various claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On May 15, 2000, a lawsuit was filed in the United States District Court for the Northern District of Texas against the Company, its current and former directors and officers at the time of the Company's June 1998 initial public offering and three underwriters, Salomon Smith Barney, A.G. Edwards & Sons, Inc. and Furman Selz, LLC asserting various claims under Sections 11, 12(2) and 15 of the Securities Act of 1933. Motions to dismiss these actions were filed by the Company and, on September 25, 2001, were denied by the court. On September 12, 2002, the Company announced that an agreement in principle to settle the actions described above had been reached. The settlement requires a payment of $5.75 million ($3.25 million of which the Company estimates will be funded from amounts remaining under the Company's director and officer insurance policy after the payment of litigation expenses) and the assignment to the plaintiff settlement class of any claims the Company may have had against KPMG Peat Marwick, LLP, the Company's outside auditors at the time of the March 7, 2000 announcement. The settlement resolves all claims against the Company, its current and former defendant officers and directors and the defendant underwriters. Based on the foregoing, the Company recorded a loss contingency of $2.5 million, or $0.22 per share, during the second quarter of fiscal 2002. Before completion of the settlement agreements, plaintiffs' counsel informed the Company that the plaintiff settlement class had settled all claims against KPMG, including the claims assigned by the Company. Amended settlement agreements that added the terms of the KPMG settlement with the plaintiff settlement class are expected to be filed in mid December 2002. The settlement is subject to court approval. HOUSEHOLD INTERNATIONAL: States Approve $484M Accord to Consumer Suit --------------------------------------------------------------------- All 50 states and the District of Columbia have given final approval to a $484 million settlement with Household International, a lending company which is accused of duping tens of thousands of poor home buyers with hidden and unnecessary costs, the Los Angeles Daily News reports. Overall, this case presents the largest restitution amount in a state or federal consumer case, said Thomas Miller, Iowa Attorney General and lead prosecutor in the case. A preliminary agreement of the settlement was reached in October after officials from 19 states and Washington, DC accused the company of misrepresenting loan terms and keeping cost information from home buyers. Many borrowers lost their homes, or nearly lost them because their monthly payments were higher than expected, the state officials alleged in the lawsuit. In the preliminary settlement, the Company did not admit to wrongdoing, but apologized and agreed to new lending practices and better monitoring of real estate loans. IRVINE SENSORS: Plaintiffs File Consolidated Securities Suit in C.D. CA ----------------------------------------------------------------------- Plaintiffs in the securities class actions pending against Irvine Sensors Corporation filed a consolidated amended suit in the United States District Court for the Central District of California. The suit names as defendants the Company, certain of its current and former officers and directors, and an officer and director of its former subsidiary Silicon Film Technologies, The amended complaint alleges that defendants made false and misleading statements about the prospects of Silicon Film during the period January 6, 2000 to September 15, 2001, inclusive. The amended complaint asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5, and seeks damages of an unspecified amount. There has been no discovery to date and no trial has yet been scheduled. The Company believes that it has meritorious defenses to these actions. Failure by the Company to obtain a favorable resolution of the claims set forth in the actions could have a material adverse effect on the Company's business, results of operations and financial condition. KIA MOTORS: Lawsuit Over Alleged Defective Brakes Gets Class Status ------------------------------------------------------------------- A federal judge said a woman who demanded a refund for her Kia Sephia automobile after it needed five brake jobs in just 17,000 miles, can sue the carmaker on behalf of 10,000 Pennsylvanians who bought the same car, Associated Press Newswires reports. US District Judge J. Curtis Joyner said the woman, who bought her Kia in Philadelphia three years ago, had introduced evidence that "a vast number" of Sephias bought between 1997 and 2001, needed to have their brake pads and rotors replaced less than every 5,000 miles. In a recently signed opinion, Judge Joyner certified the woman as the lead plaintiff in a class action against Kia Motors America, which discontinued the Sephia model in 2001. Judge Joyner's ruling applies only to car owners in Pennsylvania, but Mr. Feldman said he hopes judges in other states will take note of his decision. "We intend to seek relief for every member of the class," said Philadelphia attorney Alan M. Feldman, who is representing the plaintiff Shamell Samuel-Bassett. "Consumers should have a method for vindicating their rights when they are sold a defective car." The lawsuit claims that the Sephia suffers from a defect that causes its brakes to repeatedly wear out. Drivers notice the problem when their brakes begin to shudder, make grinding noises, and, in some cases, fail entirely, says the lawsuit. The 2000 Sephia had a base price of about $13,370, the lawsuit said. The plaintiffs want the company to pay for past or future repairs, plus damages to cover the diminished value of their cars. The carmaker said it would appeal Judge Joyner's ruling. MAKITA USA: Voluntarily Recalls 180,000 Circular Saws For Injury Hazard ----------------------------------------------------------------------- Makita USA, Inc. is cooperating with the US Consumer Product Safety Commission, (CPSC) by voluntarily recalling about 180,000 circular saws. The lower blade guard of the saw can become jammed, which can result in the consumer coming in contact with the blade and suffering a serious injury. Makita USA Inc. has not received any reports of incidents. This recall is being conducted to prevent the possibility of injuries. The recall involves 7 1/4-inch circular saws with the model number 5740NB. The model number is located on the silver nameplate next to the name "Makita." The saw's housing is blue-green and the name "Makita" appears on the metal blade guard and silver nameplate on the motor housing. The recalled saws were manufactured in China. Home centers, hardware stores and industrial suppliers nationwide sold the circular saws from April 1998 to November 2002 for between $99 and $119. For more details, contact the Company by Phone: (800) 462-5482 between 8 am and 4:30 pm Monday through Friday. MILWAUKEE ELECTRIC: Recalls 24,000 Electric Grinders For Injury Hazard ---------------------------------------------------------------------- Milwaukee Electric Tool Corporation is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 24,000 electric grinders. The grinder's switch can stick in the "on" position, which could pose an injury hazard to consumers. The Company has received 12 reports of grinder switches sticking in the "on" position. No injuries have been reported. The recall includes the 15 Amp grinders that have a seven or nine inch disc and have the following catalog and serial numbers, which can be found on a nameplate on the top of the grinder: (1) Catalog Number: 6086-20, Serial Numbers: 991A and 991B only, (2) Catalog Number: 6088-20, Serial Numbers: Serial Prefix 994A and 994B only, (3) Catalog Number: 6089-20, Serial Numbers: Serial Prefix 992A The grinders were manufactured in the United States. Home centers, hardware stores and industrial distributors nationwide sold these grinders from June 2001 through November 2002 for between $165 and $175. For more details, contact the Company by Phone: (800) 414-6527 between 6 am and 6:30 pm CT Monday through Friday, or visit the firm's Website: http://www.heavydutytool.com. NETWORK ASSOCIATES: Plaintiffs File Consolidated Securities Suit in CA ---------------------------------------------------------------------- Plaintiffs filed a consolidated amended class action in the United States District Court for the Northern District of California against Network Associates, Inc. and: (1) William Larson, (2) Prabhat Goyal and (3) Peter Watkins The suit, filed on behalf of persons who purchased the Company's stock between July 19 and December 26, 2000. The complaint asserts causes of action (and seeks unspecified damages) for alleged violations of Exchange Act Section 10(b)/SEC Rule 10b-5 and Exchange Act Section 20(a). In particular, the complaint alleges that defendants engaged in improper practices designed to increase the Company's revenues and earnings and that, as a result of those practices, the Company's class period financial statements were false and misleading and failed to comply with Generally Accepted Accounting Principles (GAAP). Defendants' filed a motion to dismiss plaintiff's consolidated complaint on October 29, 2001. The hearing on the motion to dismiss was held on April 16, 2002. On April 29, 2002, the court entered an order approving a jointly stipulated withdrawal of defendants' motion to dismiss. PEDIATRIC SERVICES: Settlement of Securities Fraud Lawsuit Deemed Final ----------------------------------------------------------------------- The settlement of the securities class action filed against Pediatric Services of America, Inc. has become final after no appeal was filed with the United States District Court for the Northern District of Georgia. The suit names as defendants the Company and certain of its then current officers and directors, and alleged that prior to the decline in the price of the Company's common stock on July 28, 1998, there were violations of the federal securities laws arising from misstatements of material information in and/or omissions of material information from certain of the Company's securities filings and other public disclosures principally related to its reporting of accounts receivable and the allowance for doubtful accounts. The amended complaint purported to expand the class to include all persons who purchased the Company's common stock during the period from July 29, 1997 through and including July 29, 1998. The Company and the individuals named as defendants moved to dismiss the amended complaint on both substantive and procedural grounds, but the court denied the motions. The Company and the individuals named as defendants later filed their answer, denying liability. The court later granted plaintiffs' motion for class certification. Fact discovery was commenced in the suit. On September 5, 2001, Plaintiffs moved for leave to file a second amended complaint and to expand the class period. The proposed second amended complaint purported to expand the class to include all persons who purchased the Company's stock between November 11, 1996 and July 28, 1998. The court denied plaintiffs' motion on October 12, 2001. In January 2002, the parties entered into a stipulation of settlement settling all claims asserted in the lawsuit against all parties for a total of $3.2 million, subject to court approval. On March 14, 2002, following a hearing on the fairness, reasonableness and adequacy of the proposed settlement, the court entered an order approving the settlement. The time for appeal of the settlement order has expired and no appeal has been taken. PETCO ANIMAL: Plaintiffs Seek Certification for CA Overtime Wage Suit --------------------------------------------------------------------- Plaintiffs in the overtime wage lawsuit filed against PETCO Animal Supplies, Inc. asked the Superior Court of California for the County of San Diego to certify the suit as a class action. The suit was commenced on behalf of salaried managers or assistant managers in the Company's stores in the state of California at any time between July 30, 1997 and the present. The complaint alleges that the individual plaintiffs and the purported class members worked hours for which they were entitled to receive, but did not receive, overtime compensation under California law, and that they were classified as "exempt" store management employees but were forced to work more than 50% of their time in non-exempt tasks. The complaint alleges violations of the California Labor Code and the California Business and Professions Code. The Company has answered the complaint and is vigorously defending the action. A motion for certification of this action as a class action was filed on November 1, 2002. The Company has filed its written opposition to the motion for class certification. A ruling is expected within the next 60 days. If successful, this litigation could have a material adverse effect on the Company's financial condition, and any required change in the Company's labor practices could have a negative impact on its results of operations. PILGRIM'S PRIDE: To Oppose Certification of Listeriosis Outbreak Suit --------------------------------------------------------------------- Pilgrim's Pride Corporation and Wampler Foods, Inc. faces a class action filed in the Philadelphia County Court of Common Pleas in the Commonwealth of Pennsylvania by an individual who allegedly consumed the Company's meat products. The complaint seeks recovery on behalf of a putative class of all persons that purchased and/or consumed meat products manufactured by the Company between May 1, 2002, and October 11, 2002, bearing establishment code P-1351 and who have suffered an injury. This class represents all individuals who have suffered Listeriosis and symptoms of Listeriosis and other medical injuries. Plaintiff also seeks to represent a putative class of all persons that purchased and/or consumed meat products manufactured by the Company between May 1, 2002 and October 11, 2002 bearing establishment code P-1351 and who have not suffered any personal injury. The complaint seeks compensatory and punitive damages under: (1) theories of negligence, (2) alleged violation of the Pennsylvania Unfair Trade Practices Act and Consumer Protection Law, (3) strict liability in tort, and (4) unjust enrichment The time for responding to the complaint has not yet arrived. The Company intends to defend vigorously both certification of the case as a class action and questions concerning ultimate liability and damages, if any. No discovery has been conducted to date. Neither the likelihood of an unfavorable outcome nor the amount of ultimate liability, if any, with respect to this case can be determined at this time. The Company does not expect this matter to have a material impact on its financial position, operation or liquidity after considering its available insurance coverage. PILGRIM'S PRIDE: Appeals Court Upholds Dismissal of Overtime Wage Suit ---------------------------------------------------------------------- The United States Fifth Circuit Court of Appeals upheld a lower court's decision dismissing the class action filed against Pilgrim's Pride Corporation by seventeen of its current and/or former employees, alleging violations of the Fair Labor Standards Act. The suit, filed in the United States District Court for the Eastern District of Texas, Lufkin Division, alleged the Company failed to pay employees for all hours worked. The suit generally alleged that: (1) employees should be paid for time spent to put on, take off, and clean certain personal gear at the beginning and end of their shifts and breaks and (2) the use of a master time card or production "line" time fails to pay employees for all time actually worked. Approximately 1,700 consents to join as plaintiffs were filed with the court by current and/or former employees. During the week of March 5, 2001, the case was tried in court. The Company prevailed at the trial with a judgment issued by the court, which found no evidence presented to support the plaintiffs' allegations. The plaintiffs filed an appeal in the Fifth Circuit Court of Appeals to reverse the judge's decision. The Fifth Circuit Court of Appeals heard oral arguments in this matter on June 4, 2002. On June 6, 2002 the Fifth Circuit Court of Appeals entered a per curiam opinion affirming the opinion of the trial court. Appellants did not file any motion for a rehearing and the deadline for filing of such a motion has passed. In August of 2000, four of our current and/or former employees filed the case of "Betty Kennell, et al. v. Wampler Foods, Inc." in the United States District Court for the Northern District of West Virginia, claiming the Company violated requirements of the Fair Labor Standards Act. The suit generally makes the same allegations as the suit discussed above. Plaintiffs seek to recover unpaid wages plus liquidated damages and legal fees. Approximately 150 consents to join as plaintiffs were filed with the court by current and/or former employees. No trial date has been set. To date, only limited discovery has been performed. Neither the likelihood of an unfavorable outcome nor the amount of ultimate liability, if any, with respect to this case can be determined at this time. The Company does not expect this matter, individually or collectively, to have a material impact on its financial position, operations or liquidity. PILGRIM'S PRIDE: Asks For Dismissal of Suit For Packers Act Violations ---------------------------------------------------------------------- Pilgrim's Pride Corporation asked the United States District Court for the Eastern District of Texas, Texarkana Division to dismiss the class action filed against the Company on behalf of a putative class of chicken growers. The complaint alleges that the Company violated the Packers and Stockyards Act (7 U.S.C. Section 192) and breached fiduciary duties allegedly owed to the plaintiff growers. The plaintiffs also brought individual actions under the Packers and Stockyards Act alleging common law fraud, negligence, breach of fiduciary duties and breach of contract. The Company filed our Motion to Dismiss under Rules 12(b) (1), 12(b) (6) and 9(b). The Company also filed a motion to transfer venue and the plaintiffs have filed a motion for preliminary injunction to prohibit any alleged retaliation against the growers. Discovery has not yet been conducted in this case. The court has not ruled upon any of the motions. The Company intends to defend vigorously both certification of the case as a class action and questions concerning ultimate liability and damages, if any. Neither the likelihood of an unfavorable outcome nor the amount of ultimate liability, if any, with respect to this case can be determined at this time. The Company does not expect this matter, to have a material impact on our financial position, operations or liquidity. RAMBUS INC.: Asks CA Court To Dismiss Consolidated Securities Lawsuit --------------------------------------------------------------------- Rambus, Inc. asked the United States District Court for the Northern District of California to dismiss the consolidated securities class action filed on behalf of purchasers of the Company's common stock between February 11, 2000 and May 9, 2001, inclusive. The suit asserts claims under Section 10(b) of the Exchange Act and Section 20(a) of the Exchange Act, as well as Rule 10b-5. The suit alleges that the Company misled shareholders concerning its business and the status of its intellectual property in light of allegations concerning its involvement in JEDEC. On May 17, 2002, the Company moved to dismiss the consolidated complaint. The Company also filed a reply brief and the matter is pending. RAMBUS INC.: Plaintiffs File Amended Consumer Lawsuit in CA State Court ----------------------------------------------------------------------- Plaintiffs in the class action filed against Rambus, Inc. filed an amended suit in the California Superior Court, Santa Clara County. The suit purports to be on behalf of an alleged class of "indirect purchasers" of memory from January 2000 to March 2002. The suit alleges that those purchasers paid higher prices for various types of dynamic random access memory (DRAM) due to the Company's alleged unlawful use of market power in the various DRAM markets to coerce vendors of equipment using that technology to enter into supposed agreements in restraint of trade. Plaintiffs base their claims on various legal theories and on the Company's alleged anticompetitive actions in patenting and licensing various technologies relating to DRAM, which plaintiffs assert, occurred during the Company's involvement at JEDEC in 1991-96, as well as during its subsequent patent licensing and litigation efforts. The Company demurred to this complaint in its entirety on June 24, 2002 and a hearing on this demurrer occurred on August 27, 2002, at which point the court granted the Company's demurrer, giving plaintiff leave to amend its suit. The Company has already demurred to the amended complaint, and its demurrer is pending. SYCAMORE NETWORKS: NY Court Dismisses Officers, Directors From Lawsuit ---------------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed Sycamore Networks, Inc.'s officers and directors as defendants in the consolidated securities class action filed against them, the Company, the underwriters for the Company's initial public offering on October 21, 1999, the underwriters for the Company's follow-on offering on March 14, 2000. The amended complaint was filed on behalf of persons who purchased the Company's common stock between October 21, 1999 and December 6, 2000 and alleges violations of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, primarily based on the assertion that the Company's lead underwriters, the Company and the other named defendants made material false and misleading statements in the Company's Registration Statements and Prospectuses filed with the SEC in October 1999 and March 2000 because of the failure to disclose: (1) the alleged solicitation and receipt of excessive and undisclosed commissions by the underwriters in connection with the allocation of shares of common stock to certain investors in the Company's public offerings; and (2) that certain of the underwriters allegedly had entered into agreements with investors whereby underwriters agreed to allocate the public offering shares in exchange for which the investors agreed to make additional purchases of stock in the aftermarket at pre-determined prices. The amended complaint alleges claims against the Company, several of the Company's officers and directors and the underwriters under Sections 11 and 15 of the Securities Act. It also alleges claims against the Company, the individual defendants and the underwriters under Sections 10(b) and 20(a) of the Securities Exchange Act. The action against the Company is being coordinated with over three hundred other nearly identical actions filed against other companies. The actions seek damages in an unspecified amount. A motion to dismiss addressing issues common to the companies and individuals who have been sued in these actions was filed on July 15, 2002. An opposition to that motion was filed on behalf of the plaintiffs and a reply brief was filed on behalf of the defendants. The fully briefed issues are now pending before the court and oral arguments were heard on November 1, 2002. On October 9, 2002, the court dismissed the individual defendants from the case without prejudice based upon stipulations of dismissal filed by the plaintiffs and the individual defendants. The Company believes that the claims against it are without merit, but is not currently able to estimate the possibility of loss or range of loss, if any, relating to these claims. TENET HEALTHCARE: Senior Citizens Commence Consumer Fraud Suit in CA -------------------------------------------------------------------- A group representing more than 650,000 California senior citizens filed a lawsuit this week contending that Tenet Healthcare (NYSE: THC) has engaged in a wide variety of illegal actions, adding exorbitant mark- ups to prescription drugs and other hospitalization charges, as well as conducting unnecessary medical procedures, in an effort to boost corporate profits at the expense of its members and other health care consumers. The Congress of California Seniors, an umbrella organization for hundreds of affiliated senior groups in California, filed the suit in an effort to reclaim the estimated millions of dollars of illegal profits reaped by Tenet with devastating impact on seniors and other consumers. The litigation is sponsored by Community Catalyst, a national health advocacy organization working with the Congress of California Seniors and consumer groups around the country to improve health care access. "Many of our members get their care at Tenet Hospitals," said Congress of California Seniors Legislative Director Bill Powers. "So these outrageous prices have hurt many of us directly, by forcing us to pay higher premiums, higher deductibles, higher co-pays. Then they tell us Medicare can't afford to pay for drugs. Well, now we know why. Medicare's getting ripped off by corporations like Tenet, just to feed the company's bottom line." Health system changes driven by the rise of market-based health care is a major focus for Community Catalyst, which provides support to consumer groups in more than 30 states, ensuring that they have a voice in key health care access issues, including hospital and health plan ownership changes. "We've warned for years that treating health care as a market commodity means consumer and community interests take a back seat. And it absolutely distorts the health system. This lawsuit is about bringing some corporate accountability to bear on companies that price their services in complete disregard of consumer health needs," said Community Catalyst attorney Dawn Touzin. The nation's second largest health care company, Tenet racked up more than $2.9 billion in profits during the last 13 years through its aggressive pricing markup practice. Tenet's exorbitant pricing has hurt Medicare, private health plans and other payers, as well as the uninsured, who are forced to pay these inflated prices out-of-pocket. Tenet's practices have led to several government investigations, including a federal audit of its Medicare reimbursements, a probe by the Securities and Exchange Commission (SEC), and a FBI investigation of two leading doctors at the Redding Medical Center. "We intend to show that Tenet's core business philosophy is to dominate a region in such a way as to create a virtual stranglehold on the health care delivery system," said Steve Berman, managing partner of Hagens Berman, the law firm leading the litigation. "Once they achieve that market dominance, that's when the price-gouging begins." Berman noted that Tenet hospitals in California charge as much as twice the price other hospitals charge for some procedures. "It is a viciously cynical approach to health care, and one that needs to stop," he said. The lawsuit filed by Congress for California Seniors claims Tenet also trumped up its profits by using its overwhelming regional market power to charge unlawfully high prices for other aspects of hospital care, including pharmaceutical charges. "It's clear that within the Tenet system, which seeks to maximize profits through any means possible, the company's doctors and health institutions were promised bonus and incentive programs to the extent that they helped boost Tenet revenue," Touzin noted. According to the complaint, the price gouging also extended to prescription drug prices, with Tenet setting prices more than 1,000 percent above actual drug costs in California, and twice the drug mark- ups by other hospitals. Two Tenet physicians, in particular, are being investigated for operating a scheme in which they used a combination of high rates and frequent recommendations of unnecessary surgery to boost profits for Tenet and themselves. According to the suit, both Drs. Chae Hyun Moon and Fidel Realyvasquez billed more than $7 million in Medicare claims during the last year, charging prices four to five times more than average physicians at times. For example, during 2001, Dr. Moon performed 876 left-side catheterization procedures - several times more than average physicians - in addition to numerous other stent placement procedures and angioplasties. In each instance, the catheterization was being performed outside the hospital, at a Tenet-owned catheterization lab. An independent review of the two doctors' patients and their medical histories revealed that 25 to 50 percent of the patients underwent unnecessary procedures, the complaint states. The suit claims these excessively high prices for surgeries and drugs force consumers to choose between life-saving medical care and basic needs. The suit was filed December 17, 2002 in California Superior Court in Los Angeles. The suit asks for a return of all illegal profits received by Tenet as a result of its allegedly unlawful business practices. For more details, contact Steve Berman of Hagens Berman by Phone: 1-206-623-7292 by E-mail: steve@hagens-berman.com or visit the firm's Website: http://www.hagens-berman.com UTAH: Inmates' Suit Opposes Salt Lake Jail's Policy For DNA Test Fees --------------------------------------------------------------------- A proposed class action filed on behalf of Salt Lake County Jail inmates challenges the jail's policy of using inmates' funds to pay a $75 fee for DNA testing of felons, which is required by law, The Salt Lake Tribune reports. The jail does not assess inmates' finances to determine their ability to pay, which is required by the testing law, the suit alleges. The statute says the fee is to be paid by the felon "unless the agency determines the person lacks the ability to pay." Agencies are required to establish "guidelines and procedures" to determine an inmate's ability to pay. However, "what the jail has said is that we are going to assess everybody (to pay the fee)," said Brian Bernard of Utah Legal Clinic, an attorney representing the inmates. According to the lawsuit, Salt Lake County Jail takes "the position that all felony inmates . have the ability to pay for the DNA test and that no inmate (indigent or not) will have that fee waived." The lawsuit seeks a judge's ruling that the inmates are not required to pay the fee until an administrative determination is mad on their ability to pay. The lawsuit seeks to include the claims of all past, current and future inmates who allegedly suffered damages because they were not properly evaluated. Third District Judge Timothy Hanson has been assigned to hear the lawsuit. Mr. Bernard has a similar class action pending against the Utah Department of Corrections over DNA testing. WALT DISNEY: Plaintiffs Ask For Consolidation of Securities Fraud Suit ---------------------------------------------------------------------- Plaintiffs in the securities class actions against The Walt Disney Company have asked the United States District Court for the Central District of California to consolidate the suits. The suits also name as defendants the Company's Chief Executive Officer and its Chief Financial Officer. The suits, filed on behalf of purchasers of the Company's common stock between August 15, 1997 and May 15, 2002, uniformly allege that the defendants violated federal securities laws by not disclosing the pendency and potential implications of the Winnie the Pooh litigation prior to the Company's filing of its quarterly report on Form 10-Q in May 2002. The plaintiffs claim that this alleged nondisclosure constituted a fraud on the market that artificially inflated the Company's stock price, and contend that a decline in the stock price resulted from the May 2002 disclosure. The plaintiffs seek compensatory damages and/or rescission for themselves and all members of their defined class. Several of the plaintiffs have filed motions asking the court to appoint lead plaintiffs and counsel, and to consolidate the related actions into a single case. Management believes that it is not currently possible to estimate the impact, if any, that the ultimate resolution of these matters will have on the Company's results of operations, financial position or cash flows. WINNEBAGO INDUSTRIES: Trial in ERISA Suit Set June 2004 in Iowa Court --------------------------------------------------------------------- Trial in the class action pending against Winnebago Industries, Inc. and its employee compensation plans is set for June 2004 in the United States District Court for the Northern District of Iowa, Central Division. The plans named as defendants in the suit are: (1) Winnebago Industries, Inc. Deferred Compensation Plan, (2) Winnebago Industries, Inc. Deferred Incentive Formula Bonus Plan and (3) Winnebago Industries, Inc. Deferred Compensation Plan and Deferred Bonus Plan Trust The suit alleges a class consisting of participants in the Winnebago Industries, Inc. Deferred Compensation Plan and the Winnebago Industries, Inc. Deferred Incentive Formula Bonus Plan and alleges 23 separate causes of action including declaratory and injunctive relief, federal common law unjust enrichment, breach of fiduciary duty and violation of Employee Retirement Income Security Act (ERISA) vesting provisions and ERISA funding requirements. The suit seeks to negate certain amendments made to the Plans in 1994 which reduced the benefits which some participants would receive under the Plans. This action has not been certified as a class action. The Company believes the defendants have meritorious defenses to class certification and as to the plaintiff's substantive claims. The Company is vigorously defending the lawsuit and will oppose any attempt by the plaintiffs to have the case certified as a class action. New Securities Fraud Cases ANNUITY AND LIFE: Caldwell & Associates Lodges Securities Lawsuit in CT ----------------------------------------------------------------------- Caldwell & Associates LLC initiated a securities class action in the United States District Court, District of Connecticut against Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) and certain of its Officers and Directors, on behalf of all persons who purchased the Company's securities during the period from February 12, 2001 through November 19, 2002, inclusive. The complaint alleges that defendants violated the federal securities laws by issuing a series of materially false and misleading statements and/or concealing material adverse facts throughout the class period, thereby artificially inflating the price of the Company's securities. Throughout the class period, the Company reported strong revenue growth and stable projected earnings. The Complaint alleges, however, that defendants failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had failed to properly account for embedded derivatives contained in its annuity reinsurance contracts in 2001; (2) that, since at least 2001, the Company had understated a portion of its liabilities and expenses; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's balance sheet and financial results were materially overstated at all relevant times. On November 19, 2002, the last day of the class period, the Company announced that it would be restating its financial results for 2000, 2001 and the first and second quarters of 2002 due to the Company having improperly accounted for embedded derivatives contained it its annuity reinsurance contracts during those years. The Company's stock plummeted 44% upon this revelation. For more details, contact Ann M. Caldwell by Mail: 159 Old Belmont Avenue, Bala Cynwyd, PA 19004 by Phone: (888) 255-5455 or (610) 668-8600 by E-mail: acaldwell@classactlaw.com or visit the firm's Website: http://www.classactlaw.com CYTYC CORPORATION: Milberg Weiss Commences Securities Suit in MA Court ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Cytyc Corporation (NASDAQ: CYTC) between July 25, 2001 to June 25, 2002 inclusive in the United States District Court for the District of Massachusetts, against the Company, Patrick J. Sullivan (CEO throughout the Class Period, President until January 30, 2002, Chairman since November 7, 2001) and Robert L. Bowen (CFO). 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 July 25, 2001 to June 25, 2002. Among other things, the complaint alleges that throughout the class period the Company issued press releases representing that: (1) it was enjoying record revenue and earnings growth, increasing the market share of its primary product (ThinPrep), (2) its revenues would grow by 25% in 2002 over 2001, to $275-$300 million, and (3) the Company was not negatively impacted, and would not be negatively impacted, by the general economic slowdown that was well underway at the time. These statements were materially false and misleading, according to the complaint, because they failed to disclose that the Company's seemingly-impressive revenue and earnings growth was attributable, in material part, to overstocking of inventory at the laboratories which purchased ThinPrep in large volumes in reaction to deep discounts offered by Cytyc (which recognizes revenue upon shipment). The complaint further alleges that defendants were motivated to commit the alleged securities laws violations in order to pump up the Company's results so that it could use its inflated stock as currency for key corporate acquisitions. On December 3, 2001, Cytyc acquired Pro-Duct Health, Inc. for $167 million in Cytyc common stock and cash and, on February 2, 2002, announced that it has entered a definitive merger agreement to acquire Digene Corporation using Cytyc common stock and cash. At the time of the announcement, the Digene acquisition was valued at $554 million. On April 24, 2002, after the close of trading, Cytyc revealed, in a conference call, that its revenues and earnings for 2002 would be materially less than the market had been led to believe. Instead of revenues between $295-$305 million, the Company stated 2002 sales would be as low as $270 million, and reduced earnings expectations from $0.66 per share to $0.55-$0.55 per share. According to the Company, the cut was due to inventory reduction by its customers (laboratories), which had overstocked ThinPrep in the first quarter of 2002 and would meet end-user demand from inventory instead of new orders. In response to the announcement, which was contrary to repeated assurances by the Company, the price of Cytyc common stock plummeted by 36.5%, falling from a $24.80 per share close on April 24 to close at $15.73 on April 25, on extremely heavy trading volume. The truth regarding the Company's business, however was still undisclosed, according to the complaint. On June 25, 2002, Cytyc shocked the market by again lowering its expected revenues for 2002 to $230- $245 million and earnings per share to $0.40- $0.44. In a conference call held later that day, Cytyc announced that it was considering switching its revenue recognition model from its current recognition-on-shipment to a system more reflective of end-user demand. In response, Cytyc's stock price plummeted again, this time by 39%, falling from a $11.46 per share close on June 24, to close at $6.88 per share on June 25, 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: cytyccase@milbergNY.com or visit the firm's Website: http://www.milberg.com SPIEGEL INC.: Pomerantz Haudek Lodges Securities Fraud Suit in N.D. IL ---------------------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP initiated a securities class action in the United States District Court for the Northern District of Illinois (Eastern Division), case number: 02 C 9107, against Spiegel, Inc. (Pink Sheets:SPGLA) and four of the Company's senior officers on behalf of investors who purchased the common stock of Spiegel during the period between April 24, 2001 and April 19, 2002, inclusive. The lawsuit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing and/or failing to correct false and misleading financial statements and press releases concerning the Company's publicly reported revenues and earnings. The suit alleges that Spiegel, a leading international specialty retailer marketing fashionable apparel and home furnishings to customers through catalogs, nearly 580 specialty retail and outlet stores, and e-commerce sites, issued and/or failed to correct financial statements and results of operations which were false and misleading and prepared in violation of Generally Accepted Accounting Principles (GAAP), due, among other things, to Spiegel's accounting of its credit card business which improperly inflated its income and earnings, failed to account for increasing charge-offs, and grossly inflated the value of its securitized receivables. On April 19, 2002, Spiegel revealed to the market information concerning the deterioration of its credit card business and its impact on Spiegel's' overall business. In addition, the Company reported that it had not filed its Form 10-K for the 2001 fiscal year. In response to the news, Spiegel's Class A Non-Voting shares fell from a high of $3.15 on April 19, 2002 to a low of $1.01 on April 22, 2002 or a decline of more than 90% from the Class Period high of $10.71. One June 3, 2002, the NASD delisted the Company's Class A common stock on the Nasdaq National Market System effective June 2, 2002, "based on the Company's filing delinquencies and other public interest concerns." For more details, contact Andrew G. Tolan by Phone: 888-476-6529 ((888) 4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's Website: http://www.pomlaw.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 * * *