/raid1/www/Hosts/bankrupt/CAR_Public/030304.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, March 4, 2003, Vol. 5, No. 44
Headlines
ALASKA: Senators To Study Bill Taxing Damages To Commercial Fishermen
ALASKA: State Senator Won't Testify At Salmon Price-Fixing Suit Trial
ARIZONA: Governor Wants Legislation Barring Lawsuits Asking For Refunds
AUSTRALIA: Legionnaire's Disease Suit May Get Early Hearing in Victoria
CALIFORNIA: Homeowners Settle Lawsuit Over Association's Negligence
CALIFORNIA: CHP Reveals Details of Racial Profiling Lawsuit Settlement
CHATTEM INC.: Faces 302 Consumer Lawsuits Over PPA in Dexatrim Products
CHATTEM INC.: Agrees To Settle Lawsuit For CA Proposition 65 Violations
CRYOLIFE INC.: Plaintiffs File Amended Securities Fraud Suit in N.D. GA
DAIMLERCHRYSLER: Black Clergy Says Address Bias Charges or Face Boycott
ENRON CORPORATION: US Bankruptcy Judge Denies Investors' Right To Sue
INVESTORS FINANCIAL: Faces Overtime Wage Violations Lawsuit in CA Court
LUCENT TECHNOLOGIES: SEC Ends Two-Year Probe With Agreement, No Fines
MICHIGAN: Pact Brings Homes To Black Areas Demolished For Urban Renewal
MISSOURI: Two Dozen Charities to Benefit From Junk Fax Suit Settlement
PARDEE CONSTRUCTION: Home Owner, Buyers Sue For Construction Defects
PG&E ENERGY: Federal Court Remands Energy Fraud Suits to CA State Court
SELECT COMFORT: MN Court To Rule on Approval For Securities Settlement
SOUTH KOREA: Market-Oriented Reforms Lead To Growth Says High Official
SUPREME COURT: Anti-Abortion Activists Not Subject To "Mobster" Law
TEXTRON INC.: Plaintiffs File Amended Securities Fraud Suit in RI Court
TEXTRON INC.: Plaintiffs File Amended Suit For ERISA Violations in RI
TRAFFIX INC.: Named As Defendant in Unsolicited Fax Advertisement Suit
New Securities Fraud Cases
800AMERICA.COM: Marc Henzel Commences Securities Fraud Suit in S.D. NY
ATMEL INC.: Wolf Haldenstein Commences Securities Fraud Suit in N.D. CA
COSI INC.: Abbey Gardy Initiates Securities Fraud Lawsuit in S.D. NY
INTERSTATE BAKERIES: Bernstein Liebhard Commences Securities Suit in MO
MICROTUNE INC.: Charles Piven Launches Securities Fraud Suit in E.D. TX
NAM TAI: Marc Henzel Launches Securities Fraud Lawsuit in S.D. New York
ROYAL AHOLD: Holzer & Holzer Commences Securities Fraud Suit in S.D. NY
ROYAL AHOLD: Weiss & Yourman Commences Securities Fraud Suit in S.D. NY
ROYAL AHOLD: Cohen Milstein Commences Securities Fraud Suit in E.D. VA
ROYAL AHOLD: Abbey Gardy Commences Securities Fraud Lawsuit in S.D. NY
SAWTEK INC.: Marc Henzel Commences Securities Fraud Lawsuit in M.D. FL
TRANSACTION SYSTEMS: Marc Henzel Commences Securities Fraud Suit in NE
TRANSKARYOTIC THERAPIES: Marc Henzel Commences Securities Lawsuit in MA
UNUMPROVIDENT CORPORATION: Marc Henzel Files Securities Suit in E.D. TN
UNUMPROVIDENT CORPORATION: Weiss & Yourman Launch Securities Suit in NY
VERITAS SOFTWARE: Marc Henzel Launches Securities Fraud Suit in N.D. CA
WESTAR ENERGY: Marc Henzel Commences Securities Fraud Suit in KS Court
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ALASKA: Senators To Study Bill Taxing Damages To Commercial Fishermen
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A bill has been introduced recently in Alaska's state Legislature that
would, in effect, "tax" the judgments commercial fishermen win in
unfair trade practice lawsuits against seafood processors, Associated
Press Newswires reports.
The bill says that 15% of a damages award or $40 million, whichever
amount is less, shall be deposited in the state's general fund. The
bill says, as well, that it is the intent of the legislation that the
Legislature use the funds thus obtained in the marketing of wild
salmon. If the bill becomes law, it will be retroactive to January 1,
2003, but has not yet been scheduled for a hearing.
Approximately 4,500 Bristol Bay salmon fishermen are the plaintiffs in
a class action in Anchorage that alleges that the processors and
importers conspired by means of price-fixing and other unfair trade
practices to take a higher cut of the profits as their markets shrank
in the late 1980s.
The figure $40 million cited in the bill is the same amount that
lawyers for the Bristol Bay fishermen in the class action have
collected in settlements during the course of the trial from the
processors and importers.
Sponsors of the bill are Reps. Bruce Weyhrauch, R-Juneau and John
Harris, R-Valdez.
ALASKA: State Senator Won't Testify At Salmon Price-Fixing Suit Trial
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Superior Court Judge Peter Michalski, in Anchorage, has denied a motion
from one of the defendants in the salmon price-fixing case to put
Alaska state Senator Ben Stevens on the witness stand. Trident
Seafoods Corporation of Seattle made the request. The judge did not
explain his decision, the Associated Press Newswires reports.
Lawyers representing the plaintiff fishermen in the price-fixing class
action said Trident wanted to call Senator Stevens in order to make a
"grandstanding" move. The senator, R-Anchorage, had fished
commercially in Bristol Bay, earlier in his career. He has called the
lawsuit unfounded and a threat to the overall health of the salmon
industry.
Lawyers for the approximately 4,500 commercial fishermen charge in the
civil class action that processors and Japanese importers conspired in
the early 1990s to fix the price of Bristol Bay's sockeye salmon in
order to get for themselves a larger share of the profits.
The trial has completed its 18th day, with lawyers for the fishermen
still presenting their case to the jurors. They are expected to
complete their presentation by Tuesday or Wednesday next week. At that
point, lawyers for about a dozen seafood processing and Japanese
importing companies will start presenting their case to the 12-member
jury.
The trial is expected to last until the end of April.
ARIZONA: Governor Wants Legislation Barring Lawsuits Asking For Refunds
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Arizona Governor Janet Napolitano has urged the Legislature to pass
laws prohibiting the state's taxpayers from filing class-action
lawsuits asking for tax refunds, according to a report by Associated
Press Newswires.
The state already is liable to taxpayer plaintiffs in a $350 million
settlement of one case relating to refunds, and is potentially facing
big costs in others, a state of affairs explaining the governor's
proposals for legislative action on the matter of refunds. The House
Judiciary Committee recently endorsed a bill backed by the governor to
prohibit class action claims for overpayment of taxes or fees. The
bill is still in the early stages of consideration.
Taxpayers would still have the legal remedy of filing individual
lawsuits, however, even if the proposed legislation passes, and lawyers
who have analyzed the bill said cases already certified by the courts
as class actions would not be affected if the bill is enacted into law.
While wealthy individuals and companies still would be able to afford
suing as individuals if the bill is passed, "you will close the door to
the courthouse to the average person," attorney Randall Wilkins told
the Judiciary Committee. "It's (the newly proposed legislation)
intended to cut off rights that already exist for hundreds of thousands
of taxpayers right now."
Mr. Wilkins was among the lawyers who handled the case that produced
the $350 million settlement, a case that involved state income taxes
illegally collected on some corporate dividends paid in the 1980s,
under a law levying taxes unevenly on out-of-state corporations.
That case, known as the Ladewig lawsuit because the lead plaintiff was
the estate of Helen Ladewig of Phoenix, was prompted by a landmark
August 2001 ruling by the Arizona Supreme Court, which said taxpayers
can file class actions to jointly press their claims for refunds
against the state.
Aside from debate in the Legislature over whether that body should
restrict class-action tax lawsuits, there is the question whether the
lawmakers legally can do so. During his recent testimony before the
Judiciary Committee, Mr. Wilkins noted that the Arizona Supreme Court
had said, in the Ladewig decision, that it is up to the courts, not the
Legislature to decide whether tax class actions should be permitted.
"If you tried to devise a more unconstitutional bill, I don't know how
you would do it," Mr. Wilkins said.
AUSTRALIA: Legionnaire's Disease Suit May Get Early Hearing in Victoria
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Supreme Court Justice Bernard Bongiorno, in Melbourne, Victoria, said
he would try to fix an early hearing date for the class action brought
by 143 people affected by the Melbourne Aquarium legionnaire's disease
outbreak, according to a report by Australian Associated Press General
News. The class action relates to Australia's largest legionnaire's
outbreak, when two elderly women died and another 72 people contracted
the disease after visiting the aquarium in April 2000.
Terry Casey, Queens Counsel, requested this dispensation from Justice
Bongiorno, in the light of the health of the plaintiffs: 10 of the
plaintiffs between ages 63 and 90 have died, said Mr. Casey, and others
were in poor health.
Justice Bongiorno said, in view of Mr. Casey's submission, he would
contact the listing master to determine whether it was possible to
bring the case to court in the latter part of 2003, possibly October or
November. The class action is currently set for February next year.
CALIFORNIA: Homeowners Settle Lawsuit Over Association's Negligence
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Homeowners recently settled a class action against the Coast Homeowners
Association for $6.1 million, over its failure to monitor and pump the
wells that had been built years earlier to control groundwater levels
and prevent earth movement near an ancient landslide, and also near
their community, according to a report by Associated Press Newswires.
The settlement will help compensate the homeowners for damage to their
homes without crippling the association because the settlement money
is being paid by six insurance companies, said Patrick Evans, attorney
for the homeowners.
The class action was filed by 470 homeowners in 1997, and was tried in
federal bankruptcy court, because the association filed for bankruptcy
in 1999, after the lawsuit had been filed. A three-judge panel held
the association liable for damages, said Mr. Evans, but the attorneys
had negotiated the settlement before the beginning of the penalty
phase.
Mr. Evans said the settlement was one of the largest in California
involving a class action against a homeowner association in which
individual board members were held liable for gross negligence.
CALIFORNIA: CHP Reveals Details of Racial Profiling Lawsuit Settlement
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The California Highway Patrol (CHP) has settled a class action filed in
1999, on behalf of three alleged victims of racial profiling and black
and Latino motorists who were, or later would be, stopped, detained or
searched by CHP officers in the Coastal and Central divisions, the
Contra Costa Times (Walnut Creek, CA) reports.
Some terms of the settlement require:
(1) CHP to ban some car searches and prohibit officers from using
minor traffic violations as an excuse to follow hunches on
drug activity;
(2) CHP to keep tracking racial data on vehicle stops, appoint a
high-level auditor to study the data and provide every officer
with new training;
(3) CHP to honor the three-year extension on the moratorium on
consent searches, in which officers ask permission to search
the driver's vehicle or person; and
(4) CHP is to pay $875,000 to the plaintiffs.
Rick TerBorch, president of the California Police Chiefs Association,
said some chiefs will consider the ban on CHP consent searches to be a
step in the wrong direction. There are valid reasons to profile based
on factors other than race, and "where an officer can justify his or
her actions, that is entirely proper," Mr. TerBorch said.
American Civil Liberties Union (ACLU) lawyers claim consent searches
allow broad officer discretion and contribute to racial profiling.
"Officers should not be operating just on a hunch. They should be able
to articulate the reasons they are doing something," said ACLU attorney
Mark Schlosberg. "This is the type of agreement that should be
implemented in other communities."
Mr. Schlosberg said the CHP is the first agency in the country with a
long-term ban on consent searches. Most of the settlement terms are
policies the CHP already has implemented. The settlement, which still
must be approved by a federal judge, makes some voluntary policies
mandatory, sets up stronger accountability and places the explicit
policies prominently in officer training manuals.
Kevin Johnson, a UC Davis law professor who specializes in racial
profiling issues, said the settlement was consistent with other recent
efforts to curtail officer abuse. "The idea is to prevent misuse of
discretion," Professor Johnson said. "This is an important settlement.
It is not the end to dealing with a problem. But it is a good
beginning."
CHATTEM INC.: Faces 302 Consumer Lawsuits Over PPA in Dexatrim Products
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Chattem, Inc. faces approximately 302 lawsuits involving claims by
approximately 1,357 plaintiffs alleging that the plaintiffs were
injured as a result of ingestion of products containing
phenylpropanolamine (PPA), which was an active ingredient in most
of the Company's DEXATRIM products until November 2000.
Most of the lawsuits seek an unspecified amount of compensatory and
exemplary damages or punitive damages. The lawsuits that are federal
cases have now been transferred to the United States District Court for
the Western District of Washington (In re Phenylpropanolamine (PPA)
Products Liability Litigation, MDL No. 1407). The remaining cases are
state court cases, which have been filed in a number of different
states.
The Company anticipates that additional lawsuits will be filed with
similar or other allegations related to the Company's DEXATRIM products
containing PPA. None of these lawsuits has, to date, been resolved by
settlement or judicial ruling. The earliest scheduled trial date in
the state cases is May 19, 2003. It is anticipated that other state
cases will be set for trial during the course of the year and that
significant evidentiary and other hearings will be held during the
course of the year in the federal cases.
Approximately half of the existing suits represent cases involving
alleged injuries by products manufactured and sold prior to the
Company's acquisition of DEXATRIM in December 1998. The Company is
being defended and is indemnified from liability by The DELACO Company,
Inc. (DELACO), successor to Thompson Medical Company, Inc. which owned
DEXATRIM prior to December 1998. The Company understands that DELACO
maintains product liability insurance coverage for products
manufactured and sold prior to December 1998 with annual limits of
coverage and has an excess liability policy, but otherwise has only
nominal assets. Accordingly, it is unlikely that DELACO will be able
to indemnify the Company beyond its insurance coverage.
In addition, there can be no assurance that the insurance maintained by
DELACO will be sufficient to cover claims related to products
manufactured or sold prior to the Company's acquisition of DEXATRIM or
that ultimately the Company will not be held liable for these claims.
Of the existing lawsuits, about two-thirds of the cases make non-
specific factual allegations against a broad group of PPA
manufacturers. There are approximately 20 identified cases which we
currently believe contain allegations that the plaintiff suffered a
hemorrhagic stroke within three days of ingesting DEXATRIM products
containing PPA that were sold after our acquisition of DEXATRIM in
December 1998.
As additional lawsuits are filed and discovery in the existing lawsuits
continues, the Company expects to know more about the characteristics
of the cases, which will result in a fluctuation in the number of cases
ascribed to the categories listed above. The Company is aggressively
defending these lawsuits. It is too early in the litigation to
evaluate fully the risks that these lawsuits pose, or express a range
of likely outcomes. It is also too early to estimate the number of
lawsuits related to DEXATRIM with PPA or DEXATRIM with ephedrine that
will be filed or whether the Company's available insurance is
sufficient to cover these claims.
CHATTEM INC.: Agrees To Settle Lawsuit For CA Proposition 65 Violations
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Chattem Inc. agreed to settle several lawsuits filed in relating to its
topical skin care products that contained zinc oxide, in California
state court.
The first suit was brought by the Center for Environment Health (CEH)
contending that the Company violated the California Safe Drinking Water
and Toxic Enforcement Act of 1998 (Proposition 65) by selling to
California consumers, without a warning, topical skin care products
containing zinc oxide which in turn contains lead. The lawsuit
contended that the purported failure to comply with Proposition 65
requirements also constituted a violation of the California Business &
Professions Code. Violations of either Proposition 65 or the
California Business and Professions Code render a defendant liable for
civil penalties of up to $2.5 per day per violation.
The second suit was filed in December 1999, on behalf of the general
public in California, against the same entities that are defendants in
the first lawsuit. As with the CEH lawsuit, the suit alleged that the
Company violated Proposition 65 by selling to California consumers
without a warning topical skin care products containing zinc oxide
which in turn contains lead. The lawsuit did not assert claims
directly under Proposition 65, but asserted that the alleged failure to
comply with Proposition 65 gave rise to claims under California's
Business and Professions Code and the California Civil Code. The
lawsuit sought injunctive and equitable relief, restitution, the
disgorgement of allegedly wrongfully obtained revenues and damages.
The plaintiffs in the two separate actions filed a consolidated amended
complaint that included a claim based upon the allegation that zinc
oxide allegedly also contains cadmium. During the third quarter of
fiscal 2002 a settlement was finalized among the parties for these two
cases pending final court approval. Final court approval of the
settlement is expected during the Company's second quarter of fiscal
2003.
In the settlement, the Company paid a settlement amount that was within
the expected range that had been previously accrued by the Company.
The settlement amount was not material to the Company's results of
operations.
CRYOLIFE INC.: Plaintiffs File Amended Securities Fraud Suit in N.D. GA
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Plaintiffs in several securities class actions against Cryolife, Inc.
and certain officers of the Company filed a consolidated amended suit
in the United States District Court for the Northern District of
Georgia.
The suit alleges that the defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The suit was filed on behalf of all purchasers of the
Company's stock between April 2, 2001 and August 14, 2002. The
consolidated complaint also seeks recovery of compensatory damages in
an unspecified amount and various fees and expenses of litigation,
including attorneys' fees.
The principal allegations of the consolidated complaint are that the
Company failed to disclose its alleged lack of compliance with certain
FDA regulations regarding the handling and processing of certain
tissues and other product safety matters.
Although the Company considers all of the claims in the consolidated
complaint to be without merit and intends to defend against them
vigorously, the Company is unable to predict at this time the final
outcome of these claims. An adverse judgment could have a material
adverse effect on the Company's financial position, results of
operations, and cash flows.
DAIMLERCHRYSLER: Black Clergy Says Address Bias Charges or Face Boycott
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March 15 is the boycott date set by a group of black clergy from a
number of states, unless DaimlerChrysler responds to allegations of
discrimination by ceasing use of an automated credit checker, and
adopts, instead, standard credit checks, the Associated Press Newswires
reports.
The unnamed coalition of some 240 black clergy from 14 states gathered
at a Baptist church in Harvey, Illinois, to protest the alleged
discriminatory credit practices of the company, which denies car loans
to minorities.
Minority consumers have filed a class action against the automaker's
financing arm, DaimlerChrysler Services, claiming the Company uses an
automated credit checker, except at dealerships in largely minority
areas, where the machine allegedly is programmed to call for greater
scrutiny.
Nonetheless, said Sean Howard, a spokesman for the group of black
clergy, the coalition is calling for the company to stop use of the
automated system and adopt standard credit checks by March 15, or the
group will call a boycott of Daimler-Chrysler vehicles. The group
also is calling for an increase in the number of minority-owned
dealerships and minority executives.
"They are basing these demands on allegations in the lawsuits that we
find absolutely outrageous," said James Ryan, spokesman for
DaimlerChrysler Services.
ENRON CORPORATION: US Bankruptcy Judge Denies Investors' Right To Sue
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United States Bankruptcy Court Judge Arthur Gonzalez denied a motion by
Enron shareholders seeking the right to sue the company, citing as a
reason the potential costs to the Company while it tries to repay
creditors, the Associated Press Newswires reports.
Enron shareholders were seeking the authorization to name Enron as a
defendant in a class action filed in federal district court in Houston.
To this end, the shareholders had asked Judge Gonzalez to lift the stay
imposed on the bringing of civil suits against the Company when it came
under Chapter 11 bankruptcy protection in December 2001.
Judge Gonzalez explained that the single most important factor guiding
his decision was consideration of the "balance of harm." Such
litigation, said the judge, would substantially encumber Enron, while
the potential benefits to the shareholders were uncertain. Judge
Gonzalez did add, however, that the shareholders can return to renew
the motion after US District Court Judge Melinda Harmon, in Houston,
has set a deadline for plaintiffs to add defendants in the securities
class action.
Helen Hodges, an attorney for the University of California regents, who
are lead plaintiff in the class action, said after the hearing, "We are
glad that the judge left it open to renew the request."
Shareholders in the lawsuit are seeking more than $29 billion from the
fallen energy trader. After information surfaced, in late 2001, about
the millions of dollars in debt which the company had managed to hide
through creation of fraudulent entities, Enron share lost $68 billion
in value from their peak in August 2000.
INVESTORS FINANCIAL: Faces Overtime Wage Violations Lawsuit in CA Court
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Investors Financial Services Corporation faces a class action alleging,
among other things, violations of California wage and hour laws at the
Company's Sacramento and Walnut Creek facilities. The lawsuit was
filed in the Superior Court of California, County of Sacramento.
While the Company is in the early stages of investigating this
complaint, it believes that it has complied at all times with
applicable law and we intend to defend this lawsuit vigorously. The
Company does not yet know the amount of damages that the plaintiffs are
seeking to recover. However, the defense of class action lawsuits can
be costly and time consuming, and can divert the attention of
management. A determination that the Company violated applicable wage
and hour laws could have a material adverse effect on its business,
financial condition and results of operations.
LUCENT TECHNOLOGIES: SEC Ends Two-Year Probe With Agreement, No Fines
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The Securities and Exchange Commission (SEC) ended its two-year
investigation of Lucent Technologies Inc.'s accounting problems with an
agreement. No fines or penalties will be imposed on the company, but
Lucent is required to sign a consent decree, stating Lucent will pay
severe penalties for any future violations of a number of federal
securities laws, such violations including fraud, financial reporting
and internal-control provisions, according to a report by The Wall
Street Journal.
The Murray Hill, New Jersey, telephone maker said it will not be
required to restate financial results. However, Lucent still faces a
class action, and still faces a criminal probe by the US attorney's
office in Newark, New Jersey.
Lucent discovered in December 2000, that it had improperly recognized
$679 million in revenue during the company's 2000 fiscal fourth quarter
ending September 30. Although Lucent caught the problem, adjusted it
at the outset and never officially filed the matter with the SEC, that
regulator initiated a probe.
Chairwoman and Chief Executive Patricia Russo said the Company was
pleased with the outcome, and now they can all "totally focus" on
moving the business forward.
The class action which the Company is facing claims shareholders
were misled about Lucent's performance in relation to the improper
revenue recognition. Shareholders commonly use information contained
in the final consent decree as the grounding for their lawsuits. That
consent decree will be made public after the SEC commissioners hold a
final vote on the settlement plan.
Lucent still remains a subject of criminal investigation, since the
probe by the US attorney's office in Newark, NJ isn't over. The
prosecutors are looking into a $125 million transaction with Winstar
Communications in 2000.
MICHIGAN: Pact Brings Homes To Black Areas Demolished For Urban Renewal
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In the late 1950's, Hamtramck, a city near Detroit, set about the
project of identifying its black neighborhoods and demolished them in
the mid-1960s for purposes of urban renewal. City officials worked to
ensure, for example, that I-75 would cut through the chiefly black
Grand Haven-Dyar neighborhood, with plans for a shopping center on the
east side of I-75, the Detroit Free Press reports.
Many of the black residents who lost their homes in the name of urban
renewal sued the city in a class action and won. However, 30 years of
dissension over details went by before a settlement was finally reached
aiming to rebuilt what had been lost. Michael Barnhart, attorney for
the plaintiffs, said the city had "an intentional plan to remove black
people from the city."
So it was that last Thursday, the penultimate day of Black History
Month, Hamtramck Mayor Gary Zych and Wayne County Executive Robert
Ficano honored the 144 plaintiffs named in the class action in a
ceremony at Senior Plaza, which was the first phase in restoring the
homes. In the mid-1980s, 150 houses had been built at the Senior
Plaza.
In 1971, then US District Judge Damon Keith ruled in favor of the
residents. The city appealed, and, in 1974, a federal appeals court
upheld Judge Keith's ruling. However, it was not until 1981, that a
settlement on the replacement housing was reached. That agreement came
with help: pressure from the US Department of Housing and Urban
Development, which held up a grant to clear land for the General Motors
Poletown Plant.
The settlement provided for a total of 350 houses; 150 of those already
had been built at Senior Plaza in the mid-1980s, as indicated above,
and 150 more would be built and 50 more renovated. Funding and
wrangling delayed action. However, movement has been revived, less
tension seems to hamper action and talk of action.
Albert Bogdan, the Wayne County housing director, said construction on
the new homes could begin in two years. They will range from $95,000
to $115,000, with up to $60,000 in subsidies per home.
MISSOURI: Two Dozen Charities to Benefit From Junk Fax Suit Settlement
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A class action over an auto dealership's advertisements, which were
faxed to more than 33,000 numbers in the St. Louis area, has been
settled for $6.5 million, and nearly $1.4 million will be shared with
two dozen charitable groups around St. Louis, Associated Press
Newswires reports. The amount of the settlement represented the cap on
the auto dealer's insurance coverage.
"Junk faxes," which are barred by federal law, went out for an auto
dealership to 33,108 numbers in the St. Louis area, from January 25 to
February 22, 2001, according to court documents. By law, recipients of
unsolicited faxed advertising may collect up to $500 from the sender.
Steven Katz, who filed the class action, said the dealership's owners
did not know the practice was illegal when they hired a company,
American Blast Fax of Dallas, now out of business, to do the
advertising. Mr. Katz's firm and two St. Louis firms that helped with
the case were awarded 25 percent of the total settlement, or just over
$1.6 million.
The charity recipients of the $1.4 million were chosen by the lead
lawyer for each side, Mr. Katz, who works for a Swansea-based firm
specializing in class actions and Newbold Toyota-BMW attorney, Gordon
Broom of Edwardsville. The list of charities was approved by St. Clair
County Circuit County Judge Michael J. O'Malley, who supervised the
negotiations for settlement between the parties' attorneys.
PARDEE CONSTRUCTION: Home Owner, Buyers Sue For Construction Defects
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Homebuyers sued homebuilder Pardee Construction Company over alleged
construction defects in their entry-level- priced homes that the
builder refused to correct, the Orlando Sentinel reports.
The homebuilder asked the judge to refer the lawsuit for alleged
construction defects to a court-appointed referee because paragraph 15
of the purchase contract provides for "judicial reference" of any
disputes to a court-appointed referee, waiver of jury trial and denial
of any punitive damages to the homebuyers.
The homeowners argued it would be unfair to deny them a jury trial
because when they bought their homes, they did not understand paragraph
15 meant they gave up their legal right to a jury trial over any
disputes that might arise with the homebuilder.
Superior Court Judge Rodriguez refused the reference to the court
referee because when plaintiff home owners purchased their homes they
had no bargaining power with the home builder. They were offered a
"take it or leave it" purchase contract, said the judge.
The home buyers signed their contracts to buy their homes, said Judge
Rodriguez, but they were not told the legal consequences of paragraph
15, which meant they gave up their rights to a jury trial and punitive
damages for any dispute with the home builder. The judge also said
that "the right to pursue claims in a judicial forum is a substantial
right and one not lightly to be deemed waived."
Because the home buyers had no bargaining power, the judge said, the
contract presented to them by the homebuilder was a contract of
adhesion. The homebuyers received no benefit in return for unknowingly
agreeing to paragraph 15. Its provision for "judicial reference" to a
court-appointed referee was unconscionable, he ruled. Therefore, the
home buyers are entitled to a court trial with a jury, and they can
recover punitive damages from the home builder if justified by the
facts, Judge Rodriguez concluded.
PG&E ENERGY: Federal Court Remands Energy Fraud Suits to CA State Court
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The United States District Court for the Southern District of
California remanded to state court several class actions pending
against PG&E Energy Trading Holdings Corporation and various of its
affiliates, along with multiple other defendants.
The suits, known as Pier 23, were filed against marketers and other
unnamed sellers of electricity in California markets. These cases are:
(1) "Pier, 23 Restaurant v. PG&E Energy Trading Corporation, et
al.," filed on January 24, 2001, in San Francisco Superior
Court and subsequently removed to the United States District
Court for the Northern District of California;
(2) "Hendricks v. Dynegy Power Marketing, Inc., PG&E Energy
Trading Corporation, et al.," filed on November 29, 2000, in
San Diego Superior Court and subsequently removed to the
United States District Court for the Southern District of
California;
(3) "Sweetwater Authority v. Dynegy Inc., PG&E Energy Trading
Corporation, et al.," filed on January 16, 2001, in San Diego
Superior Court and subsequently removed to the United States
District Court for the Southern District of California; and
(4) "People of the State of California v. Dynegy Power Marketing,
Inc., PG&E Energy Trading Corporation, et al.," filed on
January 18, 2001, in San Francisco Superior Court and
subsequently removed to the United States District Court for
the Northern District of California
These cases are all currently pending in the US District Court for the
Southern District of California. Plaintiffs filed a motion to remand
the proceedings to state court and in January 2003, the motion was
granted. However, in view of various appeals of the remand order, the
cases remain in federal court.
These suits allege violation by the defendants of state antitrust laws
and state laws against unfair and unlawful business practices.
Specifically, the named plaintiffs allege that the defendants,
including the owners of in-state generation and various power
marketers, conspired to manipulate the California wholesale power
market to the detriment of California consumers. Included among the
acts forming the basis of the plaintiffs' claims are the alleged
improper sharing of generation outage data, improper withholding of
generation capacity, and the manipulation of power market bid
practices. The plaintiffs seek unspecified treble damages and, among
other remedies, disgorgement of alleged unlawful profits for sales of
electricity beginning in 1999 or 2000, restitution, injunctive relief,
and attorneys' fees.
SELECT COMFORT: MN Court To Rule on Approval For Securities Settlement
----------------------------------------------------------------------
The United States District Court of Minnesota has heard for final
approval the settlement agreement proposed by Select Comfort
Corporation to settle the securities class action filed against it and
certain of its former officers and directors.
The suit, filed on behalf of purchasers of our common stock between
December 4, 1998 and June 7, 1999, alleges that the Company and the
named former directors and officers failed to disclose or
misrepresented certain information concerning the Company in violation
of federal securities laws.
The Company believes that the suit is without merit. The Company
consented to a settlement of this litigation, and does not expect the
settlement to have any impact on its results of operations or financial
condition. On December 13, 2002, the settlement agreement received
preliminary approval from the court.
SOUTH KOREA: Market-Oriented Reforms Lead To Growth Says High Official
----------------------------------------------------------------------
Deputy Prime Minister for Finance and Economy Kim Jin-pyo recently told
a group of reporters, following his appointment as head of the Ministry
of Finance and Economy, that Koreans will strive for continued growth
through market-oriented reforms, Asia Pulse reports.
Mr. Kim conceded that overall conditions were unfavorable at the
moment. He said the pending conflict in the Middle East and the North
Korean nuclear standoff, as well as fall-off in domestic consumption
and investments were all developments having a negative impact on the
economy. However, said Mr. Kim, by working in close concert with the
other ministries and taking appropriate countermeasures, adverse
fluctuations in the economy could be reduced.
At the top of his list of measures to be taken to increase the
business-friendly climate in Korea, along with reducing administrative
red tape and tax system reform, was the adoption, as soon as possible,
of a securities-related class action system.
"Government proposals outline a clearly defined set of standards when
it comes to class actions, and if implemented, will contribute to
bettering transparency and credibility for Korean firms," Mr. Kim said.
He said that the current limits on investment by chaebol into other
businesses will be maintained at its current levels. Mr. Kim also
said, among other things, that the government was not contemplating
policies to bolster the economy at the moment, since most of the
problem causing the downturn in figures originated from outside the
country and was, therefore, beyond Korea's control.
SUPREME COURT: Anti-Abortion Activists Not Subject To "Mobster" Law
-------------------------------------------------------------------
In an 8 to 1 decision, the US Supreme Court rules that activists who
blockade abortion clinics are not racketeers subject to federal laws
aimed at groups or mobsters who obtain property through extortion,
according to the Akron Beacon Journal (OH).
In the lawsuit, Scheidler v. National Organization for Women, the
majority observed in its decision that the anti-abortion activists did,
at times, engage in criminal behavior, some of which deprived clinic
operators of their property rights when they shut down abortion clinics
with raucous protests in the 1980s.
However, while acknowledging such criminal behavior did take place, the
High Court said the US Court of Appeals for the Seventh Circuit was in
error when it affirmed a lower-court ruling holding activist Joseph
Scheidler and several other anti-abortion groups liable under the
Racketeer Influenced and Corrupt Organizations Act (RICO). The
majority rested its reasoning upon the fact that the groups never
"obtained" the clinics' property, which it was necessary that they do
in order to substantiate an extortion claim, an essential component to
proving a RICO violation.
The opinion nullifies the $250,000 in damages awarded to NOW by a lower
court. The opinion also lifts a federal court order banning aggressive
clinic protests. Anti-abortion groups said the decision lifted the
chilling effect the lower-court ruling had cast over their First
Amendment rights to rally, leaflet and picket at abortion clinics. The
abortion rights lobby said the opinion belittled women's rights by
leaving them vulnerable harassment and intimidation when they attempted
to engage in the exercise of their rights to an abortion.
Justice John Paul Stevens dissented, disagreeing in his minority
opinion with the court's narrowing of RICO's application. Some legal
experts said it is unclear whether the justices were taking a stand
against the further broadening the application of RICO, or whether the
High Court was, in fact, deciding narrowly on the facts in the
Scheidler case.
National Organization for Women President Kim Gandy called the decision
"shocking." "This overturns 50 years of settled criminal law," Ms.
Gandy said. "It is almost as if the court is saying, if you hold a gun
to someone's head but don't physically take their money, you are not
committing extortion. They (the justices) are drawing an incredibly
fine line."
TEXTRON INC.: Plaintiffs File Amended Securities Fraud Suit in RI Court
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Plaintiffs in the class action filed against Textron, Inc. filed an
amended suit in the United States District Court in Rhode Island on
behalf of a purported class of Company shareholders. The defendants
are the Company, certain of the present and former officers of the
Company and Bell Helicopter.
The lawsuit alleged that the defendants violated the federal securities
laws by making material misrepresentations or omissions between October
19, 2000, and September 26, 2001, in connection with Bell Helicopter's
V-22 and H-1 programs. An identical complaint was subsequently filed
by another Textron shareholder.
On September 26, 2002, the court consolidated the two cases and
appointed as lead plaintiff three affiliated pension funds for
International Brotherhood of Teamsters, Local 710 (referred to as
"Local 710 Pension Fund.")
The amended complaint is substantially similar to the original
complaint, alleging that the defendants failed to make certain
accounting adjustments in response to alleged problems with Bell
Helicopter's V-22 and H-1 programs. In addition, plaintiffs
allege that the company failed to timely write down certain assets of
its OmniQuip unit. The amended complaint seeks unspecified
compensatory damages.
TEXTRON INC.: Plaintiffs File Amended Suit For ERISA Violations in RI
---------------------------------------------------------------------
Plaintiffs in the securities class actions against Textron, Inc. filed
a consolidated amended suit in the United States District Court in
Rhode Island, on behalf of participants in the Textron Savings Plan
between January 1, 2000 and December 31, 2001.
The complaint named the Company, the Textron Savings Plan and the
Plan's trustee as defendants. The complaint alleged breach of certain
fiduciary duties under ERISA, based on the amount of Plan assets
invested in Textron stock during 2000 and 2001. The amended complaint
seeks equitable relief and compensatory damages on behalf of various
Textron benefit plans and the participants and beneficiaries of those
plans during 2000 and 2001, to compensate for alleged losses relating
to Textron stock held as an asset of those plans. The Company believes
this lawsuit is without merit and intends to defend it vigorously.
TRAFFIX INC.: Named As Defendant in Unsolicited Fax Advertisement Suit
----------------------------------------------------------------------
Traffix,Inc. was named as a defendant in a class action initially filed
against Columbia House, one of its clients by Sony Music Entertainment,
Inc., in the Circuit Court of Cook County, Illinois.
Columbia House initially notified the Company of an indemnification
claim relating to the suit. Plaintiff claims to have received
unsolicited commercial e-mail from, among others, Columbia House, in
violation of Illinois law. Columbia House advised the Company that it
believed that the email in question was not approved by Columbia House
when it was sent by the Company, and asserted a claim for
indemnification against the Company pursuant to its contract. The
Company and Columbia House agreed to defer resolution of the
indemnification claim. Columbia House is defending against the suit
and has filed a motion to dismiss it.
In January 2003, the Company was named as a defendant in the suit. In
an additional count in the complaint, the plaintiff asserts that the
Company violated the Illinois Consumer Fraud and Deceptive Business
Practices Act by providing to a co-defendant a list of consumers who
had consented to receive commercial e-mails when, the complaint
alleges, they had not. The complaint seeks injunctive relief and
unspecified damages. The Company is currently investigating the claim,
and will timely respond to the complaint in due course.
New Securities Fraud Cases
800AMERICA.COM: Marc Henzel Commences Securities Fraud Suit in S.D. NY
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Southern District of New
York against 800America.com (Other OTC: ACCO.PK) and three individual
defendants on behalf of all persons or entities who purchased or
otherwise acquired the securities of 800America during the period
between January 17, 2001 and November 13, 2002.
The lawsuit charges that defendants violated Sections 10(b) of the
Securities Exchange Act of 1934 by engaging in a massive, multifaceted
scheme to artificially inflate the value of 800America stock by
"cooking" its books and records, and by issuing public filings that
grossly distorted the Company's true state of affairs.
The suit alleges that, throughout the class period, defendants engaged
in fraudulent actions, which included, among other things:
(1) reporting millions of dollars in fictitious earnings,
revenues, expenses and assets, deliberately concealed by
defendants' creation of phony bank statements, checks,
invoices and a general ledger, which they supplied to
800America's auditor;
(2) the misappropriation and looting of substantial assets of the
Company by defendants David Elie Rabi and Tillie Ruth Steeples
through transfers of funds from 800America accounts to
accounts controlled by Mr. Rabi and/or Mr. Staples;
(3) the issuance of a press release falsely denying Mr. Rabi's
criminal past and failing to disclose that Ms. Steeples was a
control person of the Company; and
(4) the filing of a 10-KSB which listed as officers and/or
directors or ''significant employees`` several individuals who
had either left the Company or could not be located by the
Company.
The suit further alleges that 800America maintained two separate sets
of books in furtherance of their fraud, in which virtually all of its
reported revenues in fiscal years 2001 and 2002 were fictitious. In
addition, 800America reported approximately $13.2 million in cash
assets for fiscal year 2001-supported by a phony bank statement
provided to the Company's auditor reflecting approximately $12.67
million in cash-while the actual bank statement reflected that such
account never contained more than $640.66 for that entire period.
On November 13, 2002, the Securities & Exchange Commission (SEC) filed
a civil action against 800America, Mr. Rabi and Ms. Steeples in the
Southern District of New York, alleging that the Company falsified
virtually all of its reported revenue, concealed the criminal histories
of Mr. Rabi and Ms. Steeples, and otherwise perpetrated a massive fraud
against investors. Both Mr. Rabi and Ms. Steeples were arrested on
criminal charges in connection with this fraud.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
ATMEL INC.: Wolf Haldenstein Commences Securities Fraud Suit in N.D. CA
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Northern District of
California, on behalf of all who purchased the securities of Atmel
Corporation (Nasdaq: ATML) between January 20, 2000 and July 31, 2002,
inclusive against the Company and certain of its officers and
directors.
The complaint alleges that during the class period, Atmel's shares were
traded at artificially inflated levels, through the issuance of false
and misleading financial statements issued. At the same time,
defendants concealed that it was selling defective chips to its
customers which would lead to product recalls, repairs and loss of
customer relationships. defendants sold more than $500 million in notes
in a private placement offering while the Company's stock price was
artificially inflated caused by defendants' false statements. These
securities were later registered for resale via a Registration
Statement.
On July 31, 2002, media reports indicated that a suit had been
commenced against the Company by Seagate Technology Inc. for selling
defective chips causing defects in millions of disk drives. Following
this news, the Company's stock price decreased to $2.96.
For more details, contact Fred Taylor Isquith, Michael Miske, George
Peters or Derek Behnke by Mail: 270 Madison Avenue, New York, New York
10016, by Phone: (800) 575-0735 by E-mail: classmember@whafh.com or
visit the firm's Website: http://www.whafh.com. All e-mail
correspondence should make reference to Atmel.
COSI INC.: Abbey Gardy Initiates Securities Fraud Lawsuit in S.D. NY
--------------------------------------------------------------------
Abbey Gardy, LLP commenced 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 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 suit
alleges that the defendants failed to exercise reasonable due diligence
to ensure that the Prospectus disclosed all material facts.
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 suit 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 news, Cosi shares fell significantly, closing at $2.80
per share on February 4, 2003, down $1.67 or almost 40%.
For more details, contact Nancy Kaboolian by Phone: 1-800-889-3701 by
E-mail: NKaboolian@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com
INTERSTATE BAKERIES: Bernstein Liebhard Commences Securities Suit in MO
-----------------------------------------------------------------------
Bernstein Liebhard & Lifshitz LLP initiated a securities class action
on behalf of all persons who purchased or acquired the securities of
Interstate Bakeries Corporation (NYSE: IBC) between September 17, 2002
through and including December 17, 2002, in the United States District
Court for the Western District of Missouri against the Company, Charles
A. Sullivan, and Frank W. Coffey.
The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between September 17, 2002 and December 17, 2002, thereby
artificially inflating the price of IBC common stock. Throughout the
class period, as alleged in the suit, defendants issued numerous
statements regarding the Company's financial performance and future
prospects.
Specifically, defendants claimed that the Company was experiencing a
rebound in the sales of its sweet cake products, which had slowed down
in the previous quarter, and described how the Company would be able to
increase prices for certain bread products and maintain its anticipated
level of profitability in the face of increasing commodity prices.
The suit alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that since the beginning of the class period, the Company was
actually experiencing a negative variance with respect to cake
sales as compared to the prior year and, therefore, had not
seen any indication of any rebound in cake sales; and
(2) the Company did not maintain sufficient centralized control
over price increases to ensure that the Company could raise
prices on bread products without damaging profitability;
defendants knew that an increase in prices typically would
result in a sacrifice in market share and the Company actually
was exposed to significant risk with respect to its ability to
attain profits based upon commodity prices.
On December 17, 2002, the last day of the class period, IBC shocked the
market by reporting extremely poor second quarter earnings, which it
attributed primarily to weak sales of its sweet cakes. Following this
announcement, shares of IBC common stock plunged in value by over 35%,
from $23.16 per share on December 16, 2002, to $15.00 per share on
December 17, 2002, on extremely heavy trading volume that was almost
fifty (50) times more active than normal. Prior to the disclosure of
the Company's true financial condition, certain of the Individual
Defendants and other IBC insiders sold shares of their personally held
common stock for gross proceeds in excess of $16 million.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations, by Mail: 10 East 40th Street, New York, New York 10016, by
Phone: (800) 217-1522 or 212-779-1414 or by E-mail: IBC@bernlieb.com or
visit the firm's Website: http://www.bernlieb.com.
MICROTUNE INC.: Charles Piven Launches Securities Fraud Suit in E.D. TX
-----------------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of Microtune, Inc. (Nasdaq:TUNE)
between April 22, 2002 and February 20, 2003, inclusive. The case is
pending in the United States District Court for the Eastern District of
Texas, Sherman Division, against the Company and certain of its
officers and directors.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202, by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
NAM TAI: Marc Henzel Launches Securities Fraud Lawsuit in S.D. New York
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court, Southern District of New York on
behalf of purchasers of the common stock of Nam Tai Electronics, Inc.
(NYSE: NTE) between July 29, 2002 and February 14, 2003, inclusive.
The suit alleges that defendants violated Section 10(b) of the
Securities Exchange Act of 1934 by issuing false and misleading
statements regarding its financial performance, and failing to issue
timely reports concerning adverse developments in certain material
litigation. Adverse news regarding Nam Tai was released by the Company
after the close of trading on February 14, 2003. In reaction to this
unexpected bad news, Nam Tai shares fell significantly, closing at
$27.65 per share on February 18, 2003, down $5.76, a decline of more
than 15%.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
ROYAL AHOLD: Holzer & Holzer Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Holzer & Holzer initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of purchasers of Koninklijke (translated as "Royal") Ahold, N.V.
(NYSE:AHO) publicly traded securities during the period between March
6, 2001 and February 21, 2003, inclusive.
Throughout the class period, as alleged in the complaint, defendants
issued numerous statements and filed annual reports with the SEC which
described the Company's increasing income and financial performance.
As alleged in the complaint, these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that the Company had materially overstated its income by
improperly including far higher promotional allowances --
provided by suppliers to promote their products -- than the
company actually received in payment;
(2) that the Company's Disco unit had engaged in certain
transactions which were possibly illegal and were improperly
accounted for;
(3) that the Company was experiencing a slowdown in consumer
demand and that, contrary to defendants' representations, the
Company's financial performance was not "very solid" and its
fundamental business was not really "quite robust";
(4) that, contrary to defendants' representations, the Company was
having difficulty integrating its numerous acquisitions;
(5) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(6) as a result of the foregoing, the Company's financial
statements issued during the class period were materially
false and misleading.
On February 24, 2003, before the opening of regular trading, Ahold
shocked the market by announcing that it:
(i) would be reducing its earnings expectations for 2002;
(ii) would be restating its financial results for 2000, 2001 and
its interim results for 2002, primarily due to overstatements
of income, which may exceed $500 million, related to
promotional allowance programs at US Foodservice in the past
two years;
(iii) will deconsolidate its interests in three subsidiaries -- ICA
Ahold, Jeronimo Martins Retail and Disco Ahold International
Holdings; and
(iv) has been investigating the legality of certain transactions
and their accounting treatment at the Company's Argentine
subsidiary Disco; and
(v) as a result of all of this, the Company's CEO and CFO would be
resigning.
As a result, shares of Ahold's American Depositary Receipts fell $6.53
per share, or more than 61%, to close at approximately $4.16 per share,
a far cry below their class period high of $32.65 per share, on
extremely heavy trading volume.
For more details, contact Michael I. Fistel, Jr. by Phone: (888) 508-
6832, or by E-mail: mfistel@holzerlaw.com.
ROYAL AHOLD: Weiss & Yourman Commences Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Weiss & Yourman initiated a securities class action against Koninklijke
Ahold, N.V. (NYSE:AHO), its officers and its auditor was commenced in
the United States District Court for the Southern District of New York
on behalf of purchasers of Ahold securities between March 6, 2001 and
February 21, 2003.
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 Ahold common stock at artificially inflated
prices.
For more details, contact Joseph H. Weiss, David C. Katz, or James E.
Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New
York, NY 10176 by Phone: (888) 593-4771 or (212) 682-3025 or by E-mail:
info@wynyc.com
ROYAL AHOLD: Cohen Milstein Commences Securities Fraud Suit in E.D. VA
----------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action on behalf of its client against Royal Ahold Corporation
(NYSE:AHO) in the United States District Court for the Eastern District
of Virginia, in Alexandria, Virginia. Ahold's US headquarters are
located in Chantilly, Virginia.
The lawsuit seeks recovery for investors who have lost money in Ahold
securities as a result of the recent announcement of accounting
irregularities and the resignation of the Company's chief executive
officer and chief financial officer.
On February 24, 2003, Ahold stunned the market when it disclosed that
operating earnings for fiscal year 2001 and expected operating earnings
for fiscal year 2002 were overstated by an amount that the company
believes may exceed $500 million. The overstatements of income
discovered to date will require the restatement of Ahold's financial
statements for fiscal year 2001 and the first three quarters of fiscal
year 2002.
As disclosed by the Company, and as alleged in the suit, during the
2002 fiscal year-end audit for Ahold's US Foodservice subsidiary,
significant accounting irregularities were discovered in the
recognition of income, including prepayment amounts related to US
Foodservice's promotional allowance programs. In light of the
disclosure, Ahold President and Chief Executive Officer, Cees van der
Hoeven, and Chief Financial Officer, Michael Meurs, will resign.
In response to the disclosure of Ahold's true financial condition, its
ADRs plummeted from a close of $10.69 on February 21, 2003 to as low as
$3.60 per ADR when trading resumed Monday, February 24, 2003. The
decline represents a one day loss of over 65%.
For more details, contact Steven J. Toll Katrina by Mail: 1100 New York
Avenue, NW Suite 500 - West Tower Washington, DC 20005 by Phone:
888/240-0775 or 202/408-4600 by E-mail: stoll@cmht.com or
kjurgill@cmht.com or visit the firm's Website: http://www.cmht.com
ROYAL AHOLD: 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 Southern District of New York on behalf
of all persons or entities who purchased securities of Koninklijke
Ahold N.V. d/b/a/ Royal Ahold, Inc. between March 6, 2001 and February
21, 2003, 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, thereby artificially inflating the
price of Ahold American Depositary Receipts (ADR's).
The complaint alleges that in 2001 and 2002 Ahold made a series of
materially false and misleading statements regarding the Company's
results of operations and financial condition. The complaint further
alleges that on February 24, 2002 Ahold shocked the market; it issued a
press release announcing, among other things, that Ahold's operating
earnings for fiscal year 2001 and expected operating earnings for
fiscal year 2002 have been overstated by at least US$500 million and
that the overstatements would require the restatement of Ahold's
financial statements for fiscal year 2001 and the first three quarters
of 2002. On this news, the price of Ahold securities plummeted.
For more details, contact Nancy Kaboolian by Phone: 1-(800)-889-3701 by
E-mail: Nkaboolian@abbeygardy.com or visit the firm's Website:
http://www.abbeygardy.com/
SAWTEK INC.: Marc Henzel Commences Securities Fraud Lawsuit in M.D. FL
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Middle District of Florida
on behalf of all persons who purchased securities of Sawtek, Inc.
currently a subsidiary of TriQuint Semiconductor, Inc. (Nasdaq: TQNT)
between January 27, 2000 and May 24, 2001, inclusive.
The suit charges Sawtek and certain of its executive officers with
violations of federal securities laws. Among other things, plaintiff
claims that defendants' material omissions and the dissemination of
materially false and misleading statements concerning Sawtek's business
operations and financial performance caused Sawtek's stock price to
become artificially inflated, inflicting damages on investors.
Sawtek designs, develops, manufactures and markets a broad range of
electronic signal processing components, based on "surface acoustic
wave" or SAW technology, primarily for use in the wireless
communications industry. The complaint alleges that during the class
period, defendants misrepresented Sawtek's financial performance by
improper "channel stuffing" -- inflating revenue by shipping more
products than distributors could sell -- and by disseminating false and
misleading statements concerning the Company's revenue and business
prospects despite a widespread downturn in the wireless and
telecommunications markets.
Sawtek's actual financial performance was revealed on May 23, 2001,
when defendants' acknowledged that the Company's projected results for
the quarter ending June 30, 2001, would fall well below the Company's
previously issued revenue guidance. By the close of trading on the
next day, May 24, 2001, Sawtek's stock price had plunged more than
seventeen percent (17%) from the previous day's close as a result of
this news.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
TRANSACTION SYSTEMS: Marc Henzel Commences Securities Fraud Suit in NE
----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Nebraska on
behalf of all purchasers of the common stock of Transaction Systems
Architects, Inc. (Nasdaq: TSAIE) between January 21, 1999 and November
18, 2002, inclusive.
The complaint charges that during the class period, Transaction Systems
Architects and certain of its officers and directors issued and/or
failed to correct false and misleading financial statements and press
releases concerning the Company's publicly reported revenues and
earnings directed to the investing public. Specifically:
(1) the Company's software license revenues and net income for
1999, 2000, 2001 and for the ninth-month period ended June 30,
2002 have been seriously overstated;
(2) the Company lacked sufficient internal controls and therefore
was unable to understand its true financial standing; and
(3) because of these problems, the value of the Company's balance
sheet and income statement were materially overstated at all
relevant times.
On August 14, 2002, the Company shocked the market and revealed that
management was reviewing several transactions involving the Company's
customers that occurred during fiscal 1999 and 2000, to determine
whether they had been accounted for appropriately. The Company
announced that it would conduct a re-audit of the financial statements
for fiscal years 1999, 2000 and 2001. In response to the news, the
Company's shares plummeted more than 20%, falling $2.22 per share (from
the previous day's closing price of $10.72 per share), to $8.50 per
share on August 15, 2002.
On November 19, 2002, the Company confirmed that in the course of the
review of its financial statements, the Company identified certain
accounting adjustments that will result in the restatements of the
Company's financial statements for fiscal 1999, 2000 and 2001, as well
as the restatements of previously announced 2002 quarterly results
because it improperly recognized revenue in conjunction with its
software licensing arrangements.
As a result, previously reported Company's software license revenues
and net income will decrease substantially in fiscal 1999, 2000 and
2001. The Company said that these adjustments may be material.
Further, the Company announced that as a result of these adjustments,
it is not possible to complete the re-audit prior to the November 29,
2002, deadline allowed by NASDAQ. The Company requested an extension
from NASDAQ until December 31, 2002 to complete the re-audit process.
After the market digested the November 19, 2002 announcement, TSA's
shares fell to a low of $ 6.50, closing on November 20th at $7.35.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
TRANSKARYOTIC THERAPIES: Marc Henzel Commences Securities Lawsuit in MA
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Massachusetts
in Boston, Massachusetts on behalf of persons who purchased stock, or
who sold put options of Transkaryotic Therapies, Inc. (Nasdaq: TKTX) on
the open market from January 4, 2001 through January 14, 2003.
The complaint alleges that during the class period, defendants made
misrepresentations and nondisclosures of material fact to the investing
public concerning TKT's prospects for FDA approval of TKT's Replagal
enzyme therapy for the treatment of Fabry disease. In fact, as the
suit alleges, defendants knew by virtue of their ongoing communications
with the FDA of adverse facts concerning the FDA's consideration of
TKT's application that were inconsistent with TKT's positive
representations.
More specifically, according to testimony at the January 14, 2003 FDA
Advisory Committee hearing, in a letter dated December 22, 2000, the
FDA had advised TKT that "the clinical study data [from the Phase II
studies] had not provided substantial evidence of efficiency and fully
detailed the facts leading to that conclusion. [The FDA's Center for
Biologics Evaluation and Research] recommended that additional clinical
studies be conducted."
The true facts were all finally revealed after the January 14, 2003 FDA
Advisory Committee meeting. On January 15, 2003, TKT closed at $6.49,
more than 85% below its class period high.
Defendants were motivated to make the materially false and misleading
statements during the class period, among other things, so that TKT
could sell $267 million in common stock in secondary public offerings
and defendant Richard F. Selden, TKT's President and CEO, could sell
90,000 shares of his personal holdings of TKT common stock during the
class period for total consideration of $2,800,000.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
UNUMPROVIDENT CORPORATION: Marc Henzel Files Securities Suit in E.D. TN
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The Law Offices of Marc S. Henzel 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.
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 Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
UNUMPROVIDENT CORPORATION: Weiss & Yourman Launch Securities Suit in NY
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Weiss & Yourman initiated a securities class action against
UnumProvident Corporation (NYSE:UNM) and certain of its officers was
commenced in the United States District Court for the Southern District
of New York, on behalf of purchasers of UnumProvident shares between
May 7, 2001 and February 4, 2003.
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 UnumProvident common stock at artificially
inflated prices.
For more details, contact James E. Tullman, Mark D. Smilow, or David C.
Katz by Mail: The French Building, 551 Fifth Avenue, Suite 1600, New
York NY 10176 by Phone: (888) 593-4771 or (212) 682-3025 by E-mail:
info@wynyc.com
VERITAS SOFTWARE: Marc Henzel Launches Securities Fraud Suit in N.D. CA
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The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the Northern District of
California on behalf of purchasers of VERITAS Software Corporation
(NASDAQ: VRTS) publicly traded securities during the period between
January 24, 2001 and January 16, 2003.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
VERITAS is a software storage company that provides data protection,
storage management and disaster recovery software. The complaint
alleges that on January 17, 2003, the Company announced the restatement
of its 2000 and 2001 financial statements as a result of its improper
accounting for transactions with AOL Time Warner in 2000. The release
stated in part: "(t)he transactions involved in a $50 million software
purchase by AOL and a $20 million advertising services purchase from
AOL."
While VERITAS' financial statements were admittedly false and its stock
price artificially inflated, the Company's top officers and directors
took advantage of this and sold nearly $15 million worth of their
VERITAS shares to the unsuspecting public.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
WESTAR ENERGY: Marc Henzel Commences Securities Fraud Suit in KS Court
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The Law Offices of Marc S. Henzel 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 Westar Energy Inc.
(NYSE: WR) and on behalf of all purchasers of Western Resources Capital
I Cumulative Quarterly Income Preferred Securities Series A (NYSE:
WR_pa) from March 31, 2001 through December 26, 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 March 31, 2001 and December 26, 2002.
As alleged in the complaint, these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that the Company had engaged in certain trades that may have
violated Federal Energy Regulatory Commission (FERC) affiliate
transaction rules, specifically that these transactions
involved power sales from one Cleco Corporation (NYSE: CNL)
affiliate to Westar and then back to another or the same Cleco
affiliate, these transactions totaled approximately $3.4
million in 2000, $12.6 million in 2001 and $3.8 million in
2002; and
(2) further as a result of a improper accounting practices
regarding Westar's approximately 88% ownership of Protection
One (NYSE: POI) a provider of property monitoring services,
including electronic monitoring and maintenance of alarm
systems, first and second quarter 2002 financial earning
results had to be re-audited and restated.
On December 26, 2002, the last day of the class period, Westar
announced in a press release that it had received a subpoena from the
Federal Energy Regulatory Commission on December 16, 2002, and that in
addition to seeking details on trades with Cleco and its affiliates,
FERC also requested documents concerning power transactions between
Westar's system and marketing operations, and information on power
trades in which Westar or other trading companies acted as
intermediaries.
For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or 888-643-6735
by Fax: 610-660-8080 by E-Mail: mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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