/raid1/www/Hosts/bankrupt/CAR_Public/030219.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, February 19, 2003, Vol. 5, No. 35
Headlines
AIRGATE PCS: Shareholders Commences Securities Fraud Suits in N.D. GA
CALIFORNIA: Officers Sue Inglewood City Over "Reverse Discrimination"
CREDIT CARDS: Proceedings Begin in Australian Suit V. Visa, MasterCard
DELAWARE: Norfolk Southern Train Derails in Farmington, None Injured
DIGITAL IMPACT: Court Hears Arguments For Dismissal of Securities Suit
DUKE ENERGY: Teamed Up With Official, Firm To Decommission Power Plants
EDISON SCHOOLS: NY Court Orders Plaintiffs To File Amended Fraud Suit
EDISON SCHOOLS: NY Court Orders Filing of Amended Lawsuit by March 2003
EN POINTE: Asks CA Court To Dismiss Consolidated Securities Fraud Suit
IBUPROFEN: Could Be Dangerous For Heart Patients If Taken With Aspirin
IDAHO: Violates Provisions For Protecting Kids From Lead, Court Rules
INFOGRAMES INC.: Appeals Court Upholds Dismissal of Columbine Lawsuit
INKTOMI CORPORATION: Asks Court To Dismiss Derivative, Securities Suits
InterWAVE COMMUNICATIONS: Asks Court To Dismiss Securities Fraud Suit
OPENWAVE SYSTEMS: Asks NY Court To Dismiss Consolidated Securities Suit
OPENWAVE SYSTEMS: Asks CA Court To Dismiss Shareholder Derivative Suit
SELECTICA INC.: NY Court Dismisses Officers, Directors From Fraud Suit
SELECTICA INC.: CA Court To Hear Motions to Dismiss Derivative Lawsuit
TERRORIST ATTACK: 9/11 Victims' Families Fear Obstruction of True Story
UNITED STATES: Entitled To $500M in Overtime, Justice Dept Lawyers Say
UNIVERSITY OF MICHIGAN: Ex-Military Officers Support Affirmative Action
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
AEGON NV: Weiss & Yourman Commences Securities Fraud Lawsuit in S.D. NY
CARREKER CORPORATION: Cauley Geller Launches Securities Suit in N.D. TX
CARREKER CORPORATION: Schiffrin & Barroway Lodges Securities Suit in TX
COSi INC.: Abbey Gardy Commences Securities Fraud Lawsuit in S.D. NY
COSi INC.: Wolf Haldenstein Commences Securities Fraud Suit in S.D. NY
MCSI INC.: Chitwood & Harley Commences Securities Fraud Suit in S.D. OH
OWENS CORNING: Schiffrin & Barroway Lodges Securities Suit in N.D. Ohio
OWENS CORNING: Cauley Geller Commences Securities Fraud Suit in N.D. OH
PATRIOT AMERICAN: Cotchett Pitre Commences Securities Suit in N.D. CA
SPRINT CORPORATION: Cauley Geller Commences Securities Suit in KS Court
SPRINT CORPORATION: Schiffrin & Barroway Lodges Securities Suit in KS
UNUM PROVIDENT: Schiffrin & Barroway Lodges Securities Suit in E.D. TN
UNUM PROVIDENT: Cauley Geller Launches Securities Fraud Suit in E.D. TN
WORLDCOM INC.: Abbey Gardy Launches Securities Fraud Lawsuit in S.D. NY
*********
AIRGATE PCS: Shareholders Commences Securities Fraud Suits in N.D. GA
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Airgate PCS, Inc. faces several securities class actions complaints
were filed in the United States District Court for the Northern
District of Georgia. The suit names as defendants the Company and:
(1) Thomas M. Dougherty,
(2) Barbara L. Blackford,
(3) Alan B. Catherall,
(4) Credit Suisse First Boston,
(5) Lehman Brothers,
(6) UBS Warburg LLC,
(7) William Blair & Company,
(8) Thomas Wiesel Partners LLC and
(9) TD Securities
The complaints seek class certification and allege that the prospectus
used in connection with the secondary offering of Company stock by
certain former iPCS shareholders on December 18, 2001 contained
materially false and misleading statements and omitted material
information necessary to make the statements in the prospectus not
false and misleading. The alleged omissions included:
(i) failure to disclose that in order to complete an effective
integration of iPCS, drastic changes would have to be made to
the Company's distribution channels;
(ii) failure to disclose that the sales force in the acquired iPCS
markets would require extensive restructuring; and
(iii) failure to disclose that the "churn" or "turnover" rate for
subscribers would increase as a result of an increase in the
amount of sub-prime credit quality subscribers the Company
added from its merger with iPCS.
On July 15, 2002, certain plaintiffs and their counsel filed a motion
asking for appointment as lead plaintiffs and lead counsel. On
November 26, 2002, the court entered an order requiring the plaintiffs
to provide additional information in connection with their motion for
appointment as lead plaintiff and in December 2002, plaintiffs
submitted declarations in support of motion for appointment of lead
plaintiff. The Company believes the plaintiffs' claims are without
merit. However, no assurance can be given as to the outcome of the
litigation.
CALIFORNIA: Officers Sue Inglewood City Over "Reverse Discrimination"
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The City of Inglewood, California faces a lawsuit filed in the Los
Angeles Superior Court by two police officers claiming reverse
discrimination, Reuters reports. The two were earlier disciplined and
charged with criminal offences over the videotaped arrest of a black
teenager in which the boy was slammed onto the hood of a squad car.
Jeremy Morse and Bijan Darvish filed the suit, allegedly saying they
were treated more harshly than a black officer also at the scene, due
to political pressure. After the July 2002 arrest of Donovan Jackson,
16, Mr. Morse was fired from the Inglewood Police Department and
charged with assault while Mr. Darvish was suspended and charged with
filing a false police report. The two officers seek reinstatement and
compensatory damages.
"Both of them are contending that they are simply being used as
scapegoats when use of force experts at the Inglewood Police Department
found that they did not violate policy," attorney Gregory Smith told
Reuters. He added that an African American officer was at the scene,
too, and struck Mr. Jackson. He was suspended for only four days and
was not charged. Mr. Darvish allegedly did not strike the teen but was
treated harshly.
The two officers have pleaded not guilty to the charges and are
expected to face trial next month, Reuters states. An attorney for
Inglewood could not be reached for comment.
CREDIT CARDS: Proceedings Begin in Australian Suit V. Visa, MasterCard
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Visa International and MasterCard, after three "directions" or planning
hearings were held late last year, are scheduled to begin legal
proceedings in Sydney, Australia, in the Federal Court, on May 19, the
Australian Financial Review reports.
The two credit card companies will be battling Australia's central
bank, the Reserve Bank of Australia (RBA) on its credit card reforms
during the six weeks the presiding judge, Justice Brian Tamberlin has
set aside for the proceedings. During the interval preceding May 19,
the lengthy process of obtaining key documents, the discovery process,
will be taking place.
Although Judge Tamberlin has set the date for commencement of the legal
proceeding, he has yet to rule formally on whether the Visa and
MasterCard actions against the RBA can be heard concurrently. A fourth
"directions" hearing is scheduled for early next month to gauge whether
all the parties are adhering to the court's timetable.
Meanwhile, in the United Kingdom, a debate on interchange fees is
taking place, with much discord among the parties. A report last week
by the UK Office of Fair Trading (OFT) found that MasterCard's
interchange fees infringed the UK Competition Act of 1988, in that such
fees not only restricted competition but also resulted in higher prices
for consumers.
"The OFT's preliminary conclusion is that the MIF (multilateral
interchange fee) agreement creates an appreciable restriction of
competition," the report said. "In particular, the agreement leads to
an unjustifiably high fee being paid to card-issuing banks on every
transaction made by a MasterCard credit or charge card in the UK."
The OFT did stipulate, however, that it would provide MasterCard the
opportunity to justify its current arrangement or devise an alternative
model to meet exemptions under the legislation. However, the regulator
was blunt in its warning, saying if the credit card company failed to
meet OFT's criteria, it would move a decision in coming months to force
MasterCard to cease the infringing practice.
MasterCard came back with a prompt and strong response to the report,
saying that "the likely outcome (if interchange fees were reduced) is
less choice, less competition and increased charges without any
resulting benefit to the consumer." MasterCard also called on the UK
regulator, OFT, to modify its position.
Visa International and MasterCard also remain involved in a long-
running class action in the United States against a group of retailers,
which claims the credit card issuers have violated antitrust laws by
tying acceptance of debit to acceptance of credit.
DELAWARE: Norfolk Southern Train Derails in Farmington, None Injured
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A Norfolk Southern train was derailed last week in the town of
Farminton, Delaware, spilling a small amount of acid powder authorities
told the Associated Press. 200 Farmington residents were evacuated,
but no one was hurt.
Norfolk Southern spokesman Rudy Husband said the 45-car freight train,
carrying 15 propane tankers, derailed at about 3:30 am on Friday. The
cause of the accident was not immediately known. Six of the seven
derailed cars fell on their sides. Five of the cars were propane
tankers another car was a covered hopper carrying adipic acid, a raw
material used to make nylon fiber, polyurethane and other products, Mr.
Husband told AP.
People living within a mile of the site were told to leave their homes,
and a shelter was set up at a fire station. "The evacuation is a
precaution," State Police Cpl. Harlan Blades told AP. "There's
certainly a large potential for problems anytime those tankers aren't
sitting on their tracks."
Mr. Husband said that less than five pounds of the powdered acid was
spilled, and an environmental contractor was at the scene cleaning it
up.
DIGITAL IMPACT: Court Hears Arguments For Dismissal of Securities Suit
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The United States District Court for the Southern District of New York
heard oral arguments on the motion to dismiss the consolidated
securities class action filed against Digital Impact, Inc., certain of
its officers and directors, and certain investment bank underwriters
for the Company's initial public offering (IPO).
The suit alleges undisclosed and improper practices concerning the
allocation of the Company's IPO shares, in violation of the federal
securities laws, and seeks unspecified damages on behalf of persons who
purchased the Company's stock during the period from November 22, 1999
to December 6, 2000.
The court has appointed a lead plaintiff for the consolidated cases.
On April 19, 2002, plaintiffs filed an amended complaint. Other
actions have been filed making similar allegations regarding the IPOs
of more than 300 other companies. All of these lawsuits have been
coordinated for pretrial purposes as In re Initial Public Offering
Securities Litigation, Civil Action No. 21-MC-92. Defendants in these
cases filed omnibus motions to dismiss on common pleading issues.
The Company's officers and directors have been dismissed without
prejudice in this litigation. The Company believes it has meritorious
defenses to the claims against it and will defend itself vigorously.
In the opinion of management, after consultation with legal counsel and
based on currently available information, the ultimate disposition of
these matters is not expected to have a material adverse effect on its
business, financial condition or results of operations, and hence no
amounts have been accrued for these cases.
DUKE ENERGY: Teamed Up With Official, Firm To Decommission Power Plants
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Duke Energy teamed up with a former port commissioner and the latter's
private company in a plant to buy, operate and decommission power
plants across the country for profit, The San Diego Union-Tribune
reported, according to Associated Press Newswires.
Documents obtained from the computers of David Malcolm, the former port
commissioner, indicate he lobbied public officials in Washington on
behalf of Duke, modeling power plant acquisitions on the energy
company's $110 million lease with the South Bay Power Plant near San
Diego, according to copies of the documents obtained by The San Diego
Union-Tribune.
Lawyer Michael Aguirre has filed a class action against Duke Energy and
other energy companies, alleging rampant overcharging of customers
during the energy crisis, the newly revealed documents having provided
further evidence of the conspiracy to limit availability of energy, or
as in this instance, actually decommission power plants.
Additional evidence that Duke Energy's plan of acquisition and
decommissioning of power plants was a focused, unified one, is the
existence, among the newly revealed documents, of a contract assigning
51 percent ownership to Duke of any power plant acquired by the Duke
Energy/David Malcolm partnership.
Acquisition of the power plants was facilitated by Mr. Malcolm's
ownership of a private company, Public Benefit Power Co. Mr. Malcolm
vigorously lobbied politicians to help Duke and Public Benefit acquire
waterfront power plants, which when purchased, they planned to operate
for an interval and subsequently decommission.
After the April 1999 lease took effect with the South Bay Power Plant
in Chula Vista, Mr. Malcolm sent letters to elected officials in
Virginia and Washington, D.C., as well as to congressional
representatives in attempts to acquire the Benning, Buzzard Point and
Potomac River power plants, the Union-Tribune reports.
EDISON SCHOOLS: NY Court Orders Plaintiffs To File Amended Fraud Suit
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The United States District Court for the Southern District of New York
gave plaintiffs in the securities class actions against Edison Schools,
Inc. and certain of its officers and directors until March 6,2003 to
file an amended consolidated suit.
The suits allege that the Company and certain of its officers and
directors violated Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934. In addition, one lawsuit alleges a claim against the
Company for the violation of Section 11 of the Securities Act. They
seek an unspecified amount of compensatory damages, costs and expenses
related to bringing the actions, and in a few instances, injunctive
relief.
Plaintiffs allege that the Company's public disclosures from November
1999 to March 2002 regarding its financial condition were materially
false and misleading because the Company allegedly improperly inflated
its total revenues by including certain payments, including payments
for teacher salaries, that were paid directly to third parties by local
school districts and charter school boards that contracted with the
Company. Several of the lawsuits also mention two restatements of the
Company's financial statements, one regarding a warrant purchased in
1998 by a philanthropic organization and the other regarding a
severance agreement between the Company and one of its senior officers,
made by the Company as a result of the May 14, 2002 cease-and-desist
order.
On October 29, 2002, the court consolidated all ten actions and
appointed Hawaii Electricians Annuity Fund as lead plaintiff and
Milberg Weiss Bershad Hynes & Lerach LLP as lead counsel. The Company
will have until May 7, 2003, to respond to the amended complaint.
The Company believes that it has strong defenses to the claims raised
by these lawsuits, however the outcome of this litigation cannot be
determined at this time. If the Company were not to prevail, the
amounts involved could be material to the financial position, results
of operations and cash flows of the Company.
EDISON SCHOOLS: NY Court Orders Filing of Amended Lawsuit by March 2003
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The Supreme Court for the State of New York, County of New York gave
plaintiffs in the shareholder derivative lawsuits filed on behalf of
Edison Schools, Inc. until March 24, 2003 to file an amended
consolidated suit.
Between May 15, 2002, and July 19, 2002, three lawsuits were filed
derivatively on behalf of the Company against certain of its officers
and directors. Plaintiffs in these lawsuits contend that the Company's
officers and directors committed various common law torts against the
Company in connection with the allegedly improper inflation of the
Company's total revenues by including certain expenses, including
teacher salaries, that were paid directly by local school districts.
In particular, the plaintiffs allege that the officers and directors
named as defendants violated their fiduciary duties to the Company by
failing to implement and maintain an adequate internal accounting
control system, causing the Company to conceal from the public its true
financial condition, and using material non-public information to sell
shares of the Company's common stock and thereby reap millions of
dollars in illegal insider trading gains.
These lawsuits seek compensatory damages in the amount of the profits
that the individual defendants allegedly made, as well as a
constructive trust over such profits.
On November 14, 2002, the court consolidated these actions. The
Company has negotiated a stipulation in this consolidated action that
allows:
(1) plaintiffs until March 24, 2003 to file a consolidated
amended complaint and
(2) defendants until May 26, 2003 to file a responsive pleading
The Company believes that Edison's officers and directors also have
strong defenses to these lawsuits.
EN POINTE: Asks CA Court To Dismiss Consolidated Securities Fraud Suit
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En Pointe Technologies, Inc., and certain of its current and former
officers asked the United States District Court for the Southern
District of California to dismiss the consolidated amended securities
class action pending against them and seven other unrelated defendants.
The suit alleges that the defendants made misrepresentations regarding
the Company and that the individual defendants improperly benefited
from the sales of shares of the Company's common stock and seeks a
recovery by the Company's shareholders of the damages sustained as a
result of such activities.
On February 19, 2002, the Company filed a motion to dismiss on the
grounds that the allegations failed to state any actionable claims.
The court granted the motion, but allowed plaintiffs leave to amend the
suit. Plaintiffs have filed their amended complaint.
IBUPROFEN: Could Be Dangerous For Heart Patients If Taken With Aspirin
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New research published in the Lancet medical journal has revealed that
ibuprofen could be dangerous for most heart patients because it can
block the blood-thinning benefits of aspirin, the Associated Press
reports. The journal additionally said that those taking both aspirin
and ibuprofen were twice as likely to die during the study period as
those who were taking aspirin alone or with other types of common pain
relievers.
Aspirin is considered the most important medicine for heart disease,
because it prevents clots that cause heart attacks and strokes.
Ibuprofen allegedly clogs a channel inside a clotting protein that
aspirin acts on. Aspirin gets stuck behind the ibuprofen and cannot
get to where it is supposed to go to thin the blood. Ibuprofen is a
common pain reliever, and is in Motrin and Advil among other brands.
Britain's Medical Research Council's Medicines monitoring unit did a
study involving the medical records of 7,107 heart patients who had
been discharged from hospitals between 1989 and 1997 with aspirin
prescriptions and had survived at least one month after leaving the
hospital. The subjects were divided into groups, based on their
prescriptions:
(1) the first group included those on aspirin alone;
(2) the second were given aspirin and ibuprofen and the third group
had aspirin with another pain killer, diclofenac. Ibuprofen
and diclofenac both belong to a widely used class of pain
relievers known as nonsteroidal anti-inflammatory drugs, or
NSAIDs.
(3) the last group included those taking aspirin with any other
NSAID, such as acetaminophen, which is in Tylenol.
Scientists at the council discovered that those taking ibuprofen were
almost twice as likely as those taking aspirin alone to die by 1997.
That meant that for every 1,000 patients treated, there were 12 extra
deaths a year when ibuprofen was taken with aspirin, AP reports. For
heart-related deaths, ibuprofen was linked to three extra deaths per
1,000 patients treated per year.
"The message here is beginning to be 'go for something other than
ibuprofen,'" said Garret FitzGerald, who was not connected with the
latest study, but whose research sparked concerns about the combination
just over a year ago, according to AP. "Mechanistically, you have a
very clear rationale for why it should happen . Now we have four
studies each coming out with the same message. It's several pieces of
ancillary evidence that when assembled are more persuasive than when
taken in isolation."
"Lots of people take these two kinds of drugs chronically and probably
a large number take both together chronically," Mr. FitzGerald
continued. "Talk to your doctor before you embark on this combination
thinking that it's totally innocuous because both are available over
the counter."
The findings are not rock solid, though, experts qualified. "This
definitely raises a red flag . but I don't think this can be viewed as
the definitive answer on the question," said Dr. Veronique Roger, head
of cardiovascular research at the Mayo Clinic in Rochester, Minnesota,
who was not connected to the study, AP reports.
IDAHO: Violates Provisions For Protecting Kids From Lead, Court Rules
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The state of Idaho is violating mandatory Medicaid provisions for the
testing and treating of children with elevated blood-lead levels, a
federal magistrate ruled recently, according to a report by Associated
Press Newswires.
US District Court Magistrate Mikel Williams listed 10 areas in which
the state violated the Medicaid rules regarding children's screening
for lead. Magistrate Williams' ruling stems from a class action filed
in October 2000, by plaintiffs from the Silver Valley. Lead
contamination is an ever-present concern in Silver Valley, the only
place in Idaho where children are being tested for lead.
Former Idaho Supreme Court Justice Robert Hutley of Boise, could not be
reached immediately for comment, AP reports.
Congress requires state Medicaid programs to provide children with
comprehensive lead testing and treatment services. Under Medicaid
rules, wrote Magistrate Williams, Idaho is required to aggressively
identify and inform poor families of the benefits of lead screening,
and treatment if necessary. The state, he said, must screen all
children for lead poisoning at 12 and 24 months of age, and screen
children up to age six if they have not been tested previously.
Magistrate Williams found that before 2002, the Department of Health
and Welfare maintained it could not, or would not, inform physicians
serving Medicaid-eligible children that lead testing was required by
law.
The Panhandle Health District in Silver Valley, however, has been
conducting voluntary screenings, funded by the Centers for Disease
Control and Prevention, and the Agency for Toxic Substances and Disease
Registry. This endeavor is part of the Superfund cleanup of mine
wastes.
The annual screening in Silver Valley has shown a steady decline in
elevated blood-lead levels among the children tested, although the
levels are still significantly higher in the Silver Valley than in the
rest of the state, probably because of the area's earlier history as a
mining center and the prevalence of mine wastes, to an extent that the
area qualifies for Superfund cleanup.
INFOGRAMES INC.: Appeals Court Upholds Dismissal of Columbine Lawsuit
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The United States Tenth Circuit Appeals Court upheld the dismissal of a
class action filed against Infogrames, Inc. by the family of William
David Sanders, a teacher murdered on April 2, 1999 in a shooting
rampage committed by Eric Harris and Dylan Klebold at the Columbine
High School in Jefferson County, Colorado.
The action was brought against 25 defendants, including the Company and
other corporations in the videogame business, companies that produced
or distributed the movie The Basketball Diaries, and companies that
provide allegedly obscene Internet content.
The complaint alleges, with respect to the Company and other
corporations in the videogame business, that Mr. Harris and Mr. Klebold
were influenced by the allegedly violent content of certain videogames
and that the videogame manufacturers are liable for Mr. Harris' and Mr.
Klebold's conduct. The complaint seeks a minimum $15,000 for each
plaintiff and up to $15.0 million in compensatory damages for certain
plaintiffs and $5.0 billion in punitive damages, injunctive relief in
the form of a court established "monitoring system" requiring video
game companies to comply with rules and standards set by the court for
marketing violent games to children.
In June 2001 the Company waived service of a summons, and later filed a
motion to dismiss. In March 2002, the court granted the Company's
motion to dismiss and later denied plaintiffs' motion for
reconsideration. On April 5, 2002 plaintiffs filed a notice of appeal.
A stipulation of dismissal was filed on December 9, 2002 and on
December 10, 2002 the appeals court dismissed the appeal.
INKTOMI CORPORATION: Asks Court To Dismiss Derivative, Securities Suits
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Inktomi Corporation asked the California Superior Court for the County
of San Mateo to dismiss three derivative and class action lawsuits
filed against it (as a nominal defendant) and five directors, relating
to the Company's pending merger with a wholly-owned subsidiary of
Yahoo!
The first suit was commenced in January 2003, alleging that, in
pursuing the transaction with Yahoo! and approving the merger
agreement, the directors breached their fiduciary duties to the holders
of the Company's common stock and the Company by, among other things:
(1) engaging in self-dealing,
(2) abusing control of the company,
(3) failing to obtain the highest price reasonably available for
Inktomi and its shareholders,
(4) committing waste of corporate assets and
(5) failing to properly value Inktomi
The complaint further alleges that the merger agreement resulted from a
flawed process and that the directors tailored the terms of the merger
to meet the needs of two directors. The complaint also alleges that
the Company directly breached and/or aided and abetted the directors'
alleged breaches of fiduciary duties.
The complaint seeks, among other things, certification of the
litigation as a class action, a declaration that the merger agreement
was entered into in breach of the directors' fiduciary duties, a
preliminary and permanent injunction enjoining Inktomi, the directors
and others from consummating the merger, a direction requiring that the
directors exercise their fiduciary duties to obtain a transaction which
is in the best interests of the Inktomi shareholders, rescission of the
merger or any of the terms thereof to the extent implemented, an award
of costs, including attorneys' and experts' fees, and other unspecified
relief.
On January 24, 2003, an alleged holder of Inktomi common stock filed a
purported class action captioned "Malachinski v. Peterschmidt, et al."
in the same court. On January 29, 2003 an alleged holder of Inktomi
common stock filed another purported class action captioned "Zakary v.
Peterschmidt, et al." in the same court.
The complaint in the Zakary action is substantially identical to the
complaint in the Malachinski action. Both complaints name as
defendants three of the Company's five current directors, two of its
former directors and the Company.
The complaints in the Malachinski and Zakary actions allege that the
Company's directors breached their fiduciary duties in connection with
the proposed acquisition by Yahoo! by, among other things:
(i) approving a transaction in which they allegedly stand to
receive financial benefits not shared by the other Inktomi
shareholders,
(ii) retaining a financial advisor (Thomas Weisel Partners) that
has business ties to Yahoo!,
(iii) failing to obtain the best offer possible for Inktomi's
shareholders,
(iv) agreeing to the termination fee provisions of the merger
agreement,
(v) failing to adequately value Inktomi, and
(vi) failing to make complete and adequate disclosure of alleged
material facts regarding the transaction and the events that
preceded the execution of the merger agreement.
The plaintiffs seek, among other things, certification of their
respective actions as class actions, a declaration that the directors
have breached their fiduciary duties, an order requiring the defendants
to indemnify the shareholders for the alleged breaches of fiduciary
duty, an injunction enjoining the merger or rescinding it, if
consummated, an order requiring defendants to make additional
disclosures, an award of compensatory and/or rescissory damages, an
award of interest, attorneys' fees, expert fees and other costs, and
other unspecified relief.
On January 29, 2003, the plaintiff in the Malachinski action filed a
motion for expedited discovery and an order temporarily enjoining the
merger. On January 30, 2003, the Malachinski action was removed from
the Superior Court to the United States District Court for the Northern
District of California. On January 31, 2003, the Zakary action was
removed from the Superior Court to the same district court. The
Company filed motions to dismiss the suits in February 2003.
Based on its review of the three complaints, the Company believes that
the allegations in the Tuttle, Malachinski and Zakary actions are
without merit and intends, along with the directors, to defend the
actions vigorously. In the event that holders of a majority of the
outstanding shares of Inktomi common stock vote in favor of adoption of
the merger agreement, in addition to any other defenses Inktomi and the
directors may assert, Inktomi and the directors intend to rely upon the
approval of the proposal to adopt the merger agreement in defense of
the claims asserted in the actions.
Specifically, Inktomi and the directors intend to argue that the
approval of the proposal to adopt the merger agreement by holders of a
majority of the shares of the Company's common stock constitutes a
ratification or acceptance of the conduct that is the subject of
plaintiffs' complaints. Inktomi and the directors further intend to
argue that such ratification or approval constitutes a complete defense
to the claims asserted in the complaints or otherwise operates to
protect them from liability or increase the plaintiffs' burdens of
pleading and proof in the actions.
InterWAVE COMMUNICATIONS: Asks Court To Dismiss Securities Fraud Suit
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interWAVE Communications, International, Ltd. asked the United States
District Court for the Southern District of New York to dismiss the
consolidated securities suit filed against it, certain of its officers
and directors and certain investment bank underwriters for the
Company's initial public offering (IPO).
The amended complaint alleges undisclosed and improper practices by the
underwriters concerning the allocation of the Company's IPO shares, in
violation of the federal securities laws, and seeks unspecified damages
on behalf of persons who purchased interWAVE's stock during the period
from January 28, 2000 through December 6, 2000.
Similar complaints have been filed regarding more than 300 other IPOs.
These cases have been coordinated "In re Initial Public Offering
Securities Litigation, Civil Action No. 21-MC-92." An omnibus motion
to dismiss has been filed on behalf of all the issuer defendants in the
coordinated litigation on common pleading issues.
On October 8, 2002, the court entered an order of dismissal as to all
of the individual defendants in the Company's IPO litigation. The
Company believes it has meritorious defenses to the claims and will
continue to defend the action vigorously.
MAINE: Court Orders Hiring of Expert To Fix Mental Health Care System
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A federal court ordered the state of Maine to hire an outside expert to
establish a system that would track the hundreds of mentally ill
children in need of psychiatric services, the Associated Press
Newswires reports. The state is being charged in court with having
failed to keep the agreement it signed last May to settle a class
action, known as the Risinger case.
The order refers to evidence that the state's Department of Behavioral
and Developmental Services has failed to comply with its agreement to
provide timely in-home to mentally ill and disabled children. Maine is
legally obligated under Medicaid rules to provide in-home services to
children within six months when they seek help.
William Kayatta, one of the attorneys who filed the Risinger case, said
the state promised to develop a new computer system to keep better
track of the children, but shut down its old computer while the new
computer system of tracking was being developed. Now, state officials
can only estimate that 800 children were waiting for either in-home
services or evaluation.
Deputy Attorney General Paul Stern said that when the governor's office
heard of the situation, it took it very seriously. Mr. Stern said, "We
are moving forward to provide these children with the services they are
entitled to." Governor John Baldacci has promised to streamline the
four state agencies providing services to mentally ill and disabled
children.
The recently filed court order requires the state to hire an expert to
evaluate the status of the children involved and to make sure they
receive the services they require within 180 days. Mr. Kayatta said
the state can be brought back to court if it does not follow the
expert's advice.
OPENWAVE SYSTEMS: Asks NY Court To Dismiss Consolidated Securities Suit
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Openwave Systems, Inc. asked the United States District Court for the
Southern District of New York to dismiss a consolidated securities
class action filed on behalf of all persons who purchased the Company's
common stock from June 11, 1999 through December 6, 2000. It names as
defendants the Company, five of the Company's present and former
officers and several investment banking firms that served as
underwriters of the Company's initial public offering and secondary
public offering.
The amended complaint alleges liability as to all defendants under
Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, on the grounds that the
registration statement for the offerings did not disclose that:
(1) the underwriters had agreed to allow certain customers to
purchase shares in the offerings in exchange for excess
commissions paid to the underwriters; and
(2) the underwriters had arranged for certain customers to
purchase additional shares in the aftermarket at predetermined
prices.
The amended complaint also alleges that false analyst reports were
issued. No specific damages are claimed.
The Company is aware that similar allegations have been made in other
lawsuits filed in the Southern District of New York challenging over
300 other initial public offerings and secondary offerings conducted in
1999 and 2000. Those cases have been consolidated for pretrial
purposes before the Honorable Judge Shira A. Scheindlin.
On July 15, 2002, the Company (and all other issuer defendants)
moved to dismiss the respective complaints. That motion was heard on
November 1, 2002, and a decision is still pending. The parties have
stipulated to dismiss certain individual defendants without prejudice,
subject to an agreement extending the statute of limitations through
September 30, 2003.
Based upon the Company's current understanding of the facts, the
Company believes that the complaint's claims against the Company are
without merit, intends to defend the case vigorously and does not
believe that resolution of this matter will have a material adverse
effect on the financial condition of the Company.
OPENWAVE SYSTEMS: Asks CA Court To Dismiss Shareholder Derivative Suit
----------------------------------------------------------------------
Openwave Systems, Inc. asked the United States District Court for the
Northern District of California to dismiss the purported shareholder
derivative lawsuit, filed on behalf of the Company. The complaint, as
amended, asserts claims against its officers and directors at the time
of the Company's initial public offering, and the underwriters of that
offering, for:
(1) breach of fiduciary duty to the Company,
(2) negligence,
(3) breach of contract, and
(4) unjust enrichment
The plaintiff asserts that the alleged conduct injured the Company
because the Company's shares were not sold for as high a price in the
IPO as they otherwise could have been. The Company is aware that
similar allegations have been made in other derivative lawsuits
involving issuers that also have been sued in the Southern District of
New York securities class actions.
On July 12, 2002, the Company moved to dismiss the initial complaint.
Subsequently, plaintiff demanded that the Board of Directors assert his
purported claims. The Board of Directors appointed a Special Committee
to consider the demand. The Special Committee has issued a report and
made recommendations regarding the disposition of the claims asserted
by plaintiff.
On November 4, 2002, plaintiff filed an amended complaint. On December
5, 2002, the Company, the individual defendants, and the underwriters
filed motions to dismiss. The parties agreed to continue the hearing
on the motions to dismiss until March 6, 2003. The Company does not
believe that resolution of this matter will have a material adverse
effect on the financial condition of the Company.
SELECTICA INC.: NY Court Dismisses Officers, Directors From Fraud Suit
----------------------------------------------------------------------
The United States District Court for the Southern District of New York
dismissed certain of Selectica, Inc.'s officers and directors as
defendants in the consolidated securities class action pending against
them, the Company and Credit Suisse First Boston Corporation (CSFB), as
the underwriters of the Company's March 13, 2000 initial public
offering (IPO).
The amended complaint alleges that the Company, the officer and
director defendants and CSFB violated federal securities laws by making
material false and misleading statements in the prospectus incorporated
in our registration statement on Form S-1 filed with the SEC in March,
2000 in connection with the Company's IPO.
Specifically, the complaint alleges, among other things, that CSFB
solicited and received excessive and undisclosed commissions from
several investors in exchange for which CSFB allocated to those
investors material portions of the restricted number of shares of
common stock issued in the Company's IPO.
The complaint further alleges that CSFB entered into agreements with
its customers in which it agreed to allocate the common stock sold in
the Company's IPO to certain customers in exchange for which such
customers agreed to purchase additional shares of the Company's common
stock in the aftermarket at pre-determined prices.
The complaint also alleges that the underwriters offered to provide
positive market analyst coverage for the Company after the IPO, which
had the effect of manipulating the market for Selectica's stock.
Plaintiffs contend that, as a result of the omissions from the
prospectus and alleged market manipulation through the use of analysts,
the price of the Company's stock was artificially inflated between the
date of the IPO and December 6, 2000 and that the defendants are liable
for unspecified damages to those persons who purchased stock during
that period.
The suit was consolidated before a single judge along with cases
brought against numerous other issuers, their officers and directors
and their underwriters, that make similar allegations involving the
allocation of shares in the IPOs of those issuers. The consolidation
was for purposes of pretrial motions and discovery only.
On July 15, 2002, the Company and the officer and director defendants,
along with other issuers and their related officer and director
defendants, filed a joint motion to dismiss based on common issues.
Opposition and reply papers have been filed and the Court has heard
oral argument. The Court has not yet decided the matter.
The Company believes that the allegations against it and its officers
and directors are without merit and intends to contest them vigorously.
However, the litigation is in its preliminary stages, and the Company
cannot predict its outcome. The litigation process is inherently
uncertain. If the outcome of the litigation is adverse to the Company
and if, in addition, the Company is required to pay significant
monetary damages, the Company's business would be significantly harmed.
SELECTICA INC.: CA Court To Hear Motions to Dismiss Derivative Lawsuit
----------------------------------------------------------------------
The Superior Court of California in Santa Clara County is set to hear
on March 4,2003 the motion to dismiss the shareholder derivative
lawsuit filed against Selectica, Inc. (as a nominal defendant, certain
of its officers and directors, and Credit Suisse First Boston (CSFB),
as the underwriters of the Company's IPO. The action was filed by a
shareholder purporting to assert on behalf of the Company claims for:
(1) breach of fiduciary duty,
(2) aiding and abetting and conspiracy,
(3) negligence,
(4) unjust enrichment, and
(5) breach of contract
The suit relates to the pricing of shares in the Company's IPO. On
June 6, 2002, the plaintiff filed an amended complaint dropping the
breach of contract claim against CSFB and adding claims against CSFB
for breach of an agent's duty to its principal and for violation of the
California Unfair Competition Law, based on alleged violations of
certain rules of the National Association of Securities Dealers.
On November 25, 2002, following the removal of the case to federal
court and the subsequent remand of the case back to the state court,
the Company and the officer and director defendants filed answers to
the amended complaint, preserving certain defenses including defenses
based on plaintiff's lack of standing to bring the suit. Also on
November 25, 2002, CSFB filed a motion to dismiss the case, on the
grounds that the plaintiff lacks standing.
The Company believes that the allegations against it and its officers
and directors are without merit. However, the litigation is in its
preliminary stages, and the Company cannot predict its outcome. The
litigation process is inherently uncertain. If the outcome of the
litigation is adverse to the Company and if, in addition, the Company
is required to pay significant monetary damages, the Company's business
would be significantly harmed.
TERRORIST ATTACK: 9/11 Victims' Families Fear Obstruction of True Story
-----------------------------------------------------------------------
Relatives of several victims of the September 11 terrorist attacks
expressed misgivings that the true account of what happened that day
may never be told, due to obstacles in legislation, the Associated
Press reports.
People seeking claims from the Congress-initiated September 11 Victims
Compensation Fund waive their right to sue the airlines - and relatives
of the victims say these potential suits could have uncovered security
flaws.
A ten-member panel, labeled the National Commission on Terrorist
Attacks, started its probe on the causes and lessons of the attacks
last month, focusing on intelligence, law enforcement diplomacy,
immigration, commercial aviation and the flow of assets to terror
organizations. However, three members are connected with law firms
that lobbied for the airline industry, relatives said. The three
members are:
(1) former Gov. James Thompson, R-Ill.,
(2) former Sen. Slade Gorton, R-Wash. and
(3) Fred Fielding, legal counsel to President Reagan
According to disclosure forms filed with the House and Senate, Mr.
Thompson's firm, Winston & Strawn, was paid $380,000 during the last
two years to lobby for American Airlines, which had two planes hijacked
on September 11.
"I believe the government is protecting the carriers, but I also
believe the government is protecting itself," Mary Schiavo, a former
Transportation Department inspector general, a lawyer representing
relatives of almost four dozen September 11 airline passengers, told
AP.
Relatives of the victims say relinquishing the right to sue after
filing monetary claims with the Victims Compensation Fund closes off an
investigative avenue. Former National Transportation Safety Board
Chairman Jim Hall called lawsuits "another pair of eyes on the system."
"Clearly, the victims' litigation has historically been a very
important factor in ensuring safety and security in our nation," he
told AP.
NTSB vice chairwoman Susan Coughlin, and head of the Aviation Safety
Alliance, an advocacy group disagreed. "I don't think you'll ever find
that court was the breeding ground for important information that the
government hadn't already uncovered."
The victims' fund is part of a $15 billion airline relief package
instituted by Congress after September 11, 2001, to stem billions of
dollars in losses and potential legal claims for the airline industry.
The package also limited the airlines' liability to the amount of
insurance that had been carried by the four hijacked flights - about $6
billion. House Republicans added a provision to the homeland security
bill last fall that limited the liability of companies that screened
airline passengers.
Industry officials reject the assertion that the legislation was aimed
at discouraging airline lawsuits, AP reports. "Congress was trying to
create an expeditious alternative, not to deny anyone the right to go
to court," Michael Wascom, a spokesman for the Air Transport
Association, which represents the major airlines, told AP.
Commission Chairman Thomas Kean said panel members won't work on issues
where clear conflicts exist. "When you appoint a commission like this,
you're going to end up with these things," he told AP.
UNITED STATES: Entitled To $500M in Overtime, Justice Dept Lawyers Say
----------------------------------------------------------------------
More than 9,100 former and current Department of Justice lawyers,
including about 225 from New Jersey, are suing the government, claiming
it violated federal labor laws by expecting them to work long hours
with no overtime pay, The Star-Ledger (Newark, NJ) reports. If the
lawyers win, the cost to the government could be as high as $500
million.
In the midst of these claims and disclaimers, a US Court of Federal
Claims judge in Washington, DC, ruled recently that the nation's
prosecutors and other regulatory enforcers were entitled to overtime
under the Federal Employees Pay Act. Late last month, the Justice
Department asked the US Court of Appeals for the Federal Circuit in
Washington, DC, for permission to appeal the ruling about entitlement
to overtime pay. In rebuttal, lawyers for the employees filed their
paperwork.
The appeals court will probably take about a month to decide whether to
hear an appeal by the Justice Department or send the class action back
to the trial judge to begin his determinations relating to damages,
various lawyers said.
The case began in 1998, when about 200 Department of Justice lawyers
filed suit in the US Court of Federal Claims. Since then, thousands of
current and former Justice Department Attorneys have joined the
lawsuit, including assistant U.S. attorneys, lawyers who work for the
FBI, or for the Immigration and Naturalization Service and attorneys in
US Trustee offices.
Justice Department documents filed in court show that the department
took the unusual step of keeping two sets of books for many of its
lawyers. One, for purposes of meeting payrolls, showed lawyers worked
40 hours a week. A second set of time sheets clocked the time lawyers
worked over 40 hours; that is, overtime hours. Those documents were
used by supervisors to determine budgets and staffing levels for each
office, lobby Congress for larger appropriations; and, in some cases,
to bill fees to adversaries. The documents were used for every
purpose, except to determine what each lawyer was owed for hours worked
beyond 40 hours.
However, the department's handbook for lawyers who work in the US
Attorneys' offices and headquarters in Washington, details the overtime
Policy. "Assistant U.S. Attorneys are professionals and should expect
to work in excess of regular hours without overtime pay.
The statute, the Federal Employees Pay Act, says, yes, overtime is due
the lawyers, but the handbook, which should give interpretation to the
statute, says, no, the lawyers are professionals and should not expect
overtime. The department still commissioned several internal reviews
on the subject. One, in 1980, said attorneys should be eligible for
overtime. In a 1998 memo, a Justice Department lawyer warned that a
lawsuit could happen.
Advancing to the present, in court papers on file with the federal
claims court in Washington, the department said none of the people in
the suit asked for overtime. Therefore, it cannot be held responsible
for no one getting paid, the papers said.
Further, said the papers, paying overtime to agency lawyers diminishes
the prestige of the position. Agency lawyers, they said, are given a
great deal of autonomy and power to handle cases and oversee
investigations, the papers on file with the federal claims court said.
"Ordering and approving overtime work would be inconsistent with and
harmful to this professional atmosphere," lawyers for the department
said in the court papers. "That type of discretion detracts from the
attorney's autonomy, discretion and control of her or his work
product."
Federal Claims Court Judge Robert Hodges said, this view of the nature
of an attorney's work was a valid point, but one that does not matter
legally. The Justice Department "may not exempt themselves from the
law by issuing a policy stating that it will not pay overtime," Judge
Hodges wrote in a decision in November of last year.
However, regardless of Judge Hodges' view that the statute determines
that the attorneys are entitled to overtime, some of the lawyers
participating in the class action do not agree with the lawsuit because
of that view of the attorney as a professional who finds the law and
carries that law forward until the problem at hand is concluded - no
matter how long it takes, no matter what the lawyer gets paid.
"In a way, it has always seemed like an unfair claim (the overtime
claim) because lawyers by their very nature work overtime. It is what
they do," said Paul Weissman, who worked as an assistant U.S. attorney
in New Jersey and now is vice president of Schering-Plough. He said,
"I thought to myself how awful I would feel if thousands of other
people made a recovery and I did not."
UNIVERSITY OF MICHIGAN: Ex-Military Officers Support Affirmative Action
-----------------------------------------------------------------------
Several of the country's best known retired military officers and
former top Pentagon officials intend to file a Supreme Court brief
supporting affirmative action admissions at the University of Michigan,
the Associated Press reports. More than two dozen officials will
support the brief including:
(1) Gen. Norman Schwarzkopf, the commander in the first Persian
Gulf War,
(2) Adm. William Crowe,
(3) Gen. Hugh Shelton,
(4) Gen. John M. Shalikashvili,
(5) former defense secretary William Perry,
(6) former defense secretary William Cohen,
(7) all former chairmen of the Joint Chiefs of Staff; and
(8) Gen. Anthony Zinni, former head of the US Central Command
Former Army undersecretary Joe Reeder, announcing the legal action,
told AP, "It is absolutely essential to our fighting force . You can't
get there yet without taking race into consideration."
President George Bush earlier ordered the United States Justice
Department to file written briefs asking the Supreme Court to halt the
programs, saying they were "unconstitutional" and arguing that race-
neutral alternatives were available. Democrats in Congress and civil
rights leaders have criticized the move, according to an earlier Class
Action Reporter story.
The United States Supreme Court scheduled arguments for April 1,2003
for two politically charged politically charged cases challenging the
University of Michigan's affirmative action policies that favor
minority applicants.
Tuesday is the deadline for briefs in the Michigan case, which will be
argued before the Supreme Court on April 1. The University of Michigan
expects more than 60 briefs will be filed to support its affirmative
action admissions policies, AP reports. So far, 15 briefs have been
filed by opponents of the university's policies, which consider
minority status as a factor in deciding which students to pick.
Many large companies have also broken with President Bush on the
affirmative action case, including General Motors Corporation,
Microsoft, Steelcase, Procter & Gamble, Intel and Banc One. Those
companies have filed supporting briefs. More than 100 US House
Democrats filed a supporting brief February 13, the Associated Press
reports.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
February 20-21, 2003
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Marriott Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
March 3-4, 2003
TOXIC MOLD LITIGATION
Marriott East Side Hotel, New York
Contact: 1-888-224-2480;
http://www.americanconference.com
March 3-4, 2003
PRACTICAL TRAINING FOR THE CLAIMS PROFESSIONAL
Mealey Publications
The Westin Hotel, Stamford
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
March 6-7, 2003
VACCINE LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton, Boston Commons, Boston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
March 17-18, 2003
FEN-PHEN LITIGATION CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
March 20-21, 2003
FUNDAMENTALS OF INSURANCE COVERAGE LAW
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
March 23-24, 2003
CALIFORNIA ENVIRONMENTAL UPDATE
Bridgeport Continuing Education
Long Beach
Contact: 818-505-1490
March 27-28, 2003
ASBESTOS LITIGATION
Hotel Nikko, San Francisco
Contact: 1-888-224-2480;
http://www.americanconference.com
April 2-5, 2003
INSURANCE INSOLVENCY & REINSURANCE ROUNDTABLE
Mealey Publications
The Fairmont Scottsdale Princess, AZ
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
April 4-5, 2003
TOXIC TORT IN CALIFORNIA
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
April 4-5, 2003
TOXIC TORT AND ENVIRONMENTAL IN CALIFORNIA
Bridgeport Continuing Education
Contact: 818-505-1490
April 8, 2003
SILICA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Boston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
April 10-11, 2003
HANDLING CONSTRUCTION RISKS 2003:
ALLOCATE NOW OR LITIGATE LATER
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
April 15, 2003
WALL STREET FORUM: ASBESTOS
Mealey Publications
The Ritz-Carlton Hotel Battery Park
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
April 28-29, 2003
EPHEDRA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
April 28-29, 2003
BAD FAITH AND PUNITIVE DAMAGES
Hotel Nikko, San Francisco
Contact: 1-888-224-2480;
http://www.americanconference.com
May 1-2, 2003
ASBESTOS LITIGATION 2003
Andrews Publication
New Orleans Grande Hotel, New Orleans
Contact: seminar@andrewspub.com
May 14-15, 2003
CALIFORNIA ENVIRONMENTAL UPDATE
Bridgeport Continuing Education
San Jose
Contact: 818-505-1490
June 2-3, 2003
BAYCOL LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 2-3, 2003
ASBESTOS BANKRUPTCY CONFERENCE
Mealey Publications
The Westin Hotel Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 9, 2003
ANTI-SLAPP STATUTE CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 9, 2003
CCA-TREATED WOOD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 12-13, 2003
ENVIRONMENTAL INSURANCE: PAST, PRESENT AND FUTURE
American Law Institute
Boston
Contact: 215-243-1614; 800-CLE-NEWS x1614
June 16-17, 2003
LITIGATING EMPLOYMENT DISCRIMINATION &
SEXUAL HARASSMENT CLAIMS
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
June 16-17, 2003
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 8-9, 2003
CORPORATE GOVERNANCE: LIABILITY OF CORPORATE
OFFICERS AND DIRECTORS
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
Water Contamination Litigation Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
TBA
Fair Labor Standards Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
February 06-28, 2003
ETHICAL CONSIDERATIONS IN MASS TORT
AND CLASS ACTION LITIGATION IN TEXAS
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
February 06-28, 2003
NBI PRESENTS "LITIGATING THE CLASS
ACTION LAWSUIT IN FLORIDA
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
May 14, 2003
CLASS ACTION BASICS
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
PAXIL LITIGATION
LawCommerce.Com
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
LawCommerce.Com
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
LawCommerce.Com
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
______________________________________________________________________
The Meetings, Conferences and Seminars column appears in the Class
Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
AEGON NV: Weiss & Yourman Commences Securities Fraud Lawsuit in S.D. NY
-----------------------------------------------------------------------
Weiss & Yourman initiated a securities class action against Aegon N.V.
(NYSE:AEG) and certain of its officers in the United States District
Court for the Southern District of New York, on behalf of purchasers of
Company shares between August 9, 2001 and July 22, 2002.
The complaint charges defendants with violations of the Securities
Exchange Act of 1934. It alleges that defendants issued a series of
material misrepresentations that caused plaintiff and other members of
the class to purchase Aegon common stock at artificially inflated
prices.
For more details, contact David C. Katz, James E. Tullman by Mail: The
French Building, 551 Fifth Avenue, Suite 1600, New York, New York 10176
by Phone: 888/593-4771 or 212/682-3025 or by E-mail: info@wynyc.com
CARREKER CORPORATION: Cauley Geller Launches Securities Suit in N.D. TX
-----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Northern District of
Texas, Dallas Division, on behalf of purchasers of Carreker Corporation
(Nasdaq: CANIE) publicly traded securities during the period between
May 20, 1998 and December 10, 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 May 20, 1998 and December 10, 2002.
According to the complaint, throughout the class period, Carreker filed
financial statements with the SEC which represented that the Company
was consistently delivering numerous consecutive quarters of record,
double-digit growth, which the Company attributed to the strong demand
for its products and Carreker's business model.
In addition, according to the complaint, the Company expressly assured
investors of its "dedication to transparent reporting practices" and
highlighted the supposed "quality and integrity of (Carreker's)
accounting and corporate governance practices."
These statements were materially false and misleading, according to the
complaint, because they failed to disclose that the Company had been
improperly recognizing revenues throughout the class period, thereby
artificially inflating its revenues, income and earnings per share. On
December 10, 2002, the Company issued a press release announcing that
it was investigating whether revenues were improperly recognized by
being booked at once instead of ratably over a period of time, as
required by applicable generally accepted accounting principles.
This belated disclosure severely and negatively impacted Carreker's
stock price, causing it to fall by 22.6% in one day on extremely heavy
trading volume, from a December 9 close of $5.08 per share to close at
$3.93 per share on December 10. Subsequently, the SEC initiated an
investigation, which is ongoing, into the Company's accounting
practices. On January 28, 2003, the Company announced that it will be
restating the financial reports it has filed since 1998.
For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie
Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock,
AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com
or visit the firm's Website: http://www.cauleygeller.com
CARREKER CORPORATION: Schiffrin & Barroway Lodges Securities Suit in TX
-----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Texas, Dallas
Division on behalf of all purchasers of the common stock of Carreker
Corporation (Nasdaq:CANIE) between May 20, 1998 and December 10, 2002,
inclusive.
The complaint charges the Company with issuing false and misleading
statements concerning its business and financial condition.
Specifically, the complaint alleges that throughout the class period,
Carreker filed financial statements with the SEC which represented that
the Company was consistently delivering numerous consecutive quarters
of record, double-digit growth, which the Company attributed to the
strong demand for its products and Carreker's business model.
In addition, according to the complaint, the Company expressly assured
investors of its "dedication to transparent reporting practices" and
highlighted the supposed "quality and integrity of (Carreker's)
accounting and corporate governance practices."
These statements were materially false and misleading, according to the
complaint, because they failed to disclose that the Company had been
improperly recognizing revenues throughout the class period, thereby
artificially inflating its revenues, income and earnings per share. On
December 10, 2002, the Company issued a press release announcing that
it was investigating whether revenues were improperly recognized by
being booked at once instead of ratably over a period of time, as
required by applicable generally accepted accounting principles. This
belated disclosure severely and negatively impacted Carreker's stock
price, causing it to fall by 22.6% in one day on extremely heavy
trading volume, from a December 9 close of $5.08 per share to close at
$3.93 per share on December 10.
Subsequently, the SEC initiated an investigation, which is ongoing,
into the Company's accounting practices. On January 28, 2003, the
Company announced that it will be restating the financial reports it
has filed since 1998.
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website:
http://www.sbclasslaw.com
COSi INC.: Abbey Gardy Commences Securities Fraud Lawsuit in S.D. NY
--------------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action in the United
States District Court for the District Court, Southern District of New
York (03 cv 1053) on behalf of all persons or entities who purchased
securities of Cosi, Inc. (Nasdaq:COSI) between November 21, 2002 and
February 3, 2003, inclusive.
The suit alleges that defendants violated Section 11 of the Securities
Act of 1933 by issuing a false and misleading Registration Statement
and Prospectus in connection with Cosi's initial public offering (IPO)
on November 21, 2002 of 5.5 million shares at $7 per share. The
prospectus misrepresented that the proceeds of the offering were
sufficient to fund the Company's fast growth business plan for at least
two years, allowing Cosi to open between 53 and 59 new company-owned
specialty sandwich shops in 2003. On February 3, 2003, just ten weeks
after the IPO, Cosi shocked the market by announcing the immediate
resignation of CEO and co-founder Andy Stenzler, that Cosi would lay
off personnel, and that it would open only 10 new stores in 2003.
In addition, the Company stated that it would immediately reverse its
company-owned stores business model to one involving turning the
business over to franchisees. The complaint alleges that, at the time
of the IPO, Cosi's business plan had already failed, and that the
proceeds raised in the offering were less than were needed to fund even
the Company's short term needs.
In reaction to this unexpected bad news, Cosi shares fell
significantly, closing at $2.80 per share on February 4, 2003, down
$1.67 or almost 40%.
The suit alleges that the defendants failed to exercise reasonable due
diligence to ensure that the prospectus disclosed all material facts.
For more details, contact Evan Kaufman by Phone: (800) 889-3701 by E-
mail: EKaufman@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com
COSi INC.: Wolf Haldenstein Commences Securities Fraud Suit in S.D. NY
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Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York, on behalf of all who purchased or acquired the common stock
of Cosi, Inc. (Nasdaq: COSI) pursuant to or traceable to the Company's
Registration Statement and Prospectus dated November 13, 2002, which
was declared effective by the SEC on November 21, 2002, and filed in
connection with Cosi's initial public offering (IPO), through February
3, 2002, inclusive. The suit names as defendants the Company, certain
of its officers and directors, and the Underwriter of the IPO, William
Blair & Co., L.L.C.
The Company made its initial public offering on November 22, 2002,
selling 5,555,556 shares of common stock to the public at $7.00 per
share. The Registration Statement/Prospectus represented that the net
proceeds from the IPO offering would be sufficient to finance the
opening of an additional 53 to 59 restaurants in 2003.
The complaint alleges that defendants' statements in the Registration
Statement/Prospectus and other public statements made at or about the
time of the IPO were materially false and misleading, among other
things, because at the time of the IPO, the Company had neither the
intent nor the ability to open 53 to 59 new restaurants in 2003 with
the net proceeds of the IPO.
On February 3, 2002, only ten weeks after the IPO, the Company
announced that the financing from the offering was insufficient to open
53 to 59 new stores in 2003 and that Cosi instead predicted the
openings of only 10 Company-owned restaurants in 2003. After the
disclosure, the price of Cosi common stock dropped $1.67 or nearly 40%
to close on February 4, 2003, at $2.80 per share.
For more details, contact Fred Taylor Isquith, Michael Miske, George
Peters, Derek Behnke by Mail: 270 Madison Avenue, New York, New York
10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or
visit the firm's Website: http://www.whafh.com. All e-mail
correspondence should make reference to Cosi.
MCSI INC.: Chitwood & Harley Commences Securities Fraud Suit in S.D. OH
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Chitwood & Harley LLP initiated a securities class action in the United
States District Court for the Southern District of Ohio, Western
Division against MCSI, Inc., Michael Peppel and Ira Stanley. The suit
was filed on behalf of purchasers of the common stock of MCSi, Inc.
(Nasdaq:MCSI), between July 24, 2001 and February 26, 2002, inclusive.
The complaint charges defendants with violations of federal securities
laws by, among other things, issuing a series of materially false and
misleading press releases concerning MCSi's financial results and
business prospects. Specifically, the complaint alleges that MCSi
touted the success of its businesses -- particularly the high-margin
systems integration business.
These statements were false and misleading as they failed to disclose
that MCSi's business was actually corroding and that its integration
business was not operating on as a successful level as represented. As
a result, the price of the Company's securities were artificially
inflated throughout the class period, allowing insiders to sell massive
amounts of stock following two follow-on public offerings.
On February 26, 2002, however, the Company shocked the market by
reporting a 29% decline in shares for the fourth quarter of 2001. In
reaction to this announcement, shares of MCSi common stock plunged by
40%, falling from $17.35 per share close on February 25, 2002 to a
close of $10.40 per share on February 26, 2002.
For more details, contact Jennifer Morris by Mail: 1230 Peachtree
Street, Suite 2300, Atlanta, Georgia 30309 by Phone: 1-888-873-3999 or
404-873-3900 by E-mail: jlm@classlaw.com or visit the firm's Website:
http://www.classlaw.com
OWENS CORNING: Schiffrin & Barroway Lodges Securities Suit in N.D. Ohio
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Northern District of Ohio, Western
Division on behalf of all purchasers of the common stock of Owens
Corning Inc. (OTCBB:OWENQ) during the period from September 20, 1999
through October 5, 2000, inclusive.
The complaint charges five Company executives, including the Company's
Chief Executive Officer, two Chief Financial Officers, and Comptroller,
as well as one director. Due to the automatic stay of proceedings
afforded by the Company's bankruptcy filing, Owens Corning is not named
as a defendant in this action. The alleged violations, according to
the complaint, stem from materially false and misleading statements
made by the defendants during the class period that materially
misrepresented Owens Corning's financial health and performance;
thereby causing Owens Corning stock to trade at artificially-inflated
prices.
Specifically, the complaint alleges that defendants described Owens
Corning's financial viability in two different ways to different
audiences at the same time. At the very same time that the defendants
were publicly representing that Owens Corning's National Settlement
Program (the "NSP") - implemented by Owens Corning in 1999 in order to
extinguish Owens Corning's asbestos liabilities - was effectively
managing and extinguishing Owens Corning's asbestos liabilities and
that the NSP would leave Owens Corning largely liability-free after
2001, the defendants told a very different - and more accurate - story
to a small, select group of Owens Corning investors who were positioned
to control Owens Corning in the event of a bankruptcy.
To the latter group, according to the complaint, defendants revealed
the truth - the NSP plan wasn't working, and would in fact capsize
Owens Corning unless NSP-mandated payments were drastically curtailed.
As the complaint charges, the share price of Owens Corning stock was
artificially inflated during the class period by defendants' positive
public statements, which materially misled the public as to Owens
Corning's true financial state and very financial viability. During
late 1999 and early 2000, Owens Corning stock - supported by
defendants' statements - traded at between $15 and $25 per share. In
mid- and late 2000, as defendants slowly began to reveal to the public
a more accurate assessment of Owens Corning and its asbestos
liabilities, Owens Corning's share price deflated. On October 5, 2000,
Owens Corning shares fell to $1 per share when Owens Corning declared
bankruptcy and admitted that it had been overwhelmed by the asbestos
liabilities that defendants claimed publicly to have solved.
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website:
http://www.sbclasslaw.com
OWENS CORNING: Cauley Geller Commences Securities Fraud Suit in N.D. OH
-----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Northern District of
Ohio, Western Division, on behalf of purchasers of Owens Corning, Inc.
(OTC Bulletin Board: OWENQ) publicly traded securities during the
period between September 20, 1999 and October 5, 2000, inclusive.
The complaint charges five Owens Corning executives, including Owens
Corning's Chief Executive Officer, two Chief Financial Officers, and
Comptroller, as well as one Owens Corning director. Due to the
automatic stay of proceedings afforded by Owens Corning's bankruptcy
filing, Owens Corning is not named as a defendant in this action. The
alleged violations, according to the complaint, stem from materially
false and misleading statements made by the defendants during the class
period that materially misrepresented Owens Corning's financial health
and performance; thereby causing Owens Corning stock to trade at
artificially-inflated prices.
Specifically, the complaint alleges that defendants described Owens
Corning's financial viability in two different ways to different
audiences at the same time. At the very same time that the defendants
were publicly representing that Owens Corning's National Settlement
Program (the "NSP) - implemented by Owens Corning in 1999 in order to
extinguish Owens Corning's asbestos liabilities - was effectively
managing and extinguishing Owens Corning's asbestos liabilities and
that the NSP would leave Owens Corning largely liability-free after
2001, the defendants told a very different -- and more accurate --
story to a small, select group of Owens Corning investors who were
positioned to control Owens Corning in the event of a bankruptcy.
To the latter group, according to the complaint, defendants revealed
the truth -- the NSP plan wasn't working, and would in fact capsize
Owens Corning unless NSP- mandated payments were drastically curtailed.
As the complaint charges, the share price of Owens Corning stock was
artificially inflated during the class period by defendants' positive
public statements, which materially misled the public as to Owens
Corning's true financial state and very financial viability. During
late 1999 and early 2000, Owens Corning stock -- supported by
defendants' statements -- traded at between $15 and $25 per share.
In mid- and late 2000, as defendants slowly began to reveal to the
public a more accurate assessment of Owens Corning and its asbestos
liabilities, Owens Corning's share price deflated. On October 5, 2000,
Owens Corning shares fell to $1 per share when Owens Corning declared
bankruptcy and admitted that it had been overwhelmed by the asbestos
liabilities that defendants claimed publicly to have solved.
For more details, contact Samuel H. Rudman or David A. Rosenfeld,
Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438,
Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail:
info@cauleygeller.com or visit the firm's Website:
http://www.cauleygeller.com
PATRIOT AMERICAN: Cotchett Pitre Commences Securities Suit in N.D. CA
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Cotchett, Pitre, Simon & McCarthy initiated a securities class action
in the United States District Court for the Northern District of
California, on behalf of all former shareholders of California Jockey
Club and Bay Meadows Operating Company who, as a result of the July 1,
1997 merger between California Jockey Club, Bay Meadows Operating
Company and Patriot American Hospitality, Inc., became shareholders in
the successor companies, Patriot American Hospitality, Inc. and Patriot
American Hospitality Operating Company, subsequently called Wyndham
International, Inc. The proposed class period is from June 2, 1997 to
May 7, 1999.
The lawsuit is one of nine lawsuits alleging securities fraud, filed in
the United States District Courts in Northern District of California or
the Northern District of Texas. The first action was filed on May 7,
1999. In October 1999, the Judicial Panel on Multidistrict Litigation
(JPML) ordered the transfer of cases filed in other districts to the
Northern District of California for coordinated pretrial proceedings.
The cases are known as In Re: Patriot American Hospitality, Inc.,
Securities Litigation, MDL No. 1300 VRW. The cases were assigned to
the Honorable Vaughn R. Walker, Unites States District Judge.
Prior to transfer and consolidation of these cases, several groups of
plaintiffs filed motions for appointment as lead plaintiff and for
appointment of their attorneys as lead counsel. The court, however,
stayed the proceedings pending the JPML's final transfer order, which
was issued on October 22, 1999.
After inter-district transfer, the court consolidated the nine pending
cases into two actions for pretrial purposes:
(1) the "Merger Action," brought by plaintiffs who obtained
Patriot shares when California Jockey Club and Bay Meadows
Operating Company merged with Patriot on July 1, 1997, and
(2) the "Open Market Action," brought by plaintiffs who purchased
and/or sold Patriot shares on the open market.
Plaintiffs in the merger action filed a first amended consolidated
complaint on September 15, 2000. Defendants filed motions to dismiss,
which were granted with leave to amend.
Plaintiffs' Second Amended Consolidated Complaint in the Merger Action
alleges causes of action under section 10(b) of the Securities Exchange
Act of 1934, section 14(a) of the Securities Exchange Act of 1934,
section 11 of the Securities Act of 1933, and section 12(2) of the
Securities Act of 1933. The named defendants are:
(1) Patriot American Hospitality, Inc.,
(2) Wyndham International, Inc.,
(3) PAH GP, Inc.,
(4) PAH LP, Inc.,
(5) Patriot American Hospitality Partnership, LP, and
(6) Wyndham International Operating Partnership, L.P. and
(7) UBS PaineWebber Inc.
The claims are based on alleged false statements and misleading
omissions contained in a Joint Proxy Statement and Prospectus issued to
Bay Meadows and Patriot shareholders on June 2, 1997, seeking approval
of the merger. Plaintiffs allege that the Patriot Defendants targeted
Bay Meadows because of its unique paired-share corporate structure,
which Patriot wanted in order to both own and derive operating revenues
from its hotels, with substantial tax benefits. Plaintiffs allege that
the Proxy concealed material information about Patriot's hotel
expansion plans, intended debt financing, and unconventional debt
instruments used to finance such expansion.
On September 3, 2002, the Court entered its order on defendants'
motions to dismiss the second amended consolidated complaint filed in
the merger action. The court dismissed all claims against PaineWebber,
and dismissed all claims brought under sections 10(b) and 14(a) of the
Securities Exchange Act of 1934 against the Patriot Defendants.
However, the Court denied the Patriot Defendants' motion to dismiss
certain claims brought under sections 11 and 12(2) of the Securities
Act of 1933. The Court held that plaintiffs adequately pled a claim
based on allegations that the Patriot Defendants failed to disclose in
the Proxy their present intent to increase Patriot's debt, at an
exorbitant rate, following the Bay Meadows' merger.
Plaintiffs allege that, while the Proxy generally described a $1.2
billion credit facility to help fund Patriot's expansion plans, and
certain commitments already made, Patriot intended to amass debt at a
much higher rate and by the end of 1998, Patriot had amassed over $3.8
billion in debt (more than tripling the level of debt announced to
plaintiffs at the time of the merger).
The court also held that plaintiffs adequately pled a claim based on
allegations that the Patriot Defendants failed to disclose in the Proxy
their present intent to use high-risk forward equity contracts, instead
of conventional debt financing, to fund the expansion.
Plaintiffs allege that Patriot received funds from at least three
forward equity contracts - a $95 million contract with UBS, a $125
million contract with NationsBanc Montgomery Securities, and a $139
million contract with PaineWebber - which required Patriot to sell
stock to the lenders at a set price and, in return for the money lent,
Patriot agreed to repay from equity pegged at a price in the future,
i.e., Patriot bet that its stock price would keep increasing so the
loans could be covered.
Plaintiffs allege that, in late 1998, Patriot began to default on the
loans, requiring it to sell off assets and causing its stock price to
plunge. Plaintiffs allege that, because of the concealment of such
information, the merger was approved effective July 1, 1997, and Bay
Meadows' shareholders exchanged their shares for the same number of
shares in the new Patriot entities.
Plaintiffs allege that, at the time of the merger on July 1, 1997,
their Bay Meadows' shares were worth and were trading at approximately
$44 per share and that the true value of the Patriot shares they
obtained, based on the value as of May 1999, after the Patriot
Defendants' allegedly true intentions and resulting conduct began to be
revealed, was less than $10 per share. In addition, Patriot has
renounced its REIT status and become a C-corporation, terminated its
lease for the Bay Meadows racetrack facilities, and sold off its
interests in the racetrack.
For more detail, contact Mark C. Molumphy by Mail: 840 Malcolm Road,
Suite 200, Burlingame, California 94010 or visit the firm's
Website: http://www.cpsmlaw.com.
SPRINT CORPORATION: Cauley Geller Commences Securities Suit in KS Court
-----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the District of Kansas
on behalf of purchasers of Sprint FON Group (NYSE: FON) common stock
during the period between February 1, 2001 and February 5, 2003,
inclusive.
The complaint charges that defendants, the Sprint Corporation, Ernst &
Young LLP, William Esrey and Ronald Lemay 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 February 1, 2001 and
February 5, 2003.
Specifically, that press releases, SEC filings and disclosures
distributed by the Company during calendar years 2001 and 2002, were
each materially false and misleading because they failed to disclose
that Sprint, with the help of Ernst & Young, had improperly avoided
substantial tax liabilities as a result of its employees exercising
numerous stock options.
For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie
Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock,
AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com
or visit the firm's Website: http://www.cauleygeller.com
SPRINT CORPORATION: Schiffrin & Barroway Lodges Securities Suit in KS
---------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Kansas on behalf of
all purchasers of the common stock of Sprint FON Group (NYSE:FON) from
February 1, 2001 through February 5, 2003, inclusive.
The complaint charges that defendants, the Sprint Corporation, Ernst &
Young LLP, William Esrey, and Ronald Lemay 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 February 1, 2001 and
February 5, 2003.
Specifically, that press releases, SEC filings and disclosures
distributed by the Company during calendar years 2001 and 2002, were
each materially false and misleading because they failed to disclose
that Sprint, with the help of Ernst & Young, had improperly avoided
substantial tax liabilities as a result of its employees exercising
numerous stock options.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com
UNUM PROVIDENT: Schiffrin & Barroway Lodges Securities Suit in E.D. TN
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Eastern District of Tennessee on
behalf of all purchasers of the common stock of UnumProvident
Corporation (NYSE:UNM) publicly traded securities during the period
between May 7, 2001 and February 4, 2003 , inclusive.
The complaint charges UnumProvident Corporation and certain of its
officers and directors with issuing false and misleading statements
concerning its business and financial condition. Specifically, the
complaint alleges that during the class period, defendants caused
UnumProvident's shares to trade at artificially inflated levels through
the issuance of false and misleading financial statements.
The Company failed to properly record the impairment to its investments
and operated "long-term denial factories," causing the Company's
financial results to be inflated. As a result, the Company's shares
traded at inflated prices enabling UnumProvident to raise proceeds of
$250 million on June 13, 2002 in its bond offering.
UnumProvident and its top officers inflated the prices of the Company's
securities in order to pursue an accelerated securities sale program.
Defendants knew that by concealing UnumProvident's true financial
results they could foster the perception in the business community that
UnumProvident was a "growth company," i.e., it was the only way
UnumProvident could post the revenue and earnings per share growth
claimed by defendants. On February 5, 2003, UnumProvident announced
that it had recorded investment losses of $93 million and also reported
that it was responding to Securities and Exchange Commission requests
for information relating to its investment disclosures.
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
(888) 299-7706 by E-mail: info@sbclasslaw.com or visit the firm's
Website: http://www.sbclasslaw.com
UNUM PROVIDENT: Cauley Geller Launches Securities Fraud Suit in E.D. TN
-----------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Eastern District of
Tennessee on behalf of purchasers of UnumProvident Corporation (NYSE:
UNM) publicly traded securities during the period between May 7, 2001
and February 4, 2003, inclusive.
The complaint charges UnumProvident and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
UnumProvident provides group disability and special risk insurance, as
well as group life insurance, long-term care insurance, and payroll-
deducted voluntary benefits offered to employees at their worksites.
UnumProvident operates around the World. The complaint alleges that
during the class period, defendants caused UnumProvident's shares to
trade at artificially inflated levels through the issuance of false and
misleading financial statements. The Company failed to properly record
the impairment to its investments and operated "long-term denial
factories," causing the Company's financial results to be inflated. As
a result, the Company's shares traded at inflated prices enabling
UnumProvident to raise proceeds of $250 million on June 13, 2002 in its
bond offering.
UnumProvident and its top officers inflated the prices of the Company's
securities in order to pursue an accelerated securities sale program.
Defendants knew that by concealing UnumProvident's true financial
results they could foster the perception in the business community that
UnumProvident was a "growth company," i.e., it was the only way
UnumProvident could post the revenue and earnings per share growth
claimed by defendants. On February 5, 2003, UnumProvident announced
that it had recorded investment losses of $93 million and also reported
that it was responding to Securities and Exchange Commission requests
for information relating to its investment disclosures.
For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie
Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock,
AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com
or visit the firm's Website: http://cauleygeller.com/template8
WORLDCOM INC.: Abbey Gardy Launches Securities Fraud Lawsuit in S.D. NY
-----------------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action in the United
States District Court for the District Court, Southern District of New
York on behalf of all persons or entities who purchased 12% GOALs(+)
Equity Linked Notes linked to the common stock of Worldcom, Inc.
(AMEX:GPL.D) between May 17, 2001 and June 25, 2002, inclusive.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market during the class period. The complaint names as defendants:
(1) Bernard J. Ebbers,
(2) Scott D. Sullivan,
(3) David F. Myers,
(4) Buford Yates, Jr.,
(5) James C. Allen,
(6) Judith Areen,
(7) Max E. Bobbitt,
(8) Francesco Galesi,
(9) Stiles A. Kellett, Jr., and
(10) John W. Sidgmore
Defendants were all officers and/or directors of Worldcom, Inc. during
the class period.
The suit alleges that defendants issued a series of materially false
and misleading statements regarding Worldcom. Specifically, the suit
alleges that throughout the class period, Worldcom's revenue, earnings,
income and assets were materially overstated and its financial
statements issued during the class period violated Generally Accepted
Auditing Principles (GAAP).
As a result of defendants' violations of the federal securities laws
Worldcom has declared bankruptcy and its shares are virtually
worthless. The suit alleges that the purchase price of the GOALs(+)
was materially inflated because their value was directly tied to the
market value of Worldcom common stock, which was materially inflated as
a result of the fraud.
For more details, contact Gianna McCarthy by Phone: (800) 889-3701 by
E-mail: GMccarthy@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.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.
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