/raid1/www/Hosts/bankrupt/CAR_Public/030827.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, August 27, 2003, Vol. 5, No. 169
Headlines
AMEREN CORPORATION: Moves to Dismiss Parts of ERISA Suit in IL
ARKANSAS: Seeks Dismissal Of Suit On Behalf Of Retarded Inmates
BECTON DICKINSON: Recalls ProbeTec Instruments For Injury Risk
BRANTLEY CAPITAL: Court Refuses To Consolidate Securities Suits
CALIPER TECHNOLOGIES: Agrees To Settle Consolidated Stock Suit
CAPSTONE TURBINE: Agrees To Settle Securities Lawsuit in S.D. NY
CAREMARK RX: Antitrust Lawsuits V. PBMs Consolidated in CA Court
CAREMARK RX: Asks Consolidation of Two ERISA Lawsuits in N.D. AL
CHARTER MUNICIPAL: Agrees To Settle Securities Suit in NY Court
CHOICEPOINT INC.: Faces Suits For Privacy Violations in FL, LA
CHORDIANT SOFTWARE: Agrees to Settle Securities Suit in S.D. NY
CORNELL COMPANIES: Asks TX Court To Dismiss Securities Lawsuit
CNL HOSPITALITY: Plaintiffs File Amended TN Suit Over RFS Merger
DALEEN TECHNOLOGIES: Agrees To Settle NY Securities Fraud Suit
DELTA FINANCIAL: Discovery Commences in NY Consumer Fraud Suit
DELTA FINANCIAL: NY Court Approves Securities Lawsuit Settlement
DELTA FINANCIAL: Court Approves Consumer Fraud Suit Settlement
EMERGING VISION: Plaintiffs Appeal CA Court's Dismissal of Suit
EN POINTE: CA Court Briefs Motion To Dismiss Securities Lawsuit
ENVOY CORPORATION: Agrees To Settle TN Securities Fraud Lawsuit
FRIEDE GOLDMAN: Ex-employees Launch Lawsuit For WARN Violations
HORIZON ORGANIC: Shareholders File Suit V. Dean Foods Co. Merger
i2 TECHNOLOGIES: TX Court Orders Securities Suits Consolidated
IMPATH INC.: Faces Several Securities Suits For Accounting Fraud
LIQUID AUDIO: Agrees To Settle Securities Fraud Suit in S.D. NY
MODEM MEDIA: Agrees To Settle Securities Fraud Suit in S.D. NY
NORTHWEST PIPE: Court To Hear Summary Judgment for Consumer Suit
NOVATEL WIRELESS: Dropped As Defendant in CSFB Securities Suit
NRG ENERGY: Arguments on Appeal of Antitrust Suit Dismissal Held
NRG ENERGY: Plaintiffs Appeal Dismissal of Energy Antitrust Suit
NVIDIA CORPORATION: CA Court Dismisses Securities Fraud Lawsuit
PACIFIC PREMIER: Working For Settlement of NY Securities Lawsuit
RADIO ONE: Reaches Agreement To Settle Securities Lawsuit in NY
SILICON IMAGE: Agrees To Settle Securities Fraud Suit in S.D. NY
SILICON IMAGE: Dropped as Defendants in FL CSFB Securities Suit
SMITH BARNEY: Most Claims In Sex Discrimination Suit Dismissed
SOLUTIA INC.: Faces Several Securities Fraud Lawsuits in N.D. CA
SOUTH MILL: GA Agriculture Dept Recalls Sliced Fresh Mushrooms
TERADYNE INC.: MA Court Heard Arguments For Stock Suit Dismissal
US NAVY: Chaplains Allege Bias V. Some Christian, Evangelicals
VALICERT INC.: Agrees To Settle NY Consolidated Securities Suit
VERISIGN INC.: CA Court Dismisses in Part Securities Fraud Suit
VIGNETTE CORPORATION: Reaches Agreement For NY Securities Suit
VITALWORKS INC.: Plaintiffs File Consolidated CT Securities Suit
WALT DISNEY: Asks CA Court To Dismiss Securities Fraud Lawsuit
WEBMD CORPORATION: Agrees To Settle Securities Suit in S.D. NY
WEST CORPORATION: Appeals Court Reverses Denial of Certification
ZONES INC.: Shareholders Launch Suit Over Purchase offer in WA
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
FIRSTENERGY CORPORATION: Federman & Sherwood Files OH Stock Suit
FLOWSERVE CORPORATION: Chitwood & Harley Lodges Stock Suit in TX
READ-RITE CORPORATION: Wechsler Harwood Files Stock Suit in CA
*********
AMEREN CORPORATION: Moves to Dismiss Parts of ERISA Suit in IL
--------------------------------------------------------------
Ameren Corporation moved to dismiss various counts in the class
action filed in the United States District Court for the
Southern District of Illinois, against it and:
(1) Union Electric Company, operating as AmerenUE, a
subsidiary,
(2) Central Illinois Public Service Company, operating as
AmerenCIPS, a subsidiary,
(3) Ameren Energy Resources Company, a subsidiary,
(4) Ameren Energy Generating Company, a subsidiary,
(5) Ameren Services Company, a subsidiary, and
(6) the Company's Retiree Medical Plan
Twenty retirees and surviving spouses of retirees of the Company
or its predecessors or subsidiaries filed the suit. The
retirees were members of various local labor unions of the
International Brotherhood of Electrical Workers (IBEW) and the
International Union of Operating Engineers (IUOE).
The complaint alleges:
(i) the labor organizations which represented the
plaintiffs have historically negotiated retiree medical
benefits with the defendants and that pursuant to the
negotiated collective bargaining agreements and other
negotiated documents, the plaintiffs are guaranteed
medical benefits at no cost or at a fixed maximum cost
during their retirement;
(ii) Ameren has unilaterally announced that, beginning in
2004, retirees must pay a portion of their own health
care premiums and either an increasing portion of their
dependents' premiums or newly imposed dependents'
premiums, and that surviving spouses will be paying
increased amounts for their medical benefits;
(iii) the defendants' actions deprive the plaintiffs of
vested benefits and thus violate the Employee
Retirement Income Security Act and the Labor Management
Relations Act of 1947, and constitute a breach of the
defendants' fiduciary duties; and
(iv) the defendants are estopped from changing the plan
benefits.
The plaintiffs have filed the complaint on behalf of themselves,
other similarly situated former non-management employees and
their surviving spouses who retired from January 1, 1992 through
October 1, 2002, and on behalf of all subsequent non-management
retirees and their surviving spouses whose vested medical
benefits are reduced or are threatened with reduction.
The plaintiffs seek to have this lawsuit certified as a class
action, seek injunctive relief and declaratory relief, seek
actual damages for any amounts they are made to pay as a result
of the defendants' actions, and seek payment of attorney fees
and costs. On August 11, 2003, the defendants filed motions to
dismiss various counts of the complaint.
ARKANSAS: Seeks Dismissal Of Suit On Behalf Of Retarded Inmates
---------------------------------------------------------------
The state of Arkansas is asking for dismissal of a lawsuit that
was filed on behalf of a mentally retarded woman who died at a
state facility on August 9.
Janet C. Baker of the Disability Rights Center at Little Rock,
filed the lawsuit on March 21, for which she sought class action
status, so that its claims would apply to all of some 1,200
people in the state's six human development centers, the
Associated Press Newswires reports. However, no decision had
been made on whether class-action status would be granted.
The suit claimed that the original plaintiff, known only as
"Jane Doe," wanted to leave the center, but was forced to stay
at the behest of her sister, her legal guardian. Jane Doe had
lived at the Conway Human Development Center for 36 years.
The suit further alleged that the state was violating the
constitutional rights of mentally retarded residents at the
human development centers. According to the lawsuit, the
residents are not allowed to have a voice in when they are
admitted or released. The lawsuit seeks an order requiring the
residents to be provided with legal representation or a hearing
in front of a judge.
Ms. Baker said that the Disability Rights Center is "still
working on its strategy," trying to decide how to proceed in the
wake of the death of the woman named as plaintiff in the
lawsuit. She said it might be possible to find another
plaintiff to represent the class.
Meanwhile, the state Department of Human Services, by its
attorney Breck G. Hopkins, moved for dismissal of the lawsuit,
contending that "The claims stated by the plaintiff . do not
survive her death."
BECTON DICKINSON: Recalls ProbeTec Instruments For Injury Risk
--------------------------------------------------------------
Becton Dickinson & Co. is recalling its ProbeTec ET Instruments,
which is an in-vitro diagnostic medical device used for the
detection of Chlamydia and gonorrhea in symptomatic patients
(patients who have symptoms of the disease) and in asymptomatic
patients (patients without symptoms of the disease).
A component of the in-vitro diagnostic device was incorrectly
installed causing false positive and false negative results in
both symptomatic and asymptomatic patients. Continued use of
the defective instrument could result in a moderate to high risk
of serious adverse health consequences, including death.
For more details, contact Charlotte Duke of Quality
Management/Regulatory Compliance, Becton Dickinson & Co. by
Mail: 7 Loveton Circle, Sparks, Maryland 21152 or by Phone: 410-
316-4258
BRANTLEY CAPITAL: Court Refuses To Consolidate Securities Suits
---------------------------------------------------------------
The United States District Court for the Northern District of
Ohio refused to consolidate a class action filed against
Brantley Capital Corporation, its directors (excluding Phillip
Goldstein), IVS Associates, Inc. and JMP Securities LLC, with an
earlier identical action filed by company director and
stockholder Philip Goldstein.
The class action alleges a series of derivative and direct
claims that the directors have breached their fiduciary duties
and that the Company engaged in wrongdoing with respect to the
Annual Meeting of Stockholders held on September 17, 2002. The
complaint seeks, among other things, an order declaring Mr.
Goldstein's nominees to be directors of the Company, an order
declaring that the investment advisory agreement be terminated
and damages for breach of fiduciary duty.
CALIPER TECHNOLOGIES: Agrees To Settle Consolidated Stock Suit
--------------------------------------------------------------
Caliper Technologies, Inc. agreed to settle the consolidated
securities class action filed in the United States District
Court for the Southern District of New York against it and three
of its officers and directors:
(1) David V. Milligan,
(2) Daniel L. Kisner and
(3) James L. Knighton
The suit alleges claims against the Company and the individual
defendants under Sections 11 and 15 of the Securities Act of
1933, and under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as well as Rule 10b-5 promulgated
thereunder.
The consolidated suit also names certain underwriters of the
Company's December 1999 initial public offering of common stock.
The complaint alleges that these underwriters charged excessive,
undisclosed commissions to investors and entered into improper
agreements with investors relating to aftermarket transactions.
The complaint seeks an unspecified amount of money damages.
Similar complaints were filed in the same court against hundreds
of other public companies that conducted IPOs of their common
stock since the late 1990s. On August 8, 2001, the IPO Lawsuits
were consolidated for pretrial purposes before United States
Judge Shira Scheindlin of the Southern District of New York.
Together, those cases are denominated In re Initial Public
Offering Securities Litigation, 21 MC 92(SAS).
The Company and the other issuers named as defendants in the IPO
Lawsuits moved on July 15, 2002 to dismiss all claims on
multiple grounds. By Stipulation and Order dated October 9,
2002, the claims against Mr. Milligan, Mr. Kisner and Mr.
Knighton were dismissed without prejudice.
On February 19, 2003, the court granted the Company's motion to
dismiss all claims against it. Plaintiffs were not given the
right to replead the claims against Caliper; the time to appeal
the dismissal has not yet expired.
In May 2003, a Memorandum of Understanding was executed by
counsel for plaintiffs, issuers and their insurers setting forth
the terms of a settlement that would result in the termination
of all claims brought by plaintiffs against the issuers and
individual defendants named in the IPO Lawsuits.
On July 7, 2003, a Special Litigation Committee of the Caliper
Board of Directors approved the settlement terms described in
that Memorandum of Understanding. Final documentation of the
settlement has not yet been prepared. The settlement will be
subject to numerous conditions, including approval by Judge
Scheindlin.
CAPSTONE TURBINE: Agrees To Settle Securities Lawsuit in S.D. NY
----------------------------------------------------------------
Capstone Turbine Corporation agreed to settle the securities
class action filed in the United States District Court for the
Southern District of New York against it, two of its officers,
and the underwriters of the Company's initial public offering,
on behalf of purchasers of the Company's common stock during the
period from June 28, 2000 to December 6, 2000.
Plaintiffs allege that the underwriter defendants agreed to
allocate stock in the Company's June 28, 2000 initial public
offering and November 16, 2000 secondary offering to certain
investors in exchange for excessive and undisclosed commissions
and agreements by those investors to make additional purchases
of stock in the aftermarket at pre-determined prices.
Plaintiffs allege that the prospectuses for these two public
offerings were false and misleading in violation of the
securities laws because they did not disclose these
arrangements.
A committee of the Company's Board of Directors conditionally
approved a proposed partial settlement with the plaintiffs in
this matter. The settlement would provide, among other things,
a release of the Company and of the individual defendants for
the conduct alleged in the action to be wrongful in the Amended
Complaint.
The Company would agree to undertake other responsibilities
under the partial settlement, including agreeing to assign away,
not assert, or release certain potential claims the Company may
have against its underwriters. The Company's insurers will
likely cover any direct financial impact of the proposed
settlement. The committee agreed to approve the settlement
subject to a number of conditions, including the participation
of a substantial number of other Issuer Defendants in the
proposed settlement, the consent of the Company's insurers to
the settlement, and the completion of acceptable final
settlement documentation. Furthermore, the settlement is
subject to a hearing on fairness and approval by the Court.
CAREMARK RX: Antitrust Lawsuits V. PBMs Consolidated in CA Court
----------------------------------------------------------------
Caremark Rx, Inc. and Caremark, Inc. faces two lawsuit filed in
Los Angeles County, California state court, alleging violations
of the California unfair competition law.
Attorney General Robert Irwin filed the first suit on behalf of
the general public of the State of California. Nine other
pharmacy benefit manager (PBM) companies are also named as
defendants in this lawsuit. Specifically, the lawsuit
challenges alleged business practices of PBMs, including
practices relating to pricing, rebates, formulary management,
data utilization and accounting and administrative processes.
The lawsuit seeks injunctive relief, restitution and
disgorgement of revenues.
On March 19, 2003, Caremark Rx and Caremark were served with a
purported representative action filed by American Federation of
State, County & Municipal Employees, a labor union comprised of
numerous autonomous local unions and affiliations. Several
other PBM companies are also named as defendants in this
lawsuit.
The lawsuit alleges violations of the California unfair
competition law. Specifically, the lawsuit challenges alleged
business practices of PBMs, including practices relating to
rebates, pricing, formulary management and mail order services.
The lawsuit seeks injunctive relief, restitution and
disgorgement of revenues.
The Company believes the lawsuits mischaracterize the business
practices of Caremark Rx and Caremark and has meritorious
defenses to the claims alleged. The Company intends to
vigorously defend this lawsuit. The two cases are being
coordinated.
CAREMARK RX: Asks Consolidation of Two ERISA Lawsuits in N.D. AL
----------------------------------------------------------------
Caremark Rx, Inc. asked for the consolidation of two lawsuits
filed against it for violations of the Employee Retirement
Income Security Act of 1974 (ERISA).
The two suits were originally filed in the United States
District Court, Central District of California, but were later
transferred to the United States District Court, Northern
District of Alabama. Both of these lawsuits have been amended
to name Caremark, Inc. as a defendant, and Caremark Rx, Inc. has
been dismissed from the second case filed.
These lawsuits, which are similar to pending litigation recently
filed against other pharmacy benefit manager (PBM) companies,
allege that the defendants each act as a fiduciary as that term
is defined in the ERISA, and that they breached certain
purported fiduciary duties under ERISA. The lawsuits seek
unspecified monetary damages and injunctive relief.
Management believes that they have meritorious defenses to these
lawsuits. The Companies, as applicable, have filed motions
seeking the consolidation and complete dismissal of both of
these actions on various grounds. These motions are currently
pending before the court.
CHARTER MUNICIPAL: Agrees To Settle Securities Suit in NY Court
---------------------------------------------------------------
Charter Municipal Mortgage Acceptance Company agreed to settle a
securities class action filed in the Supreme Court of the State
of New York, County of Nassau, against it (as a nominal
defendant, each member of its board of trustees and Related
Capital Company.
The plaintiff alleges that each of the members of the Company's
board of trustees and Related breached fiduciary duties and/or
aided and abetted breaches of fiduciary duties owed to the
Company and the Company's shareholders in approving the
Company's proposed acquisition of Related.
The amended complaint alleges, among other things, that the
purchase price for Related is excessive, the transaction has
been pursued and structured solely for the benefit of the
trustees that are affiliated with Related and the members of the
special committee are not independent because they are
supposedly "dominated or controlled" by the trustees that are
affiliated with Related.
Additionally, the amended complaint alleges that the defendants
also breached fiduciary duties owed to a putative class of all
of the Company's shareholders (excluding the defendants and
their affiliates) due to alleged dilution of the voting power
and economic interests of the Company's shareholders by the
proposed transaction.
The amended complaint further alleges that shareholder
ratification of the proposed transaction supposedly will not be
effective and the trustees allegedly will not "disclose the true
nature and purpose of the proposed transaction." The amended
complaint seeks declaratory and injunctive relief, including
enjoining the consummation of the proposed transaction, and
unspecified amounts of compensatory damages, costs,
disbursements and attorneys' fees.
Although the defendants in the action do not believe that the
plaintiff's allegations have merit, the defendants have engaged
in settlement negotiations with the plaintiff's counsel solely
in order to avoid unnecessary expenses, burdens, uncertainties
and distractions of continued litigation.
In April and May 2003, counsel for the parties met to discuss
the issues in the case and counsel for the defendants provided
counsel for the plaintiff with certain documents and other
information. In June 2003, counsel for the parties drafted a
memorandum of understanding setting forth the terms of a
settlement in principle.
In June 2003, the Company's board of trustees and the special
committee approved the memorandum of understanding and
authorized and directed the Company's counsel to enter into the
memorandum of understanding and a settlement agreement on terms
substantially in accordance with the memorandum of
understanding. Also in June 2003, plaintiff conducted limited
confirmatory discovery pursuant to the memorandum of
understanding.
In July 2003, the parties to the litigation entered into a
stipulation of compromise and settlement. The stipulation of
compromise and settlement requires defendants to make certain
changes to the proposed transaction and the related agreements.
On August 7, 2003, the Company entered a hearing order that, in
pertinent part:
(1) conditionally certifies the class for purposes of
settlement;
(2) schedules for October 24, 2003 a settlement hearing at
which the Company will consider whether to approve the
settlement embodied in the stipulation of compromise
and settlement;
(3) requires defendants to distribute with the proxy
statement, and to file with the Securities and Exchange
Commission as an exhibit to a Form 8-K, a notice to the
class members of the action, the settlement, and the
settlement hearing; and
(4) establishes procedures and deadlines for members of the
class to file objections to the settlement or to opt
out of the class.
The individual defendants and Related have informed the Company
that if the case is not settled, they intend to fight the
plaintiff's claims.
CHOICEPOINT INC.: Faces Suits For Privacy Violations in FL, LA
--------------------------------------------------------------
ChoicePoint, Inc. faces several class actions filed in Florida
and Louisiana federal courts alleging violations of the Driver's
Privacy Protection Act (DPPA).
The first suit was filed in the United States District Court for
the Middle District of Florida on May 30, 2003. A similar
complaint filed in the United States District Court for
the Southern District of Florida was amended to add three
ChoicePoint entities as defendants.
The complaints allege that the Company has obtained, disclosed
and used information obtained from the Florida Department of
Highway Safety and Motor Vehicles (Florida DHSMV) in violation
of the DPPA. The plaintiffs seek to represent classes of
individuals whose personal information from Florida DHSMV
records has been obtained, disclosed and used for marketing
purposes or other allegedly impermissible uses by ChoicePoint
without the expressed written consent of the individual. A
number of the Company's competitors have also been sued in the
same or similar litigation in Florida.
In addition, on July 10, 2003, a plaintiff filed a class action
against the Company in the United States District Court for the
Eastern District of Louisiana that alleges substantially similar
violations of the DPPA. This plaintiff seeks to represent a
national class of all individuals whose information the Company
has obtained from motor vehicle records and a subclass of all
individuals domiciled in Louisiana whose information the Company
has obtained from motor vehicle records in Louisiana.
Each of these complaints seeks certification as a class action,
compensatory damages, attorney's fees and costs, and injunctive
and other relief.
The Company denies the allegations.
CHORDIANT SOFTWARE: Agrees to Settle Securities Suit in S.D. NY
---------------------------------------------------------------
Chordiant Software, Inc. reached a settlement agreement for a
consolidated securities class action filed in the United States
District Court for the Southern District of New York against it,
certain of its officers and directors, as well as the
underwriters of its initial public offering (IPO).
The plaintiffs allege that the Company, certain of its officers
and directors and its IPO underwriters violated section 11 of
the Securities Act of 1933 based on allegations that Chordiant's
registration statement and prospectus failed to disclose
material facts regarding the compensation to be received by, and
the stock allocation practices of, the IPO underwriters. The
complaint also contains a claim for violation of section 10(b)
of the Securities Exchange Act of 1934 based on allegations that
this omission constituted a deceit on investors. The plaintiffs
seek unspecified monetary damages and other relief.
In October 2002, the parties agreed to toll the statute of
limitations with respect to Chordiant's officers and directors
until September 30, 2003, and on the basis of this agreement,
our officers and directors were dismissed from the lawsuit
without prejudice. In February 2003, the court issued a
decision denying the motion to dismiss the Section 11 claims
against the Company and almost all of the other company
defendants and denying the motion to dismiss the Section 10(b)
claims against Chordiant and many of the company defendants.
In June 2003, Issuers and Plaintiffs reached a tentative
settlement agreement that would, among other things, result in
the dismissal with prejudice of all claims against the Issuers
and their officers and directors in the IPO Lawsuits.
In addition, the tentative settlement guarantees that, in the
event that the Plaintiffs recover less than $1 billion in
settlement or judgment against the Underwriter defendants in the
IPO Lawsuits, the Plaintiffs will be entitled to recover the
difference between the actual recovery and $1 billion from the
insurers for the Issuers. Although the Company has approved
this settlement proposal in principle, it remains subject to a
number of procedural conditions, as well as formal approval by
the court.
CORNELL COMPANIES: Asks TX Court To Dismiss Securities Lawsuit
--------------------------------------------------------------
Cornell Companies, Inc. asked the United States District Court
for the Southern District of Texas, Houston Division to dismiss
the consolidated securities class actions filed against it,
Steven W. Logan, and John L. Hendrix.
The suit was filed on behalf of all purchasers of the Company's
common stock between March 6, 2001 and March 5, 2002. The
lawsuits involve disclosures made concerning two prior
transactions executed by the Company: the August 2001 sale
leaseback transaction and the 2000 synthetic lease transaction.
Flyline Partners, LP has been appointed as the lead plaintiff.
The consolidated complaint alleges that the defendants violated
Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5
promulgated under Section 10(b) of the Exchange Act, Section
20(a) of the Exchange Act and Section 11 of the Securities Act
of 1933. The consolidated complaint seeks, among other things,
restitution damages, compensatory damages, rescission or a
rescissory measure of damages, costs, expenses, attorneys' fees
and expert fees.
The Company believes that it has good defenses to each of the
plaintiffs' claims and intends to vigorously defend against each
of these claims.
CNL HOSPITALITY: Plaintiffs File Amended TN Suit Over RFS Merger
----------------------------------------------------------------
Plaintiffs filed an amended class action against CNL Hospitality
Properties, Inc., its subsidiary RFS Hotel Investors, Inc. and
RFS' directors in the Circuit Court of Shelby County, Tennessee,
30th Judicial District. The amended complaint alleges, among
other things, that:
(1) the merger consideration to be received by RFS'
shareholders is significantly less than the intrinsic
value of RFS;
(2) the RFS directors breached their fiduciary duties due
to shareholders on a variety of grounds including
failing to ascertain the true value of RFS, failing to
determine whether there were any other bidders for RFS,
and failing to avoid certain alleged conflicts of
interest shared by members of the RFS Board and its
financial advisor;
(3) the Company aided and abetted the RFS Board in
connection with their breach of fiduciary duties;
(4) the RFS Board violated portions of the Tennessee
Investor Protection Act, and
(5) the RFS proxy statement is false and misleading
Among other things, the amended complaint seeks certification of
the class action, an injunction enjoining RFS and the Company
from completing the merger, monetary damages in an unspecified
amount, the payment of attorney's fees, and rescissory damages.
On July 1, 2003 the Company filed an answer to the amended
complaint setting forth an affirmative defense and its general
denials of the allegations set forth therein. The plaintiff's
motion for a temporary restraining order for purposes of
enjoining the transaction, which was argued by the plaintiff on
July 8, 2003, was denied by the Circuit Court of Shelby County,
Tennessee, 30th Judicial District on said date.
Based upon the information currently available to the Company,
the Company believes the allegations contained in the amended
complaint are without merit.
DALEEN TECHNOLOGIES: Agrees To Settle NY Securities Fraud Suit
--------------------------------------------------------------
Daleen Technologies, Inc. agreed to settle the consolidated
securities class action filed on behalf of persons purchasing
the Company's common stock between September 20, 1999 and
December 6, 2000. The suit names as defendants the Company and:
(1) BancBoston Robertson Stephens Inc.,
(2) Hambrecht & Quist LLC,
(3) Salomon Smith Barney Inc.,
(4) James Daleen,
(5) David B. Corey and
(6) Richard A. Schell
The individual defendants, Mr. Corey, Mr. Schell and Mr. Daleen,
have entered into tolling agreements with the plaintiffs
resulting in their dismissal from the case without prejudice.
The remaining defendants include the Company and certain of the
underwriters in the Company's initial public offering (IPO).
More than 300 similar class action lawsuits filed in the
Southern District of New York against numerous companies and
their underwriters have been consolidated for pretrial purposes
before one judge under the caption "In re Initial Public
Offering Securities Litigation."
The complaint includes allegations of violations of:
(i) Section 11 of the Securities Act of 1933 by all named
defendants,
(ii) Section 15 of the Securities Act of 1933 by the
individual defendants and
(iii) Section 10(b) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder by the
underwriter defendants
Specifically, the plaintiffs allege in the complaint that, in
connection with the IPO, the defendants failed to disclose
"excessive commissions" purportedly solicited by and paid to the
underwriter defendants in exchange for allocating shares of the
Company's common stock in the IPO to the underwriter defendants'
preferred customers.
Plaintiffs further allege that the underwriter defendants had
agreements with preferred customers tying the allocation of
shares sold in the IPO to the preferred customers' agreements to
make additional aftermarket purchases at pre-determined prices.
Plaintiffs further allege that the underwriters used their
analysts to issue favorable reports about the Company to further
inflate the Company's share price following the IPO.
Plaintiffs claim that the defendants knew or should have known
of the underwriters' actions and that the failure to disclose
these alleged arrangements rendered the prospectus included in
the Company's registration statement on Form S-1 filed with the
SEC in September 1999 materially false and misleading.
Plaintiffs seek unspecified damages and other relief.
In June 2003, the Company approved the terms of a proposed
settlement involving the plaintiffs, the insurance companies and
numerous issuers, including the Company and the individual
defendants, that includes a waiver by the insurance companies of
any retention amounts under the policies. Court approval of the
settlement will be required.
Under the terms of the proposed settlement, there would be no
liability to be recorded by the Company other than legal fees
incurred in the initial defense of the action, which are
immaterial.
DELTA FINANCIAL: Discovery Commences in NY Consumer Fraud Suit
--------------------------------------------------------------
Discovery will now proceed in a class action filed against Delta
Financial Corporation in the Supreme Court of the State of New
York, Nassau County, alleging that the Company improperly
charged certain borrowers processing fees.
The complaint seeks certification of a class of plaintiffs, an
accounting and unspecified compensatory and punitive damages
(including attorneys' fees), based upon alleged:
(1) unjust enrichment,
(2) fraud and
(3) deceptive trade practices.
In September 1999, the Company filed a motion to dismiss the
complaint, which was opposed by plaintiffs, and was later denied
by court. In April 1999, the Company filed a motion to change
venue and plaintiffs opposed the motion. In July 1999, the
Court denied the motion to change venue. The Company appealed
and in March 2000, the Appellate Court granted the appeal to
change venue from New York County to Nassau County.
In August 1999, plaintiffs filed a motion for class
certification, which the Company opposed in July 2000. In or
about September 2000, the court granted plaintiffs' motion for
class certification, from which the Company appealed. The
Appellate Court denied the appeal in December 2001.
In June 2001, the Company filed a motion for summary judgment to
dismiss the complaint, which was denied by the court. The
Company appealed that decision, but the appellate court denied
the appeal in November 2002. The Company filed a motion to re-
argue in December 2002, but the court later denied this.
Discovery will now continue in the lower court.
DELTA FINANCIAL: NY Court Approves Securities Lawsuit Settlement
----------------------------------------------------------------
The United States District Court for the Eastern District of New
York granted approval to the settlement proposed by Delta
Financial Corporation relating to a class action charging the
Company with violations of the federal securities laws in
connection with its initial public offering in 1996 and its
reports subsequently filed with the Securities and Exchange
Commission.
The complaint alleges that the scope of the violations alleged
in the consumer suits and regulatory actions brought in or
around 1999 indicate a pervasive pattern of action and risk that
should have been more thoroughly disclosed to investors in the
Company's common stock.
In October 2000, the Company filed a motion to dismiss the
complaint in its entirety, which was opposed by plaintiffs in
November 2000, and denied by the court in September 2001. The
Company reached an agreement in principle with plaintiffs'
counsel and our insurer to settle the action on a class-wide
basis in or about August 2002 and executed a settlement
agreement in January 2003 (pursuant to which the Company denied
all wrongdoing).
The Court approved the settlement at a fairness hearing in April
2003, and the settlement will be administered in the coming
months.
DELTA FINANCIAL: Court Approves Consumer Fraud Suit Settlement
--------------------------------------------------------------
The Supreme Court of the State of New York, Nassau County
approved the settlement proposed by Delta Financial Corporation
to settle the class action charging the Company with improperly
charging and collecting from borrowers certain fees when they
paid off their mortgage loans with the Company.
The complaint seeks certification of a class of plaintiffs,
declaratory relief finding that the payoff statements used
include unauthorized charges and are deceptive and unfair,
injunctive relief and unspecified compensatory, statutory and
punitive damages (including legal fees), based upon alleged
violations of Real Property Law 274-a, unfair and deceptive
practices, money had and received and unjust enrichment, and
conversion.
In March 2001, the Company filed a motion for summary judgment,
which was opposed by plaintiffs in March 2001, and granted by
the court in June 2001. In August 2001, plaintiffs appealed the
decision. In September 2002, the Company executed a settlement
agreement with plaintiffs in which the Company denied all
wrongdoing, but agreed to resolve the litigation on a class-wide
basis. The settlement will be administered in the coming
months.
EMERGING VISION: Plaintiffs Appeal CA Court's Dismissal of Suit
---------------------------------------------------------------
Plaintiffs appealed the California Superior Court, Los Angeles
County's dismissal of a class action filed against Emerging
Vision, Inc. and VisionCare of California, Inc., wholly owned
subsidiary of the Company.
Consumer Cause, Inc., filed the suit, which seeks a preliminary
and permanent injunction enjoining the defendants from their
continued alleged violation of the California Business and
Professions Code and restitution based upon the defendants'
alleged illegal charging of dilation fees during the four year
period immediately preceding the date of the plaintiff's
commencement of such action.
In its complaint, the plaintiff alleged that VCC's employment of
licensed optometrists, as well as its operation (under the name
Sterling VisionCare) of optometric offices in locations which
are usually situated adjacent to the Company's retail optical
stores located in the State of California, violates certain
provisions of the California Code and was seeking to permanently
enjoin VCC from continuing to operate in such manner.
On motion of the Company, which included a claim that VCC is a
specialized Health Care Maintenance Organization that has been
specifically licensed, under the California Knox Keene Health
Care Service Plan Act of 1975, as amended, to provide the
identical services that the plaintiff was seeking to enjoin, the
court dismissed this action, with prejudice, and without
liability to the Company.
In April 2003, the plaintiff filed a Notice of Appeal of the
decision of the lower court dismissing this action. The Company
opposes this appeal.
EN POINTE: CA Court Briefs Motion To Dismiss Securities Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
California has yet to decide on En Pointe Technologies, Inc.'s
motion to dismiss the securities class action filed against it,
five of its directors, one current officer, and certain former
officers along with seven unrelated parties.
The suit alleges that the defendants made misrepresentations
regarding the Company and that the individual defendants
improperly benefited from the sales of shares of the Company's
common stock and seeks a recovery by the Company's stockholders
of the damages sustained as a result of such activities.
On February 19, 2002, the En Pointe defendants filed a Motion to
Dismiss on the grounds that the allegations failed to state any
actionable claims against the En Pointe defendants. The motion
to dismiss was granted with leave to amend. Plaintiffs then
filed their amended complaint.
In January 2003, the En Pointe defendants filed another Motion
to Dismiss. The motion has been fully briefed and is currently
under submission with the court. The En Pointe defendants
vigorously deny the allegations.
ENVOY CORPORATION: Agrees To Settle TN Securities Fraud Lawsuit
---------------------------------------------------------------
Envoy Corporation agreed to settle the consolidated securities
class actions filed in the United States District Court for the
Middle District of Tennessee, Nashville Division against the
Company and some of its officers.
Plaintiffs alleged that the defendants made material
misrepresentations and omissions in the Company's public filings
and public statements concerning its financial statements and
its accounting for some charges taken in connection with
acquisitions. In addition, plaintiffs alleged that, as a result
of defendants' alleged actions, the Company's reported earnings
during the class period were overstated and the price for the
Company's common stock was artificially inflated.
In April 2002, the court certified a class of plaintiffs
consisting of all persons, other than defendants, who purchased
shares of Envoy common stock between February 27, 1997 and
August 18, 1998.
On July 11, 2003, Envoy entered into a Memorandum of
Understanding regarding the settlement in principle of this
litigation. The Memorandum of Understanding and the settlement
are subject to the execution of additional settlement documents
(including a definitive stipulation of settlement), preliminary
and final approval of the District Court, and other customary
conditions.
The Memorandum of Understanding provides that defendants will
pay to plaintiffs the sum of $11 million in settlement of the
claims asserted in the action and that plaintiffs will release
defendants and the action will be dismissed with prejudice.
Defendants have denied and continue to deny the allegations
asserted in this lawsuit and have agreed to the Memorandum of
Understanding and the settlement contemplated therein to
eliminate the burden and expense of further litigation.
It is anticipated that the stipulation of settlement and other
settlement documents will be presented to the District
Court for preliminary approval on or before September 2, 2003
and that, following preliminary Court approval, the settlement
will be presented to the Court for final approval and dismissal
of the action with prejudice within 45 to 90 days thereafter.
FRIEDE GOLDMAN: Ex-employees Launch Lawsuit For WARN Violations
---------------------------------------------------------------
Friede Goldman Halter, Inc. and Friede Goldman Offshore, Inc.
faces a class action filed in the United States Bankruptcy
Court, alleging wrongful termination in violation of the Workers
Adjustment and Retraining Notification Act (WARN Act).
The suit seeks wages for each member of the proposed class in an
amount equal to the employee's wage rate times the workdays
within the 60-day notification period required by the WARN Act,
coverage for medical expenses incurred by each member of the
proposed class that would have been covered under a benefit plan
during the 60-day notification period required by the WARN Act,
prejudgment interest, attorney fees and costs.
Based on the latest information available, the Company estimates
its maximum exposure to be approximately $4.0 million. The
Company believes that it has sufficient defenses to mitigate
and/or eliminate this claim and has recorded no liability. The
eventual outcome of this matter or the potential monetary
liability cannot be determined at this time.
HORIZON ORGANIC: Shareholders File Suit V. Dean Foods Co. Merger
----------------------------------------------------------------
Horizon Organic Holdings Corporation faces several class actions
relative to the Agreement and Plan of Merger, dated June 29,
2003, between the Company and Dean Foods Company.
Four actions were filed in the Court of Chancery in New Castle
County, Delaware. One action was filed in the District Court of
Boulder County, Colorado. The Company and the members of the
board of directors are defendants in all of the actions. Dean
Foods Company is a defendant in three of the Delaware actions,
but is not a defendant in the other actions.
The complaints generally allege that the $24.00 per share cash
merger consideration is unfair and inadequate and results from
breaches of fiduciary duty and self-dealing by the Company, its
directors and Dean Foods Company. The actions generally seek
to enjoin the merger and, if the merger is consummated, to
rescind the merger or receive damages.
i2 TECHNOLOGIES: TX Court Orders Securities Suits Consolidated
--------------------------------------------------------------
The United States District Court for the Northern District of
Texas (Dallas Division) consolidated two securities class
actions filed against i2 Technologies, Inc. and certain of its
officers and directors.
The first consolidated amended complaint alleges that the
Company and certain of its officers violated the federal
securities laws, specifically Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, by making purportedly false and
misleading statements concerning the characteristics and
implementation of certain of the Company's software products.
The complaint seeks unspecified damages on behalf of a purported
class of purchasers of our common stock during the period from
May 4, 2000 and February 26, 2001.
Beginning in April 2003, a number of purported class actions
were filed in the same court against the same defendants. The
complaints bring claims under the federal securities laws,
specifically Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, relating to the Company's announcement that it
would re-audit certain of our consolidated financial statements
and that there would be material adjustments to our financial
statements.
Specifically, these actions allege that the Company issued a
series of false or misleading statements to the market during
the class period that failed to disclose that:
(1) the Company had materially overstated its revenue by
improperly recognizing revenue on certain customer
contracts;
(2) the Company lacked adequate internal controls and was
therefore unable to ascertain the Company's true
financial condition; and
(3) as a result of the foregoing, the Company's financial
statements issued during the class period were
materially false and misleading.
Plaintiffs contend that such statements caused the Company's
stock price to be artificially inflated. The complaints seek
unspecified damages on behalf of a purported class of purchasers
of the Company's common stock during the period from April 18,
2000 to January 24, 2003.
In July 2003, the Court issued an order that consolidated, for
purposes of pre-trial matters only, the class actions above.
The Company continues to vigorously defend against this lawsuit.
Based on the stage of the litigation, it is not possible to
estimate the amount or range of possible loss to the Company
that might result from an adverse judgment or a settlement of
this matter, the Company said in a disclosure to the Securities
and Exchange Commission.
IMPATH INC.: Faces Several Securities Suits For Accounting Fraud
----------------------------------------------------------------
Impath Inc., a cancer-testing services provider, said that it is
the subject of 13 shareholder lawsuits seeking class action
status in connection with the accounting problems alleged in
their suits, The Wall Street Journal reports. The company also
disclosed a Securities and Exchange Commission (SEC) into
possible accounting irregularities and said it is considering
filing for Chapter 11 bankruptcy-court protection.
The New York Company said it will cooperate with the SEC
investigation. Impath had said last month that it was
conducting an investigation into a possible overstatement of
accounts receivable. Impath also said at the same time that its
audit committee had begun hiring independent counsel and an
independent forensic accountant to investigate. That plan,
however, has been deferred because its cash is limited.
Impath has declined to give details relating to the possible
problems with the accounts receivable. However, analysts have
said they believe the issue involves the inability to collect on
tests that were not covered by insurance. Impath is in default
under its credit agreement.
The company said its stock will be delisted from the Nasdaq
Stock Market this week.
LIQUID AUDIO: Agrees To Settle Securities Fraud Suit in S.D. NY
---------------------------------------------------------------
Liquid Audio, Inc. agreed to settle the consolidated securities
class action pending in the United States District Court for the
Southern District of New York against it, certain of its
officers and directors, and various of the underwriters in the
Company's initial public offering (IPO) and secondary offering.
The consolidated amended complaint generally alleges that
various investment bank underwriters engaged in improper and
undisclosed activities related to the allocation of shares in
the Company's IPO and secondary offering of securities. The
plaintiffs brought claims for violation of several provisions of
the federal securities laws against those underwriters, and also
against the Company and certain of its directors and officers,
seeking unspecified damages on behalf of a purported class of
purchasers of the Company's common stock between July 8, 1999
and December 6, 2000.
Various plaintiffs filed similar actions asserting virtually
identical allegations against more than 40 investment banks and
250 other companies. All of these "IPO allocation" securities
class actions currently pending in the Southern District of New
York have been assigned to Judge Shira A. Scheindlin for
coordinated pretrial proceedings as In re Liquid Audio, Inc.
Initial Public Offering Securities Litigation, 21 MC 92.
Defendants have filed motions to dismiss the actions. In
October 2002, the directors and officers were dismissed without
prejudice. A proposal has been made for the settlement and
release of claims against the issuer defendants, including the
Company, in exchange for a contingent payment to be made by the
issuer defendants' insurance carriers and an assignment of
certain claims.
On July 16, 2003, the Company's Board of Directors approved
participation in the settlement. The settlement is subject to a
number of conditions, including approval of the proposed
settling parties and the court.
MODEM MEDIA: Agrees To Settle Securities Fraud Suit in S.D. NY
--------------------------------------------------------------
Modem Media, Inc. agreed to settle the consolidated securities
class action filed in the United States District Court for the
Southern District of New York naming as defendants the Company,
and:
(1) G.M. O'Connell, Chairman,
(2) Steven Roberts, former Chief Financial Officer,
(3) Robert C. Allen II, Board member, a Managing Director
and former President,
(4) FleetBoston Robertson Stephens, Inc.,
(5) BankBoston Robertson Stephens, Inc.,
(6) Bear Stearns & Co., Inc.,
(7) Nationsbanc Montgomery Securities and
(8) Banc of America Securities LLC
The amended complaint alleges, among other things, that the
underwriters of the Company's initial public offering violated
the securities laws by failing to disclose certain alleged
compensation arrangements (such as undisclosed commissions or
stock stabilization practices) in the offering's registration
statement and by engaging in manipulative practices to
artificially inflate the price of Modem Media stock in the
after-market subsequent to the IPO.
The Modem Media defendants are named in the amended complaint
pursuant to Section 11 of the Securities Act of 1933, and
Section 10(b) and Rule 10b-5 of the Securities Exchange Act of
1934 on the basis of an alleged failure to disclose the
underwriters' alleged compensation arrangements and manipulative
practices. The complaint seeks unspecified damages.
Similar complaints have been filed against over 300 other
issuers that have had initial public offerings since 1998 and
all such actions have been included in a single coordinated
proceeding.
On June 30, 2003, a committee of the Company's Board of
Directors conditionally approved a proposed partial settlement
with the plaintiffs in this matter. The settlement would
provide, among other things, a release of Modem Media, Inc. and
of the individual defendants for the conduct alleged in the
action to be wrongful in the amended complaint.
The Company would agree to undertake other responsibilities
under the partial settlement, including agreeing to assign away,
not assert, or release certain potential claims it may have
against its underwriters. Any direct financial impact related
to the proposed settlement will likely be covered by the
Company's insurers.
The committee agreed to approve the settlement subject to a
number of conditions, including the participation of a
substantial number of other issuer defendants in the proposed
settlement, the consent of the Company's insurers to the
settlement, and the completion of acceptable final settlement
documentation. Furthermore, the settlement is subject to a
hearing on fairness and approval by the court overseeing the IPO
Litigation. The settlement is partial because the Underwriters
are not party to the settlement.
NORTHWEST PIPE: Court To Hear Summary Judgment for Consumer Suit
----------------------------------------------------------------
The United States District Court for the Northern District of
California will hear summary judgment motions for the class
action filed against Northwest Pipe Co., and two companies it
acquired I 1998 on September 8,2003.
The Foothill/DeAnza Community College filed the suit on behalf
of plaintiffs who purchased small diameter, thin walled fire
sprinkler pipe sold as the "Poz Lok" system that plaintiffs
allege was defectively designed and manufactured and sold by the
defendants during the 1990s. DeAnza alleges that the pipe
leaked necessitating replacement of the fire sprinkler system
and that the leaks caused damage to other property as well as
loss of use.
The Company answered the complaint, denied liability, and
specifically denied that class certification was appropriate.
On July 1, 2002, the court certified a class of facility owners
in six states (California, Washington, Arizona, Oregon, Idaho
and Nevada) on claims of breach of express warranty, fraud, and
unfair trade practices. Depositions of expert witnesses and
some document and other discovery have taken place.
The Ninth Circuit Court of Appeals, on August 19, 2002, denied
the Company's Petition for Review of the class certification
decision. The amount of damages claimed has not been specified.
While the Company does not have any way to accurately estimate
the damages, if any, at the present time, plaintiffs have
alleged that there are approximately 1,500 affected facilities
in the six states, and they seek replacement costs for all
facilities. A trial date has been scheduled for March 22, 2004.
The Company's summary judgment motions are presently pending
hearing on September 8, 2003. The Company is continuing to
defend itself and pursuing insurance coverage for those claims.
NOVATEL WIRELESS: Dropped As Defendant in CSFB Securities Suit
--------------------------------------------------------------
Novatel Wireless, Inc. was dismissed as a defendant in the
securities class action filed in the United States District
Court for the Southern District of Florida against Credit Suisse
First Boston (CSFB)and approximately 50 companies for whose
respective initial public offerings CSFB purportedly served as
the lead underwriter. The suit purported to be on behalf of all
the purchasers of the common stock of the named issuing
companies and alleges violations of federal and state securities
law.
On June 19, 2003, the Company, along with certain other
companies, were dismissed without prejudice from this suit
voluntarily by the plaintiff without explanation.
NRG ENERGY: Arguments on Appeal of Antitrust Suit Dismissal Held
----------------------------------------------------------------
Arguments for and against the appeal of the dismissal of the
California attorney general lawsuit against NRG Energy, Inc. is
set for August 2003 in the United States District Court for the
District of California.
California Attorney General William Lockyer filed the suit,
alleging that the defendants violated California Business &
Professions Code 17200 by selling ancillary services to the
California ISO, and subsequently selling the same capacity into
the spot market. The Attorney General seeks injunctive relief
as well as restitution, disgorgement and civil penalties.
On April 17, 2002, the defendants removed the case to the United
States District Court in San Francisco. Thereafter, the case
was transferred to Judge Vaughn Walker, who is also presiding
over various other "ancillary services" cases brought by the
California Attorney General against other participants in the
California market, as well as other lawsuits brought by the
Attorney General against these other market participants. The
Company has tolling agreements in place with the Attorney
General with respect to such other proposed claims against it.
The Attorney General filed motions to remand, which the
defendants opposed in July 2002. In an Order filed in early
September 2002, Judge Walker denied the remand motions. The
Attorney General has appealed that decision to the United States
Court of Appeal for the Ninth Circuit, and the appeal remains
pending. The Attorney General also sought a stay of proceedings
in the district court pending the appeal, and this request was
also denied.
A "Notice of Bankruptcy Filing" respecting NRG Energy was filed
in the Ninth Circuit and in the District Court in mid-December
2002. The Attorney General filed a paper asserting that the
"police power" exception to the automatic stay is applicable
here. Judge Walker agreed with the Attorney General on this
issue.
In a lengthy opinion filed March 25, 2003, Judge Walker
dismissed the Attorney General's action against NRG Energy and
Dynegy with prejudice, finding it was barred by the filed rate
doctrine and preempted by federal law. The Attorney General has
filed a Notice of Appeal, and a brief was filed on behalf of
respondents (including NRG Energy) on June 6, 2003.
The Company also filed a "Notice of Bankruptcy Filing" in the
Ninth Circuit shortly after its Chapter 11 filing, and the Ninth
Circuit issued a stay as to NRG Energy. NRG Energy is unable at
this time to accurately estimate the damages sought by the
Attorney General against NRG Energy and its affiliates, or
predict the outcome of the case.
NRG ENERGY: Plaintiffs Appeal Dismissal of Energy Antitrust Suit
----------------------------------------------------------------
The Public Utility District of Snohomish County appealed the
United States District Court, Southern District of California's
dismissal of the class action it filed against NRG Energy, Inc.
and other California energy market participants.
The complaint alleges violations of the California Business &
Professions Code (the Cartwright Act) and Business & Professions
Code 17200. The basic claims are price fixing and restriction
of supply, and other market "gaming" activities.
All defendants filed motions to dismiss and to strike in the
fall of 2002. In an Order dated January 6, 2003, the Honorable
Robert Whaley, a federal judge from Spokane sitting in the
United States District Court in San Diego, pursuant to the Order
of the MDL Panel, granted the motions to dismiss on the grounds
of federal preemption and filed-rate doctrine.
NVIDIA CORPORATION: CA Court Dismisses Securities Fraud Lawsuit
---------------------------------------------------------------
NVIDIA Corporation recently announced the United States District
Court for the Northern District of California has approved the
dismissal of the consolidated securities class action against
the Company, according to a report by Asia Pulse.
This lawsuit arose out of NVIDIA's announcement on February 14,
2002, that it was conducting an internal investigation of
certain accounting matters and its subsequent net positive
restatement of financial statements for the periods February 15,
2000, through February 14, 2002.
The court's recent dismissal of the consolidated securities
class action against NVIDIA follows its ruling on June 12, 2003,
dismissing with prejudice all of the claims arising from
NVIDIA'S restatement of its financial results. Plaintiffs
requested the dismissal of their remaining claims, and the court
ordered the dismissal with prejudice as to the lead plaintiffs.
NVIDIA Corporation is a market leader in visual computing
technology dedicated to creating products that enhance the
interactive experience on consumer and professional computing
platforms. Its graphics and communications processors have
broad market reach. NVIDIA has its headquarters in Santa Clara,
California, and employs more than 1,600 people worldwide.
PACIFIC PREMIER: Working For Settlement of NY Securities Lawsuit
----------------------------------------------------------------
Pacific Premier Bancorp, Inc. is pursuing a settlement for the
securities class action filed against it, certain former
officers and current and former directors in the United States
District Court located in the Southern District of New York.
Following a motion to dismiss, the court dismissed plaintiffs'
claim for violation Section 10b of the Exchange Act.
Plaintiffs' sole remaining cause of action is based on an
alleged violation of Section 11 of the Securities Act.
The parties, with the court's approval, recently agreed to stay
the litigation for 60 days to pursue settlement negotiations.
The parties have completed very limited discovery. The court
has not certified the class nor has it set a trial date.
RADIO ONE: Reaches Agreement To Settle Securities Lawsuit in NY
---------------------------------------------------------------
Radio One, Inc. agreed to settle the consolidated securities
class action filed in the United States District Court for the
Southern District of New York against it and certain of its
officers and directors.
The plaintiffs allege that the Company, certain of its officers
and directors, and the underwriters of certain of its public
offerings violated Section 11 of the Securities Act of 1933 by
failing to disclose in its registration statements material
facts regarding the compensation to be received by, and the
stock allocation practices of, the underwriters.
The complaint also contains a claim for violation of section
10(b) of the Securities Exchange Act of 1934 based on
allegations that this omission constituted a deceit on
investors. The plaintiffs seek unspecified monetary damages and
other relief.
Similar complaints were filed in the same court against hundreds
of other public companies that conducted initial public
offerings of their common stock in the late 1990s. Those cases
are now consolidated.
In October 2002, the parties agreed to toll the statute of
limitations with respect to the Company's officers and directors
until September 30, 2003, and on the basis of this agreement,
the officers and directors were dismissed from the lawsuit
without prejudice. In February 2003, the court issued a
decision denying the motion to dismiss the Section 11 claims
against Radio One and almost all of the issuers, and denying the
motion to dismiss the Section 10(b) claims against Radio One and
many of the issuers.
In July 2003, a Special Litigation Committee of Radio One's
Board of Directors agreed to participate in a settlement with
the plaintiffs that is anticipated to include most of the
approximately 300 issuer defendants in similar actions. Once
finalized, the settlement agreement will be subject to court
approval and sufficient participation by issuer defendants in
similar actions.
The proposed settlement includes, without limitation, a
guarantee of payments to the plaintiffs in the lawsuits,
assignment of certain claims against the underwriters to the
plaintiffs, and a dismissal of all claims against Radio One and
related individuals. Other than legal fees incurred to date,
Radio One expects that all expenses of settlement, if any, will
be paid by its insurance carriers.
SILICON IMAGE: Agrees To Settle Securities Fraud Suit in S.D. NY
----------------------------------------------------------------
Silicon Image, Inc. proposed a settlement for the securities
class action filed against it, certain of its officers and
directors, and its underwriters in the United States District
Court for the Southern District of New York.
The lawsuit alleges that all defendants were part of a scheme to
manipulate the price of Company stock in the aftermarket
following the Company's initial public offering in October 1999.
Response to the complaint and discovery in this action on behalf
of the Company and individual defendants has been stayed by
order of the court.
The lawsuit is proceeding as part of a coordinated action of
over 300 such cases brought by plaintiffs in the Southern
District of New York. Pursuant to a tolling agreement,
individual defendants have been dropped from the suit for the
time being. In February 2003, the court denied the
underwriters' motion to dismiss and ordered that the case may
proceed against issuers including against the Company.
A proposed settlement has been negotiated that has yet to be
reviewed and approved by the court.
SILICON IMAGE: Dropped as Defendants in FL CSFB Securities Suit
---------------------------------------------------------------
Silicon Image, Inc. and certain of its officers have been
dropped as defendants in the securities class action filed
against them, and its underwriters, notably Credit Suisse First
Boston Corporation, in the United States District Court for the
Southern District of Florida.
The suit was filed on behalf of a putative class of shareholders
who purchased stock from some or all of approximately 50 issuers
whose public offerings were underwritten by Credit Suisse First
Boston. The lawsuit alleged that the Company and certain
officers were part of a scheme by Credit Suisse First Boston to
artificially inflate the price of Company stock through the
dissemination of allegedly false analysts' reports.
The parties have reached a suit settlement. The Company admits
no wrongdoing and states the suit's claims are without merit.
SMITH BARNEY: Most Claims In Sex Discrimination Suit Dismissed
--------------------------------------------------------------
An alternative dispute resolution panel has dismissed all but
one of the claims of former Smith Barney sales trader Deborah
McCrann, who argued the big Wall Street firm, the securities
unit of Citigroup, Inc., failed to promote and compensate her
fairly because of her gender, the Wall Street Journal reports.
In early 1999, Ms. McCrann, thinking she twice had been passed
over for promotion and was not compensated as well as her male
counterparts, left Smith Barney and filed a discrimination
claim. By doing so, she became one of the highest-ranking women
at Smith Barney to join the so-called Boom-Boom Room
discrimination case.
That particular lawsuit rocked Wall Street with its allegations
of sexual harassment of women in a basement area in a basement
area which the brokers called a "boom-boom room" at a Smith-
Barney brokerage branch in Garden City, New York. Ms. McCrann
worked in Smith Barney's head office in New York.
Ms. McCrann's case went to a three-person alternative dispute
resolution panel, which rule that the "overwhelming weight of
the evidence indicates that the compensation system, despite
including a number of highly subjective factors, actually
operated very much in Ms. McCrann's favor" against almost every
trader on the desk. Ms. McCrann was the second-highest paid
sales trader at Smith Barney from 1994 to 1998, with her
compensation climbing as high as $910,000 in 1997, wrote the
panel in its 25-page decision.
While the panel also dismissed Ms. McCrann's claim that she was
passed over for a promotion in 1993 because of gender, it found
fault with part of the firm's rationale when it came time to
decide whom to promote to head of the "over-the-counter" sales
desk in 1997. That year, a pregnant Ms. McCrann was a contender
to run the desk, but lost out to Gregory Voetsch, the trader
whose compensation often topped hers.
During the panel's hearing, a former supervisor of Ms. McCrann
seemed to surprise lawyers on both sides by testifying he had
been concerned that Ms. McCrann's pregnancy would affect her
ability to do the job.
"I knew she was going to have to take time," said Robert
DiFazio, who in 1997, ran Smith Barney's equities division. "It
didn't bother me at all that she was pregnant. But whether or
not she was going to be able to spend the time to actually
perform the job and to be a mom and do all that; yeah, we
factored it in, sure. We were concerned."
The panel found "it hard to imagine sentiments more universally
regarded as symbolic of illegal gender bias." The panel ruled
the remarks constituted evidence of gender discrimination.
However, the panel nonetheless decided that, regardless of these
sentiments, the firm, for legitimate reasons, would have
promoted Mr. Voetsch over Ms. McCrann.
As a result, the panel ordered Smith Barney to pay Ms. McCrann's
legal fees related specifically to her claim that she was passed
over for promotion in 1997, but did not award her punitive
damages.
Wayne Outten, a lawyer representing Ms. McCrann, said that while
he was pleased the panel had concluded there was evidence of
gender discrimination in relation to Ms. McCrann's 1997
promotion attempt, he was disappointed the panel believed the
result would have been the same regardless of her pregnancy. In
terms of an appeal, said Mr. Outten, Ms. McCrann is still
weighing her options.
Ms. McCrann's case has been widely watched, not only because of
her relatively senior position at the firm, but because it could
set the tone for the dozens of other cases against the firm
scheduled to be heard this year. Citigroup has paid out almost
$100 million to settle with all but about 70 of 1,920 women who
participated in the class action stemming from the Boom-Boom
Room case, according to a person familiar with the matter. Only
two cases have gone to arbitration.
However, the discrimination claims - in themselves - along with
other ones at other firms, have led to changes in the way Wall
Street supervisors, pay and promote female brokers and other
employees. In 1997, for example, Smith Barney agreed to spend
$15 million on programs aimed partly at improving its record in
hiring and promoting women.
SOLUTIA INC.: Faces Several Securities Fraud Lawsuits in N.D. CA
----------------------------------------------------------------
Solutia, Inc., its chief executive officer, and its chief
financial officer face several securities class actions filed in
the United States District Court for the Northern District of
California.
The complaint alleges that from December 16, 1998, to October
10, 2002, Solutia's accounting practices regarding incorporation
of Flexsys's results into Solutia's financial reports violated
federal securities laws by misleading investors as to Solutia's
actual results and causing inflated prices for Solutia's
publicly traded securities.
SOUTH MILL: GA Agriculture Dept Recalls Sliced Fresh Mushrooms
---------------------------------------------------------------
Georgia's Commissioner of Agriculture Tommy Irvin announced
today that Department of Agriculture food scientists have found
two samples of a brand of sliced fresh mushrooms to be
contaminated with Listeria monocytogenes, a species of
potentially dangerous bacteria.
The mushrooms are South Mill Gourmet Slices and are sold in the
produce section of grocery stores in 8-ounce containers labeled
"Ready to Eat." The codes on the packages found to be
contaminated are 213 SLI.A1005 AP and 212 SLIC A1404 BS. The
mushrooms are packaged by South Mill Mushrooms, 649 West South
Street, Kennett Square, Pennsylvania.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially serious disease.
The most common manifestation of listeriosis is meningitis,
which has symptoms of high fever, severe headache, neck
stiffness and nausea. Listeriosis can also cause miscarriages
and stillbirths, as well as serious and sometimes fatal
infections to infants, the elderly and those with weakened
immune systems such as persons with chronic disease, AIDS or HIV
infection or taking chemotherapy for cancer.
"Our inspectors will be checking stores to make sure the
affected mushrooms are removed from shelves," said Commissioner
Irvin. "The Department's Food Lab tests samples pulled
routinely by our inspectors from stores all over Georgia. At
this point, we do not know how many of the mushrooms may be in
Georgia stores. Anyone with concerns over the mushrooms may
return them to the place of purchase for a refund."
TERADYNE INC.: MA Court Heard Arguments For Stock Suit Dismissal
----------------------------------------------------------------
The United States District Court in Boston, Massachusetts heard
arguments for and against the dismissal of a consolidated
securities class action filed against Teradyne, Inc. and two of
its executive officers.
The complaint alleges, among other things, that the defendants
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934, by making, during the period from July 14, 2000 until
October 17, 2000, material misrepresentations and omissions to
the investing public regarding the Company's business operations
and future prospects. The complaint seeks unspecified damages,
including compensatory damages and recovery of reasonable
attorneys' fees and costs.
The Company filed a motion to dismiss all claims asserted in the
complaint on February 7, 2003. On April 9, 2003, the lead
plaintiffs filed a memorandum in opposition to the Company's
motion to dismiss. On May 28, 2003, the Company filed a reply
memorandum in support of its motion to dismiss all claims
asserted in the complaint.
The Company believes it has meritorious defenses to the claims.
US NAVY: Chaplains Allege Bias V. Some Christian, Evangelicals
--------------------------------------------------------------
A group of current and former navy chaplains have sued the U.S.
Navy to challenge its system of hiring, retaining and promoting
chaplains, The News & Observer reports.
Navy Chaplain David Wilder, one of the plaintiffs, tells of
offering grape juice at communion services in keeping with his
Southern Baptist beliefs, when he worked at a Marine base in
Japan, and being ordered to switch to wine. Now Mr. Wilder, a
lieutenant commander stationed at Camp Lejeune Marine Corps
base, offers both as a compromise made in order to continue
serving the Marines and sailors.
Mr. Wilder, who has been a chaplain for 18 years, also alleges
he was ordered to follow various liturgical Protestant practices
and guidelines in his sermons and Scripture readings and was
forbidden to offer worshippers an invitation to accept Christ, a
widespread tradition at evangelical services.
The plaintiff chaplains contend that the Navy requires
evangelical Christian chaplains to give generic religious
services that contradict their beliefs and favor denominations
such as Catholics, Lutherans and Episcopalians.
These charges are contained in a class action that is moving its
way through the US District Court in Washington, D.C., at first
on behalf of about 50 plaintiffs, including Mr. Wilder and seven
other chaplains from the Jacksonville, Florida area. The
lawsuit has now expanded to include hundreds of chaplains who
served as long ago as the 1970s. Similar charges are contained
in several other lawsuits around the country involving
individual chaplains.
The Rev. Dr. William Leonard, dean of the divinity school at
Wake Forest University, said the issues being raised by the
chaplains reflect what has been happening in American society
with the growth of evangelicals and a decline in mainline
churches.
"It is an illustration of the changing nature of American
religion and the growing popularity of evangelical approaches to
preaching, theology and worship," Rev. Leonard said.
The attorney for the chaplains in the Washington case, Arthur C.
Schulcz of Vienna, Virginia, said evangelical chaplains have
been forced out of the service and passed over for promotions.
"The ultimate victim is not the chaplain," said Mr. Schulcz.
"It is the sailor or Marine who winds up not being able to
worship according to the dictates of his conscience."
The plaintiffs are asking the federal court to order reforms in
the way the Navy recruits and promotes chaplains. Mr. Schulcz
said the lawsuit does not ask for specific monetary damages, but
he said plaintiffs who were forced out of the service because of
illegal practices on the Navy's part could seek compensation.
In Navy documents and policies, evangelical faith groups are
referred to as non-liturgical because they do not follow a set
liturgy or order of worship, do not baptize infants and the
chaplain does not wear clerical garments.
In documents submitted in the Washington case, the chaplains
contend that the mainline, "liturgical" denominations hold power
out of proportion to the number of their followers in the
military. They say their review shows that less than eight
percent of Navy personnel are affiliated with liturgical
Protestant groups, while about 35 percent of the chaplains are
thusly affiliated. The Navy evangelical Protestant community is
about four times the size of the liturgical Protestant
community, the plaintiffs contend.
The instant lawsuit further claims that evangelical chaplains
are less likely to be promoted; and until this year, liturgical
chaplains selected by the chief of chaplains dominated Navy
promotion boards. The Army and Air force have different
systems, and the chaplains in those services have not
experienced discrimination, the plaintiffs say.
Mr. Schulcz said the complaints initially focused on
discrimination in the late 1980s, when he said, the Navy
followed a "thirds policy:" Christian chaplains were to be one-
third Catholic, one-third mainline or liturgical Protestant and
one-third evangelical or nonliturgical. The Navy denies there
was a thirds policy.
VALICERT INC.: Agrees To Settle NY Consolidated Securities Suit
---------------------------------------------------------------
Valicert, Inc. agreed to settle the securities class action
filed in the United States District Court for the Southern
District of New York on behalf of purchasers of the Company's
common stock, from the date of its July 27, 2000 initial public
offering through December 6, 2000. It names as defendants the
Company, its former chief executive officer, its chief financial
officer as well as an investment banking firm that served as an
underwriter for the IPO.
The complaint alleges liability under Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, on the grounds that the
registration statement for the IPO did not disclose that:
(1) the underwriter agreed to allow certain customers to
purchase shares in the IPO in exchange for excess
commissions to the paid to the underwriter; and
(2) the underwriter arranged for certain customers to
purchase additional shares in the aftermarket at
predetermined prices.
The complaint also appears to allege that false or misleading
analyst reports were issued. The complaint does not claim any
specific amount of damages. Similar allegations have been made
in lawsuits relating to more than 300 other initial public
offerings conducted in 1999 and 2000, all of which have been
consolidated for pretrial purposes.
In February 2003, the court issued a ruling on all defendants'
motions to dismiss, denying Valicert's motion to dismiss the
claims under the Securities Act of 1933, but granting its motion
to dismiss the claims under the Securities Exchange Act of 1934.
In June 2003, the Company accepted a settlement proposal
presented to all issuer defendants in this case. Under the
proposed settlement, the plaintiffs will dismiss and release all
claims against the Valicert Defendants in exchange for a
contingent payment guaranty by the insurance companies
collectively responsible for insuring the issuers in all the
consolidated cases, and the assignment or surrender of control
to the plaintiffs of certain claims the issuer defendants may
have against the underwriters.
Under the guaranty, the insurers will be required to pay the
amount, if any, by which $1 billion exceeds the aggregate amount
ultimately collected by the plaintiffs from the underwriter
defendants in all of the cases. If the plaintiffs fail to
recover $1 billion and payment is required under the guaranty,
Valicert would be responsible to pay its pro rata portion of the
shortfall, up to the amount of the deductible retention under
its insurance policy, which is $500,000.
The timing and amount of payments that Valicert could be
required to make under the proposed settlement will depend on
several factors, principally the timing and amount of any
payment required by the insurers pursuant to the $1 billion
guaranty. The proposed settlement is subject to approval of the
Court, which cannot be assured.
VERISIGN INC.: CA Court Dismisses in Part Securities Fraud Suit
---------------------------------------------------------------
The United States District Court for the Northern District of
California dismissed in part the consolidated securities class
action filed against VeriSign, Inc. and certain of its current
and former officers and directors.
The consolidated action seeks unspecified damages for alleged
violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, on
behalf of a class of persons who purchased Company stock from
January 25, 2001 through April 25, 2002.
VIGNETTE CORPORATION: Reaches Agreement For NY Securities Suit
--------------------------------------------------------------
Vignette Corporation agreed to settle the securities class
action filed in the United States District Court for the
Southern District of New York against it and certain of its
current and former officers and directors on behalf of a
purported class that purchased Vignette common stock between
February 18, 1999 and December 6, 2000. Also named as
defendants were four underwriters involved in the Company's
initial public offering of Vignette stock in February 1999 and
the Company's secondary public offering of Vignette stock in
December 1999:
(1) Morgan Stanley Dean Witter, Inc.,
(2) Hambrecht & Quist, LLC,
(3) Dain Rauscher Wessels and
(4) US Bancorp Piper Jaffray, Inc.
The complaint alleges violations of Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, based on, among other things, claims that the four
underwriters awarded material portions of the shares in the
Company's initial and secondary public offerings to certain
customers in exchange for excessive commissions.
The plaintiff also asserts that the underwriters engaged in
"tie-in arrangements" whereby certain customers were allocated
shares of Company stock sold in its initial and secondary public
offerings in exchange for an agreement to purchase additional
shares in the aftermarket at pre-determined prices.
With respect to the Company, the complaint alleges that the
Company and its officers and directors failed to disclose the
existence of these purported excessive commissions and tie-in
arrangements in the prospectus and registration statement for
the Company's initial public offering and the prospectus and
registration statement for the Company's secondary public
offering.
The action is being coordinated with approximately 300 other
nearly identical actions filed against other companies. On July
15, 2002, the Company moved to dismiss all claims against it.
On October 9, 2002, the court dismissed the Individual
Defendants from the case without prejudice based upon
Stipulations of Dismissal filed by the plaintiffs and the
Individual Defendants. This dismissal disposed of the Section
15 and 20(a) control person claims without prejudice, since
these claims were asserted only against the Individual
Defendants.
On February 19, 2003, the court denied the motion to dismiss the
complaint against the Company. The Company has approved a
Memorandum of Understanding (MOU) and related agreements which
set forth the terms of a settlement between the Company and the
plaintiff class.
It is anticipated that any potential financial obligation of the
Company to plaintiffs due pursuant to the terms of the MOU and
related agreements will be covered by existing insurance.
Therefore, the Company does not expect that the settlement will
involve any payment by the Company. The MOU and related
agreements are subject to a number of contingencies, including
the approval of the MOU by a sufficient number of the other
approximately three hundred companies who are part of the
consolidated case against the Company, the negotiation of a
settlement agreement, and approval by the Court.
VITALWORKS INC.: Plaintiffs File Consolidated CT Securities Suit
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
VitalWorks, Inc. and three of its executive officers in the
United States District Court for the District of Connecticut, on
behalf of purchasers of securities of the Company between April
24, 2002 and October 23, 2002.
The complaint alleges, among other things, violations of Section
10(b) of the Securities Exchange Act of 1934, Rule 10b-5
promulgated thereunder and breach of fiduciary duties. The
complaint alleges that the defendants made misleading statements
and omissions regarding the Company's business and operations,
principally in press releases and public conference calls in
April 2002 and July 2002, which allegedly had the effect of
artificially inflating the market price of the Company's common
stock during the class period. The suit further alleges that
six officers of the Company, including the defendant officers,
sold shares of Company common stock during the class period.
The plaintiff seeks recovery of an unstated amount of
compensatory damages, attorneys' fees and costs.
The Court has appointed a lead plaintiff and lead attorney, and
the Company's law firm was served with a consolidated complaint
on August 4, 2003.
WALT DISNEY: Asks CA Court To Dismiss Securities Fraud Lawsuit
--------------------------------------------------------------
The Walt Disney Co. asked the United States District Court for
the Central District of California to dismiss the consolidated
securities class action filed against it, its Chief Executive
Officer and its Chief Financial Officer.
The suit, filed on behalf of purchasers of the Company's common
stock between August 15, 1997 and May 15, 2002, alleges that the
defendants violated federal securities laws by not disclosing
the pendency and potential implications of a copyright lawsuit
over Winnie the Pooh material. The plaintiffs claim that this
alleged nondisclosure constituted a fraud on the market that
artificially inflated the Company's stock price, and contend
that a decline in the stock price resulted from the May 2002
disclosure. The plaintiffs seek compensatory damages and/or
rescission for themselves and all members of their defined
class.
Management believes that it is not currently possible to
estimate the impact, if any, that the ultimate resolution of
these legal matters will have on the Company's results of
operations, financial position or cash flows, it revealed in a
disclosure to the Securities and Exchange Commission.
WEBMD CORPORATION: Agrees To Settle Securities Suit in S.D. NY
--------------------------------------------------------------
WebMD Corporation agreed to settle the consolidated securities
class actions filed in the United States District Court for the
Southern District of New York against the Company, certain of
its former officers and directors and the underwriters of its
initial public offering, when the Company was still known as
Healtheon.
The suit against the Company and its former officers and
directors alleged violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 under that Act and Section
11 of the Securities Act of 1933 because of failure to disclose
certain practices alleged to have occurred in connection with
the distribution of shares in the Healtheon IPO. Claims under
Section 12(a)(2) of the Securities Act of 1933 were also brought
against the underwriters.
Similar suits were filed in connection with over 300 other
initial public offerings that occurred in 1999, 2000 and
2001. These claims were consolidated, along with claims
relating to over 300 other initial public offerings, in the
Southern District of New York.
The plaintiffs have dismissed the claims against the four former
officers and directors of WebMD without prejudice, pursuant to
Reservation of Rights and Tolling Agreements with those
individuals. On July 15, 2002, the issuer defendants in the
consolidated action, including WebMD, filed a joint motion to
dismiss the consolidated complaints. On February 18, 2003, the
court denied, with certain exceptions not relevant to WebMD, the
issuer defendants' motion to dismiss.
After a lengthy mediation under the auspices of former United
States District Judge Nicholas Politan, the issuer defendants in
the consolidated actions (including WebMD), the affected
insurance companies and the plaintiffs reached an agreement on a
settlement to resolve the matter among the participating issuer
defendants, their insurers and the plaintiffs. The settlement
is embodied in a Memorandum of Understanding and a number of
related agreements that together set out a comprehensive
framework for settlement of the consolidated actions among these
parties.
The settlement calls for the participating issuers' insurers
jointly to guarantee that plaintiffs recover a certain amount in
the IPO litigation and certain related litigation from the
underwriters and other non-settling defendants. Accordingly, in
the event that the guarantee becomes payable, the agreement
calls for WebMD's insurance carriers, not WebMD, to pay WebMD's
pro rata share.
WebMD has approved the settlement, and understands that
virtually all of the approximately 260 other issuer defendants
who are eligible have also elected to participate in the
settlement. Although the Company believes that the claims
alleged in the lawsuits were primarily directed at the
underwriters and, as they relate to WebMD, were without merit,
the Company believes that the settlement is beneficial to it
because it reduces the time, expense and risks of further
litigation.
In order for the settlement to become final, the Memorandum of
Understanding must be reduced to a separate settlement agreement
as to each issuer, each of which must be approved by the court.
Accordingly, the Company cannot guarantee, that this settlement
will resolve the IPO allocation securities litigation between
the plaintiffs and WebMD.
WEST CORPORATION: Appeals Court Reverses Denial of Certification
----------------------------------------------------------------
The 8th District Court of Appeals for the State of Ohio reversed
the denial of class certification for a lawsuit filed against
West Corporation and two of its clients.
The suit was filed in January 2001 in the Court of Common Pleas
in Cuyahoga County, Ohio, seeking statutory, compensatory, and
punitive damages as well as injunctive and other relief. The
suit alleges violation of:
(1) various provisions of Ohio's consumer protection laws,
(2) negligent misrepresentation,
(3) fraud,
(4) breach of contract,
(5) unjust enrichment and
(6) civil conspiracy in connection with the marketing of
certain membership programs offered by the Company's
clients
On February 6, 2002 the court denied the plaintiffs' motion for
class certification. On March 7, 2002, the plaintiffs filed an
interlocutory appeal to the 8th District Court of Appeals for
the state of Ohio. The Court of Appeals issued an order on July
10, 2003 reversing the trial court's decision and remanding the
case. The Company plans to pursue an appeal of the Court of
Appeals ruling to the Ohio Supreme Court. The Company is
currently unable to predict the outcome or reasonably estimate
the possible loss or range of losses associated with this claim.
ZONES INC.: Shareholders Launch Suit Over Purchase offer in WA
--------------------------------------------------------------
Zones, Inc. and each of its directors face a class action filed
in King County Superior Court in Seattle, Washington, in
response to the Company's receipt of a proposal from an investor
group led by the Company's President and CEO, Firoz Lalji, to
acquire all of the Company's shares not owned by the investor
group for a cash price of $1.00 per share, and the Board of
Directors' intention to appoint a special committee of directors
unaffiliated with the investor group to review the proposal with
the assistance of financial and legal advisors.
The plaintiff alleges that the directors of the Company cannot
protect the public shareholders and have breached their
fiduciary duties to the Company and its shareholders. The
Company denies the allegations.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
September 8-9, 2003
CORPORATE GOVERNANCE: LIABILITY OF CORPORATE
OFFICERS AND DIRECTORS
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
September 8-10, 2003
NATIONAL AND INTERNATIONAL ASBESTOS LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Chicago
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September 11-12, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
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mealeyseminars@lexisnexis.com
September 15-16, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 18-19, 2003
REINSURANCE SUMMIT
Mealey Publications
The Westin Hotel, Chicago
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mealeyseminars@lexisnexis.com
September 19-21, 2003
THE 20TH TOBACCO PRODUCTS LIABILITY PROJECT CONFERENCE
Northeastern University School of Law
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September 22-23, 2003
BAD FAITH CONFERENCE
Mealey Publications
The Westin Hotel, Philadelphia
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mealeyseminars@lexisnexis.com
September 26, 2003
MANAGING ENVIRONMENTAL RISKS
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
September 29-30, 2003
PRACTICAL SKILLS SERIES: TOXIC TORT LITIGATION
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
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mealeyseminars@lexisnexis.com
September 29-30, 2003
CONSUMER FINANCE CLASS ACTIONS
American Conference Institute
New York City
Contact: 1-888-224-2480; http://www.americanconference.com
October 2-3, 2003
SECURITIES LITIGATION & ENFORCEMENT 2003
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
October 8-9, 2003
ASBESTOS LITIGATION
American Conference Institute
New York City
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October 13, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Ritz-Carlton Hotel, Atlanta
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mealeyseminars@lexisnexis.com
October 13-14, 2003
SILICA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel, Atlanta
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 15, 2003
LEXISNEXIS PRESENTS WALL STREET FORUM:
PHARMACEUTICAL & MEDICAL DEVICE INDUSTRY LITIGATION
Mealey Publications
The Ritz-Carlton New York, Battery Park
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mealeyseminars@lexisnexis.com
October 16-17, 2003
LEAD LITIGATION CONFERENCE
Mealey Publications
Westin Copley Plaza, Boston
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mealeyseminars@lexisnexis.com
October 20, 2003
FUNDAMENTALS OF INSURANCE COVERAGE LAW
Mealey Publications
The Westin Chicago River North
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mealeyseminars@lexisnexis.com
October 21, 2003
FUNDAMENTALS OF REINSURANCE AND INSOLVENCY
Mealey Publications
The Westin Chicago River North
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
October 23 - 24, 2003
THE SECOND INTERNATIONAL ADVANCED FORUM ON RUN-OFF AND
COMMUTATIONS
American Conference Institute
New York Marriott East Side
Contact: 1-888-224-2480; http://www.americanconference.com
October 24, 2003
7TH ANNUAL NATIONAL INSTITUTE ON CLASS ACTIONS
American Bar Association
San Francisco, CA
Contact: 800-285-2221; abacle@abanet.org
October 27-28, 2003
INSURANCE COVERAGE DISPUTES CONCERNING CONSTRUCTION DEFECTS
Mealey Publications
The Westin Chicago River North
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 6-7, 2003
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Ritz Carlton, New Orleans, Louisiana
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
November 7, 2003
7TH ANNUAL NATIONAL INSTITUTE ON CLASS ACTIONS
American Bar Association
Washington, DC
Contact: 800-285-2221; abacle@abanet.org
November 10-11, 2003
FEN-PHEN LITIGATION CONFERENCE
Mealey Publications
The Four Seasons Hotel, Houston
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 13-14, 2003
MASS TORT LITIGATION TOOLS FOR PARALEGALS
Mealey Publications
The Westin Bonaventure Hotel, Los Angeles
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
November 13-14, 2003
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
November 17, 2003
WATER CONTAMINATION LITIGATION CONFERENCE
Mealey Publications
Pasadena
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mealeyseminars@lexisnexis.com
November 17-18, 2003
INSURANCE ALLOCATION CONFERENCE
Mealey Publications
The Ritz-Carlton Golf Resort, Naples, FL
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mealeyseminars@lexisnexis.com
November 18, 2003
MEDICAL MONITORING CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena
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mealeyseminars@lexisnexis.com
November 18, 2003
DAUBERT CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena
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mealeyseminars@lexisnexis.com
December 8-9, 2003
ASBESTOS PREMISES LIABILITY CONFERENCE
Mealey Publications
The Fairmont Hotel, San Francisco
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mealeyseminars@lexisnexis.com
December 8-9, 2003
CALIFORNIA SECTION 17200 CONFERENCE
Mealey Publications
The Fairmont Hotel, San Francisco
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mealeyseminars@lexisnexis.com
December 11-13, 2003
CONSTRUCTION DEFECT AND MOLD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
December 11-13, 2003
EMERGING SECURITIES LITIGATION CONFERENCE
Emerging Securities Litigation Conference
Mealey Publications
The Westin Kierland Resort & Spa, Scottsdale
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mealeyseminars@lexisnexis.com
December 12, 2003
MOLD LITIGATION 101 CONFERENCE
Mealey Publications
The Ritz-Carlton, Lake Las Vegas, Las Vegas
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
January 22-23, 2004
ENVIRONMENTAL AND TOXIC TORT MATTERS: ADVANCED CIVIL LITIGATION
ALI-ABA
Orlando (Walt Disney World)
Contact: 215-243-1614; 800-CLE-NEWS x1614
March 18-19, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
The Fairmont, San Francisco, California
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
April 14-17, 2004
INSURANCE INSOLVENCY AND REINSURANCE ROUNDTABLE
Mealey Publications
The Scottsdale Princess, Scottsdale, AZ
Contact: 1-800-MEALEYS; 610-768-7800;
mealeyseminars@lexisnexis.com
June 10 & 11, 2004
SECURITIES, DRUGS & ENVIRONMENTAL LITIGATION
MassTortsMadePerfect.Com
Atlantis, Paradise Island, Bahamas
Contact: 1-800-320-2227; register@masstortsmadeperfect.com
TBA
FAIR LABOR STANDARDS CONFERENCE
Mealey Publications
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mealeyseminars@lexisnexis.com
TBA
AIRLINE BANKRUPTCY LITIGATION CONFERENCE
Mealey Publications
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mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
August 05-31, 2003
DAMAGES IN TEXAS INSURANCE LITIGATION:
EVALUATING, PLEADING, AND PROVING
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
August 05-31, 2003
NBI PRESENTS "EMERGING ISSUES IN CALIFORNIA
INDOOR AIR QUALITY AND TOXIC MOLD LITIGATION
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
August 05-31, 2003
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
CLEOnline.Com
Contact: 512-778-5665; info@cleonline.com
September 16, 2003
AORTIC ANEURYSM DEVICE LITIGATION
Mealey Publications
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mealeyseminars@lexisnexis.com
ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
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ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
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EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
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INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
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NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
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PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
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RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES
AND ADVERSTISING
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
________________________________________________________________
The Meetings, Conferences and Seminars column appears in the
Class Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
FIRSTENERGY CORPORATION: Federman & Sherwood Files OH Stock Suit
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Federman & Sherwood initiated a securities class action against
FirstEnergy Corporation (NYSE: FE) in the United States District
Court for the Northern District of Ohio against the Company,
certain current and former officers and directors of the
Company.
The complaint alleges violations of federal securities laws,
including allegations of issuing a series of material
misrepresentations to the market between the dates of the class
period, April 24, 2002 and August 5, 2003, whereby artificially
inflating the price of the securities.
For more details, contact William B. Federman by Mail: 120 N.
Robinson, Suite 2720, Oklahoma City, OK 73102 by Phone:
(405) 235-1560 by Fax: (405) 239-2112 or by E-mail:
wfederman@aol.com
FLOWSERVE CORPORATION: Chitwood & Harley Lodges Stock Suit in TX
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Chitwood & Harley filed a securities class action in the United
States District Court for the Northern District of Texas, Dallas
Division, on behalf of all purchasers of securities of Flowserve
Corporation (NYSE:FLS), between October 23, 2001, and September
27, 2002, inclusive. The suit is brought against the Company,
C. Scott Greer, and Renee J. Hornbaker.
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 October 23, 2001 and
September 27, 2002, thereby artificially inflating the price of
Flowserve securities.
During the class period, the Company alleges that Defendants,
among other things:
(1) misrepresented that the Company's aftermarket sales
(the Company's "quick turnaround" business) were
steady, stable and consistent streams of revenue;
(2) misrepresented that the Company's growth made it less
dependent upon the chemical and industrial segments,
which had historically been very sensitive to economic
downturn;
(3) failed to disclose that the Company had instructed one
or more of its plants to stop building inventory as a
result of the projected (albeit undisclosed) continuing
decline in sales; and
(4) without any reasonable basis, projected full year 2002
earnings at ranges that were unattainable due to the
declines the Company was experiencing in critical
business segments.
On September 27, 2002, the Company warned of a 21% earnings
shortfall for the quarter ending September 30, 2002, and cut its
full year 2002 earnings guidance by over 60%, to $1.45 per
share, from the $2.30 per share earnings guidance shared with
investors during road show presentations promoting Flowserve's
public offerings less than six months prior.
Market reaction to the Company's announcement was swift and
severe. Flowserve shares fell over 38% to close at $8.70 on
September 27, 2002, a decline of more than 75% from the Class
Period high of $34.90 reached on May 2, 2002.
Prior to disclosure of the true facts, Flowserve completed two
public offerings of its common stock, thereby raising more than
$430 million, and Flowserve insiders sold their personally held
Flowserve common stock for substantial profit.
For more details, contact Lauren Antonino or Jennifer Morris by
Mail: 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309
by Phone: 1-888-873-3999 or 404-873-3900 ext. 6883 by E-mail:
jlm@classlaw.com or visit the firm's Website:
http://www.classlaw.com
READ-RITE CORPORATION: Wechsler Harwood Files Stock Suit in CA
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Wechsler Harwood LLP initiated a securities class action against
Alan S. Lowe and Andrew C. Holcomb, respectively the Chief
Executive Officer and Chief Financial Officer of Read-Rite
Corporation (NasdaqNM:RDRTQ) in the United States District Court
for the Northern California on behalf of all persons or entities
who purchased Read-Rite stock between October 30, 2001 and June
17, 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 the Securities and Exchange Commission
by issuing a series of material misrepresentations about the
financial condition of Read-Rite in order to materially inflate
the stock price, obtain a stream of capital to keep the Company
operational, and maintain the lucrative salaries received by
defendants.
The complaint alleges that the defendants released financial
statements that were in violation of Generally Accepted
Accounting Principles (GAAP). On June 17, 2003, Read-Rite
stunned the market when it disclosed that it would seek
bankruptcy protection under Chapter 7.
For more details, contact Craig Lowther by Mail: 488 Madison
Avenue, 8th Floor, New York, New York 10022 by Phone:
(877) 935-7400 x-283 or by E-mail: clowther@whesq.com
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A list of Meetings, Conferences and Seminars appears in each
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
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora
Fatima Antonio and Lyndsey Resnick, Editors.
Copyright 2003. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without
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Information contained herein is obtained from sources believed
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