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/raid1/www/Hosts/bankrupt/CAR_Public/030203.mbx C L A S S A C T I O N R E P O R T E R Monday, February 3, 2003, Vol. 5, No. 23 Headlines AEGON NV: Denies Allegations In Securities Fraud Lawsuit in S.D. NY CALDERA INTERNATIONAL: Asks NY Court To Dismiss Securities Fraud Suit CALIFORNIA: EEOC Reaches Landmark $100M Age Discrimination Settlement CANADA: Court To Decide On Certification on Aboriginal Veterans' Suit CANADA: Senior Citizens Commence Benefits Lawsuit V. Ottawa Government CATHOLIC CHURCH: Boston Archdiocese Charged in New Sexual Abuse Suits COOPER LIGHTING: Voluntarily Recalls 60T Halogen Bulbs Over Fire Hazard CREDIT AGENCIES: Settles Consumer Lawsuit Over Misleading Data in GA CREDIT SUISSE: Allegedly Told Employees To "Edit" IPO Related E-mails CROSSROADS SYSTEMS: TX Court Grants Summary Judgment in Securities Suit CROSSROADS SYSTEMS: Faces Shareholder Derivative Suit in TX State Court GEORGIA: Law Firm Says Prison Inmate's Death Could Have Been Prevented GLOBAL CROSSING: Faces Consolidated Securities Fraud Suit in NY Court ISM CANADA: Customer Files Suit Over Personal Data on Stolen Hard Drive JDN REALTY: GA Court Dismisses Securities Lawsuits Opposing DDR Merger OPTICAL CABLE: Pays Final Installment of Securities Lawsuit Settlement PAYLESS SHOE: Consumer Group Lodges Suit Over Anti-Shoplifting Devices TRIWEST HEALTHCARE: Officer Commences Lawsuit Over Computer Data Theft UNITED STATES: Retired Air Force Colonel Continues Lawsuit For Benefits VERSANT CORPORATION: Appeals Court Upholds Securities Lawsuit Dismissal VERSATA INC.: Court Preliminarily Approves Securities Suit Settlement WATER POLLUTION: Honeywell, Siemens Face Suit Over VOC Pollution in OH ZENITH ELECTRONICS: Recalls 80T Projection Televisions For Fire Hazard New Securities Fraud Cases AEGON NV: Marc Henzel Commences Securities Fraud Lawsuit in S.D. NY AMERICREDIT CORPORATION: Marc Henzel Lodges Securities Suit in N.D. TX AMERICREDIT CORPORATION: Kirby McInerney Launches Fraud Suit in N.D. TX ARIBA INC.: Stull Stull Commences Securities Fraud Lawsuit in N.D. CA MCSi INC.: Marc Henzel Commences Securities Fraud Lawsuit in S.D. Ohio TRANSKARYOTIC THERAPIES: Marc Henzel Commences Securities Lawsuit in MA VERITAS SOFTWARE: Marc Henzel Launches Securities Fraud Suit in N.D. CA ********* AEGON NV: Denies Allegations In Securities Fraud Lawsuit in S.D. NY ------------------------------------------------------------------- Dutch insurance firm AEGON NV faces a class action filed in the United States District Court for the Southern District of New York by prominent securities law firm Milberg Weiss Bershad Hynes & Lerach, on behalf of purchasers of the Company's securities (NYSE: AEG) between August 9, 2001 to July 22, 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, by issuing a series of materially false and misleading statements to the market between August 9, 2001 to July 22, 2002. It said Aegon, one of the world's top ten insurers, "shocked the market" on July 22 last year when it unexpectedly warned that 2002 profits would be a third lower than the 2001 level. Aegon says it had acted in accordance with US guidelines, the Edinburgh Evening News reports. Company spokesman Gijsbert Siertsema said, "Aegon has always met the rules and regulations of the US authorities." He declined to say what the next step in the procedure would be. Analysts said the allegations could further damage Aegon, which has seen its market value plunge 40 per cent since its profit warning shocked investors who had previously equated the firm with solid earnings growth. CALDERA INTERNATIONAL: Asks NY Court To Dismiss Securities Fraud Suit --------------------------------------------------------------------- Caldera International, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it and the underwriters of its initial public offering. The suit alleges violations of the securities laws. The consolidated complaint alleges certain improprieties regarding the circumstances surrounding the underwriters' conduct during Caldera's initial public offering and the failure to disclose that conduct in the registration statement, in violation of the Securities Act of 1933, as amended. The consolidated complaint also alleges that, whether or not the Company's officers or directors were aware of the underwriters' conduct, the Company and those officers and directors have statutory liability under the securities laws for issuing a registration statement in connection with its initial public offering that failed to disclose that conduct. The consolidated complaint also alleges claims solely against the underwriters under the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. Over 300 other issuers, and their underwriters and officers and directors, have been sued in similar cases pending in the same court. In September 2002, the plaintiffs agreed to dismiss the individual defendants for the time being. The Company believes that the claims against it and any of its officers and directors are without legal merit. The Company is not aware of any improper conduct by it, its officers and directors, or its underwriters, and denies any liability relating thereto. The court has not yet ruled on the motions to dismiss, but the Company expects a ruling in the near term. CALIFORNIA: EEOC Reaches Landmark $100M Age Discrimination Settlement --------------------------------------------------------------------- The United States Equal Employment Opportunity Commission (EEOC) reached a record-breaking settlement of more than $100 million in an age discrimination case affecting 1,700 police, firefighters and other public safety workers in California, the Associated Press reports. Though the plaintiffs are primarily from California, "the impact of this case will extend beyond California," commission spokeswoman Linda Li told AP. "This is a historic big deal for EEOC." The settlement was the biggest settlement of a single lawsuit in the agency's history. A California federal judge finalized the settlement this week. Ms. Li told AP the settlement was for significantly more than $100 million, but would not provide details. She added the commission, which enforces federal anti-discrimination laws, has seen an increase in age bias claims over the past few years. In one notable age discrimination settlement, the commission in December announced Gulfstream Aerospace Corporation would pay $2.1 million to settle allegations made by 61 former employees at a plant in Georgia. CANADA: Court To Decide On Certification on Aboriginal Veterans' Suit --------------------------------------------------------------------- Regina, Canada State Court Judge Ian McLellan is set to decide whether to grant class certification to a civil lawsuit filed against the Ottawa government by aboriginal war veterans over alleged inequitable treatment, the Canadian Press reports. The veterans have until February 15th to decide whether to accept a federal offer of $20,000 compensation. In exchange for a cash settlement, the veterans must sign away their rights to sue for any further compensation. Lawyer Clint Docken, who represents the veterans and their families who launched the class action, told the Canadian Press he hopes a decision on the lawsuit is made before the deadline. CANADA: Senior Citizens Commence Benefits Lawsuit V. Ottawa Government ---------------------------------------------------------------------- The Ottawa government faces a class action filed on behalf of low- income senior citizens, seeking to allow them to receive up to $6,000 a year in benefits, CTV.ca reports. Lead plaintiff Andre Le Corre filed the suit on behalf of 300,000 seniors who have never received the payments they were entitled to over the past decade. The suit further alleges that the lawsuit says Ottawa knew that eligible seniors weren't receiving benefits and says the federal government should be forced to make back payments. If successful, the suit could cost Ottawa $3 billion. Mr. Le Corre told CTV that government should have told him that he entitled to receive guaranteed income supplement payments. Instead, he struggled to survive and he doesn't want to happen to anyone else. "These Canadians are the poorest in the country, so it's very unfair that for years they did not receive this amount of money," he told CTV's Jed Kahane in Montreal. In response, Ottawa argues the most anyone can claim is one year in the past, and that an average of 95 per cent of eligible seniors received the benefit, CTV reports. The federal government also says that despite problems in the past, it's now informing seniors who qualify. Information about the guaranteed income supplement is available online. CATHOLIC CHURCH: Boston Archdiocese Charged in New Sexual Abuse Suits --------------------------------------------------------------------- The Archdiocese of Boston faces 70 new lawsuits filed in Suffolk Superior Court in Massachusetts, alleging 41 Roman Catholic priests raped or sexually abused children as far back as the 1940s, Reuters reports. Attorney Michael Garabedian filed the lawsuits and named the archdiocese as a defendant in 52 of them, alleging abusive acts between 1941 and 1987. Of the 70 complaints, 23 involve accusations of rape. Mr. Garabedian told a news conference the lawsuits depicted "unspeakable acts" not limited to rape or fondling. "Masturbation, providing alcohol to these children while they're minors, showing pornographic movies to these minors - men with little boys in the movies - taking nude photos of these victims, taking a video of the victim and the priest both masturbating," Atty. Garabedian said, according to a Reuters report. "It goes on and on." Of the 41 priests named in the lawsuits, 13 are "new" priests who have not previously been accused of wrongdoing, Atty. Garabedian continued. Of those 13, eight have died and at least two were still working for the church, he said. Under Massachusetts law, plaintiffs may only file lawsuits within three years of the alleged sexual abuse or within three years of the time a victim discovers an emotional or psychological injury caused by the abuse, Reuters states. The archdiocese has been exerting efforts to settle the claims against it. Cardinal Bernard Law and other officials have been charged of knowing about the allegations, but failing to keep the clergymen from children. Instead, the archdiocese left them in ministry and moved them from parish to parish. Cardinal Law resigned last month as archbishop. Bishop Richard Lennon, who was named Law's temporary replacement last month, told Reuters the church was in talks with plaintiffs' attorneys about reaching a 90-day truce in the litigation that would allow settlement talks to move forward. Bishop Lennon said in an interview with Boston radio station WBZ that he hoped to settle the more than 450 lawsuits that the archdiocese faces, filed by people who say they were abused by priests. The bishop acknowledged that the church was already taking steps to raise money to pay victims, although he declined to comment on whether the two sides have zeroed in on a dollar amount for a possible settlement. "I have authorized the go-ahead for the real estate department to begin to market certain properties," Bishop Lennon told WBZ, declining to identify which of the church's assets may be sold. COOPER LIGHTING: Voluntarily Recalls 60T Halogen Bulbs Over Fire Hazard ----------------------------------------------------------------------- Cooper Lighting, Inc. is cooperating with the United States Consumer Product Safety Commission (CPSC) by recalling nearly 60,000 Regent 500- watt halogen bulbs. These bulbs may pose a fire hazard if used in torchiere floor lamps or other indoor residential fixtures. These 500- watt light bulbs generate very high temperatures compared to incandescent and lower wattage halogen bulbs and can start a fire if they come in contact with curtains, clothes or other flammable material. These bulbs are intended for use in outdoor work lights and flood lamps. While the Company has not received any reports of fires or injuries, the CPSC is aware of at least 290 fires and 25 deaths since 1992 involving halogen torchiere floor lamps. Current packaging for the Regent 500-Watt Halogen Bulb, with model numbers WM500Q and BP500Q, does not contain the recommended warning label of the American National Standards Institute (ANSI). The label should read, "Warning: Fire Hazard! Do Not Use In Torchieres Or Other Indoor Residential Fixtures." The Company has asked retailers to add the label to bulb packaging currently on store shelves and new 500-watt halogen bulbs will contain the label. Wal-Mart, Lowes and smaller retail outlets nationwide sold these 500-watt halogen bulbs between January 1999 and October 2002 for about $4. For more details, contact the Company by Phone: (800) 954-7145 anytime or visit the firm's Website: http://www.cooperlighting.com. CREDIT AGENCIES: Settles Consumer Lawsuit Over Misleading Data in GA -------------------------------------------------------------------- Credit agencies Equifax and TransUnion reached a settlement for the class action filed in the United States District Court in Georgia alleging that they sold misleading data about millions of consumers, the Atlanta-Journal Constitution reports. The agreement may affect millions of consumers who either were co-signers on loans or had joint accounts with people who filed for bankruptcy. The suit alleges the Companies placed bankruptcy notations on credit reports of co-signers and joint-account holders, even if they weren't the ones who filed for bankruptcy. In Texas, credit scoring became a hot issue after homeowners and car insurance policies skyrocketed last year. Consumer groups and other insurance-industry critics say insurance premiums are rising partly because of credit scoring, a claim the industry says is off the mark. The deals, which were reached through mediation, also have implications beyond addressing one issue, Dick Rubin, a consumer advocacy lawyer in Santa Fe, NM, told the Journal-Constitution. They could be a "road map for correcting systemic problems in the industry," Two years ago, an appeals court ruled that consumers cannot ask a court to order credit-reporting companies to change the way they do business, Mr. Rubin noted. Only the Federal Trade Commission can do that, he said. He added that the South Carolina case provides a possible away around that limitation. The plaintiffs' lawyers used the leverage of possible massive damages to win changes by the companies in the way they do business, Mr. Rubin told the Journal-Constitution. The plaintiffs' lawyers didn't ask the district court to order the changes, he explained, so they didn't run into the limitation set by the appeals court. Under the settlement, the companies agreed to stop such practices, according to lawyers and others familiar with the negotiations. Atlanta-based Equifax had no comment. Trans- Union said only that it is "still finalizing the terms of the agreement," the Atlanta Journal- Constitution states. US District Judge Margaret Seymour has set preliminary settlement hearings for February. If Judge Seymour accepts the settlement, then consumers who qualify for the class action would be notified by mail within 90 days. CREDIT SUISSE: Allegedly Told Employees To "Edit" IPO Related E-mails --------------------------------------------------------------------- Investment firm Credit Suisse First Boston allegedly told employees to "edit" their files related to initial public offerings days before an investigation into the firm's IPOs became public in 2000, according to company e-mails, Bloomberg.com reports. Attorneys in the securities class action filed against the Company also revealed that the Company later reversed itself later that week with a December 6 e-mail message telling employees to "please stop editing public offering files until further notice." Attorneys suing the firm for securities fraud said documents that should have been kept may have been destroyed. "You can do a lot of damage in three days," Fred Taylor Isquith, an attorney whose firm has filed class action lawsuits against CSFB in connection with 310 initial public offerings told Bloomberg.com. "Absolutely it hurts." The firm said in a statement that its employees haven't done anything wrong, and in fact tried to save documents once the firm learned it was under investigation. "CSFB's document policies comply with all applicable laws and regulations and are consistent with industry standards," Victoria Harmon, a spokeswoman, said in a prepared statement. "In this instance, CSFB took appropriate steps to ensure that all relevant documents would be preserved and provided to regulators. We strongly believe that CSFB's employees acted appropriately in this matter." CSFB last year paid $100 million to settle charges by the Securities and Exchange Commission and the National Association of Securities Dealers that it handed out sought-after IPO shares in exchange for kickbacks, Bloomberg reports. This month, CSFB said it set aside 456 million Swiss francs ($336 million) to pay possible damages from plaintiffs' lawsuits. CROSSROADS SYSTEMS: TX Court Grants Summary Judgment in Securities Suit ----------------------------------------------------------------------- The United States District Court for the Western District of Texas granted Crossroads Systems, Inc.'s motion for summary judgment in a securities class action filed on behalf of purchasers of the Company's common stock during various periods ranging from January 25, 2000 through August 24, 2000. The suit alleges violations of federal securities laws. On November 22, 2002, the court granted the Company's motion for summary judgment, concluding that the plaintiffs failed to demonstrate an essential element to their claim of securities fraud. The Company anticipates the plaintiffs will file an appeal to the Fifth Circuit Court of Appeals. The litigation is at an early stage and it is not possible at this time to predict whether the Company will incur any liability or to estimate the damages, or the range of damages, that the Company might incur in connection with such actions. An adverse judgment may have a material adverse effect on the Company's business and financial performance, it stated in a disclosure to the United States Securities and Exchange Commission. CROSSROADS SYSTEMS: Faces Shareholder Derivative Suit in TX State Court ----------------------------------------------------------------------- Crossroads Systems, Inc. faces a shareholder derivative lawsuit filed in the 261st District Court of Travis County, Texas on behalf of the Company, naming several of its officers and directors as defendants. The derivative state action alleges that certain of the individual defendants sold shares while in possession of material inside information in purported breach of their fiduciary duties to the Company. The suit also alleges waste of corporate assets. The Company has filed an answer to, and general denial of, the derivative state action. The Company believes the allegations in the derivative state action are without merit. Its inability to prevail in this action could have a material adverse effect on our future business, financial condition and results of operations. GEORGIA: Law Firm Says Prison Inmate's Death Could Have Been Prevented ---------------------------------------------------------------------- The Southern Center for Human Rights in Georgia criticized the state's Department of Corrections, following the January 12 murder of inmate Arthur Umberhand by a cellmate, the Gwinnett Daily Post reports. The center had earlier filed a class action against the Department on behalf of 300 severely mentally ill inmates at Phillips State Prison in Buford. In a statement, the center said that Mr. Umberhand's death at the hands of fellow inmate William Seigler, 32, was preventable. The statement stated Mr. Seigler had been in "a mental rage" for days before he was put into the same cell as Mr. Umberhand. It further stated attorneys from the center had specifically warned the GDC about dangers of double-bunking severely mentally ill patients. Gwinnett District Attorney Danny Porter, who assisted with the GBI investigation of the incident, told the Gwinnett Daily Post that the statement that Mr. Seigler was in a mental rage was false. "That is not true," Mr. Porter said. "There was no evidence of that in my investigation." Mr. Seigler told investigators there had been no incidents of provocation by himself or Mr. Umberhand prior to the killing, according to Mr. Porter. Double bunking is not a common procedure at the prison, but in Mr. Umberhand and Mr. Seigler's case it was an "emergency thing because they were short of beds," Mr. Porter added. GLOBAL CROSSING: Faces Consolidated Securities Fraud Suit in NY Court --------------------------------------------------------------------- Global Crossing, Ltd. faces a consolidated securities class action filed in the United States District Court in Manhattan, New York, naming more than 20 executives and directors, including former chairman Gary Winnick, the International Herald Tribune reports. The suit was filed on behalf of investors who lost billions of dollars in Company stock and bonds. The suit's claims go further beyond previous disclosures of the frenzied atmosphere at the Company before it collapsed early last year. The suit further states that the Company's senior executives began efforts to disguise the Company's financial difficulties months earlier than previously disclosed, giving them more time to sell their shares. The suit also names as defendants several investment banks - including Salomon Smith Barney, part of Citigroup Inc. - that raised money for the Company and recommended its securities to their clients. John Coffee Jr., an expert in securities law and a professor at Columbia University's School of Law, told the Herald Tribune damages in the case could reach into the billions of dollars, potentially raising the bar for awards in corporate securities fraud complaints. The defendants disputed the claims on Wednesday. Terry Christensen, a lawyer for Mr. Winnick, said, "All that has happened is that pursuant to an order of the court, the various allegations in 70 different complaints have been consolidated into a single complaint." Mary Ellen Hillery, a spokeswoman for Salomon Smith Barney, told the Herald Tribune, "We are familiar with the allegations and believe them to be without merit." Lawyers representing other defendants in the action were also not available to comment. Some evidence in the lawsuit has already been made public, like a memorandum written on June 5, 2000, by Leo Hindery Jr., Global Crossing's chief executive at the time, to a handful of directors. In it, he wrote, "The stock market can be fooled, but not forever, and it is fundamentally insightful and always unforgiving of being misled," the Herald Tribune reports. ISM CANADA: Customer Files Suit Over Personal Data on Stolen Hard Drive ----------------------------------------------------------------------- Computer firm ISM Canada, the Workers' Compensation Board and the Saskatoon, Canada provincial government faces a possible class action initiated by workplace safety consultant Alex Taylor, who alleges his personal information was on the computer hard drive stolen from the firm, the Star Phoenix reports. The Company announced the theft earlier this month. The hard drive, which contained sensitive government data and personal information on the clients of ISM customers, went missing from a restricted area at the company's Regina office. Several government departments and agencies were affected including Health, Finance, the Saskatchewan Property Management Corporation (SPMC), the Public Employees Benefits Agency (PEBA), SaskPower and SaskTel. Thousands of co-operators Life customers were told this week some of their personal and financial information was on the hard drive. The Regina Police Service has been called in to investigate. Initially, government officials indicated just 88 WCB clients were affected by the theft. However, last week, WCB chief executive officer Peter Federko sent letters to more than 4,600 clients informing them information concerning their WCB annuity may have been lost by ISM, which supplied computer services to the board until August of last year, the Star Phoenix reports. The WCB clients were told the personal information included their injury claim numbers, names, addresses and birth dates, in addition to information on the financial performance of their annuity from 1996 to 2000. Mr. Taylor has hired a lawyer with the Merchant Law Group to examine the possibility of a lawsuit. Saskatoon now has legislation permitting class actions, but it would be up to a judge to decide whether Mr. Taylor and others named in the suit could represent the 4,600 WCB clients affected by the theft. "This is a direct breach of the Workers' Compensation Act," Mr. Taylor told the Star Phoenix. "They failed to protect the security of our documentation. And it's not only the board who is at fault. The province has oversight over the board. Mr. (Andrew) Thomson (minister responsible for information technology) is going to have manure on his shoes when we're done with him." Board spokesperson Janice Siekawitch could not comment on the possibility of a lawsuit, the Star Phoenix states. As to why ISM still had the information, she said the WCB is as perplexed as everyone else. Last August, the board decided to handle the information processing done by ISM in-house. "It (the theft of the information) caught us a bit off guard. We are talking to them about it. We're asking them why that information wasn't erased and how this happened," Ms. Siekawitch said. She said the board has ensured its information technology area in its Regina headquarters is secure. She said general security within the building is also tight. JDN REALTY: GA Court Dismisses Securities Lawsuits Opposing DDR Merger ---------------------------------------------------------------------- The Superior Court of Fulton County, Atlanta, Georgia dismissed with prejudice two purported class actions pending against JDN Realty Corporation (NYSE: JDN) in connection with its proposed merger with Developers Diversified Realty Corporation (DDR). The suit alleged, among other things: (1) claims of breach of fiduciary duty, (2) waste, (3) abuse of control and (4) unjust enrichment The plaintiffs and their counsel have agreed to dismiss each of these lawsuits with prejudice and without the payment by the Company of any fees or other settlement amounts. Through these dismissals, all shareholder litigation arising out of the proposed merger with DDR has been concluded. OPTICAL CABLE: Pays Final Installment of Securities Lawsuit Settlement ---------------------------------------------------------------------- Optical Cable Corporation has paid the second and final installment of the settlement for the consolidated securities class action filed against it and: (1) former Chairman, President and Chief Executive Officer Robert Kopstein, (2) Luke J. Huybrechts and (3) Kenneth W. Harber The consolidated suit was filed in the United States District Court for the Western District of Virginia, on behalf of purchasers of the Company's common stock during the period ranging from June 14, 2000, through September 26, 2001. The suit alleged that the defendants violated Sections 10(b) and 20 of the federal Securities Exchange Act of 1934 in making certain alleged misrepresentations and/or omitting to disclose material facts. In June 2002, the Company reached a tentative agreement to resolve the suit. The settlement provided for a cash payment of $700,000 and the issuance of warrants to purchase 250,000 shares (adjusted for the 1- for-8 reverse stock split approved on July 30, 2002) of its common stock at an exercise price per share of $4.88 (adjusted for the 1-for-8 reverse stock split). On July 22, 2002, the court entered an Order of Preliminary Approval of the proposed settlement, and on September 23, 2002, the court entered an Order and Final Judgment, approving the settlement and dismissing the consolidated suit with prejudice. The order and final judgment was subject to appeal for 30 days after being entered. Since no appeal was filed with the Court within 30 days, the settlement became final and binding. The Company paid $500,000 of the cash portion of the settlement upon preliminary court approval. The second and final installment, totaling $200,000, of the cash portion of the settlement was paid on November 1, 2002. The warrants will be exercisable for five years. The Company is in the process of registering the shares issuable upon the exercise of the warrants under the Securities Act of 1933, as amended. PAYLESS SHOE: Consumer Group Lodges Suit Over Anti-Shoplifting Devices ---------------------------------------------------------------------- Payless ShoeSource, the nation's largest shoe retailer, faces a class action filed by a consumer group, alleging the store sells damaged goods in mostly black neighborhoods because of its security practice of bolting tags onto shoes to stop shoplifting, Reuters reports. The Los Angeles-based National Association for Cosmetologists commenced the suit, which says the Company should stop bolting anti-theft devices to shoes sold in minority neighborhoods and publicize its policy of offering customers refunds for goods damaged as a result. The suit further said that the devices leave holes in the shoes where they are bolted on. The National Association for Cosmetologists filed the suit on behalf of allegedly 853,000 people in the beauty trade. The group also threatened demonstrations and a boycott of the Company. "It's about economic justice and being fair to poor people. Every dime matters to them," James Stern, executive director of the association told Reuters. Mr. Stern said he filed the lawsuit, which seeks class action status, after negotiating unsuccessfully with the chain to require store managers to inform patrons at urban stores that they are entitled to a discount on damaged shoes, Reuters states. He said a recent survey of five stores in Los Angeles, including one in the predominantly black neighborhood of Watts, showed that managers were not consistently giving discounts. A spokesman for Topeka, Kansas-based Payless told Reuters the company used anti-theft tags in about a third of its 5,000 stores in the United States based on how much merchandise had been lost to shoplifting in the past. For example, the store on New York's posh Fifth Avenue uses the tags, he said. "I can't say this too strongly: the race or ethnicity of people who shop in a certain area has never been a consideration," Timothy Reid, a Payless spokesman, told Reuters. He added that any customer could get a refund or a credit for damaged goods. TRIWEST HEALTHCARE: Officer Commences Lawsuit Over Computer Data Theft ---------------------------------------------------------------------- Defense contractor TriWest Healthcare Alliance faces a class action filed on behalf of military personnel whose personal information was stolen in a computer data theft last month at the Company's Phoenix office, the Associated Press reports. Attorneys David Karnas and Gary Bellovin commenced the suit against the Company, on behalf of Lt. Col. Michael Stollenwerk and his wife Andrea De Gatica, both of Virginia. Lt. Col. Stollenwerk serves in the Army. The theft occurred on December 14, which resulted in the loss of computer hard drives containing names, addresses, phone numbers, medical claim histories and Social Security numbers for about 562,000 military personnel. The Company serves about 1.1 million active-duty personnel, their dependents and retirees in 16 states. TriWest was negligent under Arizona law by failing to protect people's privacy interests and to "keep confidential and secure each plaintiff's sensitive personal information it collected from them," according to the complaint, AP states. Security measures were lax, the lawsuit states. The lawsuit claims the Company also violated the US Privacy Act of 1974. Mr. Karnas told AP the plaintiffs are asking for damages somewhere "in the millions." He also said he wants TriWest to pay for credit monitoring of all the affected personnel over the next 20 years in an effort to curb credit fraud. TriWest officials declined comment on the civil complaint Wednesday, AP states. UNITED STATES: Retired Air Force Colonel Continues Lawsuit For Benefits ----------------------------------------------------------------------- In 1996, George "Bud" Day, a retired Air Force colonel and lawyer, filed a class action on behalf of military retirees who entered the service before June 7, 1956, and are owed, the lawsuit contends, free lifetime health care because recruiting material promised this benefit, the Columbus Ledger-Enquirer (GA) reports. Colonel Day, 77, is reportedly the nation's most-decorated living service member. He is a former Vietnam prisoner of war and a Medal of Honor recipient. The Colonel filed a lawsuit in federal court in Pensacola, Florida, on behalf of Military Retiree Health Care. The suit alleges breach of contract with military retirees older than 65, by the failure of the United States to provide the military medical care it had promised. The lawsuit seeks to restore free health care for retirees 65 and older and their dependents. It also requests reimbursement of money (maximum of $10,000) that has been withheld from Social Security pay over the years to finance Medicare Part B, as well as gaining relief from future Medicare deductions. Military retirees are the only federal employees forced into Medicare instead of having a continuing health plan, Mr. Day says. In 1998, a federal judge in Jacksonville, Florida ruled against Mr. Day's Class Act Group, as his organization is called. However, a panel of the US Circuit Court of Appeals, in February 2001, ruled against the government. When the court agreed the United States had breached its contract, it also found that Colonel Day's clients were entitled to recover damages for the Medicare B premiums they have been forced to pay since military HMOs evolved. On November 18, 2002, however the full US Circuit Court of Appeals ruled against Colonel Day's group. "The court ruled that while the government conceded that recruiters did promise free health care, they and the government did not have the authority to promise free health care since the benefit was not guaranteed by law, Army Echoes reported in its December 2002 edition. On January 24, Colonel Day filed a petition to take the Class Act Group's case before the US Supreme Court, said Colonel Harry Riley, the organization's office manager. Meanwhile, Class Act Group is planning a February 12 rally at the Supreme Court, Colonel Riley said. VERSANT CORPORATION: Appeals Court Upholds Securities Lawsuit Dismissal ----------------------------------------------------------------------- The United States Ninth Circuit Court of Appeals upheld the dismissal of the consolidated securities class action pending against Versant Corporation and certain of its present and former officers. The suit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act, and Securities and Exchange Commission Rule 10b-5 promulgated under the Securities Exchange Act, in connection with public statements about the Company and its financial performance. On December 4, 2001, the court dismissed the suit with prejudice due to plaintiff's failure to state a claim of their securities fraud action. On December 13, 2001, plaintiffs filed a notice of appeal to the Ninth Circuit Court of Appeals. On May 2, 2002, the plaintiffs, now as appellants, filed an opening brief alleging the dismissal was in error and should be reversed. Oral arguments were heard on January 14, 2003 and on January 23, 2003 the Court of Appeals affirmed the dismissal. VERSATA INC.: Court Preliminarily Approves Securities Suit Settlement --------------------------------------------------------------------- The United States District Court for the Northern District of California granted preliminary approval to the settlements proposed by Versata, Inc. to settle the securities class action and the shareholder derivative lawsuit pending against it, and certain of its current and former officers and directors. The consolidated securities fraud suit was filed against the Company and certain of its former officers and a current director. The suit alleges claims under section 10(b) and section 20(a) of the Securities Exchange Act of 1934 and claims under section 11 and 15 of the Securities Act of 1933. The amended complaint sought an unspecified amount of damages on behalf of persons who purchased Company stock during a class period between March 31, 2000 and April 30, 2001. In July 2002, the Company reached an agreement with the plaintiffs to settle the lawsuit in order to avoid protracted and expensive litigation and the uncertainty of the outcome at a trial. The agreement for settlement does not constitute any admission of wrongdoing on the part of Versata or the individual defendants. The settlement calls for a payment of $9.75 million in cash by the Company's insurance carriers, the issuance of 200,000 shares of the Company's common stock, and for certain corporate therapeutics. The holders of the settlement stock have a put option of $3.50 per share during a period of 20 trading days commencing one year from the date of distribution; provided however, the put options shall expire if Versata shares trade above $3.50 per share for 15 consecutive trading days during the one year period following the date of distribution of the settlement stock. Three derivative lawsuits were filed against certain of the Company's current and former officers and directors on the Company's behalf in the Superior Court of Alameda County, California. The complaints also name the Company as a nominal defendant. The suits allege the defendants made or permitted the Company to make false financial statements. The complaints alleged that the defendants: (1) breached their fiduciary duties, (2) abused their control of the corporation, and (3) engaged in gross mismanagement of the corporation In July 2002, in conjunction with the settlement of the securities litigation discussed above, the Company reached an agreement to settle the derivative action. As discussed, the agreement for settlement does not constitute any admission of wrongdoing on the part of the Company or the individual defendants. Final settlement hearing is set for February 14, 2003. WATER POLLUTION: Honeywell, Siemens Face Suit Over VOC Pollution in OH ---------------------------------------------------------------------- Honeywell International, Inc. and Siemens Energy & Automation, Inc. face a class action filed in the United States District Court in Cincinnati, Ohio, alleging that the two companies polluted the water with "highly toxic chemicals," the SpringfieldSunNews.com reports. The suit alleges that volatile organic compounds (VOCs) such as tetrachlorethene (PCE) or trichloroethene (TCE) contaminated the local water supply for as many as 10,000 people. The chemicals allegedly can cause cancer, liver and kidney damage, heart problems, impaired fetal development in pregnant women, coma and death. The suit further states that government officials knew about the problem but didn't tell the public soon enough. The lawsuit doesn't specify a monetary amount, but plaintiffs' attorneys said they will seek "many millions of dollars" for property damage and punitive damages. No government agencies were named in the lawsuit, SpringfieldSunNews.com reports. The plaintiffs aren't claiming any medical problems in the lawsuit, but there have been no local studies to determine if there are any clusters of diseases that might be caused by PCE or TCE. "These families were left with no choice but to file a lawsuit to try to vindicate their rights to live in their homes without being trapped by this contamination," Shawn Collins of The Collins Law Firm in Naperville, Ill., an attorney for the plaintiffs told SpringfieldSunNews.com. The Environmental Protection Agency first began testing for these compounds nationwide in 1988 and the compounds were discovered at Urbana sites in 1989. In 2001 government officials disclosed that the chemicals moved from north to south under the city in a plume that has contaminated private water wells outside the city and affected city water wells at Old Troy Pike. ZENITH ELECTRONICS: Recalls 80T Projection Televisions For Fire Hazard ---------------------------------------------------------------------- Zenith Electronics Corporation is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling to repair about 80,000 large-screen, analog projection televisions manufactured between 1995 and 1998. This recall is an expansion of a 1998 recall program involving 111,000 projection television sets. A tear in a gasket can cause coolant fluid to leak from the picture tube assembly. This can cause smoking, charring, and electrical arcing inside of the television, posing a fire hazard to consumers. Since 1998, the Company has received 45 reports of incidents involving coolant leakage, causing smoking or charring with the televisions, including four cases where minor property damage occurred outside of the unit. No injuries have been reported. The projection televisions recalled in this expansion and the earlier program have 46-60 inch screens and were manufactured from April 1995 through July 1997, and August 1998 through November 1998. The date of manufacture can be found on the white label on the back of the set. These televisions were manufactured in Mexico. Projection televisions manufactured after 1998 are not included in this recall. Major appliance and department stores nationwide sold these televisions from about April 1995 through April 1999 for between $1,200 and $2,800. For more details, contact the Company by Phone: (800) 777-5195 anytime to arrange for a free inspection and repair, or visit the firm's Website: http://www.projorecall.com. New Securities Fraud Cases AEGON NV: Marc Henzel Commences Securities Fraud Lawsuit in S.D. NY ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the securities of Aegon N.V. (NYSE: AEG) between August 9, 2001 to July 22, 2002, inclusive. The action is pending against the Company, Don Shepard, Kees Storm and Jos B.M. Streppel 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 August 9, 2001 to July 22, 2002. Aegon, through its member companies, is an international insurer. During the years preceding the class period, and during the class period, as stock markets suffered substantial declines, increasing numbers of investors gravitated from variable products to fixed products. Aegon distinguished itself from its competitors with the claim that its purportedly broad product mix better enabled it to take advantage of this market shift while it simultaneously assured investors that it had sufficient reserves to fund the sharply increasing guaranteed payout obligations required by its fixed products. The complaint further alleges that Aegon also assured investors that it was less vulnerable to the vicissitudes of the equity and credit markets than competitors because the Company matched "high quality investment assets . in an optimal way to the corresponding insurance liability, taking into account currency, yield and maturity characteristics." The Company claimed that, for the foregoing reasons, "(c)onsistency and reliability in earnings forecasting is a particular source of pride" and that, while not immune to equity and real estate market shifts, the Company was not subject to sharp downward variations in annual net income. Accordingly, the Company reduced its earnings guidance for 2002 but at all relevant times maintained its forecast that 2002 net income would at least equal 2001 net income. The class period ends on July 22, 2002. The complaint alleges that, on that date, the Company shocked the market, announcing that 2002 net income would not equal 2001 net income but, on the contrary, would be 30% to 35% lower than 2001 net income. On this news, Aegon shares declined from a closing price of $16.99 on Friday, July 19, 2002 to a closing price of $13.25 on Monday, July 22, 2002, when trading resumed For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 AMERICREDIT CORPORATION: Marc Henzel Lodges Securities Suit in N.D. TX ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of purchasers of AmeriCredit Corp. (NYSE: ACF) publicly traded securities during the period between April 14, 1999 and Jan. 15, 2003. The complaint charges AmeriCredit and certain of its officers and directors with violations of the Securities Exchange Act of 1934. AmeriCredit is a national consumer finance company specializing in purchasing, securitizing and servicing automobile loans. The complaint alleges 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. Specifically, defendants were improperly deferring delinquent loans to avoid consumer defaults so AmeriCredit would have access to cash which otherwise would have been restricted. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 AMERICREDIT CORPORATION: Kirby McInerney Launches Fraud Suit in N.D. TX ----------------------------------------------------------------------- Kirby McInerney & Squire, LLP initiated a securities class action in the United States District Court for the Northern District of Texas on behalf of all purchasers of AmeriCredit Corp. common stock (NYSE:ACF) during the period from April 14, 1999 through January 16, 2003. The complaint asserts claims for violation of Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 against AmeriCredit, as well as its Chief Executive and Chief Financial Officers. The alleged violations, according to the complaint, stem from materially false and misleading statements made by the defendants during the class period that, as detailed below: (1) materially misrepresented AmeriCredit's operational and financial performance; (2) caused AmeriCredit stock to trade at artificially-inflated prices. The complaint charges that AmeriCredit -- a national consumer finance company specializing in purchasing, securitizing and servicing automobile loans -- was, during the class period, improperly deferring delinquent loans in order to avoid the proper accounting and financial reporting consequences of consumer defaults. By deferring write-offs that GAAP would have required, AmeriCredit was able to report financial results much higher than those GAAP dictated. These inflated financial results, in turn, caused AmeriCredit shares to trade at prices artificially inflated by AmeriCredit's misleading reported financial results. AmeriCredit took advantage of its share price inflation by raising $500 million through a secondary stock offering in September 2002, while AmeriCredit's CEO and CFO received $53 million from their class period sales of AmeriCredit shares at inflated prices. As the complaint charges, on January 16, 2003, AmeriCredit cleaned its books and recognized a backlog of delinquent loans, resulting in disastrous financial results including a 33% revenue shortfall and a loss three times larger than expected. AmeriCredit shares -- which had already fallen from $80 to $8 per share -- lost half their remaining value. For more details, contact Ira M. Press or Ori Braun by Mail: 830 Third Avenue, 10th Floor, New York, New York 10022 by Phone: (212) 317-2300 or Toll Free (888) 529-4787 by E-Mail: obraun@kmslaw.com ARIBA INC.: Stull Stull Commences Securities Fraud Lawsuit in N.D. CA --------------------------------------------------------------------- Stull Stull & Brody LLP initiated a securities class action in the United States District Court for the Northern District of California, on behalf of purchasers of Ariba, Inc. (NASDAQ: ARBAE) securities between January 11, 2000 and January 15, 2003, inclusive. Ariba provides Internet-based business to business software and services which assist companies in managing their operations' cash costs. The suit charges that the Company and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b(5). The action alleges that defendants issued a series of false and misleading statements concerning the Company's financial condition while garnering over $692 million as the result of insider trading. Specifically, the suit charges that defendants issued financial results which were presented in violation of Generally Accepted Accounting Principles (GAAP). As a result, the suit charges that defendants were forced to restate the Company's financial statements for the fiscal years ended September 30, 2000 and 2001, and for the quarters ended March 31, 2000 through June 30, 2002. The suit further alleges that as a result of defendants' actions, plaintiff and the class were damaged. For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New York NY 10017 by Phone: 1-800-337-4983 by Fax: 212-490-2022 by E-mail: SSBNY@aol.com or visit the firm's Website: http://www.ssbny.com. MCSi INC.: Marc Henzel Commences Securities Fraud Lawsuit in S.D. Ohio ---------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Ohio, Western Division on behalf of purchasers of MCSi, Inc. (Nasdaq: MCSI) for violations of federal securities laws. The complaint names as defendants the Company and: (1) Chief Executive Officer, President and Chairman of the Board Michael E. Peppel, and (2) its Chief Financial Officer and Vice-President, Ira H. Stanley. Filed by three law firms, the named plaintiff is a single shareholder who purports to represent a class of MCSi shareholders who purchased MCSi securities between July 24, 2001 and February 26, 2002. The complaint alleges that during this seven-month period MCSi "made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading . in an effort to maintain artificially high market prices for MCSi's securities in violation of (U.S. securities law)." For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 TRANSKARYOTIC THERAPIES: Marc Henzel Commences Securities Lawsuit in MA ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the District of Massachusetts in Boston, Massachusetts on behalf of persons who purchased stock, or who sold put options of Transkaryotic Therapies, Inc. (Nasdaq: TKTX) on the open market from January 4, 2001 through January 14, 2003. The complaint alleges that during the class period, defendants made misrepresentations and nondisclosures of material fact to the investing public concerning TKT's prospects for FDA approval of TKT's Replagal enzyme therapy for the treatment of Fabry disease. In fact, as the Complaint alleges, defendants knew by virtue of their ongoing communications with the FDA of adverse facts concerning the FDA's consideration of TKT's application that were inconsistent with TKT's positive representations. More specifically, according to testimony at the January 14, 2003 FDA Advisory Committee hearing, in a letter dated December 22, 2000, the FDA had advised TKT that "the clinical study data [from the Phase II studies] had not provided substantial evidence of efficiency and fully detailed the facts leading to that conclusion. [The FDA's Center for Biologics Evaluation and Research] recommended that additional clinical studies be conducted." The true facts were all finally revealed after the January 14, 2003 FDA Advisory Committee meeting. On January 15, 2003, TKT closed at $6.49, more than 85% below its class period high. Defendants were motivated to make the materially false and misleading statements during the class period, among other things, so that TKT could sell $267 million in common stock in secondary public offerings and defendant Richard F. Selden, TKT's President and CEO, could sell 90,000 shares of his personal holdings of TKT common stock during the class period for total consideration of $2,800,000. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 VERITAS SOFTWARE: Marc Henzel Launches Securities Fraud Suit in N.D. CA ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of VERITAS Software Corporation (NASDAQ: VRTS) publicly traded securities during the period between January 24, 2001 and January 16, 2003. The complaint charges VERITAS and certain of its officers and directors with violations of the Securities Exchange Act of 1934. VERITAS is a software storage company that provides data protection, storage management and disaster recovery software. The complaint alleges that on January 17, 2003, the Company announced the restatement of its 2000 and 2001 financial statements as a result of its improper accounting for transactions with AOL Time Warner in 2000. The release stated in part: "(t)he transactions involved in a $50 million software purchase by AOL and a $20 million advertising services purchase from AOL." While VERITAS' financial statements were admittedly false and its stock price artificially inflated, the Company's top officers and directors took advantage of this and sold nearly $15 million worth of their VERITAS shares to the unsuspecting public. For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2002. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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