/raid1/www/Hosts/bankrupt/CAR_Public/030707.mbx
C L A S S A C T I O N R E P O R T E R
Monday, July 7, 2003, Vol. 5, No. 132
Headlines
AFRICAN MARKET: Recalls Uneviscerated Fish For Botulism Hazard
AMC ENTERTAINMENT: Settles Shareholder Derivative Lawsuits in MO
AMC ENTERTAINMENT: CA Case Settlement Hearing Is On December 3
AMC ENTERTAINMENT: Talks Underway to Resolve ADA Violations Suit
AMC ENTERTAINMENT: Moves to Dismiss Consumer Lawsuit in Illinois
BLUE & WHITE: Recalls Whitefish Salad for Listeria Contamination
BRISKA INC: Recalls MERIT Brand Smoked/Seasoned Turkey Breast
BSQUARE CORP: Charles Jung Proceeds with Securities Class Action
CAMBIOR INC.: Not Willing to Settle Over Guyana Mine Operations
DEEP VEIN THROMBOSIS: Appeals Court Rejects Lawsuit V. Airlines
FLAG TELECOM: Plaintiffs File Consolidated Securities Suit in NY
GOODYEAR TIRE: Judge Allows Workers to Pursue Age Bias Claims
HARVEST MEATS: Recalls Honey Garlic Sausage Due to Allergy Risk
HEALTH NUTRITION: Recalls VIGA Diet Supplement For Health Hazard
HMO LITIGATION: Aetna, Emory Reach Accord Over Members' Coverage
HUGO BOSS: Court Dismisses Lawsuit Over Share Price Manipulation
KENTUCKY: Lawyers Sued Over Abandoning Sex-Abuse Victims in KY
LOUISIANA: Indian Workers Sue After Job Promises Disintegrate
MAINE: Blueberry Price-Fixing Suit Set For Trial This Fall
MCI/WORLDCOM: BoycottMCI Founder Calls $250M Offer a "Sick Joke"
NEURALYN LITIGATION: ID Resident Sentenced For Fraud, Net Scam
NORTHWEST AIRLINES: Sued by Union Over Honoring Contract Terms
PFIZER INC.: Court Certifies Suit Against Rezulin Manufacturer
SIX FLAGS: Sues Insurer Over Refusal to Pay Settlement
SPORTS CLUB: Says Shareholder Lawsuit Has No Merit
SURATI SWEET: Canadian Importer Recalls Shalini Brand Til Chikki
TOUCH AMERICA: Executives Face Suit Over Employee Lay-Offs
US LIQUIDS: Asks For Summary Judgment on Insurance in Stock Suit
VIXEL: Court Releases Officer, Director Defendants in NY Suit
WORLD WRESTLING: Works For Settlement of Securities Fraud Suit
New Security Fraud Cases
CREE INC: Schatz & Nobel Commences Securities Fraud Suit in NC
CREE INC: Chitwood & Harley Files Securities Lawsuit in M.D. NC
DAISYTEK INTL: Lockridge Grindal Launches Lawsuit in E.D. Texas
GUIDANT CORPORATION: Schatz & Nobel Files Suit in S.D. Indiana
INTERMUNE INC: Schiffrin & Barroway Files Lawsuit in N.D. CA
POLYMEDICA CORP: Wolf Haldenstein Commences Fraud Lawsuit in MA
SINGING MACHINE: Schiffrin & Barroway Launches Suit in S.D. FL
SINGING MACHINE: Cauley Geller Lodges Securities Suit in S.D. FL
SINGING MACHINE: Marc Henzel Launches Securities Suit in S.D. FL
TYCO INTERNATIONAL: Glancy & Binkow Commences Lawsuit in S.D. FL
*********
AFRICAN MARKET: Recalls Uneviscerated Fish For Botulism Hazard
--------------------------------------------------------------
African Market is recalling 200 boxes of uneviscerated fish,
named BROCHETTE, which was discovered by New York State
Department of Agriculture and Markets Food Inspectors during a
routine inspection of a market in Staten Island. Samples
analyzed confirmed that the fish had not been eviscerated prior
to processing.
This product may be contaminated with Clostridium botulinum
spores, which can cause Botulism, a serious and potentially
fatal food-home illness. The sale of this type of fish is
prohibited under New York State Agriculture and Markets
regulations because Clostridium botulinum spores are more likely
to be concentrated in the viscera than any other portion of the
fish. Uneviscerated fish has been linked to outbreaks of
botulism poisoning. Symptoms of botulism include blurred or
double vision, general weakness, poor reflexes, difficulty
swallowing and respiratory paralysis.
BROCHETTE was sold individually and in 30-pound boxes. The
product is uncoded. The recalled product was sold cash and
carry at African Market, 48A Bronx Terminal Market, Bronx, NY
10451.
Consumers who purchased BROCHETTE are advised not to eat it, but
should return it to the place of purchase. Consumers with
questions should contact John Okoro at 1-718-665 6524.
AMC ENTERTAINMENT: Settles Shareholder Derivative Lawsuits in MO
----------------------------------------------------------------
AMC Entertainment Inc. is a party to three shareholder
derivative lawsuits filed on its behalf against all of the
members of the company's board of directors.
Two of the lawsuits, captioned Krajewski et al. v. Laurence M.
Berg, et al. (Case No.02-CV-221038) and Lamb v. Laurence M.
Berg, et al. (Case No.02-CV-222236), were filed on July 31 and
August 14, 2002, respectively, in the Circuit Court of Jackson
County, Kansas City, Missouri.
On December 30, 2002, another shareholder derivative lawsuit,
captioned Malone v. Brown et al, (Case No.20103-NC), was filed
in the Delaware Chancery Court.
The complaints generally allege that the company's board
violated its fiduciary duties of loyalty and good faith and
wasted corporate assets by causing the company to improperly
forgive loans to Chief Executive Officer Peter C. Brown and
Executive Vice President Philip M. Singleton, without adequate
consideration.
The complaint in the Malone Action also generally alleges that
the individual defendants violated provisions of the 1999 Stock
Option and Incentive Plan and the executive compensation policy
as adopted by the compensation committee.
The plaintiffs seek unspecified damages on the company's behalf
together with their costs, fees and expenses. The defendants
believe there is no merit to the allegations of wrongdoing.
On May 6, 2003, counsel for the parties jointly filed a
Stipulation of Settlement in the Circuit Court of Jackson
County, Kansas City, Missouri.
Among other things, the settlement provides that:
1) the board will adopt a compensation committee charter
with specified terms,
2) the compensation committee will retain a compensation
consultant for fiscal year 2005,
3) the company will pay plaintiffs' counsel fees and
expenses of $450,000 and
4) Peter C. Brown and Philip M. Singleton will extend
existing lock-up agreements by three months to March 6,
2004.
A notice of settlement describing the terms was mailed to
shareholders of record as of May 6, 2003.
A hearing to determine the fairness of the settlement was held
June 24, 2003. Shareholders that objected to the terms of the
settlement were given the opportunity to state their objections.
The circuit court held that the settlement was reasonable and
fair and accordingly approved the settlement.
As a result, the actions will be dismissed as soon as practical.
AMC ENTERTAINMENT: CA Case Settlement Hearing Is On December 3
--------------------------------------------------------------
AMC Entertainment Inc. is a defendant in two coordinated class-
action cases now pending in California before the San Francisco
County Superior Court. These are captioned:
1) Weaver v. AMC Entertainment Inc. (No.310364, filed
March 2000 in Superior Court of California, San
Francisco County)
2) Geller v. AMC Entertainment Inc. (No. RCV047566, filed
May 2000 in Superior Court of California, San Bernardino
County)
Plaintiffs allege that AMC sold discount tickets and Gifts of
Entertainment in violation of California law making it "unlawful
for any person or entity to sell a gift certificate to a
purchaser containing an expiration date."
In both cases, plaintiffs allege unfair competition and seek
injunctive relief. Geller seeks restitution of all expired "gift
certificates" purchased in California since January1, 1997 and
not redeemed. Weaver seeks disgorgement of all revenues and
profits obtained since January 1997 from sales of "gift
certificates" containing an expiration date, as well as actual
and punitive damages.
In May 2001, following a special trial on the issue, the court
ruled that the Gifts of Entertainment and discount tickets are
"gift certificates." Subsequently, the court certified a
plaintiff class consisting of holders of Gifts of Entertainment
or discount tickets, which did not contain expiration dates or
disclaimers.
On April 28, 2003, the parties entered a settlement agreement
providing for our payment of approximately $600,000 in cash and
$900,000 in Gifts of Entertainment. The settlement agreement
received preliminary court approval in accordance with
California procedures June 19, 2003. At the preliminary hearing
the court held that the settlement was within the range of
possible approval.
The court will finally determine the fairness and adequacy of
the settlement at a hearing on December 3, 2003. The class
members will be notified of the hearing and have an opportunity
to attend and state their objections.
AMC ENTERTAINMENT: Talks Underway to Resolve ADA Violations Suit
----------------------------------------------------------------
On May 23, 2002, a plaintiff filed a purported class action in
the United States District Court for the Southern District of
Texas on behalf of his son and all deaf and severely hearing-
impaired individuals against AMC Entertainment Inc., four other
exhibitors and nine movie production companies. The lawsuit is
captioned Rob Todd v. AMC Entertainment International, Inc. et.
al. (Case No.H-02-1944).
The complaint alleges that the production company defendants
have violated the ADA by failing to produce enough closed-
captioned films (an emerging film technology sometimes referred
to as rear window captioning where a film's dialogue is
displayed on a device affixed to the armrest).
The complaint further alleges that the exhibition defendants
have violated the ADA by failing to show a sufficient number of
closed-captioned movies. The production company defendants have
been dismissed from the case.
The plaintiff now seeks declaratory and injunctive relief that
would require exhibitors to show more films with open
captioning, which displays the dialogue on the screen, or a
substitute system to permit deaf and severely hearing-impaired
individuals to attend movies. Plaintiff has not identified a
specific substitute system.
A similar class action suit, Kevin Ball, et al. v. AMC
Entertainment Inc. and Loews Cineplex Entertainment Corp. (Case
No.1: 00CV00867, United States District Court for the District
of Columbia), involves only theatres in the District of Columbia
area. The Ball suit seeks to have AMC install closed-captioning
in several screens at several theatres in the D.C. area, which
the company estimates would cost approximately $16,000 per
screen.
The company is engaged in settlement discussions to resolve this
case. Any settlement will be subject to court approval and class
notice and objection provisions.
AMC ENTERTAINMENT: Moves to Dismiss Consumer Lawsuit in Illinois
----------------------------------------------------------------
On February 25, 2003, Barbara LaSpesa filed a putative class
action case captioned LaSpesa v. AMC EntertainmentInc.
(No.03CH03572, filed in the Chancery Division of the Circuit
Court of Cook County, Illinois), alleging violations of the
Illinois Consumer Protection Act for unfair and deceptive trade
practice.
Ms.LaSpesa, on behalf of a purported class consisting of United
States patrons, alleges that company policies and practices
result in the showing of non-movie preview advertising after the
advertised movie start time and claims damages in the amount of
$75.00 per putative class member.
A motion to certify the class has yet to be formally presented
to the Chancery Court. The company denies the allegations and
has filed a motion for summary judgment to dismiss all claims.
BLUE & WHITE: Recalls Whitefish Salad for Listeria Contamination
----------------------------------------------------------------
Blue & White Food Products is recalling its 7-ounce plastic
containers of Sabra Smoked Whitefish Salad because they have the
potential to be contaminated with Listeria monoctyogenes, an
organism which can cause serious and sometimes fatal infections
in young children, frail or elderly people and others with
weakened immune systems. Although healthy persons may suffer
only short-term symptoms such as high fever, severe headache,
stiffness, nausea, abdominal pain and diarrhea, Listeria
infection can cause miscarriages and stillbirths among pregnant
women.
The recalled Sabra Smoked Whitefish Salad was distributed to
retail stores in the NY, NJ and CT area. The product comes in
7-oz. plastic containers marked with the code 071803. No
illnesses have been reported to date in connection with this
problem.
The potential for contamination was noted after routine sampling
by NYS Agriculture and Markets Food Inspectors revealed the
presence of Listeria monocytogenes in some 7-ounce containers of
Sabra Smoked Whitefish Salad. Production of the product has
been suspended while the company continues their investigation
as to the source of the problem.
For more details, contact the Company by Phone: 718-932-9000.
BRISKA INC: Recalls MERIT Brand Smoked/Seasoned Turkey Breast
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Briska Inc. of Montreal, Quebec, in cooperation with the
Canadian Food Inspection Agency (CFIA), is voluntarily recalling
MERIT Selection Brand Smoked Turkey Breast and Seasoned Turkey
Breast from the marketplace. These products are distributed in
Quebec only.
The company warns consumers not to consume MERIT Selection brand
Smoked Turkey Breast and Seasoned Turkey Breast as these
products may be contaminated with Listeria monocytogenes.
All sizes of the following products bearing establishment code
CANADA 141 and the Best Before date 03JL25 are affected by this
alert: Product Brand UPC (beginning with) Smoked Turkey Breast
MERIT Selection 0 293050 and Seasoned Turkey Breast MERIT
Selection 0 293051
Food contaminated with Listeria monocytogenes may not look or
smell spoiled. Consumption of food contaminated with this
bacterium can cause listeriosis. Listeriosis can cause high
fever, severe headache, neck stiffness and nausea. Pregnant
women, young children, the elderly and people with weakened
immune systems are particularly at risk. Infected pregnant women
may experience only a mild, flu-like illness, however,
infections during pregnancy can lead to premature delivery,
infection of the newborn, or even stillbirth.
There have been no reported illnesses associated with the
consumption of these products.
The CFIA is monitoring the effectiveness of the recall.
For more information, call CFIA at 1-800-442-2342 from 8:00 am
to 4:00 pm local time - Monday to Friday.
BSQUARE CORP: Charles Jung Proceeds with Securities Class Action
----------------------------------------------------------------
The Law Office of Charles H. Jung announced that it is
continuing with the securities class action it commenced on
February 28, 2003 on behalf of shareholders who purchased or
otherwise acquired the common stock (but excluding purchasers of
each company's initial public offering) of any of the following
companies during the following time periods:
1) Bsquare Corp. (Nasdaq:BSQR)
From 12/7/2000 until 7/6/2001
2) CacheFlow, Inc. (Nasdaq:BCSI)
From 12/7/2000 until 1/31/2001
3) Centillium Communications (Nasdaq:CTLM)
From 5/24/2000 until 5/11/2001
4) Efficient Networks Inc. (NYSE:SI)
From 7/15/1999 until 1/2/2001
5) Handspring Inc. (Nasdaq:HAND)
From 12/7/2000 until 3/27/2001
6) InterNAP Network Services Corp. (Nasdaq:INAP)
From 12/7/2000 until 3/5/2001
7) Lante Corp. (Nasdaq:LNTE)
From 2/11/2000 until 10/3/2000
8) Lightspan Partnership Inc. (Nasdaq:LSPN)
From 2/10/2000 until 8/16/2000
9) New Focus Inc. (Nasdaq:NUFO)
From 12/7/2000 until 3/6/2001
10) Simplex Solutions Inc. (NYSE:CDN)
From 5/2/2001 until 10/24/2001
11) Tanning Technology Corp. (Nasdaq:TANN)
From 7/23/1999 until 7/5/2000
12) Tumbleweed Communications Corp. (Nasdaq:TMWD)
From 8/6/1999 until 10/18/2000
No class has yet been certified in the above action.
For more details, contact the law office of Charles H. Jung by
Mail: 41 Sutter Street No. 1470, San Francisco, California
94104, by Phone: (877) 891-0342, or by Email: seclaw@ureach.com.
CAMBIOR INC.: Not Willing to Settle Over Guyana Mine Operations
---------------------------------------------------------------
Guyana residents are willing to negotiate a settlement for the
environmental class action filed against Cambior, Inc., but the
Company says it is not willing to do so, Canada.com reports.
The $1 billion suit was filed on behalf of 23,000 people who
claim to have suffered from a 1995 spill of 2.9 million cubic
metres of cyanide-tainted slurry into the Essequibo River
downstream from the Omai gold mine. A representative for the
plaintiffs told Canada.com that residents are willing to
negotiate a settlement that protects their health.
"We don't want to get involved in any long, drawn-out
litigation," Gustav Jackson, executive director of the Guyana
Research and Environmental Education Network told Canada.com.
However, the Company refused to settle, calling the suit
"frivolous." Robert LaValliere, Cambior's manager of investor
relations, told Canada.com the company has no plans to settle
because there's no foundation to the lawsuit.
He claimed the mine doesn't release any cyanide, despite
suggestions from Jackson that 4.5 kilograms of the substance are
released daily. Samples taken from the river show that levels
of cyanide and other chemicals are below guidelines set by U.S.,
Canadian and Guyanese standards, added Mr. LaValliere.
An inquiry by the Guyana government concluded that the
contaminated water wasn't a serious threat to life or posed a
health hazard to residents.
"What they do know from the scientific evidence that we've
garnered so far, is that for years to come - and I believe for a
millennium and probably for an eternity - they will continue to
suffer from the dumping of hazardous and toxic materials that
will continue to drain from that site," Mr. Jackson told
reporters on the steps of the Montreal courthouse, Canada.com
reports.
DEEP VEIN THROMBOSIS: Appeals Court Rejects Lawsuit V. Airlines
---------------------------------------------------------------
The United Kingdom's Court of Appeal ruled that passengers who
developed potentially fatal blood clots after long flights could
not sue airlines for compensation, the Associated Press reports.
The condition, called deep vein thrombosis, happens when a blood
clot forms in the deep veins of the legs. The condition is
linked to long-haul flights and other situations where people
sit still for a long time and can be potentially fatal when part
of the clot breaks off and blocks a blood vessel in the lungs.
In 2001, the British government issued an advisory asking
passengers on long flights to get up and walk around to avoid
developing blood clots in their calves.
Relatives of several passengers who died because of the
condition filed the suit, alleging the airlines failed to warn
them about the problem. A High Court decision in December
stated that the condition cannot be classified as an accident
under the Warsaw Convention, the international agreement that
regulates compensation for death and injury during air travel.
If the court ruled in favor of the claimants, 18 airlines would
have faced a class action.
Attorneys plan to appeal the ruling to the House of Lords, the
final court of appeal in Britain.
"New European legislation, anticipated shortly, will compensate
financially passengers whose flights are delayed, yet victims of
(deep-vein thrombosis) fail to be recognized," lawyer Desmond
Collins said outside the court, AP reports.
FLAG TELECOM: Plaintiffs File Consolidated Securities Suit in NY
----------------------------------------------------------------
FLAG Telecom Group, Inc. faces a consolidated securities class
action filed in the United States District Court for the
Southern District of New York, against it, its predecessor
company FLAG Telecom Holdings Ltd. and some of predecessor's
past and present officers, on behalf of those who purchased
Predecessor's stock between February 16, 2000 and February 13,
2002.
The consolidated amended complaint asserts claims under sections
11, 12(a)(2) and 15 of the Securities Act and sections 10(b) and
20(a) of the Exchange Act, as well as Rule 10b-5. More
specifically, the Complaint alleges, among other things, that
the defendants:
(1) knew but failed to tell the market about the glut of
capacity and falling bandwidth prices that allegedly
existed at the time of the initial public offering and
throughout the Class Period;
(2) engaged in, or caused Predecessor to engage in,
transactions with competitors whereby they would sell
each other cable that neither needed, for the sole
purpose of increasing revenue; and
(3) accounted for, or caused Predecessor to account for,
these transactions improperly and to overstate revenue.
GOODYEAR TIRE: Judge Allows Workers to Pursue Age Bias Claims
-------------------------------------------------------------
Summit County, Ohio, Judge Brenda Burnham Unruh has ruled in a
lawsuit seeking class action status, that some Goodyear current
and former employees can pursue age discrimination claims
against Goodyear Tire & Rubber Co., reported the Akron Beacon
Journal.
Judge Unruh said in her ruling that Ohio law allows individuals
to sue companies for policies or practices that have the effect
of punishing a high number of older workers.
Lawyers for both sides will meet with Judge Unruh on July 31 to
discuss the case.
The plaintiffs are all current or former older Goodyear
employees, who allege that Goodyear's grading system in their
performance evaluations forced managers to give low marks, or
C's to about 10 percent of white-collar workers; and high marks,
or A's, to the top 10 percent. The middle 80 percent got B's.
An overwhelming number of the C employees were older workers.
Workers who got a C, received no raise and got a warning that
another C could result in a demotion or dismissal. Goodyear has
since modified the system, dropping the letter grades and the
requirement for managers to distribute a certain percentage of
low grades.
The company has tried to dismiss the suit, arguing that in
age-discrimination claims, Ohio courts do not recognize the
theory of "disparate impact"; that is, the theory that
disproportionately negative effects of employment policies on
older workers amount to age discrimination. Ohio law only
forbids companies from actively targeting older workers for
discrimination, Goodyear argued. The company also argued that
federal courts have rejected disparate impact theory under the
U.S. Age Discrimination Employment Act.
But Judge Unruh ruled that Ohio law allows individual to sue
companies for policies or practices that have the effect of
punishing a high number of older workers.
The judge's ruling means that the workers only have to prove
that Goodyear's grading system adversely affected older workers,
not that Goodyear deliberately targeted them, said Laurie
McCann, an attorney with AARP, the nation's largest advocacy
group for people 50 and older. AARP has joined the workers' side
in the case.
Still, Goodyear could defend itself, under the law, by saying it
had a valid business reason for setting up its grading system
the way it did, said Ms. McCann. And then, she said, it will be
up to the workers and their lawyers to convince a judge or jury
that Goodyear could have achieved the same purpose without
adversely affecting older workers.
As indicated, above, lawyers for the workers are seeking class-
action status; if granted, dozens or perhaps hundreds of workers
who got low grades could be covered by the lawsuit. Last
summer, as Goodyear began firing workers who received their
second C, hundreds of Goodyear workers around the country
attended meetings with lawyers in Akron to complain about the
grading system.
Judge Unruh's ruling did not completely please the older
workers. Judge Unruh dismissed four of the eight plaintiffs
from the case, saying they did not bring a claim quickly enough,
but waited more than 180 days after receiving their first C
before filing their complaint.
AARP's Laurie McCann, who works with Steven Bell, an attorney
for the Goodyear workers, said the workers' lawyers plan to
appeal Judge Unruh's ruling about the tardiness of the claims of
some workers.
HARVEST MEATS: Recalls Honey Garlic Sausage Due to Allergy Risk
---------------------------------------------------------------
Harvest Meats Co. Ltd. of Yorkton, Saskatchewan, in cooperation
with The Canadian Food Inspection Agency (CFIA), is voluntarily
recalling Harvest brand Honey Garlic Sausage from the
marketplace. This product is known to have been distributed in
Saskatchewan, Manitoba, Alberta, and British Columbia.
The company warns people with an allergy to milk protein not to
consume Harvest brand Honey Garlic Sausage. This product may
contain milk protein that is not declared on the label. This
alert is of concern to those individuals who have an allergy to
milk protein.
The affected product, Harvest brand Honey Garlic Sausage, is
sold in a 500 g package, bearing the UPC 0 57393 70180 9. All
Best Before codes up to and including AU22 are affected by this
alert.
Consumption of this product may cause a serious or life-
threatening reaction in persons with an allergy to milk protein.
There have been no reported illnesses associated with the
consumption of this product.
The CFIA is monitoring the effectiveness of the recall.
For more information, call Harvest Meats Co. Ltd at
(306) 783-9446 (ext 244) or CFIA at 1-800-442-2342. - 8:00 am to
4:00 pm local time - Monday to Friday.
HEALTH NUTRITION: Recalls VIGA Diet Supplement For Health Hazard
----------------------------------------------------------------
Health Nutrition (RMA Labs) is warning its consumers not to
purchase or consume the product known as VIGA or VIGA FOR WOMEN.
These products which are being marketed as a dietary supplement
contains the unlabeled drug ingredient sildenafil, which may
pose possible serious health risks to some users.
Viga is sold in bottles of 30 tablets, and in packet of 4
tablets (ten packets in one small box). VIGA for women is sold
in bottle of 20 tablets. Both products are distributed by
Health Nutrition (RMA Laboratories Inc) and sold without medical
prescription.
The interaction between nitrates and sildenafil can result in
profound and life-threatening lowering of blood pressure. The
use of nitrates is an absolute contraindication for sildenafil
users. The potential for this product to be taken by unknowing
nitrate user is real since sexual dysfunction is often a
concurrent condition in patients with diabetes, hypertension,
hyperlipidemia, smokers and patients with ischemic heart
disease.
For more details, contact the Company by Mail: 6439 Alondra
Blvd, Paramount, CA 90723 or by Phone: 1-562-616-0100.
Consumers who have purchased this product and have medical
concerns should consult with their health care provider.
HMO LITIGATION: Aetna, Emory Reach Accord Over Members' Coverage
----------------------------------------------------------------
A new contract between Aetna and Emory Healthcare will allow
more than 300,000 Georgians to keep Aetna's network coverage for
visits to Emory doctors and hospitals. Aetna has agreed to give
Emory a "significant increase" in reimbursement rates for
medical services in the four-year agreement that will begin
September 1.
Citing low reimbursements, Emory said in April that it would
drop out of Aetna's network on January 1. Emory said it was
losing at least $3 million a year on care for Aetna patients.
The new agreement will end those losses, said Emory.
Emory Healthcare includes almost 1,000 physicians plus Emory
University Hospital and two other highly reputed hospitals. Dr.
Charles Peck, Southeast regional manager for Aetna and an Emory
University graduate, said, "We want all of the highest-quality-
care providers in our [Aetna] network, and Emory Healthcare is
one of them."
These words were echoed by a conclusion from Michael Rovinsky,
president of Integrity Consulting Group, a consulting firm, who
said certain hospitals cannot be left out of insurer networks,
"and in this market, Emory is one of them."
Had no agreement been reached, the 330, 000 members in Aetna's
HMO and preferred provider organization in Georgia -- the vast
majority of them in metro Atlanta -- would have had to pay much
more out-of-pocket to use Emory physicians and facilities in
2004.
Patrick Hammond, Emory's director of managed care, said talks
with Aetna were helped by Mr. Peck's personal involvement.
Another factor helping the negotiations, said Mr. Hammond, was
Aetna's having reached an agreement, in May, with the nation's
doctors who had brought a massive class-action lawsuit against
several health insurers. In this accord, Aetna agreed to give
the health insurer's physicians more control in making decisions
about patient treatment. The pledge was part of Aetna's proposed
settlement of the same class-action lawsuit that also included
resolution of some billing problems.
HUGO BOSS: Court Dismisses Lawsuit Over Share Price Manipulation
----------------------------------------------------------------
A United States federal court dismissed a securities class
action filed against high-end German retailer Hugo Boss AG,
Reuters reports. The suit charged the Company with overstating
revenues to artificially inflate share prices. The suit,
commenced in July 2002, alleges the firm's former US chief Marty
Staff and his deputy, Vincent Ottomanelli, "knew or recklessly
disregarded that the company was overstating revenues . as a
result of inventory manipulations" from November 5, 2001 to May
28, 2002.
The Company did not give a reason for the suit's dismissal in
its statement, Reuters states.
Analysts welcomed the news that the issue had been resolved but
said any positive share-price impact was overshadowed by the
sluggish economy that has slowed Boss's suit sales.
"If we see a share price rise on this it will be a brief
reaction as people are still very concerned about the retail
environment weighing on this firm," said Gavin Finlayson, a
retail analyst at Commerzbank in Frankfurt.
KENTUCKY: Lawyers Sued Over Abandoning Sex-Abuse Victims in KY
--------------------------------------------------------------
A malpractice lawsuit was filed recently in Fayette Circuit
Court, in Lexington, Kentucky, against six lawyers who played a
part in settling past child sex-abuse cases against the city of
Lexington, in what has been called the Ron Berry case, according
to a report by The Lexington Herald Leader.
At one time, Ron Berry was director of the city-funded youth
program, called Micro-City Government. A number of years later,
he was accused of sexually abusing some boys who were under his
direction in the youth program. The accusations proliferated,
and the number reached 96 victims; the victims hired six lawyers
who said they planned to sue the city of Lexington. Another
group of victims who approached the same lawyers, numbering more
than 20 men, also claimed to have been sexually abused by Mr.
Berry when he was director of the youth program.
The recently filed lawsuit, brought by attorney James Morris on
behalf of 96 unidentified victims, accuses the six lawyers of
abandoning the interests of the 96 Berry victims in order to
settle two federal cases for the second group of victims. Those
two federal cases, which involved the more than 20 men in the
second group claiming Mr. Berry sexually molested them when he
was director of the city-funded youth program, were settled for
a total of $2.85 million.
In the instant lawsuit, Mr. Morris says the lawyers in the
federal cases willfully failed to protect the rights of the 96
other alleged victims, shut out by second group's cases'
settlement without battling for class action status.
The attorneys "breached a duty of undivided loyalty" to the 96
other plaintiffs, who also were their clients, "when they
negotiated an agreement that provided no recovery" for the first
group of 96 plaintiffs, who are now the 96 John and Jane Does in
the new case, Mr. Morris's lawsuit claims.
The John and Jane Does also have sued the city of Lexington in
US District Court, alleging the city knew or should have known
of Mr. Berry's sexual proclivities toward teen-age boys, but
that officials studiously ignored Mr. Berry's misdeeds to curry
political favor in the black community.
The city has always denied that claim, saying rumors swirled
about Mr. Berry, but it was not until an actual victim came
forward that a criminal case could be made against him. When
victims did appear five years ago, Mr. Berry was quickly
arrested and is presently serving a three-year prison sentence
for sodomy.
LOUISIANA: Indian Workers Sue After Job Promises Disintegrate
-------------------------------------------------------------
A large group of workers from India is suing a Baton Rouge
company and at least two businessmen who they say promised them
jobs that never materialized, Associated Press Newswires
reports. The plaintiffs' attorney is seeking class-action
status for the workers' lawsuit, there could be as many as 300
plaintiffs.
The lawsuit, filed recently in federal court in New Orleans,
claims the migrant workers paid $6 to come to the United States
to get well-paying jobs as welders and pipe fitters, as well as
medical insurance and eventually green cards. The work turned
out to be temporary or nonexistent, the lawsuit alleges.
Falcon Steel Structures, a Baton Rouge, Louisiana company, is a
named defendant, as well as Terry Forrester of Labor Consultants
in Post Falls, Idaho, and Baljit Vijasingh, a businessman who
lives in Canada. Falcon Steel sponsored many of the men on
temporary work visas, and Mr. Forrester and Mr. Vijasingh helped
companies find foreign laborers, according to plaintiffs'
lawsuit.
"They took their money and robbed them of their dreams and
opportunities," said Kent Felty, the workers' lawyer.
Falcon Steel owner Chad Chandler, as well as Mr. Forrester and
Mr. Vijasingh, could not be reached for comment.
MAINE: Blueberry Price-Fixing Suit Set For Trial This Fall
----------------------------------------------------------
The Knox County Superior Court jury is set to decide this fall
on the matter regarding an antitrust class action lawsuit
against four Down East blueberry processors namely:
1) Jasper Wyman & Son of Milbridge,
2) Cherryfield Foods Inc. of Cherryfield,
3) Merrill Blueberry Farms Inc. and
4) Allen's Blueberry Freezer Inc. of Ellsworth
The suit, filed by Union blueberry grower Nathan "Nate" Pease
more than three years ago, alleges that the processors conspired
to set artificially low field prices for the state's wild
blueberry crop from 1996 through 1999. All four companies
maintain otherwise, Maine's Bangor Daily News reports.
Plaintiff's counsel William D. Robitzek of Lewiston notifies
Maine's more than 500 blueberry growers that they have until
July 23 to exclude themselves from the litigation.
Mr. Robitzek says the jury trial will likely be scheduled in
late October or November. "We've gone through the preliminary
motions, and the defendants have attempted to have the case
thrown out on technical grounds and that's been denied," he
said.
MCI/WORLDCOM: BoycottMCI Founder Calls $250M Offer a "Sick Joke"
----------------------------------------------------------------
A new offer by MCI/WorldCom to offer $250 million in its post-
bankruptcy stock to investors holding 2.96 billion shares of its
now nearly worthless shares is a "declaration of independence
from sanity" that should be rejected by the federal judge who is
reviewing the terms of the scandal-ridden company's settlement
with the Securities and Exchange Commission (SEC), according to
Mitch Marcus, a former WorldCom Account Manager and the founder
of BoycottMCI.com (formerly BoycottWorldCom.com).
Marcus said: "I can only imagine that this is someone at
WorldCom/MCI's idea of a sick 4th of July joke. This is no step
forward for ripped-off shareholders; it is a declaration of
independence from sanity. You have to keep in mind the enormous
scale of MCI's fraud: The piddling $250 million would only be
worth eight cents a share to current holders of the nearly 3
billion shares of the company's stock. What makes this so
outrageous is that the stock was trading at $65 a share before
MCI/WorldCom was forced to acknowledge what we now know to be
more than $11 billion in accounting fraud. An offer to give
shareholders less than one thin dime per share is not a good
thing - it is a slap in the face. This is next-generation funny
money - it is not real."
Marcus noted that the original settlement of $500 million
amounted to only about one week of MCI/WorldCom revenue. The new
$250 million "sweetener", in new stock no less, would only
amount to a few extra days of company revenue, adding "insult to
injury from the original slap on the wrist that the SEC was
willing to accept," Marcus said.
He added: "The paltry amount being offered by WorldCom is an
even bigger insult when you consider that this company used its
fraud schemes to extract $300 million in extra tax breaks from
the federal government. So, they aren't even returning to
Americans what they have taken out of the Federal Treasury. My
advice to Americans is to let MCI/WorldCom know that this
outrageous new proposal fails the smell test. If you want to
celebrate the 4th of July this year, why not declare
independence from a company that would treat its customers in
this manner. We urge all Americans to boycott all MCI/WorldCom
products and services. This is not a company that deserves to
have the patronage of Americans who believe in this nation's
core values of fair dealing and taking responsibility for one's
crimes."
Marcus also urged the federal judge now reviewing the
SEC/WorldCom settlement to reject it. Not only is the financial
settlement weak, but the investigation of the MCI/WorldCom
scandal is not complete. Marcus said: "I know from what I have
been told directly by the SEC that this investigation did not
explore all leads and avenues of possible fraud. The last thing
we want to see happen is for shareholders and taxpayers to be
swindled a second time." Marcus urged Judge Rakoff to reject the
settlement and to press the SEC to conduct a full investigation.
ABOUT BOYCOTTMCI.COM
Since its founding in May 2002, the Web site now known as
http://www.BoycottMCI.comhas supported a variety of steps to
highlight problems at the former WorldCom. Marcus has called for
the debarment of the troubled telecommunications company from
future federal contracts. BoycottMCI.com also has opposed
efforts by the Securities and Exchange Commission (SEC) to let
WorldCom off the hook with no meaningful penalty. Earlier this
year, Marcus highlighted financial issues that were buried in
reports issued by the former WorldCom.
BoycottMCI.com was established in May 2002 to: dissuade
consumers, businesses, and governmental entities from purchasing
internet/data/telecom services and equipment from WorldCom, Inc.
or any of its owned companies or subsidiaries; encourage retail
and institutional investors to divest of all WorldCom/MCI
equities and initiate class action; and organize grassroots
effort to encourage Federal and State investigations into
WorldCom's business practices. BoycottMCI.com founder Mitch
Marcus is a former WorldCom account relations manager, who
resigned his position due to concerns about company operations.
NEURALYN LITIGATION: ID Resident Sentenced For Fraud, Net Scam
--------------------------------------------------------------
A former Meridian resident was sentenced to 33 months in federal
prison and ordered to repay her victims almost $800,000 for
conspiring to use the Internet to falsely promote a cure for
spinal cord injuries and other serious illnesses, US Attorney
for the State of Idaho, Tom Moss, announced.
In addition to the prison time, Chief US District Judge B. Lynn
Winmill ordered Beverly Vigil to serve three years of supervised
release following her incarceration, and to repay her victims
$795,396.06. She has been in jail since her arrest in January
2002, and will receive credit for time already served.
Beverly Vigil and her ex-husband, Tom Vigil, owned and operated
the Alternative Medicine and Biophysics Research Institute in
Nampa, and promoted a product they called Neuralyn on their web
site. More than 100 patients, most of them paraplegics or
quadraplegics, paid up to $10,000 each to come to Nampa or
affiliated clinics in Utah and Colorado to be treated with
Neuralyn.
Prospective patients were told that Neuralyn was 85 to 95
percent successful and could enable them to move or even walk
again by regrowing nerve cells. They were also told, falsely,
that Tom Vigil was a medical doctor with training in
biochemistry, that Neuralyn had undergone clinical studies, and
that a patent application and FDA approval were pending. An
"advisory board" of distinguished physicians and scientists
consisted mainly of people who had no idea they were on such a
board.
In addition to conspiracy to commit wire fraud, Beverly Vigil
pled guilty to a charge of conspiracy to delivery a misbranded
drug in interstate commerce with the intent to defraud. The
Vigils promoted Neuralyn as an all-natural substance made from
plants from the Yucatan. In reality, the product contained a
topical anesthetic which gave some patients temporary pain
relief and led them to believe that they were improving.
The Vigils charged $300 to $500 for a vial of Neuralyn for home
treatment, claiming that the ingredients, production process,
and costs of research and patent applications justified the high
price. Beverly Vigil admitted, however, that vials of Neuralyn
cost them only $15 apiece.
Tom Vigil faces two counts of conspiracy, 18 counts of wire
fraud and eight counts of delivering a misbranded drug into
interstate commerce with intent to defraud. He is a fugitive,
believed to be in Mexico.
California pharmacist David Taylor, who supplied the Neuralyn to
the Vigils, pled guilty to conspiracy to deliver a misbranded
drug in interstate commerce with intent to defraud. He
cooperated with the investigation, was given five years
probation, and has paid restitution to the victims.
The case was investigated by the Federal Bureau of Investigation
and the Food and Drug Administration, Office of Criminal
Investigations.
NORTHWEST AIRLINES: Sued by Union Over Honoring Contract Terms
--------------------------------------------------------------
The Professional Flight Attendants Association (PFAA) filed a
lawsuit to compel Northwest Airlines to honor the terms of the
current labor contract covering the airline's flight attendants,
the Associated Press Newswires reports. The lawsuit was filed
in the US District Court for the Central District of California.
The lawsuit seeks an injunction, ordering Northwest to permit
union dues to be deducted from flight attendants' paychecks.
The lawsuit also seeks compensation for the amount of dues and
service fees PFAA has been unable to collect since it replaced
the Teamsters as the flight attendants' collective bargaining
agent on June 20, 2003.
After June 20, Northwest refused to make the required payroll
deductions, referring instead to the "poison pill" contract
clause designed to erase the requirement to deduct union
dues from the flight attendants' paychecks if the Teamsters were
ever replaced.
"The goal of this provision was to discourage employees from
ever replacing the Teamsters," said PFAA Interim President Guy
Meek. "That in itself is illegal." The Railway Labor Act and
subsequent case law have established clearly that labor
contracts are made between employees and the employer. The
terms of a contract cannot be changed when employees replace one
union with another, as happened in this case."
PFAA recently reached an agreement with the Northwest Airlines
Federal Credit Union to deduct union dues from accounts of
flight attendants who belong to the credit union, the Associated
Press Newswires reports. More than 90 percent of the flight
attendants are credit union members.
"Northwest flight attendants are customer-focused safety
professionals. We want to assure the public that our
differences with Northwest management will not affect our
dedication to Northwest passengers," said Patti Lutz, PFAA
member-at-large.
PFIZER INC.: Court Certifies Suit Against Rezulin Manufacturer
--------------------------------------------------------------
West Virginia's state Supreme Court gave class action status to
the lawsuits against the maker of the diabetes drug Rezulin,
which was pulled from the market three years ago because of
liver-related deaths, the Associated Press Newswires reports.
The Supreme Court reversed a decision by Raleigh County Circuit
Court Judge John A. Hutchison, who denied the plaintiffs' class
action request in 2001 and ruled that tests did not conclusively
prove the drug caused liver damage. Judge Hutchison will now
hear the case brought on behalf of up to 5,000 West Virginians
to recover the costs of medical monitoring to determine whether
they have been injured by having taken the drug.
Warner-Lambert Co. made Rezulin, which received Food and Drug
Administration (FDA) approval in 1997. The drug generated $2.1
billion in revenue before it was banned in March 2000. FDA
research linked the drug to 63 deaths from liver failure.
The Supreme Court concluded that Judge Hutchison was mistaken in
considering the merits of the claims at this early stage (as,
for example, that the tests did not prove conclusively the drug
caused liver damage), and said also that the judge erred in
denying the class certification.
Warner-Lambert was bought by Pfizer in 2000. Since more than
two million people took Rezulin before it was pulled from the
market, Pfizer has said it faces hundreds of lawsuits and claims
over the drug.
SIX FLAGS: Sues Insurer Over Refusal to Pay Settlement
------------------------------------------------------
Oklahoma City-based Six Flags Inc. filed a lawsuit Friday in the
Oklahoma County District Court, alleging that its insurance
company, Pacific Employers Insurance Co., is refusing to pay for
possible settlement and legal costs related to a pending class
action lawsuit, The Daily Oklahoman reports.
The amusement park operator claims that its policy with Pacific
covers up to $8 million in settlement claims and defense costs.
Six Flags accused Pacific of breach of contract and said it had
benefited financially from Six Flags' efforts to defend the
class action litigation.
Six Flags is a defendant in a 2001 class action lawsuit filed in
California that alleges its Magic Mountain park security
discriminated against minority visitors.
According to The Daily Oklahoman, the California Superior Court
for Los Angles County has stayed that case as the parties went
to mediation. Six Flags said it is close to reaching a
settlement but needs reassurance from Pacific that its insurance
coverage will pick up some of the possible settlement costs.
"Six Flags has previously advised (Pacific) that if the
Armendarez action was not settled, the stay lifted and
proceedings resumed, Six Flags would likely be exposed to costs,
fees and/or damages liability well in excess of the policy
limits," the lawsuit stated.
SPORTS CLUB: Says Shareholder Lawsuit Has No Merit
---------------------------------------------------
The Sports Club Company, Inc. (AMEX:SCY) announced that a
purported shareholder class action lawsuit had been filed in
Delaware Chancery Court Tuesday against the Company and its
principal shareholders and directors alleging, among other
things, that the individual defendants had violated certain
fiduciary duties owed the minority shareholders by announcing
the principal shareholders' offer to cash out the minority
shareholders in a "going private" transaction at a price of
$3.00 per share.
The complaint also asserts that the defendants were using the
proposed "going private" transaction to avoid disclosure of
accounting problems that resulted in the restatement of the
Company's financial statements, which were filed with the
Securities and Exchange Commission last week. The plaintiffs are
seeking to enjoin the completion of the "going private"
transaction, damages, and attorneys' fees.
"The complaint is wholly without merit and reflects a complete
misunderstanding of the status of the proposal, in that it seeks
to enjoin a transaction that has not been approved by the
independent special committee of the Board of Directors," stated
Rex A. Licklider, co-chief executive officer and one of the
named defendants in the lawsuit.
"Furthermore, the Company's restated financial statements do not
materially change its reported results of operations for the
periods covered by them and are not expected to have any impact
on the proposed ``going private' transaction, which was
initiated before management became aware of the issues that
caused the restatement," Mr. Licklider continued. "Needless to
say, we intend to vigorously defend what we consider to be a
frivolous action."
The Sports Club Company, Inc., based in Los Angeles, owns and
operates luxury sports and fitness complexes nationwide under
the brand name "The Sports Club/LA."
SURATI SWEET: Canadian Importer Recalls Shalini Brand Til Chikki
----------------------------------------------------------------
Toronto, Ontario-based importer Surati Sweet Mart Ltd., in
cooperation with the Canadian Food Inspection Agency (CFIA), is
voluntarily recalling Shalini brand Til Chikki from the
marketplace. This product has been distributed in Ontario,
Quebec, Manitoba and Alberta.
The company warns consumers with allergies to peanuts not to
consume Shalini brand Til Chikki. This product may contain
peanuts that are not declared on the label. This alert is of
concern to individuals with allergies to peanuts.
The affected product, Shalini brand, Til Chikki is sold in 25gm
packages. Some packages of the affected product also mention the
name as Sesame Brittle, while some packages do not. All types of
packages and codes are affected by this alert. This product is
imported from India.
Consumption of this product may cause a serious or life-
threatening reaction in persons with allergies to peanuts. There
have been no reported illnesses associated with the consumption
of this product.
The CFIA is monitoring the effectiveness of the recall.
For more information, call CFIA at 1-800-442-2342 from 8:00 am
to 4:00 pm local time - Monday to Friday.
TOUCH AMERICA: Executives Face Suit Over Employee Lay-Offs
----------------------------------------------------------
Touch America executives, including CEO Robert Gannon, violated
the law when they laid off 216 employees on June 18, according
to the lawsuit filed recently in District Court in Butte,
Montana, the Associated Press Newswires reports. In a separate
filing, the company's investors are involving themselves in
Touch America's bankruptcy filing.
Billings, Montana attorney Clifford Edwards and Lori Dwyer
Armstrong of the JD Law Firm in Butte brought the class action
on behalf of the laid-off workers. The lawsuit does not name
Touch America. Instead, it names as defendants Mr. Gannon,
Michael Meldahl, Jerry Pederson and Michael Zimmerman, the
company's 10 board members, as well as Nightingale LLC, of
Stamford, Connecticut, a consulting firm. Mr. Edwards said the
lawsuit will not get derailed in bankruptcy court because it
does not name the corporation.
The lawsuit says the defendants negligently failed to honor
their fiduciary responsibility to employees under the federal
Workers Adjustment and Retraining Notification Act. The
employees laid off June 18 say in their lawsuit that they did
not get a 60-day notice, as required by WARN, nor the vacation
pay or other benefits given to other Touch America workers who
lost or will lose their jobs.
Ms. Armstrong, of the JD Law Firm in Butte, said going after the
consulting company, Nightingale, which apparently has been
advising Touch America for about year makes sense.
"They have a lot of money," said Ms. Armstrong. "They are a
solid company, and we wanted to bring them to court in Montana,
because they have profited from this Montana company and these
employees."
Touch America ran into trouble almost immediately after
converting itself from the former Montana Power Co. into a
telecom provider by selling about $1 billion worth of utility
assets. Also, about the same time as the filing of the workers'
lawsuit, Touch America investors filed objections in a Delaware
court to the bankruptcy process, hoping to slow it down.
Shareholder Marjorie Schmechel, an attorney in Eugene, Oregon,
characterized as a joke the expectation that the company could
file for bankruptcy on June 19 and expect in 31 days the whole
sale process will be completed. "These kinds of bankruptcies
normally would take a year," she said. Ms. Schmechel said the
month-long Chapter 11 schedule the company has set for itself is
unfair, especially because the company has not even filed
financial reports since last September.
US LIQUIDS: Asks For Summary Judgment on Insurance in Stock Suit
----------------------------------------------------------------
US Liquids, Inc. and its insurance carrier moved for summary
judgement in the securities class action filed in the United
States District Court for the Southern District of Texas,
Houston Division, against the Company and certain of its current
and former officers and directors.
The suit alleges violations of Sections 11, 12(a)(2) and 15 of
the Securities Act of 1933 on behalf of purchasers of the
Company's common stock in the Company's March 1999 public
offering and violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder on behalf of purchasers of the Company's common stock
during the period beginning on May 12, 1998 and ending on August
25, 1999.
The plaintiffs generally allege that the defendants made false
and misleading statements and failed to disclose allegedly
material information regarding the operations of the Company's
Detroit facility and the Company's financial condition in the
prospectus relating to its March 1999 stock offering and in
certain other public filings and announcements made by the
Company. The remedies sought by the plaintiffs include
designation of the action as a class action, unspecified
damages, attorneys' and experts' fees and costs, rescission to
the extent any members of the class still hold common stock, and
such other relief as the court deems proper.
In January 2001, the court dismissed the claims asserted by the
plaintiffs under Sections 10(b) and 20(a) and Rule 10b-5 of the
Exchange Act and in April 2002 the court dismissed the claims
asserted by the plaintiffs under Section 12(a)(2) of the
Securities Act. Accordingly, the lawsuit is proceeding only
with respect to the claims asserted under Sections 11 and 15 of
the Securities Act.
In June 2002, the court determined that two individuals
designated by the plaintiffs are adequate class representatives
for plaintiffs' claim under Section 11 of the Securities Act. In
August 2002, the court entered an order defining the plaintiff
class as all persons who purchased or otherwise acquired Company
common stock pursuant or traceable to the Company's March 1999
stock offering.
Further lawsuit proceedings and discovery have been suspended,
pending the resolution of the Company's dispute with its
insurance carrier over whether insurance coverage exists for the
plaintiffs' asserted. The Company and its insurance carrier
have both moved for summary judgment on the issue of whether
that type of insurance coverage exists.
VIXEL: Court Releases Officer, Director Defendants in NY Suit
-------------------------------------------------------------
A securities class action was filed in the United States
District Court in the Southern District of New York on November
15, 2001, against two of Vixel Corporation's officers and
directors and certain underwriters who participated in the
company's initial public offering in late 1999.
The complaint alleges violations under Section 10(b) of the
Securities Exchange Act of 1934 and Section 11 of the Securities
Act of 1933 and seeks unspecified damages on behalf of persons
who purchased our stock during the period October1, 1999 through
December 6, 2000.
Subsequent to the filing, the Court issued a summary judgment
releasing the Company's officers and directors from the action.
WORLD WRESTLING: Works For Settlement of Securities Fraud Suit
--------------------------------------------------------------
World Wrestling Entertainment, Inc. is working toward the
settlement of a securities class action filed in the United
States District Court for the Southern District of New York
against it and:
(1) Bear, Stearns & Co. Inc.,
(2) Merrill Lynch, Pierce, Fenner & Smith, Incorporated,
(3) Credit Suisse First Boston Corporation,
(4) WIT Capital Corporation,
(5) Donaldson, Lufkin & Jenrette Securities Corporation,
(6) Chase H&Q,
(7) Vincent K. McMahon,
(8) Linda E. McMahon and
(9) August J. Liguori
The complaint alleges, inter alia:
(i) claims under Section 11 of the Securities Act against
all defendants,
(ii) claims under Section 12(2) of the Securities Act
against the Underwriter Defendants,
(iii) claims under Section 15 of the Securities Act against
the Company and the Individual Defendants,
(iv) claims under Section 10(b) of the Exchange Act and Rule
10(b)(5) against all defendants, and (v) claims under
Section 20(a) of the Exchange Act against the
Individual Defendants.
According to the complaint's allegations, the underwriter
defendants allegedly engaged in manipulative practices by, inter
alia, pre-selling allotments of shares of Company stock in
return for undisclosed, excessive commissions from the
purchasers and/or entering into after-market tie-in arrangements
which allegedly artificially inflated the Company's stock price.
The plaintiff further alleges that the Company knew or should
have known of the unlawful practices.
The Company denies all allegations against it, believing it has
meritorious defenses against the plaintiffs' claims. It
understands that nearly 1,000 suits with similar claims and/or
allegations have been filed over the past couple of years
against companies that have gone public in that general time
period.
The Company was part of a motion to dismiss filed on behalf of
all issuers on July 15, 2002. On February 19, 2003, the court
issued its ruling granting in part and denying in part the
issuers' motion. Specifically, the court granted the motion
dismissing the Section 10(b) claims against the Company and
denied the motion as to Section 11 claims against it.
A settlement between the class plaintiffs and the issuer
defendants, including the Company and the Individual Defendants,
currently is being contemplated. Although the Company cannot
predict the likelihood of a settlement being reached on
the terms currently being contemplated, if it were, the Company
anticipates that it would not have a material adverse effect on
it.
New Security Fraud Cases
CREE INC: Schatz & Nobel Commences Securities Fraud Suit in NC
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a securities
class action in the United States District Court for the Middle
District of North Carolina on behalf of all persons who
purchased the common stock of Cree, Inc. (Nasdaq: CREE) between
August 19, 1998 and June 13, 2003, inclusive.
The Complaint alleges that Cree and certain of its officers and
directors issued materially false and misleading statements
about Cree's business during the Class Period.
Specifically, the Complaint alleges defendants manipulated
Cree's financial results using transactions between Cree and an
affiliated company C3, Inc. Details of the improper transactions
are contained in a complaint filed by the brother of the
Chairman of Cree's Board of Directors. When these facts were
made public on June 13, 2003, the market price of Cree's common
stock fell over 18% in one day.
For more details, contact attorneys Andrew M. Schatz or Wayne T.
Boulton by Phone: (800) 797-5499, or by E-mail: sn06106@aol.com,
or visit the firm's Web site: http://www.snlaw.net
CREE INC: Chitwood & Harley Files Securities Lawsuit in M.D. NC
---------------------------------------------------------------
Chitwood & Harley initiated a securities class action in the
United States District Court for the Middle District of North
Carolina, on behalf of all purchasers of securities of Cree,
Inc. (Nasdaq:CREE), between July 24, 2001, and June 13, 2003,
inclusive.
The suit is brought against Cree, Inc. and:
1) Charles Swoboda,
2) Cynthia Merrell,
3) F. Neal Hunter.
The complaint charges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of materially false
and misleading statements to the market between July 24, 2001
and June 13, 2003.
The complaint alleges that Cree issued materially false and
misleading press releases and SEC reports, thereby inflating its
results and stock price.
According to the complaint, during the Class Period, Cree issued
press releases announcing its results for its fiscal fourth
quarter 2001, year 2002, and the first three fiscal quarters of
2003, and filed financial reports covering such quarters with
the SEC. Cree's earnings releases and SEC filings were
materially false and misleading when made because they failed to
disclose that:
(1) a material portion of the Company's revenues were
generated from non "arms length" sales to related
entities that did not reflect the true demand for the
Company's products;
(2) the Company failed to implement and maintain an
adequate internal accounting control system;
(3) since 2002, Eric Hunter, Cree's former President, CEO
and Chairman had alleged, to the Company's board of
directors, that the Company was improperly accounting
for transactions with related entities and was issuing
and filing materially false and misleading press
releases and financial reports; and
(4) that a material portion of Cree's reported Class Period
sales were improperly recognized and reported in the
Company's financial statements in violation of
Generally Accepted Accounting Principles.
The market first learned of Cree's improper revenue recognition
practices on June 13, 2003. On that date, Cree announced that
its former CEO, President and Chairman has filed a private
action accusing the Company and current Chairman F. Neal Hunter
of misleading investors and the SEC by issuing false press
releases and filing false financial statements. The market
reacted swiftly to this news, and the price of Cree common stock
fell from $22.21 per share on June 12, 2003 to $18.10 per share
on June 13, 2003, a drop of over 18%, on extremely heavy trading
volume.
For queries, contact Lauren Antonino or Jennifer Morris by Mail:
1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309, by
Phone: 1-888-873-3999 (toll-free), by E-mail: jlm@classlaw.com,
or visit the firm's Web site: http://www.classlaw.com.
DAISYTEK INTL: Lockridge Grindal Launches Lawsuit in E.D. Texas
---------------------------------------------------------------
Lockridge Grindal Nauen P.L.L.P. initiated a securities class
action in the United States District Court for the Eastern
District of Texas, Sherman Division, on behalf of purchasers of
Daisytek International Corporation (Nasdaq:DZTK) publicly traded
securities during the period between November 9, 2001 and April
28, 2003, inclusive.
The complaint charges Daisytek and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The complaint alleges violations of the federal securities
laws arising out of defendants' issuance of false and misleading
statements about the Company's business, operating performance
and prospects. Specifically, defendants were improperly
accounting for uncollectible customer accounts receivables and
vendor rebates receivables to inflate the Company's results.
Daisytek is a global distributor of computer and office supplies
and professional tape products. Due to Daisytek's favorable
reported results, defendants were able to secure financing
essential to the Company. The Company subsequently disclosed it
would record "significant" write-downs of customer and vendor
receivables and inventory and large restructuring charges. On
this news, the Company's stock dropped to $0.53. The Company
subsequently announced the resignation of its CEO and its CFO.
For more information, contact Karen Hanson Riebel, Esq. by Mail:
100 Washington Avenue South, Suite 2200, Minneapolis, MN 55401,
by Phone: (612) 339-6900, or by E-mail: khriebel@locklaw.com
GUIDANT CORPORATION: Schatz & Nobel Files Suit in S.D. Indiana
--------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a securities
class action in the United States District Court for the
Southern District of Indiana on behalf of all persons who
purchased Guidant securities (NYSE: GDT) between September 28,
1999 and June 12, 2003, inclusive.
The Complaint alleges defendants misled the investing public as
to the safety, reliability, marketability and financial impact
of Ancure, a device Guidant's subsidiary EndoVascular
Technologies (EVT) developed and marketed for the treatment of
abdominal aortic aneurysms.
The Complaint alleges Guidant misled the investing public as to
the potential civil and criminal liability the Company may incur
as a result of product liability lawsuits and government
prosecution relating to Ancure.
On June 12, 2003, EVT entered into a settlement agreement with
the U.S. Department of Justice relating to problems with Ancure.
Under the terms of the agreement, EVT agreed to pay $94.4
million and to plead guilty to 10 felony counts. Prior to the
disclosure of this adverse information, the individual
defendants and other Guidant insiders sold more than $26.4
million of their personally-held shares of Guidant stock to the
unsuspecting public.
For more details, contact attorneys Andrew M. Schatz or Wayne T.
Boulton by Phone: (800) 797-5499, or by E-mail: sn06106@aol.com,
or visit the firm's Web site: http://www.snlaw.net
INTERMUNE INC: Schiffrin & Barroway Files Lawsuit in N.D. CA
------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a securities
class action in the United States District Court for the
Northern District of California on behalf of all purchasers of
the common stock of InterMune Inc. (Nasdaq:ITMN) from October
24, 2002 through June 11, 2003, inclusive.
The complaint charges InterMune and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. The complaint alleges that defendants made false and
misleading statements about one of the Company's leading
products, Actimmune.
Specifically the complaint alleges that defendants were aware
that:
(a) InterMune's estimated number of patients on Actimmune,
disclosed throughout the Class Period as an accurate
and valid means by which to register the level of
strength of the demand for Actimmune, was "inherently"
unreliable, inconsistent, and lacking in any
accountable basis for presentation;
(b) there had been disruptions and problems with
InterMune's sales and marketing efforts, including
extraordinary turnover and lack of proper training;
(c) since at least the fourth quarter of fiscal 2002,
InterMune was materially understating the level of
inventory being held by its distributors, of which
millions of dollars worth was being held in excess, and
materially overstating its revenues;
(d) InterMune lacked adequate and sufficient internal
controls and systems; and
(e) based on the foregoing, InterMune had no reasonable
basis to issue its financial and operational
projections.
On June 11, 2003, the Company announced that it was cutting its
2003 revenue guidance figures and slashing projected earnings
from Actimmune. The Company also announced it had overstated the
number of patients using Actimmune and that, contrary to its
earlier representations, demand for Actimmune from physicians
was flat. On news of this, the Company's stock price fell 33% to
close at $16.74.
For more information, contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala
Cynwyd, PA 19004, by Phone: (toll free) 1-888-299-7706 or 1-610-
667-7706, or by E-mail: info@sbclasslaw.com.
POLYMEDICA CORP: Wolf Haldenstein Commences Fraud Lawsuit in MA
---------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the
District of Massachusetts, on behalf of all persons who
purchased or otherwise acquired the securities of PolyMedica
(Nasdaq: PLMD) between July 23, 2001 and June 30, 2003,
inclusive.
The Complaint alleges that throughout the Class Period,
defendants issued statements, press releases, and filed
quarterly and annual reports with the SEC describing the
Company's business operations and financial condition. These
representations were materially false and misleading because
they failed to disclose that throughout the Class Period, the
Company had materially misstated its operating earnings.
Specifically, during the relevant time period, it has been
reported that PolyMedica overstated earnings by capitalizing
direct response advertising costs related to the acquisition of
new customers rather than expensing them as incurred.
Consequently, PolyMedica recorded such advertising costs as
assets rather than as expenses. By accounting for these expenses
as assets, PolyMedica could spread the cost over a two to four
year period rather than accounting for the expense in the
quarter in which they were incurred. This allowed PolyMedica to
understate operating expenses, overstate assets, and create a
false impression of operating efficiencies with the overall
effect being that the Company misled investors concerning the
Company's growth and earnings. This contrivance violates
Generally Accepted Accounting Principles and the SEC has closely
scrutinized this practice.
On June 30, 2003, after the stock market closed, PolyMedica
issued a press release announcing that as a result of
discussions with the SEC regarding the expensing of the
Company's direct response advertising costs, PolyMedica may be
forced to restate results for the fiscal years 2002 and 2003.
The Company said the restatement would reduce its fiscal 2002
earnings to $1.76 from $2.38 per share, a reduction of 26%, its
fiscal 2003 to $2.61 from $3.21, a reduction of 19%, and fiscal
2004 first quarter earnings expectations to $.66- .72 from $.84-
.90. On this news, shares of PolyMedica, which had closed at
$45.86 on June 30, 2003, opened for trading on July 1, 2003, at
$38.56, down $7.30, or 15.9%. PolyMedica shares closed later
that day at $37.39 per share for a loss of $8.47 per share, or
18.5%.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Christopher S. Hinton, Esq., 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 (re: PolyMedica), or visit the firm's Web
site: http://www.whafh.com.
SINGING MACHINE: Schiffrin & Barroway Launches Suit in S.D. FL
--------------------------------------------------------------
The Law Firm of Schiffrin & Barroway, LLP initiated a securities
class action in the United States District Court for the
Southern District of Florida on behalf of all purchasers of the
common stock of The Singing Machine, Inc. (AMEX:SMD) from August
9, 2001 through June 27, 2003, inclusive.
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between August 9, 2001 and June
27, 2003, thereby artificially inflating the price of The
Singing Machine common stock.
The complaint alleges that these statements were materially
false and misleading because they failed to disclose and
misrepresented the following adverse facts, among others:
(1) that the Company had materially overstated its net
income in violation of Generally Accepted Accounting
Principles ("GAAP");
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company;
(3) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times;
(4) that the Company avoided taking sufficient changes to
earnings in 2001 and 2002 to account for income tax
liabilities; and
(5) that as a result, the Company's financial results were
materially overstated at all relevant times.
On June 27, 2003, the Company announced that it would restate
its fiscal 2002 financial statements and possibly fiscal 2001
financial statements to increase the accrual for income taxes.
Moreover, the Company stated that the restatement will have the
effect of reducing net income for fiscal 2002 and possibly
fiscal 2001. News of The Singing Machine's restatement shocked
the market. Shares of The Singing Machine fell 33%, or $1.80 per
share, to close at $3.60 per share on June 27, 2003.
For more information contact Marc A. Topaz, Esq. or Stuart L.
Berman, Esq. by Mail: Three Bala Plaza East, Suite 400, Bala
Cynwyd, PA 19004, by Phone: (toll free) 1-888-299-7706 or
1-610-667-7706, or by E-mail: info@sbclasslaw.com.
SINGING MACHINE: Cauley Geller Lodges Securities Suit in S.D. FL
----------------------------------------------------------------
Cauley Geller Bowman & Rudman, LLP initiated a securities class
action lawsuit in the United States District Court for the
Southern District of Florida on behalf of purchasers of The
Singing Machine, Inc. (Amex: SMD) common stock during the period
between August 9, 2001 and June 27, 2003, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between August 9, 2001 and June
27, 2003, thereby artificially inflating the price of The
Singing Machine common stock.
The complaint alleges that these statements were materially
false and misleading because they failed to disclose and
misrepresented the following adverse facts, among others:
(1) that the Company had materially overstated its net
income in violation of Generally Accepted Accounting
Principles (GAAP);
(2) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company;
(3) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times;
(4) that the Company avoided taking sufficient changes to
earnings in 2001 and 2002 to account for income tax
liabilities; and
(5) that as a result, the Company's financial results were
materially overstated at all relevant times.
On June 27, 2003, the Company announced that it would restate
its fiscal 2002 financial statements and possibly fiscal 2001
financial statements to increase the accrual for income taxes.
Moreover, the Company stated that the restatement will have the
effect of reducing net income for fiscal 2002 and possibly
fiscal 2001. News of The Singing Machine's restatement shocked
the market. Shares of The Singing Machine fell 33%, or $1.80
per share, to close at $3.60 per share on June 27, 2003.
For more details, contact Samuel H. Rudman or David A.
Rosenfeld, Jackie Addison, Heather Gann or Candace Randle by
Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1-888-551-9944 by Fax: 1-501-312-8505 by E-mail:
info@cauleygeller.com
SINGING MACHINE: Marc Henzel Launches Securities Suit in S.D. FL
----------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Florida on behalf of purchasers of the securities of
The Singing Machine, Inc. (AMEX: SMD) between August 9, 2001 and
June 27, 2003, inclusive, seeking to pursue remedies under the
Securities Exchange Act of 1934. The action, is pending against
the Company and:
(1) Salberg & Company, PA, (the Company's auditors),
(2) Edward Steele,
(3) John F. Klecha, and
(4) April Green
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between August 9, 2001 and June
27, 2003.
The complaint alleges that Singing Machine emerged from
bankruptcy in 1998, and issued a series of press releases
emphasizing "record" net income to foster the impression that
the Company had profitably emerged from bankruptcy and had
successfully completed its corporate turnaround. In response to
the Company's barrage of press release and public filings
reporting strong financial results, Singing Machine's stock
price soared to over $26 per share in March 2002.
On June 27, 2003, Singing Machine shocked the market by
announcing it would restate 2002 and possibly 2001 financial
results, and would not be able to timely file its Annual Report
on Form 10-K for the fiscal year ended March 31, 2003 in order
to properly account for income tax provisions for fiscal 2003,
and to report an inventory reserve for fiscal 2003. As a
results, defendants revealed that net income for fiscal 2003
will be significantly below prior expectations.
Singing Machine announced that the restatement will have the
effect of reducing net income for fiscal 2002 and possibly
fiscal 2001. On June 27, 2003, in late afternoon trading alone
Singing Machine stock lost over 30% of its value on enormous
trading volumes of over 460,000 shares traded -- in contrast to
average trading volumes of around 50,000 shares.
The Company alleges that the financial statements issued by the
Company made during the class period, all of which implicitly
and/or expressly were prepared in conformity with generally
accepted accounting principles (GAAP), were materially false and
misleading because the Company materially overstated its net
income in its publicly issued financial statements. As a result
of the Company's misrepresentations, Singing Machine investors
have sustained tremendous losses, and stand to lose much more as
the full extent and magnitude of the restatement is disclosed.
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 or by E-Mail:
mhenzel182@aol.com
TYCO INTERNATIONAL: Glancy & Binkow Commences Lawsuit in S.D. FL
----------------------------------------------------------------
Glancy & Binkow LLP initiated a securities class action in the
United States District Court for the Southern District of
Florida on behalf of all persons who purchased securities of
Tyco International, Ltd. (NYSE:TYC) between December 30, 2002
and March 12, 2003, inclusive.
The Complaint charges Tyco and certain of its officers and
directors with violations of federal securities laws. Among
other things, plaintiff claims that defendants' material
omissions and the dissemination of materially false and
misleading statements regarding the nature of Tyco's revenues
and earnings caused Tyco's stock price to become artificially
inflated, inflicting enormous damages on investors.
For more information contact Michael Goldberg, Esquire by Mail:
1801 Avenue of the Stars, Suite 311, Los Angeles, California
90067, by Phone: (310) 201-9150 or Toll Free at (888) 773-9224,
or by E-mail: info@glancylaw.com.
*********
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Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities. The Asbestos Defendant Profiles is backed by an
online database created to respond to custom searches. Go to
http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
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
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Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora
Fatima Antonio and Lyndsey Resnick, Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
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